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The economic perils of vaccine distribution

The pace of our economic recovery depends on the speed of vaccine distribution – not just in the UK, but around the world.

Vaccination sign by the road
Garry white employee

by
Garry White

in Features

04.02.2021

To get the virus under control – so restrictions on movement can be lifted – most of a population will need to be vaccinated. Equity markets have soared to new highs on the sugar-rush of central bank support and prospects of a near-term recovery. But the rate of vaccination globally needs to speed up significantly if it is to catch up with the optimism reflected in market valuations.

There are reasons to be positive that inoculation rates can improve, but there are also plenty of political pitfalls that could upset any recovery.

Johnson & Johnson’s single-shot vaccine candidate is certain to speed up the rate of immunisation if approved. Results released so far have been very promising, and its management expects to report Phase-3 trial results next week. It will then apply for emergency approval for the vaccine – and is confident that it can deliver the orders it had already received on time.

The US vaccination programme has been lacklustre so far. “Until now, we’ve had to guess how much vaccine to expect for the next week, and that’s what the [state] governors had to do. This is unacceptable,” Joe Biden said on Tuesday.

The US president has now pledged to increase vaccine supplies to states, exercise the government’s option to buy a total of 200 million more inoculations from Pfizer and Moderna – and will give states more information on lead times and vaccine quantities so they can organise distribution more efficiently.

West Virginia leads by example

Other US states may also want to learn lessons from West Virginia, which has spent the past three weeks as either the number one or number two US state for vaccine doses administered per capita. Its governor, Jim Justice, now claims that everyone in the state over 65 could be vaccinated by Valentine’s Day – if the federal government supplied enough doses. The state’s success is based on a decision made by the governor to mobilise the skills of the private sector using companies big and small instead of relying on the federal response.

Unlike other states, vaccines are being distributed in West Virginia by nationwide chains such as CVS and Walgreens, with thousands of independent pharmacies also charged with giving out injections. The logistics of this distribution has been supported by volunteers in the National Guard. Retail giant Amazon has also offered its services to get the vaccine does to where they need to be across all 50 states.

West Virginia has given out 83% of the vaccine doses provided by the central government and about 9% of the population has received the first dose of a Covid-19 vaccine, only beaten by Alaska. No other state has given out as many second doses of a vaccine per capita. Clearly, there are lessons to be learnt here – for other US states and nations such as Britain too. 

It is still not clear whether all pharmacies will be allowed to be involved in distribution in the UK, although the government has hinted that they may be. It has commissioned Boots for three large sites – but lessons from West Virginia clearly suggest that all of Britain’s 11,400 pharmacies – which already give out flu jabs – should be involved in vaccine rollout if we are to swiftly reignite our stalled economy.

The heroically named Governor Justice has proven something that is obvious; businesses already have distribution networks in place to help us out of this crisis faster. Mobilising the private sector – from independent pharmacies to large chains and even supermarkets – offers a much swifter route out of the pandemic than relying on government distribution alone.

EU woes

Another area where vaccine rollout has been poor is the European Union (EU). After UK-based AstraZeneca said there would be a shortfall of about 50 million doses in its promised supplies to EU countries, Brussels threatened to impose export controls on the Pfizer/BioNtech vaccine manufactured in Belgium.

The EU then demanded that vaccine companies provide early notification before they export vaccine doses outside the bloc, raising the possibility of holding back supplies for itself. This has led to accusations of “vaccine nationalism” with rich countries hoarding doses. Political games such as these are likely to hold back any recovery, as it is dependent on the efficiency of distribution of the vaccine.

It also needs to be a truly global response. If poorer countries are not helped to beat the infection into retreat, a resurgence of outbreaks in the west is likely – and these countries will act as reservoirs of infection that may allow new, nastier variants of the virus to emerge. 

A study commissioned by the International Chamber of Commerce Research Foundation found that the global economy stands to lose as much as $9.2 trillion if governments fail to ensure developing economy access to vaccines, with as much as half of which falling on advanced economies. It states that, even if a country has access to the vaccine, it “experiences a sluggish recovery with a drag on its GDP” if its trading partners do not have such access.

The World Health Organisation’s Access to COVID-19 Tools (ACT) Accelerator, which aims to supply developing nations with the vaccine, currently has a $23.2bn funding shortfall. This funding gap will need to be filled as soon as possible if this global crisis is to truly end. Western governments need to mobilise the private sector to help bring this crisis to an end – and rich will have to help the poor. And this needs to happen fast.

A version of this article first appeared in the Daily Telegraph.

Nothing on this website should be construed as personal advice based on your circumstances. No news or research item is a personal recommendation to deal.

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