Pfizer’s modified-RNA vaccine has received emergency-use authorization for people 18 and older, and shipments of the vaccine have begun. The first round of vaccinations will likely be distributed to health care workers and nursing home residents and their caregivers, according to state guidelines. This represents an extraordinary achievement by the scientific community and the life sciences industry.
The mass distribution, which we expect to occur by mid-2021, will bolster economic activity in the second half of next year.
The mass distribution, which we expect to occur by mid-2021, will bolster economic activity in the second half of next year and set the stage for economic recovery and expansion over the next 12 to 24 months.
So we are on the road back to normal. Dr. Peter Hotez, co-director of the Center for Vaccine Development at Texas Children’s Hospital and who is also working on a vaccine, told NPR that “we’re going to move pretty quickly, I think, in vaccinating a significant percentage of the population” in the United States.
Yet Dr. Hotez cautions that “we don’t exactly know the performance of these vaccines in terms of reducing the amount of virus shed from our nose and mouth. So there still could be a fair bit of virus circulating. And that means there could still be some need for masks and social distancing and contact tracing.”
The vaccines come as new infections are surging. The U.S. is now averaging approximately 217,000 infections per day and deaths are occurring at a rate of nearly 2,500 per day, according to the Worldometers database. Expectations among public health officials are for more weeks of record-breaking infections and deaths.
While we are optimistic about the human and economic benefits of the vaccine, we still have to get through a difficult period. This is why we recently revised down our forecast for gross domestic product in the first quarter to a decline of 0.3%.
As of Dec. 13, there have already been 16.7 million cases of COVID-19 in the U.S. At the current rate of spread and unless the public quickly adopts social-distancing practices, our model indicates that the cumulative number of newly reported cases could surpass 17 million within the week and then reach 18 million in the days before the Christmas and New Year’s holidays.
The spike in cases has left 6.7 million people currently infected, which implies that nearly 2% of the population is likely to be fighting the myriad respiratory, liver, heart and cognitive effects of the disease over many months ahead. And according to the COVID Tracking Program, current COVID-19 hospitalizations have pushed past 109,000.
Vaccines and research
The discovery of safe and effective coronavirus vaccines in less than a year will go down as nothing short of a miracle. The first to be approved, developed by Pfizer and BioNTech, was achieved without government funding. Others, like the Moderna vaccine, had government support.
None of the vaccines could have been developed without decades of scientific work supported by government funds.
But none could have happened without decades of scientific work laying the foundation. And a significant part of this can be attributed to government support of basic research over the years.
Coronaviruses were first identified in the mid-1960s. They are characterized by a spiked protein, and can cause everything from the common cold to the deadly outbreaks of SARS in 2002-03; MERS in 2012, 2015 and 2018; and now, COVID-19.
According to a workshop summary provided by the National Center for Biotechnology Information, by 2004 “approximately $100 million in SARS-specific grant funding was awarded” by the National Institutes of Health and by the National Institute of Allergy and Infectious Diseases.
But funds for those grants waned, and though there were private efforts to develop coronavirus vaccines, corporate interest also waned as NIH grants declined. Nevertheless, by 2005 a Science article by five members of Harvard’s medical school had found that the spike protein of the coronavirus suggested a path for “the design of coronavirus vaccines.”
Yet even with advances in the private sector, funding for the NIH has been declining since 2018. According to a May 2020 analysis by the Congressional Research Service, the requested budget for the NIH in fiscal year 2021 is 6% lower in nominal terms than 2020 and 8% lower in inflation-adjusted dollar terms. Some of those 2021 funds are likely to be reinstated.
A November report from the Congressional Research Service shows an 8.8% budget cut in overall research funding in nominal terms and a 10.6% cut in inflation-adjusted terms. This is the funding for scientists and mathematicians who make technological advances possible for everything from health issues to national defense.
State-by-state analysis
The first figure below shows the spread of the infections among the six states with major metropolitan areas (Massachusetts, New York, New Jersey, Pennsylvania, Illinois and California) where the initial outbreak peaked in April. The recent rise in cases in those states more than doubles the initial outbreak and is attributed to increased social interaction as people let down their guard.
The second chart shows the spread of the virus across all the other states, where infections peaked across the South and Southwest in the weeks after the July 4 weekend. That spread has since moved into the Midwest and across the northern tier, with new cases in those states far exceeding their summer peak.
Using state-by-state data from the Johns Hopkins/Bloomberg News database, infections in the six states with major metropolitan centers are rising at a rate of more than 69,600 per day as of Dec. 13. Infections in all other states are rising at a rate of more than 143,200 per day.
Deaths attributed to the coronavirus have increased to more than 700 per day in the six states with major metropolitan areas, and to nearly 1,700 deaths per day in all other states.
Average weekly growth rate
In the following table, we show the state-by-state weekly growth rate of infections since the May reopening of local economies and since Sept. 12, which was the low point after the Labor Day weekend.
Note that because of the inconsistency of reporting by states and the haphazard spread of the virus, we are looking at the average rate of infection in the several weeks since the onset of cooler weather.
The blue highlights indicate the six states with major metropolitan areas that were initially affected by the virus. After much progress over the summer, each of those states is reporting increasing numbers of cases since Labor Day.
Cases in Vermont have increased by an average of nearly 30% in each of the 13 weeks since Sept. 12. Hawaii is the only state reporting fewer cases now than in the first weeks of September.
For more information on how the coronavirus is affecting midsize businesses, please visit the RSM Coronavirus Resource Center.
