For VC you need to get ~30x return from one company invested in to break even. Assumptions: 1 in 10 investments successful, 10 years, 12% per annum return needed by investors to cover variance (between returns of their different VC investments - risk vs reward). https://techcrunch.com/2017/06/01/the-meeting-that-showed-me...
I am guessing that greenfield pharmaceuticals is a more risky investment than tech VC, so perhaps a 50x return is fair. In a situation where there is massive consumer surplus (years of life), then an even higher multiple is probably fair.
Most people just don’t understand how much return is necessary to cover the high risk of failure. Of course, if they were mostly funded by government with no-strings-attached money, or the expected timeframe to success was very short, then the expected returns look a bit different.
Disclaimer: I hate big pharma as much as the next guy, but I try to think rationally.
Edit: anyone have a link to a calculation of consumer surplus in $ for the vaccination? To avoid a 1:10 chance of losing IQ (brain fog) or my sense of smell or a 1:1000 chance of death, I would expect that to be worth a lot to me.
The expected value of work like this should be greater than one on average, not just close to one among the successful attempts.
Moderna existed for 10 years and burned through billion(s?) of dollars before they earned any significant revenue. It doesn't matter how much I or anyone else want to save a life, I don't have 10 years and billions of dollars to spend attempting it.
Also, billions of those dollars were US government grants.
Once your experts are trained and hired, their lab built and years of precursor research funded, sure, the final step is easy. But several of those layers want to be paid. If they never go into medicine, or never go into vaccine research or never build the labs, you can be heartfelt all you want when the next pandemic hits, it won’t give you vaccines in a year.
I don't know if the polio analogy is overplayed at this point, but this is like polio. The vaccine needs to be freely available to the world. The absolute "worst case" is that Moderna faces increased competition in like 10 years and eventually goes out of business and its employees go work for different labs in different companies.
There is more than enough money to buy doses for everyone in the world at sticker price. This isn’t a debate about whether lives get saved, but about who pays for it.
In my mind it's like an off-duty firefighter standing next to someone unconscious in a burning building and being able to easily drag them to safety, but deciding not to because it might give them back problems in a few years. It's an emergency, they know how to fix it and can do so easily, and the sacrifice is minimal compared to the danger.
I get where you're coming from but people are just selfish with money, it is how it is.
Most of the threads I've started have now devolved into people accusing me of being a hypocrite who's never sacrificed anything in my life, so I guess that's the end of the road. I still don't understand why anyone needs to be convinced that this obvious moral choice is a good thing to do, and I guess I never will.
Pretty much your whole justification is that they've happened to invest in medicine and intentionally positioned themselves outside the burning building. You're investing in what? Yourself? Thin soup.
I work at a company that faces this as an existential threat; you might be able to knock off our products in single quantities, but because of decades of process knowledge that no single person (or even a committee of people) could tell you, you won't be able to beat us on price. Once you do that, it's over for us, and any beneficial technology that we planned on developing is going to need to be provided by our competitors, who don't actually have a culture of making improvements, only leeching them.
There are countless industries with high but tenable barriers to entry, and completely dealbreaking process knowledge that actually determines the viability of a company in that industry.
If they can't communicate their process quickly enough because of the tribal knowledge, then no harm done, and at least they tried.
Ha. Maybe there's little you wouldn't sacrifice that isn't yours, but there's very little you would sacrifice yourself to save someone. For $500 right now you can save someone's life for a year. What seems to be confusing you is that you're not thinking of Moderna as real people.
I guess you already don't believe me, but I do make sacrifices in my own life, and if I were in the position of running Moderna, I still cannot imagine being unwilling to make another one. Doesn't seem like I can convince anyone here, but that's the source of my confusion - why does anyone need to be convinced? How is this not normal? When I say "I would sacrifice my job to save millions of lives", why is everyone like "sure buddy, you like money as much as the rest of us, we know you're lying".
There's a forest from the trees. Nobody here is saying that you're lying when you say "I would sacrifice my job to save millions of lives". The majority of us would probably do the same, but those aren't the stakes, and nothing is that simple. That's not what forcing Moderna to share their process is. This is a threat to an entity that has been fairly cooperative, and it is that way because of the chance group of people and attitudes that make that entity up. There is no guarantee that whatever comes next will want to play nice.
There are some people who think like this[1], but this is very much not a mainstream consensus. At the margin, "lives" in the general sense (not "lives of people close to you" or "lives in your country") cost about $5,000 to save. A marginal cost of $5,000 to save someone's life does not say to me "society highly values all human lives".
COVID vaccine distribution might well come in under that $5,000 / person mark -- looking at the data I see that neither Ethiopia nor Nigeria[2] has even received enough vaccine doses to vaccinate everyone over 65. So it seems plausible that fixing supply constraints could result in saving a few hundred thousand lives worldwide. As such, it might be worth it for some effective altruists to pitch in a couple of billion dollars to buy the rights from Moderna, if that would actually lead to a large enough supply increase to justify the expense.
What I don't think makes sense is trying to change the legal landscape after the fact to obtain a bunch of vaccine doses off of Moderna's research without compensating them for it. When there's a pandemic, we want vaccines. Setting a precedent that you can't make money solving a pandemic would be a really, really bad idea. We want the opposite precedent, because we want lots of people trying the next time something like this happens -- as such, the options on the table should be "buy a bunch of doses" or "buy out the rights to make your own, and the consultants who have the domain knowledge to make it happen, at a price which makes the prior research worthwhile in expectation", rather than "try to avoid paying enough to make the research worthwhile in order to save a couple billion dollars when responding to a pandemic that cost tens of trillions".
[1] https://www.givewell.org/ [2] as far as I can tell, every other country that reports such things has received enough doses, though that doesn't necessarily mean they used those doses on the people at highest risk
You are changing the bet from double or nothing to "maybe a little bit" or nothing.
Moderna existed for 10 years and raised 3.2 billion before 2019 (https://en.wikipedia.org/wiki/Moderna). The only government funding mentioned before then was $25 million (from DARPA in 2013).
- IP for the best vaccines, vs worse ones otherwise available, so we are all healthier
- Higher yielding crop seeds, vs worse lineages, so that we can all eat better
- Efficient water purification techniques, so that we all have clean water cheaper
- Metallurgy for high performance alloys used in turbines and aircraft structures, so that we can all build safer airplanes for less
- Software to detect early cancer or heart disease from blood markers, so that we can prevent disease
Keep in mind, when you destroy the profit motive, you destroy much (Not all!) of the motivation people have to build better things
1: https://www.cnn.com/2021/05/21/business/covid-vaccine-billio...
And many don't. It's not the only motive in the world.
> When should we destroy IP rights for the public benefit?
When we're in the midst of a once-in-a-lifetime global emergency, and the IP in question has a significant chance of single-handedly ending the emergency.
that’s a fairytale we’re told to keep things the way they are. every single person on earth has passions to do and create every day. that’s literally built into the biophysics of the universe. the profit motive shapes where we collectively apply our natural motivations, it doesn’t create the motivations themselves. we will always be building better things, it’s just a question of which better things. none of your list strictly requires a profit motive to have curious minds explore them.
i do agree with your implicit premise that profit motive can drive us to do things we don't otherwise want to do, but that again is because of constraints placed on us by the political economy, not natural constraints. we coerce the economy into producing profits via these constraints, not the other way around.
i get that you want to rail against the bureaucratic regulatory function, and i can agree that we get a lot of things wrong therein, but this line of reasoning doesn't get you there.
What if there are 3 people with the knowledge and skills to successfully setup part of the production process. Should their time be made available to anyone that asks for it?
(unless you want that investor money to go into some stupid smartphone game instead, which is absolutely what will happen if you destroy the profitability of breakthrough vaccine improvements)
But if you scratch under the surface a bit, the point they deviated on isn't really "should IP of a vaccine be a thing", but more "should Pfizer keep all the profit, or should BioNTech get some of it".
Because even if, say, my country made a perfect copy of a Pfizer vaccine, EMA/FDA could still put it in an unfavourable position if you're interested in traveling to the EU/USA any time soon. EU did just that with AZ vaccines manufactured in India (not recognizing it while recognizing AZ vaccine not made in India).