Supply chains create global benefits from improved vaccine accessibility

The COVID-19 pandemic highlighted the critical need for equitable vaccine distribution to control pandemics and support economic recovery. Unequal vaccine access weakens pandemic control efforts, with many low-income countries having coverage around 10%. This study investigates how different global vaccine allocation strategies affect national benefits, aiming to design mechanisms that incentivize equitable vaccine distribution. The research uses a framework that links epidemiological and socioeconomic models to quantify the potential gains of various global vaccine allocation strategies from a socioeconomic perspective. The highly interconnected nature of global supply chains means that vaccination decisions in one country can significantly impact the economic recovery of others, creating externalities that make market-oriented distribution socially suboptimal. Understanding these externalities is crucial for maximizing the socioeconomic benefits of global vaccine rollout.

The paper references several studies on the socioeconomic impacts of COVID-19, including the effects of control measures on global supply chains, early transmission dynamics in Wuhan, the rapid dissemination of SARS-CoV-2, and the challenges in ensuring global access to COVID-19 vaccines. It also cites research on the economic impacts of vaccination decisions and the need for incentivizing wealthy nations to participate in global vaccine access initiatives. Existing literature highlights the negative economic consequences of lockdowns and the positive externalities of vaccination, setting the stage for the current study's quantitative analysis of various vaccine distribution scenarios.

The study quantifies the socioeconomic benefits of idealized COVID-19 vaccine distribution scenarios using linked epidemiological and socioeconomic modeling frameworks. Three main outcomes are evaluated: (i) health gains (value of lives saved, using the Value of Statistical Life - VSL), (ii) lockdown-easing effects (lockdown reduction multiplied by sectoral value-added), and (iii) supply-chain rebuilding benefits (using a global trade model based on the ARIO model). Vaccine distribution scenarios are designed using a tiered structure, considering country (vaccine-producing, high-income non-producing, and low-income non-producing), age group (oldest first, youngest first, uniform), and industrial sector (high-risk, critical) priorities. The epidemiological model is a realistic age-structured multi-compartmental SEIR model, parameterized with country-specific data on population pyramids, social mixing, and vaccine efficacy. The VSL is estimated using data from a global health risk pricing study, employing an income elasticity adjustment and a uniform global average VSL. Lockdown strictness is measured using Google Community Mobility Reports, and a recursive dynamic disaster impact assessment model (an extension of the ARIO model) is used to estimate lockdown-easing and supply-chain rebuilding benefits. The model accounts for labor supply constraints, constraints on productive capital, and supply constraints. A proportional rationing scheme is employed for product allocation, and firm orders are based on target inventory levels. The model simulates the propagation of exogenous shocks through the global supply chain network based on the GTAP database. Uncertainty analyses were conducted for vaccine production capability and model parameters.

The study's key findings show that an equitable global vaccine distribution significantly increases global economic benefits. Compared to a scenario where vaccine-producing countries prioritize their own populations, an equitable distribution increases total global benefits by $8.65 trillion to $9.05 trillion annually. This increase stems from higher health gains (1.8%–7.0% increase), lockdown-easing effects (1.1% increase), and supply-chain rebuilding benefits (67.4%–74.7% increase). The Balanced Age-informed Distribution Strategy yields the highest overall benefits. In lower-income countries, the health gains from equitable distribution can reach 13.3% of annual GDP, significantly higher than under the Producer-first Distribution Strategy. Domestically, prioritizing vaccination for the elderly and high-risk workers maximizes economic benefits through reduced lockdown needs and supply-chain recovery. This prioritization creates significant spillover effects across production sectors. The study also reveals that the current vaccine distribution model resembles the Producer-first Distribution Strategy, driven by the lack of a benefit-sharing mechanism. The analysis demonstrates that a multilateral benefit-sharing mechanism could create a 'win-win' situation where all countries benefit from equitable distribution. High-income countries could donate a portion of their increased benefits to incentivize vaccine-producing countries to adopt the Balanced Distribution Strategy. The findings highlight the significant positive externalities of vaccination across global supply chains and the importance of considering these externalities when designing vaccine allocation strategies.

The findings address the research question by quantifying the significant economic benefits of equitable vaccine distribution, demonstrating that it is not just ethically desirable but also economically advantageous. The results emphasize the importance of international collaboration and benefit-sharing mechanisms to overcome the current inequitable distribution. The analysis moves beyond simply advocating for equitable distribution and provides a concrete mechanism to achieve this outcome through multilateral cooperation. The study demonstrates that considering both direct health benefits and indirect economic benefits (lockdown-easing and supply-chain recovery) is crucial for informing decision-making. The framework developed can be applied to analyze vaccine distribution strategies in different contexts and infectious disease scenarios beyond COVID-19. The study also highlights the synergy between equity and efficiency in achieving sustainable development goals, challenging the common assumption of a trade-off between the two.

This research demonstrates the substantial economic benefits of equitable global vaccine distribution, driven by positive externalities in supply chains. A multilateral benefit-sharing mechanism is proposed to incentivize cooperation among countries. Future research could explore the dynamic interactions between epidemiological and economic models, incorporate technological changes and behavioral adjustments, and analyze the impact of vaccine market competition on allocation strategies. The study's framework can inform policy decisions regarding equitable resource allocation in future pandemics and contribute to the achievement of sustainable development goals.

The study has limitations including the lack of a feedback mechanism between epidemiological and economic models, assumptions about constant technological capabilities and consumer behaviors, the focus on short-term scenarios, and limited representation of vaccine market competition. The model's reliance on the GTAP database and its aggregated sectoral representation may also limit the precision of findings. The study acknowledges these limitations as areas for future research.