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I don't think this is true. In emergencies we explicitly do not allow price gouging because it just doesn't work. If it was a free market then the vaccine woul

by acover 6y ago

I don't think this is true. In emergencies we explicitly do not allow price gouging because it just doesn't work. If it was a free market then the vaccine would cost 10k and few of those who benefit most would get it. That's not efficient or fair.

nickpp 6y ago
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.
- acover 6y ago
  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.
  - nickpp 6y ago
    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...
    - acover 6y ago
      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?
      - nickpp 6y ago
        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.
        acover 6y ago
        > only people that really need it would get it 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. https://en.wikipedia.org/wiki/The_Mythical_Man-Month https://en.wikipedia.org/wiki/The_Mythical_Man-Month
- upbeat_general 6y ago
  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)
- upbeat_general 6y ago
  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).

by acover 6y ago

nickpp 6y ago

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.

acover 6y ago
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.
- nickpp 6y ago
  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...
  - acover 6y ago
    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?
    - nickpp 6y ago
      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.
      - acover 6y ago
        > only people that really need it would get it 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. https://en.wikipedia.org/wiki/The_Mythical_Man-Month https://en.wikipedia.org/wiki/The_Mythical_Man-Month
upbeat_general 6y ago
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)
upbeat_general 6y ago
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).