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Piyal Sarkar Department of Mechanical and Industrial Engineering Ryerson University |
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Dr. Shubhabrata Das Department of Medicine University of Toronto |
The COVID-19 pandemic caused by the severe respiratory syndrome coronavirus 2 (SARS-CoV-2) is a threat to humanity in the 21st century. More than 1.7 million people died due to this pandemic. Research findings show that SARS-CoV and SARS-CoV 2 bear similar genetic properties [4]. Thus, the previous scientific efforts to develop SARS-CoV vaccine has certainly paved the foundation to design vaccines for COVID-19. To minimize the deadly impact of COVID-19, the need of this hour is to roll out an effective vaccine to eradicate this global pandemic. With increasing cases of COVID-19 everyday, there is a huge demand for a reliable vaccine. In this article, we discuss the challenges, and the possible strategies to overcome these barriers associated to the COVID-19 vaccination to the entire population. Also, we mention some of the key strategies that can be learnt from Influenza or measles vaccine supply chains to develop an efficient supply chain. The main aim of this article is to make the ORMS coomunity aware of the COVID-19 vaccine supply chain and to discuss on some feasible solutions to develop an effective framework to distribute the COVID-19 vaccines to the whole population. The article finally concludes with some effective policies that can be practiced so that the world is ready to address such global pandemics.
Hospitals are trying to increase their efforts to administer the vaccines. Vaccines manufactured by companies such as Pfizer, and Moderna have been proved to be 90 percent effective. Dr Anna Nagurney, Professor of Operations Management at the University of Massachusetts, Amherst recently stated in an interview that “It’s going to be a massive logistics operation on a scale the world and the United States has never seen” [6]. The challenges underlie in delivering the products to the points of demand from the manufacturing houses. There will be several challenges in managing the supply chain of COVID-19 vaccines. The two major factors that make the vaccine supply chain complex can be attributed to: variability in demand, complicated storage requirements.
The demand of vaccine is huge. However currently almost all countries can not match the demand as these manufacturing companies have started vaccine production recently, and the production is not enough to vaccinate the whole population at once. Moreover, the vaccination strategy is different for different countries based on geopolitical factors as well as healthcare delivery system in these countries. Furthermore, improper utilization of vaccine which depends on these factors mentioned can lead to wastage. For a particular country, the demand for vaccines may be stable or relatively stable. But the challenge may lie for predicting the daily or weekly demand of vaccines in the individual vaccination sites. People may sometimes miss or skip appointments and moreover many hospitals may do not have the infrastructure to share the real time usage and inventory information to the relevant public authorities. Hence, whenever there is a mismatch in demand and supply, there is a chance of wastage of vaccines. Experts predict that a substantial amount of vaccine may get wasted if they are not used before, they expire [3]. Delivering a vaccine for a global will definitely require a logistical effort of extraordinary complexity. The three leading vaccine candidates, from AstraZeneca/Oxford, Pfizer/BioNTech, and Moderna, have very different requirements when it comes to shipping and storage, and even after the vaccines arrive at the vaccination points—the health clinics, hospitals, and pharmacies where vaccinations will occur—there are a host of logistical hurdles that must be overcome to ensure efficient and equitable distribution. Some vaccines need to be stored at extremely cold temperatures. The Pfizer vaccine can be stored at minus-70 degrees Celsius, plus or minus-10 degrees Celsius, for six months. It is definitely a super tough temperature requirement that few hospitals or health centers can offer. Essentially, hospitals would need to purchase an ultra-cold freezer, each of which can cost as much as US $20,000 and preserve more than 100,000 doses. Hence, Pfizzer has made a make-shift arrangement of thermal shipper which can keep vaccines at ultra-cold temperatures for as long as 10 days. However, these shippers can only be opened for vaccine retrieval only twice in a day posing inadequate delivery. Moreover, after 10 days, dry ice needs to be added to these shippers every five days. Furthermore, once vaccines are taken out of the shippers and put it into regular refrigerator, these need to be used within five days. In this context the other two vaccine candidates are much more flexible. The Moderna vaccine can be stored between 2 to 8 degrees Celsius for a month. Hence, a regular refrigerator can be used to preserve this vaccine. Moreover, it can be stored for six months at -20 degrees Celsius in a regular freezer. Besides, the Moderna vaccine can be stored at room temperature for around 12 hours. AstraZeneca’s DNA vaccine is also easier to store. It can be stored between 2-8 degrees Celsius for six months. This is really a very, very basic requirement. For this flexible storage requirements, many consider AstraZeneca’s vaccine to be the one that’s going to be widely distributed around the world. To explore about other vaccines in the market, readers are encouraged to refer to the following link: https://www.bloomberg.com/graphics/covid-vaccine-tracker-global-distribution/.
In the light of these above mentioned stringent logistical requirements, let us focus now some key strategies that can be practiced for maximizing COVID-19 vaccine usage as well as strategies to reduce wastage of the same. The supply chain ideas practiced by Amazon and Walmart can be of great value in this regard. Instead of shipping vaccines directly to different hospitals and health units, government could set up regional “fulfillment centers” in different areas with pooled inventory—much like the practice followed by Amazon’s. These fulfillment centers can restock the vaccination sites as per daily or weekly demand. By using this just-in-time distribution strategy, supply could better match demand at specific sites and reduce unnecessary wastage of vaccines. Also, if there is a fluctuation in demand within the adjoining sites under a same fulfillment center, vaccines cam be circulated immediately from one vaccine site to another vaccine site. Large retailers such as Walmart and Amazon have developed time-tested supply-chain tools that public health authorities could learn from. These time tested tools will help creating a database of the possible number of inventories in different vaccine sites and capture the demand information much effectively which can be used effective supply of COVID-19 vaccine supply. As mentioned above the other challenge for the COVID-19 vaccine management lies in the complicated storage requirements. As discussed. the storage requirement for COVID-19 vaccines are quite expensive. To overcome this challenge the approach of cross-docking may help. Cross docking is a logistics procedure where products from a supplier or manufacturing plant are distributed directly to a customer or retail chain with marginal to no handling or storage time. Walmart is a pioneer in cross-docking. The cross-docking approach will skip the storage in ware-houses. If the cross docking approach is followed, the vaccines can be directly delivered to the regional fulfillment centers from the vaccine manufacturing house or, the airports (for vaccines coming from facilities in other countries). The cross-docking approach for vaccine distribution would greatly reduce the need for strict cold storage requirement eliminating the need for freezers at intermediate warehouses. However, in order to apply this cross-docking approach for vaccine distribution there should be a very good coordination between the vaccine manufacturers, transport companies, health care providers and patients.
Practitioners can get certain guidance on managing the corona vaccine supply chain from the Influenza vaccine supply chain [2]. Here are some of the takeaway points. At risk early production to ensure timely delivery, flu vaccine manufacturers such as GlaxoSmithKline PLC and Sanofi often start manufacturing flu vaccines in January, well before the US Food and Drug Administration (FDA) determines which strains to produce. This practice is known as “at-risk early production”. Unfortunately, at an instance when such production does not match the FDA’s recommendation, the manufacturers must discard entire batches of vaccine strains. Thus, supply chain pressures cause manufacturers to balance between improving on-time delivery performance and reducing the likelihood of producing the wrong strains. This is one of the challenges for any flu vaccination.
Proactive contracting, complex business contracts administer the vaccines supply chain from manufacturers to health centers and retail pharmacies. The supply chain contracts minimize the supply and demand mismatch. Instead, incentive alignment is key to the design of medical supply chain contracts that band together the otherwise divergent interests of vaccine manufacturers and health-care providers [2]. In the case of flu vaccine contracting, early contracts that shares risks and rewards between a manufacture and a vaccine provider can create a virtuous circle of incentives—it provides incentives for vaccine providers to stick to sufficiently large orders and encourages manufacturers to produce early to ensure on time delivery. More importantly, early contracting influences the health-care providers to collect demand information and share it with manufacturers to plan production and delivery. In the U.S., flu vaccine manufacturers enter into early or “pre-book” contracts with their customers (hospitals, clinics, and retail pharmacies) nearly one year before the flu season [1]. These committed pre-book orders provide sure shot payments, which can reduce manufacturers’ financial risks of producing vaccines. Most of the pre-book contracts contain terms that incentivize manufacturers to produce early. They also provide incentives for health-care providers to order early, place large orders, and allow revisions to their orders as their demand forecast changes. Discounts are sometimes provided for early commitments. For example, in a 2012 contract offered by Novartis Vaccines and Diagnostics Inc. to the New York state, the price was $77.52 per 10 dose if the order is pre-booked before February 1, $82.37 between February 1 and March 1, $87.21 between March 1 and April 1, and $96.90 after April 1. Now, the return policy is based on the pre-book time schedule: the maximum returnable proportion of the pre-book orders ranges from 20% (for pre-book orders placed before February 1) to 15% to 10% and finally to 0 (for orders placed after April 1) [3].
While the distribution is challenging, another challenge lies in motivating the public to get vaccinated. Every country has their vaccine regulatory body to control and monitor the guidelines related to vaccines. For example, the Centre for Drug Control (CDC), USA has guidelines for priority vaccination groups, including people of 65 years and older, pregnant women, children, and those living with infants. In addition unlike the COVID vaccines, the side effects of flu vaccines are known and the benefits has been known to outweigh potential risks. Yet, many individuals are still reluctant to get vaccinated, in part due to deep-seated “anti-vax” beliefs that have grown more influential in recent years. As all stakeholders— hospitals, clinics, retail pharmacies, flu vaccine manufacturers, vaccine regulatory body, and the public—learned the above lessons over the years, incentive contracting, effective campaigning, and proactive planning can help balance the supply and demand of flu vaccines despite the threats of uncertainties. To explore more about the distribution strategies of the vaccines, we strongle encourage to refer to the study of Matrajt et al. [5].
Thus, the main challenge for any vaccine supply chain is to minimize the demand-supply mismatch. Regional fulfillment centers, and cross-docking can be major strategies for managing a vaccine supply chain. Also, designing supply chain contracts that minimizes the risk of “at-risk early production.” The COVID-19 pandemic has given a lesson to the entire world. The world has to be ready to combat such pandemics. The World Health Organization (WHO) must develop health policies and more effective internationalization strategies such that all countries can work together closely to design sustainable, cost-effective vaccine supply chains.
References:
- Chick, S. E., Mamani, H., and Simchi-Levi, D. (2008). Supply chain coordination and influenza vaccination. Operations Research, 56(6):1493–1506.
- Dai, T., Cho, S.-H., and Zhang, F. (2016). Contracting for ontime delivery in the us influenza vaccine supply chain. Manufacturing & Service Operations Management, 18(3):332–346.
- Dai, T. and S. Tang, C. (2020). What vaccine distribution planners can learn from amazon and walmart. https://qz.com/1946795/what-vaccine-distribution-plans-can-learn-from-amazon-and-walmart/. Accessed: March 7, 2021.
- Haque, A. and Pant, A. B. (2020). E orts at covid-19 vaccine development: Challenges and successes. Vaccines, 8(4):739.
- Matrajt, L., Eaton, J., Leung, T., and Brown, E. R. (2020). Vaccine optimization for covid-19: who to vaccinate first? medRxiv.
- Tong, S. (2020). Vaccine delivery across the country faces complex supply chain challenges. https://www.marketplace.org/2020/12/10/vaccine-delivery-across-the-country-faces-complexsupply-chain-challenges/. Accessed: March 7, 2021.