What is going on with Canada?

Weekly Insights and Interesting Trends

What is going on with Canada?

Canada followed the same vaccine procurement playbook as its wealthy peers, making early advance market purchases across a broad range of Covid-19 vaccine candidates. Between August and October 2020, Canada purchased doses from Pfizer, Moderna, Janssen (J&J), Oxford-AstraZeneca, Sanofi-GSK, and Medicago (a domestic company). In January, they added Novavax. With 500% coverage in confirmed purchases (going up to 600% when optioned doses are included), Canada defines the top of our population coverage graph.

But as we have seen over the past few months, vaccine purchases, vaccine deliveries, and vaccinations do not always track together. Canada’s success with advance market purchases has not translated into strong supply or rate of vaccinations. They have faced delay after delay from vaccine manufacturers and have received very few of their ordered doses. Their vaccination rate of 7% (as of March 11 according to Our World in Data) ranks second to last among the G7 nations. (Japan is in last place with less than 1%, hampered by a slow start and historically high vaccine hesitancy.)

Canada was heavily criticized for purchasing so many doses per capita and then criticized again for requesting doses through COVAX, one of the only high-income countries to do so. Canada has committed to donate excess doses and helped to develop the donation framework for COVAX. But now they are in a position where they do not have any doses to donate. So what went wrong for Canada? Our analysis suggests three factors at play: the timing of vaccines coming to market, opaque negotiations and contracts, and lack of manufacturing capacity.

Canada bet more heavily on the vaccines that have been slower to get to market. Their largest purchases (in terms of number of people covered) were for Medicago, Janssen, Sanofi-GSK, and Novavax. But it was Pfizer-BioNTech, Moderna, and Oxford-AstraZeneca who cleared the finish line first. Moderna, which accepted US government funding for development and manufacturing, has been clear that they are prioritizing the US for deliveries. That means that Canada has been reliant so far on their smallest orders: Pfizer-BioNTech (40 million doses) and Oxford-AstraZeneca (20 million doses). They have recently approved Janssen, giving them one more option. But like Moderna, Janssen is prioritizing US deliveries and indicated they would fulfill Canada’s order by the end of September. They have already announced delays for Canada and there is no target date for the first shipment.

It also appears that Canada did not negotiate favorable delivery schedules as part of their purchase contracts. But because details of the contracts and negotiation processes happening globally were kept confidential, they would not have had any way to know. The lack of transparency (on both price and delivery schedules) created an information imbalance that favored vaccine makers, who had access to the contract documents across countries, and put countries at a disadvantage. Country leaders often did not know where they stood in the vaccine delivery queue until doses started shipping out.

Finally, the lack of domestic manufacturing capacity has left Canada reliant on precarious global supply chains. Other wealthy countries, including the US, UK, Switzerland, and Australia invested heavily in 2020 to build on infrastructure they had developed in previous years and swiftly unlock new capacity. But Canada, which has arguably underfunded vaccine manufacturing for more than a decade, did not have this base on which to build. The country’s manufacturing was not ready to mass produce new vaccines. This meant that Canada could not leverage manufacturing contracts to control supply or get faster delivery.

One of the market lessons highlighted through this pandemic is that location of manufacturing matters. In part, this is because of the public investment that supported rapid expansion. Plants in the US that ramped up with US government funding through Operation Warp Speed are prioritizing US orders. The same is true in Europe and in the UK. These leaves Canada without any priority status. It also makes Canada vulnerable to export controls, as countries clamp down on vaccines leaving their borders.

Canada is building manufacturing capacity now and expects to be churning out doses of Novavax by the end of 2021. At that stage, Canada may become an important supplier for countries around the world still struggling to get enough vaccine. And investment now will likely pay off in future. Next time, Canada will be more prepared. But for now, it provides a case example in the importance of transparency and local manufacturing.

Interesting Trends

Significant news, updates, and trends last week:

• COVAX has delivered more nearly 29 million doses to 37 countries since it began shipments in late February. Deliveries have prioritized African countries so far but have also shipped to countries in Asia and the Middle East.
• The single-dose vaccine from Janssen (J&J) received emergency use listing (EUL) from the WHO, opening the path for rollout through COVAX. 
• Vaccines from China’s Sinopharm and Sinovac are under review for WHO EUL, with a decision expected by the end of March.
• We’ve seen a few countries enter the Covid-19 global market with their first negotiations and purchases recently, including Cambodia, Honduras, Macau, and San Marino.
• Novavax released final efficacy data showing 95% efficacy against the original strain and 86% efficacy against the UK variant in the Phase 3 trial, with 100% protection against severe disease and death. Results from the Phase 2b trial in South Africa demonstrated 55% protection against infection from the South Africa variant and 100% protection from severe disease and death.
• Thailand and many countries in Europe have paused rollout of the Oxford-AstraZeneca vaccine as a precautionary measure while reports of blood clots among a small number of people who received the vaccine are investigated. Data from the UK, where more than 11 million people have been vaccinated with Oxford-AstraZeneca indicate no increase in blood clots.
• China has launched the first “vaccination passport” program though social media platform WeChat.
• A group of countries known as the Quad – US, Australia, India, and Japan – announced a plan to expand vaccine manufacturing capacity in India by as much as a billion doses by 2022. The effort is intended to increase supply for the Indo-Pacific region.
• A Swiss pharma company has signed an agreement with Russia to manufacture the Sputnik V vaccine in their Italian facility. Meanwhile, the EU asked member states to hold off on approving Sputnik V in their own countries until the European Medicines Agency has finished their review.
• The Inter-American Development Bank (IDB) has developed a new mechanism to provide a financial backstop that can resolve indemnity and liability issues in vaccine purchase agreements. Indemnification requirements (pushed by vaccine developers) have held up, and in some cases prevented, purchase agreements, particularly among middle-income countries.
• There were reports this week that Pfizer was interested in manufacturing their Covid-19 vaccine, co-developed with BioNTech, in India if the Indian government could assure faster regulatory authority and no price controls. Other reporting, however, indicates that Pfizer is not currently pursuing this option.
• While the WTO member countries did not reach agreement over the proposed IP waiver for Covid-19 vaccines this week, the chief has called for an increase in vaccine production in developing countries.
• The US is reportedly sitting on millions of Oxford-AstraZeneca doses that cannot be administered, as the vaccine has not yet received emergency authorization in the US. However, the US government has refused to ship the doses abroad where they could be used.

For more information on our research on Covid-19 vaccine supply, please see https://launchandscalefaster.org/COVID-19.