COVID-19 vaccines: What if we don’t have enough of them?

The threat of a major global pandemic loomed large over us since the 2009 H1N1 swine flu outbreak. Throughout this period, health policy decision makers had the opportunity to prepare for the inevitable by following the two principles of supply chain resilience: 1) Redundancy by carrying strategic inventory of Personal Protective Equipment (PPE), medical consumables, and single-use devices; and 2) Flexibility by building the capability to quickly adapt chemical and automobile manufacturing lines to produce hand sanitizers and ventilators, dispatch cross-trained medical professionals to run the Intensive Care Units (ICU), and increase the number of hospital beds by erecting makeshift field hospitals in sport halls and convention centers.

Having missed the desired preparedness level which exacerbated by the sheer aggressiveness of COVID-19, the lockdown initiative has allowed the overwhelmed healthcare systems to catch their breath and match hospitalization supply and demand by cautiously converging them: increase supply of healthcare equipment and personnel by way of canceling the non-essential cares while curtailing the demand growth for healthcare assets via the “self-quarantine” policy.

Despite the triumphant “flatten the curve” campaigns, the fight with the COVID-19 beast is far from over. Now moving gingerly out of lockdown; the society expects governments, pharmaceutical companies, and international agencies to have strategies in place to quickly produce and distribute sufficient number of COVID-19 testing kits, effective vaccines, and antiviral medicines. Vaccines (if ever found), in particular, usually have complex manufacturing processes and long production lead times. It is likely that we will face acute shortages in the initial period after the vaccine is produced. We will then have to rely on good targeting and rationing strategies for the quantity of vaccines available.

Public health officials have to develop protocols for rationing the available COVID-19 vaccines based on multiple competing objectives. Priority for vaccination may be given to certain population segments. It is evident that personnel in healthcare institutions who are critical in assisting those who are hospitalized should be given priority in obtaining the vaccine. This will decrease the risk of transmission from healthcare personnel to other patients; and avoid absenteeism of essential medical personnel. Some population segments may be important to prioritize for vaccination due to the usefulness of their work in controlling the pandemic, like those who work in companies that manufacture vaccines. Those who are medically the neediest (with pre-existing pulmonary or cardiovascular conditions and/or diabetes) and face the highest mortality from the disease should also be given high priority. Similarly -from the standpoint of slowing the further progression of the outbreak-, priority can be given to those who present the highest risk of transmitting the disease onwards; for example elderly in the care homes.

On the other hand, those who argue in favor of equity and egalitarian healthcare will contend that the general population should also have sufficient access to the vaccine and availability only to high priority segments is unfair. At least some amount of the vaccine should be made available to the general population even if on a strictly First-Come-First-Served (FCFS) basis. Public health planners thus face the challenging problem of allocating scarce quantities of COVID-19 vaccines to a population consisting of high and low priority segments. The key question they face is how to set the rationing levels or service levels for each of the priority segments. These service levels are set based on subjective assessment that the decision makers want to see as their impact on the overall wellbeing of the society. Setting the high priority segments service level (and the corresponding quantity of vaccine reserved) too high leads to the general population not being able to get vaccinated; whereas setting it too low implies that a larger fraction of the high priority segments will remain unvaccinated.

Traditional inventory management systems using backlog or underage costs are generally improper in the human life context as no monetary value can be defined for human suffering or loss of life. Consequently, in addition to FCFS, the health planners can turn their attention to other inventory allocation mechanisms of Partitioned Allocation (PA), Standard Nesting (SN), and Theft Nesting (TN) commonly used in other sectors such as airlines. In any one of these other mechanisms, a part of the vaccine inventory is reserved for the exclusive use of the high priority segments while demand from the low priority segments can only be fulfilled from the unreserved portion of the vaccine inventory.

1) First-Come-First-Served (FCFS): This approach can be best used when sufficient doses of vaccines are available for all high and low priority segments. In a delightful yet extreme case when vaccines are abundant, decision makers face no ethical dilemmas of prioritizing one segment over the other.

2) Partitioned Allocation (PA): The high priority segments can only consume the vaccines specifically reserved for them while the rest is for the exclusive use of the low priority segments. No borrowing (nesting) from the unreserved vaccines is possible for the high priority segments. In another extreme case when available vaccines are so scarce that they can barely cover part of the high priority segments, all will be reserved. It fits best when negotiated strict quotas or service levels for priority segments are in place. If the reserved quantities are set too high, some doses of vaccine may stay unused to expire while the low priority segments are held back.

3) Standard Nesting (SN): The high priority segments get vaccinated using the reserved and the low priority segments using the unreserved vaccines. Once (and if) the reserved quantity is exhausted and some unreserved vaccines are still unused by the low priority segments, the high and low priority segments compete for them on a FCFS basis. Commonly used in the airline industry to maximize the revenue of a flight whilst fly with no empty seats, higher fair codes enjoy a protection level (with the permit to surpass this level) while early bird lower fair codes are constrained by a booking limit. Similarly and if reserved COVID-19 vaccine quantity selected properly, both high and low priority segments can be partially served while no vaccine stay unutilized.

4) Theft Nesting (TN): The sequence of allocation is reversed compare to SN as both priority segments start the vaccination campaign by competing for the unreserved vaccine inventory on a FCFS basis. Once (and if) the unreserved vaccine inventory is consumed, high priority segments continue to be vaccinated from the reserved inventory while low priority segments deterred. Properly called “the memoryless mechanism” (since the reserved amount stays untouched during the initial FCFS phase regardless of how many vaccinations already administered for high priority segments), it fits best when the risk-averse health planners choose to maintain a safety stock of vaccines for the high priority segments despite some doses may eventually stay unconsumed and expire.

Having completed the paramount task of procuring highly sought-after COVID-19 vaccines, it would be premature for the health planners to unbend. They should then make impactful yet informed decisions about not only the suitable choice of the vaccine inventory allocation mechanism but also the desired reserved vaccine quantity.

Behzad Samii has adapted this article from the following publication:
Samii, B., R. Pibernik, P. Yadav, A. Vereecke. (2012). Reservation and allocation policies for influenza vaccines , European Journal of Operations Research, 222 (3) 495-507.

Interested in more insights on how to cope with turbulent times?

Discover the learning lessons and expertise from our faculty on how to adapt to this new reality.

& Rankings

Equis Association of MBAs AACSB Financial Times