Over and over again we re-learn that the single proven way to distribute scarce resources is the free market. Anything else we tried led to abuses, aberrations, waste and in the end fewer people gaining access to that resource.
I have seen this in the planned economy I grew up in, which was unable to provide even toilet paper to its people - but it was ok, because we didn’t have any food either.
Our blindness to the simplicity, obviousness and logic of the market laws and our obsession with the forced, unnatural "fairness" and "equality" make us relearn this lesson the hard way, by paying the price. Unfortunately this time the price is in lives.
> you’re suggesting that we should determine access to the vaccine based on how much money you have?
No, I'm suggesting people should get the vaccine based on how much money they are willing to spend on it. Just like everything else. This would in effect reduce demand (most people would decide a mask is enough protection or to simply wait) and make sure that only people needing the vaccine (or their sponsors) would spend the money for it.
The free market works for even more essentials like food, clothes and shelter, but suddenly is not for vaccines?!
Only Moderna is a US company. BioNTech and AstraZeneca are European. The vaccine's very existence is owed to the free market and private enterprise. The failure to distribute and use the vaccine is solely due to governmental intervention.
My first reaction was "this can't possible work", but it's interesting to think about.
I wonder how the market would price it.
If there was a "vaccination passport" in operation to let those vaccinated travel freely, I would be happy to pay up to 1/2K to jump-the-queue. It's a minor premium on the expense of an overseas summer vacation.
Would also be happy if part of the fee included a subsidy for low-income.
However, morally, I would prefer to wait for first-line responders and elderly at-risk to be prioritized with first doses. Which kind of leads us back to where we started with government prioritization.
Would be interesting to see how an SV startup revenue team would price it with their huge data points on pricing models. Worth an A/B test perhaps.
the flu vaccine is delivered annually by experts. now they are creating a whole new vaccine distribution system run by people who have never done it before. the politicians are celebrating their megasites as if that is suppose to impress us. I have no doubt if the money was ever counted that we're spending ten times more per shot for covid then we do for influenza, just on the distribution.
Actually freezing prices is the best way to create long term shortages. We saw that last springs when countries with free markets kept having N95 masks available, at slightly elevated prices while countries that imposed priced controls did not have any until fall.
In a free market the vaccine would’ve cost 10k for a month while producers would’ve been scrambling to increase availability and production to take advantage of this amazing opportunity. Pretty soon after the price would’ve dropped at a greatly increased availability.
Right now the vaccine is free and very few lucky ones can get it. And it’s been months.
I think you’re looking at this too much from a pure demand theory point of view.
Ignoring the moral issues with distributing a live saving vaccine based on who has enough money, I don’t think that free market pricing would have made things much faster.
It’s not like any random person can get into the business of complex vaccine manufacturing. The companies and the government have already been scrambling to get it out faster but even if you believe that there is/was more room to incentivize the 2(?) main companies making the vaccine then again the government(s) could just say pay the companies more/less based on the timing of doses.
However I really don’t think that additional profit motive was a factor here. If there was more room to say build another factory at some high cost, I find it hard to believe that these companies would decide not to and not offer governments an offer to expand capacity (eg. we can give you X doses and bump you up but we need more money to build the factory).
I agree that price controls create shortages in the long term. The issue is that emergencies are about the short term.
I would be very surprised if more money would have helped produce more vaccines. Canada is burning a billion a day to keep everything in lockdown - money does not seem relevant to the current situation. Adding it in just makes everyone pay more for the same limited amount of vaccines.
This emergency does not seem short term. Pandemics generally aren't. There are already talks of new strains and corresponding vaccines in winter.
Canada is burning billions because it has decided to prioritize COVID protection above everything else in life. It was clear from the beginning that lockdowns were a bad idea because they weren’t feasible in the long term. Alas, this is the path most of the world's government chose. We'll be paying the price for years to come...
The supply constraints for the vaccine are short term.
> Canada is burning billions because it has decided to prioritize COVID protection above everything else in life. It was clear from the beginning that lockdowns were a bad idea because they weren’t feasible in the long term. Alas, this is the path most of the world's government chose. We'll be paying the price for years to come...
How does this relate to money being a limiting factor for vaccine production?
Do not underestimate the power of human creativity and antreprenorial spirit when correctly motivated. The ability to sell this vaccine at obscene profits would've been extremely motivating.
Now I am not in pharma I don't know how exactly the extra money would've helped, but I know that in pretty much any business more money help with new hires and better people, new machines for production lines, more wild ideas being tested and discarded if not working. Also this is a supply chain issue and they would've been strongly incentivised by more profits. Even those damn syringes missing in Japan and little container bottles to store vaccines in. Finally at macro level better profits would've attracted and incentivised more entrepreneurs with more ideas and imagination. Remember, the very existence of the Moderna and BioNTech companies is due to the free market and private enterprise.
Now on the more very short term an expensive vaccine would've reduce demand by making people consider alternatives and by making sure only people that really need it would get it. It would've avoided aberrations like vaccinating terminal patients or people who are not active and can very well wait for the price to come down wearing masks in the meantime.
But I am afraid that the supply constraint for the vaccine is long term. Because the virus is changing. And our incentives are more aligned with prolonged lockdowns than vaccine production.
I think this is where we disagree. If wealth was equally distributed I would agree but wealth follows a power law distribution. People with a 1000x less money than me but with 100x more risk should get the vaccine before me.
Do you know of the mythical man month problem? It seems to apply here.
> People with a 1000x less money than me but with 100x more risk should get the vaccine before me.
And this is how you get shortages. Because there are a lot of people considering themselves at 100x risk (high demand) and very few people interested in serving them for no profit (low supply). The market laws are simple and implacable.
This is our current strategy and I consider it disastrous. But you should be pretty happy with it then. The current vaccination is run exactly according to your priorities, so kudos!
Again, I know too little about producing vaccines to know if this is a MMM situation, but based on my expertise in other fields, I highly doubt it.
In this case many of the manufacturers are American.
Secondly, the government can purchase the vaccine at “market price” and then distribute it at a fixed price. There’s no need to have price gouging (at least given a certain supply in the US)
I have seen this in the planned economy I grew up in, which was unable to provide even toilet paper to its people - but it was ok, because we didn’t have any food either.
Our blindness to the simplicity, obviousness and logic of the market laws and our obsession with the forced, unnatural "fairness" and "equality" make us relearn this lesson the hard way, by paying the price. Unfortunately this time the price is in lives.