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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.
Patents are Not the Problem!
For the last year and a half I have been shouting from the rooftops, “invest in capacity, build more factories, shore up the supply lines, spend billions to save trillions.” Fortunately, some boffins in the Biden administration have found a better way, “the US supports the waiver of IP protections on COVID-19 vaccines to help end the pandemic.”
Waive IP protections. So simple. Why didn’t I think of that???
Patents are not the problem. All of the vaccine manufacturers are trying to increase supply as quickly as possible. Billions of doses are being produced–more than ever before in the history of the world. Licenses are widely available. AstraZeneca have licensed their vaccine for production with manufactures around the world, including in India, Brazil, Mexico, Argentina, China and South Africa. J&J’s vaccine has been licensed for production by multiple firms in the United States as well as with firms in Spain, South Africa and France. Sputnik has been licensed for production by firms in India, China, South Korea, Brazil and pending EMA approval with firms in Germany and France. Sinopharm has been licensed in the UAE, Egypt and Bangladesh. Novavax has licensed its vaccine for production in South Korea, India, and Japan and it is desperate to find other licensees but technology transfer isn’t easy and there are limited supplies of raw materials:
Virtually overnight, [Novavax] set up a network of outside manufacturers more ambitious than one outside executive said he’s ever seen, but they struggled at times to transfer their technology there amid pandemic travel restrictions. They were kicked out of one factory by the same government that’s bankrolled their effort. Competing with larger competitors, they’ve found themselves short on raw materials as diverse as Chilean tree bark and bioreactor bags. They signed a deal with India’s Serum Institute to produce many of their COVAX doses but now face the realistic chance that even when Serum gets to full capacity — and they are behind — India’s government, dealing with the world’s worst active outbreak, won’t let the shots leave the country.
Plastic bags are a bigger bottleneck than patents. The US embargo on vaccine supplies to India was precisely that the Biden administration used the DPA to prioritize things like bioreactor bags and filters to US suppliers and that meant that India’s Serum Institute was having trouble getting its production lines ready for Novavax. CureVac, another potential mRNA vaccine, is also finding it difficult to find supplies due to US restrictions (which means supplies are short everywhere). As Derek Lowe said:
Abolishing patents will not provide more shaker bags or more Chilean tree bark, nor provide more of the key filtration materials needed for production. These processes have a lot of potential choke points and rate-limiting steps in them, and there is no wand that will wave that complexity away.
Technology transfer has been difficult for AstraZeneca–which is one reason they have had production difficulties–and their vaccine uses relatively well understood technology. The mRNA technology is new and has never before been used to produce at scale. Pfizer and Moderna had to build factories and distribution systems from scratch. There are no mRNA factories idling on the sidelines. If there were, Moderna or Pfizer would be happy to license since they are producing in their own factories 24 hours a day, seven days a week (monopolies restrict supply, remember?). Why do you think China hasn’t yet produced an mRNA vaccine? Hint: it isn’t fear about violating IP. Moreover, even Moderna and Pfizer don’t yet fully understand their production technology, they are learning by doing every single day. Moderna has said that they won’t enforce their patents during the pandemic but no one has stepped up to produce because no one else can.
The US trade representative’s announcement is virtue signaling to the anti-market left and will do little to nothing to increase supply.
What can we do to increase supply? Sorry, there is no quick and cheap solution. We must spend. Trump’s Operation Warp Speed spent on the order of $15 billion. If we want more, we need to spend more and on similar scale. The Biden administration paid $269 million to Merck to retool its factories to make the J&J vaccine. That was a good start. We could also offer Pfizer and Moderna say $100 a dose to produce in excess of their current production and maybe with those resources there is more they could do. South Africa and India and every other country in the world should offer the same (India hasn’t even approved the Pfizer vaccine and they are complaining about IP!??) We should ease up on the DPA and invest more in the supply chain–let’s get CureVac and the Serum Institute what they need. We should work like hell to find a substitute for Chilean tree bark. See my piece in Science co-authored with Michael Kremer et. al. for more ideas. (Note also that these ideas are better at dealing with current supply constraints and they also increase the incentive to produce future vaccines, unlike shortsighted patent abrogation.)
Bottom line is that producing more takes real resources not waving magic patent wands.
You may have gathered that I am angry. I am indeed angry that the people in power think they can solve real problems on the cheap and at someone else’s expense. This is not serious. I am also angry that they are sending the wrong message about business, profits and capitalism. So let me end on positive note. Like the Apollo program and Dunkirk, the creation of the mRNA vaccines by Pfizer and Moderna should be lauded with Nobel prizes and major movies. Churchill called the rescue at Dunkirk a “miracle of deliverance,” well the miracle of Moderna will rescue many more. Not only was a vaccine designed in under a year, an entirely new production process was set up to produce billions of doses to rescue the world. The creation of the mRNA vaccines was a triumph of science, logistics, and management and it was done at a speed that I had thought possible only for past generations.
I am grateful that greatness is still within our civilization’s grasp.
Addendum: Lest I be accused of being reflexively pro-patent, do recall the Tabarrok curve.
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.
Bigger Is Better When It Comes to Vaccine Production
My co-authors, Eric Budish and Chris Snyder, have an excellent piece in the WSJ:
We recently published a paper in the journal Science that aimed to quantify the enormous value of Covid-19 vaccine capacity: both existing and the value of building more. We worked with a team of economists, statisticians and policy experts led by the University of Chicago’s Michael Kremer.
While vaccines are intuitively very valuable, the numbers are mind-boggling. The value of three billion courses of annual vaccine capacity—enough to vaccinate rich countries by the end of 2021 and the world by the end of 2022—is $17.4 trillion, or $5,800 for every course. This reflects the value of getting people back to work and school, avoiding unnecessary deaths and preserving health. If anything, we suspect our figure is conservative.
We estimate that another billion courses of vaccine capacity is worth $1 trillion of additional global benefits, and could accelerate vaccination by two months for rich countries and five months for the world. This $1 trillion—$1,000 for each additional course—would be much higher if the pandemic takes a turn for the worse—if, say, new variants require fresh vaccination or some vaccine manufacturers hit production snags.
Is it physically possible to build more capacity? We don’t know how much more can be built and how quickly, but the global benefits of capacity—$5,800 for every vaccination course overall, and $1,000 for incremental capacity—far exceed the prices paid to firms in deals to date, between $6 and $40 a course. This means that private incentives are a fraction of the social value at stake.
Private incentives may be particularly poor when it comes to speed. Consider a firm that will vaccinate one billion people at a fixed price of $40 each. The firm earns the same $40 billion whether it supplies the billion courses in a single month or stretched over a year. But doing it in a month requires 12 times the capacity costs. If you are wondering why vaccination is taking so long, this is the basic economic reason.
…The recent announcement that Merck will produce the Johnson & Johnson vaccine is a great example of finding a creative way to build more capacity. We don’t have specific production numbers for this deal. But suppose deals like this one could create an additional 40 million courses a month for the U.S., starting in April. Our analysis suggests that such a capacity increase is worth $136 billion to the U.S. and allows Americans to be vaccinated by June instead of August. If this new capacity is donated to the world after the U.S. is finished using it, it would generate more than $500 billion in total global benefits and accelerate global vaccination by nearly three months.
There are also options for stretching what exists: delaying the second of two doses, giving only one dose to those previously infected, or using lower-dose regimens. If it turns out that half doses are almost as effective as full doses, or a single dose is almost as effective as a two-dose course, capacity would effectively double overnight—which our analysis suggests is worth several trillion dollars.
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.
Preparing for a Pandemic: Accelerating Vaccine Availability
In Preparing for a Pandemic, (forthcoming AER PP), by myself and a host of worthies including Susan Athey, Eric Budish, Canice Prendergast, Scott Duke Kominers, Michael Kremer and others equally worthy, we explain the model that we have been using to estimate the value of vaccines and to advise governments. The heart of the paper is the appendix but the paper gives a good overview. Based on our model, we advised governments to go big and we had some success but everywhere we went we were faced with sticker shock. We recommended that even poor countries buy vaccines in advance and that high-income countries make large investments in vaccine capacity of $100b or more in total.
It’s now obvious that we should have spent more but the magnitudes are still astounding. The world spent on the order of $20b or so on vaccines and got a return in the trillions! It was hard to get governments to spend billions on vaccines despite massive benefit-to-cost ratios yet global spending on fiscal support was $14 trillion! Even now, there is more to be done to vaccinate the world quickly, but still we hesitate.
I went over the model for Jess Hoel’s class and we also had a spirited discussion of First Doses First and other policies to stretch the vaccine supply.
Most Popular MR Posts of the Year
Here is a selection of the most popular MR posts of 2020. COVID was a big of course. Let’s start with Tyler’s post warning that herd immunity was fragile because it holds only “for the current configuration of social relations”. Absolutely correct.
The fragility of herd immunity
Tyler also predicted the pandemic yo-yo and Tyler’s post (or was it Tyrone?) What does this economist think of epidemiologists? was popular.
Tyler has an amazing ability to be ahead of the curve. A case in point, What libertarianism has become and will become — State Capacity Libertarianism was written on January 1 of last year, before anyone was talking about pandemics! State capacity libertarianism became my leitmotif for the year. I worked with Kremer on pushing government to use market incentives to increase vaccine supply and at the same repeatedly demanded that the FDA move faster and stop prohibiting people from taking vaccines or using rapid tests. As I put it;
Fake libertarians whine about masks. Real libertarians assert the right to medical self-defense and demand access to vaccines on a right to try basis.
See my 2015 post Is the FDA Too Conservative or Too Aggressive for a good review of ideas on the FDA. A silver lining of the pandemic may be that more people realize that FDA delay kills.
My historical posts the The Forgotten Recession and Pandemic of 1957 and What Worked in 1918? and the frightening The Lasting Effects of the the 1918 Influenza Pandemic were well linked.
Outside of COVID, Tyler’s 2005 post Why did so many Germans support Hitler? suddenly attracted a lot of interest. I wonder why?
Policing was also popular including my post Why Are the Police in Charge of Road Safety? which called for unbundling the police and my post Underpoliced and Overprisoned revisited.
Tyler’s great post The economic policy of Elizabeth Warren remains more relevant than I would like. On a more positive note see Tyler’s post Best Non-Fiction Books of the Year.
One of the most popular posts of the year and my most popular post was The Gaslighting of Parasite.
But the post attracting the most page views in 2020 by far, however, was Tyler’s and it was…
You people are weird. Don’t expect more UFO content this year. Unless, well you know.