• Michael Weiss

How to Prepare for the Next Pandemic: An Interview with a Covid-19 Vaccine Clinical Trial Volunteer

Updated: Dec 7, 2020

Image Credit: Time Magazine

Since the first reported case of Covid-19, the global infection count has risen to over 67 million people across 98% of the world’s countries, accounting for over 1.5 million deaths. Not to be a pessimist, but going into the holiday season, these numbers will only get worse.

Nobody could have seen this coming. Is there anything that could’ve been done to mitigate the damages of Covid-19 on our daily lives, the global economy, and – most importantly – public health security? How can we prepare for the inevitable “next one”?

I think it’s fair to say almost none of us could’ve controlled how this coronavirus started, but as a society, albeit they are reactive measures, we can control how it spreads and how (or if) it can be eradicated. The latter – which is presumed to be the only long-term solution – lies in the hands of vaccine developers, like Pfizer, Moderna, and AstraZeneca who all recently disclosed significant efficacies in the late-stage results of their clinical trials.

What if these developers, rather than rushing to push vaccines through the FDA approval process amidst a pandemic, were able to be proactive and simply pull down a pre-approved vaccine “from the shelf” before widespread global distress ensues? What if the world were able to have a Covid-19 vaccine before we even knew about it?

These are the questions Andrew Lo from MIT Sloan School of Management and his colleagues pose in their recent working paper for the National Bureau of Economic Research. Lo’s team studied the economic feasibility of developing and supporting a portfolio of vaccines for the world’s most threatening emerging infectious diseases (EIDs) as determined by scientific experts participating in the Coalition for Epidemic Prepared Innovations (CEPI) global initiative. The idea is that if we develop a broad portfolio of vaccines beforehand, we would be able to administer doses swiftly upon EID emergence, therefore mitigating potential risks, including significant economic losses, like the projected multi-trillion dollar hit to the global economy from Covid-19.

In order to finance R&D programs of multiple vaccines at once, Lo proposes the creation of an EID megafund. His team financially engineered the securitization of vaccine candidates targeting 9 “top priority” EIDs. Then, using portfolio theory, they constructed an asset portfolio which allows the megafund to raise sufficient funding through the capital markets in order to purchase vaccine “assets” and reach a critical diversification threshold. The required fundraise would be of the order of $35.25 billion. For perspective, the largest ever private equity fundraise, executed by Blackstone, received $26 billion in capital commitments to its BCP VIII fund.

In short, although a private investment vehicle for vaccines is certainly thought provoking, it wouldn’t receive any attention from investors. Assuming industry average R&D costs, approval timelines, probabilities of success/outbreak, and other revenue projections, Lo’s team analyzed the net present value (NPV) of each vaccine candidate, and subsequently found the portfolio’s expected return to be -61% with a standard deviation of 4%. In order for the fund to simply break even (expected return of 0%, although the σ is a loftier 10%), the NPV per successful vaccine candidate would have to reach $772 million, juxtaposed against the NPV of $7.6 million estimated using industry average parameters. This would require selling vaccines at prices 100x higher than the past average (Lo), which would be infeasible, to say the least.

Since I am not a vaccine scientist, it’s important for us to gain perspective from one here. So, to get some credible answers, I’ve brought in Michael Doyle, a PhD candidate who specializes in Pathology, Microbiology, and Immunology research at Vanderbilt University Medical Center, and who also happens to be my cousin. During his candidacy, Doyle has co-authored various publications in the Proceedings of the National Academy of Sciences, among other highly-regarded scholarly science journals. His thesis research has been recognized on the national stage, and his appointment to the Chemical Biology of Infectious Disease T32 grant allowed him to gain industry experience at AstraZeneca. Doyle is also a volunteer in the ongoing Covid-19 vaccine clinical trials for Moderna, which means it’s possible he has already been immunized; an event that won’t likely occur for the general public until 2021.

Disclaimer: Doyle's views and opinions are his own and do not necessarily reflect those of Vanderbilt University Medical Center.

Thanks for agreeing to share your insights with us, Michael.

Absolutely, Mike. Happy to help where I can.

On a very basic level, can you tell us what an EID is, and how it is identified by scientists?

Emerging infectious diseases can be broadly broken down into two categories. The first, and maybe most obvious, is the appearance of a new disease that has not previously been described. A great example is SARS-CoV-2, but can include more recently “emerging” pathogens like Nipah and Hendra viruses (among many, many others).
The second category would be pathogens that previously seemed under control, but incidence of human infection is rising. For example, yellow fever virus (YFV) is a beacon of vaccine success, and has been thought to be mostly controlled for many years. Unfortunately, we’re seeing more and more people in South America and Sub-Saharan African become infected as vaccine coverage decreases and urbanization increases.
I’ve described viruses as EIDs here because that is my background, but EIDs can be viral, bacterial, fungal, helminth, etc. Both public and private surveillance efforts try to identify these before they emerge, or monitor them during their emergence. This can include surveillance of potential wildlife reservoirs (think bats for SARS, fowl for Influenza, rats for Hantaviruses, and so on), sero-surveillance (looking for pathogen-reactive antibodies in a person’s blood) of high-risk individuals, and other techniques aimed at keeping track of where these pathogens pop up. The surveillance aspect is a bit out of my wheelhouse, and I’ve certainly over-simplified it, but suffice to say this is a massive undertaking by government and academic institutions.

And these EIDs are growing at a rate we’ve never seen before. According to the World Health Organization, over 40 infectious diseases have been discovered since 1970, including some of the ones Doyle mentioned, and many of them you probably have heard of before: SARS, MERS, Ebola, swine flu, Zika, and now the novel coronavirus.

With such profound emergence of infectious diseases, we are also more at risk in our modern society than ever before; as globalization and urbanization trends continue, EIDs become more concerning. However, one EID is not as equally virulent nor deadly as the other. Each has its own unique risk profile, which I asked Doyle to elaborate on…

What are the characteristics of an EID that deem it as “high risk” for global health security?

I think there are a few key considerations that make a particular pathogen an enhanced global health security risk. Two of the most important ones would be 1) efficient human-to-human spread via respiratory secretions and 2) high mortality associated with infection. Even more insidious and concerning is a pathogen that is able to be transmitted human-to-human without showing any symptoms, a hallmark of the SARS-CoV-2 pandemic, and a huge reason for why it has been so hard to control.
Other factors intrinsic to specific pathogens can also make them a concern, such as ability to withstand harsh environmental conditions (think Anthrax), ability to mutate quickly away from the human immune system (think Influenza), and resistance to drugs or antibiotics (think multi-drug resistant bacteria, which can include A. baumanii, K. pneumoniae, C. difficile, and others.)
A final consideration, albeit more nebulous, is the bioterror potential of a pathogen. I say this is nebulous because there really has only ever been one successful bioterrorism event, that being the Amerithrax attacks in the early aughts (there have arguably been others, but not on this scale). Despite this, we know our adversaries have worked on “weaponizing” other viral and bacterial pathogens in the past, so this must remain on our radar.

The ease-of-spread, mortality rate, and potential weaponization are all characteristics of infectious diseases that make them a risk to global health security, which is the top priority in battling a pandemic. But the economic impacts are vast as well – worldwide economic losses totaled $671 million, $40 billion, and $2.2 billion in the 1998 Nipah outbreak (Malaysia), 2003 SARS outbreak (China), and the 2014 Ebola outbreak (West Africa), respectively. As mentioned before regarding Covid-19, the global economy is projected to lose trillions of dollars when it’s all said and done.

With billions of lives and trillions of dollars at stake, wouldn’t it make sense to begin developing vaccines for infectious diseases when they emerge, rather than waiting for an outbreak to occur? It’s easy for us to say, but tell that to a vaccine developer that has to spend hundreds of millions of dollars on R&D, prove it is safe and effective, hurdle stringent regulatory challenges, and then create a plan to distribute doses in an accessible/affordable manner – not your typical laundry list. Oh, and if the vaccine is never needed (because an associated outbreak does not materialize), the project will never become profitable.

Much of our society can’t wrap their heads around the inherent risks involved in vaccine development. According to Lo, it can cost upwards of $900 million to fund a single research & development program, and only 6-11% of vaccine candidates successfully pass through FDA clinical trials. I asked Doyle to detail the costs and risks associated in R&D, and to explain how these programs are financed…

What are the specific costs that are involved in an R&D program, and how are they funded?

Living most of my scientific life in academia, this can sometimes be a bit of a black box for me, but I’ll do my best to break down my understanding: The costs associated with R&D are highly variable depending on project and on the company. Some companies will not focus their efforts on early R&D (target validation, lead molecule discovery, etc.), but will instead either purchase promising molecules from smaller companies/academic labs, or will gobble up the smaller companies themselves. The reagents, personnel, and likelihood that many of the leads will fail is a large source of cost, so directly purchasing these can help to offset some risk.
After pre-clinical development, manufacturing and clinical trials become massive sources of cost. Here again, companies may do their own manufacturing, or contract another company to do this for them. I think something that gets lost on people is the cost of all the drugs that never made it to clinic. For every successful drug, there are millions of hours and dollars worth of failed molecules.
The source of funding is also a little all over the place. If you’re a smaller biotech just getting off the group, you’re probably relying on venture capital. Larger pharmaceutical companies are more likely to be publicly traded, and likely also making money from their successful programs to fund further discovery efforts. That being said, government funding of pharma R&D isn’t unheard of. I can think of specific examples such as DoD (Department of Defense) and DARPA (Defense Advanced Research Projects Agency) funding pertinent work at both big, established pharmaceutical firms and small, burgeoning biotech companies.

As Doyle explains here, the costs and risks involved in vaccine development are evident, but what about the reward?...

So, what’s in it for the vaccine developers? How are firms currently incentivized for their efforts?

Right now, it seems there are two incentives for companies to develop vaccines (at least for SARS-CoV-2). First, and most obviously, is the large amount of money being doled out by the government. Novavax, for instance, received $1.6 billion from Operation Warp Speed to push their COVID-19 vaccine candidate (a much different platform from Moderna and Pfizer’s promising candidates) through clinical development.
Second, there’s some pretty serious market incentive right now for a highly efficacious vaccine. While “antivax” movements will stop some from wanting a SARS-CoV-2 vaccine, there are still hundreds of millions of people who will want to be dosed, which brings in substantial revenues.

Strictly from a corporation’s standpoint, under the profit-maximization assumption (antiquated, I know), it fiscally does not make sense to undergo these types of projects. The losses can be colossal, as Doyle highlighted by the tremendous amount of wasted resources on failed molecules, but the rewards do not seem to validate the risk profiles.

Remember, in Lo’s research, they find the expected risk-adjusted NPV of a vaccine in their hypothetical EID vaccine portfolio – upon regulatory approval – to be $7.6 million, which is “two or three orders of magnitude lower than the comparable value of an approved cancer drug, yet the [upfront] costs to develop an EID vaccine are not dissimilar [to cancer drugs].” If a large cap pharma company – currently operating solely under successful therapeutic drug programs – were to add Lo’s hypothetical vaccine portfolio into their product mix, the best case scenario would yield an annual ~9% loss in shareholder value. What kind of company would willingly do this? Let’s get a scientist’s point of view…

Knowing the probability of success for FDA approval and administration of a vaccine are slim, why do biopharma companies engage in vaccine development, when they know they can be a lot more profitable if they stick to making drugs and other therapeutics?

The short answer: most of the larger companies haven’t put a ton of energy into vaccine development. You can sort of see this in the way some of the COVID-19 vaccine candidates came about. Moderna and Pfizer, for example, both derived the stabilized protein design they used for their vaccines from a collaboration with the NIH and other academic partners. AstraZeneca’s candidate was developed at Oxford, and so on.
That being said, having successful campaigns against other drug targets, like cancer, can potentially enable companies to work on these less profitable vaccines. There is a lot of expertise in this area in both biotech and big pharma, so the scientific drive is certainly there, just a matter of money from what I see.

Developers may spend months on end creating vaccines that don’t have any sort of demand yet, or if at all in a scenario where the associated EID doesn’t evolve into an outbreak. How can these scientists work for so long on a vaccine knowing that statistically, it will most likely end up in the garbage? I tapped into Doyle’s experiences to answer this…

What are you hearing about EID vaccine development in your research? Is it plausible, or are developers discouraged since the risks are not yet “real”, and may never be?

I think vaccine development for EIDs has been galvanized like never before because of our current pandemic. One of the things that will come about because of this pandemic is a broadly applicable, (now) highly-validated platform technology. Let’s take Moderna for instance. They’ve now been able to show that their mRNA vaccine platform works really well against SARS-CoV-2, and this will serve as a “plug and play” system for other pathogens. This removes a whole lot of risk from the development process, and will likely lead to many vaccine candidates targeting EIDs.
With this, along with the academic and government collaborations that are growing, I’m very encouraged, and think we will see companies like Moderna and others start to build a broader EID portfolio.

From Doyle’s response, there seems to be a silver lining in the pandemic we’re living through – that technology will enable developers, and more robust collaborations will fuel EID portfolio expansion for biopharma giants. However, going back to the EID megafund rationale, the financial unattractiveness of a strictly private investment model may explain a few reasons why the biopharma industry largely gravitates away from vaccine development, and more towards therapeutics.

But what if the public sector intervenes? In a government-backed guarantee structure, public agencies agree to absorb a predetermined amount of initial losses, effectively “shielding private-sector investors from substantial negative returns (Lo, et al.).” In Lo’s EID vaccine portfolio, a guarantee on up to 50% of the invested principal improves the expected return in the base case scenario from -61% to -12%. Although a -12% return is still not likely to attract investors, it underscores the private-public sector collaboration needed to make an EID vaccine portfolio feasible. According to Lo, the guarantee structure combined with other government support mechanisms could potentially “transform a financially unattractive portfolio of EID vaccine candidates into one that could realistically attract private-sector capital.” Doyle seems to agree…

Would you say we need more “buy-in” from governments to secure ample resources to develop EID vaccines? In your experience, have you seen or heard of any programs leveraging investment from the private sector?

Definitely. If our current situation has taught us anything, it is that the approach to responding to pandemic-potential viruses as they emerge will result in lives lost and unimaginable economic damage.
CEPI is probably the best example of a public-private partnership I’ve seen, and Lo highlights this in his piece as such. They’ve really been able to infuse serious money into targets that would otherwise be completely untouched by vaccine developers. In my own world, a Nipah virus vaccine has been funded by CEPI that shows great promise, but would have otherwise had a hard time being funded through clinical trials.

Both Doyle and Lo make compelling arguments for the necessity of public-private partnerships in order to make EID vaccine portfolios work. Building upon this, Lo introduces one last alternative financing model, where the largest governments in the world purchase “subscriptions” to EID vaccines on a regular basis, which in effect would guarantee the citizens of their respective nations vaccine doses upon an outbreak. Lo views this subscription model as a “society-wide immune system”, where countries can protect themselves against outbreaks and avoid strain on epidemic response resources, ultimately making it easier to raise capital while maintaining affordable dosages.

For example, to finance Lo’s EID vaccine portfolio, if the governments of all G7 nations were to pay a fixed subscription fee per capita over a fixed amortized period, it would cost $12.08 per person per year in a 5-year amortization period, and even less at $7.45 per person per year in a 10-year amortization period. Putting that into perspective, for the 5-year period, that is only 0.15% of the current per capita healthcare expenditure in the United States. For the 10-year period, it is only 0.9% of current per capita healthcare spend in the U.S. What do these figures look like for the other G7 nations? The proportions are similarly miniscule (or so it seems, at least):

Source: Lo, et al.

It’s like the Netflix for emerging infectious disease vaccines, except the monthly subscription would be over $331 million (wouldn’t surprise me if Netflix gets this expensive eventually…). This seems like a no-brainer, doesn’t it? But perhaps there’s a few things I didn’t consider…

In your own opinion, does a model (proposed by Lo) where individuals and governments can “subscribe” to EID vaccines work? Would this create problems for accessibility? What are some other factors to consider when assessing future demand for EID vaccines?

This is a really cool idea that I think would gain a lot of traction in the scientific community. Many scientists who’ve been sounding the alarm for years about the threat of a pandemic would likely see this as an enormous step forward in providing sufficient funding for developing vaccines and therapeutics against pathogens that have not yet entered the global arena.
I do have a few concerns and considerations. First, let’s assume we get a high level of “subscription,” we accurately predict the next pandemic virus, and have a stockpile of vaccine ready to go out the door at a moment’s notice. Let’s also assume this vaccine regiment requires 2 doses. That’s over 10 billion doses needed depending on what kind of coverage we need to achieve heard immunity. Who gets the first doses? Do we base it on buy-in, even though this would benefit those countries with more wealth in the tiered system proposed? I could see this being a massive concern considering the likelihood we could stockpile billions of doses seems unlikely.
Now let’s go in the other direction. The capital derived from this program leads to a number of successful vaccines against the scariest pathogens: Nipah, Ebola, Lassa, take your pick. We spend massive amounts of money on these programs, stock-pile enough to cover the world over, and agree on a distribution plan that is equitable. Then, a novel virus, never previously described or picked up by surveillance programs, emerges and causes a deadly global pandemic, and we have no vaccines or therapeutics ready to combat it. Maybe the money from this program helps to build up platforms that can pump out a vaccine more quickly, but we’re still stuck for some period of time without a countermeasure. This is a reasonable possibility, and countries that buy in need to understand this pitfall. I worry this could deter some, though perhaps I’m getting too deep into the weeds. Overall, I really do like this idea, but think there are many considerations that need to be addressed first.

The empirical results and consensus from the scientific community are promising for a government-led EID vaccine subscription model. With intervention from the public sector, it seems to be financially feasible, and Lo further argues that the economic and political benefits would yield significantly for the participating nations, such as enhanced biodefense and pandemic preparedness programs. Although the considerations previously stressed by Doyle and Lo should be addressed, the subscription model may encourage more comprehensive preparedness measures globally, and potentially bridge the gap between adequate funding and the EID vaccine pipeline.

To conclude our interview, I asked Doyle what he would prefer in a perfect world…

Finally, from a scientist’s perspective, how would you prefer to see vaccine development financed, so that laboratories are fairly compensated and incentivized to pursue further EID research?

This depends on whether we’re talking academia, government, or the private sector. I would like to see more funding mechanisms that bridge all three, allowing for one project to cover everything from basic biology to clinical translation. We already have some of this, but scaling up will be key to addressing multiple pathogens. For academic labs, the NIH budget needs to be substantially increased, more so than in previous years, if we are to foster the next generation of scientists ready to address problems related to EIDs. I personally think this would help make academia a more viable route for younger trainees, who see the job market and difficulty in obtaining funding as a deterrent.
I think Lo’s proposed model is really promising, and I would at least like to see this discussed in a more public fashion in the near future.”

Considering Lo’s research and Doyle’s responses, it’s clear that a better business model is needed to finance and distribute vaccines. Through this investigation, the answer seems to revolve around mechanisms to enhance existing financial incentives with support from the public sector. This would empower both to new and established developers in addition to academic labs to advance vaccine development capabilities.

Regardless of the methodology, it’s imperative for society to “close the gap between the economic value of epidemic prevention and the financial returns of vaccine assets.” Can we achieve this linkage to properly compensate market participants through employing a government-led subscription model, securitizing vaccine assets into an investment portfolio, or – as Doyle prescribes above – finding a way to bind academia with public-private collaborations?

Either way, by addressing the existing shortages in our current system, we “will better enable the global health security community to address the dangers of EIDs (Lo et al.).” While it may not be on the forefront while we continue to fight Covid-19, financing EID vaccines will be a matter of life or death in the years to come.

Join the Discussion:

How can we enhance funding for vaccines (and other global health security measures) to be better prepared for the next pandemic?


I would like to thank Michael Doyle at Vanderbilt University Medical Center for his insightful comments and intriguing discussion, and special thanks to Albert Lo at MIT and his constituents for their thorough research, which inspired me to write this article.


(1) Michael Doyle’s views and opinions are his own and do not necessarily reflect those of Vanderbilt University Medical Center.

(2) © by Jonathan T. Vu, Benjamin K. Kaplan, Shomesh Chaudhuri, Monique K. Mansoura, and Andrew Lo. All credit behind the empirical analyses above goes to the listed authors, and neither I, nor Doyle contributed to their independent research in any way. All additional commentaries in this article are meant solely to spark ideas and further discussion.

(3) Nothing on this page constitutes as any sort of financial advice and is meant solely for the purpose of sharing thoughts and ideas. To avoid employer compliance and FINRA violations, I do not, and will not discuss any proprietary information that comes across my desk at work. Every link and piece of information on this page is readily available to the public via the internet.