A Market-Based Mechanism for Global Vaccine Procurement Coalitions

Problem definition: Equitable vaccine distribution is paramount to containing global disease outbreaks. An important pathway to achieve this goal is pooled vaccine procurement through global coalitions, exemplified by the COVID-19 Vaccine Global Access (COVAX) initiative, which was implemented based on equitable, centrally managed vaccine allocation, affordable prices, and subsidies to fund lower-income economies. However, the limited participation of high-income countries—which chose to purchase vaccines directly from manufacturers via bilateral agreements—reduced the supply available to COVAX and compromised the equity objective of the initiative. Regulatory barriers, such as export bans, exacerbated the coalition’s lack of access to vaccines. In this paper, we propose a market-based mechanism to enhance participation in a global vaccine procurement coalition under supply constraints. Methodology/results: We develop a new variant of the Fisher market model by incorporating a Nash bargaining game that captures bilateral agreement negotiation under regulation. We show that adopting market-clearing prices to match vaccine supply with demand in the coalition can effectively discourage bilateral agreements, provided that countries do not impose stringent export restrictions or possess dominating negotiation power. Complementing market-clearing prices with a subsidy allocation that accounts for disparities in risk, per-capita procurement budget, and power across countries can lead to an equitable vaccine distribution outcome, if sufficient subsidy funding is available. A case study based on COVAX illustrates the equity improvements of the proposed mechanism under practical settings. Managerial implications: Achieving vaccine equity in health emergencies marked by supply constraints may require an integrated approach that combines market mechanisms to incentivize global participation with centrally coordinated aid to address disparities in wealth and power. Supplemental Material: The online appendix is available at https://doi.org/10.1287/msom.2025.0036 .