New COVID-19 Global Vaccine Facility Would Include Three-Track Finance Mechanism – But Finalizing Legal Structure Is Critical
Photo Credit: European Commission

The European Commission has announced that it will join the new WHO-sponsored COVID-19 vaccine facility (COVAX) with a  € 400 million commitment – inching the visionary global fund much closer to reality.  

If the new COVAX facility becomes a reality, it would set a historic precedent of multilateral cooperation, not only on the pandemic, but in the global health arena that could be a win-win for the entire world.

It would also turn the tide on a period of “vaccine nationalism” when rich countries, including the United States, United Kingdom, Japan, and even Switzerland, have hastened to pre-order quantities of leading vaccine candidates – even if they are not really sure that candidate will ultimately succeed. Such bilateral deals so far have no provisions for allocations to less well-funded nations.

An announcement of the EC commitment to the pooled vaccine purchase mechanism was made by WHO Director-General Dr Tedros Adhanom Ghebreyesus at Monday’s press conference, on the day which was supposed to have been the deadline for countries to register interest in joining what could become the biggest vaccine procurement plan in global health history. 

“As President Ursula Von der Leyen said, ‘global collaboration is the only way to overcome a global COVID-19 pandemic,’” said Dr Tedros. “I would like to thank the EU Commission for its announcement today that it is joining the COVAX Facility, and for its contribution of  € 400 million.”

Dr Tedros announces the EU Commission’s commitment to the COVAX Facility
Deadline for Final Commitments Delayed – Allows Time To Legally Formalize COVAX   

The hard deadline to join the Facility has also been pushed to September 18, when countries will be expected to make a “binding financial commitment” to the initiative, said WHO senior advisor Bruce Aylward at the press conference. 

Some 170 Member States have expressed preliminary interest in the facility, including Germany, which just publicly signed onto the Facility on Monday. 

But in fact, no firm financial commitments have yet been signed – as the facility lacks a formal legal framework. 

The three- week delay will provide time to resolve a set of complex legal and financial and governance issues so that the COVAX structure can be formalized, said Nora Kronig, Switzerland’s global health ambassador, in an interview with Health Policy Watch earlier on Monday.

That legal framework is critical to enable firm commitments by the wide range of WHO member states that have shown interest in COVAX- but operate under vastly different national rules for vaccine approval and procurement, added Kronig, head of the International Affairs Division of Swiss Office of Public Health.  

Switzerland co-chairs with Singapore an informal working group of countries that are supporting the development of the vaccine facility and have been working intensively to hammer out the arrangements. 

“We are in the latter stages of the design. But it is quite tricky,” Kronig said in the interview. “ We need to put in place legal and financial frameworks that work well together, while also catering to the needs of different countries in a highly dynamic environment.

“There are really a lot of technical dimensions that we have to find solutions to, given the different national situations. That’s what makes it really complicated, to make sure it really works, and what we are concerned with now,” Kronig added.

A safe and efficacious COVID-19 vaccine is another tool in the public health arsenal to stop the spread of COVID-19. (Photo Credit: Jernej Furman)

Facility is a Win-Win for Rich and Poor Countries    

The facility would provide an opportunity for high- and middle-income countries to purchase approved vaccines in bulk – and therefore at lower prices – with reference to a dozen vaccine candidates now in advanced stages of trials, which have received R&D support from the Oslo-based Coalition for Epidemic Preparedness (CEPI), and are thus engaged somehow with the COVAX facility.  

Countries that can’t afford to do separate deals for all of the products under development, or realistically anticipate which vaccine candidate will anyway be the most successful, would be assured of access to the best vaccine candidates through the COVAX facility.  

Countries that join the facility would be able to pre-commit to orders for doses of vaccines sufficient to supply between 3-20% of their population – enough to cover most of their high-risk groups like older people, healthcare workers or those with underlying conditions.

And at the same time, the costs of procurement for some 92 low-income countries that will depend on international aid to get their share of the vaccine pie, would be significantly reduced because of the bulk purchase arrangements.  

A Three-Track Financing Process To Cater To The Needs Of Different Countries 

The COVAX Facility could set a historic precedent for multilateral cooperation, if the legal mechanisms are worked out. (Photo Credit: Jernej Furman)

According to the structure currently under consideration, there would be three “tracks” by which countries can join COVAX, sources told Health Policy Watch, confirming earlier reports that WHO and its partners have sought to create greater financial flexibility to attract high-income countries to the sharing pool.  

While negotiations are still ongoing, the three-tracks that are taking shape appear to look something like the following: 

  • Committed Purchase Option – Countries would pay a comparatively low  “pre-order price”, per vaccine dose (e.g. about US $ 1.60 a dose) backed by a financial guarantee to actually purchase the doses at a baseline cost of somewhere between US$ 10.55 and US$ 21.10;
  • Optional Purchase Commitment –  Countries would pay a higher “pre-order price” (e.g. about US $ 3.10 per dose) with the possibility to opt out of the final vaccine purchase for doses or vaccine candidates that they ultimately don’t need or want;
  • Advance Market Commitments  (AMC)-  The 92 low- and middle-income countries that are part of the AMC of GAVI, the Global Vaccine Alliance,  which regularly negotiates vaccine purchases in bulk at concessionary prices– will receive the vaccine through that mechanism, financed by traditional international donor allocations – although the final prices for those doses is sure to be a hot topic of debate.    

“The fact that there are three different financing streams all pooled together is innovative and new, and may improve the prospects for COVAX,” the source said. 

Although COVAX is co-led by WHO, CEPI, and Gavi, the Vaccine Alliance, Switzerland and Singapore have jointly chaired the informal “Friends of the COVAX facility” group – which is attempting to iron out the final details and ensure broad participation in COVAX among high income and upper middle income WHO member states.  

Still, while the outlines are falling into place, challenges remain to be faced in working out the fine print over the next three weeks. 

“It is critical for the legal mechanism of COVAX to meet the needs of different countries and to account for the most efficient use of the doses available, as well as the fact that different vaccine technologies will have different needs, including cold-chains,” one source pointed out, adding that vaccine procurement regulations vary widely between countries, and COVAX must accommodate national legislation.  

Added Kronig, ultimately the same goal is shared by all countries – and despite the obstacles faced, that should be a stimulus to the success of COVAX.

“We also have to be mindful of the fact that we are acting in a completely unpredictable environment,” she cautioned, noting that the creation of the facility remains a work in progress.

“But we all want this to work out – because it is the best way to protect our populations and I think also to protect society as a whole.”


Grace Ren contributed to this story

Image Credits: European Commission, Flickr: Jernej Furman, Flickr: Jernej Furman.

Combat the infodemic in health information and support health policy reporting from the global South. Our growing network of journalists in Africa, Asia, Geneva and New York connect the dots between regional realities and the big global debates, with evidence-based, open access news and analysis. To make a personal or organisational contribution click here on PayPal.