What Operation Warp Speed Did, Didn’t and Can’t Do
Operation Warp Speed was a tremendous success and one that I was pleased to support from the beginning. Many people, however, are concluding from the success of OWS that big Federal funding can solve many other problems at the same speed and scale and that is incorrect.
First, it’s important to understand that OWS did not create any scientific innovations or discoveries. The innovative mRNA vaccines are rightly lauded but all of the key scientific ideas behind mRNA as a delivery mechanism long predate Operation Warp Speed. The scientific advances were the result of many decades of work, some of it supported by university and government funding and also a significant fraction by large private investments in firms such as Moderna and BioNTech. It was BioNTech recall that hired Katalin Karikó (and many other mRNA researchers) when she couldn’t get university or government funding. Since OWS created no new scientific breakthroughs there isn’t much to learn from OWS about the efficacy of large scale programs for that purpose.
Second, it’s important to understand that we got lucky. OWS made smart bets and the portfolio paid off but it could have failed. Indeed, some OWS bets did fail including the Sanofi and Glaxo-Smith-Klein vaccine and the at-best modest success of Novavax. Many other vaccines which we didn’t invest in but could have invested in also failed. To be clear, my work with Kremer et al. showed that these bets and more were worth taking but one should not underestimate the probability of failure even when lots of money is spent.
So what did Operation Warp Speed do? There were four key parts to the plan 1) an advance market commitment to buy lots of doses of approved vaccines–this was important because in past pandemics vaccines had entered development and then the disease had disappeared leaving the firms holding the bag with little to show for their investment 2) the lifting of FDA regulations to allow for accelerated clinical trials, for example, phase 3 trials could start before phase 2 trials were fully complete 3) government investment in large clinical trials–clinical trials are the most expensive part of the development process and by funding the trials generously, the trials could be made large which meant that they could be quick 4) government investment in capacity, building factories not just for the vaccines but also for the needles, vials and so forth, even before any of the vaccines were approved–thus capacity was ready to go. All of these steps shaved months, even years, off the deployment timeline.
The key factor about each of these parts of the plan was that we were mostly dealing with known quantities that the government scaled. It’s known how to run clinical trials, it’s known how to produce vials and needles. The mRNA factories were more difficult but scaling problems are more easily solved with investment than are invention problems. It’s also known how to lift government regulations and speed the bureaucracy. That is, no one doubts that lifting regulations and speeding bureaucracy is within our production possibilities frontier.
It also cannot be underestimated that OWS funded people who were already extremely motivated. The Pfizer and Moderna staff put in near super-human effort–many of them felt this was the key moment of their life and they stepped up to their moment. OWS threw gasoline on fire–don’t expect the same in a more normal situation.
Another factor that people forget is that with vaccines we had a very unusual situation where the entire economy was dependent on a single sector–a macroeconomic O-ring. As a result, the social returns to producing vaccines were easily a hundred times (or more) greater than any potential vaccine profits. Thus, by accelerating vaccine production, OWS could generate tremendous returns. Most of the time, markets internalize externalities imperfectly but reasonably well which means that even if you accelerate something good the total returns aren’t so astronomical that you can’t overspend or spend poorly. Governments can spend too much as well as too little so most of the time you have to factor in the waste of overspending even when the spending is valuable–that problem didn’t really apply to OWS.
So summarizing what do we need for another OWS? 1) Known science–scaling not discovering, 2) Lifting of regulations 3) Big externalities, 4) Pre-existing motivation. Putting aside an Armageddon like scenario in which we have to stop an asteroid, one possibility is insulating the electrical grid to protect North America from a Carrington event, a geomagnetic storm caused by solar eruptions. (Here is a good Kurzgesagt video.) Does protecting the grid meet our conditions? 1) Protecting the electrical grid is a known problem whose solution does not require new science 2) protecting the grid requires lifting and harmonizing regulations as the grid is national/inter-national but the regulations are often local, 3) The social returns to power far exceed the revenues from power so there are big externalities. Indeed, companies could have protected the grid already (and have done so to some extent) but they are under-incentivized. (The grid is aging so insulating the gird could also have many side benefits.) 4) Pre-existing motivation. Not much. Can’t have everything.
I think it’s also notable that big pandemics and solar storms seem to occur about once in every one hundred years–just often enough to be dangerous and yet not so often that we are well prepared.
Thus, while I think that enthusiasm for an “OWS for X” is overblown, there are cases–protecting the grid is only one possibility–where smart investments could pay big returns but they must be chosen carefully in light of all the required conditions for success.