Operation Warp Speed (OWS) was a federal effort that successfully accelerated the launch of vaccines against SAR-CoV-2,
Posted: Thu May 05, 2022 6:38 am
Operation Warp Speed (OWS) was a federal effort that
successfully accelerated the launch of vaccines against SAR-CoV-2,
the virus that causes COVID-19. In fewer than 12 months since its
launch, 5 of 6 candidates within OWS entered Phase 3 clinical
trials, which are larger scale trials on humans to evaluate
efficacy and safety. Two of these vaccines, by Moderna and Pfizer,
came to the U.S. market before the end of 2020 under emergency
authorization. Remarkably, they relied on an unprecedented mRNA
platform. A third vaccine has since been launched by Johnson &
Johnson. Your task is to answer the set of questions below. To
succeed, ensure that your answers apply knowledge from this course,
including our discussions of consumer theory and economic
epidemiology, along with your prior economics coursework, and from
the provided reading and any other material that you want to rely
upon. Use economic theory, economic principles, and economic
terminology at every opportunity. In answering these questions,
simplify and assume there’s only a single vaccine and a single
manufacturer. Also simplify by only considering the U.S., even
though the value to the rest of the world is undeniably enormous.
The total U.S. population across all ages is approximately 330
million people. Estimates suggest that by December 31, 2021, about
62%, or 205 million people were fully vaccinated, which requires
two doses per person. Fully vaccinated means they have received two
shots, for about 410 million doses total, ignoring those who have
received only one shot, and ignoring boosters. The vaccination
rates are substantially higher among older people. You do not need
to provide this full rubric with your answers. However, be sure to
label each answer clearly so that I know which question you are
addressing. Please be sure that your answers focus specifically on
the question being asked.
1. What are the various types of benefits that you would include
to estimating the total social value of the COVID-19 vaccine to the
U.S. through the end of 2021? To simplify, ignore any future
benefits and any benefits outside of the U.S. List them out,
grouping them using the terminology from economic epidemiology as
discussed in the course. (5 points)
2. What is the total social value of the vaccine to the U.S.
alone through the end of 2021? Assign dollar values to each of the
benefits that you listed for question 1, and briefly explain your
reasoning. Then sum them up. For example, if you are including
lives saved, provide the number of lives and how you valued each
life and your source or reasoning. (5 points)
3. U.S. taxpayers provided substantial funding for the vaccines,
in terms of basic infrastructure, OWS itself, and then advance
purchase commitment contracts. Health economists provide an
overview here. In terms of the direct costs of purchasing the
developed vaccines from manufacturers, estimates indicate that we
have paid manufacturers $12 billion for 700 million doses. If
delivered prior to expiration and without wastage, this is enough
to vaccinate 350 million people. (Question 3 continued on the next
page) 2 Thinking only about these direct costs paid to the
pharmaceutical firms, compare their revenues against your answer to
number 2. What share of the social value was captured by the
innovating firms? Report as a percent. If easier, you may instead
report as a cost-benefit per vaccinated person who receives two
doses. From a societal perspective, again thinking only about this
direct spending, were these contracts worthwhile? State the
decision rule you used in making this assessment. (4 points)
4. Vaccines are available at a price of $0 to the person
receiving them. As described above, some share of the U.S. remains
unvaccinated. Under revealed preference assumptions, describe what
you learn about the private net value of the vaccine to those
individuals who remain unvaccinated. (2 points)
5. Research has established that vaccinated people can become
infected and infect others. For purposes of this question, assume
that the vaccine does nothing at all to inhibit people from
transmitting the virus to others. Given that assumption, do you
think the optimal out-of- pocket price should currently be $0,
above $0 so that people must pay something themselves, or below $0,
so that people are paid to get the vaccine? You do not have to give
a precise price. However, provide the economic rationale(s) for
your answer. Organize your rationale(s) based on the two criteria
that should be used to evaluate all policy decisions such as
vaccine pricing. (4 points)
successfully accelerated the launch of vaccines against SAR-CoV-2,
the virus that causes COVID-19. In fewer than 12 months since its
launch, 5 of 6 candidates within OWS entered Phase 3 clinical
trials, which are larger scale trials on humans to evaluate
efficacy and safety. Two of these vaccines, by Moderna and Pfizer,
came to the U.S. market before the end of 2020 under emergency
authorization. Remarkably, they relied on an unprecedented mRNA
platform. A third vaccine has since been launched by Johnson &
Johnson. Your task is to answer the set of questions below. To
succeed, ensure that your answers apply knowledge from this course,
including our discussions of consumer theory and economic
epidemiology, along with your prior economics coursework, and from
the provided reading and any other material that you want to rely
upon. Use economic theory, economic principles, and economic
terminology at every opportunity. In answering these questions,
simplify and assume there’s only a single vaccine and a single
manufacturer. Also simplify by only considering the U.S., even
though the value to the rest of the world is undeniably enormous.
The total U.S. population across all ages is approximately 330
million people. Estimates suggest that by December 31, 2021, about
62%, or 205 million people were fully vaccinated, which requires
two doses per person. Fully vaccinated means they have received two
shots, for about 410 million doses total, ignoring those who have
received only one shot, and ignoring boosters. The vaccination
rates are substantially higher among older people. You do not need
to provide this full rubric with your answers. However, be sure to
label each answer clearly so that I know which question you are
addressing. Please be sure that your answers focus specifically on
the question being asked.
1. What are the various types of benefits that you would include
to estimating the total social value of the COVID-19 vaccine to the
U.S. through the end of 2021? To simplify, ignore any future
benefits and any benefits outside of the U.S. List them out,
grouping them using the terminology from economic epidemiology as
discussed in the course. (5 points)
2. What is the total social value of the vaccine to the U.S.
alone through the end of 2021? Assign dollar values to each of the
benefits that you listed for question 1, and briefly explain your
reasoning. Then sum them up. For example, if you are including
lives saved, provide the number of lives and how you valued each
life and your source or reasoning. (5 points)
3. U.S. taxpayers provided substantial funding for the vaccines,
in terms of basic infrastructure, OWS itself, and then advance
purchase commitment contracts. Health economists provide an
overview here. In terms of the direct costs of purchasing the
developed vaccines from manufacturers, estimates indicate that we
have paid manufacturers $12 billion for 700 million doses. If
delivered prior to expiration and without wastage, this is enough
to vaccinate 350 million people. (Question 3 continued on the next
page) 2 Thinking only about these direct costs paid to the
pharmaceutical firms, compare their revenues against your answer to
number 2. What share of the social value was captured by the
innovating firms? Report as a percent. If easier, you may instead
report as a cost-benefit per vaccinated person who receives two
doses. From a societal perspective, again thinking only about this
direct spending, were these contracts worthwhile? State the
decision rule you used in making this assessment. (4 points)
4. Vaccines are available at a price of $0 to the person
receiving them. As described above, some share of the U.S. remains
unvaccinated. Under revealed preference assumptions, describe what
you learn about the private net value of the vaccine to those
individuals who remain unvaccinated. (2 points)
5. Research has established that vaccinated people can become
infected and infect others. For purposes of this question, assume
that the vaccine does nothing at all to inhibit people from
transmitting the virus to others. Given that assumption, do you
think the optimal out-of- pocket price should currently be $0,
above $0 so that people must pay something themselves, or below $0,
so that people are paid to get the vaccine? You do not have to give
a precise price. However, provide the economic rationale(s) for
your answer. Organize your rationale(s) based on the two criteria
that should be used to evaluate all policy decisions such as
vaccine pricing. (4 points)