December 16, 2021

There has been a lot of debate recently about how much money should be spent upfront investing in vaccine options to fight the virus, how to spend it, and who should pay. In my opinion, the business case is pretty cut-and-dry.

So far, the federal government alone has committed ~$10 billion to help speed vaccine development. I’m confident that spending more to get the country vaccinated faster would produce a very compelling return on investment.

The US economy was down about 10% in the second quarter, relative to 2019. Given our roughly $20 trillion GDP, that implies that the US economy is losing almost $40 billion every single week that this pandemic continues.

Of course, there are more costs than just lost productivity, including the health, livelihood and well being of many Americans.

Investments that help accelerate the timeline to a vaccine, even by a few weeks, offer a very clear return on investment.

With multiple phase 3 trials under way, we’re on track to develop a vaccine for this virus far faster than many thought possible. That’s an important step, but approving a vaccine doesn’t end the pandemic. We also have to manufacture it at scale and distribute it widely.

From an investment perspective, the right approach is to build a portfolio of solutions as well as manufacturing and distribution capacity that will help bring an end to this disease.

What might look like redundant spending — on multiple different vaccines, lots of manufacturing capacity, and many distribution channels — is actually necessary to get the best risk-adjusted returns.

Excess capacity reduces the risk of a failure somewhere in the value chain. That extra spending now is a lot like buying insurance. Fund many vaccines, many production factories, and many distribution channels, because we know that some of them may fail.

When it comes to getting a return on our tax dollars, the government might never be able to do better than it will on vaccine investments.

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