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Kenan Institute 2023 Grand Challenge: Workforce Disrupted
Market-Based Solutions to Vital Economic Issues
Jul 29, 2020

Paying for Sustained Private-Public Vaccine Co-Development: COVID-19 and Beyond


The United States is pursuing a vaccine for COVID-19 with a bottom-up, mission-based private-public industrial policy. This is a pivot from its earlier industrial policy of supporting the global vaccine development ecosystem. With so much development cost already borne by governmental investors, there should be opportunities to recycle revenue from successful vaccines to strengthen ongoing support for vaccine preparedness. Sooner or later the U.S. will return to the vaccine ecosystem support mode. Methods of pricing the vaccine and recouping revenue to support that ongoing research are presented. Because development is a process of uncertainty reduction, the initial co-development contracts should use differing payment mechanisms at different stages of co-development, the final portion of which is the allocation of revenue to both public and private investors. The public part can be recycled into future vaccine preparedness.

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