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The news about a potential COVID-19 vaccine raises hope and buoys markets when it arrives. In order to speed up the time from research to market, the Trump administration quickly launched Operation Warp Speed, led by the Department of Health and Human Services and the Department of Defense. It aims to deliver 300 million doses of a safe and effective vaccine for COVID-19 by January 2021, preceded by a report by the president’s Council of Economic Advisers (CEA) in September 2019 demonstrating the value of rapid vaccine production during a pandemic. The $10 billion investment has put money into speeding up vaccine candidates from, among others, Johnson & Johnson, Pfizer, Moderna and AstraZeneca—developed in conjunction with the University of Oxford.
The total loss inflicted by a disease is made up of the costs of preventing it, as well as the health losses inflicted by patients diagnosed with it. Typically, the larger the health harm caused by a disease, the larger the costs undertaken to prevent it. For example, the cost imposed by polio is largely through the cost of vaccinations, not the disease itself. Likewise, for COVID-19, the largest share of the overall cost has been prevention, in terms of foregone economic activity through mitigation, rather than losses in lives if measured by standard government metrics valuing health in dollars. We estimate that as of July 22, about 87 percent of the U.S. loss can be attributable to reduced economic activity, and 13 percent to the 143,190 lost lives. Operation Warp Speed’s main benefit will therefore be restored economic activity, more so than saved lives—particularly for the poorest part of the population, which has paid the brunt of the cost of the regressive policies reducing economic activity.
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