The flood of vaccines would have saved money: Berlin's hesitant vaccine policy is taking revenge

Saturday, January 09, 2021

The vaccine flood would have saved money
Berlin's hesitant vaccine policy is taking revenge

By Roland Lindenblatt

Why hasn't the government made sure that more corona vaccine is available? Economists calculate that costs cannot be the reason. Because the price for the lockdown is much higher. Whether the vaccination campaign would go better is still questionable.

Critics say that the vaccination strategy has been criticized for days: people are being vaccinated too slowly, because Germany and the EU have ordered too few vaccines. Criticism comes mainly from the ranks of the SPD and the FDP. But economists are also getting involved: From an economic perspective, it would have been worthwhile to produce much more vaccine early on, before it was clear which vaccine would ultimately be effective against the coronavirus.

To understand this, a somewhat simplified calculation helps: According to the "FAZ" two doses of the vaccine from Biontech / Pfizer and Moderna cost 36 and 24 euros respectively, the promising Astra-Zeneca vaccine cost 1.76 euros per vaccination . Assuming that the prices remained the same even for larger order quantities, and that one had placed a large order for these three vaccines, each with enough doses for all 450 million EU citizens, that would have cost a total of 28 billion euros for the whole EU, and a little more for Germany than 5 billion euros.

In contrast, there are the costs of a lockdown, the extension of which could be avoided by faster vaccinations. The economic damage caused by the lockdown in Germany alone would amount to 3.5 billion euros per week, estimated Enzo Weber from the Institute for Employment Research (IAB) in December. So you could have procured more than enough doses of vaccine for all of Germany from one candidate. For ten days of lockdown it would have been enough for all three promising candidates and so on.

The EU should have spread the risk better

But the EU has not spread the risk quite as widely. According to the German representation of the EU Commission, it has secured two billion doses of vaccines from six manufacturers and has not yet had them produced. And among the two billion doses are only up to 460 million doses of the previously approved agents from Moderna and Biontech / Pfizer, with which 230 million people can be vaccinated once they have been produced. It will take longer until everyone is vaccinated, as many critics criticize.

The EU cannot be blamed for having ordered too few doses of the vaccines from Moderna and Biontech in advance or too late. Because no one could know last summer which of the vaccine candidates would turn out to be effective. From an economic point of view, the EU should still have bought a sufficient amount for all EU citizens from all promising manufacturers and had it produced before approval. In this way, everyone would have received the first approved vaccine as soon as possible. Because without sufficient orders, the manufacturers of the vaccine candidates had no incentive to start mass production of their vaccines well in advance of approval. But that would have been necessary so that vaccinations can now be carried out quickly.

Wrong incentives for manufacturers

Clemens Fuest, the director of the Ifo Institute, says: "It is true that by investing more money, more vaccinations could have been obtained, especially by financing an earlier expansion of production capacities. However, politics was before you Consideration problem: All manufacturers would have had to finance the development of production capacities, with the result that part of the money is lost because not all vaccine developments have worked. It would still have been acceptable to accept this risk; the incentives for individuals Companies were too little to take this risk. "

Hasn't the EU weighed that up? Such errors suggest statements made by the German representation of the EU Commission on Twitter at the beginning of the week. Only the construction of a Biontech production facility received additional support with 100 million euros. It also states that the vaccine selection was made on the basis of predictions of success, time factor and price. "Biontech was more expensive, which is why some member states were initially reluctant," said Health Minister Spahn of the "Rheinische Post". So the EU only secured supplies of the most promising candidates and none of them enough to vaccinate the entire population with just one substance.

Technical hurdles in production

But there are also some arguments for defending the EU. Firstly, the criticism of the lack of production financing applies to almost every country in the world; secondly, the EU would probably have had to justify a huge overproduction of vaccinations if the second wave of the corona pandemic had not hit so hard, and thirdly, all the criticism remains the question remains whether such overproduction would have been technically possible at all.

"There is a wide range of resources that can create bottlenecks. Certain materials are required to make the vaccine itself, such as lipid nanoparticles for mRNA vaccines, and then the vaccines have to be bottled and processed, and that in turn requires one there must be a sufficient supply of vials, "says Caroline Casey from the health sector analysis institute Airfinity.

The Federal Association of the Pharmaceutical Industry makes it clear: "First of all, it must be stated that at the time the approval was granted, a lot of the vaccine was already available. This is not a matter of course and means that the manufacturers have already started production at the risk of the approval . " In addition, millions of vaccine doses could not be produced in one go. The production of vaccines on this scale means above all securing the necessary quantities in the supplier industry.

It is therefore not easy to answer whether overproduction would have been possible. It would definitely have made economic sense. Now it is important to expand production capacities for the approved vaccines as quickly as possible.

The article first appeared on Capital.de.