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Vaccine Modelling Thought Leadership

The logistics, the costs and the availability of the Covid-19 vaccine bring significant challenges and complexity to a simple solution aimed at leading societies and economies back to health.
David McNay

David McNay

Senior portfolio manager

Key takeouts
  • We aim to answer a question top of all our minds, “when will the world recover”.

  • Our research considers the current production (supply side) of various Covid-19 vaccines, as well as the procurement and administration plans of key countries to inform a recovery timeline.

  • Based on a fair amount of educated assumptions we forecast a timeline that sees many developed countries back to normalcy by Q2 and Q3.

  • Unfortunately with inequalities across our geographies, emerging countries will lag this time and South Africa in particular may see a longer journey to recovery given the slower approach to procuring much needed doses and the ambiguity around administration implementation.

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Alien in Africa: Down the Rabbit Hole

 I had intended to introduce myself with some witty anecdotes about the article title and how a Singaporean-born-Englishman finds himself in SA discussing investing with a South African audience. Alas, those anecdotes will have to wait, because this alien is currently stuck, literally on the other side of the map, unable to get IN to Africa.


This note expands on the webinar Warren Buhai and I gave on 19 November, where we spoke briefly about the latest vaccine developments. Of course, these days “latest” is a term that goes out of date faster than a refrigerated Pfizer vaccine. Now we have vaccines making their way into the arms of people en masse, our objective today is to try to answer the question: “When will there be a return to normality?”


Dodging the existential question about the nature of normality, this is still impossible to answer. All I know for certain is that I am going to be wrong! But while we grope about in the dark, I can show you what we believe to be the right way to attack the problem.

Global Vaccine Course; Estimated Production
Estimating supply side in world of inequality

We start by estimating the supply side of the vaccine equation – which unfortunately is not the trivial exercise one might hope. To do this we look through company press releases and news articles for insights into the estimated production capacity in 2021 and beyond, as well as intentions to develop additional capabilities. When we model those production figures with a vaccine approval timeline, we can create an implied global timeline for the manufacture of vaccine courses[1], which I have plotted above. I ought to highlight here that I have no special insight into the vaccine approval timeline. Our assumptions are based on data from Bloomberg[2] and the New York Times[3].


Imagine for a moment we lived in a fair and equitable society, in which resources were allocated based on need rather than money or politics. In that world, assuming no supply shocks, it would take until between February and May 2022 to have enough vaccine courses to inoculate the entire world, excluding China. If we proxy the vulnerable as people over the age of 50[4] then it would, in theory, be possible to vaccinate all the vulnerable people in the world by about the middle of 2021.


But the world is neither fair nor equitable. Developed economies have footed the bill for a disproportionate amount of the research, which has allowed these vaccines to be developed at record breaking speeds. So they expect to be at the front of the queue for allocations. The team at the Duke Global Health Innovation Centre[5] has compiled public data on the national and supranational pre-orders of vaccines, as well as publicly-disclosed “optional” doses.

Percentage of Population Vaccinated

Many readers will have seen some variant of the chart above which shows how Canada has pre-ordered enough vaccines for over 520% of their population. What is frequently ignored is that Canada itself is less than 0.5% of the global population, so while the headline figure is certainly attention-grabbing, it gives no context. The chart below combines the Duke dataset of pre-orders and options with our estimates of 2021 manufacturing capability, normalised to 100%. This makes relatively grim reading if you are an economy short on vaccines and looking to get procurement arrangements in place, like SA.


I said the chart is normalised to 100% and eagle-eyed readers will notice several bars over 100%. This is where producers have already accepted pre-orders totalling more than 100% of their total capacity for 2021 and the available doses (teal) are negative. The takeaway here is that Pfizer, Moderna, Johnson & Johnson (J&J) (Janssen vaccine) and Novavax are all over their 2021 capacity already.


The Janssen vaccine statistics are a particular blow, because prevailing wisdom has been that J&J’s relationship with Aspen would mean SA would receive preferential treatment, and this may be the case. Recently SA managed to achieve agreement for nine million doses of the J&J vaccine. I have zero insight into the conversations between authorities and vaccine producers but the Aspen relationship may have helped in achieving those nine million when J&J are already 30% oversubscribed for the year. If this is correct it would, however, indicate that there may not be many more doses to be had from J&J.

Excess capacity vs. 2021 Vaccine Pre-Orders

The good news is that I have deliberately exaggerated the problem. Of the -30% above, about 400 million doses of the Janssen vaccine are on option with the UK, US, and Europe. If we exclude those, or SA was able to enter into a bilateral agreement, then about 126 million doses of capacity are available. The following chart is un-normalised (actual doses) and removes options.

Timing the world’s return to normality?

Before I attempt to answer the original question about the return to normality, I remind you of a quote from the White Queen in the Lewis Carroll’s children’s book, “Through the Looking Glass”:“Why, sometimes I’ve believed as many as six impossible things before breakfast.”


At the beginning of this missive I told you that finding the wrong answer will give us the correct way to think about the problem. To contextualise the answer, you would need to believe in our six impossible things, which are the parameters[6] we flex to build our vaccine roll-out model.

  1. Major vaccines are rolled out on schedule and there are no major hiccups in manufacturing (other than reasonable waste which is assumed at 10%).
  2. China and Russia are net exporters of vaccines – we assume China releases 25%. In practice, this is a real wild card, as data on Chinese inoculation is quite opaque and, although China has an advantage in being able to pool manufacturing capability better than the West, implied supply is not enough. Anecdotally, we have heard of discussions with Western producers which, if there were an agreement, would make China a net consumer, reducing capacity for the rest of the world.
  3. Developed markets make excess supply available when they reach 150% of their population. Currently we cannot say for sure what this number needs to be, other than meaningfully about 100%. Partly this reflects hoarding, but also, we do not know about the efficacy of each vaccine to mutant strains yet, when it may become desirable to take multiple vaccines, or when a “booster” shot becomes beneficial, if antibody response declines through time.
  4. Unfortunately, while we have details on quantities purchased, we have very limited details on the priority of each country compared with others who have also pre-ordered. Where we have no better information, we create a key based on pro-rating pre-order quantity (50%), total population (25%) and population at risk (25%) to allocate supply. COVAX, as a supranational, is assumed to have an equal priority to the US.
  5. Initially excess supply is not entirely absorbed by other developed markets and 50% of the sharing of excess vaccines goes to emerging markets.
  6. We live in a frictionless environment, implying that there are no logistical delays and that immunity is achieved immediately. Rather than trying to account for differing national abilities to implement vaccination programs, our model simply implies when a country would have enough courses of a vaccine. Realistically, we would expect delays, and we also need to remember that most vaccines require multiple doses, to be taken weeks apart.

If you are willing to believe these impossible things, then our model would imply that for developed markets (purple lines) the vaccine roll-out is largely a domestic logistical challenge over the second and third quarters of this year, for most emerging markets we should see meaningful progress in Q3, but full vaccination would be in early-to-mid 2022. Finally, SA (teal line), looks to do meaningfully worse than most other low- and middle-income countries, as its implied total vaccination occurs around October 2022.



To make fair disclosure, in my first draft I outlined a positive argument: that because Covid-19 has a disproportionate impact on the over-65s, SA would be economically free much earlier, due to the relatively small number of older people. However, I had this notion dispelled by a colleague who showed me South African health statistics – specifically ~30% obesity, 13% diabetes rate[7] and 13% of the country with HIV[8] as well as higher instances of other coronavirus co-morbidities[9]. The numbers are not additive, and we lack data on the crossover of people with multiple co-morbidities, but we can say demographics are more likely to be working against SA than for it.



SA is not well positioned to vaccinate the population. Despite having a manufacturing base within the country for one of the major vaccine candidates, SA is one of the few middle-income countries not to have secured any pre-orders of vaccines through 2020 and it was among the last to commit to COVAX. This “head in the sand” approach has left limited supply on the table to be negotiated. Where SA has secured access, evidence is that these vaccines come at a premium, which will further impact the country’s weak (or maybe even “precarious”) fiscal situation.


If the situation remains unchanged, our modelling indicates that SA would be one of the last middle-income countries to achieve a 100% vaccination rate, with our model suggesting it will occur sometime in Q3 2022.


But this is not a foregone conclusion! At least we now have a better idea which vaccines are likely to be effective, and, while supply is low, it is not zero. With sensible negotiation, SA could materially improve its position. With a non-unreasonable[10] acquisition assumption, we find that SA could complete its vaccination program by Q1 2022 and be one of the better EM performers.



[1] We refer to courses as the total doses required for immunity – for most vaccines these imply two-dose courses.



[4] the BMJ have similar findings using data from across the world. A purer proxy would be to separately calculate over-60s, under-60s with co-morbidities, and healthcare workers per country. For ease we just proxy with the age 50, for which we have better access to demographic data.

[5] – the Duke GHIC website is an excellent resource if you wish to dig deeper into the stats. My particular thanks to Blen.

[6] Institutional clients interested in adapting or changing these parameters for your own output are encouraged to speak to your sales or relationship manager.

[7] – World Bank figure from 2019.

[8] – UN data indicates approximately 13%. Arguably, from a Covid-19 perspective, the picture is actually worse, because the proportion of 15- to 49-year-olds with HIV is 19%, which increases the mutual exclusivity with age across the entire population.

[9] – for a good Africa-specific overview.

[10] Here we use the same assumptions above, but with SA buying 5% of excess AstraZeneca capacity as well as finding a way to acquire another nine million doses of the Janssen vaccine (doubling current allocation).

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