There have been no higher-stakes public investments recently than those the federal government made in biomedical research and production to make COVID-19 vaccines. Many commentators, conservatives and progressives alike, have seen the program that directed these investments, Operation Warp Speed (OWS), as a key example of how the government can enact new industrial policy—the deliberate attempt to shape different sectors of the economy to meet public aims. David Adler, for example, calls OWS “a triumph and validation of industrial policy,” concluding that the initiative “illustrates best practices in program design, as well as in government contracting” and should be a model for efforts to implement industrial strategy more broadly.

COVID-19 vaccines were both a tremendous success in terms of public health and a real failure in terms of industrial strategy.

We think this view is seriously misguided. There is nothing new about industrial policy if it simply means public investments that yield vast benefits and outsized control for the private sector and comparatively little for the public. As historian Brent Cebul describes in his new book, Illusions of Progress, “supply-side liberalism”—a pattern of governance that directs federal money toward public aims but cedes critical aspects of policy, rules, and authority to the private sector—has a long history in the United States. In the late New Deal, ambitious federal spending programs like the Works Progress Administration gave significant control to local actors in order to overcome opposition of racist demagogues and business elites. This decentralized, deferential administrative model had staying power because it compensated for a lack of state capacity—and in turn, it helped ensure that no such capacity would be built. Cebul traces this template through the design of the postwar Federal Housing Administration and urban renewal into the 1980s and ’90s, when public-private partnerships and market-centered solutions became predominant during the Carter, Reagan, George H. Bush, and Clinton administrations.

The case of COVID-19 vaccines extends this pattern of political economy. The federal government gave tens of billions of public dollars—along with critical decision-making power and knowledge—to vaccine companies through direct grants, purchase agreements, and low-cost licenses for government-owned patents on essential vaccine technology. Pfizer and Moderna earned extraordinary rewards and now claim nearly exclusive control over the results. They are now quadrupling prices and rewriting history, downplaying federal investments and casting their earlier prices as somehow “discounted.” Though the federal government had both the resources and the authority to build public expertise and public manufacturing and research infrastructure, it did neither.

In some sense, this should not surprise us. For decades neoliberal ideas and policy choices treated industrial policy as an inefficient market “intervention,” valorized the profit motive as a disciplining force, and undermined state capacity and curbs on corporate greed. And as Cebul stresses, there is an entrenched political logic to the U.S. habit of deferring to business interests. It will take enormous effort, coordination, organizing, clear-eyed vision, and ambition to change this dynamic.

At the same time, this is a moment of growing excitement about industrial policy in Washington—when Joe Biden’s major legislative victories, from the semiconductor bill to the American Rescue Plan and the Inflation Reduction Act, have been heralded as a paradigm change. Precisely for this reason, we should not take the tens of billions poured into COVID-19 vaccines as a model for these efforts. They were both a tremendous success in terms of public health and a real failure in terms of industrial strategy. If we do not rethink what it means to empower the public sector, the investments we make in greening our energy system and in other forms of infrastructure will entrench rather than change the failed paradigm of the last several decades.

There is no doubt that the COVID-19 mRNA vaccines are a stunning scientific success, and their public health benefits have been enormous. That we now call these the “Moderna” and “Pfizer” vaccines, however, shows that we attribute the success far too much to industry. Their discovery and development should instead be tallied as a win for mission-driven government investment.

The U.S. government spent billions financing and making the discoveries undergirding them, beginning as far back as the 1980s. Through grants and its own scientists, the National Institutes of Health (NIH) supported discovery and development of the critical SARS-CoV-2 spike protein that is the active ingredient of nearly every COVID-19 vaccine, including those made by Pfizer-BioNTech, Moderna, and Johnson & Johnson. In the 2000s and 2010s, NIH funded additional groundbreaking academic research on mRNA that showed how to modify mRNA to make it more stable and avoid dangerous immune reactions. In the early 2010s, the Department of Defense funded companies, including Moderna, to develop what was then highly speculative mRNA vaccine technology, which it hoped could be used for viral diseases including Zika and Chikungunya.

The government also played an essential role in catalyzing the subsequent development and clinical testing of COVID-19 vaccines during the pandemic. OWS, launched in May 2020, disbursed billions in direct R&D subsidies—paying, for example, almost 100 percent of Moderna’s clinical development costs. It supported and directed vaccine manufacturing on huge scale, paying much of Moderna’s early manufacturing costs. It also played an operational role at times, transporting manufacturing equipment to Moderna’s Massachusetts factory in a military plane. In late 2020, then-head of OWS, Moncef Slaoui, summarized OWS’s relationship with Moderna this way: “We held Moderna by the hand on a daily basis.” OWS provided or supported industry with equipment, staff, training, raw materials, technology transfer and validation—even down to vials, syringes, and the process of putting the vaccines into them.

There is nothing new about industrial policy if it simply means public investments that yield vast benefits and outsized control for the private sector.

In short, the federal government’s unusual degree of control over the entire process ensured that these companies would succeed financially, even if their vaccine candidates failed. On top of direct grants and material help, OWS promised Moderna and other manufacturers tens of billions in payments for deliveries of their vaccines—in at least one case, regardless of whether those vaccines ever received FDA authorization or approval. To use a bit of economic jargon, these promises majorly “de-risked” development for these manufacturers. In return, the government—which had access to billions allocated by Congress—made sure that people would receive the vaccine for free, compensating Pfizer and Moderna at about $20 to $25 per dose. Pfizer and Moderna made enormous profits at these prices. Once developed and validated, mRNA vaccines are cheap to make; independent experts estimate less than $3 per dose, and perhaps less than $1 per dose.

The OWS story thus shows that government can successfully pick good investments and tolerate some risk and failure, giving the lie to the neoliberal picture of innovation. The neoliberal consensus worries that industry will not contribute to efforts that produce trillions of dollars in social value if industry can capture only a small portion of those benefits. OWS demonstrates that this worry is unfounded, especially in the presence of a concerted, mission-driven government campaign. Vaccine manufacturers opted into OWS because they benefitted from massive infusions of government money and technology; corresponding expansion of knowledge and infrastructure; and a public relations boost. Moderna went from having essentially no clinical evidence that its mRNA-based vaccines actually work in people to mountains of evidence. The benefits of government partnership, from infrastructure to knowledge, were important enough that two major manufacturers, Johnson & Johnson and AstraZeneca, agreed to forgo any direct profits from selling their vaccines.

At the same time, the OWS story also reveals important failures.

One measure of OWS’s limitations has to do with vaccine access. Instead of leveraging the enormous public investment to facilitate fair vaccine prices over the long term—or using its power to press companies to share intellectual property and data to enable more rapid and sustainable production of vaccines abroad—OWS deliberately disavowed these kinds of moves.

We now know that COVID-19 was and is deadlier in many parts of the Global South (both because of lower vaccination rates and difficulties accessing care). Vaccines were initially unavailable in these regions because high-income countries used advanced-purchase agreements to snap up doses. Global distribution efforts such as COVAX overpromised but underdelivered, often sending limited and nearly expired doses to low- and middle-income countries much too late. Gold-standard mRNA-based vaccines have been even more scarce in these countries. One study found that around half of the deaths in Sri Lanka, El Salvador, and Mexico before October 2021 could have been averted if people there had similar access to vaccines as people in high-income countries.

Low rates of primary vaccination and even lower rates of boosting continue to fuel illness, death, and the emergence of new variants around the world. Health, like climate, is global; our industrial policy must be too. Yet the U.S. government repeatedly fumbled an opportunity to guarantee distribution to poor countries and, better yet, to empower those countries to make affordable mRNA vaccines themselves. It could have used funding contracts, its own patents, or the Defense Production Act (DPA) to insist on better supplies for the world. And since industry claimed it could not, at critical moments, produce more, the government could have demanded that beneficiaries of OWS teach others how to make and distribute the vaccine, creating a more resilient and distributed infrastructure for the future. In 2021 the Biden administration’s chief science officer for the COVID-19 response, David Kessler, admitted that the DPA gave the administration strong authority, including to tell industry who to collaborate with and where doses should go.

An industrial policy that fails to invest in public infrastructure will allocate technical power to industry instead.

Moreover, since pharma’s manufacturing data remains an intensely guarded secret, the promising vaccine hub that the WHO has facilitated in South Africa has been forced to attempt to reverse engineer the NIH-Moderna shot from square one. (The Biden administration has, at least, licensed the U.S. government’s own mRNA patents to the World Health Organization vaccine hub and sent some of NIH’s leading immunologists to help, but it has drawn the line at pressing industry to do the same.) On the horizon, then, there’s an initiative for vaccine manufacturing abroad that is credible, and could be enormously important not just for COVID-19 but for manufacturing capacity in the next pandemic—which industry is stonewalling, with the blessing of the U.S. government.

Access has been better in the United States, but even here the situation is changing. Many Americans are not yet vaccinated or boosted. It’s hard to say how much of this has been due to supply constraints; other factors, from hidden costs to the politicization of vaccines, have loomed larger. But price is becoming a real issue. The Biden administration ended the public health emergency designation for COVID-19 in May, announcing that Americans should expect full “commercialization” of vaccines, treatments, and tests. Biden has declared that “the pandemic is over,” and Congress has refused to extend funding to develop, procure, and distribute these products; instead, the Department of Health and Human Services (HHS) has announced a limited bridge access program that will end in 2024.

All this means that the government is in the process of relinquishing its enormous power to negotiate discounts on bulk procurement orders. As a result, the administration now effectively resorts to begging. In July the HHS Secretary sent a letter to vaccine manufacturers reminding them how much they benefitted from public money and pleading with them not to “price gouge.” Unsurprisingly, Moderna’s and Pfizer’s executives did just that, raising prices for federal agencies by over 200 percent (about $80 per dose) and the private health plans by about 400 percent (about $120 per dose). Already these high prices have led to clinics and pharmacies procuring a limited number of doses, stymieing efforts to vaccinate the most vulnerable as COVID-19 hospitalizations rise.

In other words, we’re right back to the dysfunctional ravages of the American normal. Patients who are underinsured or without insurance will soon face copays and other out-of-pocket costs for vaccines. In the future these patients might get access through companies’ “patient assistance programs,” but these are difficult to navigate and do not guarantee eligibility. (Moderna has made big promises but has not yet shared any details of its plan.) Reverting to business as usual means not just that many people will forego getting vaccinated but that those who pay will be forced to skimp on other necessities instead. Insurance premiums will rise, and we will divert scarce resources to pad the revenues of companies that have already made extravagant profits. The result will almost certainly reflect and amplify existing racial, geographic, and socioeconomic disparities.

Remarkably, OWS did worse than just ignore these issues; it deliberately sidestepped a federal law, called the Bayh-Dole Act, intended to ensure access to government-funded inventions, for example by creating an automatic government license to make them. When OWS signed contracts pouring billions into efforts like Moderna’s, it made an end-run around Bayh-Dole requirements, suspending them. (OWS’s leaders didn’t publicize this fact; we learned it from FOIA requests by public interest organizations, especially Knowledge Ecology International.) Had the federal government instead leveraged its funding and rights to negotiate a long-term guarantee on pricing, we would be in a far better place for the coming years. In fact, the Biden administration just showed that this can be done, by imposing reasonable pricing restrictions for the first time in a new funding contract with Regeneron for monoclonal antibodies used to treat COVID-19.

In the darkest days of the pandemic, for a brief period, we had something approaching universal health care in the United States, if just for COVID-19. Vaccines, testing, and treatment were all provided free of charge, at times by public employees. This brief experiment in socialized medicine parlayed OWS’s stunning success in inventing effective vaccines into stunning success in distributing those vaccines to many places. All of that is now at risk, with funding drying up, prices rising, and no durable public infrastructure for vaccine production or distribution.

Another crucial limitation of OWS is that it has done nothing to prepare us for the next pandemic.

Future pandemic risks tend to get short shrift from policymakers; as the outbreak of COVID-19 itself demonstrated, there’s a long pattern of failing to prepare for the next one. Global health experts had long predicted a coronavirus-like pandemic and urged more be done to prepare for. We need to be working, immediately and feverishly, on vaccines for new flu strains. Messenger RNA may hold the key to new vaccines against a raft of infectious diseases that industry has neglected, whether because firms refuse to make investments now for pandemics they might not arrive for decades to come, or because many diseases (including Zika, malaria, MERS, and dengue) largely affect the Global South and therefore promise little profit. (While we cannot necessarily anticipate every new strain, viruses like influenza and coronaviruses often have stable features, making it possible to identify and target those features in advance.) It also has potential against diseases that are major problems in the United States today, such as HIV, RSV, influenza, and even certain cancers, and may yield important new therapeutics.

In many ways, despite Operation Warp Speed, we’re right back to the dysfunctional ravages of the American normal.

None of this was under the purview of OWS, but this is work that states can and should do. Governments and the World Health Organization are the backbone of the global flu surveillance and vaccine system, and OWS shows that government funding, expertise, and leadership can build mRNA R&D and manufacturing capacity in record time. But the United States built no significant new capacity or rights to undertake public mRNA research over the last three years, and the U.S. public cannot easily leverage its enormous past investments in mRNA to shape the course of current and future research.

That is because drug companies, not the U.S. government or other publicly accountable entities, control a growing majority of the relevant patents, trade secrets, contracts, laboratories, manufacturing plants, and distribution networks. These companies also employ most of the scientists and engineers with hands-on experience and “tacit knowledge” in mRNA. As a condition of employment, these companies can and do impose non-disclosure, non-compete, and other restrictions that can make it hard for employees to disseminate information without the companies’ permission—and hard even to quit.

In short, the United States has allowed this new technology to become more and more embedded in private—and even secret—for-profit infrastructures, which have little history of investing in public health threats. Companies are quietly reverting to their pre-pandemic scientific “playbook”—claiming “proprietary” legal rights in research data to keep it secret and choosing exclusive licensing over licensing multiple manufacturers, concentrating manufacturing in just a few places, walking back on promises to build capacity abroad. All this undermines resilience.

OWS itself suggests how things could have been different. Though less open than it could have been, OWS did require drug companies to share trial data and other research data with the U.S. government, which acted as a clearinghouse and facilitated sharing some with other companies. It also spent much funding and energy on expediting clinical trials and data sharing. That effort helped expose problems with vaccines that were less successful, like the Oxford-AstraZeneca COVID-19 vaccine. Within weeks OWS helped reveal those issues and prompted AstraZeneca to release revised data. Absent OWS-like oversight, drug companies often delay disclosure of new product testing. For example, in late 2022, GlaxoSmithKline initially declined to share details of a safety signal detected in trials of its RSV vaccine, seeming to revert to industry’s pattern of doing science by press release.

The upshot, as we envision future industrial policy, is that the U.S. government (and other governments) could have attached strings to their investments in mRNA and other vaccine technologies—strings that would have mandated data sharing for years to come and required public and academic researchers have access to the new mRNA platforms for research purposes. Companies could have been compelled to share more details of their clinical trials and other R&D. Useful knowledge of what works would be disseminated more quickly and more widely, catalyzing breakthroughs at home and around the world.

In addition, by reserving the rights to the platform, the U.S. government could have shaped the subsequent science being built on publicly funded knowledge. For example, the government could have funded and directed further research applying mRNA technology to diseases endemic to low- and middle-income countries, such as malaria and dengue. Or the government could have directed development of vaccines that can be inhaled nasally rather than injected via a needle, improving uptake. Instead, Moderna and Pfizer have invested in defending and marketing fantastically profitable booster shot “franchises” for recurring infections in rich countries, especially COVID-19 and influenza.

Better yet, the U.S. government could have built its own R&D and manufacturing infrastructure. A great deal of sociological literature on innovation suggests that it is immanent to capacity. Building public capacity, knowledge, and networks will thus be critical to redirecting R&D to public purposes. For a fraction of the investment OWS gave to Moderna and other companies, the U.S. government could have expanded facilities, hired and retained personnel, and concentrated knowledge of mRNA and other cutting-edge technologies within the NIH. In fact, Congress allocated money for such a production facility, which was never built. (Perhaps comparable facilities will someday be built within NIH’s newly constituted ARPA-H, which will focus specifically on applied research, or within Project NextGen, which aims to address the next generation of pandemic threats.)

The significance of such capacity building is well known. Scholarship has shown that socially useful innovation doesn’t just materialize from financial incentives to innovate; it emerges from institutions and the social relations—the people—inside those institutions. Concentrating scientific expertise and capacity within public institutions yields incredible technical breakthroughs, as economist Mariana Mazzucato and others have noted. “Public pharma” could also yield stable, high-paying jobs for domestic scientists, engineers, and other workers, many of whose salaries have flatlined and whose jobs have become increasingly precarious as the pharma and biotech industries become more financialized, consolidated, and outsourced. Building government infrastructure for mRNA R&D and manufacturing would have enabled the government—and through it, however imperfectly, the public—dictate the scientific agenda, instead of a handful of self-interested corporations.

In our technologically mediated world, this kind of “path dependence” matters. An industrial policy that fails to invest in public infrastructure will allocate technical power to industry instead, which will use power to its advantage. Industry control then undermines the viability of the next effort to build public capacity. Industry’s incumbent advantage makes it seem too slow or cumbersome to develop public capacity in any single effort, particularly in the short run—so a clear-eyed and long-term commitment to that capacity is essential.

A new government effort to make insulin offers an example. In 2022 California announced a bold plan to manufacture and distribute low-cost insulin. The state government determined that investing $100 million would pay dividends in a few years, even if just a portion of patients switched over. Critics initially argued that the government would fail because private companies control the relevant expertise and distribution channels; they predicted that incumbent manufacturer companies would wield their market power to undercut the effort. But California now appears to be around a year away from bringing biosimilar insulin to market—at a hefty discount of around $30 per vial (about a 90 percent reduction in some cases). The state currently relies on just one non-profit drug company to do the work, lacking the capacity and expertise to go it alone. Fortunately, the contracts California executed will allow the state insight into the development process and seats on the board of the foundation overseeing the effort. That means that California can build public priorities in and also move to a more fully public model over time.

Building public infrastructure and public power will require us to believe in it and commit to it and to develop stepwise processes to get there over time. We must commit to it just as conservatives committed, decades ago, to their slow and relentless project of fragmenting public power over industry and building power in places—including statehouses and the federal courts—where they hold huge advantages today.

There are parallels here with climate change and other crises we face. We should be skeptical of a “silver bullet”—technological solutionism—and focus on social and political change rather than wait solely for technology to save us. But clearly there is some role for technological innovation in the fight against climate change and its effects on people and nature. And there is good reason to think that letting industry write that innovation agenda will reinforce the status quo and fail to produce the technologies we most need.

Consider that car companies’ preferred version of “clean transportation”—electric vehicles—encourage continued sprawl, require huge batteries made of metals mined in environmentally destructive ways, and cannot reduce emissions as much as expansion of public transit, e-bikes, transformation of housing, and other greener options could. Yet 2022’s Inflation Reduction Act offers huge new tax incentives for electric vehicles—billions in new public spending on suboptimal technology. The IRA structures the spending as a corporate giveaway, to boot, meaning that Tesla, GM, and other companies control the intellectual property, the scientists, and knowledge of improved battery designs. Meanwhile, the United States continues to underinvest in R&D that is unprofitable—and that is thus neglected by the market—but that could spare the United States and other countries from some of the worst harms of climate change.

Where does all this leave us? As the future of industrial policy is being written, we need to talk in the same breath about how public investment must yield public infrastructure, public rights, and public power. There is nothing radical about public investment. Large public investments in R&D and procurement that can be feasted on is part of the essential formula of high neoliberalism: socialized risk and private profit. Industry prefers this arrangement, but it generates and exacerbates many harms we need to remedy today.

Public investment must be coupled with public infrastructure, public rights, and public power.

To be clear, more public investment is usually good, as is the renewed enthusiasm for more publicly directed investment, including into more than just “basic” research. The case of COVID-19 vaccines shows that removing “last-mile” roadblocks between promising science and commercialization is a worthy undertaking for government. But it also shows the need for all this to be coupled with public infrastructure, public rights, and public power.

Building a new industrial policy of vaccines that expands public capacity will not be easy. For one thing, the powerful pharmaceutical industry will mount a fierce campaign of resistance. The resilience of supply-side liberalism in the United States was born of a kind of interest convergence: progressives get some spending on priorities that matter to them, and conservatives and business interests profit handsomely. Without a more muscular form of developmental governance of the economy, we will not be able to provide the most basic things that government should—forms of security for our health and our planet that enable decent work and care for all.

Our political institutions are aligned against democratic lawmaking, but one reason industrial policy looks like the path forward for progressive priorities is that spending can be passed in budget reconciliation (avoiding the counter-majoritarian filibuster rules in the Senate). And many of the decisions that need to be made—for example, about ownership and authority of the public—can be made as a matter of implementation of spending. Public options, like the one California is creating for insulin production and the one New York is creating for green energy production, are popular measures that can help develop the expertise needed and show a skeptical public that government can indeed do this work well.

As we build stepwise toward more public authority, we will face difficult questions, but we can learn from the process how to effectively build public power. The recent Regeneron deal, for example, shows that public funding deals with private companies can and should include fair pricing provisions. And when industry uses its power by threatening to walk away from such deals, we must respond with the long-term balance of powers in mind by cultivating institutions that can bring products to market with the public in the driver’s seat the whole way. Existing initiatives like ARPA-H and Project NextGen are possible vehicles for this. A new approach will take years to build, but it can start now—for example, contracting in expertise, as California did to manufacture insulin, while the state builds expertise and capacity.

These policy experiments will help us build operationally effective government agencies—and, over time, perhaps even government-owned firms that can discover, validate, manufacture, and distribute vaccines. We have some models to build on, such as the federal government’s wildly innovative national laboratories—which are owned by the government—and a myriad of successful government firms. Historical examples, however, likely do not go far enough. With our long history of supply-side liberalism in mind, we must also experiment with forms of industrial policy that build constituencies and political power for more muscular and democracy industrial policy over the long term. We should consider governance roles—board seats and more—for workers, patients, and other stakeholders, and build coalitions that can durably support public authority, and also hold it accountable.

We cannot start down this road from the mistaken impression that Operation Warp Speed is a model for the industrial policy we need. Instead, it is a cautionary tale.