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My Conversation with Michael Kremer

Self-recommending, here is the transcript, audio, and video.  Here is part of the summary:

Michael joined Tyler to discuss the intellectual challenge of founding organizations, applying methods from behavioral economics to design better programs, how advanced market commitments could lower pharmaceutical costs for consumers while still incentivizing R&D, the ongoing cycle of experimentation every innovator understands, the political economy of public health initiatives, the importance of designing institutions to increase technological change, the production function of new technologies, incentivizing educational achievement, The Odyssey as a tale of comparative development, why he recently transitioned to University of Chicago, what researchers can learn from venture capitalists, his current work addressing COVID-19, and more.

Here is one excerpt:

COWEN: I’ve seen estimates — they’re actually from one of the groups you founded — that a deworming pill could cost as little as 50 cents a year per person in many parts of Africa. So why isn’t deworming done much more?

KREMER: You could say the glass is half empty, you can say it’s half full, or you can say it’s almost three-quarters full. I think it’s about three-quarters full. When I first got involved in deworming, it was testing a small NGO program. We found phenomenal effects of that. The original work found health gains and education gains. Now we’ve tracked people over 20 years, and we’re seeing people have a better standard of living or earning more.

Following the early results, we presented the results of the government of Kenya to the World Bank. Kenya scaled this up nationally, in part with assistance from the World Bank, primarily just in conveying some of that information.

Indian states started doing that, and then the national government of India took this on. They’re reaching — a little bit harder to know the exact numbers — but probably 150 million people a year. Many other countries are doing this as well, so it’s actually quite widely adopted.

COWEN: But there’s still a massive residual, right?

KREMER: That is for sure.

COWEN: What’s your best explanatory theory of why the residual isn’t smaller? It would seem to be a vote winner. African countries, fiscally, are in much better shape than they used to be. They’re more democratic. Public health looks much better. The response to COVID-19 has probably been better than many people expected, say, in Senegal, possibly in Kenya. So why not do deworming more?

KREMER: The people who have worms are pretty poor people. The richer people are less likely to have worms within a given society. Richer people are probably more politically influential.

There’s also something about worms — they gradually build up in your body, and one worm is not going to do that much damage. The problem is when you’ve got lots of worms in your body, and even there, it’s going to take time.

I’ve had malaria. I don’t think I’ve had worms. I hope I haven’t. When you have malaria, you feel terrible. You go from feeling fine to feeling terrible, and then you take the medicine. You feel great afterwards. With worms, it’s much more like a chronic thing, and when you expel the worms from your body, that’s sort of gross. I don’t think, even at the individual level, do you have quite the demand that would be commensurate with the scale of the problem. That’s a behavioral economics explanation.

I think there are political issues and then there are behavioral issues. I would actually say that a huge, huge issue . . . This sounds very boring, but this falls between the Ministry of Health and the Ministry of Education, and each one of them has different priorities. The Ministry of Health is going to be worried about delivering things through clinics. They’re worried about HIV and malaria, tuberculosis, as it should be.

The Ministry of Education — they’re worried about teacher strikes. It’s very easy for something to either fall between the cracks or be the victim of turf wars. It sounds too small to be, “How can that really get in the way?” But anybody who’s spent time working in governments understands those things can very easily get in the way. In some ways, it’s surprising how much progress has been made.

Here’s one way the political economy works in favor. You mentioned democracy — I think that’s a factor. I actually find — and I don’t want to be necessarily a big fan of politicians — but in some ways, politicians hear how much this costs, and they think they can affect that many people for that small amount of money, and they’re like, “Hey, I want to get on that. Maybe this is something I can claim as an achievement.” We saw that in Kenya. We saw that in India.

And:

COWEN: Let’s say the current Michael Kremer sets up another high school in Kenya. What is it that you would do that the current high schools in Kenya are not doing? What would you change? You’re in charge.

KREMER: Right. We’ve learned a lot in education research in recent years. One thing that we saw in Kenya, but was also seen in India and many other places, is that it’s very easy for kids to fall behind the curriculum. Curricula, in particular in developing countries, tend to be set at a fairly high level, similar to what you would see in developed countries.

However, kids are facing all sorts of disadvantages, and there are all sorts of problems in the way the system works. There’s often high teacher absence. Kids are sick. Kids don’t have the preparation at home, often. So kids can fall behind the curriculum.

Whereas we’ve had the slogan in the US, “No Child Left Behind,” in developing countries, education system is focused on kids at the top of the distribution. What’s been found is, if you can set up — and there are a whole variety of different ways to do this — either remedial education systems or some technology-aided systems that are adaptive, that go to where the kid is . . . I’ve seen huge gains from this in India, and we’re starting to see adoption of this in Africa as well, and that can have a very big impact at quite low cost.

Intelligent throughout.

Michael Kremer, Nobel laureate

To Alex’s excellent treatment I will add a short discussion of Kremer’s work on deworming (with co-authors, most of all Edward Miguel), here is one summary treatment:

Intestinal helminths—including hookworm, roundworm, whipworm, and schistosomiasis—infect more than one-quarter of the world’s population. Studies in which medical treatment is randomized at the individual level potentially doubly underestimate the benefits of treatment, missing externality benefits to the comparison group from reduced disease transmission, and therefore also underestimating benefits for the treatment group. We evaluate a Kenyan project in which school-based mass treatment with deworming drugs was randomly phased into schools, rather than to individuals, allowing estimation of overall program effects. The program reduced school absenteeism in treatment schools by one-quarter, and was far cheaper than alternative ways of boosting school participation. Deworming substantially improved health and school participation among untreated children in both treatment schools and neighboring schools, and these externalities are large enough to justify fully subsidizing treatment. Yet we do not find evidence that deworming improved academic test scores.

If you do not today have a worm, there is some chance you have Michael Kremer to thank!

With Blanchard, Kremer also has an excellent and these days somewhat neglected piece on central planning and complexity:

Under central planning, many firms relied on a single supplier for critical inputs. Transition has led to decentralized bargaining between suppliers and buyers. Under incomplete contracts or asymmetric information, bargaining may inefficiently break down, and if chains of production link many specialized producers, output will decline sharply. Mechanisms that mitigate these problems in the West, such as reputation, can only play a limited role in transition. The empirical evidence suggests that output has fallen farthest for the goods with the most complex production process, and that disorganization has been more important in the former Soviet Union than in Central Europe.

Kremer with co-authors also did excellent work on the benefits of school vouchers in Colombia.  And here is Kremer’s work on teacher incentives — incentives matter!  His early piece on wage inequality with Maskin, from 1996, was way ahead of its time.  And don’t forget his piece on peer effects and alcohol use: many college students think the others are drinking more than in fact they are, and publicizing the lower actual level of drinking can diminish alcohol abuse problems.  The Hajj has an impact on the views of its participants, and “… these results suggest that students become more empathetic with the social groups to which their roommates belong,.” link here.

And don’t forget his famous paper titled “Elephants.”  Under some assumptions, the government should buy up a large stock of ivory tusks, and dump them on the market strategically, to ruin the returns of elephant speculators at just the right time.  No one has ever worked through the issue before of how to stop speculation in such forbidden and undesirable commodities.

Michael Kremer has produced a truly amazing set of papers.

The Nobel Prize in Economic Science Goes to Banerjee, Duflo, and Kremer

The Nobel Prize goes to Abhijit Banerjee, Esther Duflo and Michael Kremer (links to home pages) for field experiments in development economics. Esther Duflo was a John Bates Clark Medal winner, a MacArthur “genius” award winner, and is now the second woman to win the economics Nobel and by far the youngest person to ever win the economics Nobel (Arrow was the previous youngest winner!). Duflo and Banerjee are married so these are also the first spouses to win the economics Nobel although not the first spouses to win Nobel prizes–there was even one member of a Nobel prize winning spouse-couple who won the Nobel prize in economics. Can you name the spouses?

Michael Kremer wrote two of my favorite papers ever. The first is Patent Buyouts which you can find in my book Entrepreneurial Economics: Bright Ideas from the Dismal Science. The idea of a patent buyout is for the government to buy a patent and rip it up, opening the idea to the public domain. How much should the government pay? To decide this they can hold an auction. Anyone can bid in the auction but the winner receives the patent only say 10% of the time–the other 90% of the time the patent is bought by the government at the market price. The value of this procedure is that 90% of the time we get all the incentive properties of the patent without any of the monopoly costs. Thus, we eliminate the innovation tradeoff. Indeed, the government can even top the market price up by say 15% in order to increase the incentive to innovate. You might think the patent buyout idea is unrealistic. But in fact, Kremer went on to pioneer an important version of the idea, the Advance Market Commitment for Vaccines which was used to guarantee a market for the pneumococcal vaccine which has now been given to some 143 million children. Bill Gates was involved with governments in supporting the project.

My second Kremer paper is Population Growth and Technological Change: One Million B.C. to 1990. An economist examining one million years of the economy! I like to say that there are two views of humanity, people are stomachs or people are brains. In the people are stomachs view, more people means more eaters, more takers, less for everyone else. In the people are brains view, more people means more brains, more ideas, more for everyone else. The people are brains view is my view and Paul Romer’s view (ideas are nonrivalrous). Kremer tests the two views. He shows that over the long run economic growth increased with population growth. People are brains.

Oh, and can I add a third Kremer paper? The O-Ring Model of Development is a great and deep paper. (MRU video on the O-ring model).

The work for which the Nobel was given is for field experiments in development economics. Kremer began this area of research with randomized trials of educational policies in Kenya. Duflo and Banerjee then deepened and broadened the use of field experiments and in 2003 established the Poverty Action Lab which has been the nexus for field experiments in development economics carried on by hundreds of researchers around the world.

Much has been learned in field experiments about what does and also doesn’t work. In Incentives Work, Dufflo, Hanna and Ryan created a successful program to monitor and reduce teacher absenteeism in India, a problem that Michael Kremer had shown in Missing in Action was very serious with some 30% of teachers not showing up on a typical day. But when they tried to institute a similar program for nurses in Putting a Band-Aid on A Corpse the program was soon undermined by local politicians and “Eighteen months after its inception, the program had become completely ineffective.” Similarly, Banerjee, Duflo, Glennerster and Kinnan find that Microfinance is ok but no miracle (sorry fellow laureate Muhammad Yunus). A frustrating lesson has been the context dependent nature of results and the difficult of finding external validity. (Lant Pritchett in a critique of the “randomistas” argues that real development is based on macro-policy rather than micro-experiment. See also Bill Easterly on the success of the Washington Consensus.)

Duflo, Kremer and Robinson study How High Are Rates of Return to Fertilizer? Evidence from Field Experiments in Kenya. This is an especially interest piece of research because they find that rates of return are very high but that farmers don’t use much fertilizer. Why not? The reasons seem to have much more to do with behavioral biases than rationality. Some interventions help:

Our findings suggest that simple interventions that affect neither the cost of, nor the payoff to, fertilizer can substantially increase fertilizer use. In particular, offering farmers the option to buy fertilizer (at the full market price, but with free delivery) immediately after the harvest leads to an increase of at least 33 percent in the proportion of farmers using fertilizer, an effect comparable to that of a 50 percent reduction in the price of fertilizer (in contrast, there is no impact on fertilizer adoption of offering free delivery at the time fertilizer is actually needed for top dressing). This finding seems inconsistent with the idea that low adoption is due to low returns or credit constraints, and suggests there may be a role for non–fully rational behavior in explaining production decisions.

This is reminiscent of people in developed countries who don’t adjust their retirement savings rates to take advantage of employer matches. (A connection to Thaler’s work).

Duflo and Banerjee have conducted many of their field experiments in India and have looked at not just conventional questions of development economics but also at politics. In 1993, India introduced a constitutional rule that said that each state had to reserve a third of all positions as chair of village councils for women. In a series of papers, Duflo studies this natural experiment which involved randomization of villages with women chairs. In Women as Policy Makers (with Chattopadhyay) she finds that female politicians change the allocation of resources towards infrastructure of relevance to women. In Powerful Women (Beaman et al.) she finds that having once had a female village leader increases the prospects of future female leaders, i.e. exposure reduces bias.

Before Banerjee became a randomistas he was a theorist. His A Simple Model of Herd Behavior is also a favorite. The essence of the model can be explained in a simple example (from the paper). Suppose there are two restaurants A and B. The prior probability is that A is slightly more likely to be a better restaurant than B but in fact B is the better restaurant. People arrive at the restaurants in sequence and as they do they get a signal of which restaurant is better and they also see what choice the person in front of them made. Suppose the first person in line gets a signal that the better restaurant is A (contrary to fact). They choose A. The second person then gets a signal that the better restaurant is B. The second person in line also sees that the first person chose A, so they now know one signal is for A and one is for B and the prior is A so the weight of the evidence is for A—the second person also chooses restaurant A. The next person in line also gets the B signal but for the same reasons they also choose A. In fact, everyone chooses A even if 99 out of 100 signals are B. We get a herd. The sequential information structure means that the information is wasted. Thus, how information is distributed can make a huge difference to what happens. A lot of lessons here for tweeting and Facebook!

Banerjee is also the author of some original and key pieces on Indian economic history, most notably History, Institutions, and Economic Performance: The Legacy of Colonial Land Tenure Systems in India (with Iyer).

Duflo’s TED Talk. Previous Duflo posts; Kremer posts; Banerjee posts on MR.

Before last year’s Nobel announcement Tyler wrote:

I’ve never once gotten it right, at least not for exact timing, so my apologies to anyone I pick (sorry Bill Baumol!). Nonetheless this year I am in for Esther Duflo and Abihijit Banerjee, possibly with Michael Kremer, for randomized control trials in development economics.

As Tyler predicted he was wrong and also right. Thus, this years win is well-timed and well-deserved. Congratulations to all.

Kremer’s Prize

The Advance Market Commitment for vaccines launched on friday.  Under the commitment a group of developed nations (Canada, Italy, Norway, Russia, the United Kingdom) and Bill Gates! (The Bill & Melinda Gates Foundation) promises to pay for a pneumococcal vaccine suitable in price and effectiveness for the developing world.  The idea, the brain child of economist Michael Kremer, could save millions of lives over the next several decades.  Kremer deserves a Prize for his Prize – in Peace or Economics.

Owen, who played a part in the project, has more background and musings.

Implementing Michael Kremer’s vaccines idea

…finance ministers from at least three Western countries are scheduled to meet in Rome next week to announce a pilot program for delivering next-generation vaccines more rapidly to poor nations.  An official for the GAVI Alliance, an international vaccines group, confirmed that the project would be the first step of a controversial plan to pay qualifying vaccine makers a higher price than they would ordinarily receive for their products in impoverished areas hard hit by infectious diseases.

Here is the full story.  Here is Alex on Kremer’s idea.

Operation Warp Speed: A Story Yet to be Told

Operation Warp Speed was by far the most successful government program against COVID. But as of yet there is very little discussion or history of the program. As just an indication I looked for references in a bunch of pandemic books to General Perna who co-led OWS with Moncef Slaoui. Michael Lewis in The Premonition never mentions Perna. Neither does Slavitt in Preventable. Nor does Wright in The Plague Year. Nor does Gottlieb in Uncontrolled Spread. Abutaleb and Paletta in Nightmare Scenario have just two index entries for Perna basically just stating his appointment and meeting with Trump.

Yet there are many questions to be asked about OWS. Who wrote the contracts? Who chose the vaccines? Who found the money? Who ran the day to day operation? Why was the state and local rollout so slow and uneven? How was the DPA used? Who lifted the regulations? How was the FDA convinced to go fast?

I don’t know the answer to these questions. I suspect when it is all written down, Richard Danzig will be seen as an important behind the scenes player in the early stages (I was involved with some meetings with him as part of the Kremer team). Grogan at the DPC seems under-recognized. Peter Marks at the FDA was likely extremely important in getting the FDA to run with the program. Marks brought people like Janet Woodcock from the FDA to OWS so you had a nominally independent group but one completely familiar with FDA policy and staff and that was probably critical. And of course Slaoui and Perna were important leaders and communicators with the private sector and the logistics group but they have yet to be seriously debriefed.

It’s also time for a revisionist account of President Trump’s Council of Economic Advisors. Michael Kremer and I spoke to the DPC and the CEA early on in the pandemic and argued for a program similar to what would later be called OWS. The CEA, however, was way ahead of the game. In Sept of 2019 (yes, 2019!) the CEA produced a report titled Mitigating the Impact of Pandemic Influenza through Vaccine Innovation. The report calculates the immense potential cost of a pandemic and how a private-public partnership could mitigate these costs–all of this before anyone had heard the term COVID. Nor did that happen by accident. Thomas Philipson, the CEA chair, had made his reputation in the field of economic epidemiology, incorporating incentives and behavioral analysis in epidemiological models to understand HIV and the spread of other infectious diseases. Eric Sun, another CEA economist, had also written with Philipson about the FDA and its problems. Casey Mulligan was another CEA chief economist who understand the danger of pandemics and was influenced by Sam Peltzman on the costs of FDA delay. So the CEA was well prepared for the pandemic and I suspect they gave Trump very good advice on starting Operation Warp Speed.

In short, someone deserves credit for a multi-trillion-dollar saving government program! More importantly, we know a lot about CDC and FDA failure but in order to know what we should build upon we also need to know what worked. OWS worked. We need a history of how and why.

Review of Nightmare Scenario by Abutaleb and Paletta

Nightmare Scenario opens with Anthony Fauci stripped to his skivvies and wondering whether the white powder he has just been exposed to in his NIH office is anthrax, ricin, or a hoax. The first and last he can survive, ricin is a death sentence. A security team douses him with chemicals and moves him to another office where a portable shower has been deployed. Fauci showers, calls his wife, and waits for the test results.

Nightmare Scenario is the best of the recent books on the pandemic (I earlier reviewed Lewis’s The Premonition and Slavitt’s Preventable). Based on hundreds of interviews it’s a true inside account. It doesn’t contain much in the way of analysis but that’s a strength in a journalistic history. Rather than a strict review, I will note a couple of things that jumped out to me.

An astounding amount of time was spent at the highest level of government on what do do about the Americans stuck on the Diamond Princess and other cruise ships. I was almost screaming at the book at this point “there’s just 437 Americans on the cruise ship! Pay attention to the 328 million Americans at home!” It’s ridiculous that 437 Americans should occupy the President’s time but that’s what happens when people think the President is their father (or mother) who needs to show them that he cares.

Governance by the 24 hour news cycle is by no means solely a Trump failing. Biden doesn’t need to know anything about the Miami tower collapse, for example. It’s a tragedy but a state and local matter. But the 24-hour news cycle means that politicians don’t think more than a step ahead, often to a bizarre extent. When the Dow dropped, Larry Kudlow rushed to get on the news to say the “virus is contained”. What was he thinking? If true, this would reveal itself in time and the Dow would rise. If false, he gains at best a couple of days of bump and then lose credibility. Similarly, what was Pence thinking when he wrote in a June of 2020 WSJ op-ed “There Isn’t a Coronavirus Second Wave.” You can’t confidence game a virus.

The CDC botched the initial test and when Joe Grogan at the Domestic Policy Council questioned Azar, Redfield and Fauci he was told “Everything is taken care of. The CDC is remedying the situation.” After repeated delays, the FDA sent an expert to investigate what was going on with the CDC test:

When Stenzel gained access to three key labs developing the test, he couldn’t believe what he saw. In two of the three labs, the agency wasn’t following standard operating procedure. And he discovered the CDC had put together the test in the same lab where it was running the test on live virus samples. That was a violation of the most basic manufacturing practices… “If you were a commercial entity, I would shut you down.” p.81

The CDC failing to use standard operating procedures wasn’t Trump’s fault. The rot is deep.

I was hoping to get more information from Abutaleb and Paletta about Pfizer’s peculiar change in study design. Pfizer released their trial design in mid-September. Articles in the Washington Post and the New York Times were clear that Pfizer planned to look at their data once 32 trial participants had been infected. President Trump, following Pfizer CEO Bourla, thus predicted that there would be vaccine news in October, before the election. Instead Pfizer announced their terrific results on Monday November 9, after the election. When the announcement came people were surprised that between mid-September and November the trial design had been changed. STAT News, for example, noted:

In their announcement of the results, Pfizer and BioNTech revealed a surprise. The companies said they had decided not to conduct the 32-case analysis “after a discussion with the FDA.” Instead, they planned to conduct the analysis after 62 cases.

Abutaleb and Paletta report that the Trump team was furious when they discovered that the good news had been delayed and then they say the following:

FDA officials, of course, had no control over when Pfizer reported its results, because the company could report them only after a certain number of people in the trial had contracted coronavirus.

This is blatantly false. FDA officials have only to signal what they want from a company and the company will comply. Moreover, it was precisely by changing the number of people who needed to have contracted coronavirus that control was exerted. What exactly was said in this “discussion with the FDA” that caused Pfizer to wait? Probably not coincidentally it was also in October that Nancy Pelosi began to worry that British immune systems were different than American immune systems.

Abutaleb and Paletta have nothing good to say about Jared Kushner (unlike Birx who was obviously a source) but if you read between the lines Kushner comes off surprisingly well. At the very least, he moves quickly and sometimes gets things done. Abutaleb and Paletta offer this critique:

Kushner was correct that the normal processes for procuring supplies were cumbersome and slow. But circumventing those processes risked wasting taxpayer money, buying faulty supplies, or running afoul of government contracting laws. There were protections in place to try to prevent the government from overpaying for products or supplies and to try to ensure that companies did not receive unfair advantages…” p. 258.

Oooh, overpaying for products. As if that never happens when the processes are followed. All of this makes it clear that there would have been big errors under other administrations but they would have been different errors like moving even slower so as not to run “afoul of government contracting laws.”

One thing which comes through in The Premonition, Preventable and Nightmare Scenario is that quite a few people understood the crisis early. On January 18, Scott Gottlieb texted Joe Grogan to warn him about the virus in Wuhan. Grogan takes it seriously (it may have been Grogan who was responsible for inviting Kremer and I to speak to the DPC on accelerating vaccines.) On January 28, deputy national security advisor Matthew Pottinger warned Trump that he could be facing the deadliest pandemic since the 1918 flu. But Gottlieb had already left the administration, Grogan would resign early, and when Pottinger started wearing a mask to work he was considered an alarmist and was frozen out of decision making. Many others had or would soon leave:

Who was left? A mix of family members, twentysomethings, hangers-on, fourth-stringers, former lobbyists, sycophants…That created tremendous pressure on the government officials who remained in their positions in 2020. Many of them were totally unprepared for what was coming. Many of them were so focused on their own survival that it never occurred to them to focus on anyone else’s. p.31.

Overall, Nightmare Scenario is an excellent read.

Towards a COVAX Exchange

Israel had vaccine that was about to expire before it could be administered. South Korea needed vaccine immediately to stop a surge. They arranged a deal.

South Korea said it will receive 700,000 doses of Pfizer-BioNTech’s coronavirus vaccine from Israel on loan this week, in an attempt to speed up immunisation following a surge in infections around the capital Seoul.

…Under the vaccine swap arrangement announced by both governments on Tuesday, South Korea will give Israel back the same number of shots, already on order from Pfizer, in September and October.
South Korea has quickly distributed the COVID-19 vaccines it has, but has struggled to obtain enough doses in a timely manner as global supplies are tight, particularly in Asia.

“This is a win-win deal,”  [Israeli Prime Minister Naftali Bennett] said in an earlier statement.

One of the weaknesses of the COVAX facility for distributing vaccines is that distribution is primarily based on population with all countries guaranteed that “no country will receive enough doses to vaccinate more than 20% of its population until all countries in the financing group have been offered this amount.” That’s equitable, but it has dynamic challenges: different countries may have different needs and capabilities at different points in time. A country may be given vaccines, for example, when it may not yet be ready to administer them — and that can potentially lead to waste. The Israel-South Korea deal, for example, only narrowly averted 700,000 Pfizer doses from being tossed.  Countries may also have different preferences for vaccines, as different vaccines may fit better with their healthcare systems. A fixed distribution schedule doesn’t adapt to the unique circumstances of time and place, as Hayek might have said.

It’s not surprising that COVAX chose a fixed distribution rule as many people wouldn’t trust a centralized authority to decide who gets what vaccines when. But what about guaranteeing each country a right to vaccine but allowing them to trade? Trade wouldn’t be vaccines for dollars which could introduce ethical and agency issues but vaccine at time 1 for vaccine at time 2 as in the Israel-South Korea exchange or across other factors such as vaccine type. My colleagues on the Kremer team, most notably Eric Budish, Scott Duke Kominers and Canice Prendergast, have been helping think through the design of just such a system. Prendergast designed the now-famous distribution system for Feeding America, Budish helped to design Wharton’s Course Match system and Kominers has worked on mechanisms for allocating convalescent plasma, vaccines and many other goods.

A suitably designed exchange can increase efficiency while maintaining equity. The Israel-South Korea deal reminds us that this is a priority. Greater efficiency in this context means fewer vaccine doses wasted, and more lives saved.

Use Fractional Dosing to Speed Vaccination and Save Lives

I’ve been shouting about fractional dosing since January, most recently with my post A Half Dose of Moderna is More Effective Than a Full Dose of AstraZeneca and the associated paper with Michael Kremer and co-authors. Yesterday we saw some big movement. Writing in Nature Medicine, WHO epidemiologists Benjamin Cowling and Wey Wen Lim and evolutionary biologist Sarah Cobey title a correspondence:

Fractionation of COVID-19 vaccine doses could extend limited supplies and reduce mortality.

Exactly so. They write:

Dose-finding studies indicate that fractional doses of mRNA vaccines could still elicit a robust immune response to COVID-192,3. In a non-randomized open-label phase 1/2 trial of the BNT162b2 vaccine, doses as low as one third (10 μg) of the full dose produced antibody and cellular immune responses comparable to those achieved with the full dose of 30 μg (ref. 4). Specifically, the geometric mean titer of neutralizing antibodies 21 days after the second vaccine dose was 166 for the group that received 10 μg, almost the same as the geometric mean titer of 161 for the group that received 30 μg, and 63 days after the second dose, these titers were 181 and 133, respectively4. For the mRNA-1273 vaccine, a dose of 25 μg conferred geometric mean PRNT80 titers (the inverse of the concentration of serum needed to reduce the number of plaques by 80% in a plaque reduction neutralization test) of 340 at 14 days after the second dose, compared with a value of 654 for the group that received the standard dose of 100 μg (ref. 5). According to the model proposed by Khoury et al.6, if vaccine efficacy at the full dose is 95%, a reduction in dose that led to as much as a halving in the post-vaccination geometric mean titer could still be in the range of 85–90%. Although other components of the immune response may also contribute to efficacy, these dose-finding data are at least indicative of the potential for further exploration of fractionation as a dose-sparing strategy. Durability of responses after fractional doses should also be explored.

…Concerns about the evolution of vaccine resistance have been posited as a potential drawback of dose-sparing strategies. However, vaccines that provide protection against clinical disease seem to also reduce transmission, which indicates that expanding partial vaccination coverage could reduce the incidence of infection. As described in a recent paper, lower prevalence should slow, not accelerate, the emergence and spread of new SARS-CoV-2 variants8.

…In conclusion, fractionated doses could provide a feasible solution that extends limited supplies of vaccines against COVID-19, which is a major challenge for low- and middle-income countries.

Also a new paper in preprint just showed that 1/4 doses of Moderna create a substantial and lasting immune response on par with that from natural infection.

Here we examined vaccine-specific CD4+ T cell, CD8+ T cell, binding antibody, and neutralizing antibody responses to the 25 ug Moderna mRNA-1273 vaccine over 7 months post-immunization, including multiple age groups, with a particular interest in assessing whether pre-existing crossreactive T cell memory impacts vaccine-generated immunity. Low dose (25 ug) mRNA-1273 elicited durable Spike binding antibodies comparable to that of convalescent COVID-19 cases. Vaccine-generated Spike memory CD4+ T cells 6 months post-boost were comparable in quantity and quality to COVID-19 cases, including the presence of TFH cells and IFNg-expressing cells.

Finally, an article in Reuters notes that Moderna are preparing to launch a 50 ug dose regimen as a booster and for children. Thus, contrary to some critics of our paper, the technology is ready.

Frankly, governments are way behind on this–they should have been pushing the vaccine manufacturers and funding trials on alternative dosing since at least January. Indeed, imagine how many lives we might have saved had we listened to Operation Warp Speed advisor Moncef Slaoui who advocated for half doses in January. On a world scale, we could have vaccinated tens even hundreds of millions more people by now had we ramped up fractional dosing.

At this point, it’s my view that there is enough knowledge to justify rolling out alternative dosing in any hot spot or in any country worried about outbreaks. Roll it out in a randomized fashion (as Kominers and I discussed in the context of the US vaccination rollout) to study it in real time but start the roll out now. Lives can be saved if we speed up vaccination, especially of the best vaccines we have, the mRNAs. Moderna and Pfizer have together pledged to deliver (mostly Pfizer and mostly through the US) some 250m vaccine doses to COVAX in 2021 for delivery to less developed countries. If we go to half-doses that becomes 500m doses–a life saver. And recall these points made earlier:

Judging by neutralizing antibodies, a 50 ug dose of, for example, Moderna looks to be more effective than standard dosing of many other vaccines including AZ and J&J and much better than others such as Sinovac. Thus alternative dosing is a way to *increase* the quality of vaccine for many people.

A 50 ug dose vaccine available today is much higher quality than a 100 ug dose vaccine available one year from now.

If we have the will, we can increase vaccine supply very rapidly.

The Premonition

In The Premonition Michael Lewis brings his cast of heroes together like the assembling of the Avengers. In the role of Captain America is Charity Dean, the CA public health officer who is always under-estimated because she is slight and attractive, until she cracks open the ribcage of a cadaver that the men are afraid to touch. Then there is Carter Mecher, the redneck epidemiologist who has a gift for assembling numbers into coherent patterns. And Richard Hatchett the southern poet who finds himself at the head of The Coalition for Epidemic Preparedness (CEPI), the world’s most important organization during the pandemic; and Joe DiRisi the brilliant, mad scientist picked by the Chan Zuckerberg Initiative as the person most likely to cure disease…all of them. As you might expect from Michael Lewis, it’s all terribly well done, albeit formulaic and  sometimes over-the-top, e.g.

Charity’s purpose was clear….she was put on earth to fight battles, and wars, against disease. To save lives and perhaps even an entire country. p. 200-201

But Lewis has a bigger problem than over-the-top writing.

The heroes were defeated. Lewis likes to tell stories of brilliant mavericks like Billy Beane and Michael Burry who go against the grain but eventually, against all odds, emerge victorious. But six hundred thousand people are dead in the United States and whatever victory we have won was ugly and slow. Indeed, Lewis assembles his mighty team but then The Premonition trails off as the team is defeated by bureaucracy, indecision, complacency and malaise before they even have a chance to enter the real battle against the virus. It’s telling that none of Lewis’s heroes are even mentioned in Andy Slavitt’s Preventable (about which I will say more in a future post).

To be fair, Lewis’s heroes are fascinating, brilliant people who did some good. As part of the Kremer team I interacted a bit with Richard Hatchett and CEPI. Hatchett headed CEPI and understood the danger of SARS-COV-II before anyone else and with Bill Gates’s support started funding vaccine production and shoring up supply lines before anyone else was off the starting line. CEPI was magnificent and their story has yet to be told in full measure. Had Lewis’s heroes been in charge I have no doubt that many lives could have been saved but, for the most part, the heroes were sidelined. Why and how that happened is the real question but Lewis’s story-telling skills aren’t the right skills to answer that question.

If there is one central villain in The Premonition, it’s the CDC. Lewis acknowledges that his perspective has changed. In The Fifth Risk, the system (the “deep state” used non-pejoratively if you will) is full of wisdom and power but it’s under threat from Trump. In The Premonition, Trump is an after-thought, at best a trigger or aggravating factor. Long before Trump or the pandemic:

Charity had washed her hands of the CDC. “I banned their officers from my investigations,” she said. The CDC did many things. It published learned papers on health crisis, after the fact. It managed, very carefully, public perception of itself. But when the shooting started, it leapt into the nearest hole, while others took fire. “In the end I was like ‘Fuck you’, said Charity. “I was mad they were such pansies. I was mad that the man behind the curtain ended up being so disappointing.” p. 42

As the pandemic starts the CDC fails repeatedly. At the beginning of the pandemic on January 29 the government had started to repatriate Americans from Wuhan bringing some of them to a National Guard base just outside of Omaha. But shockingly the CDC doesn’t test them for the virus.

Never mind that every single one of the fifty-seven Americans in quarantine wanted to be tested: the CDC forbade it. And [James] Lawler [US Naval Commander and national security coordinator on pandemic response] never understood the real reason for the CDC’s objections…Whatever the reasons, fifty-seven Americans spent fourteen days quarantined in Omaha, then left without having any idea of whether they’d been infected, or might still infect others. “There is no way that fifty-seven people from Wuhan were not shedding virus,” said Lawler. p. 176

Many of the people brought home from China are not even quarantined just told to self-quarantine:

…When local health officers…set out to find these possibly infected Americans, and make sure that they were following orders to quarantine, they discovered that the CDC officials who had met them upon arrival had not bothered to take down their home addresses.

…[Charity] posed a rude question to the senior CDC official moved on the call: How can you keep saying that Americans are at low risk from the virus if you aren’t even testing for the virus. She’d been answered with silence, and then the official move on to the next topic. [p.206-207, italics in original]

And all of this is before we get to the CDC’s famously botched test an error which was amplified by the FDA’s forbidding private labs and state governments to develop their own tests. Charity Dean wanted California to ignore the CDC and FDA and, “blow open testing and allow every microbiology lab to develop its own test.” But Dean is ignored and so by as late as February 19, “Zimbabwe could test but California could not because of the CDC. Zimbabwe!” p. 223. The failure of testing in the early weeks was the original sin of the crisis, the key failure that took a containment strategy ala South Korea and Taiwan off the table.

Lewis’s most sustained analysis comes in a few pages near the end of The Premonition where he argues that the CDC became politicized after it lost credibility due to the 1976 Swine Flu episode. In 1976 a novel influenza strain looked like it might be a repeat of 1918. Encouraged by CDC head David Sencer, President Ford launched a mass vaccination campaign that vaccinated 45 million people. The swine flu, however, petered out and the campaign was widely considered a “debacle” and a “fiasco” that illustrated the danger of ceding control to unelected experts instead of the democratic process. The CDC lost authority and under Reagan the director became a political appointee rather than a career civil servant. Thus, rather than being unprecedented, Trump’s politicization of the CDC had deep roots.

Today the 1976 vaccination campaign looks like a competent response to a real risk that failed to materialize, rather than a failure. So what lessons should we take from this? Lewis doesn’t say but my colleague Garett Jones argues for more independent agencies in his excellent book 10% Less Democracy. The problem with the CDC was that after 1976 it was too responsive to political pressures, i.e. too democratic. What are the alternatives?

The Federal Reserve is governed by a seven-member board each of whom is appointed to a single 14- year term, making it rare for a President to be able to appoint a majority of the board. Moreover, since members cannot be reappointed there is less incentive to curry political favor. The Chairperson is appointed by the President to a four-year term and must also be approved by the Senate. These checks and balances make the Federal Reserve a relatively independent agency with the power to reject democratic pressures for inflationary stimulus. Although independent central banks can be a thorn in the side of politicians who want their aid in juicing the economy as elections approach, the evidence is that independent central banks reduce inflation without reducing economic growth. A multi-member governing board with long and overlapping appointments could also make the CDC more independent from democratic politics which is what you want when a once in 100 year pandemic hits and the organization needs to make unpopular decisions before most people see the danger.

Lewis hasn’t lost his ability to write exhilarating prose about heroic oddballs. Page by page, The Premonition is a good read but the heroes in Lewis’s story were overshadowed by politics, bureaucracy and complacency–systems that Lewis’s doesn’t analyze or perhaps quite understand–and as a result, his hero-centric story ends up unsatisfying as story and unedifying as analysis.

More on Alternative Dosing

Some quick comments in response to questions and discussion about my paper Could Vaccine Dose Stretching Reduce COVID-19 Deaths? (written with the all-star cast of Witold Więcek, Amrita Ahuja, Michael Kremer, Alexandre Simoes Gomes, Christopher M. Snyder and Brandon Joel Tan.

1) Any method of increasing vaccine supply will require other changes in the supply chain such as more needles. We think alternative dosing can increase supply quickly with the fewest supply chain disruptions.

2) If we had started Moderna with 50 ug dosing no one would be advocating for 100 ug dosing, thereby halving supply. Rather than “full” or “half-doses,” which bias thinking, we should talk about alternative dosing and ug.

3) Judging by neutralizing antibodies, a 50 ug dose of, for example, Moderna looks to be more effective than standard dosing of many other vaccines including AZ and J&J and much better than others such as Sinovac. Thus alternative dosing is a way to *increase* the quality of vaccine for many people.

4) A 50 ug dose vaccine available today is much higher quality than a 100 ug dose vaccine available one year from now.

5) There are substantial risks from following the current approach, as India and now parts of Africa illustrate. Alternative dosing has a very large upside but small downside since we could switch back to standard doses. For example, Great Britain and Canada delayed the second dose to 12 and 16 weeks respectively but have since reduced the dosing interval as more supplies have become available.

6) The greatest risk to immune escape comes from the unvaccinated. Alternative dosing protects not only those who are dosed but by reducing transmission also reduces risks to the unvaccinated.

7) The key question we face now is not whether there are objections and complications to alternative dosing (there are) the key question is what additional information, available quickly could resolve the most uncertainty? In other words, what can we learn soon that would most aid decision makers?

See the paper for details and also my previous post, A Half Dose of Moderna is More Effective Than a Full Dose of AstraZeneca.

Addendum: It should be clear that this isn’t about the United States, it is about getting high-quality vaccine to places that have little to none.

A Half Dose of Moderna is More Effective Than a Full Dose of AstraZeneca

Today we are releasing a new paper on dose-stretching, co-authored by Witold Wiecek, Amrita Ahuja, Michael Kremer, Alexandre Simoes Gomes, Christopher M. Snyder, Brandon Joel Tan and myself.

The paper makes three big points. First, Khoury et al (2021) just published a paper in Nature which shows that “Neutralizing antibody levels are highly predictive of immune protection from symptomatic SARS-CoV-2 infection.” What that means is that there is a strong relationship between immunogenicity data that we can easily measure with a blood test and the efficacy rate that it takes hundreds of millions of dollars and many months of time to measure in a clinical trial. Thus, future vaccines may not have to go through lengthy clinical trials (which may even be made impossible as infections rates decline) but can instead rely on these correlates of immunity.

Here is where fractional dosing comes in. We supplement the key figure from Khoury et al.’s paper to show that fractional doses of the Moderna and Pfizer vaccines have neutralizing antibody levels (as measured in the early phase I and phase II trials) that look to be on par with those of many approved vaccines. Indeed, a one-half or one-quarter dose of the Moderna or Pfizer vaccine is predicted to be more effective than the standard dose of some of the other vaccines like the AstraZeneca, J&J or Sinopharm vaccines, assuming the same relationship as in Khoury et al. holds. The point is not that these other vaccines aren’t good–they are great! The point is that by using fractional dosing we could rapidly and safely expand the number of effective doses of the Moderna and Pfizer vaccines.

Second, we embed fractional doses and other policies such as first doses first in a SIER model and we show that even if efficacy rates for fractional doses are considerably lower, dose-stretching policies are still likely to reduce infections and deaths (assuming we can expand vaccinations fast enough to take advantage of the greater supply, which is well within the vaccination frontier). For example, a half-dose strategy reduces infections and deaths under a variety of different epidemic scenarios as long as the efficacy rate is 70% or greater.

Third, we show that under plausible scenarios it is better to start vaccination with a less efficacious vaccine than to wait for a more efficacious vaccine. Thus, Great Britain and Canada’s policies of starting First Doses first with the AstraZeneca vaccine and then moving to second doses, perhaps with the Moderna or Pfizer vaccines is a good strategy.

It is possible that new variants will reduce the efficacy rate of all vaccines indeed that is almost inevitable but that doesn’t mean that fractional dosing isn’t optimal nor that we shouldn’t adopt these policies now. What it means is that we should be testing and then adapting our strategy in light of new events like a battlefield commander. We might, for example, use fractional dosing in the young or for the second shot and reserve full doses for the elderly.

One more point worth mentioning. Dose stretching policies everywhere are especially beneficial for less-developed countries, many of which are at the back of the vaccine queue. If dose-stretching cuts the time to be vaccinated in half, for example, then that may mean cutting the time to be vaccinated from two months to one month in a developed country but cutting it from two years to one year in a country that is currently at the back of the queue.

Read the whole thing.

The Becker-Friedman center also has a video discussion featuring my co-authors, Nobel prize winner Michael Kremer and the very excellent Witold Wiecek.

The Economist on Patent Waivers

A good statement from The Economist:

We believe that Mr Biden is wrong. A waiver may signal that his administration cares about the world, but it is at best an empty gesture and at worst a cynical one.

A waiver will do nothing to fill the urgent shortfall of doses in 2021. The head of the World Trade Organisation, the forum where it will be thrashed out, warns there may be no vote until December. Technology transfer would take six months or so to complete even if it started today. With the new mRNA vaccines made by Pfizer and Moderna, it may take longer. Supposing the tech transfer was faster than that, experienced vaccine-makers would be unavailable for hire and makers could not obtain inputs from suppliers whose order books are already bursting. Pfizer’s vaccine requires 280 inputs from suppliers in 19 countries. No firm can recreate that in a hurry.

In any case, vaccine-makers do not appear to be hoarding their technology—otherwise output would not be increasing so fast. They have struck 214 technology-transfer agreements, an unprecedented number. They are not price-gouging: money is not the constraint on vaccination. Poor countries are not being priced out of the market: their vaccines are coming through COVAX, a global distribution scheme funded by donors.

In the longer term, the effect of a waiver is unpredictable. Perhaps it will indeed lead to technology being transferred to poor countries; more likely, though, it will cause harm by disrupting supply chains, wasting resources and, ultimately, deterring innovation. Whatever the case, if vaccines are nearing a surplus in 2022, the cavalry will arrive too late.

Elsewhere in this issue they draw on my work with Kremer et al.

The increase in capacity seen over the past year was brought about in large part because of government interventions, most notably Operation Warp Speed in America and the activities of the Vaccine Taskforce in Britain, which guaranteed payments and drove the expansion of supply chains.

These efforts splashed around a lot of money which, if none of the vaccines had worked, would have been lost. But with the benefit of hindsight it is now hard not to wish they had been more generous still. In March Science, a journal, published estimates from a group of economists of the total global economic loss that would have been avoided if enough money to produce vaccines for the entire world had been provided up front, rather than enough for most of the rich world. They calculated that if the world had put in place a vaccine-production infrastructure capable of pumping out some 1.2bn doses per month by January 2021, it would have saved the global economy almost $5trn (see chart).

Eric Budish of the Chicago Booth School of Business, one of the model’s authors, explains the situation using a plumbing metaphor: it is faster to lay down a wider-bore pipe at the start of a project than to expand a narrow one later. The rich world succeeded in producing effective vaccines remarkably quickly in quantities broadly sufficient to its needs: an extraordinary achievement. But the capacity of the system it built in order to do so created constraints that the rest of the world must now live with. That was a choice, not destiny.