Drugs are a risky business and, for equity investors hoping to eventually share in the profits, each stage of development presents an escalated risk. Lo reasoned that substantially lowering the risks, even if it meant correspondingly lowering the rewards, could attract investment instead from ordinary bond markets—that is, from managers of pension funds, university endowments, and sovereign-wealth funds, who control a great deal of money and generally invest in low-risk, low-return assets.
Given how uncertain vaccine markets are, the paper notes, governments (“public-sector interventions,” and so forth), would need to guarantee a vaccine bond by committing in advance to purchase and stockpile vaccines. The paper’s most creative suggestion is for a subscription model, a kind of vaccine Netflix, where governments would pay an annual fee to a new international-development fund, one that could perhaps be managed by the G7. The fund could float a bond to both advance vaccine biotechs and to make market commitments to Big Pharma. The virus, the markets, and the science are global.
…it would be much better for the government to say that the money is not from taxpayers. “We’re borrowing it from the rest of the world. And if and when you succeed, or any of the other hundred and fifty projects—that could have been funded, but aren’t being funded right now—succeeds, all the bond holders will get paid. That would be great. Everybody earns a return.”
Indeed, Ferguson’s Imperial College model has been proven wildly inaccurate. To cite just one example, it saw Sweden paying a huge price for no lockdown, with 40,000 COVID deaths by May 1, and 100,000 by June. Sweden now has 2,854 deaths and peaked two weeks ago. As Fraser Nelson, editor of Britain’s Spectator, notes: “Imperial College’s model is wrong by an order of magnitude.”
David Nabarro, one of the most senior public health experts at the World Health Organisation, said outbreaks of bird flu, which have killed at least 65 people in Asia, could mutate into a form transmittable between people.
“The consequences in terms of human life when the pandemic does start are going to be extraordinary and very damaging,” he said.
He told the BBC that the “range of deaths could be anything between five and 150 million”.