Vaccines Before Approval? The High-Stakes Bet Middle-Income Countries Must Make in the Next Pandemic

With disease outbreaks continuing to emerge–including mpox, bird flu, and unidentified pathogens—it’s clear that the next pandemic is not a distant possibility but a looming reality. When it arrives, countries will face a crucial decision: wait for vaccine approvals before making procurement deals or invest “at-risk” —ordering doses before regulatory approval to secure early access and enable capacity to be developed in parallel with clinical trials.

This decision is especially challenging for middle-income countries (MICs). These nations occupy a precarious middle group in the global health security architecture: too wealthy to qualify for substantial donor aid yet lacking the fiscal capacity of high-income countries (HICs). Investing in at-risk procurement involves navigating fiscal constraints, political risks associated with spending domestic finances on unproven vaccines, and complex domestic and international legal barriers around procurement.

Previously, we suggested five steps multilateral development banks (MDBs) can take to enable at-risk purchasing ahead of the next pandemic. However, one question often arises: would middle-income countries seek at-risk financing, given competing budget priorities?

Estimates from the COVID-19 pandemic indicate that the cost of at-risk investment during the COVID-19 pandemic would have been significantly lower than what many countries spent on social benefits while awaiting vaccines. Given these fiscal costs, the broader economic toll of pandemics, and the value of the early action, MICs have compelling economic reasons to plan for at-risk investments, and the MDBs should actively facilitate these preparations ahead of future pandemics.

The value of early vaccine access and the cost of delay

Early vaccine access is critical in a pandemic because health and economic losses accumulate over time; and studies show that delays in signing vaccine contracts directly impact delivery timelines, exacerbating economic and social consequences. Countries that secured COVID-19 doses early may have mitigated long-term financial burdens, while those that waited likely faced compounding costs in public health spending and economic disruptions.

Many MICs participated in the COVAX self-financing arm, paying for their allocated doses rather than receiving them as donations. Due to volume limitations, contract delays, and delivery uncertainty, many also made bilateral deals with manufacturers. 86 percent of these deals occurred in or after December 2020, after vaccines began receiving regulatory approval.

Figure 1. Timeline of key milestones of COVID-19 vaccine procurement and distribution

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Source: IMF-WHO COVID-19 Supply Tracker; WHO-UNICEF COVID-19 Vaccination Information Hub

Note: This timeline displays three key COVID-19 vaccination milestones for countries that made bilateral deals. Dark teal dots represent the average timing of first bilateral purchase agreements, yellow dots indicate when countries received enough supply to vaccinate 40 percent of their population with a single dose, and light blue dots show when 40 percent of the population received their first dose. Bold lines indicate average timelines for HICs and MICs who did purchase COVID-19 vaccines at risk, as well as MICs who did not. Vaccine supply delivery dates for the United Kingdom, United States, and Argentina are not available prior to July 2021, and hence, the timeline reflects the dates at which 40 percent of the population received a single dose. At-risk purchases are implemented through advance purchase agreements, which typically provide the manufacturer some prepayment and a legally binding commitment to procure the vaccine conditional on regulatory authorization.

MICs that did not purchase vaccines at-risk reached 40 percent vaccination coverage (the WHO target for all countries by the end of 2021) significantly later than HICs and MICs who invested earlier (Figure 1). On average, these MICs vaccinated 40 percent of their populations five months later than HICs and two months later than MICs that purchased at-risk. The fiscal costs of providing economic support during the time when vaccines were as yet unavailable due to delayed purchases were substantial. For instance, from July to September 2021, when earlier investments could have accelerated vaccine availability, Peru spent $3.7 billion on COVID-related fiscal measures, such as cash transfer programs, and the Philippines spent $6.3 billion.

Matching the vaccine procurement timelines of HICs may have been ambitious, but even modest accelerations would have had substantial value. Although MICs had valid concerns about being outbid by wealthier nations, COVID-19 demonstrated that global vaccine manufacturing capacity was more elastic than many anticipated. Concerns about insufficient supply underscore the importance of MDBs and other stakeholders enabling at-risk investments to incentivize expanded global vaccine production capacity, ultimately benefiting all countries. This elasticity in supply should be a major policy focus for the next pandemic.

What early investment might have looked like

A diversified, at-risk investment strategy could have altered countries’ pandemic trajectory. For instance, had Peru spent $2 billion in August 2020—roughly half its spending on COVID fiscal measures from July to September 2021—on early access to 11 vaccine candidates, it could have established the capacity to deliver an estimated 16.8 million monthly vaccine courses, considering the probability of success across the portfolio of candidates​. Even if some candidates failed, ex-ante modeling (prior to vaccine rollout) suggests that this investment would have yielded $4.9 billion in expected benefits—more than double the initial cost—by speeding up vaccination timelines. Similarly, if the Philippines had spent $1.2 billion—20 percent of its COVID social spending—on four vaccine candidates, it could have delivered 9.8 million doses per month, yielding $1.5 billion in expected gains. These projections, despite being based on ex-ante modeling and recognizing that the next outbreak will be different from COVID, underline the financial prudence of early vaccine investment.

Why didn’t more MICs buy at-risk?

Despite clear economic benefits, few MICs bought vaccines at-risk during COVID-19. Countries may have underestimated the fiscal costs of delay. It may also have been because of MDB constraints on lending for speculative vaccine procurement compared to spending on social welfare. Policymakers were also deterred by political and legal risks which could be addressed by institutional innovations (e.g., an expert panel that evaluates economic case for vaccine investments). Countries may have also been tempted to wait for vaccines covered by grants—this requires aligning eligibility rules to avoid penalizing early action.

Lessons for MICs in the next pandemic

The next pandemic is inevitable, only its specifics are uncertain. One clear lesson from COVID-19 is that at-risk investments are economically justified. The calculations from Peru and the Philippines highlight how the costs of social support during the months when vaccines were delayed could have paid for vaccines to come earlier. With proper support from MDBs and international stakeholders, at-risk investments can become politically and practically feasible. MDBs must therefore do more than just enable at-risk lending; they must support policymakers in navigating these choices, emphasizing that delayed investment may be the costliest option.

We thank Rachel Glennerster, Markus Goldstein, Arthur Baker, Janeen Madan Keller, Sebastian Quaade, and Sara Viglione for thoughtful comments on this post.