Vaccines for Developing Countries

There is much debate about whether the patents on Covid-19 vaccines should be waived to allow low-income countries to produce doses for themselves. We invited both our European and US panels to express their views on this issue and the broader challenges of vaccinating the world.

We asked the experts whether they agree or disagree with the following statements, and, if so, how strongly and with what degree of confidence:

a) Reliable Covid-19 vaccines will reach developing countries more quickly if the rich countries pay the pharmaceutical companies at prevailing prices to manufacture and distribute the vaccines (or to license production and support licensees), rather than waiving patent protection.

b) The benefits to the US, Canada, Europe, Japan and other rich countries of paying for 12 billion doses of Covid vaccines at prevailing prices and providing them for free to the rest of the world exceed the costs that the rich countries would incur.

Of our 47 European experts, 41 participated in this survey; of our 43 US experts, 41 participated – for a total of 82 expert reactions.

Patent waivers and global vaccine distribution

On the first statement, a strong majority (87% of the panelists) agrees that rather than waiving patent protection on Covid-19 vaccines, the rich countries should pay the pharmaceutical companies to manufacture and distribute the vaccines (or to license production and support licensees).

Weighted by each expert’s confidence in their response, 30% of the European panel strongly agree, 58% agree, 8% are uncertain, and 4% disagree. Among the US panel (again weighted by each expert’s confidence in their response), 33% strongly agree, 52% agree, 10% are uncertain, and 4% disagree (the totals don’t always sum to 100 because of rounding).

Overall, across both panels, 32% strongly agree, 55% agree, 9% are uncertain, and 4% disagree.

More nuances in the experts’ views come through in the short comments that they are able to include when they participate in the survey. Some focus on the need to overcome constraints on production and distribution of the vaccines to developing countries. For example, Barry Eichengreen at Berkeley says: ‘Companies currently producing the vaccines can ramp up production most quickly.’

Kenneth Judd at Stanford adds: ‘These firms have experience in manufacturing their vaccines. Others do not.’ Robert Shimer at Chicago notes: ‘Moderna and Pfizer have the expertise to produce those vaccines.’ And Christopher Udry at Northwestern comments: ‘More quickly is the key. Scaling up is surely faster, even if more expensive.’

Others remark on whether patents are a real constraint. Carol Propper at Imperial says: ‘The problem with waiving patent protection is that the manufacturing components may not be available to low-income countries.’ Patrick Honohan at Trinity College Dublin adds: ‘While restricting patent protection could be justified, it is unlikely to speed coverage especially given need for updated booster shots.’ And Pinelopi Goldberg at Yale explains: ‘With ten reliable vaccines available, the issue is not patent protection. It is manufacturing and distribution.’

Some of the panelists comment on the costs to the rich countries of paying for the vaccines. William Nordhaus at Yale suggests: ‘A big if when that might mean six billion people at $100 per year. Can’t see passing political cost-benefit test.’ Oliver Blanchard at the Peterson Institute says: ‘Yes, but more expensive for governments.’ Richard Thaler at Chicago points out that: ‘Prices can be negotiated and reflect prior government investment.’ And Christian Leuz at Chicago echoes this idea: ‘Payments to pharma relative to upfront public investment.’

Several panelists comment on the potential impact of removing intellectual property protection on vaccines. Franklin Allen at Imperial says: ‘This is a good way to ensure vaccines are distributed to emerging countries. Waiving patent protection may have significant negative effects.’ Eric Maskin at Yale adds: ‘Patent holders have the incentive to supply vaccines if prevailing prices are paid, but not if patent rights are waived.’

Many are concerned about the longer-term effects of patent waivers on innovation: Jan-Pieter Krahnen at Goethe University Frankfurt says: ‘Waiving patent laws this time will weaken patent laws at other times.’ Oliver Hart at Yale adds: ‘I also think that waiving patent protection sets a very bad precedent.’ And Steven Kaplan at Chicago states: ‘A big mistake and terrible precedent to waive patent protection.’

These worries are widely shared, as indicated in an earlier IGM poll (see below). In the latest survey, David Autor at MIT says: ‘The US is setting a terrible precedent by voiding patents after successful cooperation with pharma during Warp Speed. It’s a repeated game.’ Lubos Pastor at Chicago comments: ‘In addition, waiving patent protection could cause long-term damage to innovation by failing to protect intellectual property.’ Robert Hall at Stanford takes it even further: ‘In any case, removing patent protection would be a taking in violation of the taking bar in the fifth amendment.’

Among the panelists who say they are uncertain about the statement, Markus Brunnermeier at Princeton fears that: ‘Such a measure would kill production capacity in some emerging market and developing countries, e.g. in India.’ In contrast, Daron Acemoglu at MIT comments: ‘Forcing pharmaceutical companies into a free licensing agreement with developing countries could be very effective’, a point also made by Christian Leuz: ‘Licensing possible too – see BNTX [BioNTech, Pfizer’s partner in producing a vaccine].’

Richard Portes at London Business School agrees with the statement but still supports the idea of patent waivers: ‘I agree with [Joseph] Stiglitz that patent protection should be waived. But WTO procedures would be much too slow. So pay – and tax pharma.’ Pinelopi Goldberg also provides background reading in a paper on how to end the pandemic by March 2022. She herself has written on the waiver proposal, as has another of our US panelists, Maurice Obstfeld at Berkeley; and Abhijit Banerjee at MIT has co-authored with Esther Duflo a New York Times piece on global implications of the pandemic in India.

The effects of removing intellectual property protections on Covid-19 vaccines on both immediate vaccine availability in developing countries and future innovation were considered in an earlier IGM poll, which also invited views on the need for an international agreement on vaccine trade. We asked the experts on the US and European panels whether they agree or disagree with the following statements: again, over 80 responded and the overall results were as follows:

a) Removing intellectual property protections on Covid-19 vaccines would substantially improve availability of the vaccines in developing countries.

Across both panels, 21% strongly agree, 33% agree, 35% are uncertain, and 11% disagree. This result echoes the uncertainty in the latest survey around patents being the main constraint on getting vaccines to developing countries.

b) Removing intellectual property protections on Covid-19 vaccines would have a negative impact on vaccine development efforts for future variants of SARS-CoV-2 or for the next pandemic.

Across both panels, 22% strongly agree, 55% agree, 14% are uncertain, 6% disagree, and 2% strongly disagree. Thus, more than three-quarters of respondents worry about the future innovation effects of waiving patents today.

c) Without an international agreement that facilitates vaccine trade, countries’ incentives to limit exports of vaccines and/or key production inputs are likely to prolong the adverse effects of the pandemic in advanced countries.

Across both panels, 21% strongly agree, 65% agree, 9% are uncertain, and 5% disagree. Here, there’s strong agreement for global cooperation to address the vaccination needs of all countries.

Costs and benefits to rich countries of global vaccine distribution

On the second statement in the latest poll – about the benefits and costs to the rich countries of paying for 12 billion doses of Covid vaccines and providing them for free to the rest of the world – a strong majority (89% of the panelists) considers that the benefits outweigh the costs.

Weighted by each expert’s confidence in their response, 36% of the European panel strongly agree, 53% agree, 7% are uncertain, and 5% disagree. Among the US panel (again weighted by each expert’s confidence in their response), 46% strongly agree, 42% agree, 11% are uncertain, and 0% disagree.

Overall, across both panels, 41% strongly agree, 48% agree, 9% are uncertain, and 2% disagree.

Among the comments, several panelists point to reasons for the rich countries to pay both out of self-interest and altruism. David Autor is clear: ‘For both moral and pragmatic reasons, chaos and death in the developing world harm all of us. We should assist immediately and generously.’ Angus Deaton at Princeton takes a similar view: ‘I don’t agree with the premise that we count in money. We ought to do this. Period. Unlike most foreign aid, this is a good thing to do.’ So too does Oliver Hart: ‘More important than this, it’s just the right thing to do.’

Pinelopi Goldberg comments on the dangers of not acting as the pandemic worsens in some parts of the world: ‘If the world population is not vaccinated and new variants emerge, the pandemic will never end.’ Kjetil Storesletten at Oslo adds: ‘Vaccinating the world has a strong positive externality: it reduces scope for future virus mutations. Gains exceeds costs for rich countries.’

Karl Whelan at University College Dublin notes: ‘The costs are minor relative to GDP. Benefits in terms of boosting the global economy and stopping dangerous new variants emerging are big.’ And Franklin Allen says: ‘The cost of the vaccines is a relatively small amount compared to the losses associated with the pandemic and potential future losses.’

Other panelists point to potential reputational benefits for the rich countries. Kenneth Judd argues: ‘This would be a far better way to create goodwill towards the US then any other kind of foreign aid.’ Abhijit Banerjee concurs: ‘The rich countries need the rest of the world for COP26 [the upcoming summit on climate change policy in Glasgow in November], but the recent vaccine grab hasn’t helped. This will help rebuild credibility.’

Some panelists question what underpins the statement but go along with the general view. Bengt Holmstrom at Yale says: ‘I don’t know that 12 billion is the right number, but substantial help from the developed world will benefit all.’ Jonathan Levin at Stanford comments: ‘Yes, but I would change premises of question. Don’t need close to 12 billion doses, or to pay US prices for ambitious global campaign.’ Richard Thaler adds another perspective: ‘Reward the drug companies appropriately for saving us and they will do it again. At $20, the shots are a huge bargain.’

Some of the panelists make rough calculations. Larry Samuelson at Yale estimates: ‘World vaccination will lead to a healthy world economy, allowing the rich countries to more than recoup the cost of about $250 billion.’ Jose Scheinkman at Columbia suggests: ‘A bargain at a probable cost of less than 0.3% of GDP of wealthy countries.’ Christopher Udry adds: ‘The costs are about an order of magnitude lower than the benefits.’ And Jan-Pieter Krahnen comments: ‘This would be a transfer with very large social rate of return – and with a high economic rate of return as well.’

Christian Leuz points us to a study in Science, which calculates that the benefits per dose could be in the thousands and that developed countries would only have to capture a small share of it to justify the cost of the vaccine: ‘Benefits per dose far outweigh costs. Global problem and fraction of net benefits accrue to rich countries. Besides, matter of solidarity.’ And Richard Portes estimates: ‘$1 million per life. Global total Covid deaths around five million so far. Africa just starting, India-Brazil continue. Add economic costs. Simple arithmetic.’

Charles Wyplosz at Geneva agrees with the statement but adds a caveat: ‘Maybe. But evaluating the benefits is effectively impossible, given the uncertainty and dicey when relying on economic value if life.’ Finally, Robert Shimer says he is uncertain but concludes with an additional point about moral and pragmatic reasons for vaccinating the world: ‘Global benefits exceed cost, less than $240 billion, 0.3% of global GDP. Unclear how much accrues to rich countries versus it being the right thing.’

All comments made by the experts are in the full survey results.

Romesh Vaitilingam
@econromesh
May 2021

Question A:

Reliable Covid-19 vaccines will reach developing countries more quickly if the rich countries pay the pharmaceutical companies at prevailing prices to manufacture and distribute the vaccines (or to license production and support licensees), rather than waiving patent protection.

Responses weighted by each expert's confidence

Question B:

The benefits to the US, Canada, Europe, Japan and other rich countries of paying for 12 billion doses of Covid vaccines at prevailing prices and providing them for free to the rest of the world exceed the costs that the rich countries would incur.

Responses weighted by each expert's confidence

Question A Participant Responses

Participant University Vote Confidence Bio/Vote History
Allen
Franklin Allen
Imperial College London
Agree
5
Bio/Vote History
This is a good way to ensure vaccines are distributed to emerging countries. Waiving patent protection may have significant negative effects
Antras
Pol Antras
Harvard
Uncertain
6
Bio/Vote History
Bandiera
Oriana Bandiera
London School of Economics
Strongly Agree
10
Bio/Vote History
Blanchard
Olivier Blanchard
Peterson Institute
Agree
5
Bio/Vote History
yes, but more expensive for govts.
Bloom
Nicholas Bloom
Stanford
Strongly Agree
5
Bio/Vote History
Blundell
Richard William Blundell
University College London Did Not Answer Bio/Vote History
Carletti
Elena Carletti
Bocconi
Uncertain
3
Bio/Vote History
Danthine
Jean-Pierre Danthine
Paris School of Economics
Agree
5
Bio/Vote History
De Grauwe
Paul De Grauwe
LSE
Uncertain
6
Bio/Vote History
Eeckhout
Jan Eeckhout
UPF Barcelona
Disagree
6
Bio/Vote History
Fehr
Ernst Fehr
Universität Zurich
Agree
8
Bio/Vote History
Freixas
Xavier Freixas
Barcelona GSE
Strongly Agree
5
Bio/Vote History
Fuchs-Schündeln
Nicola Fuchs-Schündeln
Goethe-Universität Frankfurt
Agree
9
Bio/Vote History
Galí
Jordi Galí
Barcelona GSE
Agree
6
Bio/Vote History
Giavazzi
Francesco Giavazzi
Bocconi Did Not Answer Bio/Vote History
Griffith
Rachel Griffith
University of Manchester
Agree
5
Bio/Vote History
Guerrieri
Veronica Guerrieri
Chicago Booth
Agree
7
Bio/Vote History
Guiso
Luigi Guiso
Einaudi Institute for Economics and Finance
Agree
5
Bio/Vote History
Guriev
Sergei Guriev
Sciences Po
Strongly Agree
8
Bio/Vote History
Honohan
Patrick Honohan
Trinity College Dublin
Agree
7
Bio/Vote History
While restricting patent protection could be justified, it is unlikely to speed coverage especially given need for updated booster shots.
Javorcik
Beata Javorcik
University of Oxford
Agree
9
Bio/Vote History
Krahnen
Jan Pieter Krahnen
Goethe University Frankfurt
Strongly Agree
8
Bio/Vote History
Waiving patent laws this time will weaken patent laws at other times.
Kőszegi
Botond Kőszegi
Central European University
Strongly Agree
10
Bio/Vote History
La Ferrara
Eliana La Ferrara
Harvard Kennedy
Uncertain
3
Bio/Vote History
Leuz
Christian Leuz
Chicago Booth
Agree
4
Bio/Vote History
Speed is key; not clear patents are main constraint. Licensing possible too (see BNTX). Paymts to pharma relative to upfront pub investment
Mayer
Thierry Mayer
Sciences-Po Did Not Answer Bio/Vote History
Meghir
Costas Meghir
Yale
Agree
9
Bio/Vote History
Pagano
Marco Pagano
Università di Napoli Federico II
Strongly Agree
6
Bio/Vote History
Pastor
Lubos Pastor
Chicago Booth
Agree
4
Bio/Vote History
In addition, waiving patent protection could cause long-term damage to innovation by failing to protect intellectual property.
Persson
Torsten Persson
Stockholm University Did Not Answer Bio/Vote History
Pissarides
Christopher Pissarides
London School of Economics and Political Science Did Not Answer Bio/Vote History
Portes
Richard Portes
London Business School
Strongly Agree
8
Bio/Vote History
I agree with Stiglitz (see URL) that patent protection should be waived. But WTO procedures would be much too slow. So pay - and tax pharma.
-see background information here
Prendergast
Canice Prendergast
Chicago Booth
Agree
5
Bio/Vote History
Propper
Carol Propper
Imperial College London
Strongly Agree
6
Bio/Vote History
The problem with waiving patent protection is that the manufacturing components may not be available to low income companies.
Rasul
Imran Rasul
University College London
Agree
7
Bio/Vote History
Reichlin
Lucrezia Reichlin
London Business School
Disagree
4
Bio/Vote History
Repullo
Rafael Repullo
CEMFI
Agree
4
Bio/Vote History
Rey
Hélène Rey
London Business School
Agree
7
Bio/Vote History
Schoar
Antoinette Schoar
MIT
Strongly Agree
9
Bio/Vote History
Storesletten
Kjetil Storesletten
University of Minnesota
Agree
8
Bio/Vote History
Sturm
Daniel Sturm
London School of Economics
Agree
4
Bio/Vote History
Van Reenen
John Van Reenen
LSE
Agree
6
Bio/Vote History
Vickers
John Vickers
Oxford
Uncertain
2
Bio/Vote History
Voth
Hans-Joachim Voth
University of Zurich
Agree
9
Bio/Vote History
Whelan
Karl Whelan
University College Dublin
Agree
3
Bio/Vote History
Not my area of expertise but it seems the IP issue is a bit of a red herring at this time.
Wyplosz
Charles Wyplosz
The Graduate Institute Geneva
Agree
6
Bio/Vote History
The question is what is the most efficient way of overcoming production bottlenecks,
Zilibotti
Fabrizio Zilibotti
Yale University Did Not Answer Bio/Vote History

Question B Participant Responses

Participant University Vote Confidence Bio/Vote History
Allen
Franklin Allen
Imperial College London
Agree
5
Bio/Vote History
The cost of the vaccines is a relatively small amount compared to the losses associated with the pandemic and potential future losses.
Antras
Pol Antras
Harvard
Agree
5
Bio/Vote History
Bandiera
Oriana Bandiera
London School of Economics
Strongly Agree
10
Bio/Vote History
Blanchard
Olivier Blanchard
Peterson Institute
Agree
6
Bio/Vote History
Bloom
Nicholas Bloom
Stanford
Uncertain
8
Bio/Vote History
Blundell
Richard William Blundell
University College London Did Not Answer Bio/Vote History
Carletti
Elena Carletti
Bocconi
Uncertain
2
Bio/Vote History
Danthine
Jean-Pierre Danthine
Paris School of Economics
Agree
7
Bio/Vote History
De Grauwe
Paul De Grauwe
LSE
Agree
7
Bio/Vote History
Eeckhout
Jan Eeckhout
UPF Barcelona
Strongly Agree
8
Bio/Vote History
Fehr
Ernst Fehr
Universität Zurich
Agree
7
Bio/Vote History
Freixas
Xavier Freixas
Barcelona GSE
Strongly Agree
10
Bio/Vote History
Fuchs-Schündeln
Nicola Fuchs-Schündeln
Goethe-Universität Frankfurt
Agree
9
Bio/Vote History
Galí
Jordi Galí
Barcelona GSE
Strongly Agree
6
Bio/Vote History
Giavazzi
Francesco Giavazzi
Bocconi Did Not Answer Bio/Vote History
Griffith
Rachel Griffith
University of Manchester
Agree
4
Bio/Vote History
Guerrieri
Veronica Guerrieri
Chicago Booth
Agree
7
Bio/Vote History
Guiso
Luigi Guiso
Einaudi Institute for Economics and Finance
Agree
5
Bio/Vote History
Guriev
Sergei Guriev
Sciences Po
Strongly Agree
8
Bio/Vote History
Honohan
Patrick Honohan
Trinity College Dublin
Strongly Agree
9
Bio/Vote History
Javorcik
Beata Javorcik
University of Oxford
Agree
7
Bio/Vote History
Krahnen
Jan Pieter Krahnen
Goethe University Frankfurt
Strongly Agree
7
Bio/Vote History
This would be a transfer with very large social rate of return - and with a high economic rate of return as well.
Kőszegi
Botond Kőszegi
Central European University
Agree
6
Bio/Vote History
La Ferrara
Eliana La Ferrara
Harvard Kennedy
Agree
3
Bio/Vote History
Leuz
Christian Leuz
Chicago Booth
Agree
5
Bio/Vote History
Benefits/dose far outweigh costs (see below). Global problem & fraction of net benefits accrue to rich ctrys. Besides, matter of solidarity
-see background information here
Mayer
Thierry Mayer
Sciences-Po Did Not Answer Bio/Vote History
Meghir
Costas Meghir
Yale
Agree
9
Bio/Vote History
Pagano
Marco Pagano
Università di Napoli Federico II
Agree
3
Bio/Vote History
Pastor
Lubos Pastor
Chicago Booth
Agree
4
Bio/Vote History
Persson
Torsten Persson
Stockholm University Did Not Answer Bio/Vote History
Pissarides
Christopher Pissarides
London School of Economics and Political Science Did Not Answer Bio/Vote History
Portes
Richard Portes
London Business School
Strongly Agree
8
Bio/Vote History
$1 mn/life. Global total covid deaths ~5 million so far. Africa just starting, India-Brazil continue. Add economic costs. Simple arithmetic.
Prendergast
Canice Prendergast
Chicago Booth
Strongly Agree
9
Bio/Vote History
Propper
Carol Propper
Imperial College London
Disagree
4
Bio/Vote History
Rasul
Imran Rasul
University College London
Agree
5
Bio/Vote History
Reichlin
Lucrezia Reichlin
London Business School
Agree
5
Bio/Vote History
Repullo
Rafael Repullo
CEMFI
Agree
4
Bio/Vote History
Rey
Hélène Rey
London Business School
Agree
7
Bio/Vote History
Schoar
Antoinette Schoar
MIT
Agree
8
Bio/Vote History
Storesletten
Kjetil Storesletten
University of Minnesota
Strongly Agree
8
Bio/Vote History
Vaccinating the world has a strong positive externality: it reduces scope for future virus mutations. Gains exceeds costs for rich countries
Sturm
Daniel Sturm
London School of Economics
Agree
4
Bio/Vote History
Van Reenen
John Van Reenen
LSE
Uncertain
5
Bio/Vote History
Vickers
John Vickers
Oxford
Uncertain
2
Bio/Vote History
Voth
Hans-Joachim Voth
University of Zurich
Disagree
8
Bio/Vote History
Whelan
Karl Whelan
University College Dublin
Strongly Agree
9
Bio/Vote History
The costs are minor relative to GDP. Benefits in terms of boosting the global economy and stopping dangerous new variants emerging are big.
Wyplosz
Charles Wyplosz
The Graduate Institute Geneva
Agree
5
Bio/Vote History
Maybe. But evaluating the benefits is effectively impossible, given the uncertainty and dicey when relying on economic value if life.
Zilibotti
Fabrizio Zilibotti
Yale University Did Not Answer Bio/Vote History