Congress Should Kill the New Biden Vaccine Program

I ncluded in the debt-limit legislation that recently passed Congress was a clawback provision targeting unspent Covid-19 funds. To date, trillions have been spent fighting Covid-19, but now $27 billion in unspent funding will be pulled back from federal agencies. Getting a clawback provision to President Biden’s desk was a good first start. However, Congress should go further and defund a new vaccine program that is likely to continue to burden taxpayers and provide dubious benefits to public health.

According to the Government Accountability Office, as of January 31 of this year, the government has already spent $4.2 trillion of Covid relief funds and obligated hundreds of billions more. As if this wasn’t enough, in April, the Biden administration kicked off a new $5 billion program to hasten the development of Covid-19 vaccines. Considering the substantial sums associated with Covid spending, this is presumably intended as a down payment on a much larger program.

The initiative, called Project NextGen, is reminiscent of the Trump administration’s successful Operation Warp Speed, and it aims to create new treatments and vaccines for new variants of the virus, including, potentially, a pan-coronavirus vaccine. This may sound desirable, but both the funding and the purpose of this program require further congressional scrutiny. Indeed, rather than extend emergency programs into ordinary times, Congress should focus on stricter oversight of how federal agencies are spending taxpayer funds.

As guardians of the public trust, members of Congress should investigate how government agencies spend our money. A recent Associated Press report found, for example, that 10 percent of the $4.2 trillion spent on federal Covid relief was stolen by fraud or wasted.

The U.S. Department of Health and Human Services (HHS), one of the largest federal agencies, with over a trillion dollars in annual mandatory entitlement-program spending, warrants particular scrutiny. Consider that when Congress initially balked at funding the NextGen program, HHS somehow “found” the requisite $5 billion somewhere in its coffers, suggesting that the agency is sitting atop billions of unspent taxpayer funds.

To be clear, vaccines are vital for combating Covid-19 and other diseases, and Operation Warp Speed was critical to the government’s response to the pandemic. That program worked by offering pharmaceutical companies enormous incentives, and it made sense during a crisis. Most participating companies received large up-front subsidies and promises from the government that it would purchase medicines that successfully navigated the regulatory approval process.

Participating in the program, in other words, was a “heads I win, tails you lose” proposition for most pharmaceutical companies. Though that can make sense in an emergency, or during ordinary times when there is no market demand for drugs known to be needed if a pandemic breaks out, no-strings-attached government funding is a recipe for complacency. As pharmaceutical companies grow accustomed to a reliable customer in the form of Uncle Sam, they feel less motivated to innovate to meet the needs of the public.

The urgency that marked the original Operation Warp Speed is also unlikely to be sustained. Historically, government agencies such as the Food and Drug Administration have focused far more on the risks stemming from approving bad medicines than they have on the risks of holding up good ones that might offer new treatments. This precautionary mindset constitutes the default mode of thinking within the public-health community.

The new Biden initiative appears to already be faltering due to a lack of immediacy. An article in the New York Times earlier this week exposed how Project NextGen is experiencing setbacks due to bureaucratic uncertainty and interdepartmental disputes. The Biden administration and the HHS are finding it challenging to settle on an appropriate leader for the project. Moreover, with profitable vaccines already available on the market, pharmaceutical companies are less motivated to improve on them.

A danger of creating a permanent standing vaccine program is that the market for vaccines will grow less competitive by solidifying interest groups. Large incumbent firms with insider access will develop cozy relationships with public officials at the expense of smaller competitors. As new procedures for the program become entrenched, regulatory hurdles to innovation will form as well.

In short, with Project NextGen, we are likely to see all of the downsides associated with subsidy programs — e.g., corporate welfare and cronyism — without the good outcomes, such as rapid pharmaceutical innovation. The NextGen program could well end up reducing the nimbleness of the government to effectively respond to future pandemics.

Besides the questionable merits of Project NextGen, however, HHS’s ability to set aside unspent funds — and to abruptly discover $5 billion — to create a new program is highly concerning. Not only does it signal a lack of transparency, it raises serious questions about the agency’s stewardship of public resources and its forthrightness with Congress. Where did this money come from, and why was it available for reallocation? How much more money is accessible to the agency to spend as it sees fit?

To answer these questions, Congress should enlist the help of the Government Accountability Office to conduct a thorough audit of HHS. It should further stipulate that any future funding for vaccine programs such as Project NextGen will be authorized only if agencies can convincingly explain why their current appropriations are insufficient. And if HHS and the Biden administration can’t provide satisfactory explanations, Congress should stop funding this program.

Editor’s note: The paragraph referencing the New York Times article on Project NextGen was added after this article was published.