Working Paper: NBER ID: w27212
Authors: Jonathan T. Vu; Benjamin K. Kaplan; Shomesh Chaudhuri; Monique K. Mansoura; Andrew W. Lo
Abstract: Recent outbreaks of infectious pathogens such as Zika, Ebola, and COVID-19 have underscored the need for the dependable availability of vaccines against emerging infectious diseases (EIDs). The cost and risk of R&D programs and uniquely unpredictable demand for EID vaccines have discouraged vaccine developers, and government and nonprofit agencies have been unable to provide timely or sufficient incentives for their development and sustained supply. We analyze the economic returns of a portfolio of EID vaccine assets, and find that under realistic financing assumptions, the expected returns are significantly negative, implying that the private sector is unlikely to address this need without public-sector intervention. We have sized the financing deficit for this portfolio and analyze several potential solutions, including price increases, enhanced public-private partnerships, and subscription models through which individuals would pay annual fees to obtain access to a portfolio of vaccines in the event of an outbreak.
Keywords: Vaccines; Public Health; Economic Feasibility; Emerging Infectious Diseases; Public-Private Partnerships
JEL Codes: G11; G12; G31; G32; G38; H12; H41; H51; I11; I18; L11; L52; Q54
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| expected returns on EID vaccine assets (G12) | private sector investment (H54) |
| public sector intervention (H44) | feasibility of vaccine development (O22) |
| global acquisition fund for EID vaccines (F35) | financial viability (G32) |
| subscription model for vaccine access (G52) | financial viability (G32) |
| megafund approach (G23) | attractive investment environment (F21) |
| negative expected returns from megafund (G19) | necessity for public sector intervention (H40) |