My colleagues & I are debating an issue with implications for funding covid R&D. Question is whether SARS2 will become ENDEMIC or whether it will be ERADICATED. This question has significant implications for HOW society funds vaccines/drug development. For example... 
if we will stamp out (eradicate) SARS2 in the next few years, then the first companies to make a vaccine will maybe generate some financial return (though some pledged to sell doses at cost) but then there won’t be a long-term market for these vaccines.
That means “first good-enough” may get some reward but there will be none for developing a “better late-comer” vaccine. It means those companies working on drugs shouldn’t expect to sell much in longer run. If they can’t launch useful drugs very soon, they likely won’t be needed.
That’s not entirely true since government might decide to stockpile drugs like remdesivir & other antivirals that could work on future coronavirus outbreaks (SARS3!), but then business model is government stockpiling, which is unpredictable- investors don’t know what BARDA likes.
And antibodies will not be particularly useful for stockpiling since they are typically quite specific for a virus and can’t be expected to work for whatever SARS3 might be.
But if SARS2 can’t be eradicated, if it will stay with us as an endemic virus forever, like other 4 human coronaviruses that circulate each year causing common cold (except SARS2 would be more serious than even severe flu, especially in elderly), that’s a very different world.
It means we should still develop “first good-enough” vaccines, but we should also work on “better late-comers”. After all, we’ve long had flu vaccines but still invest in better ones.
And we should definitely continue to invest in drugs to treat COVID-19 even if they will take a while to bring to market b/c there will always be a need to save lives despite the availability of vaccines (since some people won’t take vaccines & some won’t be protected by them).
After all, we have flu vaccines yet some people still get serious flu and many die (20-60k each year just in the US, where ~50% of all Americans get vaccinated).
In either case, even without knowing whether SARS2 can be eradicated, society needs some vaccines & treatments as quickly as possible & therefore should fund these efforts. However, the answer to the “endemic vs eradicated” question is critical to HOW society funds these efforts.
If SARS2 becomes endemic & insurance will reimburse therapies that save lives of people who develop COVID-19, then drug development offers enough of a chance at a financial return that investors might want to fund such work. That’s why there is investment in cancer drugs.
It means that teachers’ and firefighters’ pension funds might decide to fund companies working on antivirals counting on them being able to someday generate a profit from selling a drug that society values and pays for via insurance (not making patients pay out of pocket!).
And these investors (individuals, pension funds, endowments, etc) might invest in better vaccines that might not get to market for another 5 years believing that society will value a more effective vaccine to protect people from an endemic virus (eg flu vaccines sell $4B/year).
But if these investors think that SARS2 won’t be endemic (which would be awesome!) b/c everyone gets such strong, durable immunity from either recovering from an infection or getting a vaccine such that the virus dies out (can’t find any new susceptible people to infect), then...
...there won’t be a long-term market. There will only be a short term market until virus goes extinct. Investors might still see profit in funding those drugs/vaccines, but they will focus on most advanced programs & even then might worry that they won’t be allowed to profit.
After all, large companies like Gilead, JNJ, and Astrazeneca, which have substantial cash flows from existing drug sales and don’t need to raise money from investors, have promised to donate doses or sell many doses at cost. So if a small company needs to raise money...
...it has to worry that it might have to also give away its product, should it be successful. Think of it this way, if every lottery winner were expected to donate winnings to charity, some people might struggle to justify buying lottery tickets (costing states revenues).
Some people think that investors have a civic duty to fund development of a useful drug even if they can’t profit from it. That’s called donating/taxes. Gates donates to CEPI, which funds COVID research. We all pay taxes, some of which go to NIH/BARDa, which funds some research.
But you can’t expect people saving for their retirement to give more than they are comfortable donating towards ending COVID by voluntarily investing in a non-profit. Society can tax people, but it’s silly to blame them for not funding unprofitable ventures.
Yet, society could still fund development of vaccines/drugs it needs even if investors aren’t sure that doing so would be financially rewarding. For example, our taxes fund BARDA, which has funded contracts with various companies to develop drugs/vaccines for SARS2.
Until there is more certainty that SARS2 will be endemic &, importantly, if it will be endemic that society will value better treatments/vaccines, society should use its tax dollars to PUSH needed development forward, as it has.
When & if SARS2 turns out to be endemic (not unlike diabetes and cancer), then society can use the promise of reimbursement of effective vaccines/drugs at profitable prices to incentives (PULL) the private sector to invest in developing them (as it does w/ diabetes & cancer R&D).
When profit feels probable, the “incentive/pull” model brings out creative drive & hustle of the entire biomedical community, as evidenced by our covid map. racap.com/covid-19. But when technical success is highly uncertain, that’s when public funding is critical.
Right now, answer to whether SARS2 will be endemic vs eradicated is unclear. Society is funding some work through taxes & investors are also providing some funding. But if scientists can answer the question more definitively, the public/private R&D financing balance will adjust.
And for FAQ on SARS2 and lots of explainers (some more colorful than this one), see my pinned tweet. If you are wondering if virus will mutate away from our vaccines, for example, you’ll find my answer there.
Here’s the pinned tweet.
