The Vaccine: Who gets it first?

For context, the common cold is caused by coronaviruses (with rhinoviruses being the most common virus) and there are no vaccines for colds. More seriously, because colds are rarely more than annoying, HIV, the virus that causes AIDS, has no vaccine despite almost 40 years of trying to develop one.  While AIDS was fatal for many years there are now treatments that hold it in check, but the vaccine remains elusive.

There is hope that an effective vaccine will be found soon for SARS-CoV-2, the virus that causes covid-19. In fact, six potential vaccines have entered phase one of human trails (the first of three required testing phases). Once a potential vaccine has been developed it must be tested first for its safety (side effects and who is at greatest risk of these side effects) and then for its effectiveness. On average it takes five to ten years to pass these hurdles and be approved for general use. Coronavirus-vaccine-here-are-the-steps-it-will-need-to-go-through-during-development

But the science has gotten better and the authorities have put great urgency on the development of a vaccine for this virus and seem willing to cut a few corners to speed up the testing and approval, though there are risks in doing so. Still “some of Mr. Trump’s top public health advisers have repeatedly cautioned that an effective vaccine might not be ready for widespread distribution for 18 months, and perhaps even longer. Mr. Trump ordered the creation of the Warp Speed program to try to speed that timeline.” Coronavirus-Trump-operation-warp-speed

Trump says the U.S. will have a vaccine by the end of the year (this year, 2020!!), which would indeed be a miracle. But even with a crash program to produce and administer it, it will take several years from approval before enough can be produced and distributed for everyone to be vaccinated. Thus, one important question is who gets it first. Lets-say-theres-a-covid-19-vaccine-who-gets-it-first

Answering that difficult question can be approached in several ways. One is to ask what would be fair. Is it fair to give everyone an equal chance at being first, second and third….? That would require a lottery and would mean that some who would benefit more and thus have a greater need for the vaccine (health care workers being an obvious example) would often be well down the line from say children less likely to get, or at least suffer from, covid-19 in the first place. So, an ethically more defensible criteria would be to establish medically which hierarchy of priorities would save the most lives in the long run.  Perhaps after healthcare workers and first defenders, children should be next so they can get on with their life-altering educations and avoid infecting their parents and grandparents, etc.

The reality, however, is that whoever owns the vaccine will have the largest say in the determination of the priorities of who gets it. Without that incentive only government labs would be working to develop a vaccine and how dreadful that would be. Private pharmaceutical companies are spending multiple millions of dollars in the race to develop “the” vaccine first. Their profit reward will come not only in initial dollars and cents but in the boost to their reputations, which will also reflect how the public sees their pricing and allocation of their product. We are quite used to the fact that hot new products–think of the first iPhones–are relatively expensive and go to those willing to pay the most. As production expands and demand is more widely met, prices come down. Governments are major funders of the research and development going into the search for a vaccine and they will rightly consider themselves entitled to an owner’s reward (first priority). Coronavirus-vaccine-frontrunners-emerge-rollouts-weighed

Policy is further complicated by whether exclusive ownership or more social collaboration (the equivalent of open source code) will produce the best vaccine the quickest.  Governments might give large financial prizes to the best two or three vaccine ideas to those developing them rather than patents to encourage information sharing.  Moreover, there can be more than one winner. The first vaccine approved will not necessarily be the best in the long run. There is a strong case for going forward with several vaccines. This view is put forth in an article by Larry Corey of the Vaccine and Infectious Disease Division at Fred Hutchinson Cancer Center, John Mascola and Anthony Fauci of the National Institute of Allergy and Infectious Diseases, and Francis Collins, head of the National Institutes of Health. Science mag.org/content/early/2020/05/12/science.abc5312

But who gets it first is an unavoidable and potentially very contentious issue.  “After controversial comments by the CEO of a French pharmaceutical company, French Prime Minister Édouard Philippe took the opportunity on Thursday to say that equal access to any vaccine that is developed is “non-negotiable.” Paul Hudson, the head of Sanofi, told Bloomberg on Wednesday that the United States would get the “largest pre-order” of a successful vaccine because it was the first to fund the firm’s research—a statement he later walked back.” Coronavirus-pandemic-vaccine-Sanofi-France-United-States.  But to say that “equal access” is non-negotiable is both ignorant and meaningless, ignoring the obvious fact that production for hundreds of millions of people will take months if not years to distribute.

It would be best if all countries agreed in advance (in a philosophical veil of ignorance) on the principles that would guide the priority of distributing vaccines. The company and country of the winner(s) should get a significant share of the initial (and subsequent) supply and within all countries those most in need for the protection of the broader society should get first priority.

“Secretary of State Mike Pompeo told an Israeli journalist on Wednesday that, ‘We’ll figure out the model for distribution when the time comes.’” Nations-jockey-to-see-who-gets-coronavirus-vaccine-first  As is so often the case these days Secretary Pompeo is wrong. Or as the Economist magazine put it this week: “For a man acknowledged to be highly intelligent, Mike Pompeo has a long history of talking nonsense.”   Mike-Pompeos-politicisation-of-foreign-policy-is-unworthy-of-him

 

 

About wcoats

I specialize in advising central banks on monetary policy and the development of the capacity to formulate and implement monetary policy.  I joined the International Monetary Fund in 1975 from which I retired in 2003 as Assistant Director of the Monetary and Financial Systems Department. While at the IMF I led or participated in missions to the central banks of over twenty countries (including Afghanistan, Bosnia, Croatia, Egypt, Iraq, Israel, Kazakhstan, Kenya, Kosovo, Kyrgystan, Moldova, Serbia, Turkey, West Bank and Gaza Strip, and Zimbabwe) and was seconded as a visiting economist to the Board of Governors of the Federal Reserve System (1979-80), and to the World Bank's World Development Report team in 1989.  After retirement from the IMF I was a member of the Board of the Cayman Islands Monetary Authority from 2003-10 and of the editorial board of the Cayman Financial Review from 2010-2017.  Prior to joining the IMF I was Assistant Prof of Economics at UVa from 1970-75.  I am currently a fellow of Johns Hopkins Krieger School of Arts and Sciences, Institute for Applied Economics, Global Health, and the Study of Business Enterprise.  In March 2019 Central Banking Journal awarded me for my “Outstanding Contribution for Capacity Building.”  My most recent book is One Currency for Bosnia: Creating the Central Bank of Bosnia and Herzegovina. I have a BA in Economics from the UC Berkeley and a PhD in Economics from the University of Chicago. My dissertation committee was chaired by Milton Friedman and included Robert J. Gordon.
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