Friday, May 27

Upping the ante with vaccines’ logistics

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After more than a year in the grip of the Covid-19 pandemic, the world finally sees a glimmer of hope as vaccine developers worldwide begin releasing tested and certified vaccines for use.

Initially, health organisations worldwide indicated that it could take up to two to three years for a Covid-19 vaccine to be available. But as early as mid-last year, vaccine developers started hinting that a vaccine could be found much earlier than expected.

In December, the World Health Organisation (WHO) listed the Comirnaty Covid-19 mRNA vaccine for emergency use, making the Pfizer/BioNTech vaccine the first to receive emergency validation from WHO since the outbreak began a year ago.

Following this, more vaccine developers have announced the effectiveness of their vaccines including Oxford-AstraZeneca’s AstraZeneca Covid-19 vaccine, ModernaTX Inc’s Moderna Covid-19 vaccine, and others.

As at January 12, 2021, WHO reported that there are currently 63 Covid-19 vaccines undergoing clinical trial with 173 more undergoing pre-clinical development.

These positive developments on vaccines cannot come soon enough as most countries worldwide grapple with the third or fourth wave of the pandemic.

“While the situation seems perilous at the moment, we believe that it is different from the one that we faced in March and April of last year,” commented analysts with MIDF Amanah Investment Bank Bhd (MIDF Research) in a research note on the MCO 2.0.

“Back in March 2020, when (the first) MCO was first imposed, we were faced with more uncertainties. Vaccines were not available, all economic activities were closed and people were generally under prepared.

“However, now people and businesses are better prepared having gone through nearly a year of the pandemic and the standard operating procedures (SOP) to contain the coronavirus. Meanwhile, some economic activities are allowed to continue despite the MCO. More importantly, we have the vaccines and are awaiting the implementation of the vaccine programme.”

Malaysia is expected to receive the vaccine by Pfizer for Phase 1 by the end of February 2021.

Procuring through Covax facilities, Pfizer and AstraZeneca, the government expects to secure supply vaccine for 40 per cent of population coverage.

MIDF Research recapped that the government is also in the process of final negotiations with Sinovac, CanSino and Gamaleya to get a guarantee of increased vaccine supply exceeding 80 per cent of the total population of the country or 26.5 million.

“With this, it is hoped that Malaysia can achieve herd immunity against the vaccine. We maintain our expectation that the vaccine will be widely available by the second half of 2021,” it projected.

So far, the government has allocated over RM3 billion under Budget 2021 for the purchases of Covid-19 vaccines to immunise an estimated 70 per cent of the population here in Malaysia.

In tabling Budget 2021, Finance Minister Tengku Datuk Seri Zafrul Tengku Abdul Aziz said the government was committed to acquiring Covid-19 vaccines through its participation in Covid-19 Vaccine Global Access (Covax).

With vaccines now available and some en route to Malaysia under the approval of Ministry of Health’s National Pharmaceutical Regulatory Agency (NPRA), the tricky part now is the logistics and distribution process, and storage of the vaccines here, as well as the cost of it all.

Vaccine logistics’ fund allocation

According to AmInvestment Bank Bhd’s research house (AmInvestment), the allocation of RM3 billion is expected to cover costs of procurement, storage and transport while another RM2 billion will be used for the purchase of equipment and supplies related to Covid-19 treatment.

Despite the massive allocation for vaccines, it believed that this value might be insufficient to cover the costs of the remaining vaccines.

“The feasibility of the RM3 billion budget is dependent on the Covax-supplied vaccine dose price. Should it be priced closer towards the US$21.10 ceiling, only RM1 billion will be left to cover the costs for the remaining vaccines as well as logistical and administration costs of the total vaccine supply,” it estimated.

However, Galen Centre for Health & Social Policy chief executive Azrul Mohd Khalib in a statement, noted that the Galen Centre estimated that the Pfizer vaccine at US$19.50 per dose (publicly known pricing) would cost around US$249.6 million (around RM1 billion).

But, he pointed out that Minister for Science, Technology and Innovation Khairy Jamaluddin stated in Parliament recently that the government was able to secure the price of a single dose to be less than RM100, which includes the logistical costs up to the vaccination sites that will be handled by Pfizer.

“This would mean that Malaysia is probably paying around RM1.2 billion for that vaccine. For Covax, we estimate that it would cost RM275 million (RM86 per person) and for AstraZeneca: RM89.6 million (RM28 per person),” he added.

For now, this cost only covers vaccination that targets 40 per cent of Malaysia’s population. The Malaysian government seeks to achieve the herd immunity by vaccinating 70 per cent of the population, focusing on healthcare workers and vulnerable citizens.

AmInvestment does not foresee this taking place until 2022 or 2023 due to the several limitations and challenges.

“The 70 per cent coverage is assumed to be the minimum threshold for herd immunity. The actual threshold is still being calculated by epidemiologists and may be higher than 70 per cent.

“However, if the vaccine is only 95 per cent effective, we believe that 74 per cent of the population would have to be vaccinated to achieve herd immunity,” it opined.

Several factors that could impede the process of achieving herd immunity include logistical and production bottlenecks, especially in remote areas, disinformation campaigns, which may diminish public trust and confidence, patients not returning for booster doses, reducing long-term effectiveness, and the possibility of Covid-19 becoming endemic (similar to annual flu), requiring annual or repeated doses.

Getting local facilities ready

The process of packaging and distributing the vaccines can be handled by multiple companies along the supply chain.

For the packaging of vaccines, AmInvestment saw that currently Schott (US), Stevanato (Italy) and Nipro Pharma (Japan) control the bulk of the global market share for vaccine vials.

However, fill-finish – which is the process of filling vials with vaccine and finishing the process of packaging the medicine for distribution – will likely be handled locally by Pharmaniaga Bhd (Pharmaniaga) and/or Duopharma Biotech Bhd (Duopharma), which have facilities approved by NPRA.

“It is not uncommon that the vaccine manufacturer does not have fill-finish facilities on site. Instead, a third party may be used for this process, with the bulk drug substance made at site and then distributed to these fill-finish facilities.”

Locally, the Malaysian government has yet to ink any bulk purchase agreement.

However, Science, Technology and Innovation Minister Khairy Jamaluddin said Prime Minister Tan Sri Muhyiddin Yassin has given the nod for both Pharmaniaga and Duopharma to undertake the fill-finish processes for a Covid-19 vaccine, once the country secures it.

Pharmaniaga has previously signed an agreement with Serum Institute of India to perform fill-finish processes for pneumococcal vaccines.

Solution Group has an exclusive tie-up with CanSino Biologics to distribute its vaccines locally.

Solution recently completed a RM28 million placement to raise proceeds for a fill-finish facility in Selangor.

“Should the vaccine be approved by the NPRA, the facility is expected to be ready in four to six months,” it added.

“Either Pharmaniaga or Duopharma is expected to act as the authorised distributor for the government procured vaccines,” it said.

“Given manpower, cold chain facility and other constraints, the authorised distributor is expected to delegate the workload to private sub-distributors,” AmInvestment pointed out.

 

Pharmaniaga gears up with vaccine process

Pharmaniaga Bhd (Pharmaniaga) has set up a task force and all geared up to distribute Covid-19 vaccine nationwide.

In a statement, it explained that the company’s wholly owned subsidiary Pharmaniaga Logistics Sdn Bhd (PLSB) has 26 solid years of vaccine logistics and distribution experience covering both for -20 degree Celsius and two to eight degree Celsius constant temperature requirements, and it will give utmost priority to the compliance of the temperature requirement of the upcoming Covid-19 vaccine to ensure its continued quality, safety and efficacy.

The company said, it has also set up a team of 400 personnel skilled in logistics and distribution in five godowns located in Selangor, Penang, Sabah and Sarawak.

In preparation for the vaccine distribution, the company was also prepared to undertake the necessary modifications to its factory, Pharmaniaga LifeScience Sdn Bhd (PLS) in Puchong, to enable them to carry out the bottle development process for the Covid-19 vaccine.

Pharmaniaga has six factories in Malaysia, namely Idaman Pharma Manufacturing Sdn Bhd in Sungai Petani and in Sri Iskandar; Pharmaniaga Manufacturing Bhd in Bangi; Pharmaniaga LifeScience in Puchong; Paradigm Industry Sdn Bhd in Klang and Bio-Collagen Technologies Sdn Bhd in Sri Kembangan. It also said it has total warehouse capacity is close to 30 million vials at any one time.

Eye on Pharmaniaga-Sinovac venture

Last week, Pharmaniaga announced PLS has entered into a binding term sheet agreement with Sinovac Life Sciences Co Ltd Sinovac for the purchase of ready-to-fill bulk product of Covid-19 vaccine and the licensing of Sinovac’s technology and know-how for the purpose of manufacturing the Covid-19 vaccine by PLS in Malaysia.

The agreement is for the supply of 14 million doses of Covid-19 vaccine to be carried out for fill and finish activity.

Group managing director Datuk Zulkarnain Md Eusope said the vaccine would be the first to be manufactured in Malaysia at the small volume injectable high-tech plant owned by PLS.

He said the group would invest RM3 million to retrofit the plant to enable the production of the vaccine.

With the Sinovac vaccine bottling process is expected to be carried out by Pharmaniaga here, Malaysia, said Science, Technology and Innovation Minister Khairy Jamaluddin noted that the government is paying less for the Covid-19 vaccine developed by Sinovac.

In a report, MIDF Research also noted that in addition to being a more economical alternative to its peers, it believed that the Sinovac vaccine was chosen given that it requires only 4°C of cold storage which is within Pharmaniaga’s current capacity of 2°C to 8°C.

“The fact that it does not require an ultra-cooler-box for storage and transportation will ultimately reduce the overall cost of the vaccine,” it said.

“In-line with its growth strategy going forward, Pharmaniaga is also expected to enter into two other agreements with Sinovac for a locally manufactured Covid-19 vaccine in the near future. What the agreements would entail among others is, the right to manufacture and distribute Sinovac’s Covid-19 vaccine in Malaysia.

“Furthermore, the subsequent agreements would also include technology and know-how license agreements which would allow the aforementioned activities to be conducted by PLS in Malaysia.

“We view this development positively given that not only it will contribute positively to Pharmaniaga’s bottomline but as the vaccine’s technology (inactivated virus) is a proven method and with a reliable history which we opine that it will bode well as part of the Pharmaniaga’s future product mix,” it added.

However, on whether there is a possibility for Pharmaniaga to manufacturing the vaccine locally, MIDF Research believe that this could take a while longer.

“We understand that these subsequent agreements and the execution of the terms of the agreements could be in effect as early as March 2021 – due to the urgent nature of the pandemic.

“This however, will be subjected to the Phase Three trial results which are currently taking place in Brazil (circa 78 per cent effective), Turkey (circa 91 per cent effective) and Indonesia (circa 65 per cent effective) as well as; the approval by NPRA before the mass production of the vaccine can be done by PLS,” it explained.

On how PLS intends to market and distribute the Covid-19 vaccine and whether any contract has been secured to date, the company in a filing said it is in the midst of negotiation with the Ministry of Health for the purchase of the vaccine.

“We are positive on the news; we feel the agreement would serve as a platform for Pharmaniaga to further strengthen its vaccine business,” the research arm of Hong Leong Investment Bank Bhd (HLIB Research) said.

“Apart from that, it will also aid in its long-term partnerships, including technology transfer to grow the sector in Malaysia. Moreover, we expect this agreement would allow for a new income stream contribution to Pharmaniaga.”

MIDF Research believed that the Sinovac vaccine was chosen given that it requires only four degrees Celsius of cold storage which is within Pharmaniaga’s current capacity of two degrees Celsius to eight degrees Celsius.

“The fact that it does not require an ultra-cooler-box for storage and transportation will ultimately reduce the overall cost of the vaccine,” it said in its own analysis.

“Meanwhile, the final bottling process and end-distribution will be handled by Pharmaniaga via its small volume injectable (SVI) plant located in Puchong, Selangor.

“The plant, which will undergo a month of retrofitting exercise at the cost of RM2 million; will have the capacity to produce two million doses per month.”

MIDF Research gathered that in-line with its growth strategy going forward, Pharmaniaga is also expected to enter into two other agreements with Sinovac for a locally manufactured Covid-19 vaccine in the near future.

As per the announcement, Sinovac LS and PLS will subsequently enter into a local manufacturing agreement and a technology and know-how license agreement.

“What the agreements would entail among others is, the right to manufacture and distribute Sinovac’s Covid-19 vaccine in Malaysia.

“Furthermore, the subsequent agreements would also include technology and know-how license agreements which would allow the aforementioned activities to be conducted by PLS in Malaysia.”

 

The logistics of transporting vaccines

On the logistics of bringing Covid-19 vaccines to Malaysia, according to AmInvestment, for now, Singapore is poised to be the regional distribution hub for the vaccines.

“Regionally, Singapore is poised to be a vaccine distribution hub for pharmaceutical manufacturers. National carrier Singapore Airlines (SIA) will transport the cargo, backed by Changi Airport’s cargo hub.

“Changi Airport is equipped with good cold chain handling infrastructure and past experience in pharmaceutical cargo handling. Multiple global integrators – such as DHL, FedEx and UPS – also have their regional hubs in Singapore, linked directly to the airport,” it explained.

Changi Airport and SATS, the chief ground-handling and in-flight catering service provider at Changi Airport, are also part of a global taskforce aimed at addressing global Covid-19 vaccines supply chain challenges.

In a statement, Changi Airport said Project Sunrays is a joint initiative between The International Air Cargo Association (TIACA) and Pharma.Aero (a cross-industry collaboration for pharma air transportation).

The taskforce aims to establish useful guidelines for the air cargo industry to ensure the proper handling, storage, and transportation of the expected high volume of Covid-19 vaccines.

For Malaysia, Malaysia’s top cargo carriers, MASkargo and Teleport (AirAsia’s cargo arm) are likely play a part in local vaccination efforts, AmInvestment said.

In a statement, Malaysia Airlines Bhd (MAB) assured that the group cargo arm operates three dedicated freighter aircraft and utilises MAB’s passenger aircraft belly which can provide a temperature-controlled environment in the cargo holds, suitable for vaccines that typically require beyond freezing point temperature packaging and handling.

MABkargo has also previously transported time and temperature-sensitive goods besides vaccines and medical products such as human organs and biological samples, which require similar handling.

There are three main temperature ranges in the world of cold storage: 2 to 8°C, minus 20°C and minus 80°C. The first two ranges can be handled with special packaging that is able to maintain the temperature for 96 hours without refrigeration.

“In contrast, minus 80°C range vaccine transport requires the use of dry ice or ultra-low temperature freezers.

“Most Covid-19 vaccines can be stored and shipped within the 2 to 8°C and minus 20°C temperatures as these are within the limits of regular household freezers.

“The exception is the Pfizer vaccine, which must be stored at minus 70°C. This requirement has already resulted in multiple logistical challenges,” AmInvestment noted.

Nevertheless, it pointed out that Pfizer has already developed plans for vaccine transport, which uses temperature-controlled cooler-type boxes, each toting 1,000 to 5,000 doses.

“They are equipped with GPS-enabled sensors, allowing Pfizer to monitor the boxes’ locations and temperatures.

“The reusable boxes require dry ice to regulate temperatures for up to 10 days. The sheer volume of dry ice, which is solid carbon dioxide, presents a suffocation hazard as the gas can displace oxygen in confined spaces.

“Currently, aviation regulators are tweaking dry ice limits to adjust for a reduced crew size,” it said.

“Ultimately, the success of vaccine delivery depends on effective coordination between air carriers and the government,” it added.