ImpactAlpha, Feb. 26 – SARS. Zika. Ebola. The coronavirus is the latest infectious outbreak wreaking social and economic havoc.
The World Health Organization has warned that dangerous pathogens may become more common in the face of climate change, urbanization and overuse of antibiotics. On Tuesday, the Centers for Disease Control warned Americans that things “could get bad,” and the Trump administration asked for $1 billion to counter the coronavirus (even as he has proposed budget cuts for critical health agencies).
The U.S. isn’t the only country unprepared for a pandemic. Action on the climate crisis is measured in years or even decades; containing a pandemic requires both immediate action and long-term preparedness. Vaccines, for example, take many years and billions of dollars to bring to market.
Some ways to bridge the gap:
Pandemic bonds. Amid the 2016 Ebola outbreak, the World Bank created the Pandemic Emergency Financing Facility, a “catastrophe bond” aimed at getting “surge funding” to developing countries at risk. The World Bank’s Jim Yong Kim promised the bond would create “an entirely new market for pandemic risk insurance.”
The offering raised $320 million from bond investors, pension funds and asset managers in the U.S. and Europe. The high yields were offset by the risk of losing principal in the event of a pandemic. Now we have one, but no payout has been triggered. That will happen only 12 weeks after the start of an outbreak and after at least 20 deaths in two countries. That costs valuable time, critics say.
“The whole scheme is set up to minimize the probability of payout,” Harvard Global Health Institute’s Olga Jonas told The Wall Street Journal.
Catalyzing R&D funding. The Coalition for Epidemic Preparedness (CEPI) was founded in 2017 by the governments of Norway and India, the Bill & Melinda Gates Foundation, the Wellcome Trust, and the World Economic Forum. Some of the $760 million it has raised has been channeled to biotech companies developing critical vaccines.
One CEPI fundee, Cambridge, Mass.-based biotech firm Moderna, shipped its first batch of a Coronavirus vaccine for testing this week. A clinical trial could begin by May.
Innovation ecosystem. Austin-based PandemicTech, a “virtual incubator” and resource network, takes a more localized approach to fighting pandemic infectious disease threats. This year, $100,000 in awards to PandemicTech Fellows will give special consideration to projects that address the coronavirus.
Tech solutions. Vaccines and pandemics have been the realm of governments and philanthropy. But the global health challenge opens up opportunities for impact investors as well. focused on fighting pandemic infectious disease threats,
Two potential areas: better diagnostic tools for distributed testing, and technology that can accelerate clinical trials, says Skoll Foundation’s Bruce Lowry.