Middle-Income Nations Urge Risk Financing to Prepare for Next Pandemic
A new call to action emphasizes the critical need for middle-income countries to secure early access to vaccines and medical countermeasures by demanding “at-risk” financing from multilateral development banks (MDBs) – a lesson learned from the stark inequalities experienced during the COVID-19 pandemic.
The world remains vulnerable to future pandemics, with studies suggesting a 2-3% annual probability of another event on par with COVID-19. Experts estimate these outbreaks will collectively cost the global economy over $700 billion each year,underscoring the urgent need for proactive preparedness.
During the COVID-19 crisis, middle-income countries faced important hurdles in procuring vaccines. The US, through Operation Warp Speed, took a groundbreaking approach by allowing manufacturers to scale up production before regulatory approval, allowed manufacturers to scale up production while clinical trials were underway.Within a year of the pandemic’s onset,the US began vaccinating its most vulnerable populations. Estimates suggest the program would have paid for itself had it shortened the pandemic’s duration by even a single day. However, this rapid response was not universally replicated.
“No middle-income country bought COVID-19 vaccines when Operation Warp Speed launched in May 2020,” a senior official stated, highlighting the initial disadvantage. Many were unable to even place orders until the following year, largely due to the stringent requirements set by MDBs. The world Bank, for example, launched a $12 billion vaccine pledge in October 2020, but initially required both in-country regulatory authorization and either World Health Association (WHO) prequalification or approval from three “stringent regulatory authorities” (SRAs) in different regions.
This created a significant bottleneck, as no vaccines met these criteria until January 2021 – a delay that demonstrably slowed vaccine uptake in many nations. Indonesia, as an example, possessed the financial resources to invest in vaccines in October 2020, but only because the pandemic had arrived relatively early in the year.
to avoid repeating these mistakes, a fundamental shift in financing mechanisms is required. mdbs must offer at-risk financing, enabling countries to invest in promising medical countermeasures before they receive full regulatory approval. Given the potential for expensive commercial borrowing during a pandemic, MDBs are uniquely positioned to provide the necessary financial scale.
Policymakers in middle-income countries must actively demand this change. A recent report from the G20 High Level Independent Panel on Financing the Global Commons for Pandemic Preparedness and Response urges MDBs to issue clear guidance notes within the next six months outlining their crisis-response facilities. This proactive step would prevent delays during the critical early stages of an outbreak and ensure MDBs effectively address the needs of middle-income nations.
The report also emphasizes the need for independent, non-political technical expertise to guide investment decisions. Access to credible expert recommendations would help policymakers navigate domestic regulatory and legal hurdles. To facilitate this, the World Bank shoudl establish a panel of economists and health experts capable of evaluating the potential of various medical countermeasures.
At-risk financing represents a true game-changer,ensuring middle-income countries can make early investments and avoid being left behind in the scramble for vaccines and therapeutics.Data indicates that up to 75% of the delay in vaccine deliveries to low- and middle-income countries during COVID-19 was attributable to their later entry into procurement agreements.
The benefits of early access extend far beyond public health. As demonstrated during the COVID-19 pandemic, successful interventions allow businesses to reopen, children to return to school, and social welfare spending to stabilize. The sooner these positive effects materialize, the better. Middle-income countries should not be reliant on frequently enough-delayed and insufficient grant-funded vaccine donations, particularly as donor nations reassess their foreign aid commitments.
Investing in early access to lifesaving vaccines and therapeutics is a high-return proposition, even with inherent risks. It was prudent to invest in these interventions during the COVID-19 pandemic, even when the probability of success for a given vaccine was as low as 20%.Moreover, well-designed investments stimulate production capacity, benefiting all nations.
Taking these steps now will empower middle-income countries to gain faster access to the vaccines and therapeutics they need when the next pandemic arrives. However, realizing this vision requires sustained pressure on MDBs and a commitment to holding them accountable for delivering on their promises.
