Tuesday, 19 January 2021

Vaccines are cheap

Israel chose to pay a bit over the odds for the Pfizer vaccine to get earlier access. 

Here's The Times of Israel from 16 November.

American government will be charged $39 for each two-shot dose, and the European bloc even less, but Jerusalem said to agree to pay $56.

Israel has now vaccinated more than 80% of their elderly population and is getting the second doses into arms. 

I do not know what New Zealand is paying. But suppose we're paying the same as the US. For only $85 million USD more, or just under $120m NZD more, we might have also had early access. 

$120m sounds like a lot in normal times. But if it meant that we could have everyone vaccinated from mid-year, instead of starting to roll-out vaccination from mid-year, we'd be able to open the border, right? Surely being able to open the border half a year earlier is worth at least $120 million. Like, if someone had offered the government a quarter of a billion to close the border for half a year, no sane government would have taken that offer.

I've heard a lot of rationalisations on this one. Some would argue that we'd have bid it away from places that needed it more. But done properly, through advance market commitment orders, it would also have helped to fund the capacity building that allows more production for everyone. 

Ex ante, it would be impossible to know which vaccine would be best. We'd have had to have paid above the odds for each of several vaccines. But even that is still incredibly cheap as compared to having to keep the border closed for longer than necessary. Even if it added half a billion all-up to the cost of vaccination, the costs of lockdowns are in the billions and so too are the costs of a closed border. If MIQ is about $6k per stay and handles 10k returning Kiwis a month, then that all by itself is $60m a month. Vaccines are cheap, even paying well over the odds. 

Meanwhile, the new online vaccination register is still under development.

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