In this episode of Lehigh University’s College of Business IlLUminate podcast, we are speaking with Chad Meyerhoefer on what went wrong with the federal government’s distribution plan for the COVID-19 vaccines. Meyerhoefer holds the Arthur F. Searing Professorship in Economics at Lehigh's College of Business. His research focuses broadly on the economics of health and nutrition, and much of his work involves the use of microeconometric methods to evaluate and inform public policy.

He spoke with Jack Croft, host of the ilLUminate podcast. Listen to the podcast here and subscribe and download Lehigh Business on Apple Podcasts or wherever you get your podcasts.

Below is an edited excerpt from that conversation. Read the complete podcast transcript

Jack Croft: It seems like another world almost, but it was only in December, just before the holidays, that we discussed what the federal government's role should be in a global pandemic. And at the time, distribution of the first FDA-approved COVID-19 vaccine, the one developed by pharmaceutical giant Pfizer and German biotech company BioNTech, was just getting underway. And a second vaccine developed by the National Institutes of Health and Moderna soon followed.

While you were critical of many aspects of the federal government's response of the pandemic, you were fairly optimistic about the federal government's distribution plan, as were I think most experts at that time. So starting with a very simple question, what went wrong?

Chad Meyerhoefer: Well, it turns out that a number of things went wrong. And at the time, we did have reason to be optimistic because both the production and distribution of the vaccine was all kind of managed under [the federal government’s] Operation Warp Speed. The production phase went relatively well, and that's mostly because in the United States and across the globe, the development of vaccines has really been the purview of large, multinational drug companies, and they're pretty good at determining how to go about doing that from a scientific perspective. And there are some scientific breakthroughs that happened that allowed them to derive a vaccine much more quickly than in the past.

The other thing that happened was, we in the United States adopted what's called production at risk, which means that we started producing doses of the vaccine before final testing had been conducted yet so that if it turned out that a vaccine candidate was successful, we would already have doses in the pipeline. And that happened both for the Moderna and the Pfizer vaccine, which means we did have a leg up on the supply of the vaccine available.

On the distribution point, the last time we talked, we hadn't really had any of the vaccine being distributed yet and we were just about to have that occur. And looking at the Operation Warp Speed plan, it looked like we would have federal coordination of vaccine distribution in terms of delivery, in terms of tracking, and also the help of the military with logistics and added support to do the vaccinations. What we found out actually happened, though, is there were some failures in many of those things.

First of all, we didn't have full tracking of the vaccine. So the federal government only tracks vaccine up to the point where it was distributed to the states and then no longer kept track of it. Now, we're in a situation where we have 20 million doses of vaccine that have been issued to states that haven't been administered to patients, and we don't know where they are. We can't account for them. So the Biden administration is currently in this sort of frenzied mode in order to try to figure out where those doses went. And from a technological standpoint, it's certainly something that could have been done.

'The Federal Government Did Not Take the Lead on Vaccine Distribution'

But that in and of itself is not the most important limitation that we've had in the response of the federal government. The main problem is that the federal government really did not take the lead on vaccine distribution. It handed over much of the administration of the vaccine to patients to states and public health agencies at the state level. And that was not something that we would have expected looking at the plan that was developed under Operation Warp Speed.

Granted, that plan was very terse in terms of its detail. They didn't have a lot of details, more of a broad overview of what to expect, but it really implied that we would have more federal involvement here. There's a couple of problems with that. One is that states are limited in several ways when it comes to doing something on the scale that's necessary to get the COVID vaccine to people's arms. One is that they're facing significant budget shortfalls due to the lack of tax revenue that's being generated from the fact that the economy has been so harmed by this virus. So they're in a situation where they don't have as much funding from tax revenue as they usually do. And at the same time, they have to somehow recruit extra resources in order to accomplish this objective.

The other thing is that states don't have what we would call surge capacity. Surge capacity is that you have a normal level of operation in any public health agency, and then during an emergency, you have to bring more people to address a certain problem. You have to have more employees. You have to have more time put in. You have to port resources. And so, that's something that, for example, the military can do very well. They have a normal level of operation, and then when we fight a war, there's this huge surge in resources that is projected onto whatever the mission is. We have a few mechanisms to do that at the federal level, but states just don't have the reserves to be able to recruit people to help out with this vaccine distribution, nor do health care systems. Because many health care systems are already overburdened treating COVID-positive patients, there's not a lot of extra health care workers out there that can give these vaccines. Then the question is, "Who's going to do that?"

'We Thought the Military Would Play a Larger Role'

Initially, we thought that the military would play a larger role here in basic logistics and also vaccine administration. And that really hasn't happened for a variety of reasons, I guess. But in the early stages of the pandemic, we did have almost 45,000 National Guard troops called up to help respond to the pandemic. That was, of course, several months, many months before we had the vaccine available. The military is very good at logistics, and the assumption was that once we came to the vaccine distribution phase, the military could really help private companies to manage that logistical challenge of getting the vaccine everywhere it needed to be.

But in December of 2020, a little over a month ago, when the vaccine was just starting to roll out, we only had about 18,000 National Guard troops deployed under what's called Title 32. Now, the distinction in the title there is important because normally, the states are responsible for paying the cost of a National Guard deployment unless it's under something like Title 32, where the federal government pays. And so, having only 18,000 troops called up under Title 32 to help distribute the vaccine is a much smaller number than what we expected. Just to give you a comparison, when the National Guard was called in the aftermath of the storming of the Capitol, there were 26,000 troops called up just to secure the Capitol. We're only talking about 18,000 troops that have been called up under Title 32 in December for COVID relief. If we take a look at the whole size of the National Guard, there are about 445,000 troops in the National Guard. So there's certainly the capacity there to have a larger role being played by the military in terms of logistics and even vaccine administration.

'Some States Are Going to Be More Effective Than Others'

So there's a resource issue. That's one thing that we need the federal government's help for. We need the federal government to be able to train people to administer the vaccine, to pay them, and then to make sure that this is being done consistently across the country. And that hasn't happened. So because every state is sort of doing things differently, what that means is some states are going to be more effective than others.

West Virginia, for example, has done a pretty good job of distributing the vaccine, but other larger states have not. And the reason why that's problematic is that if the virus is relatively uncontained in some states, then having that happen is going to allow that virus to persist and put everybody in the country at risk — more so than would be the case if we had an even approach across the entire country. And in order to have that even approach, you really need to have federal oversight, which hasn't happened.

In a way, it's like we haven't learned our lesson from the problem with PPE that occurred — personal protective equipment — the shortages we had there at the early stages of the pandemic. If you recall, there wasn't enough PPE and states had to go get it on their own and there was no federal coordination and it just didn't work. So we're revisiting that now with the vaccine distribution.

Listen to the December 2020 ilLUminate podcast with Chad D. Meyerhoefer on the Federal Government's Role in a Pandemic.

Chad D. Meyerhoefer

Chad D. Meyerhoefer

Chad D. Meyerhoefer, Ph.D., is a professor and department chair in the department of economics at Lehigh Business.