Madison, Wisconsin / USA - April 24th, 2020: Nurses at Reopen Wisconsin Protesting against the protesters protesting safer at home order rally holding signs telling people to go home.

Great Responsibility: Navigating Moral Hazards During COVID-19

By Jacqueline Salwa

Younger people may be driving the COVID-19 pandemic in part because they perceive the costs of complying with public health measures as higher and the expected benefits as lower compared with older individuals.

”Indemnifying Precaution: Economic Insights for Regulation of a Highly Infectious Disease,” a paper recently published in the Journal of Law and the Biosciences, explores how to align costs and benefits so that individuals of all ages adhere to precautions.

Younger people tend to experience less severe symptoms from COVID-19 infection, and may be disproportionately affected by other aspects of the pandemic.  These include depression from lack of social interaction, stifled career advancement, and difficulties with providing for dependents.  Compared to younger people, older people have a greater chance of being settled down, retired, and not responsible for dependents. As a result, those that  receive the least benefit from taking precautions, and incur the greatest personal costs for abiding by these precautions, have a lack of incentive to follow precautionary public health measures. This is known, in economic terms, as a moral hazard.

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A stethoscope tied around a pile of cash, with a pill bottle nearby. The pill bottle has cash and pills inside.

What Ever Happened to NIH’s “Fair Pricing” Clause?

By Jorge L. Contreras

In the midst of the COVID-19 pandemic, calls have been made for “fair” and “reasonable” pricing of the vaccines and therapeutics that will eventually be approved to address the virus. A range of proposals in this regard have been made by members of Congress, the Trump Administration, various states, academics and civil society.

Amid this current debate, it is worth remembering the brief period from 1989 to 1995 when the U.S. National Institutes of Health (NIH) did impose reasonable pricing constraints on drugs that were developed as part of cooperative R&D agreements (“CRADAs”) between federal agencies and private industry.

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