Australia’s tentative steps in global cooperative effort on COVID-19 pandemic

September 28, 2020: Australia’s Prime Minister Scott Morrison re-announced Australia’s A$80 million contribution to the COVAX Advance Market Commitment (AMC) to the UN General Assembly on September 26.

The COVAX Advanced Market Commitment promoted by the WHO aims to provide vaccines to 92 lower-middle and low income countries who cannot afford advanced purchase agreements with drug manufacturers. So far, the AMC has raised about US$700 million of the initial seed capital target of US$2 billion that is needed by the end of 2020.

While such a commitment is welcome, Australia’s commitment is very low. COVAX pricing indicates that one dose will cost a minimum of US10.66, and since an effective vaccination will require two doses, that means the cost per person vaccinated will be US$21.32, or A$29.60. Australia’s A$80 million commitment for neighbouring lower-income countries would buy just 2.7 million vaccinations. This is meant to provide real assistance to at least 10 Pacific island states and five developing ASEAN states. There are 10 million people in the Pacific Island states, and 547 million people in the eligible ASEAN states. A vaccination rate of just 10 per cent would require 111 million doses, costing well over US$1 billion.

On September 23, Health Minister Greg Hunt separately announced an initial A$123.2 million commitment to the different COVAX Facility fund.

The COVAX Facility allows self-financing countries as well as poorer countries to commit to purchasing vaccines at prices negotiated with drug companies for between 10 per cent and 50 per cent of their populations, when vaccines are expected to become available in 2021. The amount they pay into the Facility will reflect the number of doses they have requested. For these countries the Facility serves as insurance against the possible failure of their own bilateral deals with drug companies. The pooling of resources through the Facility increases the world’s chances of delivering COVID-19 vaccines as quickly as possible, and in the quantities needed.

The initial aim of COVAX is to have 2 billion doses available by the end of 2021, which should be enough to protect high risk and vulnerable people, as well as frontline healthcare workers – one billion people.

Eighty higher-income countries and economies have confirmed their interest in participating the COVAX Facility. Countries had until 18 September to commit to legally binding agreements to participate and make their upfront payments into the Facility by 9 October, so Australia’s commitment is relatively small and late.

In terms of the COVAX Facility, Australia’s initial payment of A$123.2 would vaccinate just 4.2 million Australians.

However, agreements signed between the Australian government, CSL, Queensland University and AstraZeneca in early September 2020 provide for 81 million doses to be manufactured in Australia and supplied from early to mid-2021. That would be enough to vaccinate 40.5 million people and would clearly allow Australia to provide doses to other countries if both these vaccines prove safe and effective. The price for these vaccines has not been disclosed.

The entire COVAX arrangement is clearly based on prices negotiated with pharmaceutical companies who will hold a 20 year patent on the vaccines, rather than using compulsory licencing for manufacture of the vaccines, which is allowed for under World Trade Organisation rules. Reporting makes it clear that most vaccines are actually developed in universities with public funding.