Why manufacturing a key vaccine in South Africa is so important

David Richard Walwyn, University of Pretoria

South Africa has been granted a licence to manufacture one of the world’s most important vaccines. It’s the first time the country will be able to do so since the mid 1990s, and is news that will result in many positive spin-offs for the country.

The hexavalent vaccine Hexaxim is used to vaccinate children against six life-threatening infectious diseases: diphtheria, tetanus, acellular pertussis (whooping cough), inactivated polio, Haemophilus influenza type b and hepatitis B. It is a vital component of South Africa’s expanded programme on immunisation and more than 3 million children are vaccinated every year. There are 14 vaccines administered between the ages of 0 and 2 years; four of these are Hexaxim. As a result of this programme, the number of children under the age of five that have died has significantly dropped. In 2013, it sat at 47 409 children, down from 89 418 in 2005.

In the late 1980s and early 1990s the country produced some of its own vaccines. But this capacity disappeared in the mid-1990s; the State Vaccine Institute and the South African Vaccine Producer, both run by the national health department, closed down because they weren’t operating at the required levels of manufacturing practice.

The department considered exiting vaccine manufacture entirely. But it was persuaded to enter into a partnership where a private company was mandated to upgrade the old State Vaccine Institute in exchange for a monopoly on vaccine supply. After years of negotiation and capacity building this partnership with – the Biovac Institute – has finally been given the go ahead. It will manage vaccine research and development, manufacturing and supply.

Local vaccine manufacture has several foreseeable benefits. These include decreased cost and increased availability and the capability to provide vaccines to the region. The local manufacturing process can also spur economic growth.

The cost factor

Manufacturing vaccines locally establishes a strategic capability in a sector which is prone to shortages and price fluctuations. These realities often have severe consequences for public health. For example earlier this year, newborns in South Africa could not be vaccinated against tuberculosis due to a shortage of the Bacillus Calmette-Guérin (BCG) vaccine.

Vaccines are supplied into a global market from a relatively small number of sites. Manufacturing problems, mostly linked to issues of quality and safety, do occur and not infrequently affect the supply of vaccines to lower value markets.

In South Africa the vaccines that form part of the extended programme on immunisation vaccines are a big budget item for the National and Provincial Departments of Health.

When the Biovac Institute was established the annual cost of vaccines was only R188 million. This cost has since grown to R1.75 billion. Hexaxim accounts for 37% of the expenditure. About 3 million doses of the vaccine are procured each year. These are imported directly by the Biovac Institute in single vials and then distributed to the clinics and hospitals.

Being able to manufacture these doses locally using imported antigens will enable Biovac to achieve, at least in part, one of its core objectives: to “ensure a domestic capacity in vaccine production that will enable the South African health authorities to respond to disease outbreak emergencies”. Over the medium term, local manufacture will also save an estimated 15% of the cost as compared to international procurement, depending on the actual vaccine and capacity utilisation of the manufacturing facility.

Local manufacture creates jobs, grows the economy and reduces the pressure on foreign exchange.

The details of the technology transfer agreement under which the institute will be making Hexacim are not yet publicly available. But it will be surprising if the deal does not allow South Africa to supply other countries in the Southern African Development Community and even sub-Saharan Africa with locally manufactured product. In this way it will be able to generate income.

A long time coming

Reaching this milestone has been a slow process. When the public private partnership was formed, it was thought that all of the core objectives would be reached within five years.

But the difficulties of building local skills, raising the finance and installing the infrastructure were under-estimated. Even the initial steps, which involved establishing sufficient absorptive capacity in the institute, took more time and expense that was originally anticipated.

The initiative had been costly for the public sector. Under the agreements of the partnership, the institute received a premium of about 13% on the wholesale price of the vaccine. This amounted to more than R1.1 billion between 2004 to 2016. These funds have been used to support the procurement, build the infrastructure, undertake research and development, and facilitate the technology transfer process.

Although this may seem a high price, a recent evaluation of the partnership showed that a positive value for money had been achieved. It argued that South Africa had not overpaid for its vaccines and that overall the institute had been of significant public benefit.

What it shows though is that public sector procurement is a powerful means of achieving local economic development. South Africa has not been very successful with this approach to date.

The institute’s achievement shows that such partnerships are possible. But it also shows that they require a long term commitment by both parties to resolve the problems and constraints which arise when the objectives are implemented.

Although other means are possible, the institute supports this approach to localisation and suggests one strategy by which South Africa could reach its targets of economic growth and diversification.

David Richard Walwyn, Professor of Technology Management, University of Pretoria

This article is republished from The Conversation under a Creative Commons license. Read the original article.

Researchers

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  Professor David Walwyn

  Professor Walwyn completed his undergraduate studies at the University of Cape Town and has been doing research at the University of Pretoria (UP) for the past 12 years.

  He says UP affords him the ideal environment in which to undertake his research.

  “I have access to all the library resources, a cohort of students to assist with the work, colleagues with whom I can interact and collaborate, a well-managed infrastructure to support my applications for funding, and all the common research administration functions.”

  Prof Walwyn is a transdisciplinary scholar who is focused on two important research areas: localisation of manufacturing in the health and energy sectors, and transformation of socio-technical systems, especially systems for mobility and electricity. For this work, he uses a combination of techno-economics, policy mix theory and transitions theory to identify turning points for localisation and transformation.

  The focus of his research is reaching four important Sustainable Development Goals (SDGs): SDG 7 (Affordable, Reliable, Sustainable and Modern Energy for all), SDG 11 (Sustainable Cities and Communities), SDG 13 (Women, Youth and Local and Marginalised Communities) and SDG 4 (Quality Education). In essence, the attainment of a net-zero global economy is both an imperative and a massive challenge.

  “Through my research, I hope to make a small contribution to this broader goal,” he says. “The big issue in this work is the ‘theory of change’. My perspective of the latter is that change will only happen when we can effectively confront and challenge the legacy and pathway dependencies of the present socio-technical regimes.”

  Prof Walwyn says he research “is rather just small contributions to the national discourse on energy systems and how these can be transformed”. However, he adds, his research matters because we have no choice but “to make the energy transition”.

  Within his academic discipline, he is part of two research teams, one of which is working on white hydrogen and the other on the development of hardware/software for vehicle-to-grid systems.

  He says his research has been inspired by the work of Prof Mark Swilling and Prof Johan Schot. Prof Swilling is the co-director of the Centre for Sustainability Transitions at Stellenbosch University, and writes about sustainability and the importance of Ukama or kincentric ecology. Prof Schot is professor of global comparative history and sustainability transitions at the Centre for Global Challenges at Utrecht University in the Netherlands, and writes about deep transition and changing societal meta-values.

  Prof Walwyn adds that he admires all the major contributors to his field, including people such as Bengt-Ake Lundvall, an emeritus professor of economics at Aalborg University in Denmark, and Frank Geels, a professor of system innovation and sustainability at the University of Manchester in the UK.

  Prof Walwyn dreams of a rapidly growing renewable energy sector that will reduce South Africa’s carbon footprint, empower local communities and create green jobs.

  He urges school learners or undergraduates who are interested in his field to read, study and understand. Knowledge and critical analysis are essential in the 21^st century.

  “The world needs you – you just need to discover for yourself how one can transform agency and capability into action. Follow your passion, but remain evidence-based.”

  As far as hobbies go, Prof Walwyn says he has many diverse interests. 

  “I play the flute. I do trail runs, road runs, mountain bike races and road bike events. I hike, walk, swim and surf. And I knit, mainly socks, leg warmers and beanies. If you are ever in need, just ask me!”

  Prof Walwyn’s research focus areas

  A sustainability transition is defined as “the long-term, multi-dimensional and fundamental transformation processes through which established socio-technical systems shift to more sustainable modes of production and consumption”. Examples of such transitions include changes from non-renewable (such as coal and gas) to renewable (such as wind and solar) sources of electrical energy, from internal combustion engines to fuel cell electric vehicles and the adoption of green building practices. 

  These transitions are essential if the international agreements on climate change, such as COP21, are to be met, simultaneous to the elimination of poverty and inequality (SDGs 1 and 10). Although techno-economics is only one of several drivers of such transitions, it is a sine qua non in developing countries.  Prof  Walwyn’s work has looked at how changes in the techno-economics of energy systems are supporting or preventing energy transitions.

  In the area of health sector localisation, he works on vaccine and pharmaceutical manufacturing. The work is particularly important in the context of the recent COVID-19 pandemic. His initiative in 2002 to maintain local technological capability in the vaccine value chain is now being recognised.          

  In all this work, he has attempted to understand the reasons why science, technology and innovation do, or do not, lead to economic development, and has used a number of theoretical frameworks in his research, including technological innovation systems, innovation policy mix, niche experimentation, technological capability, historical institutionalism, sustainability transitions and neo-classical economics. 

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