Global COVID-19 Vaccine Supply Chain Challenges: A Critical Analysis

Executive Summary

The COVID-19 pandemic presented unprecedented challenges to global supply chain management, particularly in the distribution of vaccines. This report provides a comprehensive analysis of the key supply chain challenges faced during the global vaccination effort, examining manufacturing constraints, behavioral factors, and cold chain logistics challenges that impacted vaccine distribution worldwide.

1.0 Introduction

The involvement of the supply chain in the New Product Development (NPD) process from inception is critical for businesses to ensure that their products are functionally and profitably supported. Collaborating with partners and suppliers early on helps to identify and address any potential supply chain issues that may affect efficiency, cost, service, and quality, thus preventing downstream impacts on launch or post-launch activities throughout the end-to-end supply chain (Shipley et al., 2017). The COVID-19 vaccine is a clear example of this, as the pandemic has exposed vulnerabilities in global supply chains, leading to disruptions in the production and distribution of vaccines, particularly in low and middle-income countries (KPMG, 2020). Therefore, supply chain management plays a crucial role in ensuring the effective distribution of the COVID-19 vaccine. Overall, the statement that "supply chain is a key driver in bringing a product to market and in ensuring its continued success" is valid, as demonstrated by the COVID-19 vaccine case study.

2.0 Main Challenges

The focus of this report is to look at the COVID-19 vaccine supply chain and highlight the key challenges. The challenges are broken down into three main categories: manufacturing challenges, behavioral challenges, and cold chain challenges associated with the vaccine supply chain.

2.1 Manufacturing Challenges

The key reasons for manufacturing challenges were limited resources, increase in vaccine cost, and lack of funds. According to a report (Kansteiner, 2021), Pfizer and Moderna increased the price of their vaccines in large European purchase agreements from €15.50 to €19.50 per dose and €19.00 to €21.48 per dose respectively. This led to increase in vaccine prices and availability. Governments that could not afford the vaccine were unable to obtain it, resulting in lower vaccination rates and increased risk of disease transmission (Sagonowsky, 2021).

Frequent inflation in the price of the vaccines put manufacturers at a disadvantage as they were increasing their production capacity in response to increased demand for the vaccine. The supply chain was majorly affected by the limited availability of resources. Many countries were facing shortages of critical vaccine delivery components, such as glass vials, syringes, and raw materials like adjuvants and lipid nanoparticles. Recent research shows that deliveries of important products of certain materials such as sterile filters had been extended from two to three months to nine to twelve months (Dakin, 2021). This shows that late procurement of raw materials had caused vaccine production to be delayed, thereby resulting in vaccine shortage. This delay was the reason that the entire supply chain got disrupted during the pandemic, when vaccines were desperately needed.

An Oxfam report (Oxfam, 2021) states that, due to the unethical vaccine monopolies of pharmaceutical companies, the cost of vaccinations has increased five times. This had a negative impact on the entire supply chain of COVID-19 vaccines as some developing countries didn't have adequate resources to afford the vaccines, which led to a delay in the distribution of the vaccines resulting in inequalities within the global health framework. Finally, only a limited number of vaccine manufacturing companies had the capability to mass produce vaccines and hence there was a constant shortfall in the required quantity. According to the Global Vaccine Market Report published by WHO (WHO, 2022), it was indicated that in 2021 out of nineteen manufacturers of the vaccinations only ten manufacturers with no other marketed vaccines were able to supply COVID-19 vaccinations and that they only had a maximum capacity of producing 15% of the required volume. This report also states that only four COVID-19 vaccine manufacturers were in the top-ten for producing non-COVID-19 vaccines and indicated that a substantial proportion of vaccine manufacturers had very limited and prior experience in producing large quantity of vaccines.

2.2 Behavioral Challenges

Mass public unwillingness to get vaccinated was another major challenge in the vaccine supply chain. According to a survey done by Fisher (2021) within the US population, almost half of the population (42.4%) showed a hesitancy pertaining to vaccination. Less than 10% didn't want to get vaccinated and 32% were uncertain about the vaccine. Reasons for hesitancy were due to vaccine specific concerns such as unknown side effects and the efficacy rate of the vaccine, and anti-vaccine belief coupled with a lack of general trust were all contributory reasons (Khubchandani et al., 2021).

Cordina, Lauri and Lauri (2021) highlight that consumers might not be fully convinced with the benefits of the COVID-19 vaccine, which could be another reason for this behavior challenge. It is evident that when most of the patients were unwilling to obtain the vaccine, there was a reduction in demand of the vaccine which resulted in the disruption in distribution and production of vaccines. The hesitancy of vaccines led to a surplus of vaccines in some areas and a high demand in other areas which resulted in a shortage. The unwillingness to take vaccines contributed to uneven distribution of vaccines, causing certain areas to have many vaccines while other parts had to face a deficit (Roser et al., 2020).

The above phenomena were an example of the Bullwhip effect, where a small change in demand at the level of consumers had resulted in substantial fluctuation within the demand at the level of the suppliers. This was identified and reported by Serum Institute of India; when vaccines were stockpiling, the institute had to halt their vaccine production due to a decline in demand. In December 2021 the stockpile grew up to 200 million doses, suggesting that only 63% of the population of India was vaccinated (The Economic Times, 2022). Some countries struggled with vaccine wastage due to low demand, which was caused by market forces. This increased costs for healthcare providers and manufacturers (Bongers et al., 2022).

2.3 Cold Chain Challenges

The cold chain that is currently established within developing countries maintains temperature from two to eight degrees Celsius which is required for almost all routine immunization vaccines. However, ultra-cold chain freezers (UCC) are necessary for vaccines such as the Pfizer-Biontech vaccine, which requires storage at -70°C for approximately 6 weeks. This creates a significant logistical challenge, as not all storage facilities and transportation options are equipped to maintain extreme temperatures (CDC, 2022b). The Moderna vaccine required a specialized storage with temperatures between -25°C to -15°C, which cannot be achieved using a normal freezer. As a result, supply constraints have arisen for both vaccines (CDC, 2022a).

Procuring the essential specialized storage facilities has recognized to be a challenge, with multiple countries attempting to purchase freezers simultaneously, creating a burden on global manufacturers and lead times (Fleming, Okebukola and Skiba, 2021). Temperature constraints commonly occurred at local levels of the supply chain such as stores in districts healthcare facilities and during outreach sessions (World Health Organization, 2018). Furthermore, poor maintenance can limit the installed capacity of the cold chain devices. Historically, the cold chain devices installed at the last mile had a failure rate of between 15 and 20 percent (GAVI, 2022). Less amount of specialized refrigerated vehicles for transportation of vaccine from the regional stores to the vaccination centers caused COVID-19 vaccines at risk of exposure to high temperatures (Read, 2021).

3.0 Conclusions

New strategies to mitigate the major challenges currently faced by COVID-19 vaccines supply chain could be implemented in several areas. To address the challenge of availability of funds, material availability and capacity, governments and public-private partners should provide excess funding and follow advanced purchase agreements to increase vaccine procurement (Yadav and Weintraub, 2021). Negotiations with pharmaceutical companies can lower vaccine prices through bulk purchasing agreements and price ceilings. Developing countries can promote vaccine sharing, where wealthy countries donate excess COVID-19 vaccines to low-income countries, enabling them to procure vaccines at a lower price (Geddes, 2022).

To resolve the issue of consumer behavior challenges, vaccine awareness programs may be conducted to educate the masses of the safety, efficacy, and the benefits of vaccination. Increasing easy access to vaccines by making the vaccines more easily accessible by constructing sites for vaccination in convenient locations could be another strategy to overcome the consumer unwillingness.

To overcome cold chain challenges in the distribution of COVID-19 vaccines, strategies such as optimizing shipment size and frequency, and monitoring through blockchain technology can be implemented. Breaking down large vaccine shipments into smaller ones that can be spread out over a few days can optimize the supply chain and reduce wastage (Fleming, Okebukola and Skiba, 2021). And tracking the cold chain using RFID technology and GPS technology can be employed (KPMG, 2020).

Effective supply chain management is crucial in ensuring equitable access to vaccines, especially in low and middle-income countries that have been impacted by pandemic-related disruptions. Close partnerships between vaccine manufacturers, logistics providers, governments, and international organizations is necessary for the efficient delivery of vaccines. Supply chain visibility can be enhanced using technology such as blockchain and artificial intelligence to track vaccine shipments and monitor inventory levels in real-time, preventing stockouts and minimizing wastage to ensure that vaccines reach those in need.

References

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