Vaccine Nationalism

services of both the US and its allies. Some nations and pharmaceutical companies are even planning for the possibility that vaccines or their components might be blocked from crossing borders, and as borders become barriers, many more people will, no doubt suffer from a preventable disease. In game theory, there's a puzzle called the prisoner's dilemma, which provides lessons on the choices people make as a weigh self interest and

cooperation of the various combinations. The best overall outcome is each prisoners to hang mom and dealing with lesser charges. What's happening now with the vaccine race is the prisoner's dilemma. In action, nations are shoeing the best case of cooperation for the risk of going it alone. Vaccine nationalism. The world's governments are vying to secure doses before their peers can.

It's already getting ugly by Vernon Silver. In a valley south of Rome where tourists rarely tread, the scene playing out on a recent morning was reminiscent of the climax of Star Wars, with the rebel pilots preparing for battle just past the vineyards. Inside a sprawling modern pharmaceutical complex, Clutches of young women and men marched down corridors in steel toed boots, mint green jumpsuits and surgical masks. One group of cadets watched a training video. Another took turns

assembling and disassembling equipment. Behind glass walls, droid like robots rolled around performing automated tasks. This Italian version of a rebel bay ace is an outpost of an American company, Cattalent. The death star is COVID nineteen, which devastated this country

in early spring. Cattalent has a contract to fill tiny glass vials with as many as four hundred and fifty million doses of the Oxford University Astra Zenica vaccine, which in late May became the first coronavirus candidate to enter large scale human trials. The stakes, perils, and opportunities could hardly be higher for Italy, going from the West's first victim to potentially having within its borders almost a quarter

of Earth's supply of a vaccine. If the mission succeeds, the precious horde will start piling up next month in a refrigerated warehouse at the cattle Ent plant. By early November, Italian regulators should be in a position to release the

first doses to the international market. According to Mario Gardiulo, global head of biologics operations for Cattalent, which is based in Somerset, New Jersey, the nation that was hardest hit to be part of the solution is a great story, guard Julo says as he shows off the plant, located in the ancient town of a Nanni. The people here have a strong responsibility. It will be the first or one of the first, on the market. This is a race.

The competition has spurred a phenomenon known as vaccine nationalism. The jockeying of governments to secure doses of promising candidates for their citizens. The means of doing that are numerous, and the field of combat is vast. There are more than one and sixty efforts under way, with twenty six and clinical evaluation as of July thirty one, according to

the World Health Organization. Front Runners in final phase three trials include the Oxford vaccine, another from Moderna, based in Cambridge, Massachusetts, and a third from Germany's bio in Tech, which has partnered with Fiser. All of these have investments from or purchasing agreements with the U. S Government and at least one other nation. China, Rush and starting this month, Italy are also among those with vaccine candidates being tested on humans,

with bragging rights and economies at stake. Not everyone is playing nice. China and Russia have tried to hack various Western vaccine efforts. According to the intelligence services of the US and its allies, Some nations and pharmaceutical companies are planning for the possibility that vaccines or their components might be blocked from crossing borders. The contest may also be

putting medical safety at risk. It normally takes years to develop a vaccine, and the compressed timelines raise concerns about leaders ambitions bending the judgment of regulators. Russia announced on August one that it will start mass inoculations in October

with a vaccine that hasn't yet finished clinical trials. In the US, there are concerns, including those raised by members of Congress at a July hearing with pharmaceutical executives, that President Trump could pressure the Food and Drug Administration to cut corners as the November election years, Trump has embraced the competition with his Operation Warp Speed, which is spending as much as ten billion dollars in the hope of having some three hundred million doses of a winner available

for Americans. As the deep pocketed spoiler, Trump is placing bats on almost every major Western vaccine effort. We will achieve a victory over the virus by unleashing America's scientific genius, which is what it is, Trump said during a July seven visit to a biotech facility in North Carolina. Astra Zeneca has committed to creating autonomous supply chains for the Oxford shot on four continents. A Frank acknowledgment that it

isn't counting on a normal flow of goods. Because of some of the politics, there's a risk of people ordering but not letting the vaccine across country borders, says Many Pungalos, the company's head of research and development for biopharmaceuticals. We've been looking at that pretty carefully and wondering what will happen if that moment comes. So we're being very care full about trying to create independent supply chains that will

enable full access to the vaccine around the world. Astra Zenica is setting up production of its two billion initial doses in Europe, Brazil, India, Russia and the US. India alone will account for half those doses, which are being made with an understanding reached with Prime Minister Nearindramodi's government that about five hundred million will stay in the country. Nations tend to flatter themselves in terms of how central

they are to the action. Some Italian newspapers refer to the Oxford Shot as the Anglo Italian vaccine because of the support roles Italian companies have played in readying it for distribution. For months, advent based in Pomesia of forty five minute drive south of Rome, has been cranking out the doses Astra Zenica has been using for clinical trials in Brazil, South Africa and the UK. The production deal with Catalent was political gold for the government of Prime

Minister Giuseppe Conte. It helped to abate the legal and political pressure that had been building around his administration's handling of the crisis, which has killed thirty five thousand Italians. When he announced the deal in June, Conte was able to crow Italy, which was the first in Europe to get to know this virus closely. Today has been recognized to be among the first countries to give an adequate response. Hopes for a vaccine replaced probes of the pandemic response

on the nation's front pages. The moment provided a lesson in the power that even marginal victories in vaccine nationalism have. Right now, the moonshot race may determine not just who lives and dies, but which economies and governments rise and fall. Countries are eyeing one another warily in part because of how they behaved during the first wave of outbreaks starting

in March. Governments blocked borders as they competed for masks, medicines, and ventilators with at least ninety jurisdictions putting restrictions on exports of protective equipment and other medical material, according to the Global Trade Alert Project at Switzerland's University of Saint Gallen. The Trump administration, for example, asked three m to stop exporting in ninety five masks to Canada and Latin America. As shortages mounted at U S hospitals. In March, Germany

temporarily banned most exports of protective medical equipment. Italy then went tit for tat, seizing mask exports. China capitalized on Italy's moment of need and perceived abandonment by its allies and sent plainloads of Chinese Red Cross teams with ventilators, protective suits, and other gear. It was a classic use of soft power. Be a friend and ally. Now see

how that might pay off later. The West's next rude awakening to vaccine nationalism came on May thirteenth, when the French drug maker Sinophi said Americans would likely get its vaccine before the rest of the world because the U

S had financially backed early research. The U S government has the right to the largest pre order because it's invested in taking the Risk Chief executive officer Paul Hudson said in an interview with Bloomberg News the company reversed course under pressure from its home country and others, but the message was plain, put in your orders or wait

in line. A second shock followed days later, when the British government announced plans to spend sixty five point five million pounds about eighty six million dollars on the Oxford

tie up with Astra Zenica. This deal with Astra Zeneca means that if the Oxford University vaccine works, people in the UK will get the first access to it, said Alok Sharma, Secretary of State for Business, Energy and Industrial Strategy, in a news release which promised that as many as thirty million doses would be available in the UK by September. The moment was a wake up call in Italy. The next morning's headline in La Republica framed the announcement as

nearly a betrayal. London reverses thirty million doses of the vaccine born between Oxford and Pomesia. The first word of the story quoted Sharma saying the UK would get the shot first. It is not clear what will go to Italy. The article added. Behind the scenes, the Italian government began its own negotiations with European Allies and Astra Zenica to

put in an order. Meanwhile, Trump's spending spree spurred fears in Germany that the US was angling to buy Kuvak, one of the country's leaders in the vaccine race, or its technology, to head off the Americans. Berlin agreed in June to buy about twenty three percent of the company for three hundred million euros about three hundred and fifty five million dollars. Germany is not for sale, Economy Minister Peter Altmeyer said at a press conference. We aren't selling

off the family silver. I am a great supporter of a global free market economy, but there are certain areas where our position must be very clear. Germany was right to understand Trump's government as putting Allies second. In his July visit to the North Carolina plant, the President laid out a vaccine nationalism doctrine that boils down to this America first, maybe some other countries later, and it's all

China's fault. We're mass producing all of the most promising vaccine candidates in advance, so that on the day one that it's approved, it will be available to the American people immediately, he said, and we'll probably have a lot for a lot of other people throughout the world. The

world is suffering from this China virus. Brazil's plan to produce the Oxford vaccine for its own population could give a boost to President Jayre Bolsonaro himself recovering from COVID nineteen as he presides over the world's second worst outbreak

while simultaneously downplaying its harm. The two and eighty seven million dollar deal the Health ministry announced in June foresees Brazil taking delivery of thirty point four million doses in December and January, and then, following a technology transfer, making seventy million doses domestically. Russia has taken some unorthodox shortcuts.

The government's planned mass inoculations will use a vaccine developed by the state run Gamalaieya Institute of Epidemiology and Microbiology in Moscow, for which it used fifty military personnel as subjects for its first trial phase. Scores of Russia's business and political elite have also been given early access to

the experimental vaccine. Bloomberg News reported in July as early as April, top executives at companies including Aluminum Giant, United Russol, as well as tycoons and government officials, began getting shots. At the same time. Russia has denied the West's hacking allegations, in part saying it doesn't need to steal any technology because it's already signed with Astra Zeneca to become a

regional production hub for the Oxford vaccine. Under the deal, our Farm, one of Russia's largest pharmaceutical companies, will make and export doses of the Oxford shot to more than thirty countries, including in the Balkans, the Middle East, and some former Soviet republics. Even the Canadian government is making sure it can make and keep an inoculation within its borders.

It's spending forty four million Canadian dollars about thirty three million dollars to upgrade a facility in Montreal so it can make vaccines, and has set up partnerships with researchers at home and abroad, including China's Cancino Biologics. Canada is prioritizing domestic capacity to manufacture a vaccine candidate when one becomes available. The government's Innovation, Science and Economic Development Department

said in a statement. Once fully operational, the Montreal facility will produce up to a hundred thousand doses a month. This investment and research collaboration will help ensure that Canadians and frontline workers have access to potential vaccines as soon as possible. In game theory, there's a puzzle called the prisoner's dilemma, which provides lessons on the choices people make as they weigh self interest and cooperation. The premise is that two members of a gang are imprisoned in separate

jail cells where they can't communicate with each other. A prosecutor, who doesn't have evidence to convict either of a serious crime, gives each prisoner the same deal. Snitch on your friend and you go free, unless he snitches on you two of the various combinations. The best overall outcome is each

prisoner staying mum and dealing with lesser charges. What's happening now with the vaccine race is the prisoner's dilemma in action, says Thomas Bally, Key, director of the Global Health Program at the Council on Foreign Relations, and Chad Brown, a senior fellow at the Peterson Institute for International economics, nations are issuing the best case of cooperation for the risk

of going it alone. Vaccine nationalism is not just morally and ethically reprehensible, it is contrary to every country's economic, strategic, and health interests. Bolly Key and Brown right in a Foreign Affairs article titled the Tragedy of Vaccine Nationalism. As countries speed to secure their own early access to vaccines, the authors say they're failing to slow the spread of the virus elsewhere, fostering supply chain disruptions, inefficiently spurring economies,

and possibly sparking geopolitical conflict. Rich countries are responding to these concerns by supporting the Kovaks Facility, a mechanism that's raising money to guarantee access to vaccines for some ninety lower income countries. At least seventy five countries say they'll support the Kovacs facility, but they're simultaneously putting their own interests first. The European Union, for example, is supporting global initiatives for equitable vaccine access, but isn't participating in such

a program for its own purchases. It's taking its pool of money to place vaccine orders for member states The UK, in turn, has decided not to participate in an EU purchasing pool because the government wants to be able to negotiate its own deals. Drill down further, and there's the deal that's leading Italy to bottle from four hundred million to four hundred and fifty million doses of the Oxford vaccine in its four country packed with France, Germany and

the Netherlands. They're in it together, but exactly how and when those doses get distributed hasn't yet been announced. Step back for a moment, though, and there's something to be said for a nation and its people working together to dig out of a crisis, especially if their efforts can help the rest of the world too. That was the case with biochemists Stephanie DeMarco, the scientific director at Advent.

DeMarco became a crucial part of the Oxford effort in the earliest days of the outbreak, working out of a one thousand square meter production facility that was once a staff jim for Pharmer Giant Merk, the campus's previous owner. In early February, a full month before Italy went into lockdown, Oxford's Jenner Institute signed a deal with Advent to produce

doses of its vaccine. Having worked with the Oxford scientists on previous vaccines, DeMarco began familiar processes for the arrival of the seed stock that would allow her team to produce thousands of doses for Oxford's clinical t misals. In the weeks that followed, Italy became the first coronavirus epicenter outside China. Businesses around the world shuttered, but DeMarco's team of about twenty five women and men kept working as

part of a government designated essential industry. After weeks of preparation, Oxford chipped the precious seed stock. The arrival on March twenty three of the samples, totaling just a few millileaters in fewer than ten vials packed in dry ice, set in motion a NonStop process. There were no spare days, DeMarco says. They worked Saturdays and Sundays and nervously scanned headlines about small pockets of local infections. During that time,

DeMarco was in daily touch with colleagues at Oxford. With that seed stock, Advent made about three leaders of vaccine, yielding thirteen thousand doses. On May, the team sent its first chipment in about four hundred multi dose vials to Oxford in temperature controlled styrofoam boxes that kept them between two degrees and eight degrees celsius. Eight days later, British

regulators released that first batch to the Oxford scientists. That evening a Thursday, they began injecting the advent doses into the arms of trial volunteers. I met DeMarco the next morning during a visit to the Palmisia lab. She wore a surgical mask as she entered a conference room for the interview and squirted sanitizer from a dispenser onto her hands. She was practically giddy with the news that the vaccine candidate her team had made had started coursing through British

veins just hours earlier. For the next hour, DeMarco was all business until I asked which moment in the months of work had meant the most to her. She paused Because of the mask. I couldn't see her whole expression, but her eyes turned glassy with tears the filling. She said that moment at about nine pm on May fourth, when technicians began the semi automated process of transferring the precious vaccine into glass fials, meant she and her team

had threaded the needle at a sprint. There was a lot of tension that something could go wrong, DeMarco said. Italian politicians might be paying tribute to the national effort, but for DeMarco and her team, which includes scientists and technicians from all over the world, her story of Italian perseverance had been one of cooperation that she expects will save lives everywhere. At Catalant's phil and finish facility, Gardiulo

says he has no interest in promoting vaccine nationalism. The threat of cross border hijings is real enough, he says that he's taken steps to mitigate possible disruptions. Take the supply of glass files. Globally, Vaccine producers are braced for a potential shortage of the bottles, which are made of a special glass Astra Zeneca has mitigated the risk in part by having contractors packed ten doses into each multi dose vial. For Gardiulo, that was just a first step

on the ground in Italy. Allies. Border blocking of material in the pandemics early days is still a fresh memory, so he reasoned he'd need to lock in a vial supply wholly within the country. He turned to a company in Italy's northwest, Sophiaria Bertolini, but he had to be careful. The company obtains its specialty glass from a German glassmaker. Before he could assure Astra Zenica that Sophiaria Bertolini could supply the vials, Gardjiulo did due diligence on the bottlemaker's

horde of raw German glass. They told us their inventories, he says, only once he was assured there was enough on Italian soil. Was the vile buying deal ago. Now, as he hires one employees and trains them on the bottling line, Catalent is awaiting the arrival as soon as September of massive bags of the vaccine drug substance being produced elsewhere in Europe. Once the drug substance is available, there will be a supply chain in Italy because everything

after that will be done in Italy. Formulation, filling, packaging, he says, those are the processes. Cattle lens, jumpsuit clad workers are preparing for adding final ingredients to the mix, pumping it into the filling line of sterilized bottles, moving the cargo into an inspection machine that scrutinizes each vial with nine cameras from different angles, and then racking the

vials into boxes that are ready for transport. As guard Julo gives a walk through of the stages, two engineers at the end of a long corridor pour over poster size float charts that map the steps the machines will go through. Once the machines start, they'll go almost non stop, cranking out twenty four thousand vials per hour around the clock. As batches are completed, they'll be moved to a refrigerated warehouse in the Catalent complex and stacked on aluminum and

plastic palettes, ready for regulatory approvals and shipping. Guard Julo says he's sure the government will fast track any bureaucratic steps. Among the last of those, the Superior Institute of Health will decide whether to release the finished product for export. While there are no mines, this scientific process has been politicized.

How it plays out could determine whether Italy is perceived as getting the vaccine first, or in the style of Chinese soft power, being a European hero for quickly distributing the supply. In Italian politics, However, there are hents that the leadership expects its citizens to be first in line, even if all official statements about the deal portrayed as being for Europeans, and the EU has taken a role

in managing the program. Health Minister Roberto Speranza has repeatedly said, including in a speech to Parliament, that if all goes well, some sixty million doses will be ready before the end of the year. That number is roughly equal to Catalant's capacity on the current schedule. It also matches the population of Italy. Yes, these doses are meant for Europe, but Italians who are casual listeners to the news could be forgiven for assuming that the first batch is going entirely

to them. With Stephanie Bigger, thanks so much for listening. Check out that story and more of this week's special issue on the Path to a COVID nineteen vaccine, including one on merk slow and steady strategy and another on the weird science behind it all. Find the issue on newsstands, online, up Bloomberg dot com, and of course, always on the

Bloomberg terminal. Also tune into Jason Kelly and My Daily radio show Monday through Friday two p m. Wall Street Time on Bloomberg Radio, and be sure to check out our podcast feed wherever you download your podcasts. I'm Carol Masser.