Progresses in the Vaccine Distribution Network

In our inaugural volume of the Falvey Foresight, we discussed the COVID-19 vaccines through the lens of the cold-chain requirements, challenges, and obstacles for global distribution. At that point, the Pfizer and Moderna vaccines were among the first to be approved and were just beginning to be administered to the public. Many of the challenges that would have to be overcome were still theoretical, and an industry focus was on the end-to-end supply chain, temperature stability, and overall handling capacity of the industry. In this article, we will explore the supply chain side of the distribution network for the multiple COVID vaccines around the world and offer an analysis of the current and developing situation.

At the time of this writing, more than 1.06B vaccines across 172 countries have been administered worldwide with 232M doses administered in the US. These figures makes up enough administered doses to fully vaccinate around 7% of the global population. However, this number can be misleading since wealthier nations have received much more wide-spread access to treatment so far. In the US, the vaccination rate has reached an average of 2,717,062 doses per day. Top officials claim that 70-85% of the US population will need to be fully vaccinated before things can return to some sort of normalcy, and with a population of over 331M people reported by the US census bureau, it will take another 3 months at this pace to reach 75% of the population. More supply is on the way in the form of ramped up manufacturing and newly developed vaccines with eight options currently available globally for consumer usage in limited quantities. However, these options are challenged by mutating strains, unequal distribution to poor and remote countries or regions, and potential disruptions to the supply chain.

The CDC has authorized and recommended vaccines from Pfizer-BioNTech, Moderna, Johnson & Johnson as currently available options and vaccines from AstraZeneca and Novavax currently in phase 3 clinical trials. Recently, the distribution of one of those approved vaccines by Johnson & Johnson was paused by the CDC after adverse reactions were reported in six patients out of the sample size of more than 6.8M people. This pause was temporary with the CDC once again endorsing the use of the Johnson & Johnson vaccine as a key component to reach the goal of providing global access to immunization. The pause has caused some delay in the delivery of immunizations as the vaccine in question is a single shot regime and they have projected the supply of 1B doses worldwide, 200M of which are for the US.

The effectiveness of these vaccines and their efficient distribution could mean the difference between global herd immunity against the novel coronavirus COVID-19 and the virus becoming endemic, recurring year after year.

All of this occurs in a time when the supply chain has seen many disruptions from land, sea, and air transport involving winter storms, congested ports, and imbalanced supply and demand in the market. The pandemic has influenced consumer behaviors to drive an all-time high in e-commerce and online shopping. The high demand for goods from overseas combined with the disrupted operations in the ocean and air cargo market has resulted in the interruption of global supply chains.

The disruptions are happening when the US and some other leading economies are beginning to return to normalcy. As the economy resurges, vaccine distribution is increasing, and consumer confidence returns, the vulnerability of the supply chain continues to be a concern.

Federal Reserve Chairman Jerome Powell said at a recent press conference that he expects supply chains to adjust as economic growth accelerates. “It’s very possible, let’s put it that way, that you will see bottlenecks emerge and then clear over time…. These are not permanent. It’s not like the supply side will be unable to adapt to these things. It will—the market will clear. It just may take some time.”

This perspective prompts us to question the health and sustainability of the supply chain. Bottlenecks in ports in California have resulted in backlogs as ships are forced into waiting for prolonged periods of time for berthing space. This is worsened by the port workers who have been out of work due to COVID-related sickness. There are many downstream effects beyond just the vaccine availability. There is a long term question on how this past year of quarantine and market disruption will affect the industry and the global economy and the way we do business moving forward.

Sources:

Centers for Disease Control and Prevention (cdc.gov)

Joint CDC and FDA Statement on Johnson & Johnson COVID-19 Vaccine | CDC Online Newsroom | CDC

Everywhere You Look, the Global Supply Chain Is a Mess - WSJ

Patience tested: 62 ships at anchor in San Pedro Bay - FreightWaves

Why We Can’t Make Vaccine Doses Any Faster — ProPublica

Covid-19 Vaccine Rollout: County and State Tracker - The New York Times (nytimes.com)

More Than 1.16 Billion Shots Given: Covid-19 Vaccine Tracker (bloomberg.com)