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Inside Operation Warp Speed: A New Model for Industrial Policy

Operation Warp Speed1 (OWS) was launched on May 15, 2020. A partnership between the Departments of Health and Human Services (HHS) and Defense (DoD), other agencies, and the private sector, its goal was to “accelerate the testing, supply, development, and distribution of safe and effective vaccines, therapeutics, and diag­nostics to counter Covid-19.” As a result of OWS, millions of lives were saved from the pandemic.

Operation Warp Speed was a triumph of public health policy. But it was also a triumph and validation of industrial policy. OWS shows what the U.S. government can still accomplish when it comes to tackling a seemingly unsolvable technological challenge. It demonstrates the strength of the U.S. developmental state, despite forty years of ideological assault.

OWS offers insights into what is required to rebuild American production of key medical products and other industrial capabilities more generally. Investing in only basic scientific research, the tra­ditional strategy of the United States, is not sufficient. Instead, reindustrialization requires sustained demand2—as provided by Warp Speed’s guaranteed contracts. To avoid stagnation, it should involve competition among firms as well—which in OWS took the form of a race for FDA approval of vaccines.

But OWS can also be understood as a specifically American oper­ational success story, a government structure that can be used to implement industrial strategy more broadly. OWS is a working mod­el of how different government agencies, and the private sector, can cooperate to quickly solve a technological challenge. It illustrates best practices in program design, as well as in government contracting.

Though OWS was created to accelerate the development, manufacturing, and distribution of vaccines, this same institutional model could be used for other technological and manufacturing challenges facing the United States. Conventional fiscal or monetary policy is no longer working effectively to foster domestic productivity growth or to prevent deindustrialization. OWS‑type interventions offer an entirely new set of economic poli­cies that could be a blueprint for industrial strategy going forward. OWS shows how the United States can reimagine and leapfrog existing manufacturing paradigms to dom­inate the technologies of the future. The model offers new ways to bolster economic security and ultimately national security as well.

Red Dawn

The pandemic preparedness community realized fairly early in 2020 that the novel coronavirus posed a severe threat. News about the virus kept going from bad to worse. It was originally hoped that it would be like H1N1 (swine flu), which was highly contagious, but not lethal. Instead, as was becoming clear, the novel coronavirus was highly contagious and often lethal, too; it wasn’t comparable to just a bad case of the flu.

These discussions among public health experts can be found in the so-called Red Dawn emails.3 (The name “Red Dawn” comes from the 1984 movie about Americans fighting Soviet invaders.) “The chatter is that WHO and CDC are behind the curve. Any way you cut it, this is going to be bad,” Dr. Carter Mecher, a senior medical adviser at Veterans Affairs, wrote on January 28, 2020. On February 20, he warned in another email that the outbreak of Covid-19 on cruise ships was “a preview of what will happen when this virus makes its way to the US healthcare system, not to mention institutionalized high-risk populations in the US, like nursing homes. I’m not sure that folks understand what is just over the horizon.”

When Covid-19 did hit the United States, it would be hard to argue that the pandemic was well managed. The country recorded the largest number of Covid-19 deaths in the world. Using the more relevant deaths-per-million metric, the U.S. death rate was closer to that of a midrange EU country,4 but even on this basis, New Jersey, New York, and New York City were global outliers.

Something akin to a Manhattan Project for vaccines was going to be required in response. The idea for OWS itself came from Dr. Robert Kadlec, assistant secretary for preparedness and response (ASPR) at HHS, who had read the Red Dawn emails and created a coronavirus task force. Also deserving credit is Dr. Peter Marks, director of the center at the FDA that regulates biological products, who similarly saw the need for an accelerated vaccine development program. Marks gave Warp Speed its name—he is a Star Trek fan.

In April 2020, Kadlec and Marks wrote a proposal for HHS secretary Alex Azar, who in turn took it to Jared Kushner and others in the White House, who were enthusiastic. President Trump sup­ported it and signed off on it. Azar brought in the DoD as well. (The bureaucratic history of OWS, like everything to do with it, is complex and contested.) Azar, Kushner, and others then made two hiring deci­sions that were crucial to Warp Speed’s success, recruiting Moncief Slaoui, a pharma executive, and Gustave F. Perna, a general, as its leaders. Slaoui, OWS’s chief adviser, had been chairman of global vaccines at GlaxoSmithKline (GSK) and brought pharma knowledge. General Perna, OWS’s chief operating officer, had overseen the global supply chains for the U.S. Army and brought logistical expertise.

Organizationally, OWS resembled a pharma company, with Slaoui and Perna reporting to a board, here composed of the secretaries of Defense and HHS, and officials from the White House Coronavirus Task Force. (The idea of a cross-agency structure to fight infectious disease had already been pioneered by the Zika Leadership Group led by the NIH and ASPR.) But unlike a pharma company, OWS didn’t have to focus on share price or short-term financial objectives; its funding came from the Covid-related cares Act. Instead, its central goal was to develop safe, effective vaccines as quickly as possible.

Though OWS involved the private sector, operationally it had almost nothing in common with the public-private partnership mod­els popular during the Clinton-Bush era. These were largely maneuvers to take projects off of government balance sheets—often only to have them return once things went wrong. Typically, they were organized by third-party consultants such as McKinsey. In contrast, OWS was organized and led by the U.S. government.

The Scale-Up Problem

Dr. Matthew Hepburn, Col. (Ret.), joined Warp Speed on day one as the DoD lead for vaccine development. He had previously served as the director of medical preparedness on the White House National Secu­rity Staff in the Obama administration, and had also been a darpa program manager. Hepburn, who was part of the Red Dawn email chain, remembers, “many people I trusted were freaking out about Covid-19 so I was fired up to join. The beauty of Warp Speed was the focus on speed. I wanted to accomplish the impossible. But even I thought the vaccine goals were outrageous.”

Typically, the process to bring a new vaccine to market takes ten years or more, if it can be accomplished at all. With OWS, the goal was to do that in just a few months. To reach this goal, the efforts by Warp Speed were extensive, including prioritizing vaccine technologies for development, supporting clinical trials, building manufacturing capacity, mapping supply chains, sharing technology, implementing the Defense Production Act, project management, logistics, guar­anteed demand, and of course, funding. The private sector played a key role in OWS, but to claim OWS’s success was simply the product of the market is as absurd as arguing that the Manhattan Project was fundamentally a free market exercise (though it too involved private companies). It is also ridiculous to think that the handful of horizontal industrial policies which the U.S. economics establishment deems acceptable—better infrastructure, more education, the right tax incen­tives, clusters, “broadband for all”—could on their own have achieved what Warp Speed did, and in just a few months.

The specific economic problem plaguing America that a Warp Speed–style program solves for—aside from a pandemic of course—is the scale-up problem.5 This refers to America’s inability to develop and manufacture at scale the technologies that are invented in the United States. Outside of software, technologies don’t scale here; instead, they are typically manufactured abroad.

In fact, there is a long list of advanced technologies created in the United States that America no longer manufactures or even has the capability to manufacture. The problem is acute for hardware start-ups. There are few financial mechanisms in the United States to domestically scale up advanced manufacturing start-ups, in contrast to the direct subsidies and infant industry protection policies used by East Asian countries.

Vaccine technology is a case in point. Underlying the seemingly overnight success of OWS was the fact that the United States had already made huge advances in vaccines. Much of the technology had been pushed forward by darpa, the renowned DoD research agency. As is typically the case in the United States, however, these breakthroughs were languishing when it came to widespread manufacturing and market implementation at scale. OWS changed that.

Dr. Hepburn says, “There were a lot of fundamental principle and tactical approaches that our government incorporated into Warp Speed. Warp Speed was inspired by darpa but with a focus on scaling and implementation. OWS was darpa at scale.” Hence to fully understand OWS, it is important to start with darpa.

DARPA

The Defense Advanced Research Projects Agency, or darpa, was established in response to the Soviets’ 1957 launch of Sputnik with a mission “to make pivotal investments in breakthrough technologies for national security.” It functions as the central research and devel­opment agency of the Department of Defense. While it is connected to the Army and Navy, is not part of them. The transformative technologies that have come out of darpa include arpanet (the precursor to the internet), drones, the F-1 engine that powered the Saturn V rockets used in the Apollo missions, portable GPS, voice‑technology recognition software, flat-panel displays, and self-driving cars.

Darpa essentially functions as a catalyst for revolutionary tech­nological innovation by funding projects that connect basic science with engineering applications to reach a tangible goal. Bill Bonvillian, writing in the anthology The Darpa Model for Transformative Technologies, describes darpa’s approach as “Undertaking connected science, rather than simply fundamental research. Its model focuses on revolutionary technology development, encouraging and promoting its concepts with partners who move it into service procurement and/or the civilian sector for initial production, enabling full innovation not simply invention.”6

Darpa’s philosophy is captured in the questions used to evaluate any potential project, which are known as the Heilmeier Catechism (after the legendary darpa director George Heilmeier, who led the agency from 1975 to 1977). These questions have spread beyond darpa to the VC world, even if the name Heilmeier is no longer always associated with them, even at darpa:

(1) What are you trying to do? Articulate your objectives using absolutely no jargon. (2) How is it done today, and what are the limits of current practice? (3) What is new in your approach and why do you think it will be successful? (4) Who cares? If you are successful, what difference will it make? (5) What are the risks? (6) How much will it cost? (7) How long will it take? (8) What are the mid-term and final “exams” to check for success?

Despite its outsize impact, darpa is a tiny organization with a flat structure consisting of a director, a handful of office directors, and about one hundred constantly rotating program managers. The pro­gram managers have enormous latitude in their quest to use transformative technology to overcome challenges. Bonvillian writes, “darpa typically builds strong teams and networks of collaborators, bringing in a range of technical expertise and applicable disciplines and involving university researchers and technology firms that are often new and small and not significant defense contractors.”

The operative word in the name “the Defense Advanced Research Projects Agency” that best describes darpa’s character is not just “defense” but also “projects.” Program managers stay only for four to five years. These comparatively short stints mean that darpa is able to recruit the best people from across industry who otherwise would not want a lifetime government career. It also ensures that darpa’s people are focused on collaborating, not competing with each other—program managers’ badges convey the date they will be leaving.

Finally, combining different areas of expertise within projects leads to cross-fertilization. A positive but perhaps unintended side effect of this project focus is that there is no time for empire building and no space for people to stay on indefinitely as deadwood. It eliminates the problem of entrenched bureaucracies resistant to change—one structural explanation of why legacy sectors in the U.S. economy, such as manufacturing, are often closed to radical innovation.7

Further, darpa typically takes a “portfolio approach” to a chal­lenge, pursuing several different technological approaches in parallel when trying to reach a goal quickly. This is a way to hedge risk, even if it appears to waste resources. Taking bets on many different horses increases the possibility of overall success.

Darpa and OWS are fundamentally different organizations. Darpa sits in the Department of Defense and has a defense mission. OWS is an interagency partnership with a health mission. The time periods of focus are also distinct. Darpa is concerned with largely unseen threats over the horizon, ten to fifteen years out, whereas OWS is concerned with an immediate crisis. Darpa’s budget is around $3.4 billion dollars annually, whereas OWS’s is many times that. Darpa’s innovations are upstream, culminating in prototypes that can transition to the DoD and the industrial base. OWS’s innova­tions are downstream: it is attempting vaccine development and manufacturing at scale.

At the same time, there are obvious similarities between the two, principally in program design. Darpa and OWS are high-risk, high-payoff development programs trying to solve a challenge, quickly. Both use a portfolio approach to hedge risks, running competing approaches in parallel, using multiple vendors and technologies. Both are flat organizations and project-oriented: OWS is very darpa-like in that the people involved are only there for a short period of time and not trying to build a bureaucratic empire. Both use the same approach to contracting for acquisitions, using OTs (other transaction agreements, discussed below) which are flexible and fast com­pared to traditional DoD procurement contracts. OWS is staffed with many ex‑darpa people.

But there is an even more direct, albeit less well-known, link between darpa and OWS. Though darpa is famous for its “gee whiz” engineering breakthroughs such as self-driving cars, it also has a Biological Technologies Office. This office seeds biodefense pro­jects. The office’s founding director, Dr. Geoffrey Ling, Col. (Ret.), who today is the CEO of an advanced pharma manufacturing company, explains, “Soldiers go everywhere. One of the biggest threats they face is infectious disease.” The solution to this threat was to figure out how to develop vaccines much more quickly than by using conventional methods. And using mRNA to make vaccines, a core technology in OWS’s efforts, was darpa’s solution.

Vaccine Development Prior to OWS

The commercial vaccine world was a sleepy one until very recently. By 2010, the U.S. vaccine industry had consolidated into four major pharma companies, compared to thirty or so manufacturers in the 1970s. The drivers were partially economic. Preventing infectious disease is not a good business; vaccines don’t require daily usage. But the causes were also regulatory. Careful FDA monitoring of production made it too burdensome for mom-and-pop vaccine manufacturers to operate. The resulting consolidated industry intentionally avoided new manufacturing processes: these required huge capital investments and brought with them immense regulatory risks.

Vaccines themselves are still largely based on the age-old method of growing a pathogen and then putting either the live or dead bug, or a protein fragment derived from it, into the human body to train the immune system. The manufacturing process, which typically still involves using chicken eggs in bioreactors to grow the virus, is difficult to control, subject to variability, not easily scalable, and takes a long time.

As early as 1950, however, it was understood that another ap­proach to vaccines was possible, at least theoretically, using DNA. DNA makes RNA which makes proteins. Given that viruses are made of proteins, it might be possible to use this method to have the body create a protein that would trigger an antibody response, rather than injecting someone with a virus. Then, in 2005, the scientists Katalin Karikó and Drew Weissman, working at the University of Pennsylvania, discovered a way of altering messenger RNA (mRNA) to increase its therapeutic potential. Their research breakthroughs, and parallel work on using lipid nanoparticles as a delivery mechanism, created the foundation for mRNA vaccine technology.8

Dr. Dan Wattendorf arrived at darpa’s biological technologies office in April 2010 from the National Institutes of Health (NIH), where he had worked on the Human Genome Project. He is a geneti­cist who is also interested in industrial innovation, and new genetic approaches to vaccine manufacturing. There was already promising data showing that mRNA had worked in vaccines for animals, and the technology offered the potential for rapid responses to pandemics.

Wattendorf felt investments in lipid-based mRNA delivery sys­tems could lead to effective vaccines for humans, though manufacturing such vaccines had not been widely attempted nor were there any clinical human trials. What made the new approach appealing to darpa is that it could produce vaccines very quickly, critical to darpa’s defense mission of reducing the risks of exposure to new pathogens and bioterrorism faced by military personnel. The old biological manufacturing process using chicken eggs to grow the pathogen would simply take too long to effectively respond to these threats. Moreover, vaccine production using mRNA technology could be conducted with tighter process controls compared to the laborious traditional methods.

Wattendorf went to darpa’s director for funding to investigate further. “A fundamental part of the initial pitch was the speed and the rapidity of the scale-up in using mRNA for vaccines,” he says. In the summer of 2010 he started his mRNA vaccine work. He was able to found the program adept: protect (Autonomous Diagnostics to Enable Prevention and Therapeutics: Prophylactic Options to Envi­ronmental and Contagious Threats). The program’s goal was to “develop platform technologies that can be deployed safely and rapidly to provide the U.S. population with near-immediate protection against emerging infectious diseases and engineered biological weapons, even in cases when the pathogen or infectious agent is unknown.”

“Adept was an applied science project. It was goal-directed. We fund[ed] both academic researchers and industry,” according to Wattendorf. He organized a consortium of Big Pharma companies, newer biotech companies, and scientific researchers to solve the technological problem of how to use mRNA to make vaccines. Darpa funded preliminary research by this consortium, and the clinical data showed the mRNA approach could work. The new manufacturing methods were fast and scalable, allowing for a rapid response to engineered biothreats or pandemics. Darpa was prepared to make catalytic investments to further the new technology.

But traditional pharma companies weren’t interested in pursuing the mRNA approach to vaccines, at least at that time, even though it offered rapid and scalable manufacturing. Wattendorf explains, “The funding of research and development and clinical trials to develop a new manufacturing process takes billions of dollars. They were not prepared to commit the influx of capital required which would only disrupt their existing vaccine business.” They also faced huge regulatory risks associated with attempting to bring a new manufacturing process into human trials.

Wattendorf turned to newer biotech companies instead. Even though mRNA technology could open up enormous opportunities for biomedicine, the same financial incentives that make vaccines a bad business apply across the board. One German company he spoke to was interested in mRNA technology, but only in using it for the more lucrative field of cancer therapies rather than infectious disease.

In 2013, darpa made a $25 million grant to the recently founded biotech firm Moderna Therapeutics to “advance promising antibody producing drug candidates into preclinical testing and human clinical trials.” The company would make vaccines using mRNA technology (notice the last three letters in Moderna’s name).

In 2019, Moderna announced positive results for a phase 1 trial using mRNA to create a vaccine against the chikungunya virus. The trial demonstrated that mRNA technology could in fact be used for vaccines, and the exact same process could be replicated for other infectious diseases besides chikungunya. Wattendorf says, “It re­quired an infusion of capital and a goal-directed approach to take on the technical challenge of making a vaccine using mRNA.”

As a result of darpa’s support for mRNA vaccine technology, as well as other mRNA vaccine research conducted independently across the world, Operation Warp Speed had a proven vaccine platform to turn to when it needed to push a rapid response to the Covid-19 pandemic. This technology allowed for rapid development of both vaccines and manufacturing at scale, and the leapfrogging of conventional, sluggish ways of making vaccines.

Despite the eventual success of mRNA for vaccines, Wattendorf, who today is a director at the Bill and Melinda Gates Foundation, has a more measured, even contrarian take: namely, that it took a Warp Speed—and Covid-19—to lead to widespread deployment of the technology. Until the pandemic took place, the United States failed to develop a commercial mRNA vaccine industry, even though the technology was proven and could have been used earlier to counter many infectious diseases.

“Darpa’s early investments de-risked the technical problem. But they didn’t solve the fundamental capital shift we needed,” Wattendorf says. Though mRNA for vaccines was clearly a transformative technology, there was no capital or industrial policy vision for scaling it up. It required the slap in the face provided by Covid-19, and the intervention of the U.S. government.

Wattendorf adds, “maybe a more positive way to say this is the U.S. government flexed its muscles and capital rushed into the system. That capital was critical for the scale up in manufacturing and distribution and partnerships for clinical trials. But as much as OWS was a success, reactive emergency funding is not a predictive way to plan.”

OWS and Vaccine Development

Slaoui and Hepburn published an article in the New England Journal of Medicine in October 2020 in which they explained OWS’s strategy for vaccine development: “We sought to build a diverse project portfolio that includes two vaccine candidates based on each of the four platform technologies.”9 Core to OWS’s acceleration strategy was to run vaccine development processes in parallel rather than sequentially. Almost from the outset, OWS took on the unprecedented financial risk of funding and scaling up manufacturing efforts while the vaccine candidates were still in clinical trials.

To choose from over a hundred vaccine candidates, OWS used “down select,” according to Hepburn, meaning whittling down the list using objective criteria. “The goal was never to try to pick one type of vaccine technology, let alone one company, but instead to keep the portfolio diverse. This was very deliberate given the many unknowns,” he says. Vaccine candidates had to use one of the three platform technologies deemed most promising. They were further selected on the basis of clinical trial data and other formalized criteria, including their potential for scalability in manufacturing. In the end, three vaccine platforms, and two companies per platform, were tar­geted: (1) mRNA: Moderna, Pfizer/BioNTech; (2) replication-defec­tive live-vector platform: AstraZeneca, Janssen; (3) recombinant-sub­unit-adjuvanted protein: Novavax, Sanofi/GSK.

These “platform technologies” are very different: mRNA relies upon cells in the body to create the spike protein of Covid (but not the virus itself), which induces antibodies in response. Replication-defective live-vector is a form of adenovirus that has been engineered to give the signal for an antigen but which removes some of the genes for replication so that it doesn’t infect cells. Hepburn notes that the Oxford team’s and Janssen’s (Johnson & Johnson’s) work in this area was a triumph of genetic engineering.10 Recombinant-subunit-adjuvanted protein is more of a traditional vaccine format; an “adju­vant” is an added ingredient of a vaccine that helps promote a better immune response. (At the time that Slaoui and Hepburn’s NEJM article was published, OWS was still considering a fourth vaccine technology, the attenuated replicating live-vector platform. This is a weakened live virus technology and hence a traditional format. OWS did not ultimately invest heavily in this technology. Merck, which took this approach for its vaccines, abandoned its development efforts in January 2021.11)

OWS heavily invested in R&D for these vaccine candidates. Pfizer was an outlier in that OWS did not fund development or manufacturing, but it did place a roughly a $2 billion order for a hundred million doses, contingent upon FDA approval or authorization of the vac­cine. Pfizer’s CEO said the reason for this structuring was to “liber­ate” the company from government bureaucracy. Another un­stated but possible motive was to immunize Pfizer’s intellectual property from public claims related to federally funded research. Notably, moreover, Pfizer’s partner BioNTech received $445 million in fund­ing for development and scale-up manufacturing from the German government.12

Moderna designed its vaccine in just two days, demonstrating the power of mRNA technology. It produced an actual vaccine that could be tested on humans in sixty-three days. Nevertheless, Moderna, unlike Pfizer, lacked deep expertise at running clinical trials, and faced the problem of too few minority volunteers. Here the NIH stepped in to help. OWS pursued a strategy of running clinical trials concurrently rather than sequentially, saving significant time.

OWS’s acceleration and compression of the vaccine pipeline paid off. The process typically takes ten years or more. Two Covid-19 vaccines, Pfizer-BioNTech’s, followed by Moderna’s, received emer­gency use authorization from the FDA in December 2020.

Dr. Michael Callahan, an infectious disease specialist at Massachusetts General Hospital and Harvard Medical School, explains just how radical these results were, including the novel technology and development efforts that led to them: “mRNA-based protein expres­sion is the most recent interesting American invention,” Callahan says. “Warp Speed could not have happened if the technology had not been developed to move this quickly. We got very lucky with mRNA.” With mRNA, scientists only need to know the sequence of the virus to design a vaccine. Sequence data was provided by the Chinese in the first week of January 2020. China’s capabilities in this area are comparable to or better than America’s.

Callahan’s academic bio doesn’t convey the depth of his expertise. Callahan previously oversaw darpa’s biodefense therapeutics port­folio, the “Accelerated Manufacture of Pharmaceuticals” (AMP) pro­gram, whose goal was to radically accelerate the manufacturing of protein vaccines, and sister programs “7 Day Biodefense” and “Prophecy” (to predict virus evolution). Callahan coled the world’s largest international medical evacuation from a hot zone, the repatriation of nearly four hundred Americans from the Covid-19-plagued Diamond Princess cruise ship, and emergency care of infected passen­gers on the Grand Princess cruise. He was then recruited as special adviser on Covid-19 to the assistant secretary of preparedness and response (ASPR), Robert Kadlec.

Callahan emphasizes that the industrial policy efforts of OWS were key to its success. “OWS completely took away R&D risk and regulatory risk,” he says. The government offered guaranteed demand and financing regardless of final regulatory outcome (with Pfizer as an exception).

Nevertheless, “the government is usually a horrible customer. The cost of dealing with a U.S. government contract is terrible,” Callahan says. He points to multiple promising biotech companies which have gone bankrupt while attempting to sign a contract with U.S. federal agencies. These contracts involve almost insurmountable reporting challenges. Indeed, the stock prices of biotech companies have often gone down13 once they signed a contract with barda.14 For OWS, in contrast, he notes that the contracting was easy and narrowly focused, overcoming a key hindrance to innovation facing the U.S. biodefense industrial base.

“Warp Speed has transformed the investment and R&D cycle for public health using biotechnology,” Callahan says. “No one is going back to the eleven-year development cycle.”

Contracting

“One reason we did well is we had control of the contracts. We had people in place to make sure Big Pharma conformed and we had obligation enforcement mechanisms,” says Hepburn. Dr. Hepburn worked closely with barda and the NIH on the contracts governing vaccine development. He contrasts OWS’s approach to the contracts of 1990s-style public-private partnerships organized by external man­agement consultants. These couldn’t provide “enforcement mechanisms” comparable to those of the federal government.

The specific types of contractual mechanisms Warp Speed used were crucial to its rapid progress. These need to be understood in the context of the regulatory regime under which federal entities typically operate. Procurement contracts that would normally take six months could be signed in three weeks under OWS. But they also involved potential tradeoffs.

OT agreements. Other transaction agreements, sometimes re­ferred to as other transaction authority, offer one such contractual approach. In contrast to the standard federal procurement laws and regulations, OTs enable speed and flexibility in structuring agreements.15 They are particularly useful in government consortiums, and were commonly used by Warp Speed. Hepburn observes, “darpa has been using them for a very long time. HHS could use them but the DoD has been the best at using them.”

A Government Accountability Office (GAO) study explains their appeal: “To attract innovative companies that may not traditionally do business with DOD, the department can use flexible agreements known as ‘other transactions.’ Other transactions are not subject to certain federal contract laws and requirements.”16

But there are potential risks, even controversies, related to OTs. They bring reduced transparency, and some exemptions from regula­tions designed to protect taxpayers. Specifically, the concern around OWS is that OTs might have allowed pharma companies to circumvent the Bayh-Dole Act,17 which provides the public with rights in intellectual property arising out of federally funded research, includ­ing march-in rights.18

EUA. Emergency Use Authorization (EUA) is a mechanism to allow use of medical products without full FDA approval during a health emergency, such as a pandemic. Traditional FDA approval for a vaccine can take years, whereas an EUA is much quicker, though it still involves rigorous evaluation by the FDA. As the FDA notes, “efforts to speed vaccine development to address the ongoing Covid-19 pandemic have not sacrificed scientific standards, integrity of the vaccine review process, or safety.”19

The GAO, however, was slightly critical in its report assessing the use of EUAs during the pandemic. Its study in no way argued that the authorized medicines weren’t safe, but rather that “the FDA does not uniformly disclose its scientific review of safety and effectiveness data for EUAs,” as it does for traditional approvals.20

DPA. The Defense Production Act (DPA) expedites the supply of services and materials needed for national defense. Hepburn says, “the Defense Production Act is great for an emergency and prioritizing the vaccines in a portfolio but not great because it is encroaching upon traditional vaccine manufacturing. We used the Defense Pro­duction Act in Warp Speed and it was a good thing, but it had potential costs.” OWS had to make sure its use of the Defense Production Act did not impinge upon flu vaccine production, which is where the issue of supply chain management comes in.

A benchmark for using these types of expedited contracts, or rather not using them, is the experience of the European Commission.21 The Commission, which had no particular expertise in emer­gency vaccine procurements, haggled for months in contract negotiations with pharma companies. As a result, the EU was able to obtain slightly cheaper vaccines,22 but this achievement was only notional because it also resulted in almost no supply. The Commission’s solution was to use what it termed a “vaccine export transparency mechanism” to block exports to the UK and to keep vaccines for itself. This was for the “global common good,” said Commission president Ursula von der Leyen.23

Scaling Up Manufacturing and Mapping Supply Chains

Before OWS began scaling up vaccine manufacturing—in fact before OWS was officially formed—the urgent problem facing the United States was the need to provide more Covid-19 tests. Whereas South Korea could test ten thousand people per day early in the pandemic, the United States had only tested 1,583 people in total by March 2020.24 The source of the bottleneck was the CDC, which insisted on design­ing and manufacturing its own tests.25

Admiral Brett P. Giroir, MD, assistant secretary of HHS, took on the role of coordinating Covid-19 diagnostic testing in March 2020. He explains some of the challenges facing the United States: “We didn’t have a stockpile of tests or basic materials, and very little domestic manufacturing capacity. We had to scramble to import basic materials like swabs and pipette tips while we jump-started domestic production. There were no rapid tests, only PCR tests that required sophisticated laboratories.” Admiral Giroir began flying in one 747 a week filled just with swabs and similar basic materials from Europe.

A greater limitation, though, was the CDC’s mission and culture. He says, “The CDC was insular and academic. It was not built for a rapidly emerging, potentially catastrophic health threat. It was used to creating tests in the thousands, such as for detecting anthrax, not in the millions.” He further argues that the CDC had almost no history of partnering with the commercial sector, and completely missed the importance of engaging with it. It was not built for scaling.

Admiral Giroir, who earlier had directed the Defense Sciences Office at darpa, implemented private-public partnerships to scale the manufacturing of tests. The government invested billions of dollars to build domestic test manufacturing capacity. By June 2020, the United States was testing five hundred thousand people daily.

In terms of vaccine production, OWS had been working with companies to scale up manufacturing almost from inception, when vaccine candidates were still only in preclinical trials. Slaoui and Hepburn, in their NEJM article, described some of the ways OWS offered technical support for the rapid scaling of manufacturing:

To ensure that industrial processes are set, running, and validated for FDA inspection when phase 3 trials end, OWS is supporting facility building or refurbishing, equipment fitting, staff hiring and training, raw-material sourcing, technology transfer and validation, bulk product processing into vials, and acquisition of ample vials, syringes, and needles for each vaccine candidate.26

One reason vaccine candidates were selected in the first place was because of their inherent manufacturing scalability. And mRNA had unmatchable advantages here that made older technologies seem archaic: “We do not need to build billion-dollar factories which takes three to four years. The factory is in your arm,” says Michael Callahan. That is, as directed by mRNA, your own cells produce the vaccine consisting of spike proteins.

Someone still had to make hundreds of millions of doses of mRNA, however, and very few companies had this expertise. Moderna already operated an existing advanced biotech manufacturing facility, but more production capacity was required. Moderna partnered with the contract manufacturer Lonza in May 2020,27 long before its vaccine received an EUA. With funding provided by OWS through barda, the companies established mRNA manufacturing lines at Lonza’s factories in the United States and Switzerland.

But Warp Speed provided much more than just financing for manufacturing, as the NEJM article made clear. Hepburn says, “We told the smaller biotech companies, we will help you grow. We will put people in your manufacturing plant. We will help you with project management. We can assist with your regulatory strategy.” According to the GAO, even the U.S. Army Corps of Engineers was brought in to “oversee construction projects to expand capacity at vaccine manufacturing facilities.”28

These interventions by OWS extended deep into the U.S. medical supply chain. The CEO of Pfizer complained in December 2020 that “we are running at critical supply limitations.”29 He suggested that OWS should use the Defense Production Act to prioritize supply to the company. But it wasn’t that simple from the perspective of optimizing vaccine production nationally.

“Sanofi knows their supply chain and so does Pfizer, but they don’t know the total supply chain. The Defense Production Act could lead to smaller biotech companies getting crowded out. The better solution is to create the capacity to make enough vaccine for everyone,” Hepburn says.

To this end, OWS did extensive supply chain mapping over the summer of 2020, identifying vulnerabilities. This involved vaccine manufacturing forecasting, and investing to close any supply chain gaps before they arose. “We were obsessed with the supply chain mapping. DoD people do this as part of operation planning. This is what logistics does,” Hepburn adds.

Supply chain mapping is something U.S. regional economic devel­opment agencies do, too, but the U.S. record is far from excellent. For instance, when Apple tried to assemble the Mac Pro in Texas, it found it could not source a needed screw and so gave up and moved produc­tion offshore.30 Better supply chain mapping would have avoided this problem. In China, provinces constantly map supply chains, actively plugging any gaps so the province can supply whatever is needed by a manufacturer.31 OWS shows that the United States does have the capacity to perform successful mapping and also to fix the supply chain, but these capabilities seem limited to the DoD. This is yet another area where Warp Speed holds lessons for industrial development in the United States.

Manufacturing Case Study: SIO2 Materials Science

SiO2 Materials Science is a manufacturer of technologically advanced packaging for pharmaceuticals. OWS contracted with the company to produce vials made of a revolutionary glass-plastic hybrid that could handle the ultracold supply chain required for mRNA storage. SiO2 is both a case study of how manufacturing for OWS worked in practice as well as the power of OWS-type industrial policy to enable the leapfrogging of traditional technologies.

The pharma packaging space in which SiO2 operates is in many ways a typical U.S. industry. It is dominated by three companies, known as “Big Glass.” It exhibits minimal innovation and extensive offshoring: 90 percent of glass vials are produced abroad. In contrast, as SiO2 president Laurence Ganti explains, “We spent ten years developing a disruptive, breakthrough packaging technology for pharma glass. We created a hybrid container well suited to the next generation of drugs.”

Incumbents don’t like change, and as Ganti acknowledges, VCs typically don’t invest in manufacturing start-ups, particularly if there is no track record. But SiO2 is not a start-up. It had a six-decade track record. The market was ready for the new approach to packaging as opposed to the hundred-year-old technology deployed by big glass. Nonetheless, it took a pandemic—and funding from OWS—to help catalyze the adoption of the new invention. SiO2 received a $143 million contract from barda in June 2020 to produce its new vials made of hybrid materials.

“Our contract has priorities. We needed to have the capacity to produce in the US,” Ganti says. SiO2 was easily able to scale up production, once the contract was signed. The company also had frequent site visits from the U.S. Army Corps of Engineers and others, and had to file cybersecurity reports.

“Before Warp Speed I thought the government would only slow things down,” Ganti says, “I am shocked at speed of government. They are facilitating things.” Perhaps this is because, as he points out, OWS is a small government operation within big government.
Warp Speed effectively brought the production of medical grade pharmaceutical packaging back to the United States. These are good jobs, too, paying $80,000 a year in rural Alabama. The risk of future offshoring and foreign competition still exists. But Ganti says, “The difference is we have a new advanced technology, we are not commoditized basic glass. And our technology is patented.”

Distribution versus Administration

Warp Speed divided the world into two: pre-EUA and post-EUA. Once a vaccine received an Emergency Use Authorization, the primary focus moved to distribution, which was overseen by General Perna, coupled with continued scaling of manufacturing. The partici­pation of the DoD in OWS brought enormous logistics and contracting support given the DoD’s expertise in “operational planning” for fighting wars. General Perna applied operational planning to OWS’s needs.

When it came time for the rollout of the new vaccines, however, the United States stumbled, slightly. It was not the most successful country in the world at vaccinating its population on a percentage basis, though it was still among the top performers, and the leader on an absolute basis.

The rollout had two components: (1) distribution and (2) administering shots in the arm. OWS, broadly defined, oversaw distribution, here consisting of McKesson’s contract with the CDC, and Pfizer’s own distribution network. Distribution consisted of getting the vac­cine to a location on time, and providing ancillary supplies like needles. The logistics involved were complex, given that mRNA vac­cines require an ultracold distribution chain, and a two-dose regi­men. Nonetheless, 99 percent of the vaccine showed up on time and at the right temperature.

In contrast, the states ran the administration side, meaning delivering shots in the arm. States would decide who got the vaccine first. They in turn received guidance from the CDC. The CDC’s recommendations initially prioritized allocations on the basis of equi­ty and social justice considerations rather than lives saved.32 After a journalistic outcry about the deaths which would result,33 the CDC adjusted its guidance somewhat, but it remained complex.

Initially, OWS considered having the Department of Defense rather than the states handle vaccination administration. In June 2020, however, a coalition of leaders of state and local immunization programs wrote a letter to General Perna and Dr. Slaoui raising concerns about this potential arrangement:

We particularly wish to offer feedback on the importance of building on existing vaccine delivery infrastructure to clarify the expected role of the military. . . . The announcement of OWS implied a possible role for the military in vaccine administration. It will be important to consider together if uniformed military vaccinators will improve or undermine con­fidence in a covid-19 vaccine, particularly in certain minority and underserved communities where trust in the medical and political systems are already strained.34

These concerns about the militarization of vaccine administration were apparently heard. In the end, the states, with the CDC’s endorsement, would administer the vaccines as they requested;35 they, not Warp Speed or the DoD, would control the shots in the arms. This is standard public health policy in the United States, but the states were not able to execute on time. They blamed poor communications and coordination from the federal government,36 but never themselves.37

The speed differential between “distribution” and “administra­tion” in the vaccine rollout can be seen in the CDC’s statistics.38 As of January 15, 2021, 31,161,075 doses had been “distributed,” but only 12,279,180 doses had been “administered.” The distinction between vaccine distribution and administration is not widely known, though it was never hidden, and the problems with the vaccine rollout remain a highly charged topic. OWS was not faultless. In December, General Perna apologized for miscommunication about the number of doses that were ready to be delivered.

But the rollout rapidly improved with time, particularly in certain states. Connecticut, for example, was a national leader. According to the state’s COO Josh Geballe, “I think it’s increasingly evident that that has a lot to do with prioritizing vaccine for older people first.”39 The state ignored the CDC’s recommendations, which prioritized two-thirds of the entire population. “We went back to first principles: how do we save the most lives?” Geballe stated. “The older you are, the more at risk you are of severe illness and death.”40 Once the policy was implemented, Connecticut experienced one of the fastest declines in Covid-19 deaths of any state, unlike New York which pursued a very different approach to prioritization.

Nationally, administration more closely tracked distribution as the rollout continued. Authorization of a third vaccine, Janssen (Johnson & Johnson), further increased supply. The rollout’s success can be seen in the fact that by late February 2021, 93 percent of skilled nursing homes reported no new Covid-19 cases.41

The Biden administration made accelerating rollout a priority. The administration opened mass vaccination sites managed by the Federal Emergency Management Agency, deployed four thousand active-duty troops to support vaccination; doubled the number of pharmacies participating in the federal pharmacy program; and delivered vac­cine to community health centers to reach underserved communities, all with the goal of putting “the nation on a path to get closer to normal by July 4th.”

These efforts should hasten a return to life as we knew it. But Hepburn warns, “we should not go back to business as usual after the pandemic. We should take the lessons and disruptive innovations learned from Warp Speed and put them into medical advances.”

Business as usual pre-pandemic, taken literally, meant resistance by market incumbents to next-generation vaccines, antiquated vaccine manufacturing technology, offshored PPE production, offshored PCR test production, offshored glass production, and a decrepit domestic supply chain supporting what industrial activities still remained in the United States. OWS, by contrast, pursued a “Made in the USA” agenda. This was controversial. Defenders of the globalized—or really China-centric—production system mounted a vigor­ous counteroffensive throughout the pandemic,42 supported by ideo­logically laden platitudes such as “a virus knows no borders,” and a “global pandemic demands a global response.” All very true. But now the United States is in a position to export vaccines and vaccine technology for global use and help other countries manage their pandemics more effectively.

And this is a potential indication of what might come next, a sort of global Warp Speed, one that doesn’t just take care of the United States but also takes care of the world. Hepburn says, “Imagine if we could make billions of doses, as a global team, to serve billions of people. The first step would be a ‘stretch goal,’ like we did with OWS.”

Repairing the American Innovation System

The United States has an innovation system, but it is opaque and fragmented. It consists of federally funded academic research, the national labs, ffrdcs (federally funded research and development centers, which are government-owned, contractor-operated entities), NIH, NSF, NIST, the Manufacturing Institutes, federal agencies, darpa, Manufacturing Extension Partnerships, and more. (The United States historically also had a corporate innovation system, with its central research labs such as Bell Labs, but this has withered under market pressures for short-term financial results.)

The U.S. system, which tilts toward basic science R&D, has many strengths. It is still capable of breakthrough innovations, as seen in the ICT revolution. But it has weaknesses and holes. It neglects “process innovation” in manufacturing, unlike Germany or Japan.43 This be­came visible in the malaise of the 1970s, when Japan’s auto industry raced ahead of Detroit. And unless U.S. innovations scale at close to zero marginal cost—as is true of software—venture capital tends not to support them; hence they don’t scale up here and are manufactured elsewhere.

As Callahan says of darpa, “all we do is demonstrate. We show if it flies. But we have a problem at handoff. Somebody needs to land the thing.” Currently, or at least before Warp Speed, there is no American institution specifically designed to do that.

London School of Economics political economist Robert Wade describes these vulnerabilities in the U.S. system: “The government simply assumed that ‘the market’ would transform the results of military-related R&D more or less automatically into commercial innovations in civilian industry. The 1980s saw a growing realization that military-related technologies were being carried into commercial applications only slowly and patchily.”44 Wade offers a case study:

The U.S. federal government played a vital role in making U.S.-based networks of public and private actors the world’s leading source of PV (photovoltaic) inventions and innovations, start­ing in the 1970s. But it mounted no corresponding federal programme to accelerate deployment of the innovations in public use; and state programmes have been bitty and widely varying from state to state. Germany, Japan, and Spain all have raced ahead in installed capacity per capita.45

Many other American innovations have followed this trajectory. Breakthrough technologies, including those developed by darpa, such as flat-panel displays or drones, quickly migrated to mercantilist Asian countries for their actual production. Future product development, innovation—and employment—has taken place there, not in the United States.

U.S. economists have offered little tangible advice to policymakers about how to respond to these issues, and questioned if there should be a response at all. Part of this is because of academic economists’ ideological attachment to free trade, and hostility to industrial policy. Paul Krugman wrote in 1997, “If economists ruled the world, there would be no need for a World Trade Organization. The economist’s case for free trade is essentially a unilateral case—a country serves its own interests by pursuing free trade regardless of what other countries may do.”46

Here, free trade, even with a mercantilist counterpart, is an un­qualified good. More recently, trade models have been updated to acknowledge that free trade brings with it both domestic winners and losers but is still a net positive for society as long as the former compensated the latter. This remains the reigning wisdom today. But transfer payments, even if accompanied by an opioid prescription, are not adequate compensation for a jobless future. And economists obviously didn’t consider how an economy that has offshored so much of its productive capacity would perform in a pandemic.

Underlying some of these policy blind spots is confusion around innovation. Mainstream economic policy debates rarely acknowledge that different countries have different innovation systems.47 (In con­trast, China’s most recent five-year plan explicitly makes calls to bolster and refine “the national innovation system.”48) Mainstream trade models have in no way considered that the loss of production could impact the ability to innovate going forward. Nor has economics contemplated whether America still has the industrial base neces­sary to capitalize on technologies created here.

These holes in the U.S. innovation system in areas of deployment and scale up, coupled with China’s accession to the WTO in 2001, have not only had consequences in terms of technological or industrial strength but also contributed to America’s rapidly rising inequality. If the United States started the new millennium as a global hegemon, by 2020 it faced a peer competitor in China well positioned to dis­place it. In the process, its working and middle classes had become necrotic. Mainstream economics is now well aware of the increased inequality in the United States, and is even obsessed with it. But because its models don’t fully capture the developments that have driven it—particularly the problems in the American innovation system—its solutions are at best partial and primarily redistributive.49

U.S. policymakers have therefore been left with an extremely narrow, and largely worn-out set of economic policy ideas, whether Keynesian or monetarist. There is little focus on the growth possibilities offered by innovation and how to get there beyond funding more basic science research. The current economic system is taken as given, and relies on wealth transfer as the primary mechanism of repair.

OWS-type interventions add a whole new repertoire of policies. OWS is a case study of how to tie together America’s fragmented innovation system and scale up technological breakthroughs that would otherwise languish, as mRNA vaccine technologies were be­fore the pandemic. It shows how the United States can bring to market disruptive, radical technologies that leapfrog existing manufacturing processes. OWS takes away R&D and regulatory risk, and adds in financing, government assistance in tech transfer for manufacturing, support for a robust domestic supply chain, and guaranteed demand. The latter, in particular, offers a marked contrast with most regional development and applied innovation efforts in the United States, such as the Manufacturing Institutes, in which the demand side is lacking. OWS demonstrates that American deindustrialization is a repairable lapse, with the OWS model offering one recuperation mechanism.

Along with new Warp Speeds, the United States needs to establish new darpas more broadly across government agencies, such as a darpa for Commerce, a darpa for Transportation, with arpa-e in Energy as an example. The Biden administration has made promising moves to consider establishing a health-arpa.50 And though the United States already has lots of institutions to create new technologies, it has no real institution to commercialize or scale them (except for the VC industry which has narrow interests). An OWS structure can take care of scale up and possible interagency coordination, and even help catalyze private sector investment.

Slaoui and Hepburn write that Warp Speed, and the partnership between the DoD, HHS, and the private sector, “Grew out of an acknowledged need to fundamentally restructure the way the U.S. government typically supports product development and vaccine distribution. The initiative was premised on setting a ‘stretch goal.’”

The U.S. government needs to fundamentally restructure the way it supports development in many other industries besides vaccines, using OWS as the model. This is a new “stretch goal” for U.S. economic policy. But it shouldn’t be impossible to implement. For one, it is obvious that OWS was a huge success. OWS has established a template for how different government agencies and the private sector can work together and create a new institutional settlement to galvanize an otherwise inert federal bureaucracy. There is no need to transplant a new institution from another country or create a new federal agency.

Applications beyond Vaccines

Which technological challenges should the United States prioritize for an OWS style intervention? The possibilities are almost endless, though the model works best in areas where the government is a large purchaser.

In terms of OWS programs for defense, developing the next generation of computer chips, batteries, or a competitor to Huawei is obvious. But the United States also faces extreme vulnerabilities out­side of emerging technologies. Naval construction and the con­solida­tion of navy shipyards is an example. China now has the world’s largest navy, supported by the world’s largest commercial shipbuilding industry. Chinese shipyards are dual purpose with “blended” military and commercial production.

The United States has no merchant shipbuilding industry to speak of. Navy shipyards are on their own, with no economies of scale. A Warp Speed could solve that problem by creating “blended” shipyards in the United States, only with technology flowing from naval construction to commercial ship construction. Supported by the Jones Act,51 coupled with a restoration of U.S. subsidies from zero to the standard levels found in East Asia,52 this intervention could help bring to life the extinct U.S. commercial shipbuilding industry and the jobs that go with it.

Or take high-speed rail. California was unable to build a high-speed rail line. Nearly the entire project was overseen by external consultants in a 1990s-style private-public partnership arrangement, including a consultant who oversaw the other consultants.53 American passenger rail is decades behind the rest of the world—Morocco launched a bullet train connecting Tangier with Casablanca in 2018. Given the dysfunction of the passenger rail industry in America, which also has some of the highest construction costs in the world, a leapfrog strategy is needed.

But rather than investing all hope in Elon Musk’s hyperloop, a darpa-like portfolio approach is called for. This could fund different technologies from different vendors, with an OWS-style apparatus scaling up any successful breakthroughs of new transport technologies. How to pay for these novel ideas? They pay for themselves, certainly compared to throwing even more money at failed infrastructure projects, or failing to commercialize new naval technologies that could bring down shipbuilding costs through efficiencies of scale.

Transformational Technology

Regardless of whether further OWS-type structures emerge, OWS should be celebrated for its own success. In terms of future health breakthroughs, OWS has unlocked, and will likely unleash, a biotech revolution through the development and regulatory approval of new vaccine technologies. These technologies can be applied to more than just infectious disease. The mRNA technology directs cells to make protein; insulin, human growth hormone, and thyroid hormones are all proteins. Through the efficient factory of your own body, mRNA technology could someday produce long-lasting insulin or better growth hormones; it is new foundational technology with many possibilities. The adenovirus-based vaccines, as they become increasingly precise, can be used to target cancer using an immune response.

The new vaccine technologies will transform how we treat infec­tious disease. There are already trials underway for a malaria vaccine. The next disruptive medical technology is mRNA that can make “express antibodies,” bypassing the need for the vaccination step and offering immediate protection. Yet these technologies will still require supply-side and demand-side interventions in bio manufacturing and scale-up. As OWS showed, we can’t assume the market will just solve this problem on its own.

Though there remains a risk that a variant of Covid-19 could breach current vaccines, which all target the spike protein, there are alternatives. Looking ahead, Dr. Hepburn says, “I hope that infectious diseases will be much better controlled in the future. With new technologies we should be able to aspire to take pandemics off the table.”

OWS was a triumph of American industrial and innovation policy. It saved countless lives. It demonstrated American competence, and it should give Americans confidence.

This article originally appeared in American Affairs Volume V, Number 2 (Summer 2021): 3–32.

Notes
1 “Operation Warp Speed” was the name given to the project during the Trump administration, with the Biden administration planning to rename it. It is not clear, however, what name if any has replaced it. Sometimes the White House uses “the Covid Response Team.” “Operation Warp Speed” is still used on many government websites, and internally it is typically referred to as “the Operation” or OWS. The use of “OWS” in the rest of this article follows this naming convention, referring to the same initiative across both administrations.

2 Dan Breznitz and David Adler, “Reshoring Production and Restoring American Prosperity: A Practical Policy Agenda,” American Affairs 4, no. 4 (Winter 2020): 19–35; Dan Breznitz and David Adler, “America Can’t Even Produce the Things It Invented,” New York Times, January 4, 2021.

3 Eric Lipton, “The ‘Red Dawn’ Emails: 8 Key Exchanges on the Faltering Response to the Coronavirus,” New York Times, April 11, 2020, supplementary materials, “The ‘Red Dawn’ Emails.”

4 David Wallace-Wells, “How the West Lost Covid,” New York Magazine, March 15, 2021; “Covid-19 Coronavirus Pandemic: Reported Cases and Deaths by Country or Territory,” Worldometers, accessed April 19, 2021.

5 Elisabeth B. Reynolds, Hiram M. Samel, and Joyce Lawrence, “Learning by Building: Complementary Assets and the Migration of Capabilities in U.S. Innovative Firms,” ch. 4 in Production in the Innovation Economy, ed. Richard M. Locke and Rachel L. Wellhausen (Cambridge: MIT Press, 2014); David Adler, “Financing Advanced Manufacturing: Why VCs Aren’t the Answer,” American Affairs 3, no. 2 (Summer 2019): 43–57.

6 William Boone Bonvillian, Richard Van Atta, and Patrick Windham, eds., The Darpa Model for Transformative Technologies: Perspectives on the U.S. Defense Advanced Research Projects Agency (Cambridge, UK: Open Book Publishers, 2019).

7 Charles Weiss and William B. Bonvillian, “Complex, Established ‘Legacy’ Sectors: The Technology Revolutions That Do Not Happen,” Innovations: Technology, Governance, Globalization 6, no. 2 (Spring 2011): 157–87.

8 Lawrence Goodman, “Rosenstiel Award given to pioneering scientists behind Covid-19 vaccines,” BrandeisNOW, January 21, 2021.

9 Moncef Slaoui and Matthew Hepburn, “Developing Safe and Effective Covid Vaccines—Operation Warp Speed’s Strategy and Approach,” New England Journal of Medicine 383, no. 18 (2020): 1701–1703.

10 Both vaccines, however, have been associated with extremely rare but dangerous blood clots, leading to a temporary “pause” in the use of the Johnson & Johnson vaccine in April 2021 in the United States.

11 Merck & Co, Inc., “Merck Discontinues Development of SARS-CoV-2/covid-19 Vaccine Candidates; Continues Development of Two Investigational Therapeutic Candidates” (news release), January 25, 2021.

12 Riley Griffin and Drew Armstrong, “Pfizer Vaccine’s Funding Came From Berlin, Not Washington,” Bloomberg, November 9, 2020.

13 Andrew Jacobs, “Crisis Looms in Antibiotics as Drug Makers Go Bankrupt,” New York Times, December 25, 2019.

14 The Biomedical Advanced Research and Development Authority (barda) is within the office of ASPR in HHS.

15 Moshe Schwartz and Heidi M. Peters, “Department of Defense Use of Other Transaction Authority: Background, Analysis, and Issues for Congress,” Congressional Research Service, February 22, 2019, R45521.

16 U.S. Government Accountability Office, Defense Acquisitions: DOD’s Use of Other Transactions for Prototype Projects Has Increased, GAO-20-84 (Washington, D.C., November 22, 2019).

17 For more on Bayh-Dole, see: Robin C. Feldman, Betty Change-Rowe, and Rabiah Oral, “Viral Licensing: Ensuring the Public Interest When Taxpayers Fund Pharmaceutical Research,” Santa Clara Law Review 59, no. 3 (2020): 641–61.

18 On Oct 16, 2020, the consumer group Knowledge Ecology International (KEI) sued HHS and the Army under the FOIA to seek the full release of Covid-19 research, development, and procurement contracts. See: James Love, “KEI Sues HHS and the Army Over Access to covid-19 Contracts,” Knowledge Ecology International, October 16, 2020.

19FAQs on Emergency Use Authorizations (EUAs) for Medical Devices During the covid-19 Pandemic,” U.S. Food and Drug Administration, last updated August 18, 2020.

20 U.S. Government Accountability Office, Covid-19: Federal Efforts Accelerate Vaccine and Therapeutic Development, but More Transparency Needed on Emergency Use Authorizations, GAO-21-207 (Washington, D.C., November 17, 2020).

21 For the full account of the EU’s failures regarding vaccines, see Jillian Deutsch and Sarah Wheaton, “How Europe Fell Behind on Vaccines,” Politico, January 27, 2021.

22 Wolfgang Münchau, “Our Worst Policy Error,” EuroIntelligence, January 23, 2021. The estimates, from EuroIntelligence, are that the EU paid 24 percent less for the Pfizer vaccine and 45 percent less for the Oxford/AstraZeneca vaccine than the United States.

23 Ursula von der Leyen, “Special Address” (speech), Davos Agenda Week, January 26, 2021, transcript. Von der Leyen is the president of the European Commission.

24 Brett Samuels and Jessie Hellmann, “CDC Has Tested 1,583 People for Coronavirus,” Hill, March 7, 2020.

25 David Willman, “The CDC’s Failed Race against Covid-19: A Threat Underestimated and a Test Overcomplicated,” Washington Post, December 26, 2020.

26 Slaoui and Hepburn, New England Journal of Medicine.

27 Hearing on “Pathway to a Vaccine: Efforts to Develop a Safe, Effective and Accessible Covid-19 Vaccine,” before the House Energy and Commerce Committee Subcommittee on Oversight and Investigations, 116th Cong. (February 23, 2021) (testimony of Dr. Stephen Hoge, President of Moderna, Inc.).

28 U.S. Government Accountability Office, Operation Warp Speed: Accelerated covid-19 Vaccine Development Status and Efforts to Address Manufacturing Challenges, GAO-21-319 (Washington, D.C., February 11, 2021).

29Pfizer Chairman and CEO Albert Bourla Speaks with CNBC’s ‘Squawk Box’ Today,” Squawk Box, aired December 14, 2020 on CNBC, television broadcast transcript.

30 Breznitz and Adler, American Affairs 4, no. 4 (Winter 2020): 19–35.

31 Dan Breznitz and Michael Murpree, Run of the Red Queen: Government, Innovation, Globalization and Economic Growth in China (New Haven: Yale University Press, 2011), 185.

32 Kathleen Dooling, “Phased Allocation of covid-19 Vaccines” (PowerPoint presentation, Centers for Disease Control and Prevention’s Advisory Committee on Immunization Practices covid-19 Vaccines Work Group, November 23, 2020).

33 The CDC’s recommendations, as well as the New York Times’s non-reporting of changes to them, caused political scientist Yascha Mounk to write the essay “Why I’m Losing Trust in the Institutions.” See Yascha Mounk, “Why I’m Losing Trust in the Institutions,” Persuasion, December 23, 2020.

34 Association of Immunization Managers, American Immunization Registry Association, Association of State and Territorial Health Officials, and National Association of County and City Health Officials to General Gustave Perna and Dr. Moncef Slaoui (advisory letter on Operation Wrap Speed), June 23, 2020.

35 There were some exceptions, see “Trump Administration Partners with CVS and Walgreens to Provide Covid-19 Vaccine to Protect Vulnerable Americans in Long-Term Care Facilities Nationwide” (press release), U.S. Department of Health and Human Services, October 16, 2020.

36Nation’s Health Officials Call for Greater Collaboration and Communication with Federal Government” (press release), Association of State and Territorial Health Officials, September 2, 2020.

37Covid-19: Policy Recommendations for Congress and the Administration,” Association of State and Territorial Health Officials, February 2021.

38Covid Data Tracker: Vaccinations in the US,” Centers for Disease Control and Prevention, accessed January 15, 2021.

39 Josh Geballe, “Leading through Covid: How Connecticut Accelerated Its Vaccinations,” Yale Insights, April 7, 2021.

40 Geballe, Yale Insights.

41 Patrick Connole, “Covid-19 Cases Decline in Nursing Homes After Vaccine Rollout,” Provider Magazine, February 11, 2021.

42 Chad P. Brown, “Covid-19: China’s Exports of Medical Supplies Provide a Ray of Hope,” Peterson Institute for International Economics, March 26, 2020; Pinelopi Koujianou Goldberg, “The New Empty Argument against Trade,” Project Syndicate, May 12, 2020.

43 Dan Breznitz and Peter Cowhey, “Reviving America’s Forgotten Innovation System: Fostering U.S. Growth through Incremental Product and Process Innovation,” in The Productivity Puzzle: Restoring Economic Dynamism, ed. David E. Adler and Laurence B. Siegel (Charlottesville, Va.: CFA Institute Research Foundation, 2019).

44 Robert H. Wade, “The Paradox of US Industrial Policy: The Developmental State in Disguise,” chap. 14 in Transforming Economies: Making Industrial Policy Work for Growth, Jobs and Development, ed. José Manuel Salazar-Xirinachs, Irmgard Nübler, and Richard Kozul-Wright (Geneva: International Labour Office, 2014), 379–400.

45 Wade, “Paradox of US Industrial Policy,” 379–400.

46 Paul Krugman, “What Should Trade Negotiators Negotiate About?,” Journal of Economic Literature 35, no. 1 (March 1997): 113–20.

47 See also Robert D. Atkinson, “Time for a New National Innovation System for Security and Prosperity,” PRISM 9, no. 2 (2021): 59–75; Schumpeter is an exception.

48 Original CSET Translation of “(Authorized Release) Proposal of the Central Committee of the Chinese Communist Party on Drawing Up the 14th Five-Year Plan for National Economic and Social Development and Long-Range Objectives for 2030,” Xinhua News Agency, November 3, 2020, trans. Etcetera Language Group, Inc., ed. Ben Murphy, December 7, 2020.

49 There have been some recent avant-garde economic papers which take a broader view of methods beyond redistribution to achieve equitable growth. A dynamic economy, specifically the East Asian model with its focus on manufacturing, produces fair and inclusive growth. A foundational paper here, which might only be fully appreciated in years to come is, Philippe Aghion, Reda Cherif, and Fuad Hasanov, “Fair and Inclusive Markets: Why Dynamism Matters,” International Monetary Fund Working Paper WP/21/29 (February 2021): 1–22.

50 Health Advanced Research Projects Agency (harpa); Kevin Breuninger, “Biden Says U.S. Will Seek to ‘End Cancer As We Know It’ after Covid Pandemic,” CNBC, February 19, 2021.

51 This criticism of the Jones Act by CATO, which might as well have been written by the Chinese Communist Party, contains a useful summary: Colin Grabow, Inu Manak, and Daniel J. Ikenson, “The Jones Act: A Burden America Can No Longer Bear,” Cato Institute, June 28, 2018.

52 Reagan ended U.S. subsidies to shipbuilding in 1981. Other countries didn’t. The U.S. industry collapsed. See Adam Armour, “Sid Salter: The Future of U.S. Navy Shipbuilding Will Substantially Impact State’s Ingalls Shipyard,” Daily Journal, February 10, 2021.

53 Ralph Vartabedian, “How California’s Faltering High-Speed Rail Project Was ‘Captured’ by Costly Consultants,” Los Angeles Times, April 26, 2019.


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