Strengthening the weak vaccine cold chain in a COVID-19 world

The issue

Most of us are hopeful about the COVID-19 vaccine. However, the availability of a vaccine alone won’t solve the challenge unless this is coupled with equitable vaccine distribution. Effective and safe distribution of vaccines requires a whole chain of actors to work together in a coordinated and effective way. This is easier said than done.

The fast-paced progress of a COVID-19 vaccine development has turned the eyes on the need to invest now in the required infrastructure for distributing and delivering the vaccine at a global scale on an equitable basis. We need to be ready for a potential-immediate safe and rapid distribution of billions of vaccines. Most vaccines need to be stored at cool temperatures, which increases the supply chain’s complexity as it requires an extensive and unbroken cold chain. However, globally the cold chain is underdeveloped, with only about 10 per cent of the required cold chain capacity existing in some developing nations, and one fifth of immunisation facilities in the world’s poorest countries not even having the equipment needed to keep vaccines at optimal temperatures. 

One of the investment priorities should be on establishing reliable and resilient supply chains in particular in developing economies. However, given that on average, cooling is a very climate-unfriendly sector, the challenge to be addressed is not only about access, but access to sustainable, clean, and energy-efficient cold chain solutions. So how do we address this rapid deployment of needed “clean and efficient” infrastructure? Can additional resources become available fast enough to fund the additional “clean and efficient” infrastructure required to address the needs for distributing a COVID-19 vaccine?  What happens with all this “clean and efficient” infrastructure once the crisis is part of our past?

Innovative thinking beyond science and technology

Clean and efficient cooling technologies exist and can address many of the challenges faced by supply chains in developing countries. This includes management systems to control the stocks and flow of vaccines in the supply chain, and cold storage like solar powered ice-lined refrigerators to address the lack of reliable electricity supply. While some progress has been made in recent years, barriers remain. 

Even in places equipped with access to innovative and clean technology, inappropriate operation, lack of adequate and continuous maintenance, and unavailability of spare parts has resulted in health care centers becoming dumping grounds for non-operating cooling equipment. Countries that might have the resources to buy cooling equipment, do not necessarily have the expertise at scale to operate, maintain and repair these when needed.

Strengthening the weakest links of medical cold chains in the developing world to improve  access to refrigerated medicine, while reducing greenhouse gas emissions will require significant investments in sustainable and energy efficient cold chain solutions. International development assistance alone will not be enough to meet such investment requirements. Much of this finance will need to be mobilised locally, and from private sources. Innovative financing mechanisms, incentives, business models, and financial supporting mechanisms can spur new investments in energy efficient cold chain solutions.

In a 2010 Ted Talk, Melinda Gates pointed to the effectiveness of Coca Cola in reaching remote areas with their products and encouraged governments and NGOs to learn from its success to apply it for the public good. Further, in 2017 Adrian Rostow, director of the Project Last Mile, working to make life-saving medicines available to all people, regardless of where they live, in an interview with EURACTIV indicated, “Coca-Cola had a much more structured process providing preventive maintenance, and being able to identify whenever there was a problem with a refrigerator, how quickly it could be fixed. The minute there is a problem there is a technician who has the necessary spare parts and goes to fix it”. 

Servitisation one of many solutions

So, if a private corporation is showing the way, how can we engage others in the private sector to lead the way on improving cold chains for vaccine access so that they are reliable, clean and efficient? Servitisation, an innovative but not-at-all new business model, is an effective vehicle to involve technology providers, and leverage private capital towards sustainable cold chain solutions. It is a market-based mechanism that incentivises all actors involved, namely technology providers, consumers and investors, to act for the benefit of all by aligning their individual interests.

The servitisation model applied to the cooling industry, Cooling as a Service (CaaS), in particular, and servitisation models in general, align the interest of business (private technology providers) the people (beneficiaries of improved health care access, including governments and users), and the planet. It can be applied to one or more sections of the cold chain, depending on how integrated it is.

Thanks to a transparent pricing system, the healthcare facility purchases the service of keeping vaccines cold rather than the equipment needed for the same purpose; eliminating the need for any upfront investment or having to worry about maintenance and operating costs. More importantly, the provider of the service has all the incentives to ensure the cooling equipment is operating adequately, addressing the issue of stranded assets due to lack of technical knowledge by the end user or lack of spare parts. CaaS creates a strong economic incentive for the solution provider to offer optimal maintenance, since this maximises the operating efficiency, reduces unplanned breakdowns and down-time, and avoids more expensive corrective maintenance. 

Cooling as a Service generates incentives for the provider to offer the service using the most efficient technology, the one that in the long-term will be the cheapest to operate and maintain. It also enables a system-level approach that promotes constant innovation to address the cooling needs. It positions the solution provider as the decision maker regarding, for example, which components need to be replaced or upgraded, or the inclusion of complementary elements such as passive and thermal storage to reduce the system’s life cycle cost, and whether to include the use of solar-power to improve the reliability of the system. Over the longer term, the concept of servitization also goes hand in hand with a circular economy, in which the technology is designed and installed in such a way that it facilitates modularity and re-use of components, to maximise the use of the asset as well as to minimise waste and associated costs. 

Further, Cooling as a Service enables the integration of cold storage, in the example above, but also cold chain networks with digital technologies, thereby enhancing visibility of available capacity across the supply chain, and enabling data sharing across sectors to help inform vaccine distribution for and beyond the COVID-19 response. This accelerates the role of Artificial Intelligence (AI) and data to better manage cooling systems and drive maintenance to deliver performance. 

Servitisation allows repurposing of technology to address a multitude of cooling needs building synergies with the use of Community Cooling Hubs, and its application to save a billion COVID vaccines as estimated by UNEP. For instance, cold rooms might be used for temporary vaccine storage, and later utilised to store fresh produce for farmers, or provide cooling for other applications to enable local entrepreneurs to develop their business. This characteristic of the model to enable asset utilisation optimisation is highly relevant in particular due to the sudden but temporary need for massive deployment of cooling systems for COVID-19 vaccine distribution, and the long lifespan of the equipment versus the timeline for vaccine needs. 

CaaS for vaccine storage in Nigeria

Cooling as a Service (CaaS) has the potential to strengthen some of the weakest links of the cold chain for health, and is currently being tested by Koolbox with their clean cold storage solution in 25 Delta-state Health Care Facilities in Nigeria. CaaS offers continued engagement of the provider, possibly with remote overview of operation to promote preventing rather than corrective maintenance, throughout the life of the project.

“To achieve an effective Vaccine deployment program for all, there is the need for a product and a sustainable process that delivers quality vaccine service outcome at point of need. The Koolbox system has the potential to ensure sustainable Vaccine availability especially in difficult and hard to reach areas”, Dr. Ben Nkechika, Director General/Chief Executive Officer of the Delta State Contributory Health Commission, Nigeria.

Implementing CaaS requires a change of mindset for providers, as well as mechanisms to address new risks they will be facing. From selling assets and receiving cash in the widespread transaction model today, they will instead accrue smaller instalments of cash over a longer period of time, increasing their exposure to payment default from end-users. This is all the more prominent in developing countries. Reallocating a portion of financial aid (e.g. multilateral/bilateral or even private) from financing the procurement of assets to create a partial payment-default risk guarantee for technology providers, would address this risk. The existence of a payment guarantee would increase the appeal of servitisation projects to investors and the bankability of providers, who could use the guarantee as an additional collateral for lenders. Further, a minimum percentage of first-loss guarantee financed with international financial aid, would help leverage additional  [private] funds for increasing the size of such a guarantee fund, improving the effectiveness of every USD of financial aid and making it financially sustainable over time. 

Strengthening market-based business models like servitisation can have a long and sustainable effect by making, at scale, business sense for private technology providers to get involved offering the best cooling service for vaccines. Under this scheme service providers would have a much more structured process to provide preventive maintenance; enabling them the ability to identify whenever a refrigerator has an issue, what the problem is and how quickly it can be fixed. The minute there would be a problem they would have a technician who has the necessary spare parts, and required skills to fix it. The time to address the need for a reliable and energy efficient vaccine supply chain is now. Innovative business models like CaaS can have a lasting impact that will help us with the current situation, but also be better prepared for future pandemics, which are predicted to be more common as long as we don’t address the excessive encroachment of humans on nature and prevent the planet from warming up.

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