The Economic Case for a People’s Vaccine

Sanjay G. Reddy and Arnab Acharya in the Boston Review:

Many have called for a people’s vaccine for COVID-19—a vaccine provided universally and accessibly to the entire world population. The moral arguments may be familiar, but economics supports the case, too. Economics also helps to explain what role the public sector should play in developing a people’s vaccine and how such efforts should be coordinated across countries.

Drawing on economic and moral arguments, we make the case in two steps. First we consider how a vaccine should optimally be distributed, once it has been developed. We argue that even if a vaccine were like any other consumer good—generating purely private benefits—the economic case for a people’s vaccine would be strong. But a vaccine differs from other consumer goods because of the special nature of health, which gives reason for us to value other people having it, even if there are no other spillovers involved. Moreover, a vaccine is not like just any other consumer good: its benefits extend far beyond the individual vaccinated. This externality strengthens the case for a people’s vaccine. Together, these considerations justify pricing a vaccine at an accessible cost. We argue that such a scheme is feasible even without any direct government intervention so long as the formula for the vaccine is made freely available. (After all, generic manufacturers currently compete to provide drugs using known formulas at low costs worldwide.)

More here.  [Thanks to Robin Varghese.]