Government Should Take Action To Make COVID Treatment Free
By Colin McAuliffe
The COVID-19 crisis has exposed the frailty of the global economic system, and it is now clear that ideologies that place markets above all else are not just wrong, but practically suicidal. Our capacity to treat COVID patients remains so low that the only way to protect the populace is to effectively shut down the economy. However, the federal government’s response to the dual problems of developing treatment capacity and blunting the effects of economic collapse has been poor to say the least.
The federal government has an unmatched capability to direct resources in the private sector simply through what it decides to purchase, and this power is largely being left unused, with the defense and security industries being notable exceptions. The government has the ability, with the literal stroke of a pen, to create demand for goods and services that the private market would otherwise deem unprofitable and therefore not worth producing.
This is already a major issue for ventilators and other medical equipment required for treating COVID patients. Hospitals view additional ventilator purchases as unprofitable, and so they are not interested in ordering more. This sends a signal not just to ventilator manufacturers, but to the entire global supply chain that supports the ventilator industry, that production should not be increased. This market equilibrium comes with a substantial body count.
The federal government can break this bad equilibrium by purchasing ventilators and other COVID treatments themselves. This redirects resources within the private sector without requiring us to wait for COVID treatments to become profitable for the private sector to invest in ramping up production of equipment.
The same logic applies to research for new drugs. The government can agree to buy a certain amount of a drug that is not yet available in an arrangement known as an advanced market commitment (AMC). The AMC model substantially reduces the risks associated with developing new treatments, and has been wildly successful in developing and distributing life saving vaccines in low income countries.
Mobilizing resources to produce certain treatments and equipment is only useful if the treatments get to those who need it. When the government acts as the purchaser it can choose to make the treatments free at the point of use. This is the only acceptable option, but it is completely impossible if we let markets allocate COVID treatments.
Voters overwhelmingly support this concept. We asked respondents if the federal government should make an up-front commitment of up to $100 billion to purchase COVID tests and treatments, to be administered free of price regardless of the patient’s income. We used partisan framing with pro and con arguments as follows.
Democrats in congress are proposing making an advanced commitment to spend up $100 billion dollars on testing and treatment for coronavirus cases. The tests and treatments will be administered for free regardless of the patients income.
Democrats say that making an up front commitment to buy treatments will incentivize the pharmaceutical industry to develop new treatments and quickly scale up production. They say that treatment should be free for patients so that the spread of the virus is stopped as soon as possible.
Republicans oppose this proposal and say that the spending will increase the deficit and bankrupt the country. They claim that the government is too incompetent and that getting involved in paying for treatments will only make the crisis worse.
Do you support or oppose the federal government committing to spend $100 billion on testing and treatment for coronavirus cases?
68% of respondents support this proposal while only 17% are opposed. Even those who describe themselves as “very conservative” support the measure 55% to 27%. Congress should hear this message loud and clear: Americans are demanding that unprecedented action be taken to combat the COVID crisis. Attempts at political triangulation put us all at risk while seeking to navigate constraints which simply do not exist. Making a large, up-front commitment to buy COVID treatments to be delivered to patients for free should be a central part of our COVID response.