Why Has the Vaccine Rollout Been So Slow? Answer: Big Pharma Patent Monopolies

The vaccine rollout process has been painfully slow in the United States. More than 40 days after the first vaccine was approved for emergency use by the Food and Drug Administration, just over 6.0 percent of our population has been vaccinated. And that is with just the first shot, very few having gotten the two shots needed to hit the targeted levels of immunity. Thankfully the pace of the vaccination program is picking up, both as kinks are worked out and now that we have an administration that cares about getting people vaccinated.

But we still have to ask why the process has been so slow. We have an obvious answer in the United States, the Trump administration basically said that distribution wasn't its problem. As Donald Trump once tweeted, he considered the distribution process the responsibility of the states and gave the order "get it done."

If we can explain the failure to have more rapid distribution in the United States on Trump's Keystone Cops crew, what explains the failures in other wealthy countries? As bad as the U.S. has done so far, we have vaccinated a larger share of our population than any country in Europe with the exception of the United Kingdom. That's right, countries like Denmark, France, and even Germany have done worse in vaccinating their populations than the United States. And these countries ostensibly have competent leaders and all have national health care systems. Nonetheless, they have done worse far worse in the case of France and Germany, than Donald Trump's clown show.

The Vaccine Agenda if Saving Lives Was the Priority

The pandemic is a worldwide crisis, that requires a worldwide solution. This is a classic case where there are enormous benefits from collective action and few downsides. This is not a case, like seizing oil or other natural resources, where if the United States gets more, everyone else gets less and vice-versa. Sharing knowledge about vaccines, treatments, and best practices for prevention is costless and the whole world benefits if the pandemic can be contained as quickly as possible. This point is being driven home as new strains develop through mutation, which may spread more quickly and possibly be more deadly and vaccine-resistant.

The logical path would have been to open-source all research on treatments and vaccines, both so that progress could be made as quickly as possible, and also intellectual property rights would not be an obstacle to large-scale production throughout the world. This would have required some collective agreement where countries agreed to both put up some amount of research funding, presumably based on size and per capita income, and also that all findings, including results from clinical trials, would be quickly posted on the web. This way, the information would be quickly shared so that researchers and public health experts everywhere could benefit.

This sort of international cooperation was obviously not on Donald Trump's agenda. Mr. "America First!" was not interested in the possibility that we might better be able to tame the pandemic if we acted in cooperation with other countries. But it wasn't just Donald Trump who rejected the idea of open research and international cooperation, it really wasn't on the agenda of any prominent politician, including progressives like Bernie Sanders and Elizabeth Warren. It was an issue in the scientific community, but as we know, people in policy circles don't take science seriously. (I describe a mechanism for advanced funding of open-source research in chapter 5 of Rigged [it's free].)

The big problem, of course, is that going this route of open-source research and international cooperation could call into question the merits of patent monopoly financing of prescription drug research. After all, if publicly funded open-source research proved to be the best mechanism for financing the development of drugs and vaccines in a pandemic, maybe this would be the case more generally. And, no one in a position of power in American politics wanted to take this risk of a bad example.

Making the Best of the Single Country Route

If we had gone the route of publicly funded open-source research, then the scientific community would have access to all the clinical trial results of all the vaccines as they become available. This would mean that countries could decide which vaccines they wanted to use based on the data.[1] They could also begin to produce and stockpile large quantities of vaccines, as soon as they entered Phase 3 trials. Incredibly, it seems no country has done this.

Just to be clear, there was no physical obstacle to producing billions of vaccines by the end of 2020. If we can build one factory to produce these vaccines, we can build ten factories.

While we could not know that a vaccine entering Phase 3 trials will subsequently be shown to be safe and effective, the advantages of having a large stockpile available that can be quickly distributed swamp the potential costs of buying large quantities of a vaccine that is not approved. Suppose the United States had produced 400 million doses of a vaccine that turned out not to be effective. With the production costs of a vaccine at around $2 per shot, this would mean that we had wasted $800 million. With the country seeing more than 4,000 deaths a day at the peak of the pandemic and the economic losses from the pandemic running into the trillions, the risk of spending $800 million on an ineffective vaccine seems rather trivial.

For whatever reason, no country went this stockpile route. Just to be clear, there was no physical obstacle to producing billions of vaccines by the end of 2020. If we can build one factory to produce these vaccines, we can build ten factories. If some of the inputs are in short supply, we can build more factories to produce the inputs. There may be questions of patent rights, but that is different than a question of physical limitations.

But apart from the physical availability of the vaccines, there is also the issue of distributing the vaccine and actually getting the shots in peoples' arms. It seems that, rather than making preparations in advance, most governments acted like the approval of the vaccine was a surprise and only began to make plans for distribution after the fact.

This is really mind-boggling. While we could not know the exact date a vaccine would be approved, it was known that several vaccines were approaching the endpoints of their Phase 3 trials. In that situation, it is hard to understand why governments would not have been crafting detailed plans for how they would get the vaccines to people as quickly as possible, once the authorization had been made.

This would have meant pre-positioning stockpiles as close as possible to inoculation locations. These locations should also have been selected in advance, with plans to have the necessary personnel available to oversee and administer the shots. There are reports that there are shortages of people trained in administering the shots. The fall would have been a great time to train enough people to administer the vaccine.

In a normal flu season, close to 2 million shots are given every day, without any heroic efforts by the government. Given the urgency of getting the pandemic under control, it is hard to understand why we could not have administered shots at this pace, if not considerably faster. The fact that it wasn't just the United States that missed this standard, but also every country in Europe, indicates an enormous failure of public health systems.

As a result of these failures, we will see millions of preventable infections and tens of thousands of avoidable deaths. We will also see hundreds of billions of dollars of lost economic output, as the pandemic will disrupt the economy for longer than necessary.

Will There be a Penalty for Failure?

I raise this issue primarily because I'm fairly confident the answer is no. To be clear, my point is that not being prepared for the mass distribution of vaccines as soon as they were approved was a massive policy failure both in the United States and Europe. I have no idea who was responsible for the failure, but it was presumably several high-level people in each country. In any reasonable world, these people would suffer serious career consequences for not getting the vaccines out quickly.

I am not making this point out of any vindictiveness--I don't know any of these people--I just want to see high-end workers held to the same job performance standards as those lower down the ladder. The dishwasher that breaks the dishes gets fired. The custodian who doesn't clean the toilet gets fired. Why doesn't the person who messes up vaccine distribution pay a price?

Unfortunately, the lack of accountability at the top is the rule, not the exception. To take my favorite example in economics, to my knowledge Carmen Reinhart and Ken Rogoff suffered no consequences (other than embarrassment) for their famous Excel spreadsheet error. To remind people, this was when they produced a paper that purported to show that countries with debt-GDP ratios above 90 percent took a huge hit to GDP growth. It turned out that this result was driven entirely by an error in a spreadsheet. When the error was corrected, the result went away.

Reinhart and Rogoff's paper was used to justify austerity policies in Europe and the United States. As a result of these policies millions of people needlessly went unemployed and many important areas of social spending, like education and health care, saw serious cuts.

Reinhart and Rogoff's error was surely an honest mistake (they are both competent economists, who could have come up with much better ways to fake results if that was their intention), but their failure to check their numbers was inexcusable. As they explained after the error was uncovered, the mistake was the result of rushing to finish a paper for a conference presentation.

Mistakes like that happen, and most of us have committed similar errors. That is not a big deal. The big deal was that, as their work was being cited by members of Congress, finance ministers, and central bankers, that it never occurred to them to review their rushed work.

Should Reinhart and Rogoff have lost their tenured positions at Harvard? Perhaps this would have been appropriate. At the very least, they should have lost their named chairs, after all, many people had their lives ruined in part because they couldn't be bothered to check their numbers.

Accountability for Our Elites

As I have written endlessly, we have seen a massive upward redistribution of income in the United States over the last four decades. Other countries have also seen increases in inequality over this period, although not as large. I have argued that this upward redistribution was by design, not the natural development of the economy, but for this issue, the question of causes is beside the point.

It is appalling that we have structured the economy in such a way that the elites can be protected from consequences for even the most extreme failures.

The people who have been able to enjoy rising incomes and financial security over the last four decades ostensibly justify their better position by their greater contribution to the economy and society. But when you mess up in your job in big ways that lead to major costs to the economy and society, that claim doesn't hold water.

We have seen a massive rise in right-wing populism where large numbers of less-educated workers reject the elites and all their claims about the world. When we have massive elite mess-ups, as we now see with vaccine distribution, and there are zero consequences for those responsible, this has to contribute to the resentment of the less advantaged.

It is appalling that we have structured the economy in such a way that the elites can be protected from consequences for even the most extreme failures. The fact so few elite types even see this as a problem (seen any columns in the NYT calling for firing?) shows that the populists have a real case. The economy is rigged against the left behind, and the people that control major news outlets, which include many self-described liberals or progressives, won't even talk about it.

[1] China and Russia have not been open with the clinical trial data for their vaccines. Presumably, if they had committed to transparency in an agreement, they would abide by their commitment, but obviously, we cannot be certain this would be the case.