Words such as hoarding, profit, surge-pricing, black money have come to hold a very negative meaning in our society. The negativity attached to these words are taking a heavy toll on our society. Let us understand these through some examples.
In this article, I tackle the really wonderful word "PROFIT"
As the COVID pandemic raged through the world, pharmaceutical manufacturers around the world prepared to mass produce the vaccines that would eventually come. There are essentially five ways in which vaccines are manufactured:
Inactivated Virus
Recombinant Protein
Conjugate Vaccine
Live Attenuated Vaccine
Virus-Like Particle–Based Vaccines
Each of these require a different set up. Manufacturing facilities such as Serum Institute of India had to make a call early on about which type of vaccine might make it to the market first. It was a gamble which could have easily backfired, leaving Serum Institute with a huge loss if their bet had not paid off. During the SARS Cov-1 outbreak many pharma manufacturers geared up to manufacture large quantities of the vaccine, but the pandemic never came and many of these companies suffered huge losses. Serum Institute's bet on the Astra-Zeneca vaccine paid off and India was in a position to supply the vaccine to the world. But make no mistake, the risk was taken by a private company. In return for the risk they took, they should be allowed to make a profit.
You could make the argument that given the scale of the pandemic, Serum Institute must think about the greater good of humankind and forego their profits. But that would be short-term thinking. In fact, for the the greater good of humankind, we need Serum Institute to make humongous profits. We need the investors to make tonnes of money. Only if that happens will be we ready for the next pandemic. Let's play this out. If Serum Institute is forced to forego its profits on its bet, why would they take a bet the next time around?
In the end, it all comes down to incentives. If we constrain Serum Institute's profits today, the message we are sending out to entrepreneurs is to sit tight and not take a bet. This would mean that the next time we have a pandemic, the manufacturers will invest in the manufacturing process only after the vaccine is invented. This would mean that the time required to get the vaccines to the masses from the time it is invented would cost so many more lives.
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