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Vaccines and liability

Summary:
I learned something from the New York Times lead editorial on Sunday. Why are we not shipping mega quantities of vaccines to countries like India? ... as the vaccines came to market, some vaccine makers insisted on sweeping liability protections that further imperiled access for poorer countries. The United States, for example, is prohibited from selling ...

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I learned something from the New York Times lead editorial on Sunday. Why are we not shipping mega quantities of vaccines to countries like India? 

... as the vaccines came to market, some vaccine makers insisted on sweeping liability protections that further imperiled access for poorer countries. The United States, for example, is prohibited from selling or donating its unused doses, as Vanity Fair has reported, because the strong liability protections that drugmakers enjoy here don’t extend to other countries...

Pfizer has reportedly not only sought liability protection against all civil claims — even those that could result from the company’s own negligence — but has asked governments to put up sovereign assets, including their bank reserves, embassy buildings and military bases, as collateral against lawsuits. 

Well, you can sort of see the problem. You're a drug company. You sell a billion units of a brand new drug -- still on emergency use authorization in the US -- to, say, India. 10 people get a rare blood clot that may or may not be due to your vaccine. Local courts sue you for a gazillion dollars. Who wouldn't want liability protection? 

As the Europeans allowed trillions of GDP and quite a few lives to vanish while they haggled over a few billion in cost of vaccines, perhaps the onus on countries should be, to say, we want your vaccine, we understand it's brand new and there may be risks, we'll take them?  

The NYT is, predictably, full of bad ideas. 

Suspend patents. Nearly 60 nations have petitioned the World Trade Organization to allow countries to temporarily override intellectual property rights for coronavirus-related drugs and vaccines, but so far the measure is languishing. The Biden administration should support this waiver, nudge vaccine makers into voluntary licensing agreements and help build the public-private partnerships needed to bring those agreements to fruition. It should also press companies to offer better deals to the countries trying to secure doses — no more absurd indemnity clauses that protect company profits over human lives.

"Suspend patents." Great. Just in time to discourage drug companies from working full steam to identify the new variants stewing around the world and get moving on updated vaccines. Once again, all you need to know about cost benefit analysis is that trillions > billions. The profits' of drug companies are drops in the bucket. Related to a twitter stream going on, it's always time for that "once and never more" property expropriation isn't it? 

But most of all,   "absurd indemnity clauses that protect company profits over human lives?" If you mean it, dear Times, here's a suggestion: You offer to pay for any legal damages that foreign courts assess to US drugmakers over vaccines gone wrong. Not that hot to put "people" over your own "profits," eh?

The administration should also lift any embargoes resulting from its use of the Defense Production Act. President Biden was wise to use this law to bolster domestic vaccine production, but that move has also prevented companies from exporting raw materials. As a result, production lines in India and elsewhere are at risk of shutting down for want of key ingredients available in the United States. 

I'll given them the first, but not the "wise." DPA was silly in the first place. We're not building aircraft carriers for WWII, and it is beyond hypocritical to complain about Chinese and others banning exports to us while we do that. Instead our newly internationalist administration should work to stop all export bans worldwide in such situations. The world needs to work together, and that means to use our global supply chains when we need speed and efficiency. 

John H. Cochrane
In real life I'm a Senior Fellow of the Hoover Institution at Stanford. I was formerly a professor at the University of Chicago Booth School of Business. I'm also an adjunct scholar of the Cato Institute. I'm not really grumpy by the way!

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