https://www.wsj.com/amp/articles/the-white-house-prepared-for-a-pandemic-11597792593
New York Gov. Andrew Cuomo launched the Democrats’ broadside against the Trump administration’s Covid-19 response. “Our current federal government is dysfunctional and incompetent,” he told virtual conventioneers Monday in a recorded speech. “It couldn’t fight off the virus. In fact, it didn’t even see it coming.”
The report was produced by the Council of Economic Advisers at the behest of the National Security Council’s biodefense team. It detailed the large health and economic losses that could happen from flu pandemic in the U.S. The report discussed how the lack of private market incentives had led to underinvestment in developing and using innovative technologies that can quickly produce vaccines for a new virus.
Influenza vaccines have primarily been manufactured in chicken eggs for the past 70 years. The process is too slow to produce a new vaccine for a novel, unexpected virus and impairs the vaccines’ efficacy against the flu. Public-private partnerships created under a 2006 statute led to the development of newer, faster manufacturing techniques. But these vaccines are more expensive and haven’t been widely adopted.
The main issue is that vaccine developers aren’t rewarded for innovation. Their research-and-development and investment costs for improved vaccines are recovered only through sales that occur in the unlikely event that a pandemic occurs—there have only been four flu pandemics the past 100 years—even though vaccine innovation provides benefits from risk-reduction before any pandemic. Vaccines have insurance value today that provides protection against possible future damage, regardless of whether a pandemic occurs. That means the social return from innovative vaccines is greater than their private return to developers.