President Trump’s ‘Operation Warp Speed’ Vaccine Project Might Crash Into Perverse Incentives

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SAN PEDRO, CA - SEPTEMBER 15, 2015: Donald Trump, 2016 Republican presidential candidate, waves during a rally aboard the Battleship USS Iowa in San Pedro, Los Angeles, California while wearing a red baseball hat that says campaign slogan "Make America Great Again."

This May, President Trump unveiled Operation Warp Speed, a partnership between federal regulatory agencies and private drug producers that aims to develop and distribute a Covid-19 vaccine by January. The president described the project’s lofty goal of achieving a pioneering scientific discovery in record-breaking time as “unlike anything our country has seen since The Manhattan Project.”

Despite the incredible challenge, many believe Operation Warp Speed will succeed. Secretary of Health and Human Services Alex Azar said, “President Trump’s vision for a vaccine by January 2021 will be one of the greatest scientific and humanitarian accomplishments in history, and this is the team that can get it done.” Dr. Anthony Fauci, director of the National Institute of Allergy and Infectious Diseases, said he is “cautiously optimistic” that the nation will have a vaccine by early next year.

Operation Warp Speed has moved quickly. Less than a month after launching, five drugs producers were selected as finalists to enter the partnership. Over $2 billion in R&D funds have been distributed among them. Two of the selected drug producers, Johnson and Johnson and Moderna, have found early success in their clinical trials. Both companies are expected to begin a large sample of human trials this summer.

While the progress made so far is encouraging, we are still a long way from having a vaccine. And there is still a considerable chance that the vaccines being tested will not successfully complete their clinical trials.

But, as I have stressed before, the biggest obstacle to developing a vaccine is the likelihood for government policy to create perverse incentives that undermine the overall goal. And recent headlines raise several concerns.

A recent Healthline article finds that the federal government plans to order millions of doses of Covid-19 vaccines before the completion of late-stage clinical trials (which are the most difficult stage to complete). By buying up vast amounts of the vaccine, the government hopes to avoid any unnecessary delays between completion of the drug approval process and the distribution of a vaccine to as many willing Americans as possible.

Although this strategy might seem sensible, it creates perverse incentives.

If the government purchases large quantities of a promising but ultimately unproven vaccine, drug producers have an incentive to provide them with something. This already seems to be happening.

AstraZeneca, one of Operations Warp Speed’s finalists, plans to distribute 400 million vaccine doses between the United States and the United Kingdom by September or October. The company, however, also plans to begin larger clinical trials in August. As CNBC.com writer Lucy Handley notes, this means “Clinical trials and manufacturing are set to occur concurrently, which is an unprecedented move for the pharmaceutical industry because of the risk of producing a drug that might not work.” Similar agreements were reached with Johnson and Johnson and Moderna.

Political pressures on the Trump administration during an election season also create an incentive to distribute a vaccine before it is ready for widespread human use. It’s happened before. In 1976, then-President Gerald Ford, fearing the political backlash of a Swine Flu outbreak, rushed a vaccine to market. The vaccine had severe side effects and left hundreds of patients paralyzed.

The political incentive structure also likely affected which vaccines are being prematurely purchased and considered for the public-private partnership. A CNN article finds that numerous scientists believe Operation Warp Speed’s overinvested financial support for drug producers using technologies might accelerate vaccine development, but with a higher risk of failure.

In contrast, drug producers using more reliable but slower methods to develop a Covid-19 vaccine have been overlooked. Yale University infectious disease expert Dr. Saad Omer notes, “New technologies are good, and they could perform well, but we should really be hedging our bets.”

Political figures and select drug companies seem to be hedging their bets. But they seem to be driven by the perverse incentives they face, rather than the best interests of patients. And, like an unproven vaccine, this can have detrimental consequences.