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Expanding capacity for vaccines against Covid-19 and future pandemics: a review of economic issues
[‘Seven Finance & Trade Lessons from COVID-19 for Future Pandemics’]

Author

Listed:
  • Susan Athey
  • Juan Camilo Castillo
  • Esha Chaudhuri
  • Michael Kremer
  • Alexandre Simoes Gomes
  • Christopher M Snyder

Abstract

We review economic arguments for using public policy to accelerate vaccine supply during a pandemic. Rapidly vaccinating a large share of the global population helps avoid economic, mortality, and social losses, which in the case of Covid-19 mounted into trillions of dollars. However, pharmaceutical firms are unlikely to have private incentives to invest in vaccine capacity at the socially optimal scale and speed. The socially optimal level of public spending may cause some sticker shock but—as epitomized by the tagline ‘spending billions to save trillions’—is eclipsed by the benefits and can be restrained with the help of careful policy design and advance preparations. Capacity is so valuable during a pandemic that fractional dosing and other measures to stretch available capacity should be explored.

Suggested Citation

  • Susan Athey & Juan Camilo Castillo & Esha Chaudhuri & Michael Kremer & Alexandre Simoes Gomes & Christopher M Snyder, 2022. "Expanding capacity for vaccines against Covid-19 and future pandemics: a review of economic issues [‘Seven Finance & Trade Lessons from COVID-19 for Future Pandemics’]," Oxford Review of Economic Policy, Oxford University Press and Oxford Review of Economic Policy Limited, vol. 38(4), pages 742-770.
    • Handle: RePEc:oup:oxford:v:38:y:2022:i:4:p:742-770.
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    File URL: http://hdl.handle.net/10.1093/oxrep/grac037
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    References listed on IDEAS

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    1. Chad P Bown, 2022. "Covid-19 vaccine supply chains and the Defense Production Act [‘A Proposal to End the COVID-19 Pandemic’]," Oxford Review of Economic Policy, Oxford University Press and Oxford Review of Economic Policy Limited, vol. 38(4), pages 771-796.
    2. Rachel Glennerster & Christopher M. Snyder & Brandon Joel Tan, 2023. "Calculating the Costs and Benefits of Advance Preparations for Future Pandemics," IMF Economic Review, Palgrave Macmillan;International Monetary Fund, vol. 71(3), pages 611-648, September.
    3. Snyder, Christopher M. & Hoyt, Kendall & Gouglas, Dimitrios, 2023. "An optimal mechanism to fund the development of vaccines against emerging epidemics," Journal of Health Economics, Elsevier, vol. 91(C).
    4. Ruchir Agarwal & Tristan Reed, 2022. "Financing vaccine equity: funding for day-zero of the next pandemic [‘What Drives Innovation? Lessons from COVID-19 R&D’]," Oxford Review of Economic Policy, Oxford University Press and Oxford Review of Economic Policy Limited, vol. 38(4), pages 833-850.
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    Cited by:

    1. Rachel Glennerster & Christopher M. Snyder & Brandon Joel Tan, 2023. "Calculating the Costs and Benefits of Advance Preparations for Future Pandemics," IMF Economic Review, Palgrave Macmillan;International Monetary Fund, vol. 71(3), pages 611-648, September.
    2. Isabel Helmrath & Matthias Hunold & Johannes Muthers, 2022. "Joint procurement by heterogeneous buyers," Economics working papers 2022-14, Department of Economics, Johannes Kepler University Linz, Austria.
    3. Witold Więcek, 2022. "Clinical trials for accelerating pandemic vaccines [‘A Systematic Review of Human Challenge Trials, Designs, and Safety’]," Oxford Review of Economic Policy, Oxford University Press and Oxford Review of Economic Policy Limited, vol. 38(4), pages 797-817.
    4. Scott Duke Kominers & Alex Tabarrok, 2022. "Vaccines and the Covid-19 pandemic: lessons from failure and success [‘Many Say They’re Confused About Whether, When to Get Second Booster’]," Oxford Review of Economic Policy, Oxford University Press and Oxford Review of Economic Policy Limited, vol. 38(4), pages 719-741.

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    More about this item

    Keywords

    vaccine; capacity; pandemic; Covid-19; investment; incentives;
    All these keywords.

    JEL classification:

    • D47 - Microeconomics - - Market Structure, Pricing, and Design - - - Market Design
    • H44 - Public Economics - - Publicly Provided Goods - - - Publicly Provided Goods: Mixed Markets
    • I15 - Health, Education, and Welfare - - Health - - - Health and Economic Development
    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives

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