Despite Hosting mRNA Hub, South Africa Buys Vaccines From India – Highlighting Tension Between Price Pressures and Local Production
Charles Gore(MPP), Petro Terreblanche of Afrigen, Dr Tedros Ghebreysus, Dr Joe Paahla, South Africa;s Minister of Health, and Anne Tvinnereim, Norwegian Minister of International Development, cut the ribbon to formally open Afrigen.

CAPE TOWN – South Africa’s Health Minister was somewhat embarrassed that his government’s decision to procure pneumococcal vaccines from an Indian company rather than local company Biovac became public during a high-level international meeting on the local production of mRNA vaccines in his country.

South Africa’s procurement decision coincided with a meeting in Cape Town this week of over 200 international delegates working with the mRNA technology transfer programme that was launched in June 2021 by the World Health Organization (WHO) and the Medicines Patent Pool (MPP).

The mRNA hub is based at South African company Afrigen, which has developed a COVID-19 vaccine based on Moderna’s recipe – albeit without Moderna’s help. Afrigen is passing this know-how to people from 15 other low- and middle-income countries (LMICs), and representatives of 14 of these countries participated in the five-day event.

Biovac, which is partly owned by the South African government, is Afrigen’s vaccine production partner, and it has been making Pfizer’s pneumococcal vaccine, Prevnar 13, since 2021.

Health Minister Dr Joe Phaahla explained on Thursday that the South African government is fully committed to building local vaccine development but that ministers were not involved in procurement decisions, which were governed by an Act of Parliament that civil servants were obliged to follow or face prosecution.

“But South Africa is in the process of reviewing its procurement policy to support local production,” Phaahla told the meeting.

Tensions between price constraints and support for local production

While Biovac has expressed dismay at the decision, it is precisely this tension between price constraints and the drive to support more local production that countries, global vaccine procurement agencies and donors need to resolve if local vaccine and medicine manufacturing are to become a reality in regions like sub Saharan Africa, which are so lacking in this capacity today.

Unless governments and donor agencies are actually going to procure vaccines from regional manufacturers, the mRNA technology transfer will simply become lessons in science rather than a solution to structural manufacturing inequity.  But vaccines and medicines produced by new start-ups are also likely be more expensive than those produced by giant Indian or Chinese pharma firms that have been in the business for year and are already supplying large global markets. 

As Dr Blade Nzimande, South Africa’s Minister of Higher Education, Science and Technology, told the mRNA meeting, while, technology transfer is necessary, “this is not sufficient”. 

“We need government support, and this includes the willingness to invest in research and development, building of human capacity, and willingness to pay a premium for vaccines, at least until we achieve economies of scale,” he added.

But is it realistic to expect that countries economically battered by COVID-19 will be willing and able to pay this premium when generic companies such as India’s Cipla can deliver vaccines at a significantly cheaper rate?

South African health officials told Health Policy Watch that the decision to give a three-year contract to Indian generic company Cipla instead of buying Biovac’s vaccines would save the department so much money that it could introduce two new childhood vaccines.

Cipla – which has its vaccines made by the Serum Institute of India – publicly quantified the sums involved on Wednesday, saying that its contract with South Africa would save the government approximately $133 million (R2.4 billion) over its three-year lifespan.

Preferential procurement for African vaccines by global health agencies?  

WHO Director-General Dr Tedros Adhanom Ghebreyesus described the tension between the government and Biovac as a “heads up” that the same problem could arise for mRNA vaccines.

“It’s good that this happened now, so you can prevent it from happening, especially for this big and very strategic initiative,” said Tedros, who added that there had been a “very candid discussion” that morning with key mRNA hub partners.

Nzimande said that the Finance Ministry was busy amending its “preferential procurement” legislation in South Africa, including how to balance price and local production.

“This is a very complex issue. Sometimes you may find that an international company is cheaper than a local company because it is actually being subsidised by the government in its own country, and we are not doing the same thing. We might have to pay more sometimes because we want to build local capacity.”

While Tedros expressed support for preferential procurement to support local vaccine start-ups in their infancy, he added that this should be established at a “regional and continental level”, starting with Africa’s free trade zone.

At a global level, Tedros said that WHO, Gavi, UNICEF and other international organisations would also need to support Africa’s production. 

Indeed, after decades of chasing vaccines and medicines at the lowest price possible – no matter where they were produced, Gavi late last year committted to diversifying its procurement and purchasing more African health products. But that commitment remains only on paper, critics say. Actual implementation of plans to buy locally produced vaccines in Africa is being confined to a separate budget designated for funding pharma startups, and requiring more donor funds. 

Phaala conceded that “innovative funding mechanisms will be required, both in the short, medium and long term to assure sustainability”, and proposed that “appropriate trade incentives” could be used to build “more secure demand so that this industry can grow beyond our borders”. 

But he also said that South Africa was looking to the WHO, Gavi and the COVAX facilities for support.

Meanwhile, Nzimande said that approaching international partners to subsidise prices of products that are produced locally in South Africa is a good idea. This has been done on a time-bound basis of 10 years for the pneumococcal vaccine.

Significant investment required

South African Health Minister Dr Joe Paahla, and Anne Tvinnereim, Norway’s Minister of International Development.

International donors have invested heavily in building the capacity of the African mRNA hub, mainly in reaction to the COVID-19 pandemic. Africa was isolated and vulnerable after the Indian government forbade the export of generic COVID-19 vaccines during the height of its pandemic, leaving the continent without access to COVID-19 vaccines as it imports 99% of its vaccines.

There was global recognition that building Africa’s vaccine manufacturing capacity is essential to prepare for the next pandemic, and idea of a hub to manufacture and train others germinated in the WHO and the Medicines Patent Pool (MPP).

The idea has been attractive to wealthier countries. The European Council alone has invested €40 million in the hub, and recently signed an additional €15.5 million grant with the European Investment Bank to facilitate the expansion of Biovac’s vaccines manufacturing capacity, said Martin Seycell, Deputy Director General of the European Council.

Canada has so far invested $45 million in the hub, and Caroline Delany, GlobalAffairs Canada’s Director General for Southern and Eastern Africa, announced a further commitment of $15 million on Thursday.

Norway and South Africa developed a special relationship during the pandemic as co-chairs of the Access to COVID Tools (ACT) Accelerator, and Norway’s Minister of International Relations, Anne Tvinnereim, stressed that the mRNA hub was part of a bigger ecosystem aimed at preparing for the next pandemic.

“Different parts of this system must be strengthened to facilitate increased local and regional production of vaccines, and the key will be to ensure that production capabilities will be commercially sustainable. This includes the production of other types of vaccines in non-pandemic times,” said Tvinnereim.

“South Africa and Norway follow the discussions on pandemic preparedness and a platform for medical countermeasures very closely,” she added, stressing that lessons learnt during the pandemic needed to be taken forward to the United Nations High Level Meeting on pandemic preparedness and response in September.”

Afrigen inauguration

Afrigen Executive Director Prof Petra Terblanche and scientists wait for the arrival of Dr Tedros.

Following the briefing of the mRNA hub meeting, Tedros and the international team headed to Afrigen to formally open the facility.

Waiting for the delegation was Afrigen Executive Director Prof Petro Terblanche, who said that the hub’s COVID-19 vaccine candidate, AfriVac 2121, “is currently in the scale-up phase”.

“Over the last 18 months, Afrigen has undergone an incredible transformation with the support of a network of partners and mentors enabled by this programme,” she added.

“We have grown our capability and capacity to meet the highest quality standards of mRNA vaccine development, serving the objective to build sustainable capacity in LMICs to produce mRNA vaccines.”

Afrigen is currently manufacturing vaccine batches to be used in Phase I/II clinical trials to good manufacturing practice standards, while also continuing with training and technology transfer to network partners.

Image Credits: WHO, Kerry Cullinan.

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