UNLESS Australia wants to keep pouring money into the pockets of Pfizer and Moderna for two COVID-19 vaccines that are becoming less and less effective, we must ramp up our own vaccine development and manufacturing, says a leading health economist.
Professor Martin Hensher, the Henry Baldwin Professorial Research Fellow in Health System Sustainability at the Menzies Institute for Medical Research, told InSight+ that the nature of the global vaccine industry made it very difficult for new vaccine developers to get a foot in the COVID-19 door.
“It’s fair to say that we are still very dependent on Pfizer and Moderna in this country, particularly given that AstraZeneca is certainly no longer the vaccine of choice,” Professor Hensher said, in an exclusive podcast.
“What is stifling here is the difficulty in finding newer vaccines which are more effective at preventing infection. [If we had one] that was significantly more effective at preventing infection, then we could start thinking about whether we use that to vaccinate everybody around the world.
“We’re struggling a bit. It’s no longer a surprise, surely, that COVID has gone on a lot longer than people expected it to. The idea that it’s almost over seems to me to be laughable. But the policymakers don’t seem to want to listen to that.
“We’ve got a big problem here: we just keep on having to hand over money to Pfizer and Moderna for what is still basically the same product, which presumably over time will get less and less effective.”
All of which makes a strong argument for pouring resources into new vaccine development and manufacturing on home soil.
“We’re blessed in Australia, we’ve got great researchers, we’ve got great technological capability, but there’s not that many of us,” said Professor Hensher.
“We need a coalition of the willing, of like-minded countries working on new vaccine development.
“We need to be unafraid of putting resources into this, including the manufacturing capability for these vaccines that are owned by us, or the group of nations, in new ways, not by for-profit entities.
“Australia’s ideally placed to be a manufacturing hub for our region, not just for us, but to actually be supplying our region with vaccines.”
Supply chain issues would also be alleviated by home-grown vaccine development and manufacture.
“We’re having a nasty taste of what’s happened to global supply chains, first with COVID-19, and now also from the war in Ukraine,” Professor Hensher said.
“That kind of supply chain disruption is only going to get worse as climate change continues to disrupt things. If we are relying on very long global supply chains that in some cases all depend on one country, ultimately, we’re putting ourselves in a risky position.
“We can not only safeguard our supply, but also safeguard our region’s supply and act as a good citizen in our region by setting up some of these things.”
Professor Hensher and Mrs Sithara Wanni Arachchige Dona, an Associate Research Fellow at Deakin University have written a Perspective published in the MJA, in which they talk about the effects of vaccine mandates on the economics of the global vaccine market.
“Vaccine mandates (ie, mandatory vaccination requirements to allow participation in employment or other social and economic activities) introduce a level of compulsion to the demand for vaccines which is rarely encountered in other medical interventions,” they wrote.
“From an economic perspective, however, we find ourselves in a situation of potentially open‐ended clinical need for vaccine boosters, which might become amplified by state‐enforced, mandatory requirements for repeated vaccination for large populations in some jurisdictions, while low income countries still struggle to make meaningful progress towards initial vaccination.
“This particular combination of circumstances sets up something of a worst‐case scenario for rent extraction.”
Professor Hensher told InSight+ that rent extraction was, in economic terms, considered a bad thing.
“Going back 100 plus years in the history of economics, there was one thing economists all agreed about and that was that rents were bad – that it was a bad thing for rich people who simply owned assets to get paid money for doing nothing more than sitting back and owning property,” he said.
“That’s why lots of effort in many countries went into breaking up monopolies, so that there was competition to reduce the ability of companies and individuals to benefit from the economic rents that come from monopoly power.
“One of the things that tends to make it easier to make rents to extract rents is when there is some degree of compulsion.
“One of my worries is that if we maintain vaccine mandates for boosters going into the future, and we don’t have either a bigger set of choices of vaccine that people can choose from, or, as a government, we’re not screwing down the price that we’re paying for those vaccines that are available, we’re actually seeing a lot of Australian taxpayer dollar being extracted as pure rent by the companies that own the patents for those vaccines.
“If we confronted that head on and really look at what actually creates value for people, and what actually creates real wellbeing, maybe it wouldn't be the worst thing in the world, that some companies made slightly smaller profits than they currently do.
“Perhaps we could still get the benefits of capitalism, and maybe even be a bit better off if some of those profits were somewhat reduced.”
Subscribe to the free InSight+ weekly newsletter here. It’s available to all readers, not just registered medical practitioners.
If you would like to submit an article for consideration, send a Word version to mjainsight-editor@ampco.com.au.
Professor Martin Hensher, the Henry Baldwin Professorial Research Fellow in Health System Sustainability at the Menzies Institute for Medical Research, told InSight+ that the nature of the global vaccine industry made it very difficult for new vaccine developers to get a foot in the COVID-19 door.
“It’s fair to say that we are still very dependent on Pfizer and Moderna in this country, particularly given that AstraZeneca is certainly no longer the vaccine of choice,” Professor Hensher said, in an exclusive podcast.
“What is stifling here is the difficulty in finding newer vaccines which are more effective at preventing infection. [If we had one] that was significantly more effective at preventing infection, then we could start thinking about whether we use that to vaccinate everybody around the world.
“We’re struggling a bit. It’s no longer a surprise, surely, that COVID has gone on a lot longer than people expected it to. The idea that it’s almost over seems to me to be laughable. But the policymakers don’t seem to want to listen to that.
“We’ve got a big problem here: we just keep on having to hand over money to Pfizer and Moderna for what is still basically the same product, which presumably over time will get less and less effective.”
All of which makes a strong argument for pouring resources into new vaccine development and manufacturing on home soil.
“We’re blessed in Australia, we’ve got great researchers, we’ve got great technological capability, but there’s not that many of us,” said Professor Hensher.
“We need a coalition of the willing, of like-minded countries working on new vaccine development.
“We need to be unafraid of putting resources into this, including the manufacturing capability for these vaccines that are owned by us, or the group of nations, in new ways, not by for-profit entities.
“Australia’s ideally placed to be a manufacturing hub for our region, not just for us, but to actually be supplying our region with vaccines.”
Supply chain issues would also be alleviated by home-grown vaccine development and manufacture.
“We’re having a nasty taste of what’s happened to global supply chains, first with COVID-19, and now also from the war in Ukraine,” Professor Hensher said.
“That kind of supply chain disruption is only going to get worse as climate change continues to disrupt things. If we are relying on very long global supply chains that in some cases all depend on one country, ultimately, we’re putting ourselves in a risky position.
“We can not only safeguard our supply, but also safeguard our region’s supply and act as a good citizen in our region by setting up some of these things.”
Professor Hensher and Mrs Sithara Wanni Arachchige Dona, an Associate Research Fellow at Deakin University have written a Perspective published in the MJA, in which they talk about the effects of vaccine mandates on the economics of the global vaccine market.
“Vaccine mandates (ie, mandatory vaccination requirements to allow participation in employment or other social and economic activities) introduce a level of compulsion to the demand for vaccines which is rarely encountered in other medical interventions,” they wrote.
“From an economic perspective, however, we find ourselves in a situation of potentially open‐ended clinical need for vaccine boosters, which might become amplified by state‐enforced, mandatory requirements for repeated vaccination for large populations in some jurisdictions, while low income countries still struggle to make meaningful progress towards initial vaccination.
“This particular combination of circumstances sets up something of a worst‐case scenario for rent extraction.”
Professor Hensher told InSight+ that rent extraction was, in economic terms, considered a bad thing.
“Going back 100 plus years in the history of economics, there was one thing economists all agreed about and that was that rents were bad – that it was a bad thing for rich people who simply owned assets to get paid money for doing nothing more than sitting back and owning property,” he said.
“That’s why lots of effort in many countries went into breaking up monopolies, so that there was competition to reduce the ability of companies and individuals to benefit from the economic rents that come from monopoly power.
“One of the things that tends to make it easier to make rents to extract rents is when there is some degree of compulsion.
“One of my worries is that if we maintain vaccine mandates for boosters going into the future, and we don’t have either a bigger set of choices of vaccine that people can choose from, or, as a government, we’re not screwing down the price that we’re paying for those vaccines that are available, we’re actually seeing a lot of Australian taxpayer dollar being extracted as pure rent by the companies that own the patents for those vaccines.
“If we confronted that head on and really look at what actually creates value for people, and what actually creates real wellbeing, maybe it wouldn't be the worst thing in the world, that some companies made slightly smaller profits than they currently do.
“Perhaps we could still get the benefits of capitalism, and maybe even be a bit better off if some of those profits were somewhat reduced.”
Subscribe to the free InSight+ weekly newsletter here. It’s available to all readers, not just registered medical practitioners.
If you would like to submit an article for consideration, send a Word version to mjainsight-editor@ampco.com.au.
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