Regulatory Policy

The Profit Motive Produced COVID-19 Vaccines

A healthcare worker prepares a syringe with the Moderna COVID-19 vaccine at a pop-up vaccination site in New York City, January 29, 2021. (Mike Segar/Reuters)
The end of COVID-19 was ushered in by capitalism, not charity.

I received my first COVID-19 vaccination just over a week ago. The nice young woman who gave me the shot went through a litany of potential side effects — a sore arm, an allergic reaction, possible flu symptoms. I politely told her I wanted the shot. I may have said “the damn shot,” but my memory fails me. While it will take a second shot on February 19, and then a two-week wait for full immunity, I immediately felt grateful to be an American.

Just last March, experts thought Dr. Fauci’s timeline of “at least” 12-18 months for vaccine development was, at best, ambitious. Paul Offit, the co-inventor of the rotavirus vaccine in the late 1990s, thought it was “ridiculously optimistic.” Judging by the history of vaccine development (five to ten years for most vaccines), it was hard to disagree.

Thanks to capitalism and the Trump administration’s Operation Warp Speed, it took less than 12 months for the CDC to give emergency-use authorization for two vaccines. The first was developed by Pfizer Inc., an American pharmaceutical corporation, in conjunction BioNTech, a German biotechnology company. The second was developed by Moderna Inc., an American biotechnology company.

According to the CDC, while common flu vaccinations are between 40 percent and 60 percent effective, the Pfizer and Moderna vaccines are an impressive 94-95 percent effective. Those rates include mild cases, and so they understate the vaccines’ effectiveness.  During the Phase III trials this fall, 32,000 people received the Pfizer and Moderna vaccines. Only one person developed a severe case of COVID-19. None died.

Other nations also have developed vaccines. Although testing standards differ, late-stage trials in Brazil found Chinese drugmaker Sinovac Biotech’s CoronaVac 50.4 percent effective. Oxford University and AstraZeneca, a United Kingdom biopharmaceutical company, also developed a vaccine. The U.K.’s Medicines and Healthcare Products Regulatory Agency found it 62 percent effective (although that percentage may increase with different dosage regimes). Russia claims to have a vaccine with 95 percent effectiveness, but a lack of transparency in its testing has called those claims into question.

That Pfizer and Moderna were able to develop, produce, test, and begin administering such effective vaccines in less than a year is a testament to what profit-driven corporations can accomplish when government cooperates.

The capitalist Cinderella story here is Moderna, a small biotech corporation listed on the NASDAQ exchange. While Moderna received U.S. government support of about $2.5 billion for development and purchases of vaccines, Moderna exists because of investors who expected it to make a profit.  There may well be executives and employees at Moderna who worked altruistically to find a cure for COVID-19. But they had jobs enabling them to do so because of Moderna’s profit-oriented investors.

Moderna developed and shipped the first batches of its vaccine to the National Institutes of Health for human testing on February 24, 2020, an incredible 42 days after China released the coronavirus DNA sequence. Its stock spiked from $18.59 to $21.57 on the announcement and closed at $131.02 on the day I received my shot.

That’s a good thing. The potential of businesses to produce those kinds of results is why people invest. It’s also what motivates the kind of research that results in cutting-edge advances such as the Moderna vaccine, which relies on “a novel mechanism that is not used in any existing vaccine,” according to the staff of Harvard’s Petrie-Flom Center.

Of course, to survive, Moderna had to cover the costs of researching, developing, and producing its products. It also has to turn a profit. Fortunately, the Trump administration understood this.

Last March, Health and Human Services Secretary Alex Azar stated that while the Trump administration would work to “ensure” that a vaccine was “affordable,” it couldn’t “control that price because we need the private sector to invest. Price controls won’t get us there.” Socialist senator Bernie Sanders immediately responded with a tantrum, claiming that “under the Trump doctrine, if you are wealthy you can buy a vaccine and not succumb to the sickness. If you are poor or working class, you have to get sick or even die.”

Sanders missed the point, but fortunately he wasn’t in charge. Businesses that fail to make a profit don’t survive, let alone develop cutting-edge products.

Azar subsequently made it clear that the Trump administration would ensure that anyone who wanted a vaccination would get one. In fact, the shots are free. Government clearly has a role to play in supporting private research and development as well as protecting the public’s best interests. In this case, the Trump administration excelled at both.

But the government didn’t develop the vaccines. Were this the kind of thing the government could do more effectively than profit-motivated businesses, other nations with a stronger government presence in their health-care sectors — such as the more statist nations Sanders often touts — would have beaten us to the punch. They didn’t.

It’s no coincidence that America’s private sector is so often on technology’s cutting edge. Incredible results such as the Pfizer and Moderna vaccines require the tremendous ingenuity and energy of America’s free-enterprise system supported by the capital we invest in corporations striving to make a profit. Ultimately, those corporations serve all their stakeholders — and the rest of us.

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