The US Government is Digging in the Couch to Find Change to Buy Drugs

The richest government the world has ever known is having trouble finding the money to buy Paxlovid, a critical medical treatment for COVID.

STAT: The White House has held off on buying millions of courses of Pfizer’s highly effective antiviral drug that the White House already committed to buy due to budget constraints, according to public contract disclosures and the Department of Defense, which issues the contracts.

In January, the White House announced that it was doubling its order of Pfizer’s antiviral, named Paxlovid, committing to buy an extra 10 million courses. But according to public contracts, the White House has only actually contracted for 835,000 of those courses to date.

“Contract options will be exercised when funding becomes available,” Department of Defense spokesperson Jessica Maxwell said in a statement to STAT.

The problem isn’t lack of money per se but rules and regulations designed to create “transparency” and avoid “corruption” and the resulting bureaucracy and vote players. Another example of the Mancur Olson problems Ezra Klein and I discussed and an example of how declining trust leads to rule complexity.

Here’s another telling example. Operation Warp Speed was perhaps the most successful government program in more than a half century but it was funded only because the Trump administration and then the Biden administration finagled the rules, almost certainly breaking some laws in the process. But that is sometimes the only way to get things done today, especially at speed.

Both administrations funneled far more money than Congress allocated to Operation Warp Speed, in particular, and to its successor efforts to buy vaccines and therapeutics.

Nearly 10% of the funding Congress set aside to support hospitals and health care providers, or $17 billion, was funneled to buy vaccines and therapeutics, as STAT first reported. Other funding for Operation Warp Speed was taken from money designated for the Centers for Disease Control and Prevention and the Strategic National Stockpile, as Bloomberg reported. An additional $5 billion came from a fund for Covid-19 testing efforts, according to a document obtained by STAT.

The difficulty of finding funds in an emergency is one reason I have suggested a pandemic or emergency trust fund. Even though it would only represent nominal savings it would nevertheless matter because it could be accessed quickly.