Vaccine Cronyism

Covid-19 vaccines first became available to the US public in late November of 2020. But they are still the object of considerable controversy almost a year and a half later. Two events in particular are making headlines across the country.

Pfizer recently asked the Food and Drug Administration to authorize its vaccine for children younger than five to increase vaccination efforts. Later, Noravax requested the FDA issue an emergency use authorization for its Covid-19 vaccine. Many expect the FDA to authorize Pfizer’s request, making Covid-19 vaccines available to children as young as six months old. Noravax faces a tedious and complex road, however, to becoming the fourth authorized Covid-19 vaccine in the US.

But Pfizer’s Covid-19 vaccine failed to generate an immune response when tested on children during its initial clinical trials. The company is now conducting clinical trials with three doses because trials that administered two doses performed poorly. On the other hand, Novavax proved 90 percent effective in its Phase III trial and has been provisionally approved for use in 10 other countries. The Novavax vaccine is also easier to transport than other Covid-19 vaccines because it can be stored in standard refrigerated temperatures.

However, Novavax’s vaccine is not an mRNA vaccine, subjecting it to further scrutiny to be authorized by the FDA. The agency had similar hesitancy with the AstraZeneca Covid-19 vaccine, which is not an mRNA vaccine. The AstraZeneca Covid-19 vaccine is used in 170 other countries, but was never approved in the US.

What explains this? I fear the answer might be cronyism- a troubling and harmful alliance between a handful of drug producers and the federal government. And it stems from an agreement made nearly a year and a half ago.

Well before Covid-19 mutated into its Delta and Omicron variants, US policymakers feared the only ways to end the Covid-19 pandemic were by mass vaccination or through herd immunity. Hoping to avoid more hospitalizations and deaths stemming from herd immunity, the federal government launched Operation Warp Speed (OWS)- a private/public partnership between five drug producers and several federal agencies to develop a Covid-19 vaccine in unprecedented time.

OWS provided its selected vaccine developers with testing materials, laboratories, an expedited clinical trial process, and a “blank check” in funds for R&D and purchasing agreements for when the vaccines were authorized. However, OWS’s finalists were selected because they utilized mRNA technologies, which provided a faster but less reliable way to develop a vaccine. The financial and approval arrangements between the government and the vaccine developers also largely remained unopen to the public.

As revealed through various documents well after OWS, we know the agreements limit vaccine developers not selected for OWS from expedited clinical trials and a transparent process for authorization. Consequently, non-OWS vaccine developers compete on different margins with additional barriers than developers chosen for political reasons.

We still don’t know much about the agreements made between the government and OWS vaccine producers, and it could be decades before we do. But we do know from basic Public Choice economics that alliances between special interests and political interests create benefits for a few and costs for the vast majority. I fear this is one of many forthcoming examples.

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This article, Vaccine Cronyism, was originally published by the American Institute for Economic Research and appears here with permission. Please support their efforts.

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