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Towards a COVAX Exchange

Summary:
Israel had vaccine that was about to expire before it could be administered. South Korea needed vaccine immediately to stop a surge. They arranged a deal. South Korea said it will receive 700,000 doses of Pfizer-BioNTech’s coronavirus vaccine from Israel on loan this week, in an attempt to speed up immunisation following a surge in infections around the capital Seoul. …Under the vaccine swap arrangement announced by both governments on Tuesday, South Korea will give Israel back the same number of shots, already on order from Pfizer, in September and October. South Korea has quickly distributed the COVID-19 vaccines it has, but has struggled to obtain enough doses in a timely manner as global supplies are tight, particularly in Asia. “This is a win-win deal,”  [Israeli Prime

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Israel had vaccine that was about to expire before it could be administered. South Korea needed vaccine immediately to stop a surge. They arranged a deal.

South Korea said it will receive 700,000 doses of Pfizer-BioNTech’s coronavirus vaccine from Israel on loan this week, in an attempt to speed up immunisation following a surge in infections around the capital Seoul.

…Under the vaccine swap arrangement announced by both governments on Tuesday, South Korea will give Israel back the same number of shots, already on order from Pfizer, in September and October.
South Korea has quickly distributed the COVID-19 vaccines it has, but has struggled to obtain enough doses in a timely manner as global supplies are tight, particularly in Asia.

“This is a win-win deal,”  [Israeli Prime Minister Naftali Bennett] said in an earlier statement.

One of the weaknesses of the COVAX facility for distributing vaccines is that distribution is primarily based on population with all countries guaranteed that “no country will receive enough doses to vaccinate more than 20% of its population until all countries in the financing group have been offered this amount.” That’s equitable, but it has dynamic challenges: different countries may have different needs and capabilities at different points in time. A country may be given vaccines, for example, when it may not yet be ready to administer them — and that can potentially lead to waste. The Israel-South Korea deal, for example, only narrowly averted 700,000 Pfizer doses from being tossed.  Countries may also have different preferences for vaccines, as different vaccines may fit better with their healthcare systems. A fixed distribution schedule doesn’t adapt to the unique circumstances of time and place, as Hayek might have said.

It’s not surprising that COVAX chose a fixed distribution rule as many people wouldn’t trust a centralized authority to decide who gets what vaccines when. But what about guaranteeing each country a right to vaccine but allowing them to trade? Trade wouldn’t be vaccines for dollars which could introduce ethical and agency issues but vaccine at time 1 for vaccine at time 2 as in the Israel-South Korea exchange or across other factors such as vaccine type. My colleagues on the Kremer team, most notably Eric Budish, Scott Duke Kominers and Canice Prendergast, have been helping think through the design of just such a system. Prendergast designed the now-famous distribution system for Feeding America, Budish helped to design Wharton’s Course Match system and Kominers has worked on mechanisms for allocating convalescent plasma, vaccines and many other goods.

A suitably designed exchange can increase efficiency while maintaining equity. The Israel-South Korea deal reminds us that this is a priority. Greater efficiency in this context means fewer vaccine doses wasted, and more lives saved.

The post Towards a COVAX Exchange appeared first on Marginal REVOLUTION.

Alex Tabarrok
Alex Tabarrok is Bartley J. Madden Chair in Economics at the Mercatus Center at George Mason University and a professor of economics at George Mason University. He specializes in patent-system reform, the effectiveness of bounty hunters compared to the police, how judicial elections bias judges, and how local poverty rates impact trial decisions by juries. He also examines methods for increasing the supply of human organs for transplant, the regulation of pharmaceuticals by the FDA, and voting systems.

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