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Vaccines Make the case for International Free Trade

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Vaccines Make the case for International Free Trade

Countries are planning to ban exports of vaccines to supply their own citizens first. That trade policy could have several unintended consequences.

With the pandemic already propagated worldwide and several countries experiencing a new rise in infections, governments are starting to focus on real solutions beyond lockdowns and masks. The most prominent of these solutions appears to be the development of a vaccine to treat the virus. However, such a cure brings with it what is called “vaccine nationalism,” which might end backfiring governments’ efforts to control the pandemic.

Vaccine nationalism refers to the action that some countries that are already producing the firsts trials of the potential vaccine could take if they decide to provide it to their own citizens first and prevent other nations from buying the antibody—the WHO has already requested countries to avoid this measure. The organization considers that no one will be safe if there are still outbreaks in other countries. Therefore, vaccination of a sole community without taking into account other countries will be a short-run solution.

Setting aside the public health implications of vaccine nationalism, the implementation of this strategy might have several trade policy consequences, similar to those affecting any other good subject to an export ban. Politicians could have the best intentions of trying to take care of people in their country with this policy. However, they are just considering the immediate effects of closing their borders to the exportation of vaccines and neglecting to consider the potential long-run impact on the whole community.

The total prohibition against exporting a specific good has the direct effect of reducing the final price of the product itself. In economic terms, holding the supply of the product constant, if the demand goes down due to the impossibility of exporting, the price will go down.

No one could be against lowering the price of a vaccine, because that way, more people will be able to buy it. However, this political intervention of the price does not come at no cost. Prices play a crucial role in incentivizing companies to produce whatever they consider profitable. They will be more willing to invest and hurry up the vaccine development if they know that the investments and efforts they put on it will be paid off in the future. If the price of the vaccine goes down because of the export ban, they might decide to reduce those investments and efforts. A 7.5 billion people market is much more incentive than a 300 million market.

There is also an issue with the efficiency of the economy as a whole when the government decides to intervene in foreign trade. As noted earlier, the prohibition against exporting a specific good decreases the incentive to produce that good. Resources and people will be diverted to the production of other goods and services that are more valuable, given the price reduction of the product that has its exports prohibited. The economy probably had a comparative advantage in manufacturing that product, but that will not be exploited fully anymore. Less efficient industries will increase in size at the expense of the most efficient ones. Therefore, the net effect is a change in the structure of the economy and a reduction of its efficiency.

Likewise, this distortion of the economy will probably happen with vaccine nationalism. A country might be relatively more efficient than another in producing a vaccine, maybe manufacturing it cheaply or with higher quality. However, resources will not flow quickly to its manufacturing if its price is held down artificially. Resources and people will be employed in the production of less valuable products, losing the opportunity to produce more efficiently a vaccine.

Restricting exports also presents an indirect consequence of decreasing a country’s imports through the reduction of its purchasing power. Exports pay for imports, and vice versa. The more a country exports, the more it should import. Conversely, reducing exports undercuts imports. Without exports, a nation cannot import. As any other family must sell some goods or services in order to get the purchasing power to buy something else, a country must export to be able to import. There resides the real gain of foreign trade. Through imports, consumers can get from abroad products at lower prices than domestically or goods that they are not capable of finding at home.

If vaccines are banned from being exported, that will mean that the country will see its imports decrease. No vaccines exported will reduce the possibility of importing, say, more ventilators, or masks. Given the novelty of this virus, countries are almost walking in the darkness. There is no certainty of what works and what does not. What happens if the vaccine ends up not working as expected? The government will see itself in a crossroads, with fewer funds to import from abroad products that it might require with urgency.

Finally, vaccine nationalism could have geopolitical consequences as well. The strategy could increase future retaliation from other countries. If the country that decides to prohibit exports of its vaccine then happens to have problems with its implementation, it will not be able to go to another country to ask for help. Again, there is no absolute solution for a global pandemic. Isolating from the rest of the world is undoubtedly the worst idea. 7.5 billion people looking for solutions is better than just 300 million people.

Banning the exportation of vaccines will bring many unintended consequences and end up being a bad strategy in the long run. Given the public attention that a potential cure for the virus possesses, hopefully, governments will understand that international free trade is the solution.

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Mr. Forzani is an MA student in economics at George Mason University.

vaccine

FLU VACCINES RESULT FROM GLOBAL COLLABORATION: A COVID-19 VACCINE WILL TOO

A COVID-19 vaccine will follow flu footsteps

The global coronavirus outbreak has upended the lives of billions around the world. As anxiety levels remain high and the economy is in free-fall, it remains unclear how we will return to “normal life” in the short term.

In the long term, vaccine development is our best bet for a future free of COVID-19. Several companies around the world have already launched vaccine discovery with unprecedented speed. Some were able to begin small clinical trials as soon as mid-March, though expectations should be calibrated as the clinical trials process to test safety and immune response is a lengthy one.

The race to a coronavirus vaccine is emblematic of the balance between competition and collaboration, both routine and natural for the global health community. After all, experts around the world collaborate each year to develop, produce and deliver the influenza vaccine, also known as the flu vaccine, to billions of people. They have been working together this way for decades.

The first flu vaccine

According to an article published in the Journal of Preventive Medicine and Hygiene, the earliest confirmed flu pandemic on record first appeared in 1580 in Asia and Russia. It spread from there to Europe and northwest Africa.

Yet it wasn’t until the 1940s when the University of Michigan researchers developed the first inactivated flu vaccine using fertilized chicken eggs, still the primary method for making commercial vaccines today.

Phases in Drug Development TradeVistas

Tracking global strains for drug development

The flu virus changes annually, making it unpredictable. Developing an annual vaccine is the product of a globally-educated guess.

Members of the World Health Organization (WHO) established a surveillance system in 1952 to monitor the emergence of different strains of influenza that have the potential to become a pandemic. The Global Influenza Surveillance and Response System (GISRS) comprises an international network of national laboratories in more than 100 countries. These labs conduct surveillance and share information (including representative viruses) with five WHO centers located in the United States, UK, Australia, Japan and China.

Twice a year, in preparation for the flu season in the northern and southern hemispheres, the GISRS centers convene with representatives from public health bodies, leading research institutions and private sector experts to evaluate and recommend strains to include in the seasonal vaccine. Ultimately, each country decides for itself which viruses will be included in the flu vaccine they license that year.

A network for pandemic preparedness

The WHO also maintains a Pandemic Influenza Preparedness Framework, known as PIP, which includes member governments, vaccine manufacturers, and other stakeholders.

The PIP Framework governs the sharing of virus strains and PIP-related biological materials across organizations and borders, which is critical for determining which virus strains manufacturers should target in the seasonal vaccine. The Framework also coordinates access by the world’s most vulnerable populations to vaccines and treatments and manages agreements on intellectual property and licensing of the vaccine.

PIP’s industry partners receive access to the virus strains they need to make the vaccine. In exchange, they agree to provide benefits to the WHO and to developing countries in the form of vaccine donations, royalty-free licensing to manufacturers in low-income markets to make the vaccine, or a guarantee of a specified quantity of vaccine supply at lower prices, among other arrangements.

Flu Surveillance System

Vaccine production and distribution

Once the most dangerous virus strains for the upcoming seasonal flu have been selected, manufacturers turn to producing the vaccine. According to Sanofi Pasteur, the top global producer of the seasonal influenza shot, it takes between 6 and 36 months to manufacture, package and deliver high-quality vaccines to those who need them.

The viruses are first grown in a lab setting, after which the antigens are extracted from the viruses and purified to eliminate any raw material traces. Next, the virus goes through an in-activation process that retains the properties that will elicit an immune response in the body. Next, the active substances are combined into a single chemical component. These chemical components can be combined with others to form a single shot, like the MMR vaccine that includes compounds inoculating against measles, mumps and rubella. The vaccines are then filled into a vial or syringe, packaged and shipped all around the world.

Vaccine makers have to produce several different vaccines to meet the strain selection of each country. For example: CSL, another leading influenza vaccine maker, produced seven different influenza vaccines for the last flu season.

Moon shot against any flu virus

The laborious process of monitoring, surveilling, selecting, and then inoculating against specific flu virus strains, still leaves the possibility that an unexpected strain will emerge and result in a pandemic. Some seasonal flu vaccines are not an effective match against the strain that emerges. These lingering uncertainties have motivated the public health community to work towards making a universal flu vaccine – one that could provide long-lasting protection for multiple strains of influenza in one shot.

The potential for such a shot has captured the imagination of world leaders and influencers, including Bill Gates who committed millions in grants to this research. President Trump signed an Executive Order on September 19, 2019 that directs the U.S. Department of Health and Human Services to promote new vaccine manufacturing technologies and advance the development of vaccines that provide longer-lasting coverage against a broad range of flu viruses.

Researchers have seen some success. One example: early trials focused on proteins in the flu virus that remain stable and activate an immune response to stop and destroy the infection. While we are still years away from having access to such a vaccine, there is some momentum building behind this approach.

The here and now vaccine

We don’t know how soon we could have a vaccine against COVID-19. But we do know that COVID-19 vaccine development is benefiting from years of global collaboration on seasonal flu vaccine pandemic preparedness. This includes sharing biological resources, disseminating data and research, and coordinating manufacturing rights and distribution.

Is it a perfect system? No – but doctors, scientists, labs, drug companies and national health institutions have experience in what it takes to bring the world’s knowledge to bear in a well-coordinated framework, which could speed up the discovery of a COVID-19 vaccine.

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Ayelet Haran is a contributor to TradeVistas. She is a government affairs and policy executive in the life sciences industry. She holds a Master’s of Public Administration degree in International Economic Policy from Columbia University.

This article originally appeared on TradeVistas.org. Republished with permission.