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Bob Mason
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Last week, Pfizer Inc. cut its mRNA vaccine production numbers as a result of supply chain issues. Quality control issues led to Pfizer Inc. cutting its projected doses for the year by as much as 50%.

The announcement was a reality check for the markets, with the pharmas in need of an unprecedented amount of raw materials to meet government pre-orders that have been placed globally.

In recent weeks, we had identified production and supply as the next key areas of focus for governments and the markets.

Production and supply bottlenecks would certainly raise questions over how quickly and effectively the COVID-19 pandemic can be stamped out.

Following the announcement that BioNTech/Pfizer Inc. would produce 50 million doses, allocation now also becomes an area of focus.

The UK was the first to approve BioNTech/Pfizer Inc.’s vaccine, with the UK government having pre-ordered 145 million doses of the BioNTech/Pfizer Inc. vaccine.

With doses in shorter supply than had initially been expected, the government is expecting 800,000 doses this week.

As the UK government readies to begin vaccinating high-risk groups, prioritized by the Government’s Joint Committee on Vaccination and Immunisation (“JCVI”), governments globally and the markets will be looking for any logistical issues.

BioNTech/Pfizer Inc. will also need to meet the 800,000 dose promise. Failure to deliver on the lower number and expect increased concern over the ability to any meet pre-orders.

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What’s next?

The FDA is set to review the BioNTech/Pfizer Inc. vaccine on Thursday. Assuming that there are no issues in approving the vaccine, the U.S will be next in line to receive the mRNA vaccine.

Ahead of the FDA review, the CDC has also had to prioritize vaccinations in the U.S.

BioNTech/Pfizer Inc. expects to deliver 25 million doses to the U.S before the end of the year. That’s enough to vaccinate just 12.5 million of more than 330 million people living in the U.S.

Last week, the CDC identified doctors, nurses, lab technicians, and EMT and hospital staff as first priority. The CDC also recommended that employees and residents of long-term care centers also fall into the first priority bracket.

While the onus normally falls on individual states to prioritize, it is expected that the CDC prioritization will be followed.

Beyond the first priority list, the next group is to include older adults, those with underlying medical issues, and essential workers.

For those that fall out of these groups, doses are unlikely to be available until the 2nd quarter of next year, at the earliest. This is assuming that there are no further supply chain issues or production bottlenecks.

Based on the sheer numbers, Moderna Inc. and AstraZeneca will need to also be in a position to ease demand pressures.

With AstraZeneca having only recently kicked off global trials, however, it could be some time before a 3rd vaccine is available.

The Economic Outlook

Based on the considerations above, vaccines will reach some nations more quickly than others. In fact, when considering government pre-orders from amongst the most adversely affected nations, some pre-orders fall woefully short of numbers needed to stem the rise in new cases.

On this basis, economic hardship in developing economies, in particular, are unlikely to subside any time soon.

Coupled with the global economic meltdown, this does mean that it will take years for some economies to recover.

The good news is, however, that economies more reliant upon tourism may begin to create travel bubbles with nations receiving the vaccine doses in higher numbers.

These nations would include Canada, the UK, and the U.S, who have pre-ordered more doses than total populations. Australia and the EU have also pre-ordered doses to vaccinate a significant size of the respective populations.

By contrast, however, India (18.5%) and Brazil (23.9%) fall woefully short, for example, and may remain in isolation for an extended period of time.

The Latest COVID-19 Numbers

When considering the continued rise in new COVID-19 cases, delivery of the doses could not be more critical.

At the time of writing, the total number of confirmed COVID-19 cases stood at 67,385,285. Conditions in the U.S continued to deteriorate, with the total number of cases rising to 15,159,529.

India and Brazil have reported a total of 9,676,801 and 6,603,540 new cases respectively, sitting behind the U.S as the worst affected.

France (2,292,497), Italy (1,728,878), Spain (1,699,145), and Germany (1,184,845) are also in desperate need of a vaccine. These numbers would have been far worse had the respective governments not reintroduced containment measures last month.

For the EU, however, the EMA will not review the Pfizer Inc. and Moderna Inc. vaccines until mid-January. When considering the sheer number of pre-orders, it may also be some time before EU member states are able to vaccinate a good proportion of the population.

With the vast number of doses in demand, the need to prioritize will likely create plenty of tension.  Any uncertainty over meeting projected dosage numbers for this year and next and risk aversion may well hit the markets.

There is also the vaccine’s actual effectiveness in the real world that will likely face scrutiny. Last week, Pfizer Inc. CEO Albert Bourla had reportedly stated that he was not certain if the vaccine would prevent transmission.

This uncertainty certainly causes more pain for governments looking to end the spread of the coronavirus…

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