Stuart R. Gallant, MD, PhD

The Biden administration has announced that it plans to invest billions of dollars in Covid-19 vaccine manufacturing capacity [1].  What’s the likely effect of Covid-19 on pharmaceutical manufacturing?

Parenteral Drug Manufacture:  In 2019, before the pandemic, worldwide revenue from parenteral drugs (also known as sterile or injectable drugs) was $450 billion.  The final bill for vaccinating the world’s population against Covid-19 will be approximately $160 billion dollars (assuming 2 doses at $10 each).  That means that the resources required to produce the global supply of parenteral medications will increase by about 12% for three years.

To see what that looks like graphically, consider three scenarios:  The solid line shows what spending on injectable drugs would have been without Covid-19.  The dashed line shows how spending will increase if vaccination is a one-time activity that ends after the world’s population is completely vaccinated.  The dotted line shows what spending will be if manufacture of Coronavirus vaccines becomes an ongoing activity.

A 12% increase may sound like a modest bump, but the factories that are involved in Covid-19 manufacture are some of the largest and most sophisticated in the world—companies like Switzerland’s contract manufacturer Lonza [2].  Monopolizing these factories puts a disproportionate stress on the system.  Also, parenteral manufacturing has been growing at 6% year-on-year, so the system was pre-stressed, even before Covid-19.

Expansion of Manufacturing Capacity:  But, frankly, the graph above is a little naive in its assumptions.  First, non-Covid-19 parenterals are shown to continue growing without impedance, and second, additional parenteral manufacturing capacity comes on-line very fast.  So, let’s consider what’s actually going on in parenteral manufacturing.

In May 2020, Moderna raised $1.3B in the public markets which went straight into manufacturing capacity.  This was in addition to a $483M award received by Moderna from the US government in April 2020.  This has fueled Moderna’s 650,000 sq. ft. expansion of its Norwood plant, as well as other projects.

BioNTech purchased the former Novartis site in Marburg and completely renovated it to create a 100,000 sq. ft. facility capable of producing 1B doses per year.  Delivered and projected supplies of vaccines include:

	Vaccines Manufactured in 2020	Vaccines Manufactured in 2021	2022 Vaccine Manufacture Capacity
Moderna	20 million	1 billion	3 billion
Pfizer/BioNTech	50 million	3 billion	3 billion
AstraZeneca		3 billion	3 billion
Sinovac		1 billion	2 billion
Total	70 million	8 billion	11 billion

Given the massive theoretical capacity coming on-line in 2022, these manufacturers, along with others such as Sputnik V, may find that they are soon chasing patients (rather than the other way around), given that the 55% of the world’s population has received at least 1 dose by November 2021 [3].  Let’s see what that looks like on the graph of the global parenteral market.  Since some of the production was carried out at existing facility, assume that 2021 production constitutes $40B of manufacturing at existing factories and $40B at new or expanded factories or in capture of unused capacity.

So, what does this graph tell us?  First, in spite of working as deliberately as possible, it took some time to ramp up production.  So, 2020 was a year of learning and capacity expansion, but relatively few actual vaccines were produced (in comparison to the world population).  2021 represented a big step up, both in new vaccine production, but also in capture of existing manufacturing capacity by Covid-19 manufacturers.  As a result, manufacture of some other products was delayed or canceled.  2022 may be the year that the market is saturated with Covid-19 vaccines.

Further Capacity Expansion After 2022:  Covid-19 may or may not go away as a pandemic, but new manufacturing plants for parenteral manufacture won’t go away.  So, what does the Biden administration initiative to build more vaccine manufacturing capacity mean to the parenteral market?  1) Presumably, the impact of Covid-19 manufacture on other parenterals will be greatly mitigated (the red portion of the graph disappears over time).  2)  Overall, parenteral capacity increases significantly (the green portion of the graph increases over time).  This may leave some manufacturers searching for projects if actual Covid-19 manufacture doesn’t require all this added capacity.  These other projects may include:  biosimilar projects, other vaccine projects, and innovator drugs just entering the development pipeline.

[1] Tyler Pager, “Biden administration will invest billions to expand coronavirus vaccine manufacturing”, www.washingtonpost.com/us-policy/2021/11/17/biden-covid-vaccine-manufacturing/

[2] Dan Stanton, “Lonza making 400m doses of COVID vaccine and can scale up further if Moderna asks”, bioprocessintl.com/bioprocess-insider/global-markets/lonza-making-400m-doses-of-covid-vaccine-and-can-scale-up-further-if-moderna-asks/

[3] New York Times Coronavirus Vaccine Tracker, www.nytimes.com/interactive/2021/world/covid-vaccinations-tracker.html