Beyond the pandemic: The next chapter of innovation in vaccines – McKinsey

Vaccines are vital to global health, saving millions of lives each year. The COVID-19 pandemic underscored their importance, with more than 20 million lives saved in the first year of vaccine deployment alone. This achievement was fueled by an unprecedented acceleration in innovation, with multiple COVID-19 vaccine candidates developed and launched within roughly one year, a process that has historically taken a decade on average.

This level of activity was dramatically different from what we saw in our 2019 analysis, which revealed signs that the vaccine innovation engine had begun to sputter. While the two decades preceding the pandemic saw strong growth in the vaccine industrywith pipelines doubling and annual growth rates of 12 to 15 percentwe identified four indicators of stagnation in 2019: slowing revenue growth (only 5 percent across the industry over the previous five years), a flattening development pipeline, higher attrition rates for vaccines compared with other biologics, and limited progress targeting disease areas of high unmet need, particularly those endemic to low- and middle-income countries (LMICs).

At that time, we highlighted opportunities to reinvigorate vaccine innovation across six major vaccine archetypes (Exhibit 1) by addressing commercial and technical obstacles and advocated for a comprehensive and shared approach among the relevant stakeholders, including manufacturers, governments, academia, research centers, and the private sector. Some of these strategies proved instrumental to the rapid development of the COVID-19 vaccines.

Now, roughly three years after the surge of innovation spurred by the pandemic, the vaccine industry faces another critical juncture. Despite accelerated vaccine innovation for certain diseases, progress remains uneven, and significant unmet needs persist. This article explores how the pandemic transformed the business case for vaccines. It proposes five actions the vaccine ecosystem can take to harness the pandemic-driven momentum to accelerate vaccine innovation more broadly and to tackle global health challenges more effectively.

The rapid development of COVID-19 vaccines was propelled by multiple factors, including enhanced funding, operational efficiency, technological advancements, and regulatory flexibility. The COVID-19 innovation model has spurred advancements in other areas, particularly in respiratory diseases, which saw ten launches in the United States alone from 2020 to 2023 (up from three between 2016 and 2019). In the past several years, multiple vaccines targeting diseases that primarily affect LMICs, such as dengue and chikungunya, have also been approved by the US Food and Drug Administration (FDA). The vaccine development pipeline has also seen a rise in Phase III candidates (Exhibit 2), which include two meningitis vaccines, a possible human cytomegalovirus (CMV) vaccine, and a promising vaccine against invasive pneumococcal disease in adults.

The overall vaccine development timeline is also compressing (Exhibit 3). Although not as rapid as the unprecedented COVID-19 timeline, which was roughly one year, respiratory syncytial virus (RSV) vaccines have been developed within a three- to five-year time frame (the start of clinical development through regulatory approval), a pace significantly quicker than historical norms. Other vaccine types that are also moving relatively quickly through the clinical phases include Modernas messenger ribonucleic acid (mRNA) combination vaccine candidate for RSV and seasonal influenza, which is on a three- to four-year projected development timeline.

Despite these advances, progress has been uneven across different vaccine archetypes (Exhibit 4). Multiple vaccines were launched in recent years that target residual unmet needs (archetype two) such as malaria, pneumonia, and meningitis, with additional late-stage candidates in the pipeline. However, few vaccine candidates for neglected diseases (archetype five) have progressed to late-stage clinical development. Vaccines for this disease archetype face high levels of commercial uncertainty as well as technical complexity, including difficulty in generating protective immunity.

Vaccines targeting persisting global threats (archetype three), including HIV and the EpsteinBarr virus, face technical challenges in identifying appropriate antigens and generating sufficient immune responses, especially for pathogens with complex life cycles. And although concerns about hospital-acquired antibiotic-resistant infections have piqued interest in nosocomial-associated threats (archetype six), efforts to develop vaccines for them have returned mixed results.

Some projects, such as an E. coli vaccine candidate, have moved into Phase III trials; others, including several C. difficile vaccine attempts, have not been successful. These initiatives also face commercial and logistical challenges, including uncertainties about how to identify the target demographic for vaccination and the optimal timing for vaccine administration.

Addressing disparities and accelerating vaccine development for these unmet needs remain crucial in the ongoing fight against infectious diseases. Overcoming technical challenges and streamlining the development process will be essential to closing the gaps in the vaccine development pipeline and ensuring worldwide equitable access to lifesaving vaccines.

The response to the COVID-19 pandemic strengthened the vaccine business case and led to a remarkable 30 percent increase in vaccine candidates over the past five years.

The development of vaccines targeting infectious diseases has historically been hindered by an unfavorable business case characterized by high capital costs, long regulatory timelines, increased opportunity costs, technical complexity, and commercial uncertainty. However, the response to the COVID-19 pandemic strengthened the vaccine business case and led to a remarkable 30 percent increase in vaccine candidates over the past five years (Exhibit 5). These changes to the business caseswhich demonstrated what is possible when the right stakeholders work together to accelerate innovationincluded the following:

Economic R&D and manufacturing incentives. Unprecedented levels of funding were also appropriated for vaccine R&D, including more than $2 billion each from the US federal government and the global PPP Coalition for Epidemic Preparedness Innovations (CEPI). Canada, Germany, and other public- and private-sector stakeholders worldwide also directly invested in expanding manufacturing capacity to reduce the financial risk of scaling up vaccine production.

Despite a substantial increase in public funding, it is important to note that private funding for infectious disease vaccine R&D still lags behind funding in other areas, with only 3.4 percent of the total venture capital raised for biopharmaceutical companies during the past ten years going to companies with infectious-disease-vaccine programs, compared with 38 percent for oncology programs.

Although the speed, magnitude, and cohesiveness of these responses are far more sustainable during a pandemic than in a steady state (noncrisis-related) vaccine development environment, they have given the industry a model for accelerating innovation.

The vaccine ecosystem now faces another inflection point: Will it revert to a state that is more susceptible to a challenging business case, or will it draw lessons from the pandemic and sustain or even accelerate the vaccine innovation momentum it ignited? The five actions detailed below (and outlined in Exhibit 6) aim to enhance the vaccine development landscape by addressing key drivers such as investment requirements, regulatory hurdles, and market uncertainties.

The COVID-19 pandemic showed how alliances among companies, not for profits, academia, and governments can accelerate R&D and manufacturing. Several of the most quickly approved COVID-19 vaccines represented R&D partnerships among research institutes, academia, and industry, including the National Institutes of Health/Moderna and the University of Oxford/AstraZeneca collaborations.

In addition, broader collaborations such as the Accelerating COVID-19 Therapeutic Interventions and Vaccines (ACTIV) partnership brought together US federal agencies, innovators, academia, and others to develop a research strategy to accelerate the development of COVID-19 vaccines and therapeutics and coordinate clinical trials. Vaccine manufacturing partnerships and networks also grew significantly during the pandemicmore than 70 percent of the 374 manufacturing and supply chain announcements involved a collaboration among multiple stakeholders.

There are signs that these types of partnerships will continue to grow in the coming years, particularly partnerships focused on rapid production of vaccines for future pandemics, such as the one CEPI is building in the Global South. Maintaining these partnerships beyond the pandemic context could lower capital costs and speed up production. However, new collaboration models are required to ensure rapid technology transfer with minimal risk and resource demands.

The scale of COVID-19 funding is unrealistic for steady-state vaccine development and potentially even unnecessary for more commercially attractive blockbuster vaccines. However, targeted funding commitments can reduce investment risks and promote ongoing innovation, particularly for vaccine candidates aimed at diseases prevalent in LMICs. The ones set up by the Biomedical Advanced Research and Development Authority (BARDA) and Gavi could inspire the design of future funding mechanisms.

Even without the scale of COVID-19 investment, global funders and international institutions can boost the commercial appeal of vaccine development if they offer clear innovation funding incentives. For example, Gavis recently established African Vaccine Manufacturing Accelerator has committed to making $1 billion available to manufacturers at critical moments in the development process to offset their start-up costs and create demand certainty for vaccines that may be needed to prevent future pandemics.

The pandemic demonstrated the potential for high vaccination rates among the adult population. Sustaining such levels will require coordinated efforts across the healthcare ecosystem to improve vaccine access, engage populations that are more vulnerable to certain diseases, and innovate delivery methods.

COVID-19 vaccination rates among adults who received first doses were historically high during the pandemic; conversely, the vaccination rates for subsequent booster doses have been in line with and, in some cases, lower than the rates for other adult vaccines. As of March 2024, fewer than 25 percent of eligible adults in the United States had received an updated 202324 COVID-19 vaccine since September 2023. Despite the US Centers for Disease Control and Preventions recommended immunization schedule for adults, adult immunization rates are consistently lower than those of children and vary significantly by geography and demography. Each year for the past decade, only 30 to 50 percent of mid-adults (18 to 64 years old) have gotten a seasonal influenza vaccine.

To help ensure the public health benefits and stabilize the commercial demand, the public sector, vaccine manufacturers, retail pharmacies, and other stakeholders could take the following coordinated and complementary actions:

The COVID-19 pandemic highlighted the importance of fungible capacity to reduce bottlenecks to widespread vaccine availability. Transitioning toward flexible, multiproduct manufacturing can help ensure readiness for future pandemics and streamline production processes.

The historical model, in which most large vaccine manufacturing facilities specialize in a single product, may no longer be fully fit for purpose, particularly given the need to prepare for future pandemics. One example of fungible manufacturing is at-scale systems that either allow the production of multiple vaccine types on the same platform or can produce the same vaccine on various platforms. Such flexible technology platforms will be critical to avoid building excess capacity. They will also likely be most crucial in the shorter term, particularly in the context of pandemic preparedness.

However, the expense of flexible capacity will require new incentives and significant investment on behalf of funders and manufacturers. We are seeing some promising signs of innovation. For example, Sanofis Evolutive Vaccine Facilities platform is designed around a central unit housing several fully digital production modules, making it possible to produce three to four vaccines simultaneously. This modularity can make it possible to prioritize the production of a specific vaccine more quickly.

The COVID-19 pandemic highlighted the benefits of cooperation, communication, and collaboration between innovators and regulators, which could be integrated into regular practice for other diseases. For example, at a 2023 US Senate hearing, the FDA commissioner discussed a program from the Center for Biologics Evaluation and Research (CBER) devoted to emerging pathogens. The program would, among other things, expedite reviews, provide guidance to developers, leverage real-world data for product assessment, and support advanced manufacturing.

Initiatives launched before the pandemic can offer inspiration for the design of new vaccine-focused mechanisms. For example, the European Unions PRIME initiative, launched in 2016, offers enhanced support for the development of therapies addressing unmet needs, including early contact with the European Medicines Agency and expedited scientific advice during development. The FDAs Oncology Center of Excellence Real-Time Oncology Review (RTOR) program, launched in 2018, enables faster reviews by allowing submission of top-line efficacy and safety results for drug candidates likely to demonstrate substantial improvements or candidates with straightforward study designs. This allows for earlier identification of issues that may arise during development and helps regulators and innovators align on trial design.

Global regulatory cooperation can also accelerate vaccine innovation and streamline administrative processes. During the pandemic, forums such as the International Coalition of Medicines Regulatory Authorities formed COVID-19 working groups that rapidly accelerated vaccine development by establishing governing protocols, agreeing on approaches to adapt vaccines to address variants, and improving regulatory agility. Also, the WHO-backed African Vaccine Regulatory Forum introduced an emergency joint review process that led to an accelerated review turnaround. Working groups for other diseases could promote consistent standards and requirements, encouraging innovation and bolstering clinical trial efficiencies. Expanding regulatory measures such as accepting electronic files and conducting virtual inspections could also promote vaccine innovation.

In the meantime, innovators can consider assessing and improving the level of their submission excellence, or their ability to quickly prepare high-quality regulatory submissions, which can help boost the odds of first-cycle approval.

The COVID-19 pandemic ignited a revolution in vaccine development. Unprecedented speed and scale brought lifesaving vaccines to the world in record time. However, without concerted effort, the urgency that fueled innovation during the crisis could easily dissipate. The five actions outlined in this article provide a road map for sustaining the innovation surge and accelerating the development of lifesaving vaccines for the worlds most pressing health challenges. With collective action and unwavering commitment, stakeholders in the vaccine ecosystem can harness the lessons of the pandemic to spur transformative change and help secure a healthier future for all.

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Beyond the pandemic: The next chapter of innovation in vaccines - McKinsey