Relying on Public-Private Partnerships Has Weakened America’s Pandemic Response

Relying on Public-Private Partnerships Has Weakened America’s Pandemic Response

Relying on Public-Private Partnerships Has Weakened America’s Pandemic Response

It’s happening all too often: A private company receives public funds for the public good, only to act in the best interests of its shareholders instead.


As the United States continues to record thousands of cases of Covid infection and as many as 2,000 deaths per day, many Americans are scrambling to get rapid tests for extra reassurance as they return to school, work and start to travel. But rapid tests are hard to find on stores shelves across the country—and when you finally track them down, they cost from $10 to $15 per test. As it happens, that’s because there’s a nationwide shortage of rapid tests. Meanwhile, other countries have plentiful amounts of tests—in Germany, for instance, rapid testing, along with vaccination, has become the bedrock of their plan to live with the virus. There, rapid testing is widely used and available outside of restaurants and gyms and other facilities. Why is something that could be so instrumental to managing the pandemic so hard for Americans to get their hands on?

The answer reveals something fundamentally flawed about the United States’ response to the pandemic. One of the largest US manufacturers of rapid tests, Abbott Laboratories, laid off workers and destroyed inventory at plants earlier in the summer when cases dropped, and with cases, demand. Despite receiving millions of dollars in federal contracts, the company destroyed millions of tests cards, a key component needed for rapid tests—a decision it would come to regret weeks later. Once Delta began to surge, cases rose again, but rapid tests were in short supply. Unfortunately, Abbott’s actions have come to be emblematic of the pandemic response in the United States—a private company receives public funds for the public good, only to act in the best interests of its shareholders. That has often resulted in waste and higher prices—both for the government and the individual.

Billions of dollars have been transferred from the federal government to private companies in contracts to both produce and sell tests and vaccines and manufacture materials related to the distribution of tests and vaccines. The government has frequently employed the Defense Production Act during the pandemic to facilitate this, mainly in using its power to compel companies to redirect supply chains to fulfill production needs. In his latest plan to defeat the Delta variant, President Biden announced that he would be invoking the Defense Production Act to compel companies to produce testing supplies and that the government would be spending $2 billion to purchase 280 million tests. The government also secured agreements from retailers like Walmart, Kroger, and Amazon to offer rapid tests at cost for a few weeks. While manufacturing constraints may make it impossible to avoid private-public partnerships, solely relying on private companies to drive our pandemic response—including everything from production, to logistics, delivery, and point of sale—risks leaving many people out. That approach can exacerbate access issues like distance or affordability and undermines our public health institutions—all while companies profit from lucrative contracts.

Perhaps the biggest example of the private-public partnership can be found in the development and rollout of the vaccines through a program launched in 2020 by the Trump administration, known as Operation Warp Speed. As part of Operation Warp Speed, six pharmaceutical companies received billions of dollars in public funding to use towards research. Moderna received the largest pot of money, $2.5 billion dollars in public funding. Johnson & Johnson received $1 billion and AstraZeneca received $1.2 billion. Moderna’s vaccine was also codeveloped with scientists at the National Institutes of Health; in fact, the US government holds a patent for a key component of the vaccine. While the United States has not had problems with the supply of the vaccine, the monopoly vaccine companies like Moderna have over their patents have kept the pace of vaccination slow elsewhere in the world, which ultimately harms efforts to end the pandemic at home. In addition to this, even though the Moderna vaccine was publicly funded and developed, the company has been accused, along with Pfizer, of charging countries five times the amount the vaccines are worth.

The government also chose to work with CVS and Walgreens to help rollout the vaccines to people. When it came to the initial administration of the vaccines, back when demand was high, CVS and Walgreens reported more vaccine waste than any other source, making up about 70 percent of wasted vaccines as of early May. The two chains were also part of a program to vaccinate residents and staff of long-term-care facilities; but that rollout was criticized for being slow and mismanaged. Ultimately, the state that vaccinated long-term-care residents the quickest was the one state that opted out of the federal program, West Virginia.

While private-public partnerships are enhanced, the country’s public health infrastructure continues to crumble, due to a lack of funds and staff burnout. Even here, private influence is rearing its ugly head. As the vaccine rollout proceeded, consulting companies, often times linked to political donors, were brought in to public health departments across the country to make things more efficient. Instead millions were spent, with few results. Sometimes consultants merely duplicated the work that poorer-paid state workers were already doing, an anonymous California state official told The Washington Post. According to the reporting by the Post, this strategy was repeated nationally, with the CDC paying millions of dollars to Boston Consulting Group to drive national vaccine distribution in 2020, resulting in a rocky rollout often involving consultants that had no experience in driving campaigns of this nature. The Post points out that the states that did the best at vaccinating their population in their respective regions—Colorado, New Mexico, and Vermont—did not use these consultants. But nowhere is the failure to fund public institutions more evident than in the realm of testing. Even if the United States manages to boost the supply of rapid tests so that they are cheap and readily available, with no plans to tackle the spread of the virus other than vaccination, the public health workforce will be not be able to keep up with the amount of tests to do any effective tracing.

A similar cautionary tale exists from Missouri. Last year, the state received a million rapid tests to use for in schools, but few of them ended up being used. Schools just did not have the capacity to test many students. Purchasing supplies from private companies can only go so far if you don’t have the public capacity to make them useful.

Clearly, things need to change. For testing, experts point out that regulating tests as medical devices that require FDA approval keeps the number of tests on the market low and therefore allows approved companies to set whatever price they want, even though the price of manufacturing can be as low as $1. (Abbott’s tests, for example, should cost $5, but can cost up to $24 in stores.) FDA approval subjects the rapid tests to an arduous review process, asking the tests to demonstrate that they are as accurate as PCR tests. Experts say that rapid tests do not have to meet this standard to be effective. President Biden could issue an executive order to classify the tests as public health devices (which the FDA does not regulate), with the CDC certifying the rapid tests instead of the FDA. This would allow more tests to be released and theoretically allow for prices to come down, especially as the Defense Production Act is used to make more tests. After this, if companies continue to price gouge the American people, the Federal Trade Commission could use its powers to intervene here—something several Democratic senators asked the FTC to do last spring in the midst of price gouging of cleaning supplies and essentials as the pandemic hit.

But ultimately, it is not enough to leave testing and vaccines to the realm of the pharmacy and retailer. The federal government needs to use the powers it has in the Census Bureau, the Postal Service, and other existing federal agencies to deliver and bring these supplies to the people. There are still people who lack the transportation necessary to get vaccinated. And while some cities have home outreach programs, those programs require you to request a vaccine. Other unvaccinated individuals may not speak English or may not have access to a primary care provider. This is where door-to-door outreach with community partners can help, bringing information and the vaccine to people. The Biden administration promised to do door-to-door outreach but has yet to provide any update on its progress.

Making tests cheaper will certainly make them easier to access, but a $5 cost for a test is still prohibitive for some and testing daily can add up. If we want people to test daily as they do in other countries, we need to deliver packs of tests to people’s doors via the Postal Service and allow them to order more, like the United Kingdom does. Last spring, the USPS drafted a plan to send masks to everyone’s homes—but this plan was axed by the White House.

To help the supply of vaccines globally, the federal government can do things like implement the Bayh-Dole Act of 1980 for the Moderna vaccine, which allows the federal government to intervene and issue licenses for technologies that it has funded, allowing other companies to produce it. As Beatrice Alder-Bolton and Artie Vierkant point out in The New Inquiry, other countries can also issue licenses to allow production of vaccines, but they don’t do so, out of fear of US retaliation in the form of sanctions. Washington could simply refuse to issue sanctions on these countries.

Beyond this pandemic, we are going to need more emphasis on the public part of a partnership and less on the private. We need more funding for public health departments and other government divisions so that they have dedicated resources and staff to handle the next pandemic—rather than outsourcing to consultants. But beyond that, the government needs to consider getting directly into production itself, or, at least, owning a patent and contracting with companies to manufacture tests and/or vaccines. One could easily imagine a federally owned corporation that manufactures vaccines and vaccine components working in tandem with the NIH, which already does much of the research. Vaccines are too important a public good to leave in private hands, especially when much of the funding and technology comes from the public to begin with.

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