The task of developing an effective COVID-19 vaccine has been a monumental challenge for the governments, pharmaceutical industry, research communities and entrepreneurs around the world. As of now, several vaccine variants have been successfully developed and deployed around the world.

In this assignment you will explore how economic incentives shape the process of research and development. It will touch upon such topics as economic nature of ideas (e.g. are they rival and/or excludable?), provision of public goods, government's role in the market economy and economic efficiency of competitive and monopoly markets.

Q.

Some companies that have developed successful vaccines (e.g. Pfizer) have indicated that they have no intention of renouncing the patent protecting giving them the exclusive right to produce the vaccine. Let's look at some of the ideas that have been proposed to deal with the problems that this presents.

(a) Some commentators have proposed a suspension of the intellectual property rights for COVID-19 vaccines. (see for example [1]); :

• Patent suspension: https://www.thelancet.com/journals/lancet/article/PIIS0140-6736(20)32581-2/fulltext https://www.theguardian.com/commentisfree/2020/nov/12/covid-vaccine-patentpharmaceutical-industry-profits-public-sector

(b) Others have proposed mandatory licensing (see for example [2]);

• Mandatory licensing: https://www.cnbc.com/2021/01/22/countries-look-to-acquire-the-ip-of-vaccine-makers-tofight-pandemic.html

(c) Some older ideas include such mechanisms as patent buyouts ([3]).

• M. Kremer 'Patents Buyouts: A mechanism for Encouraging Innovation" https://dash.harvard.edu/handle/1/3693705

Describe each of these proposals. Compare their benefits and drawbacks. Carefully, outline your arguments for and against each method. How does each of them solve the problem created by a vaccine patent? What new problems do they create (if any)? Overall, which of the three is likely to provide the greatest benefit for society in the long run? Explain your answer in detail.