28 million and counting. As the world grapples with the pandemic, all hopes rest on finding an early Covid-19 vaccine. With nearly 180 potential vaccine candidates globally in various stages of clinical trials as per WHO, much talked about is the vaccination being developed by Pharma major AstraZeneca and Oxford University.
In the wake of a sudden pause in the final trials of the Astra-Oxford vaccine AZD1222 after one of the recipients in the UK showed adverse symptoms followed by similar steps by Serum Institute of India what implications does this have on global vaccine trials and, on the economy specifically the Indian scenario?
While some experts claim that the pause is a routine one and is the second time that it has been halted. In July, the trial was paused for possible safety concerns, but the issue was resolved quickly, and the trial resumed shortly thereafter. While it illustrates the researchers’ commitment towards volunteer safety and high standards of conduct their studies, it is unclear how long it is going to take. WHO terms this as ‘a wake-up call’ to recognize that such ups and downs happen during vaccine trials. Though the direct impact of the Astra/Oxford vaccine halt could be on the timeline for producing the vaccine, the disruption could be a blessing in disguise.
In the current rush to produce Covid-19 vaccine, several regulatory procedures have been bypassed. The Russian vaccine, and a couple in China, have been approved in their respective countries without phase-3 trials being initiated. But now, due to much criticism, these vaccines are also preparing to undergo phase-3 trials. It could also help ease out the political push for the vaccine to be available in the US (at least notionally) before November 3 Presidential elections when President Donal Trump is seeking a re-election.
On the economic front, vaccine delay could lead to multiple concerns at a global level. There could be a second wave of the virus, government and corporate support to the furloughed workers and bank moratoriums on loan repayments may expire; US-China relations may further dwindle, and economies may further shrink. As per World Bank global economy could shrink by 5.2% in 2020 and emerging market countries will face tougher economic challenges than developed ones, given their limited social safety nets and healthcare capacity.
India as the 2nd worst-hit country by COVID-19 globally is no exception. While many analysts believe that the Indian economy may contract by 5% in FY21, economists at Bank of America Securities have stated that a longer wait for a vaccine against the virus may lead to a contraction of up to 7.5% in the Indian GDP in FY21. With a 23.9% shrinkage as per release by Ministry of Statistics and Programme Implementation (MOSPI), India’s GDP has shown the worst quarterly dip in the three months to the end of June - the worst ever since the country started releasing its quarterly data in 1996. In fact, Reserve Bank of India (RBI) foresees the economic contraction triggered by the pandemic extending into the second quarter primarily due to the severe shock to the consumption levels.
With India COVID-19 cases rising quicker than the US and spreading beyond cities since the country began the unlock phase, it could mean continued restrictions within states hence adversely affecting the restart to the economy. Coupled with all this, a possibility of delayed vaccination may further worsen the situation.
On another note, coming up with a vaccine to halt the pandemic may be just half the battle won. The next big test would be to get those billions of doses available to every corner of the world on a war footing especially at a time when each is putting their own interest first. With UNICEF leading efforts to procure and supply COVID-19 vaccines in what could possibly be the world’s largest and fastest ever procurement and supply of vaccines, one can hope for a shot at the earliest. The Indian experience with the UNICEF India pulse program has been hugely successful and is an amazing public health achievement which many considered impossible way back in 2009.
The crisis is unprecedented. But the good news is that India’s case fatality ratio (CFR) - the proportion of people who die among those who test positive for COVID-19 - has dipped from 2.15% in early August to 1.72% on September 6. Therefore, the challenge is to collectively revive the economy while continuing to have our guards up especially in the wake of vaccine uncertainty because no matter what protecting human lives will always be the top priority.
The author is Founder & Managing Director, IPE Global Limited
( Views are personal)