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South Korea has earned international plaudits as a model for its success in COVID-19 mitigation. Employing systematic approaches for testing, contact tracing, segregation, and quarantine, South Korea has, throughout the pandemic, managed to keep infection rates very low. Per capita, South Korea has suffered only 2.6, 1.8, and 5.6 percent of the infections in the U.K., U.S., and Germany, respectively.
Compared to this success in containing transmission, South Korea has been noticeably slow in administering vaccines. In fact, as of this writing, not a single Korean citizen has been immunized. This is despite over 41 million in the United States and almost 16 million in the United Kingdom having already received their first injection. Vaccinations in South Korea aren’t scheduled to begin until February 26.
In recent weeks, mounting public pressure motivated the South Korean government to follow in the footsteps of other nations and finalize vaccine import agreements. These agreements were struck at the end of January with several companies, including Pfizer and Moderna, securing enough vaccine to inoculate all Korean citizens. Despite the progress, many were left wondering: why did the government wait so long?
It seems likely that the move toward imports signaled a significant strategy shift, perhaps one that the government was even reluctant to make. Although it is always difficult, as an observer in the public domain, to peer into the minds of government officials, it seems likely that the preferred strategy prior to these agreements was one emphasizing domestic production.
In the decade preceding the pandemic, South Korea experienced a boom in drug and medical supply production. Generic drugs were especially popular, precipitating substantial export agreements with both the European Union and United States. Since 2014, the value of South Korean drug and medical exports roughly doubled, from $2.4 billion to $4.8 billion by 2019. Incidentally, it was also this domestic industry that allowed South Korea to quickly address its mask shortage during the spring of 2020, with government authorities coordinating with domestic manufacturers to resupply the entire country in a matter of weeks.
Coupled with growing confidence in its ability to mitigate virus dissemination, the South Korean government, beginning in the summer of 2020, embarked on a very aggressive strategy of connecting its domestic pharmaceutical manufacturers with foreign vaccine companies, cementing licensing agreements for domestic production. In July 2020, for example, SK-Biosciences reached an agreement with AstraZeneca. In August, a similar deal was struck with Novavax. In addition to licensing foreign vaccines, the South Korean government was also keen on encouraging domestic invention. Unfortunately, these latter efforts have lagged behind foreign competitors, precipitating doubts about Korean-invented vaccines being available in 2021.
Whether through foreign or domestic patents, domestic vaccine production offers several important advantages. First is quality control. Countries like the U.K., which are importing vaccines from abroad, have virtually no authority or oversight over the production process. This essentially forces those countries to rely on safety standards set and enforced in other nations. Although most would agree standards in the United States and Germany are robust, the same can not be said for all countries currently exporting or expected to export COVID-19 vaccines. This lack of oversight essentially eliminates direct protection against faulty products, something the South Korean government was likely determined to avoid if possible, by distributing vaccines manufactured under domestic scrutiny.
Closely related to quality is legal liability. Here too, the United Kingdom caused quite a stir by being the first country to grant Pfizer legal indemnity protection, preventing the company from being sued by U.K. patients in the event of unanticipated medical complications. Although Pfizer’s vaccine does seem safe so far, there is always the possibility that there may be unanticipated long-term side effects. This raises an important ethical issue about whether companies should even be allowed to request immunity in exchange for vaccine sales. Such immunity essentially leaves citizens unprotected if negative consequences arise, forcing individuals or the state to foot any subsequent bills. This too is likely something the South Korean government wanted to avoid, if possible.
A third advantage is enhanced availability. If a country can produce its own vaccine under a Pfizer or Moderna license, it would be able to fully vaccinate its population much faster than it would by competing with other nations for limited international supplies. Even this early in the global vaccination process, we have already seen many vaccine companies fail to deliver on their supply schedules, suggesting the tentative November 2021 target South Korean authorities announced as their desired deadline for herd immunity may be difficult to achieve with imports alone.
Prices are another area where domestic production offers advantages. Governments always have greater leverage to negotiate favorable terms when negotiating with domestic companies as opposed to foreign ones. The global scramble to bid for limited supplies also has the tendency to raise prices, a problem domestic production would help circumvent. Finally, domestic production would come with the added bonus of allowing companies to export vaccines once domestic needs have been met. Given these many advantages, South Korea’s efforts during the summer seem to logically indicate the initial desired strategy was to go for a domestically oriented approach.
Why then the sudden change in strategy? In the first week of November, South Korea was experiencing an average of only 120 new COVID-19 cases per day nationally. Many observers, including myself, were lulled into the impression that South Korea’s aggressive mitigation procedures were so successful that they may be enough to carry a stable situation through the winter. Had this been true, South Korea may have been able to avoid the need for vaccine imports entirely.
Unfortunately, the months of December and January witnessed a significant wave of new cases, peaking at a high of over 1,240 per day. Although this was still much lower than what other countries were experiencing concurrently, the spike in infections nevertheless alarmed the public, forcing the government to reevaluate its position. Hostile media criticism likely accelerated the process, even motivating the prime minister to offer a formal apology.
Moving forward, it seems likely that South Korea’s vaccination program will include some mix of imports with domestic products, especially if the former continue to experience delays. The second wave of December and January infections has since stabilized, with daily new cases back down to the 300s. Licensing agreements struck in 2020 remain valid and many foreign vaccine companies are already counting on South Korean firms to help them meet contractual obligations. This means South Korean companies are already set to play a significant role in contributing to global vaccine volume. Expansion of South Korean participation remains an ongoing process, with Moderna having just entered into talks last week to invest in a $200 million vaccine factory in Seoul, again highlighting South Korea’s favorable position as a well-reputed pharmaceutical manufacturer.
Several things do remain unclear, however. Among the uncertainties is when South Korean companies will be able to get their production online. It seems virtually certain that the first few batches of vaccine made domestically will be claimed by the South Korean government as replacements for foreign orders yet undelivered. However, the government has not yet fully specified which vaccines will be matched to recipients of which demographic, leaving open the possibility of some preferential selections later on.
Another key uncertainty is the effect of COVID-19 variants on vaccine effectiveness. If modified vaccines become required to combat the variants, having an established domestic production process will significantly enhance South Korea’s ability to respond quickly and distribute new vaccines sooner. Domestic production, even in a limited capacity, will likely remain an important contributor in South Korea’s campaign toward herd immunity. In fact, I would predict, despite South Korea’s slow start to vaccination, that the country will still be one of the first to be fully vaccinated. The speed at which this result is achieved will likely be tied intimately to the speed at which its domestic infrastructure becomes operational.
Justin Fendos is a professor at Dongseo University in South Korea.
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