EU governments are counting on speedy vaccination of their populations against COVID-19 so that they can scale back restrictions that are impeding their economies and return to a sustainable growth path. S&P Global Ratings estimates that for the EU to meet its current timeline for vaccinating 70% of its adult population by summer 2021 the delivery of vaccine doses needs to accelerate. That includes up to an additional 75 million doses that Pfizer-BioNTech promised by end-June 2021.

Using some simplified assumptions based on announced supply agreements, we estimate that half of the EU's adult population will receive the recommended doses by late June and 70% by late July. However, if there is a delay in delivering the expected volumes, reaching 70% would move to late August or early September. A delay could potentially result from a slower ramp-up of production, later approval of the Johnson & Johnson one-dose vaccine, logistical challenges with distribution and administration and last, but not least, willingness of people to be vaccinated. The U.K. should be able to achieve the 50% threshold in mid-May 2021 and 70% by late June.

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We understand that as of now the European Commission has contracted for 2.3 billion doses and has had exploratory talks for another 260 million doses. The European Commission negotiates, on behalf of all EU member states, directly with vaccine manufacturers. Each country receives supplies of their doses at the same time calculated on a per capita basis (see table 1). The U.K. government has negotiated vaccine contracts independently.

Table 1

The EU has set a target to vaccinate at least 80% of people over 80 years old as well as health and social care professionals by March 2021 and 70% of the entire adult population by summer 2021. We understand that over 70% is needed to achieve the broader protection to reduce the spread of the virus, relieve pressure on health care systems, and allow restrictions on society and business to largely be lifted. Nonetheless, it is likely that some restrictive measures will have to remain in place given the real risks of new variants reducing the efficacy of existing vaccines and the extended timeline for immunizing populations in many countries around the world.

The assumptions behind our vaccination estimates

In estimating when the EU and the U.K. could reach the 70% thresholds, we have assumed the following based on publicly available information:

• Pfizer-BioNTech, Moderna, and AstraZeneca are supplying the three vaccines currently approved in the EU and U.K.
• Potential for approval of a fourth vaccine by Johnson & Johnson in second-quarter 2021. We assume that Johnson & Johnson will first file for approval in the U.S. in February, with approval for emergency use possibly coming before end-March. We therefore think the company could file in Europe in March or April, with approval in April or May. We understand that it took the European Medicines Agency (EMA) 20 days to approve the Pfizer-BioNTech vaccine, more than one month for Moderna's vaccine, and 17 days for AstraZeneca's. As such, we assume Johnson & Johnson's supply will become available for use in Europe from only June-July 2021.
• Pfizer-BioNTech will be able to deliver 200 million doses to the EU by end-September 2021 and about 40 million doses to the U.K. by end-July 2021 under the initial agreement.
• Pfizer-BioNTech will deliver up to 75 million of additional doses to the EU in the second quarter.
• Moderna will supply 160 million doses to the EU by end-2021 and a small supply to the U.K.
• AstraZeneca continues to deliver at least 8 million doses per month to the U.K. and is to provide about 40 million doses in first-quarter 2021 to the EU, increasing to at least to 25 million per month as yields at its European plants improve.
• Johnson & Johnson starts supplying the EU with approximately 20 million doses per month in June and July 2021, ramping up to 30 million doses per month for the rest of the year.
• Sanofi and Novartis will supply additional doses from the third quarter of 2021 under recently agreed manufacturing partnership agreement with Pfizer.
• Vaccines by Pfizer-BioNTech, Moderna, and AstraZeneca are approved under a two-dose regime administrated three to four weeks apart, Johnson & Johnson is likely to be approved under a one-dose regime. For the rollout of the AstraZeneca vaccine in the EU, the gap between the first and the second dose could be longer.
• We do not factor in additional doses contracted for bilaterally outside the EU agreements.
• We do not assume any further delays in supply.
• We assume the population is willing to be vaccinated.
• We don't assume that supply of AstraZeneca's vaccine will be diverted from the U.K. to the EU, a reduction in U.K. deliveries, or the imposition of EU export restrictions on Moderna or Pfizer's European facilities.
• We assume no shortages of the medical equipment, facilities, and staff needed to administer the vaccines.

Our assumptions do not include our opinions about:

• How long immunity produced by vaccination lasts because of the lack of data.
• Potentially lower vaccine efficacy against the South African variant of the coronavirus.
• How quickly vaccine manufacturers can modify and produce vaccines against new strains and their effectiveness.

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S&P Global Ratings believes there remains high, albeit moderating, uncertainty about the evolution of the coronavirus pandemic and its economic effects. Vaccine production is ramping up and rollouts are gathering pace around the world. Widespread immunization, which will help pave the way for a return to more normal levels of social and economic activity, looks to be achievable by most developed economies by the end of the third quarter. However, some emerging markets may only be able to achieve widespread immunization by year-end or later. We use these assumptions about vaccine timing in assessing the economic and credit implications associated with the pandemic (see our research here: www.spglobal.com/ratings). As the situation evolves, we will update our assumptions and estimates accordingly.

Equitable global access to vaccines is needed to support a full reopening of economies

More than half of the world's 7.8 billion population lives in just seven countries, led by China with 1.44 billion inhabitants, followed by India with 1.38 billion. The next five most populous nations--the U.S., Indonesia, Brazil, Pakistan, and Nigeria each have populations of 200 million-330 million, compared with the EU's population of about 450 million.

Large populations sometimes living in settings with less developed health care infrastructure will make vaccination programs a more complex exercise, especially in emerging markets. However, these countries have a relatively young population compared with Western nations' and as such will need relatively fewer required doses to immunize and protect the most vulnerable.

The majority of emerging countries decided to negotiate bilaterally or to use the Covax initiative and to opt for vaccines that are cheaper and easier to distribute. Indonesia, under its signed contracts, should receive about 330 million doses, with nearly 125 million coming from China's Sinovac and Sinopharm. The rest is a mix of vaccines from AstraZeneca, Pfizer-BioNTech, and Covax. Brazil should receive 100 million doses from AstraZeneca and 100 million from Sinovac, supported by about 42 million from Covax. According to senior Nigerian officials the country was hoping to get more than 40 million Covid-19 vaccine doses to cover one-fifth of its population through the global Covax scheme in 2021, with the first doses of the AstraZeneca arriving by the end of February.

India should benefit from AstraZeneca's and Novavax's having significant manufacturing capacity in the country. Countries like China or Russia rely largely on local vaccine supply, although AstraZeneca entered into agreement with China-based vaccine manufacturer Shenzhen Kangtai to produce the AstraZeneca vaccine. If approved, they should be able to produce 400 million doses of AstraZeneca's COVID-19 vaccine per year.

We understand that less developed countries, especially in Africa and Asia, will mostly rely on distribution via Covax. Covax is a global initiative co-led by the World Health Organization, Gavi, the Vaccine Alliance, and the Coalition for Epidemic Preparedness Innovations. It aims to deliver 2 billion doses of the coronavirus vaccines to people in lower-income countries by the end of 2021. Currently the 92 low- and middle- income countries participating in the Covax Advance Market Commitment (AMC) program are expected to receive sufficient doses of vaccine to inoculate only 20% of their populations by the end of 2021. However, to meet its target, Covax said it needs $4.9 billion, in addition to the $2.1 billion it has already raised.

Currently Covax should have available and be able to distribute 336 million doses of the AstraZeneca vaccine and 1.2 million doses of the Pfizer-BioNTech vaccine in the first and second quarter of 2021. This amount distributed in the first phase will cover on average only 3.3% of the total population included in the program.

However, such a slow rollout could limit the efficacy of the EU's and other developed countries' vaccination programs. The virus will likely continue to mutate and possibly multiply in those populations with no or limited access to vaccines. This raises the risk that as developed economies seek to fully reopen their economies, including to international travel, new vaccine resistant mutations could take hold, causing renewed spikes in infections, severe illness, and excess deaths.

We understand that a significant portion of AstraZeneca's current 100 million monthly vaccine capacity will go to countries outside Europe and be distributed at cost or under charitable programs like Covax in the low- and middle-income countries. The EU is supporting the global vaccination efforts with a pledge of €500 million to Covax funding, the vaccine pillar of the Access to COVID-19 Tools (ACT) Accelerator, a global collaboration to accelerate the development, production, and equitable access to COVID-19 tests, treatments, and vaccines. Similarly, the U.K. has committed to a matched funding arrangement that could provide up to £500 million to support Covax AMC. The U.S. is also committing $4 billion of funding to Gavi over the next two years. For the vaccine rollout in Europe to be as effective as necessary, it needs to be as global as possible.

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Related Research

The Health Care Credit Beat: U.S. Herd Immunity By Midyear Is Possible With Additional Vaccine Approvals, Feb. 11, 2021