I'm Carol Mass, Sir. The Bloomberg Business Week cover story this week is about how so much went terribly wrong this year, but at least one thing went right. Fiser and Maderna both got their vaccines across the finish line, baring surprises. By spring, tens of millions of Americans will have receive shots. By summer, if there will be hundreds of millions, more lives will be saved, economies will recover. It's an achievement worth celebrating, a shining example of people
understanding what their job really is than doing it. It's also a story that highlights just how badly the US screwed up almost everywhere else. This episode is brought to you by Principal Financial Group, combining actionable insights with specialized solutions to help you meet your investment goals. Get to know us at Principal dot Com. Business at its best. With a big hand from the government, pharmaceutical companies delivered
the vaccine that the world desperately needed. Here's how something went right for a change by Drew Armstrong. At the end of before the coronavirus pandemic started, the two best known faces of the pharmaceutical business were the imprisoned Martin Screlly and the lawsuit laden opioid makers at Purdue Pharma. The rest of the industry was perhaps best known for
the skyrocketing prices of its medicines. In a gallop pole of the public's view of various business sectors, pharma was ranked at the bottom, behind the oil industry, advertising in public relations, and lawyers. Who'd have guessed that a year later pharma would be getting credit for saving the world from cruise lines to meet backers. Business will have plenty to answer for in its handling of the pandemic, but
this part of it worked. The COVID nineteen vaccines developed by the drug industry in partnership with governments will almost certainly prevent hundreds of thousands of American deaths and millions or around the world. They will revive trillions of dollars in economic activity, let grandparents see grandchildren, and finally bring an end to a year that has sing it together one last time as the ball drops over an empty
Times Square. Really sucked. In a time when almost everything else went wrong, the vaccine effort was something that went mostly right. The quest started in early January, before most people in the US and Europe were even thinking about a pandemic. The biotechnology company Moderna had downloaded the genetic code for the novel coronavirus from researchers in China. Within a few days, scientists there had developed a vaccine with the U S National Institute of Allergy and Infectious Diseases,
the research agency led by Anthony Fauci. By mid March, they'd started a clinical trial. Feiser announced its own plans around the same time. A year and a half before, it had signed a deal with a German biotech company, io in Tech, that has similar messenger RNA technology to Maderna's that could, in theory, rapidly assemble and test vaccines. Like Maderna, the company's thought the technology could make it
possible to quickly turn around a prototype. The world hasn't seen an emergency like this in one hundred years, says Stephen Joffey, the interim chairman of the Department of Medical Ethics and Health Policy at the Perlman School of Medicine at the University of Pennsylvania. We are lucky in the sense that the science was there. Other crucial pieces fell into place behind the scenes. For years, the research chiefs of the top pharmaceutical companies have had an annual gathering
to talk about ways to speed up their work. As the COVID crisis got worse, about twenty drug companies started a working group with the National Institutes of Health and other government agencies, meeting every other week to look at potential therapies and coordinate clinical trials, says Paul Staffles, the chief scientific officer at Johnson and Johnson, which has a large scale COVID vaccine trial at expected to produce results
in January. Those efforts would eventually be folded into what's now known as the Trump administration's Operation Warp Speed program. Warp Speed was revealed at the end of April, when the pandemic had killed close to sixty thousand Americans. The goal was to develop and produce enough shots to inoculate three hundred million Americans before the new year. Some companies, including Maderna and J and J would get direct funding for their efforts. Weiser got an agreement from the government
to buy the vaccine it produced if it worked. Crucially, the government was shouldering some risk financing the advanced production of the experimental vaccines while clinical trials were still going on. The most risk averse people on Earth and the riskiest business on Earth is how US Health and Human Services Secretary Alex Asar describes the drug industry. Probably the most common words said in a farmer company are how do
you d risk this? Asar, whose department helped over sea warps, says he understood how tricky a bet on vaccines can be for a business. These companies are looking at making the multibillion dollar investments in R and D and manufacturing capacity, he says, and they had just been through Zekea stars. They've been through mers viruses for which the pharmaceutical industry investigated vaccines that never saw the outside of a clinical
trial before those outbreaks dissipated or were squashed. The government's backing let smaller players get in the game and take some riskier technologies forward. Smaller companies such as Moderna, don't have the resources to do this on their own, Joffey says of large scale clinical trials. Fiser, despite its corporate reputation as a rival consuming Shark, said it would offer up any excess manufacturing capacity it might have, potentially producing
competitors vaccines. But even a company of J and J's size. It reported fifteen point one billion dollars in profits last year. Needs incentives to rapidly start up a costlyvaccine development and testing effort. Staffel says pharma companies could reasonably predict that COVID would be bad and that a vaccine would have a market, But to mobilize a billion, maybe two billion dollars to start manufacturing and do the R and D
is daunting. He says, Well, we are big companies. Nobody can free up two billion dollars in their profit and law statement overnight. Moderna, Astra, Zeneca and other vaccine developers who joined warp Speed agreed to use similar structures for their clinical trials so they could easily be compared with one another, and so it would be easier to see clear winners. The government also put together a single safety
board to oversee them, which pins Jaffey sits on. It was an unusual approach, but it let the safety monitors look for worrying side effects or problems that could show up in more than one trial. In usual circumstances, drug makers might design their experiments to show advantages over competitors or dodge a potential head to head analysis. Big Fiser and any Moderna both got their vaccines across the finish line. The shots cleared in December have been shipped out to
states and are now going into people's arms. Barring surprises, By spring, tens of millions of Americans will have gotten them. By summer, hundreds of millions more will have It's an achievement worth celebrating, a shining example of people understanding what their job really is then doing it. And it's not a story with a single hero. It's one about government
scientists and private sector researchers. The trial volunteers who put their bodies on the line, the doctors running the trials, the FedEx and UPS workers making sure the vaccine is delivered during a pandemic winter, the nurses donning PPE to administer the shots, down to the first person being vaccinated after the FDA's authorization go through the chain. And that's who made this happen. But it's also a story that highlights just how badly the US screwed up almost everything
else to do with controlling the pandemic. The nation had every asset needed to curb the virus, the world's best scientists, the biggest collection of biotechnology and pharma companies, a powerful government, and well established public health institutions. The US even had unlimited financing. Perhaps the one other thing policymakers got right is that they pumped enough money into the system to
keep the economy alive. But even then, Congress was slow to strike a second relief deal, and Americans still ended up with a badly contained, deadly outbreak. Schools have gone remote, lots of restaurants will never reopen. Chances are you know somebody who was sick enough to be hospitalized or to
have died. Michael Mina, an assistant professor of epidemiology at the Harvard TH H. Chan School of Public Health, believes that cheap, plentiful, rapid tests long ago could have done more to stop the pandemic than just about anything else we've done on over the past few months. While watching cases and debts stack up and hoping for a vaccine, the only way to deal with the virus like this appropriately is to try and identify people who are infectious.
He says he's helped develop an inexpensive, mostly accurate test with rapid results that can be done on a strip of paper. It's not as accurate as the diagnostic tests you have to wait hours in line for and often days to get a result back from. But it costs pretty much nothing and is easy to make. We make more bags of doritos than I'm asking for, he says, of the number of tests needed. These are paper strips
that get cut from one big piece of paper. His idea is that if you test like crazy, you can find enough cases to tell people who are infectious not to be out and about, and you halt a huge amount of transmission. There are people who aren't wearing a mask because of politics or whatever, Mina says, but they may still not want to get their eighty year old mom sick at Sunday dinner. He's pushed the idea to anyone who will listen, but it would need regulators to
sign off and has never gotten off the ground. So where was the warp speed for testing? Fauci, who's been the face of the US response to the outbreak, or at least the face of what it could have looked like, said at a December ninth event at Harvard's School of Public Health, that is not as if a program of mass cheap testing would have been impossible to achieve. We have done things infinitely more complicated than that. He said, we have the technology, we can do it, which, when
you think about it, brings up more questions. Where was the warp speed for contact tracing, for public health measures, for data, for making sure health care workers had protective gear. Where was the warp speed for keeping open businesses, churches, and schools? For everything that went wrong? Where was that combination of leadership and industry and money that could have made it go right. While we've been marveling rightly at the science that's made a vaccine possible, most of that
other stuff never got going at the same level. HHS Secretary Asar says there was a national strategy for much of this. It just wasn't as visible as warp speed. But we're still facing a tough winter even with large scale vaccination efforts on the horizon. Tests are more common now, but hardly plentiful, at least not in the volume you'd need to truly use them for a broad, constant public health surveillance, the kind that would allow people on mass to go to school or work, travel on airplanes, or
attend concerts or sporting events. In the New York City suburb where I live, my wife and I spent days trying to book a just to be sure COVID test
before we headed south to visit relatives for Christmas. As I'm filing this to my editor, we're barreling down the interstate with plans to eat food out of a cooler p on the side of the road, and brave fourteen hours in a midsize suv with two small children, one of whom is disastrously vomit prone, all to preserve the little bubble of isolation we've kept up ahead of the trip. Even the uncomplicated things have been hard for much of
the country. Not wearing a mask is seen as a political act by a significant portion of the population, unhelped by a mixed message from government leaders, some of whom have suggested that basically masks or for losers. We love to inject ourselves with stuff, but when it comes to simple messaging about health, doing something that would help people, we hate it. Mina says, we are very willing to mop up messes, but we have no willingness to stop
them before they occur. There is one more opportunity to get a big thing right. The US gets credit for having pushed the development of the vaccines. Now it has to make sure people take them. First. The government has to guarantee there's enough vaccine. That was a key part
of the goal of WARP speed. Since the program started, the US has signed deals for enough shots to cover five hundred and five million people, with the option to buy more, but it has only enough from Fizer so far for fifty million, and from Moderna for one hundred million. Other vaccines it's made deals for, such as Astrasenica's and JAY and Jay's, are still in development. There are growing concerns that the US, after leading development of vaccines, may
not get them as fast as it had hoped. Instead of three hundred million covered by the end of twenty twenty, the US is now aiming to supply vaccine for twenty million people by the end of December and getting to a total of one hundred million by the end of February. Vaccinating all of America now looks more like an end of twenty twenty one goal. Even if there is enough vaccine, of course, people have to be willing to take it.
If we have a ninety five percent effective vaccine and only forty percent to fifty percent of the people in society get vaccinated, It's going to take quite a while to get to that blanket of herd immunity that's going to protect us, Bauchi said at the Harvard event. Early on in the development of the vaccines, there was debate about whether to run what are known as challenge trials, in these healthy volunteers get an experimental vaccine and are
deliberately exposed. It's an ethical razor's edge. Is it moral to give somebody a virus you know, kills a small percentage of patients with their best defense being a vaccine that isn't known to work. Because there weren't COVID therapies that could cure an infected patient, researchers passed on the idea it wasn't worth the chance that someone could die. Instead, the vaccine trials signed up tens of thousands of volunteers, split into those who got the real shot and those
who got a placebo. To find out if the vaccine was effective, they had to go back out into the real world and bump into the virus on their own. The idea with these large trials, the gold standard for testing of vaccines efficacy and safety is that if the vaccine works. COVID cases rapidly accumulate in the group that got the placebo, but not in those who got the real thing. Get enough cases and you can perform a
statistical analysis of exactly how effective the vaccine is. But if there isn't enough virus circulating, few in the trial get infected and results take longer. Over the summer, Visors and Maderna's trials went into lulls as the pandemic waned. Then in the fall, cases exploded. Millions of infections were tallied around the country, and thousands of people died, and
the results started pouring in on the trials. Jay and j said in December it would shrink the size of its sixty thou person trial because the cases were coming in so fast. The US, because of its failure to control the pandemic, had essentially created one big challenge trial. There is an irony and a situation that we all hoped wouldn't have occurred. US Food and Drug Administration Commissioner Stephen Hans says the number of cases did help expedite
the performance of clinical trials both here and abroad. That did help us get to this point, But I think of us would have wanted it to be that way. That's the contradiction of the USS vaccine success. The government and scientists, all working together, came up with a shot to save the world, and then they were able to prove so quickly that it worked only because those same
institutions couldn't save us from ourselves. With Robert Langreth, and that is the Bloomberg Business Week cover story this week. Check out more stories in the magazine on newsstands, online at Bloomberg dot com and on the Bloomberg And be sure to check out Bloomberg Business Week Daily on Bloomberg Radio Monday through Friday, starting at two pm Wall Street Time, also on our podcast feed at Bloomberg dot com and on YouTube search Bloomberg Global News. I'm Carol Masser.