Buy now, save later: financing vaccine candidates

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Hello and welcome to The Intelligence on Economist Radio. I'm your host, Jason Palmer. Every weekday, we provide a fresh perspective on the events shaping your world. In Scotland, some voters reckon that the government in London has mishandled the pandemic even worse than it's mishandled Brexit. Now, the fraction wanting independence from the rest of the United Kingdom is at an all-time high. That foretells a messy battle. And there are few tricky tasks that can't be made easier by watching a few YouTube videos. Like how to hang on to the axle of a truck undetected, or how to get across the Straits of Gibraltar on a jet ski. We take a look at the vloggers of illegal migration. First up, though— right now, more than 170 vaccines for COVID-19 are being developed across the world. Of those, 6 are in final, large-scale clinical trials. While the race is on, policymakers are wrestling with 2 questions: how much to spend on vaccines that may or may not win, and and how to ensure the winner or winners are distributed fairly.

You cannot be in a world where some people are saved and others not.

Ngozi Okonjo-Iweala is the chair of the Global Alliance for Vaccines and Immunization, or GAVI. It's an alliance that funds vaccines for poor countries.

The steps that need to be taken to ensure vaccines are distributed fairly require collaboration and solidarity of the world.

Gavi has set up what's called COVAX, a purchasing pool for several late-stage vaccine candidates.

There's a facility. It has 92 developing countries in it, low- and middle-income countries, and it also has 77 rich countries that have expressed interest. By bringing them all together, we will have an affordable price of vaccines for all. We have risk sharing in the facility for all, and this will ensure that so many more people in the world who would not have had access will have access. So it will be equitable and it will be fair.

But equitable, fair division is just one problem. First, there needs to be enough of a given vaccine to divide up.

Governments around the world have invested so far at least $10 billion on COVID-19 vaccines. They have made forward purchases of about 4 billion doses. So pharma companies have essentially already started making some vaccines even before they have been proven to work.

Slava Jankova is our healthcare correspondent.

The contracts that governments have cut with pharma companies are for about 4 billion doses of various vaccines. Now, that may look like a lot. One might think it's enough to cover most of the world, but it's actually nowhere near enough.

Why not?

Well, to begin with, some of these vaccines may turn out to be ineffective when the clinical trials are all done. A typical vaccine at this stage has about a 20% chance of failure. And some of these vaccines also use novel technologies that haven't been used in any other approved vaccine before, so the risk of failure could be even higher. But the biggest issue is that manufacturing capacity globally is limited, and there would be shortages of vials and various ingredients that are used in vaccines once manufacturing begins on a large scale. So some experts think that the feasible amount of a COVID-19 vaccine that we'll have by the end of next year is just about 2 billion doses. And some vaccines actually are likely to require a course of 2 doses to work. So we're talking about nowhere near enough to cover even a minority of the world's population.

So how much would be enough? How many doses should countries be buying up at this stage?

Researchers think that given the current mix of vaccine candidates, there is a 90% chance that there will be one which actually works. Now, when a vaccine is proven to be effective, billions of doses will, of course, need to be distributed very quickly. But it's impossible to know in advance which candidate will succeed. And setting up manufacturing lines takes time. A new vaccine factory can take anywhere up to 3 years to get up and running. So governments should actually help pharmaceutical companies to produce vast quantities of a range of different vaccines. And ideally, economists think vaccines numbering in the tens of billions of doses long before regulatory approval is granted.

But if everybody makes all of the bets at the same time, there will be some losers, right? A lot will come to be wasted that way.

Yes, of course. Absolutely. And that's actually the hard part for politicians because this idea of deliberately overproducing something does not sit easily with politicians or voters indeed. But you have to think about the economic costs. Even boosting vaccine funding 10 times to about $100 billion or more, which is what many economists are advocating for pales in comparison with the $7 trillion which governments across the world have spent or pledged to preserve income and jobs that are being lost as a result of the pandemic. So in other words, if we just think of economic output alone, it would make sense for the world to spend as much as $200 billion on bringing forward an effective COVID-19 vaccine by just one week.

So the way things are headed, it seems inevitable that there will be a shortage of supplies. How will they be distributed once a good candidate is found? I mean, we saw when the pandemic began, this rush for personal protective equipment was, was not a pretty scene.

You're right, that experience was quite telling. By the end of April, there were probably around 80 countries that had banned or restricted exports due to the pandemic, especially on things like medical masks, thermometers, disinfectants. And even if we look at past pandemics, during the swine flu pandemic in 2009, rich countries basically cornered the global supplies of the vaccine, and they offered some of it to developing countries only after they had more than enough to cover their own citizens. And by then, the pandemic was over. So what we're really seeing now is what many commentators are calling vaccine nationalism. Rich countries are reserving most of the potential global supply of COVID-19 vaccines. And politicians in countries where these vaccines can be made, that have the manufacturing capacities, are very likely to put their own people first.

So what's being done to try to mitigate that global scramble?

There are several mechanisms that have been put together for countries to join forces and agree to a more equitable distribution that also may end the pandemic much faster. So the World Health Organization has grown up guidelines of how that might look like. And according to these guidelines, the first supplies of COVID-19 vaccines should go to healthcare workers and social care workers first. Then the next batch should go to the 15 or 20% of people in each country who are most vulnerable, most likely to die from COVID-19 if they're infected. And then places that are at the highest risk of outbreaks will be prioritized. Now, whether these guidelines will be followed is a different story. It's unclear how many countries will sign up. Many have expressed interest, but nothing has been signed so far.

So all told, what's your prognosis at this stage? Do you think the world will produce enough quantities of candidate vaccines and that they will be distributed in a way that's even a little bit fair?

It is likely that there won't be enough vaccine to go around in the first year. Whether it will be distributed equitably depends on where the winning vaccine is made. If the vaccine is part of the portfolio which is controlled by the global coalition backed up by the World Health Organization, then we will see supplies being distributed more equitably. On the other hand, if the vaccine turns out to be made in a country that doesn't want to share its supplies, before covering its own citizens, and it's a big country, we won't expect most of the world to be covered equitably for a time. Now, the solution perhaps is just to spend a lot more money on the current candidate vaccines, the ones that are already in late-stage clinical trials, to set up manufacturing, to start making them in large quantities. That will ensure that there is more to go around, whichever vaccine turns out to be successful.

Sloveja, thanks very much for joining us.

Thank you, Jason.

For a lot more analysis like this, subscribe to The Economist. To find the best introductory offer wherever you are, just go to economist.com/intelligenceoffer. COVID-19 is making the four nations of the United Kingdom look rather less united The virus is still circulating in Scotland.

If we allow it to, it is capable of and will spread rapidly.

In Scotland, Nicola Sturgeon, who leads the Scottish National Party and the country's semi-autonomous parliament, has impressed voters with her calm management and refusal to understate the problem.

We have been recommending the use of face coverings for some time now, and it is already mandatory on public transport.

But while many Scots were not impressed with British Prime Minister Boris Johnson's handling of the crisis, he insisted the central government had supported Scotland.

What we've seen throughout this crisis is the importance of the strength of the union in dealing with certain crucial, crucial things. Supporting people through the furlough scheme, the work of, as I say, of the army and the armed services in testing, in moving people around.

Many Scots, though, are unconvinced, and that has many talking again about seceding from the United Kingdom, about a referendum like the one in 2014 that failed only narrowly.

For the first time since the question has been asked, there is a clear trend amongst Scottish people in support of independence.

Matthew Holthouse is our British politics correspondent.

One factor is Brexit, which has pushed Remainers in Scotland towards independence because the Scottish National Party, which wants independence, opposed Brexit. The other factor seems to be coronavirus, which seems to have damaged the reputation of the British government as a competent manager and has enhanced the reputation of the Scottish government as a potential state in waiting.

And so why the disparity then in the way Scotland has handled the coronavirus versus the rest of Britain?

This has been very marked in that England has had a bad pandemic by international standards. If you look at the rate of excess deaths, which is one of the most reliable ways of measuring the impact in a country, Scotland has been slightly less bad, but it's still quite high up there. Similar mistakes have been made in England as in Scotland in terms of misjudging the pandemic early on, allowing the disease to spread in care homes. And yet Scots seem to think that the Scottish government has done a much, much better job of handling it than the British government has, and particularly rate Nicola Sturgeon's management. Nicola Sturgeon has done daily press conferences with some very clear messaging, whereas the picture south of the border has often seemed a much more erratic, much, much less clear strategic direction. The other issue which troubles unionists is that this support for independence comes despite the fact that the UK-wide powers have been used to support Scotland— support from the Treasury for the furlough scheme, things like testing capacity or cooperation between scientists. Unionists say this is a time when the union is working as it never has done before. It has been visibly active in supporting Scotland, and yet Scottish voters don't seem to be rewarding that in any way.

So is, is the increased appetite for a referendum going to actually make a referendum more likely, do you think?

So the important date to look at is May next year when there are elections to the Scottish Parliament, the devolved parliament. Now, at the moment, based on these pollings, the Scottish National Party is set to win an outright majority based on what we see at the moment, which would give Nicola Sturgeon a mandate, she would say, to ask for another referendum, a second referendum on Scottish independence. They had the last one in 2014. However, the British government is not obliged to grant that request. Constitutionally, this is a question for the UK government, and Boris Johnson has said he will do so under no circumstances.

Does the Scottish National Party have an option if the government in Westminster simply says no?

If they say no, then the Scottish government is put in a very difficult position, and lots of supporters of independence worry that they're heading for a long stalemate. Now, Nicola Sturgeon's plan is what she calls a Plan A. Is for a legal, recognised referendum, one which the British government has agreed to go down. That is the only way, she says, to get international recognition for any positive result for her and to actually open negotiations. Her members are getting really impatient, and so they want her to find a plan B in case Johnson continues to say no. So they're talking about getting a Scottish court to recognise a standalone referendum, which doesn't need British permission. They're talking about maybe getting the EU to recognise a referendum too. Nicola Sturgeon's really unlikely to go down that route because she thinks it just leads to a dead end. And so you are looking potentially at quite a long stalemate between these two camps.

And for his part, then, why won't Boris Johnson give any way here?

Well, Boris Johnson has absolutely loads of reasons to say no. The Scottish Conservative Party is pretty spooked. They got rid of their leader the other week and replaced him with the new leader, Douglas Ross, which is a response really to how the polls are going. However, Boris Johnson really can dig in. One reason is because if he allows a referendum and the UK breaks up, that's pretty fatal for him. That's his career suicide. You cannot be the prime minister who lost Scotland. Because of those reasons, there are no pressures inside the Conservative Party from MPs, from ministers, from anybody in the cabinet to tell him to give way. So he won't be forced from inside the party. Plus, there's the fact that actually this stalemate has been quite profitable for the Scottish Conservative Party. They like the fact that you can start to see divisions emerge in the Scottish National Party. And their revival in Scotland— they are now the second party in Scotland— has been due largely to the fact that they have taken this issue of the constitution, and they have said to Unionist voters, We don't want a second referendum. You said no, we're going to honor your decision to say no. And so they really, as you have this polarization in politics along the constitutional question, they've taken the no camp and really extracted a lot of reward from it. The incentives to make this issue go away against allowing it to run and run are not that great.

And as it runs and runs, what does this growing political debate mean for the people of Scotland?

You are heading for a very long campaign of attrition. The nationalist side saying, look, the British government is saying no to us, they are refusing 'You're refusing to respect Scottish democracy, therefore join our cause.' The Unionist side saying, 'Look, this thing is becoming a drag on our politics. The SNP really needs to take no for an answer.' The downside of all this polarisation, say academics who look at public policy in Scotland, is it really discourages thinking about big reforms, because reform is unpopular. And if you're in a continual referendum campaign, it discourages you from looking at things like how does your local government system work? How does your social care system work? Thinking really hard about reforms to the health service. And so you see the risk of this becoming slightly paralysing for Scottish public administration. The other issue is that it erodes the support for the devolution settlement created in 1998, which said that Scotland would have its own parliament and a degree of powers within the UK. The SNP clearly don't support that in the long run. They want to build from devolution towards independence, and they say that devolution is a poor substitute for independence. On the other hand, there is a growing number of people in the Conservative Party who don't think devolution has worked as a strategy to stop independence. They think that actually granting more powers to Edinburgh has merely fed this tiger. And so they want to really reassert the power of the central government, really show the importance of Whitehall and the Treasury money supporting Scotland. And so that middle ground But you can see the consensus around that and the support it needs at risk of ebbing away.

Matthew, thanks very much for joining us.

Thank you.

Breathtaking waterfalls.

Wow.

Wow.

Rainforest adventures. Boating between Brazilian islands. Zouer Bonan, or Zizou, has been documenting his journey from North Africa to America's border with Mexico, cutting through rainforests, crossing rivers on wooden canoes, and hitching rides in the back of pickup trucks. This travel vlog doesn't seem so different from anything else you might find on YouTube.

Nice to meet you.

Nice to meet you too.

My name is Zouer.

Except he's offering advice for would-be migrants to make the same journey without documentation.

Caesar is this remarkable traveler who's gone from Morocco to Brazil quite legally and then made his way through 10 countries of Central America illegally.

Nick Pelham is our Middle East correspondent.

He's constantly getting into the most incredible mishaps. He arrives at the Argentinian border is rebuffed. He chats up women, flirts with them on beaches and Halloween parties.

I want a big kiss from both.

A big kiss?

Yeah.

For me? Oh, for you.

And he records all of this on his mobile phone and uploads the video about once a week. And he's really attracting a huge following inside Morocco. Some of his vlogs get up to 1 million viewers or more. He is just one of many vloggers who are showing Moroccans and North Africans how to break into the West without a passport and to have a pretty good time doing it en route.

And so all of these vloggers then are essentially just putting up travelogues of their illegal adventures?

In part, yes, but there's an awful lot of useful tips about how to make that journey, how to get into Europe and America on a pretty low budget. And many of them offer advice. They have livestream advice sessions where they're providing the coordinates of, for instance, how to get from across the Turkish-Greek border. Istanbul, how can they clamber on onto the axle of a juggernaut heading from one country to the next? How can they stowaway aboard a boat, and how can they jet ski across the Straits of Gibraltar? Which smugglers to use, which lawyers to contact on arrival, which charities will provide shelter. There just seems to be a whole new range of ways in which people are looking to get into the West. These vloggers are really providing the answer.

And so is all of this because the more traditional route of people smuggling is getting harder?

It's not so much that. I think that many sort of North Africans feel that they're being scammed by these smugglers. Many of the traffickers themselves are involved in drugs. The reports of overcrowded boats capsizing in the Mediterranean, I think, have put an awful lot of would-be migrants off. And there's a new clientele, I think, which vloggers are attracting. Many of them are university graduates. They're breaking that stigma that was attached to many illegal migrants.

And as for the vloggers, what's in it for them except the adulation of people who see that sort of projected adventure?

Many of them are picking up quite a fan club en route. They attract hundreds of thousands of subscribers. They call their followers their family. There's quite a lot of fame and sort of heroism that is attached to the trip, but then they're also quite savvy. There's a lot of advertising on there, and they're making money out of that. One blogger that I spoke to, Murad Mzuri, said that he was earning $2,000 a month from advertising.

But I mean, fundamentally, this is highly viewed content about illegal activity. I mean, what are the authorities doing about this?

I think that's kind of one reason why it's attracting quite the audience that it is. Immigration authorities have got quite good at deciphering modern standard Arabic, even if they don't speak it. There are lots of internet translation tools that they can use. But Darija, the dialect of of North Africa, so far seems to be beyond them. When, for instance, they're giving directions about how to cross from one country to another, they're transliterating Darija into a mixture of Arabic letters and Latin letters and even numbers. It all looks a bit like a code, and so far that seems to be pretty hard for immigration authorities to crack. So they're below the radar, and they're really finding that they can attract an audience without so far falling foul of the law.

Nicholas, thanks very much for your time.

Jason, it's a pleasure to be with you. Thank you. Like always, peace and love.

Take care, guys.

That's all for this episode of The Intelligence. If you like us, give us a rating on Apple Podcasts and see you back here tomorrow.