The Covid-19 pandemic demonstrated that rapid vaccine development is possible – but scientific discovery alone does not guarantee delivery.
Unprecedented R&D investment and public–private collaboration spurred vaccine development, yet many candidate vaccines never reached the market. Our ESRC–JSPS research shows that innovation outcomes depend on both R&D intensity and alignment of technological, regulatory, and political capabilities at firm and system levels. Political capabilities shape how R&D translates into innovations that reach markets. Internal firm capabilities need supportive state systems that reduce uncertainty, enable coordination, and ensure equitable gains from trade.
Key messages
- The pandemic accelerated vaccine innovation but exposed major inequalities in firm capabilities, patent ownership, regulatory and market approval, and access.
- Research and development (R&D) alone do not guarantee innovation. Policy issues such as regulatory hurdles and patent system inefficiencies limit outcomes.
- Innovation outcomes depend on aligned technological, regulatory and political capabilities, at firm and system levels.
- Political capabilities – namely, brand reputation, lobbying, political connectedness, and capacity of public engagement – shape how effectively R&D translates into innovations that reach markets.
- Examples of effectiveness include India’s strong industrial policy and coordination which enabled rapid vaccine scale-up, while the UK’s institutional alignment turned research into global impact.
What the Covid-19 pandemic revealed
The Covid-19 pandemic showcased unprecedented collaboration between governments and industries in accelerating vaccine development – but it also revealed sharp asymmetries in technological capabilities, patent ownership, and access. It demonstrated that innovation is not simply a function of scientific discovery. Innovation is shaped by the interaction between technological capabilities, political capabilities, and the strength of state institutions. In this sense, innovation is systemic and political, not just technological.
Drug discovery and vaccine development entail substantial R&D expenditures and involve lengthy, highly uncertain search processes. Although higher R&D spending is intuitively associated with greater innovations in the form of patents, patent systems also exhibit significant inefficiencies and often enable a disproportionate capture of benefits by certain firms.
In order for a developed drug or vaccine to be commercially viable, pharmaceutical companies have to seek approval from regulatory bodies like the Medicines and Healthcare products Regulatory Agency in the UK, or the Central Drug Standards Control Organisation of India. These agencies have a low approval rate, ranging from as low as 0.1 per cent to 9 per cent. This suggests that although internal R&D facilitates knowledge stock creation for firms, other external resources affect its subsequent exploitation and performance implications as regards innovation and patenting.
The role of political and system-level capabilities
Our research, funded by the Economic and Social Research Council (ESRC) UK and the Japan Society for the Promotion of Science (JSPS), demonstrates that R&D intensity alone does not determine innovation performance. Instead, political capabilities and socio-institutional capabilities moderate whether scientific investment translates into patents, regulatory approval, manufacturing scale-up, and market access.
Political capabilities – such as brand reputation, lobbying, connectedness – shape how effectively R&D translates into innovations that reach markets.
Political capabilities shape the relationship between R&D expenditure and patent outcomes. These capabilities include informational and relational assets that help firms to manage regulatory and policy uncertainty; lobbying (that is, sustained engagement with policymakers and regulators); and embeddedness in political networks with access to decision makers. Firms that align strong R&D with strong political capabilities are more likely to see patenting success and secure competitive advantage. Where R&D investments are not matched by political capabilities, returns weaken. Together, these factors have the capacity to determine who controls global pharmaceutical value chains and captures the gains from trade.
The research situates firm capabilities within broader innovation systems. Even technologically sophisticated firms may fail to translate innovation into delivery without regulatory coordination and approval capacity, public procurement commitments, manufacturing orchestration, international institutional recognition (e.g. World Health Organization (WHO) pre-qualification), and alignment between firm strategies and state priorities.
In highly regulated sectors such as vaccines, political capabilities are therefore not peripheral. They operate at both firm and system levels, and determine:
- who gains accelerated regulatory approval;
- who secures advance purchase agreements;
- who accesses global health platforms; and
- who ultimately integrates into global pharmaceutical value chains.
Case studies: comparative evidence
The UK: High R&D with strong institutional and political alignment
The Oxford–AstraZeneca case for the UK illustrates how scientific strength translated into rapid global impact when embedded in a coordinated institutional system. Building on long-standing R&D capabilities at Oxford’s Jenner Institute, the UK leveraged its strong strategic IP management together with early public de-risking of investment and advance procurement commitments. Progress was furthered by regulatory agility achieved through the rolling review and emergency authorisation of the Medicines and Healthcare products Regulatory Agency (MHRA), and coordinated state infrastructure (NHS trials, manufacturing expansion, Vaccine Taskforce).
Political capabilities operated at both firm and system levels: notably, AstraZeneca’s ability to negotiate global licensing agreements; close alignment between university, regulator, government, and manufacturer; and rapid integration into WHO Emergency Use Listing and global supply chains. The government identified critical bottlenecks in coordination with Oxford and AstraZeneca, and mobilised funding to streamline the vaccine production process. Government also leveraged its established network of public hospitals (NHS) and advanced regulatory capacities to facilitate clinical trials and rapid approval of the vaccine. The results were approval in 11 months and global scale-up to 2.6 billion doses. This case reflects a strong alignment between R&D strength and institutional and political capabilities, enabling rapid approval, procurement, and global market integration.
Japan: Strong STI capability, constrained by regulatory and market structures
Despite Japan’s strong science, technology and innovation (STI) capacity and globally competitive pharmaceutical firms, the translation of this capability into vaccine outcomes was constrained by weak policy prioritisation of infectious diseases, limited vaccine market incentives through immunisation, and stringent regulatory requirements. Consequently, Japan relied heavily on imported vaccines during the acute phase of the pandemic, while domestic vaccines from Daiichi Sankyo and Shionogi were approved only after the pandemic.
Industry actors, particularly through the Japan Pharmaceutical Manufacturers Association (JPMA), engaged policymakers to strengthen pandemic preparedness, contributing to new institutional arrangements such as the Cabinet Agency for Infectious Disease Crisis Management (CAICM) and the Japan Institute of Health Security (JIHS). This has contributed to enhancing and streamlining policy for the next pandemic. However, the current market incentive may not be sufficient to keep the private sector in vaccine development.
Where technological and political capabilities aligned – as in the UK and India – vaccines moved rapidly from lab to global market.
India: Political capabilities as a force multiplier
The pharmaceutical sector in India emerged as a strong contributor to global innovation and vaccine supply during the pandemic, with robust pre-existing capabilities primarily due to earlier industrial policies and regulatory reforms. At least five different types of Covid-19 vaccine were used in India, with most being manufactured locally. Pharmaceutical companies with experience in developing key drugs ventured into the vaccine segment, driven by international demand and their certified drug-manufacturing facilities. They leveraged their capability to produce biologicals using strategic partnerships and rapid technology uptake.
India’s Covaxin case demonstrates how political capability also supports R&D outcomes. Bharat Biotech combined advanced in-house R&D and a strong patent portfolio with close collaboration with the Indian Council of Medical Research (ICMR) and state institutions. Other key components in the mix were early regulatory engagement and flexible emergency approvals; large public procurement guarantees; and active international regulatory strategy, leading to WHO listing.
Political capabilities – including regulatory knowledge, and institutional and policy connectedness – moderate the R&D–innovation relationship. Bharat Biotech’s political capability and strategic alignment with urgent national priorities allowed fast-track approval. Early mover advantage, manufacturing capability, procurement, and the conversion of scientific capability into global market presence were important factors. This is a clear example of the ‘high R&D plus high political capability’ configuration, generating strong innovation and patent outcomes.
Argentina: Strong scientific and industrial capabilities, fragile policy continuity
Beyond vaccine imports, Argentina’s pandemic response relied on mobilising domestic biopharmaceutical capabilities. A key example was mAbxience, which produced the active ingredient for the Oxford–AstraZeneca vaccine under a regional technology transfer agreement that supplied 24.4 per cent of Argentina’s vaccine needs during global shortages. This effort drew on established biosimilar manufacturing capabilities, facilities certified as Good Manufacturing Practices (GMP), skilled human capital, and state support.
Argentina’s ARVAC vaccine illustrates how strong scientific and industrial capabilities do not automatically translate into sustained technological impact. Developed by researchers at Universidad Nacional de San Martín (UNSAM) with the domestic firm Laboratorio Pablo Cassará, the project mobilised a dense public–private ecosystem supported by public STI funding and regulatory assistance from ANMAT. More than 600 professionals contributed scientific, industrial, clinical, and regulatory expertise, enabling the first preventive vaccine to be fully designed and developed in Argentina despite severe financial constraints.
Yet the case reveals fragile policy continuity. While politically motivated crisis coordination enabled an unusual state-led, mission-oriented alignment between R&D and industrial, clinical research and regulatory capabilities, ARVAC’s scaling potential was constrained by the absence of advance procurement and a global regulatory strategy, and subsequent political shifts. The experience reflects less a gap between technological and political capabilities than a tension between crisis-driven state coordination and the lack of long-term institutional continuity.
Currently, the Pan American Health Organization (PAHO)/WHO mRNA consortium partnership led domestically by Sinergium Biotech continues. Initially enabled by state regulatory and political support, it is now largely driven by the private sector following a shift in government priorities.
Indonesia: Technical effort, limited institutional scaling
Indonesia’s Inavac case shows similar patterns. PT Biotis, a private firm, in collaboration with Universitas Airlangga (UNAIR), developed a viable inactivated vaccine platform using locally circulating viral genetic material, and secured domestic emergency approval and a regular distribution permit.
However, although the vaccine became commercially viable after nearly three years, procurement and distribution remained limited as the pandemic was already subsiding, resulting in weak demand. Meanwhile, Bio Farma, an established state-owned enterprise, despite having WHO pre-qualification, sourced its Covid-19 seed vaccine from a US research partner due to institutional constraints affecting its domestic partner, the Eijkman Institute. This indicates that political and regulatory capabilities remained more reactive than strategic. As a result, the vaccine remained largely confined to domestic use despite significant scientific effort.
Vietnam: Multiple technological initiatives, limited institutional alignment
The vaccine sector in Vietnam has historically relied on four state-owned enterprises (SoEs), which primarily produced vaccines for the national immunisation programme using imported technologies. These SoEs had limited independent R&D capacity and depended largely on public funding, and collaboration with domestic and overseas research institutes.
With public procurement as the main market, incentives for private investment in advanced vaccine development remained weak. However, during the pandemic, several domestic initiatives emerged, owing to high market prospects. For example, NanoCovax, developed by the private biotechnology firm Nanogen, advanced to Phase III clinical trials but ultimately failed to obtain emergency use authorisation due to misaligned interests between the regulatory authority and the firm. This demonstrates that despite the domestic interests and capability to develop vaccine candidates, limited regulatory flexibility, weak innovation incentives, and fragmented policy coordination prevented these efforts from translating into approved products.
Conclusion: Patterns across cases
These cases show a consistent pattern: R&D intensity alone does not determine outcomes. Innovation success depends on:
- political capabilities (informational and relational assets, lobbying, regulatory embeddedness, institutional connectedness),
- regulatory capacity and flexibility,
- procurement commitments,
- IP positioning and global licensing strategy, and
- integration into international governance platforms (e.g. WHO).
Where technological and political capabilities aligned (for instance, in the UK and India), vaccines moved rapidly from lab to global market. Where alignment was partial (Argentina, Indonesia, Japan, Vietnam), R&D translated into slower, domestically confined outcomes.
Policy recommendations
Resilient pharmaceutical innovation requires not only internal firm capabilities but supportive state systems that reduce uncertainty, enable coordination, and ensure equitable gains from trade. To achieve this, national governments, industry associations, businesses, thinktanks, and international organisations should consider the following recommendations:
- Design innovation incentives that recognise how political capabilities interact with R&D, ensuring that firms are rewarded for genuine research rather than just political positioning.
- Advocate for more understanding of alignments and misalignments between R&D and different types of political capabilities which are important both for businesses to strategise and for governments to design incentives.
- Provide targeted support – for example, for low-R&D firms or for specific pharmaceutical sub-sectors, especially where heavy investment in political capabilities could undermine innovation outcomes.
- Foster transparent, structured government–industry engagement so that political capabilities complement R&D efforts synergistically, especially for firms with high R&D intensity.
- Institutionalise political capabilities and support necessary processes that can enable firms to develop alignment with their technological capabilities.
- Support processes where building political relations is complementary to investing in R&D, especially at higher levels of R&D investments.
- Strengthen lobbying transparency and oversight, as lobbying by firms does not itself enhance innovation and may divert resources from R&D.
- Strategise the mix of R&D and political capabilities for firms to respond successfully to uncertainty and to deliver in such periods.
- Use big-data tools to monitor linkages between firms and political entities, and ensure policy incentives do not unintentionally encourage misaligned strategic behaviour in times of global or national emergency.
Credits
This IDS Policy Briefing was written by Amrita Saha and Anabel Marín (IDS), Sabyasachi Saha (RIS, India), Gabriela Bortz (CONICET, Argentina), Michiko Iizuka and Tran Song Tung (GRIPS, Japan), and Rahmi Lestari Helmi (Research and Innovation Agency, Vietnam). Collaboration funded by ESRC UK and JSPS Japan. Any views and opinions expressed are those of the authors and do not necessarily reflect those of IDS or partner organisations.
© Institute of Development Studies 2026. This is an Open Access briefing distributed under the terms of the Creative Commons Attribution 4.0 International licence (CC BY), which permits unrestricted use, distribution, and reproduction in any medium, provided the original authors and source are credited and any modifications or adaptations are indicated.
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