Coronavirus update: Are vaccines public goods?
Too what extent can and should we regard the manufacturing and deployment of a covid-19 vaccine as a public good?
In theory, a new vaccine is not a pure public good because the supply of the vaccine is limited in a given time period and therefore, giving a vaccination to one person means that there is less available to someone else I.e. the vaccine is rival with a positive (although low) marginal cost of supply.
In addition, vaccines may be priced in markets and exclude those who are unable or unwilling to pay because they lack effective demand.
However, some economists are arguing that the development of a vaccine for covid-19 should be treated as a global public good in the sense that the benefits of an effective, tested vaccine have large positive externalities. As this recent WHO report argued "Vaccination has positive effect beyond individuals and provides indirect benefits to the unvaccinated."
The hope is that $ billions can be made available on a multi-lateral basis to speed up the development, manufacturing and equitable deployment of Covid-19 vaccines.
This might follow the example of life-saving treatments developed to tackle HIV-Aids over the last twenty years with higher unit prices charged in advanced high-income nations helping to cross-subsidise supply in developing / emerging countries.
David Pilling - writing recently in the Financial Times - made the point that “Health experts estimate it will cost some $20bn to vaccinate everyone on earth, equivalent to roughly two hours of global output.”
Given the scale of government financial support to prevent economic collapse in many countries over recent months, this seems a very small price to pay.