Written by: Shayna Korsh
When COVID-19 began to rapidly spread across the United States in March of 2020, millions of people were forced to quarantine in their homes in hopes of reducing the spread of the virus. Now, eleven months later, nearly 27 million Americans have contracted the disease and 462,000 have died. With daily case surges persisting throughout 2020, it has quickly become apparent that the only way to mitigate the spread of the virus is through a vaccine. However, the production and distribution of the virus is proving to be much more difficult than originally anticipated.
Pharmaceutical companies Pfizer and Moderna have both successfully developed a vaccine that efficiently prevents symptomatic infection from COVID-19. In order to produce a vaccine, a firm encounters tremendously large costs for research and development. These costs are known as fixed costs, and they present a barrier to entry in the vaccine market by dissuading agents who can’t afford the costs from entering the industry. Therefore, in order to incentivize a firm to actually enter the market, the government can issue patents on the specific technology that firm uses to create a vaccine. In other words, they are only granting the firm that was patent-approved the permission and ability to use this specific technology. By protecting firms like Pfizer and Moderna from other pharmaceutical companies that could potentially steal vaccine technologies without also enduring tremendously large fixed costs, these two companies have an incentive to develop a vaccine. Additionally, since their product is patented, Pfizer and Moderna essentially have a monopoly on the vaccine market because they are the only agents allowed to produce the drug. Therefore, these two companies are able to reap all of the profits.
After Pfizer and Moderna successfully developed vaccines, it was expected that these two firms would not be able supply enough of their vaccine to satisfy the high demand. However, the problem instead seems to be one of distribution and administration. In Florida, for example, “Less than one-quarter of delivered coronavirus vaccines have been used, even as older people sat in lawn chairs all night waiting for their shots (Robbins).” Vaccines are essentially going to waste since not all of them are being used and the people who are eligible for them are ultimately unable to get them. “In California, doctors are worried about whether there will be enough hospital staff members to both administer vaccines and tend to the swelling number of COVID-19 patients (Robbins).” Without a proper plan for distribution and administration, the speed at which both Pfizer and Moderna were able to produce a successful vaccine is proving to be irrelevant.
According to Dr. Anthony Fauci, the Director of the National Institute of Allergy and Infectious Diseases, more than two-thirds of the American population needs to become vaccinated in order to stop the spread of the virus within the United States. The fact that both vaccines require two separate doses creates even more demand for the product. To try to satisfy demand, federal officials in December said that their goal “Was to have 20 million people get their first shot by the end of this year.” More than 14 million Pfizer and Moderna vaccines were distributed across the country, but only 2.8 million people had received their first dose.
To complicate matters even more, some Americans are refusing to get the vaccine. For example, Ohio Governor Mike DeWine said in late December that “Roughly 60% of nursing home staff members offered the vaccine in the state had declined it (Robbins).” Vaccines are a positive externality since the choice of one agent to get one also helps protect other people. This internalization of the externality ultimately leads to “herd immunity” from a disease. However, if not enough people agree to get the vaccine due to concerns over its legitimacy, then this herd immunity might not be achieved. While employers or schools could eventually make inoculation mandatory, the distribution of the vaccine is currently too disorganized for this to work.
After his inauguration in late January, President Joe Biden made it clear that better logistics and distribution of COVID-19 vaccines would be of the highest priority. But change has not come quickly. Despite most states opening up vaccine qualifications to senior citizens, eligible Americans are still struggling to get it. While most Americans had hopes of life returning to some sense of normalcy in the fall, the disorganization and poor logistics of vaccine distribution are continuing to make that desire seem even less realistic.
References
Robbins, Rebecca, et al. “Here’s Why Distribution of the Vaccine Is Taking Longer Than Expected.” The New York Times, The New York Times, 31 Dec. 2020, www.nytimes.com/2020/12/31/health/vaccine-distribution-delays.html.