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Wise Canadians

On December 12 I wrote:

We should vaccinate 6 million people with first dose NOW. It is deadly cautious to hold second dose in *reserve*. Supply chain will be ok and the exact timing of the second dose is not magical and likely not critical.

Modelling by a group at the University of Toronto confirmed.

Ashleigh Tuite, an epidemiologist at U of T’s Dalla Lana School of Public Health….said she and her colleagues projected that frontloading vaccine doses would avert between 34 and 42 per cent more symptomatic coronavirus infections, compared with a strategy of keeping half the shipments in reserve.

“It makes much more sense to just get as many people their first doses as soon as possible,” Dr. Tuite said.

…everyone should get the second dose on schedule, but if supply issues delay that injection by a week or two, it shouldn’t hamper how well the vaccines work.

According to Abigail Bimman at Global News, Ontario will now switch to getting as many first doses out as possible:

NEW: Ontario is changing its vaccine policy and no longer reserving second doses, but getting all of the initial 90k out the door- they expect to finish them in the “next several days” – Health Minister’s office tell @globalnew. Change due to confidence in supply chain.

It’s not all the way to first doses first but it’s a minimally risky, smart move. Indeed, Nova Scotia, Saskatchewan and British Columbia already have said that they won’t hold back first doses.

The United States should listen to the wise Canadians.

What’s the Right Dose for Boosters?

The Biden administration says booster shots are coming, but the FDA hasn’t decided on the dose. Moderna wants a half-shot booster. Pfizer a full shot. But could the best dose for Americans and for the world be even less?

COVID-19 vaccines are the first successful use of mRNA vaccine technology, so a lot remains unknown. But identifying the smallest dose needed to provide effective boosting is critical to protect Americans from adverse effects, increase confidence in vaccines, and mitigate global vaccine inequity.

We’ve known since earlier this year that a half-dose of the Moderna vaccine produces antibody levels similar to the standard-dose and newer information suggests that even a quarter-dose vaccine may do the same. If a half or quarter dose is nearly as effective as a standard dose for first and second shots then a full dose booster may well be an overdose. The essential task of a booster is to “jog” the immune system’s memory of what it’s supposed to fight. Data from the world of hepatitis B suggest that the “reminder” need not be as intense as the initial “lesson.” And in the cases of tuberculosis, meningitis, and yellow fever vaccines, lower doses have been as good or better than the originals.

Lower doses could also reduce risks of adverse effects.

That’s myself and physicians Garth Strohbehn and William F. Parker on the Med Page Today. Strohbehn is an oncologist and specialist in optimizing doses for cancer drugs. William Parker is a pulmonologist and professor of medicine at the University of Chicago.

A new hurdle for vaccine development

Unless countries that have purchased vaccine doses and companies that have already brought vaccines into use agree to find ways to resolve the problem, manufacturers that trail the first wave of producers may not be able to prove that their vaccines work. Not only will that slow efforts to vaccinate the planet, it will block development of next-generation vaccines, and it will stymie efforts to answer key public health questions, like whether boosting with a different vaccine would generate better protection, or whether giving smaller — fractional — doses could protect more people more quickly…

The problem stems in part from the fact that at this point in the pandemic, it isn’t considered ethical to test new vaccines against placebos; instead they would have to be tested against one of the existing shots. But getting one’s hands on licensed or authorized vaccines for study purposes is nigh on impossible; all available doses have been snapped up by countries keen to vaccinate as many of their citizens as possible.

Contracts for those doses contain rigid stipulations about how the vaccines can be deployed. The doses often have to be used in the country that made the purchase; when the Biden administration wanted to share AstraZeneca doses with Canada and Mexico in March, it loaned the doses to get around the restrictions. Contracts also often stipulate that doses that have been purchased must be used for outbreak control, not for research purposes, Lurie said.

Here is the full story by Helen Branswell.  Obviously there is a market-oriented solution here, if only we care enough to implement it…

The Biden administration populist thinking about vaccine export

…top White House aides rejected that [export] recommendation over concerns that the domestic stockpile was not large enough yet — and that the optics of sending doses abroad during a big push to make vaccines more available to U.S. citizens. In subsequent weeks they repeatedly overruled administration health experts who felt it was a mistake to keep millions of doses in storage as outbreaks intensified across the world.

“The optics clearly were that we needed to take care of our own population first. Let’s not worry about the demand yet, we still have a problem at home,” said one person briefed on the matter, who requested anonymity to describe the internal divisions. “The public health people don’t see that in the same way.”

Here is the full story.

India’s Pandemic and the World

Shruti Rajagopalan is right, helping India isn’t just about India.

India’s role in the global pandemic is unique. The developing world is counting on affordable Indian vaccine-makers such as Serum Institute of India Pvt. Ltd. for their supplies. With India now reserving virtually all its doses for domestic use, those countries will have to wait even longer to be vaccinated. And if the pandemic disrupts production at Indian pharmaceutical companies, it could affect crucial non-Covid medications as well. Half the world’s children have been vaccinated by Serum Institute.

The Biden administration can do two things to help. The first is to ease restrictions on critical exports, imposed under the Defense Production Act to prioritize the needs of U.S. companies.

Vaccine production requires very specific, medically approved inputs, which are difficult to substitute quickly in the middle of a pandemic. Currently, U.S. producers must secure permission before exporting such things as special sterile filters, disposable bags for cell cultures, cell culture media and single-use tubing. The embargo has led to major bottlenecks. Serum Institute says that without those inputs, it may not be able to deliver the 160 million vaccine doses it had planned to produce next month.

Second, the U.S. should immediately share doses from its own supply of Oxford-AstraZeneca and Johnson & Johnson vaccines.

I have three things to add. First, I have already noted the foreign policy implications which weigh strongly in favor of taking a more active role in the world pandemic.

Second, India should move immediately to delay the second dose of the AZ vaccine to 12 weeks. The federal government has already recommended a 6-8 week schedule, as this improves efficiency of the AstraZeneca (Covishield) vaccine, but many people so fear shortages that they are getting a less-effective second dose at four weeks. An enforced 12 week schedule would improve efficiency and might also reassure people that there will be supplies in 12 weeks.

Third, and this is more speculative, but the rising pandemic in India provides an opportunity to test fractional dosing of the Pfizer and Moderna vaccines in a real world setting. There is currently a small-scale Belgian trial testing Moderna at 50 mcg and Pfizer at 20 mcg. We already have reasonable information that 50 mcg of Moderna induces a robust immune response in adults. The mRNA vaccines wouldn’t work in all of India but would be fine in the cities and perhaps there is an opportunity for an exchange similar to what Israel promised to get early supplies.

A Foreign Policy Disaster in the Making

NYTimes: A lethal, fast-paced second wave of the coronavirus pandemic has brought India’s health care systems to the verge of collapse and is putting millions of lives and livelihoods at risk.

On Sunday and Monday, the country recorded more than 270,000 and 259,000 cases, respectively, of Covid-19, a staggering increase from about 11,000 cases per day in the second week of February. Reported coronavirus infections shot up from about 20,000 per day in mid-March to more than 200,000 by mid-April.

The newspapers and social media are scrolls of horror and failure of the health system. There are reports of lines of ambulances with patients waiting outside the largest Covid facility in Ahmedabad in the western state of Gujarat because ventilator beds and oxygen had run out.

On Friday in the northern city of Lucknow, Vinay Srivastava, a 65-year-old journalist, shared his falling oxygen levels on Twitter, tagging government authorities for help. Overburdened hospitals and laboratories wouldn’t take calls from his family. The last tweet from Mr. Srivastava’s handle described his oxygen saturation level at 52, way below the 95 percent, which is considered normal. Nobody helped. He died on Saturday.

When I left India in February of 2020 I feared that COVID would rip through its dense, urban populations which were already under stress from some of the world’s worst air and water pollution. I feared that COVID would overwhelm India’s weak public health care system and leave its low-capacity state flailing. As it happened, I should have worried more about America’s poorly cared for nursing home populations, its high obesity rate, and its low state-capacity. It was the US state that ended up flailing, as it and the public became absorbed by media spectacles, impeachments and scandals du jour even as thousands died daily. The virus mocks us all.

All of this will require some rethinking. Today, however, I want to point to a foreign policy disaster in the making. America’s role as the guarantor of a globalized, mostly peaceful, and orderly world–already deeply hurt by four years of “America First,”–is now under further threat by an increasing perception that we are vaccine hoarders. Conspiracy theories are running wild in India on WhatsApp and elsewhere that we have hundreds of millions of spare doses. It isn’t true, of course. We ordered more doses than we needed because we didn’t know which vaccine would work and so we smartly placed multiple bets. Our advance-purchases from Pfizer and big investments in Moderna and related parts of the vaccine supply chain have paid off big time. As the US is vaccinated, our investments will benefit the entire world. Our investments in Novavax, AstraZeneca and Johnson and Johnson were also smart investments but those bets have yet to pay off in a big way. We don’t have hundreds of millions of doses stockpiled but maybe tens of millions of some AstraZeneca and Johnson and Johnson vaccines.

We have, however, used the Defense Production Act to prioritize American vaccine manufacturing at potentially great cost to India. As The Economist reports:

Production lines in India, making at least 160m doses of covid vaccine a month, will come to a halt in the coming weeks unless America supplies 37 critical items.

A shutdown of vaccine production in India would be a disaster for India and also for the United States. Our image in Asia will be tarnished at a time when we want to be making allies to counter Chinese influence. Moreover, the US benefits tremendously from a globalized world. Indeed, the US cannot supply its own vaccine needs without inputs from the rest of the world so flouting the rules will boomerang, leaving us and everyone else worse off. Autarchy is very bad for vaccine production.

The Biden Administration has some leeway. We have over 60 million doses of Pfizer and Moderna vaccines on hand and more arriving every day. We do not need to pause our own vaccination efforts to help others. We can donate what AstraZeneca stockpiles remain at no cost to us. A I said in my testimony to Congress, forget being humanitarians, there are health, economic and political reasons to vaccinate the world.

So let’s make it clear that we have an American plan to vaccinate the world before perceptions solidify that we are the villain and not the hero of the story.

My Congressional Testimony

I thought the meeting went well. I made four points.

  • It is not too late to do more.
  • We should invest in nasal and oral vaccines.
  • We should vaccinate the world.
  • We should stretch doses through fractional dosing and delaying the second dose, this will be important to vaccinate the world quickly.

One observation. Lots of people are talking about vaccine hesitancy but I am one of the few people who have been talking about nasal and oral vaccines which are the only really solid approach to the issue that I have seen.

My best line:

The unvaccinated are the biggest risk for generating mutations and new variants. You have heard of the South Africa and Brazilian variants, well the best way to protect your constituents from these and other variants is to vaccinate South Africans and Brazilians.

I also got in the last word in Q&A when discussing the pause of J&J:

For the rest of the world it is important to underline that it is most important to get vaccinated now. Use the AstraZeneca vaccine, use the Johnnson & Johnson vaccine…don’t wait for Moderna or Pfizer, it is going to take too long…start your vaccination program early…vaccinate as quickly as possible, that is the route to health and wealth.

See Western Warnings Tarnish Vaccines the World Badly Needs for the beginnings of a disaster. Note that if J&J and AZ are tarnished or knocked out of the vaccine arsenal then dose stretching and investing in more capacity are going to be even more important.

I also submitted five excellent and important pieces to Congress:

Canadian statement on delaying the second dose.

National Advisory Committee on Immunization (NACI) Canada. 2021. “COVID-19 Vaccine Extended Dose Interval for Canadians: NACI Recommendation.” Government of Canada. March 3, 2021. https://www.canada.ca/en/public-health/services/immunization/national-advisory-committee-on-immunization-naci/rapid-response-extended-dose-intervals-covid-19-vaccines-early-rollout-population-protection.html.

Value of vaccine capacity and additional investments.

Castillo, Juan Camilo, Amrita Ahuja, Susan Athey, Arthur Baker, Eric Budish, Tasneem Chipty, Rachel Glennerster, et al. 2021. “Market Design to Accelerate COVID-19 Vaccine Supply.” Science, February. https://doi.org/10.1126/science.abg0889.

Efficacy of the first dose from NEJM.

Skowronski, Danuta, and Gaston Serres De. 2021. “Letter to the Editor on Safety and Efficacy of the BNT162b2 MRNA Covid-19 Vaccine.” New England Journal of Medicine, February 17, 2021. https://doi.org/10.1056/NEJMc2036242.

Overview of dose stretching policies (with links in the online version).

Tabarrok, Alex. 2021. “What Are We Waiting For?” Washington Post, February 12, 2021, sec. Outlook. https://www.washingtonpost.com/outlook/2021/02/12/first-doses-vaccine-rules-fda/

A plan to vaccinate the world.

Agarwal, Ruchir, and Tristan Reed. 2021. “How to End the COVID-19 Pandemic by March 2022” SSRN. 2021. https://documents.worldbank.org/en/publication/documents-reports/documentdetail/181611618494084337/how-to-end-the-covid-19-pandemic-by-march-2022

The whole thing is here. My written testimony is here.

In praise of Alex Tabarrok

Here’s a question I’ve been mulling in recent months: Is Alex Tabarrok right? Are people dying because our coronavirus response is far too conservative?

I don’t mean conservative in the politicized, left-right sense. Tabarrok, an economist at George Mason University and a blogger at Marginal Revolution, is a libertarian, and I am very much not. But over the past year, he has emerged as a relentless critic of America’s coronavirus response, in ways that left me feeling like a Burkean in our conversations.

He called for vastly more spending to build vaccine manufacturing capacity, for giving half-doses of Moderna’s vaccine and delaying second doses of Pfizer’s, for using the Oxford-AstraZeneca vaccine, for the Food and Drug Administration to authorize rapid at-home tests, for accelerating research through human challenge trials. The through line of Tabarrok’s critique is that regulators and politicians have been too cautious, too reluctant to upend old institutions and protocols, so fearful of the consequences of change that they’ve permitted calamities through inaction.

Tabarrok hasn’t been alone. Combinations of these policies have been endorsed by epidemiologists, like Harvard’s Michael Mina and Brown’s Ashish Jha; by other economists, like Tabarrok’s colleague Tyler Cowen and the Nobel laureates Paul Romer and Michael Kremer; and by sociologists, like Zeynep Tufekci (who’s also a Times Opinion contributor). But Tabarrok is unusual in backing all of them, and doing so early and confrontationally. He’s become a thorn in the side of public health experts who defend the ways regulators are balancing risk. More than one groaned when I mentioned his name.

But as best as I can tell, Tabarrok has repeatedly been proved right, and ideas that sounded radical when he first argued for them command broader support now. What I’ve come to think of as the Tabarrok agenda has come closest to being adopted in Britain, which delayed second doses, approved the Oxford-AstraZeneca vaccine despite its data issues, is pushing at-home testing and permitted human challenge trials, in which volunteers are exposed to the coronavirus to speed the testing of treatments. And for now it’s working: Britain has vaccinated a larger percentage of its population than the rest of Europe and the United States have and is seeing lower daily case rates and deaths.

Here is more from Ezra Klein at the New York Times.

Vaccine Roundup

1. Politico: The Biden administration is rethinking a costly system of government-run mass vaccination sites after data revealed the program is lagging well behind a much cheaper federal effort to distribute doses via retail pharmacies….The vaccination hubs, which are run by FEMA and staffed in part by National Guard troops and other Pentagon personnel, have administered…about 67,000 shots a day, according to a series of internal FEMA briefing documents and data sets obtained by POLITICO….By comparison, the federal retail pharmacy program reported March 11 it had administered nearly 1 million doses over a single day.

Using the retail pharmacies is what Scott Duke Kominers and I argued for in mid-February in our piece titled, America’s Pharmacies Can Do a Lot More Vaccinations. Good to see the Biden administration is making adjustments. Nothing wrong with the clinics, by the way, only use the pharmacies more.

2. New CDC study of health care workers in the United States shows that the first dose of the Moderna or Pfizer vaccine is 80% effective within two weeks. Big cuts in transmission as well. N.B. not an RCT.

3. One common criticism of delaying the second dose or of using the AstraZeneca vaccine or of making or not making other changes was that this would increase “vaccine hesitancy.” Frankly, in my view this was just an all-purpose rationalization for inaction. I thought that delaying the second dose could just as easily reduce vaccine hesitancy as increase it–not that I knew this would happen, I simply knew what would happen was uncertain. More generally, I thought that we should do the thing designed to save the most lives simpliciter, address vaccine hesitancy directly, and not try to do some complicated bank-shot based on ill-informed psychological speculation. Well Britain did everything that people were worried about–Britain delayed the second dose, used the AstraZeneca vaccine, used the AstraZeneca in the elderly and didn’t halt the use of the AZ vaccine and the result is the least vaccine hesitancy of 26 countries surveyed.

British Vaccine Efficiency

The British vaccination plan has been run very well. As this audience knows, the British delayed the second dose in order to get out more first doses quickly. A life-saving move. The British have also been targeting age and riskier workers very well. The excellent Witold Więcek (an Emergent Ventures prize recipient) has done a back of the envelope calculation which indicates how well the British are targeting.

Since the vaccines have been prioritised for the elderly, the infection fatality risk (IFR) for a typical vaccinated patient is higher than the average IFR in the population. However, we have to account for the fact that many of the early doses are given to health care workers and some of the other key workers. By late February 2021, in the UK around 55% of the vaccines went to people over 70 and over 95% of that age group has been vaccinated. In the US, however, while 55% of vaccines went to people over 65, close to 30% went to people younger than 50. We calculated IFR as an approximate weighted mean of age-specific infection mortality risks, using a meta-analysis estimate in Manheim et al., 2021.

Applying this IFR approach to real-world distributions of vaccine distribution, for UK we obtained 4.7% and for the US 3.2%, a remarkable difference. In other words, despite delivering twice the number of doses (and “running out” of highest risk individuals to vaccinate), a single dose of vaccine in the UK was still used 50% more effectively than in the US. (It should be noted, however, that the UK has a slightly older population than the US.)

Given less centralized health information, it’s hard to see how the US could target much better while also maintaining speed which is why, after the first round of vaccinating the nursing homes and the very elderly, I have leaned towards opening up more vaccination sites and prioritizing speed. So read this as a credit to the British rather than a demerit to the US. Other European countries, however, also have more centralized medical systems and yet have been far behind the British. It has struck me during this crisis how little these kind of system-wide policy variable seem to explain in the efficiency of the pandemic response overall.

More from Sure

The excellent Sure in the comments. I would draw attention to “I believe in evidence based medicine, not eminence based medicine” from last time and “methodolotry” from today. And to think this website is free.

One of the most frustrating things about this pandemic is how much people are unwilling to make a decision in light of previous experience and basic scientific literacy.

Most vaccines provide some significant protection after their first dose: MMR, Varicella, influenza, meningococcus (both), and HPV are all dosed with either no follow on jab or with significant delays before the second jab in the official CDC schedules. And even the ones that we do run close together can show decent effect after the first shot.

And we should expect better vaccine response with more modern technology. We provide only the epitopes most likely to have the greatest effect and do not need the immune system to do as much trial and error during its clonal expansion and affinity maturation. And regardless, we can tell pretty easily if things bind immediately or if we need some sort of class switching (and with a bit more work if we are getting good T-cell responses).

So we should have had exceptionally strong priors that these vaccines would work and given the data from phase II, we should have had very strong priors that FDF would be viable in a situation of scarce supply and exponential growth (or decay).

And let us recall the big boogeymen of failed vaccines past: using a completely different process over 60 years ago Cutter Labs failed to inactivate polio and just injected it straight into kids (i.e. a failure mode not physically possible with current technology), some weird autoimmune interactions in the 1970s gave us 1/100,000 rates of GBS (i.e. not even a rounding error in the Covid death toll), ADE in dengue vaccines in the Philippines (maybe, the official lookback could not definitely tell if a couple of dozen kids died from ADE induced by the vaccine or if that was just dengue being its normal malevolent self), and a small increase in bowel obstruction with rotavirus (1/12,000, only seen in one variant and not observed in other rotavirus vaccines). We could have had all of them in the Covid vaccines and they would still be an order of magnitude safer than the status quo. And they would still be an order of magnitude safer than the status quo for the under 50 crowd.

Yes, I get it, there is some tail risk that somewhere out there might be something new we have never seen before. I cannot tell you that I have absolutely zero uncertainty that something completely new will rear its ugly head here; but that same uncertainty exists for the status quo. Will lockdowns lead to delayed mental health issues? I don’t know, but the indicators I see right now are not pretty. Does shafting childrens’ educations for more and more months have lifelong impacts on things like suicide risk, IVDU, CAD, and the rest? Cannot say for certain, but I see no reason why it doesn’t unless you have an extremely dim view of education’s ability to impact on life outcomes. Delayed cancer screenings, deferred elective surgeries … the uncertainty in the NPIs easily dwarfs that of the vaccines.

We should have been saying, back in July, that results are remarkedly promising. All the data suggests that these vaccines will work and we might even open up a large “open label trial” concurrent to a phase III crossover trial and release the data in real time. Titer levels from the vaccines should have been trumpeted from the beginning with historical context. And this BS about % effectiveness should have been lead off with, at every point, that all of these vaccines are vastly more effective at preventing hospitalization and death.

And I get it. If some bureaucrat stands up and says time to be risk tolerant they risk their job, their social standing, and all the rest. But this is what it means to be a physician. You wrote some BS on your medical school application that you need to be a tiny bit true so you do the hard thing and save lives.

But instead everyone cowers down and holds to mere methodolotry because following the science is too hard to do for real.

A Biden Plan for World Vaccination

Canada has approved the AstraZeneca vaccine. The US has not. The US has paid for an AstraZeneca factory in Baltimore and stockpiled millions of doses. The US should lease the factory to Canada or simply make the doses available for export. The same factory will also produce the J&J vaccine so it’s possible that there is some small opportunity cost. Exporting vaccine to our close ally, trading partner, and neighbor, however, would create significant political, economic, and health benefits for the United States.

More generally, the US is focused on vaccinating its residents first. That’s understandable. But step two is vaccinating the world. The Kremer team advocated going big on vaccine capacity for two reasons. First, we needed a lot of capacity to vaccinate the US fast and fast was valuable. Second, going big meant that the US could vaccinate its population quickly but then have that capacity available to vaccinate the rest of the world.

Contrary to what many people feared, Operation Warp Speed hasn’t taken doses from the rest of the world, Operation Warp Speed has built the infrastructure to deliver doses to the rest of the world. Our motto in advising governments and NGOs was ‘Capacity is the antidote to conflicts over distribution.

The United States will soon be the first big country with a fully vaccinated population. The US will then have a chance to lead the world into the post-pandemic era with a “Biden plan” for world vaccination akin to the Mashall Plan.

Invest more. Vaccinate the world. End the pandemic.

Start with Canada.

Market Design to Accelerate Vaccine Supply

Market design to accelerate COVID-19 vaccine supply is my new paper in Science, co-authored with Camilo Castillo, Michael Kremer, Eric Budish, Susan Athey and others. We make three vital points. First, governments invested much less than our group advised. We spent trillions on fiscal support and maybe $20 billion or so on vaccines, far too little. Nevertheless, the 3bn courses we have (conservatively) in 2021 capacity is worth on the order of $17.4 trillion or $5800 per course. If advance market commitments moved us from 2 billion to 3 billion courses then they were worth 2.4 trillion dollars. I feel pretty good about the work we did to encourage Operation Warp Speed and other advance purchases.

Second, it’s not too late to do more. If we could get an additional billion courses in capacity online by July 2021 that would speed up vaccination in high-income countries by 1.4 months and in the world by 4.3 months. A few months might not seem like much but that speed-up is worth half a trillion to the world economy. If we could get additional capacity online by April it would be worth a trillion dollars.

You might think that getting more capacity online by April isn’t possible but you can do a lot for a trillion dollars. Moreover, we can increase capacity not just by building more factories but by using the doses we have now more wisely. Low-dose syringes, for example, can increase supplies by 20%. I think the health authorities know this now (although they should have been prepared) but even at this late stage almost everyone is under-estimating how much it would be worth spending to get 20% more vaccine capacity. Similarly, going to half-doses is equivalent to doubling the number of Moderna and Pfizer factories. Even if we did half doses for the young alone, that’s a big increase in supply. We calculate that additional capacity is worth $576 to $989 per annual course, far higher than the price.

Third, we also give advice on how to structure contracts. Buying doses isn’t optimal because companies can just agree and put you to the back of the queue. Optimal rewards and penalties are very difficult to implement, especially when optimal penalties could bankrupt firms many times over (because the social value of vaccines is much greater than the private value.) So it’s much better to subsidize capacity with an option to buy doses at a discount produced from that capacity–this is similar to what Operation Warp Speed did with Moderna and Novavax.

Finally, here’s a fourth important point I haven’t made earlier. We suggest procurement auctions to surface prices on necessary inputs. Ordinarily, an increase in demand to a final producer such as a vaccine manufacturer is transmitted along the entire supply chain through the signaling and incentive mechanism of prices. When final goods prices are limited socially or by law, however, the supply chain can become dis-coordinated. Capacity contracts could be fulfilled, for example, and the producer could yet claim an inability to produce because raw materials are in short supply. Thus, we need a mechanism to coordinate supply chains.The US Defense Production Act is one such mechanism. An alternative procedure that may work more quickly is to organize procurement auctions for all the inputs and complementary goods required for vaccine production. The advantage of a procurement auction is that it can attract and incentivize firms globally, firms that are well beyond the reach of the DPA.

Read the whole thing and the appendix with details on methods and calculations.