Why not set a lower price, with a higher quantity, to give the same return but get more vaccines cheaply?
The guaranteed low, long-run price ensures that vaccines are available cheaply when the commitment is exhausted. So there is no cost-effectiveness benefit to extending the commitment to a larger number of vaccines but at a lower guaranteed price. The choice of combination of guaranteed price and maximum quantity should be determined by the amount of front-loading the sponsors want to create, not by the cost-effectiveness of the commitment, which is determined by the overall value of the commitment, not by the mix of price and quantity that is used to get there.
Related Questions
- What happens if I don follow CEF guidelines, use lower quality product, or use a lesser quantity than approved by CEF?
- Why not set a lower price, with a higher quantity, to give the same return but get more vaccines cheaply?
- What impact would it have on firms’ incentives to set a lower price, for a higher quantity?
