Covid-19: the quest for a vaccine

The disruptions of Covid-19 have become in many ways “the new normal” for everyone over the past six months or so. Travel restrictions, lockdowns, social-distancing and compulsory mask-wearing lurch in and out of our lives, as global leaders try to respond to or predict the virus’s latest move from one day to the next.

There is one thing most commentators agree on in these contentious times, though.  The true “game-changer” in returning to some kind of normalcy would be an effective, widely available vaccine. Such a vaccine would allow those parts of the economy that are still locked down or limited by government policy and social responses to begin the process of recovery. 

How does this fact affect longer-term economic forecasts?  We’ve carried out an exercise assigning probabilities and quantitative estimates to each stage of the vaccine supply chain. From this, we’ve worked out estimates of the number of people likely to receive inoculation in the G20 group of countries by mid-2021. 

Knowing the don’t-knows

Our estimates inform our base case, including potential coverage for vulnerable populations.  However, each assumption carries wide confidence intervals, meaning things aren’t that certain.For example, clinical trials testing new treatments like vaccines are divided into different stages, called phases. We still don’t have Phase 3 results for the front-runner vaccine candidates, Oxford and Moderna. Nor do we have even Phase 2 results for the many other vaccines in development across the world. We also don’t have clear information about how quickly a vaccine can be rolled out and what government strategies to drive take-up will be. So, it’s early days, but we plan to develop our vaccine analysis further with more bottom-up analysis in the coming months.

The results table below shows just how many steps are required for a widespread vaccination program and underscores the uncertainty around the science. Will a vaccine be safe? How well will it work? And the logistics – once a vaccine is approved, can it be rolled out efficiently and will there be widespread take-up?

 Component End 2020     Mid 2021
 Vaccine approval probability  60% 90%
 Manufacturing capacity  600 2114
 Roll out to vulnerable population              75% 88%
 Roll out to general population  80% 90%
 Take up in vulnerable population  100% 90%
 Take up in general population  100% 100%
 Efficacy  70% 70%
 Impact on Stringency Index *  5ppts 25ppts
 Vulnerable people inoculated  189m 1049m
 General population inoculated  202m 1149m


*Stringency Index - how strict a government is in applying something

The critical role of effective public communications

On the matter of take-up, we’ve used a multiplicative approach.That means that to calculate the number of people inoculated requires an assumption of 100% take-up.  This applies even in cases where the number of available doses is significantly smaller than the number of people needing a vaccine. Where the number of available doses is large enough to cater for large-scale inoculation, public health campaigns and political messaging will be crucial to ensuring that a vaccine is taken by a significant proportion of society. The less efficacious the vaccine, the more important those campaigns will be.This is particularly the case in countries such as the U.S., where the "anti-vax" community is large and skepticism over vaccination is prevalent to a degree.

In terms of reach, we expect that vaccinations in the first year will have a heavy developed-market slant. The exception to that rule is likely to be China, where we do think mass vaccination will be initiated. Most other emerging-market countries are likely to struggle with implementing vaccination schemes, due to financial and logistical constraints. Where vaccines are rolled out, we broadly expect vulnerable populations (immune-compromised, older populations and front line workers) to be first in line.

In conclusion

The upshot is that our analysis estimates that around 1 billion people are inoculated by mid-2021. While this would represent exceptionally fast vaccine progress, we still think it is not enough to reopen G20 economies fully, and this therefore underscores the long-term damage embedded in our global forecasts.





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