How testing market fails during a pandemic

What Caused the COVID-19 Testing Deficit?

The evidence of market failure during this pandemic is everywhere. Shortages, excessive prices, unavailable capacity...It is a clear example of mismatch between demand and supply. The question is, Can we do it otherwise?. In this article there are some hints for resource allocation for testing activities.

Globally, the development of diagnostics has long been left to markets, many of which are highly specialized. But while there are diagnostics markets for major infectious and non-infectious diseases, and even neglected tropical diseases, there is none for pandemic diseases.
Governments can of course counteract market deficiencies, but the commonly used mechanisms still require a trace level of demand, which does not exist for pandemic-disease diagnostics until the brink of an outbreak. And national governments, subject as they are to political and ideological constraints, cannot be relied upon always to create markets with the same swiftness demonstrated by South Korea. Reactive market creation is therefore not the way forward.
Instead, national governments should support the creation of a global coordinating platform for pandemic preparedness. Such a platform can take the lead in raising and pooling capital to channel toward rapid development, production, and distribution of diagnostics for pandemic diseases.
The blueprint for such a platform already exists. The Coalition for Epidemic Preparedness Innovations (CEPI) is a coordinating mechanism focused on advancing vaccine development and facilitating clinical validation, mass-scale manufacturing, and stockpiling. By reducing uncertainty and minimizing disruptions, CEPI makes vaccine markets more secure, accessible, and dynamic.
CEPI relies on both traditional financing (large grants from governments and foundations) and innovative financing (the returns from instruments like the International Finance Facility for Immunization, or IFFIm). In the event of an outbreak, CEPI uses instruments like Advanced Market Commitments (AMCs) or volume guarantees – which can be structured through mechanisms like the Global Health Investment Fund and InnovFin, or as conditional pledges to IFFIm and Gavi, the Vaccine Alliance – to enable it to scale up production quickly.
This blueprint can easily be replicated for diagnostics. All that is needed is a specialized entity – an institution or initiative that couples research and development with market access. 

Health vs. wealth in a pandemic

HEALTH VS. WEALTH? PUBLIC HEALTH POLICIES AND THE ECONOMY DURING
COVID-19

A NBER paper says:

A pandemic can impact an economy in many ways: reductions in people’s willingness
to work, dislocations in consumption patterns and lower consumption, added stress on the financial system, and greater uncertainty leading to lower investment. These are
respectively referred to as (labor) supply shocks, demand shocks, financial shocks and
uncertainty shocks. Connected economies and epidemiological communities also move in synch. Even a healthy economy, or an economy that has not mandated a shutdown, may feel the impact of external events. With the exception of the 1918 influenza, recent
pandemics have neither had as large of a global impact, nor has there been as much real
time data available to empirically assess the economic and public health impact of NPIs.
We study outcomes during the Covid-19 pandemic.
We have three main results. First, our analysis shows NPIs may have been effective
in slowing the growth rate of confirmed cases of Covid-19 but not in decreasing the growth rate of cumulative mortality. Second, we find evidence of spillovers. NPIs may have impacts on other jurisdictions. Finally, there is little evidence that NPIs are associated with larger declines in local economic activity than in places without NPIs.

Against patents for the current pandemic

Patents vs. the Pandemic

Imagine a world in which a global network of medical professionals monitored for emerging strains of a contagious virus, periodically updated an established formula for vaccinating against it, and then made that information available to companies and countries around the world. Moreover, imagine if this work were done without any intellectual-property (IP) considerations, and without pharmaceutical monopolies exploiting a desperate public to maximize their profits.
This may sound like a utopian fantasy, but it is actually a description of how the flu vaccine has been produced for the past 50 years. Through the World Health Organization’s Global Influenza Surveillance and Response System, experts from around the world convene twice a year to analyze and discuss the latest data on emerging flu strains, and to decide which strains should be included in each year’s vaccine.

This is exactly what Nobel prize David Stiglitz says in his op-ed in Project Syndicate. Absolutely agree.

For too long, we have bought into the myth that today’s IP regime is necessary. The proven success of GISRS and other applications of “open science” shows that it is not. With the COVID-19 death toll rising, we should question the wisdom and morality of a system that silently condemns millions of human beings to suffering and death every year.
It’s time for a new approach. Academics and policymakers have already come forward with many promising proposals for generating socially useful – rather than merely profitable – pharmaceutical innovation. There has never been a better time to start putting these ideas into practice.

Hopper

Austerity is not for nowadays

Austerity When It Works and When It Doesn’t

If somebody want to know what happens with austerity policies, then this is the book to read.

The term “austerity” indicates a policy of sizeable reduction of government
deficits and stabilization of government debt achieved by means
of spending cuts or tax increases, or both. This book examines the costs
of austerity in terms of lost output, what types of austerity policies can
achieve the stated goals at the lowest costs, and the electoral effects for
governments implementing these policies.
Why Austerity?
If governments followed adequate fiscal policies most of the time, we
would almost never need austerity. Economic theory and good practice
suggest that a government should run deficits during recessions—when
tax revenues are low and government spending is high as a result of
the working of fiscal stabilizers such as unemployment subsidies—and
during periods of temporarily high spending needs, say because of a natural
calamity or a war.

PS. Alberto Alessina passed away recently.

Surveillance, censorship and manipulation (using covid as excuse)

The Information Trade. How Big Tech Conquers Countries, Challenges Our Rights, and Transforms Our World

What does google know about you?. Right now they have developed a new API with Apple to control citizen location and contacts. This is the perfect tool for the end of privacy with the excuse of a pandemic.

In a recent book, all these strategies are clearly explained, specially how they defeat the democracy.

WE’RE IN A WORLD STILL DOMINATED BY NATION-STATES, BUT INCREASINGLY influenced by the actions of net states. Nation-states continue to own the physical territories within their borders, but net states wield significant power both within and across country space, guiding events that affect us both on an individual and on a global level. Therefore, we need to get smart about what net state power really looks like, and quick.
One country that’s excelling in its efforts to do so is Denmark. In 2017, it opened a door that has the potential to radically alter our existing geopolitical order: it appointed a new ambassador to capital-T Tech itself. Ambassador Casper Klynge is the world’s first-ever tech ambassador. His mandate: to establish diplomatic relations between Copenhagen and Tech. And what exactly that looks like is all fresh territory, yet to be discovered. Fittingly, his office operates as a virtual embassy, with three physical manifestations: one in his home base of Copenhagen and two in the most powerful tech hubs on Earth—Silicon Valley, California, and Beijing, China.

And the film, The creepy line, adds more concern on the same issue.

The role of testing while waiting for a cure and a vaccine

Testing for COVID-19: A way to lift confinement restrictions

HORIZONTE COVID-19: CLAVES PARA LA REINCORPORACIÓN AL TRABAJO

Vaccines for all

How to Develop a COVID-19 Vaccine for All

Messages from Mazzucato and Torreele:

The first, critical step is to adopt a mission-oriented approach that focuses both public and private investments on achieving a clearly defined common goal: developing an effective COVID-19 vaccine(s) that can be produced at global scale rapidly and made universally available for free. Realizing this aim will require firm rules regarding intellectual property (IP), pricing, and manufacturing, designed and enforced in ways that value international collaboration and solidarity, rather than competition between countries.

Second, to maximize the impact on public health, the innovation ecosystem must be steered to use collective intelligence to accelerate advances. Science and medical innovation thrives and progresses when researchers exchange and share knowledge openly, enabling them to build upon one another’s successes and failures in real time.

Third, countries must take the lead in building and buttressing manufacturingcapabilities, particularly in the developing world. While an effective COVID-19 vaccine probably will not be available for another 12-18 months, a concerted effort is needed now to put in place the public and private capacity and infrastructure needed to produce rapidly the billions of doses that will be required.

Because we don’t know yet which vaccine will prove most effective, we may need to invest in a range of assets and technologies. This poses a technological and financial risk that can be overcome only with the help of entrepreneurial states backed by collective, public-interest-driven financing, such as from national and regional development banks, the World Bank, and philanthropic foundations.

Finally, conditions for ensuring global, equitable, and affordable access must be built into any vaccine-development program from the start. This would allow public investments to be structured less like a handout or simple market-fixer, and more like a proactive market-shaper, driven by public objectives.

PS. Masks, tests, treatments, vaccines – why we need a global approach to fighting Covid-19 now
Bill Gates dixit:

 I’m a big believer in capitalism – but some markets simply don’t function properly in a pandemic, and the market for lifesaving supplies is an obvious example. The private sector has an important role to play, but if our strategy for fighting Covid-19 devolves into a bidding war among countries, this disease will kill many more people than it has to.

Edward Hopper. Cape Cod Morning, 1950. Smithsonian American Art Museum