Question A:
Given the social and regulatory pressures to keep prices down for drugs and vaccines to treat Covid-19, the financial incentives for pharmaceutical companies to invest in such products are below the value of the investment to society.
Responses
Responses weighted by each expert's confidence
Question B:
Government commitments to pay developers and manufacturers above average costs for an effective vaccine or drug treatments for Covid-19 would accelerate production.
Responses
Responses weighted by each expert's confidence
Question C:
Given the positive externalities from vaccination, an effective Covid-19 vaccine should be mandatory for every US resident (except those with health exceptions, such as infants and people with compromised immunity) with the cost covered by the federal government.
Responses
Responses weighted by each expert's confidence
Question A Participant Responses
| Participant | University | Vote | Confidence | Bio/Vote History |
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 Daron Acemoglu |
MIT | Bio/Vote History | ||
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Social incentives are high.Unclear how much more productive vaccine research can be done with more incentive. But FDA can be improved hugely
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 Joseph Altonji |
Yale | Bio/Vote History | ||
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There is also direct federal financial support for vaccine development.
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 Alan Auerbach |
Berkeley | Bio/Vote History | ||
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 David Autor |
MIT | Bio/Vote History | ||
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Would not rule out large profits for suppliers under Trump admin. Also, a large 'halo' effect for first to market.
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 Katherine Baicker |
University of Chicago | Bio/Vote History | ||
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 Abhijit Banerjee |
MIT | Bio/Vote History | ||
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I think whichever group wins this competition will collect lots of rents--Nobel prizes, reputation gains etc
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 Marianne Bertrand |
Chicago | Bio/Vote History | ||
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 Markus Brunnermeier |
Princeton | Bio/Vote History | ||
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 Raj Chetty |
Harvard | Did Not Answer | Bio/Vote History | |
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 Judith Chevalier |
Yale | Bio/Vote History | ||
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 David Cutler |
Harvard | Bio/Vote History | ||
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There will be incredible goodwill for doing so, which will translate into higher prices for other drugs.
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 Angus Deaton |
Princeton | Bio/Vote History | ||
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 Darrell Duffie |
Stanford | Bio/Vote History | ||
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 Aaron Edlin |
Berkeley | Bio/Vote History | ||
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The social value of a vaccine is many trillions of dollars. The value to the inventor is likely billions
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 Barry Eichengreen |
Berkeley | Bio/Vote History | ||
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 Liran Einav |
Stanford | Bio/Vote History | ||
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 Ray Fair |
Yale | Bio/Vote History | ||
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 Amy Finkelstein |
MIT | Bio/Vote History | ||
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 Pinelopi Goldberg |
Yale | Bio/Vote History | ||
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Several companies are researching vaccines and treatments, and trials are already under way. Incentives do not seem to be the problem
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 Austan Goolsbee |
Chicago | Bio/Vote History | ||
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 Michael Greenstone |
University of Chicago | Bio/Vote History | ||
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 Robert Hall |
Stanford | Bio/Vote History | ||
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Actually, the incentives are probably weak even without the special limitation of pricing of coronavirus-related meds.
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 Oliver Hart |
Harvard | Bio/Vote History | ||
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Pharma does not capture all the consumer benefits, which leads to underinvestment. But the race to be first can cause overinvestment.
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 Bengt Holmström |
MIT | Bio/Vote History | ||
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Public reaction and firm reputation could be an important incentive to offset financial incentive.
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 Caroline Hoxby |
Stanford | Did Not Answer | Bio/Vote History | |
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 Hilary Hoynes |
Berkeley | Bio/Vote History | ||
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 Kenneth Judd |
Stanford | Bio/Vote History | ||
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 Steven Kaplan |
Chicago Booth | Bio/Vote History | ||
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 Anil Kashyap |
Chicago Booth | Bio/Vote History | ||
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 Pete Klenow |
Stanford | Bio/Vote History | ||
 Jonathan Levin |
Stanford | Bio/Vote History | ||
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 Eric Maskin |
Harvard | Bio/Vote History | ||
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 William Nordhaus |
Yale | Bio/Vote History | ||
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 Maurice Obstfeld |
Berkeley | Bio/Vote History | ||
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 Emmanuel Saez |
Berkeley | Bio/Vote History | ||
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 Larry Samuelson |
Yale | Bio/Vote History | ||
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Drug companies are good at capturing rents, including those created by government-funded research, despite pressure to keep prices low.
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 José Scheinkman |
Columbia University | Bio/Vote History | ||
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This justifies the investment done by the US and other governments on promising SARS-CoV-2 vaccines.
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 Richard Schmalensee |
MIT | Bio/Vote History | ||
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Probably right, but it is not clear how effective those pressures will be.
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 Carl Shapiro |
Berkeley | Bio/Vote History | ||
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 Robert Shimer |
University of Chicago | Bio/Vote History | ||
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Also because innovators never capture the full return to their innovation
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 James Stock |
Harvard | Bio/Vote History | ||
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 Richard Thaler |
Chicago Booth | Bio/Vote History | ||
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Firms are investing hoping for some payday and regulatory good will but know they can't charge what a cure or vaccine would be worth.
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 Christopher Udry |
Northwestern | Bio/Vote History | ||
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Market failure is profound. Especially for vaccines, externalities are paramount. Underinvestment is pervasive.
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Question B Participant Responses
| Participant | University | Vote | Confidence | Bio/Vote History |
|---|---|---|---|---|
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Daron Acemoglu |
MIT | Bio/Vote History | ||
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Unclear gains, but huge windfall for pharmaceutical companies.
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Joseph Altonji |
Yale | Bio/Vote History | ||
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Alan Auerbach |
Berkeley | Bio/Vote History | ||
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David Autor |
MIT | Bio/Vote History | ||
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I would say "strongly agree" but there are already >100 vaccines under development, so perhaps incentives are sufficient.
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Katherine Baicker |
University of Chicago | Bio/Vote History | ||
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Abhijit Banerjee |
MIT | Bio/Vote History | ||
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Marianne Bertrand |
Chicago | Bio/Vote History | ||
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Markus Brunnermeier |
Princeton | Bio/Vote History | ||
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Raj Chetty |
Harvard | Did Not Answer | Bio/Vote History | |
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Judith Chevalier |
Yale | Bio/Vote History | ||
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The question says "above average cost" and I think a per unit payment incentive is not necessarily the right one.
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David Cutler |
Harvard | Bio/Vote History | ||
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Angus Deaton |
Princeton | Bio/Vote History | ||
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Darrell Duffie |
Stanford | Bio/Vote History | ||
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Yes, but merely "above average cost" does not suggest enough incentive.
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Aaron Edlin |
Berkeley | Bio/Vote History | ||
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Pay more, get more. Pay much more, get much more.
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Barry Eichengreen |
Berkeley | Bio/Vote History | ||
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Liran Einav |
Stanford | Bio/Vote History | ||
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Ray Fair |
Yale | Bio/Vote History | ||
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Amy Finkelstein |
MIT | Bio/Vote History | ||
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Pinelopi Goldberg |
Yale | Bio/Vote History | ||
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Incentives do not seem to be the bottleneck in this case.
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Austan Goolsbee |
Chicago | Bio/Vote History | ||
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Michael Greenstone |
University of Chicago | Bio/Vote History | ||
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Robert Hall |
Stanford | Bio/Vote History | ||
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Sure, supply functions slope upward.
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Oliver Hart |
Harvard | Bio/Vote History | ||
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Bengt Holmström |
MIT | Bio/Vote History | ||
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Public reaction and firm reputation could be important incentive off-setting direct financial rewards.
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Caroline Hoxby |
Stanford | Did Not Answer | Bio/Vote History | |
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Hilary Hoynes |
Berkeley | Bio/Vote History | ||
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Kenneth Judd |
Stanford | Bio/Vote History | ||
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It is difficult to set that payment until we know what the average cost will be. Should combine these payments with rewards to the first one
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Steven Kaplan |
Chicago Booth | Bio/Vote History | ||
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Anil Kashyap |
Chicago Booth | Bio/Vote History | ||
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Pete Klenow |
Stanford | Bio/Vote History | ||
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Jonathan Levin |
Stanford | Bio/Vote History | ||
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Eric Maskin |
Harvard | Bio/Vote History | ||
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William Nordhaus |
Yale | Bio/Vote History | ||
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Maurice Obstfeld |
Berkeley | Bio/Vote History | ||
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Emmanuel Saez |
Berkeley | Bio/Vote History | ||
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Larry Samuelson |
Yale | Bio/Vote History | ||
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José Scheinkman |
Columbia University | Bio/Vote History | ||
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Governments subsidizing promising developers and manufacturers but this could bring in projects that look less viable.
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Richard Schmalensee |
MIT | Bio/Vote History | ||
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With high "first-pill" costs, average cost is not a good measure. In general, financial incentives would increase effort.
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Carl Shapiro |
Berkeley | Bio/Vote History | ||
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Robert Shimer |
University of Chicago | Bio/Vote History | ||
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James Stock |
Harvard | Bio/Vote History | ||
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Richard Thaler |
Chicago Booth | Bio/Vote History | ||
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I like the idea of prizes for this kind of innovation.
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Christopher Udry |
Northwestern | Bio/Vote History | ||
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Implementation is a challenge, but feasibility has been demonstrated.
-see background information here |
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Question C Participant Responses
| Participant | University | Vote | Confidence | Bio/Vote History |
|---|---|---|---|---|
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Daron Acemoglu |
MIT | Bio/Vote History | ||
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Of course!
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Joseph Altonji |
Yale | Bio/Vote History | ||
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The vaccine should be subsidized. Schools and other institutions should require vaccines. A universal requirement is not realistic in US.
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Alan Auerbach |
Berkeley | Bio/Vote History | ||
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David Autor |
MIT | Bio/Vote History | ||
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Vaccination is a public good -- but so is wearing a mask, and that's not going so well...
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Katherine Baicker |
University of Chicago | Bio/Vote History | ||
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Abhijit Banerjee |
MIT | Bio/Vote History | ||
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Marianne Bertrand |
Chicago | Bio/Vote History | ||
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Markus Brunnermeier |
Princeton | Bio/Vote History | ||
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Raj Chetty |
Harvard | Did Not Answer | Bio/Vote History | |
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Judith Chevalier |
Yale | Bio/Vote History | ||
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Providing the vaccine up to the point of herd immunity is important. Supplying the vaccine to the developing world is also important.
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David Cutler |
Harvard | Bio/Vote History | ||
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Angus Deaton |
Princeton | Bio/Vote History | ||
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Darrell Duffie |
Stanford | Bio/Vote History | ||
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Seems an obvious case tradeoff of an individual freedom in favor of collective health security.
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Aaron Edlin |
Berkeley | Bio/Vote History | ||
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Barry Eichengreen |
Berkeley | Bio/Vote History | ||
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Liran Einav |
Stanford | Bio/Vote History | ||
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Ray Fair |
Yale | Bio/Vote History | ||
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Amy Finkelstein |
MIT | Bio/Vote History | ||
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I strongly support vaccination and understand the externality argument; but why not handle like other vaccinations?
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Pinelopi Goldberg |
Yale | Bio/Vote History | ||
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Austan Goolsbee |
Chicago | Bio/Vote History | ||
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Michael Greenstone |
University of Chicago | Bio/Vote History | ||
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Robert Hall |
Stanford | Bio/Vote History | ||
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The upper 50 percent of the pop could pay themselves for their mandatory vacs.
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Oliver Hart |
Harvard | Bio/Vote History | ||
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I can see the benefits. But maybe urging people to get it and making it affordable would internalize enough of the externalities.
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Bengt Holmström |
MIT | Bio/Vote History | ||
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An effective vaccine can have long-term adverse consequences. Good treatments would make vaccine less important. Lots of uncertainty.
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Caroline Hoxby |
Stanford | Did Not Answer | Bio/Vote History | |
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Hilary Hoynes |
Berkeley | Bio/Vote History | ||
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Kenneth Judd |
Stanford | Bio/Vote History | ||
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I think those who are well-off should pay something.
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Steven Kaplan |
Chicago Booth | Bio/Vote History | ||
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Although I might agree, there are too many uncertainties underlying this question to do so.
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Anil Kashyap |
Chicago Booth | Bio/Vote History | ||
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Pete Klenow |
Stanford | Bio/Vote History | ||
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Jonathan Levin |
Stanford | Bio/Vote History | ||
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Eric Maskin |
Harvard | Bio/Vote History | ||
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William Nordhaus |
Yale | Bio/Vote History | ||
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Maurice Obstfeld |
Berkeley | Bio/Vote History | ||
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I would have difficulty believing in the safety of any vaccine the current US government endorses until it has a long positive track record.
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Emmanuel Saez |
Berkeley | Bio/Vote History | ||
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Larry Samuelson |
Yale | Bio/Vote History | ||
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Vaccination has tremendous positive externalities and hence constitutes a powerful case for market intervention.
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José Scheinkman |
Columbia University | Bio/Vote History | ||
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Exceptions should be narrow and only based on health risks.
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Richard Schmalensee |
MIT | Bio/Vote History | ||
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Also visitors. Not clear that this is constitutional, though.
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Carl Shapiro |
Berkeley | Bio/Vote History | ||
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Robert Shimer |
University of Chicago | Bio/Vote History | ||
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I agree with the concept, but what is the punishment for refusing to be vaccinated? Perhaps pay people to get vaccinated.
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James Stock |
Harvard | Bio/Vote History | ||
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Richard Thaler |
Chicago Booth | Bio/Vote History | ||
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Aside from any libertarian concerns I worry that any vaccine produced soon would be insufficiently tested. Do we trust Trump to test it?
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Christopher Udry |
Northwestern | Bio/Vote History | ||
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Probably. But one could imagine an effective but risky or costly vaccine that would make the case more difficult.
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