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Comment by whakim | Hacker News Reader

Why is the NIH going to be less effective than the private market at allocating research funding? Funding scientific research is a great example of a problem markets don't solve well for the exact reasons you describe. Most research doesn't lead to tangible progress (or financial reward) not because the researchers are all idiots, but because you have to try a bunch of things and a lot of them won't work, especially with poorly understood novel phenomena. Markets will instead allocate funding to the least-adventurous surest bets. That argument aside, when you allow wealthy people to dictate the direction of scientific research, you're essentially subsidizing their individual research preferences using public money (the wealthy get to take a tax deduction for contributions to their foundations).

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Because the payoff isn't in the result, it is in the initial grant...you get paid first, why does the result matter. Private capital works hard on this to gain a return. They spend first, then are under pressure to make a return. In government funded research, it often is the opposite. You get paid first...then have to deliver something (even barely trying and ending in failure) and you can then get paid again the next time grant money is available.

Most research doesn't result in incremental progress as you pointed out, yet pharma companies still spend a TON of research. They live and breathe by getting to the next "big" drug to make them money and make up for all the failures.

Basically, while the Gates foundation isn't the example I was thinking of, the dangling of a big payoff from the government did spur a LOT of research for COVID (see vaccine and treatment methods for COVID). Private enterprises took some breakthrough concepts (mRNA vaccines) and did a ton of ground work to test and make them viable for humans.

I do strongly agree with your last point, public funded research should be directed at areas with no scalable return since private venture won't go into those areas (but having wealthy non-profits like the Gates foundation working on this is nice!)

> Private capital works hard on this to gain a return. They spend first, then are under pressure to make a return.

The key point here is "return" - in the private markets, it's just a numbers game. Most successful, important scientific research is not going to make a big return. Perhaps it'll lead to money for someone else down the line, but that's besides the point. Private markets are a bad fit for huge swathes of research where success != $$$. Which leaves a couple of areas, e.g. drug development...

> pharma companies still spend a TON of research. They live and breathe by getting to the next "big" drug to make them money and make up for all the failures.

While correct, it's important to remember that pharmaceutical company research spending is highly weighted towards drugs with a large number of patients or where demand is relatively insensitive to price. COVID vaccines are a perfect example because they fit both categories. This usually works out OK, but it isn't a good fit for a poorly-understood condition like long COVID where the size of the target market and the price sensitivity of the customers is very difficult to estimate. You also end up with other undesirable outcomes like the systematic underfunding of research into conditions that predominantly affect minoritized or less well-off communities. Pharmaceutical companies also rely on a huge body of publicly-funded basic research.

No, hang on, what is your evidence here? When we needed COVID vaccines, the research was done by private entities. That suggests that when the chips are down the private sector is better at research. And that funding was going in to companies that were already researching vaccines because it is obvious that whoever developed one would become rich. And the main contribution of the government was lowering the regulatory barrier to getting things approved quickly - the companies involved already had the technologies and processes ready to go, the vaccines were technically ready almost immediately. Why would treating long COVID be different? The main blocker is going to be that it is illegal to roll out treatments or that there will be substantial red tape.

It was notable how in the early days of COVID the ... was it the NIH? One of the TLA agencies ... centralised COVID testing under their banner, disrupted the private sector response and shipped out broken testing kits. The private market would have been all over the problem like flies on a grubby sheep. They're much faster at getting research done on health stuff, the financial incentives are absurd. People will pay literally anything for health.

Also a lot of the foundational research of modern society was done based on whatever rich people thought was interesting at the time. That is how a lot of the math was turned up. It is a perfectly fine strategy.

> Markets will instead allocate funding to the least-adventurous surest bets.

So the NIH is doing what, ignoring sure bets at curing long COVID? That shouldn't be encouraged.

Besides, you are wrong. Ever hear of something called the "Metaverse"? Companies regularly make big risky gambits that don't pay off.

> When we needed COVID vaccines, the research was done by private entities.

Decades of publicly funded research, then private companies are "spun out" of publicly funded research institutions and then the private companies are given yet more public money as grants.

The disgrace is that the profits are privatised when the novel research is not.

Solving COVID: Pfizer starts research in January 2020. Apparently they avoided Operation Warp Speed because they were worried about the government slowing them down [0]. We get a successful mRNA vaccine for I think the first time in history? Takes a few days, they've been preparing for this sort of scenario for years.

Estimated cost, $1 billion. The only thing slowing them down is legislation - they want to make money by resolving people's medical issues with novel techniques.

Solving Long COVID: NIH $1 billion. Nothing. Probably the biggest problem here is that groups like Pfizer are being banned from doing research by an NIH ethics committee that says trading 1 life to save 1,000 is an unacceptable trade.

Now I'm not against the NIH spending $1 billion on research. Better than feeding it into the military-industrial complex for example. But the evidence here is if you want a research team to fix a known problem, the people who know how work at Pfizer not the NIH. Now Pfizer probably can't do that trick of getting results on demand, but there'll be some company that can - assuming it is possible. There are a lot of companies so there are lots of attempts being made.

[0] https://en.wikipedia.org/wiki/Pfizer-BioNTech_COVID-19_vacci...

Biontech pioneered the mRNA technique and they were sponsored by German taxpayers; and Pfizer was promised by Operation Warpspeed that US taxpayers would purchase 100 million doses of any potential working vaccine before it was even developed, that must have felt motivating. There was no vaccines developed entirely through private funding even though the profits were entirely privatized, ie Moderna received about a billion in development aid and AstraZeneca somehow managed to pocket research out of Oxford University.

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https://en.wikipedia.org/wiki/BioNTech tells me BioNTech was founded in 2008 based on research by Uğur Şahin, Özlem Türeci, and Christoph Huber, with a seed investment of €150 million from MIG Capital and AT Impf.

I don't know much about Germany I must admit. Is AT Impf some sort of government body? Because this looks a lot like private actors spotting a good thing well in advance.

I'm sure they took government money at some point because the government is handing out money and why not. It'd be silly to turn it down. But there are obviously millions of dollars here to develop influenza vaccines and we see the payoff was billions of dollars. The Free market could do this with no intervention - the payoffs look pretty good.

> In September 2019, BioNTech received a capital contribution of US$55 million from the Bill & Melinda Gates Foundation, with the option of doubling that investment amount at a later date.

Heh, there they are.

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> ...US taxpayers would purchase 100 million doses...

Yeah but the 100 million doses purchase would have encouraged them to build infrastructure, which we already know the private sector is better at than the public sector at. Operation Warp speed wouldn't have hurt, but again they technically had the vaccine developed before Operation Warp Speed was a thing.

The only thing stopping people buying the vaccine in mid-2020 was that the government had made it illegal.

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