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Culture & Business: Covid-19 vaccine and business models

Culture & Business: Covid-19 vaccine and business models

We are witnessing the global anti-Covid-19 vaccination campaign and it is useful to make a consideration of principle. The business model used is made up of various manufacturing companies (Pfizer, Moderna, AstraZeneca, etc.) which have the know-how and specific skills to study and develop the vaccine, manage production and mass distribution; these companies sell their vaccine and the buyers (the States) who pay for it, resell it (at zero price) and administer it to the final user (the citizen). This is the classic model, more classic than this is how you die. The advantage of this model is that the owner company guarantees the best quality of the product by controlling the entire main process. The potential disadvantage lies in the concentration of logistics in very few places of production and distribution such that all possible operational problems upstream have exponential repercussions downstream.

As an alternative to this business model, there are others that could have been used and which, perhaps, would have guaranteed greater effectiveness, i.e. more timely vaccination for everyone. Specifically I am referring to a contract manufacturing model, industrial license or joint venture: the first two models are quite similar (except for the remuneration system) and envisage that the company owning the patent grants production and distribution to a few delocalised companies; in the third case, the company owning the patent creates investee companies with other local companies that produce and distribute the product.

In my opinion the contract model (or license) would have been the easiest to implement starting from the simple assumption of having to guarantee an immense production to meet the demand. Undoubtedly the classic model is the simplest, but the fundamental difference with the other models is the potential slowness with which it reaches the end user which, in the case of the Covid-19 vaccine, should have been a super priority decision-making criterion. On the other hand, the other models are more complicated and must take into account that peripheral manufacturing companies must have compliant production plants, be able to apply the required quality standards, have trained and adequate personnel, etc.: all issues that can be resolved if analyzed beforehand in a general programming logic.

I do not deny that the ideal model should have been completely different from the outset: pharmaceutical companies worldwide with the most advanced know-how and expertise should have studied and developed together the best vaccine and then find the most innovative production and distribution model to vaccinate as promptly as possible so as to win together the war against Covid-19. Too idealistic!

“The operation went perfectly. The patient died” Authorless

All the Best!

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