In-house

A fair shot: the in-house lawyer behind global vaccine equality efforts

After being highly commended at the 2021 Excellence Awards, Jelena Madir, General Counsel at Gavi, the Vaccine Alliance explains the technical, financial and legal challenges faced when organising equal, global access to COVID vaccines

Hands with latex gloves holding a globe with a face mask
Photograph: Anna Shvets

The onset of the COVID-19 pandemic presented Gavi and my team with challenges unprecedented in scale, speed and demands.

Our role as the administrator of the COVAX Facility – the biggest multilateral initiative since the Paris Climate Agreement – meant that we had to reallocate resources to address urgent problems and be more rigorous in deciding which work is outsourced versus what is handled internally or even postponed.

More than ever before, as lawyers, we had to be adaptable, agile, flexible, comfortable with risk and business focused.

Setting up COVAX

COVAX is essentially a global risk-sharing mechanism for pooled procurement and equitable distribution of the COVID-19 vaccines. It is a project of huge scale, enormous complexity and significant legal risks.

For this, Gavi has entered into agreements with over 150 governments, guarantees with countries and commercial banks, advance purchase agreements with numerous pharmaceutical companies, procurement agreements with UNICEF and Pan American Health Organization, and a range of financing agreements with multilateral development banks.

When we started conceptualising COVAX in June 2020, we didn’t really have the requisite skillset in the legal team for this type of project.

COVAX is very different from Gavi’s ‘business as usual’ work, as it involves securing vaccines not only for the poorest countries funded by donations, but also for many self-financing countries in the upper-middle income and high-income brackets.

Many of these upper-middle and high-income countries are Gavi’s long-standing donors and are represented on Gavi’s board. However, they joined COVAX as self-financing participants and therefore we negotiated with them as with any commercial partner.

This required a significant shift in the mindset of colleagues who were used to working with a much smaller set of donor governments and quickly had to become much more alert to the risks involved in working with a much wider pool of governments.

Financial risks

Given that high-income and upper middle-income countries are participating in COVAX on a self-financing basis, one of the biggest risks involves these countries defaulting on their payments.

As a result, we have had to negotiate different insurance products to allow Gavi to pre-purchase vaccines in bulk without putting our core assets at risk if self-financing countries default.

Another significant challenge concerns the fact that, because of the pressure to urgently develop COVID-19 vaccines, pharmaceutical companies have been requesting that they be indemnified for losses incurred in connection with claims related to unexpected adverse effects.

The question therefore becomes who will pay compensation if a vaccine causes unexpected adverse effects and what will happen to the vaccine supply to countries that are unable to provide satisfactory indemnification to manufacturers.

Moreover, with many international financial institutions (including the World Bank) funding various programmes for countries’ procurement of COVID-19 vaccines, the countries’ inability to meet the manufacturers’ indemnity requirements could impact the success of these programmes.

To resolve this conundrum, through the COVAX Facility, Gavi and WHO set up a no-fault compensation programme for COVID-19 vaccines for the 92 lower-income economies eligible for support under the COVAX Facility.

As the first and only vaccine injury compensation mechanism operating on an international scale, the programme represents a significant boost for COVAX’s goal of equitable global access to vaccines. It is funded by a small levy on each dose supported by the COVAX Advance Market Commitment programme.

Global context

First and foremost, as an in-house lawyer, you need to be aware of the wider context in which you are operating, and that takes a degree of time and sensitivity.

For example, negotiating with manufacturers in the supplier market has been far from easy. While, in theory, everyone agrees that COVID-19 vaccines should not be treated as marketplace commodities and available only to those countries and people who can afford to pay the highest price, at the same time, we are seeing numerous high-income countries purchasing enough doses to vaccinate their entire population multiple times.

And, because of the price difference for COVID-19 vaccines paid by high-income and low-income countries, manufacturers have been making decisions not to prioritise their supply to COVAX, which means they are not prioritising supply to the majority of the world's population.

To influence manufacturers’ behaviour, we have tried to push for greater transparency by manufacturers in relation to their order timelines, so we know that COVAX supply is not being bumped.

In addition, we have been negotiating “slot swapping” with governments, by which high-income countries can reallocate some of their existing vaccine orders with manufacturers and give earlier slots to COVAX.

In other words, if countries are ahead of COVAX in the manufacturer’s supply queue and they do not need the doses, we are asking that they step back and let COVAX take their place.

Technology and innovation

On the purely operational side, the pandemic and associated lockdowns have highlighted the importance of technology in the legal profession.

As an organisation, Gavi had invested in cloud solutions and collaboration tools over the last few years, so the transition to remote working was very smooth.

On Gavi’s programmatic side, we have seen a spike in innovative partnerships with private sector companies. We have partnered with several telecom companies to deploy mobile health technology in remote health facilities to increase immunisation coverage, reduce dropout rates and improve vaccine stock management.

Mobile technology provided by these private sector partners has enabled health workers to register, update and search vaccine records, send targeted alerts to caregivers, and monitor vaccine stocks via mobile phones.

Similarly, we have been partnering with tech companies to use drones to make on-demand, emergency deliveries of vaccines. For instance, most recently, we partnered with Zipline, a medical drone delivery company, UPS Foundation and the government of Ghana to have some doses of COVID-19 vaccines distributed by drones in the areas that are otherwise hard to reach.

Financing

Our UK-based subsidiary, the International Finance Facility for Immunisation (IFFIm) issues vaccine bonds and thereby accelerates the delivery of vaccines by making the money from long-term government donor pledges to Gavi available immediately.

Through this funding mechanism, known as “frontloading”, IFFIm has helped Gavi immunise more people sooner and has made vaccines more widely available.

I think the impact of this innovative finance mechanism is best illustrated through an example: If a donor government pledges 100m US dollars (USD) to Gavi, paid in tranches of 10m USD annually over the course of 10 years, Gavi will be limited to spending only 10m USD each year and will have to wait 10 years before seeing the full impact of the pledged funds.

Backed by this donor pledge, IFFIm issues its vaccine bonds in international capital markets and investors buy these bonds for an attractive rate of return, which makes funds immediately available to IFFIm.

As the sole recipient of funds raised by IFFIm, Gavi then uses the proceeds of these bond issuances to purchase more vaccines to immunise more people in the world’s poorest countries. The donor government’s annual payments to IFFIm will go towards repayment to bondholders.

In terms of financial risks and challenges, as IFFIm is active in capital markets, it must carefully manage its credit rating and the risks associated with financial transactions.

Naturally, we use swaps to protect both IFFIm’s assets (donor pledges made in different currencies) and its outstanding debt (IFFIm bonds in different currencies at fixed interest rates) from movements in foreign exchange and interest rates.

Maximise your Law Society membership with My LS