Following this Thinker prologue is an exclusive op-ed by University of Chicago Professors Casey Mulligan and Tomas Philipson on former President Donald Trump’s Operation Warp Speed. The piece was originally slated for publication in The New York Times, which catch-and-killed Mulligan and Philipson’s story by delaying its release before aborting it altogether.
Mulligan and Philipson were key members of Trump’s Council of Economic Advisers, with Mulligan serving as chief economist and Philipson as acting chair. Thus, in September 2019, Philipson watched now-infamous health official Anthony Fauci gleefully attend Trump’s signing ceremony for Executive Order 13887, which provided for “vaccine production process improvements to reduce the time required for vaccine production.” This decree was part and parcel of Trump’s wide-ranging effort to deregulate America and streamline the health bureaucracy.
Within six months of September 2019, Fauci had conveniently suppressed his memories of E.O. 13887. At a televised White House Coronavirus Task Force meeting on March 2, 2020, Trump called for the “very quick” development of a COVID-19 vaccine. But Fauci promptly and publicly contradicted his boss: “A vaccine that you make and start testing in a year is not a vaccine that’s deployable.”
Sensing the political winds, Trump never fired Fauci for indulging in the inaction, ineptitude, insubordination, and dishonesty that comprise the statist way. Instead, people showered rewards upon Fauci, who got a promotion from President Joe Biden and the Dean’s Award from UChicago’s Harris School of Public Policy. (Needless to say, Harris did not reach out to Mulligan and Philipson regarding their time with Fauci.)
Though Trump did not fire Fauci, he did the next best thing and ignored Fauci’s pessimism. Knowing full well “why approval barriers needed to be removed” and, “from prior experience, how to do it,” Trump smashed the bureaucratic consensus with Operation Warp Speed—which brought two vaccines to market in months, saved an untold number of lives, and produced an estimated ROI of 20,000%.
— Thinker editorial staff
Read the Exclusive from Mulligan and Philipson:
The final approval of Pfizer’s vaccine was the Biden administration’s long-delayed sequel to Operation Warp Speed, a public-private program with one of the largest and quickest returns for our country and the world. Warp Speed illustrates the potential gains from further deregulation of the Department of Health and Human Services (HHS), an agency that oversees about a quarter of the economy but where free-market policy proposals are taboo.
Warp Speed was a victory for health care deregulation. A clear illustration of government following the private sector science, it relied on market forces for societal good. The medical innovation it encouraged is again turning out to be a cheaper alternative to disease prevention than behavioral change. Vaccines costing billions beat foregone economic activity worth trillions—taking a shot is easier than ending valuable activities such as going to school, work, church, or restaurants.
From our time at the White House, we can confirm it already laid Warp Speed’s procedural and intellectual foundations before the disease hit our shores. From the time the 2016 election was decided, President Trump prioritized eliminating the huge number of regulations that were holding Americans back from realizing their full potential. Deregulation at the Food and Drug Administration (FDA, part of HHS) was an important component of this overall deregulatory agenda.
Deregulation was facilitated by Chicago economics-style thinking among the president’s economic team, including appropriate skepticism of excessive health care regulation. The intellectual origins of FDA deregulation trace back to the University of Chicago’s Sam Peltzman, who documented the harms imposed by the agency acting as an entry barrier to new medical products. A later quantitative analysis in 2008 by one of us found that the FDA was taking too long to approve drugs relative to the enhanced safety it encouraged.
During our time there, generic entry and competition in prescription-drug markets were freed up to contribute to the first annual decline in prices in 46 years. Right-to-try legislation was passed, allowing patients not to be bound by one-size-fits-all FDA decisions. Before COVID-19 arrived, the White House’s Council of Economic Advisers (CEA) drafted sweeping deregulatory actions together with FDA leadership. CEA also issued a report stressing expedited approvals and public-private partnerships to enhance vaccine development during a pandemic. The report prompted an executive order that founded the Domestic Policy Council’s later work on accelerated development of a COVID-19 vaccine. Therefore, when the disease emerged, the White House was ready to encourage the FDA to quickly approve vaccines.
Central to the fiscal element of Warp Speed was to have government help fund pre-approval production of vaccines and award future purchase commitments. The president’s initiative succeeded by fueling the superior performance and speed of private-sector science. A government-led vaccine development would have proceeded more slowly. Even nonprofits were handicapped, as with the Oxford team that inadvertently postponed administration of its own vaccine by resisting the participation of for-profit companies in its distribution.
Few previous presidents would have turned so rapidly to the private sector, but Trump already had firsthand success with deregulation at FDA and elsewhere. A career politician would have relied primarily on HHS bureaucracy, which is what created the cumbersome COVID-19 testing rollout, or the botched task of creating an Obamacare website. Even if it only sped up a vaccine by six months, Warp Speed had benefits estimated around $1.8 trillion to the U.S. alone, with additional benefits abroad.
The success of Warp Speed is a clear illustration that deregulation of many HHS bureaucracies would benefit patients suffering from diseases other than COVID-19. Indeed, patient-oriented groups, such as the Milken Institute’s Faster Cures, are often the loudest ones arguing for a more dynamic health care bureaucracy.
However, those elected representatives trying to correct an overly bureaucratic HHS are often told to not let “politics” interfere with so-called “science,” despite the fact that the citizens they represent are often against excessive regulations. HHS is often guided by the perspectives of doctors and lawyers, with little expertise as to the effects of their regulations on the incentives operating in health care markets or their impacts on the rest of the economy. For example, the health care sector is unique in having Soviet-style pricing set in the nation’s capital and using Medicare and Medicaid to impose rules on other customers.
Looking ahead, it is central to allow free choice and more competition to be an important force propelling the achievements of private enterprise past those of government. To further this objective, we were involved with setting forth many such recommendations in a 2018 inter-agency report. Warp Speed could be just the beginning of historic health care advances if the HHS removed some of the regulations that block competition and limit consumer choice by dictating how drugs, insurance, and other health care products and services are designed and introduced into the market.
The FDA specifically could focus on safety and leave other aspects of product quality to the market. Health plans, hospitals, and other knowledgeable players can inform consumers while product liability rules further encourage quality, as now seen with major hospitals rejecting the Alzheimer drug, Aduhelm, because they are not convinced of its efficacy. The most important factor driving improved overall well-being during the last century was the doubling of the lifespan and reduced morbidity. To continue this trend, let’s allow the people spending their lives to reduce diseases operate with fewer government blockades and more financial opportunities.
* The views expressed in the prologue solely represent the views of Declan Hurley, Mitch Robson, and Perry Zhao, not the views of the Chicago Thinker. Moreover, the views expressed in the exclusive solely represent the views of Casey Mulligan and Tomas Philipson, not the views of the Thinker.