Biden Could Force Drugmakers to Produce Approved Vaccines

Also, Gary Gensler can’t wait to police this stock market.

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It’s January 28, 2021 and welcome to First 100. You can sign up to have First 100 delivered to your email by clicking here.

The Chief

Yesterday I joined a call from President’s Biden’s COVID response team about the state of the vaccine rollout. Jeffrey Zients, the response coordinator, led the call. And the big takeaway for me was an indication that the White House is “actively exploring” the idea of compelling other pharmaceutical manufacturers under the Defense Production Act to produce approved coronavirus vaccines from Moderna and Pfizer.

Until now the expectation was that the DPA was being used to accelerate production of supplies, like syringes that can get six shots out of a Pfizer vial, or material ingredients used in production of the vaccines. Masks and test kits are also candidates for the DPA. But this was a step beyond that. “Whether or not a factory can be retrofitted to produce another vaccine, that’s under active exploration,” said Andy Slavitt, senior adviser for the COVID response team. “We will not be afraid to explore every option.”

Zients reinforced that. “This is a national emergency,” he said. “Anything we can do to increase vaccine supply and timing of delivery is on the table and we will execute accordingly.”

This is welcome and long-overdue news. Whenever I talk about getting these plants converted I get snickers from people who say I don’t know anything about this type of production. But I can read a calendar. The coronavirus genome was only mapped out in January. Production was starting once the Phase 3 trials got going in September and October. We know that, starting from scratch, you can get to production in far less than a year. Since nobody expects the world to have every vaccine it needs in that time frame, then there’s really an imperative to do this.

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And the right frame is “the world.” If developing countries are still suffering with this it affects us. Even if you’re just a crass capitalist, it affects the goods you can sell into a country in a lockdown situation. And it raises the possibility of a mutation and a resumption of the virus, which as we’ve seen doesn’t take much to rocket around the world. We need everyone on the planet covered, and we have a handful of vaccines that work and can allow us to live our lives again. We need to make as much as we can now.

There’s already a model for this. French drugmaker Sanofi has agreed to produce Pfizer vaccines at one of their facilities in Frankfurt, as the vaccine they’ve been testing has hit delays. That’s only for the European market, but it shows that yes, you can retrofit factories to produce other vaccines. But we shouldn’t wait for drug companies to figure that out and build partnerships; under the DPA we can compel companies to make that changeover.

And frankly we’re way late to this. As soon as vaccines like Pfizer and Moderna showed promising Stage 2 results, we should have moved to this changeover. That could have given enough time to get more supply by this spring. Even if one of the vaccines that you mass-produced washed out, who cares? That small waste of money pales in comparison to the economic loss from a slower vaccination campaign.

On Tuesday the White House announced that it would purchase enough Pfizer and Moderna doses to cover every U.S. adult over 16 by the end of summer. (The response team is not including Johnson & Johnson, which is close to seeking approval, or AstraZeneca in their calculations.) But there’s less to that announcement than meets the eye; it’s actually just working to get additional doses in the second quarter of the year. There’s no guarantee that Pfizer and Moderna have the capacity to produce.

(Speaking of no guarantees: two-thirds of the allotment in Oklahoma earmarked for the CVS/Walgreens plan to get shots to nursing home facilities are still frozen. Read Matt Stoller on how monopoly pharmacies and others slowed the rollout.)

Other news from that press call: Slavitt said that the federal government will only maintain a “rolling inventory” of 2-3 days of supply, getting as much out to the states as possible. They’re boosting allocations by 16 percent and locking that in for three weeks, so states know how much they’re getting and can plan. (This was a major reason for the slow rollout; nobody could make appointments with uncertain supply.) There will be 100 “community vaccination centers” rolled out in the next month, including mobile clinics; there will also be a partnership with community health centers, which are located often in hard-to-reach areas.

All of this costs money, and it’s a big reason why we need to pass at least the vaccine funding of the American Rescue Plan as soon as humanly possible. As the Federal Reserve stated yesterday, this is the main determinant of the economy, and more important of hundreds of thousands of lives. You can’t throw enough money at this.

Paging the New Sheriff

I couldn’t help myself, and so I did a Gamestop take. I concur with good reads from Ryan Cooper, Zach Carter, and Doug Henwood: this escapade exposes the stock market for all its artifice and corruption. Hedge fund types had market manipulation all to themselves for so long and can’t stand the competition; and “value” is an amorphous and disconnected concept that depends on what muscle is behind what gambling bet.

It does look like a lot of institutional players are making a lot of money off this uprising, most disturbingly Citadel, which manages order flow for the Robinhood trading app and is almost certainly front-running the trades. And Robinhood is reportedly locking out traders in key stocks today, showing that their “democratize the market” rhetoric was just that. This whole thing will require a rethinking of the market and how schemes like pump-and-dump are regulated. Fortunately, the person in the position most equipped to do that is Gary Gensler, the incoming head of the Securities and Exchange Commission, who has just the right attitude for the task. In his last go-round as a Wall Street regulator, Gensler was unafraid of sticking it to the suits, and he will have every opportunity to do so again. There may be a role for Rohit Chopra’s Consumer Financial Protection Bureau specifically on Robinhood, too. The spotlight on the Wall Street casino looms large; let’s not waste this moment.

What Day of Biden’s Presidency Is It?

Day 9. Executive actions today are focused on health care, mostly opening up the Obamacare exchanges for enrollment.

Today I Learned

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