Pharma is key to solve pandemics – Covid proves. However, companies need incentives and confidence in their multi-billion dollar investments before action.

Who’d have guessed that a year later pharma would be getting credit for saving the world? From cruise lines to meatpackers, business will have plenty to answer for in its handling of the pandemic, but this part of it worked. The Covid-19 vaccines developed by the drug industry, in partnership with governments, will almost certainly prevent hundreds of thousands of American deaths and millions more around the world. They will revive trillions of dollars in economic activity, let grandparents see grandchildren, and finally bring an end to a year that has—sing it together one last time as the ball drops over an empty Times Square—really sucked. In a time where almost everything else went wrong, the vaccine effort was something that went (mostly) right.

The quest started in early January, before most people in the U.S. and Europe were even thinking about a pandemic. The biotechnology company Moderna Inc. had downloaded the genetic code for the novel coronavirus from researchers in China. Within a few days, scientists there had developed a vaccine with the U.S. National Institute of Allergy and Infectious Diseases, the research agency led by Anthony Fauci. By mid-March, they’d started a clinical trial.

Pfizer Inc. announced its own plans around the same time. A year and a half before, it had signed a deal with a German biotech company, BioNTech SE, that has similar messenger RNA technology to Moderna’s that could, in theory, rapidly assemble and test new vaccines. Like Moderna, the companies thought the technology could make it possible to quickly turn around a prototype vaccine. “The world hasn’t seen an emergency like this in 100 years,” says Steven Joffe, the interim chairman of the department of medical ethics and health policy at the Perelman School of Medicine at the University of Pennsylvania. “We are lucky in the sense that the science was there.”

Other crucial pieces fell into place behind the scenes. For years the research chiefs of the top pharmaceutical companies have had an annual gathering to talk about ways to speed up their work. As the Covid crisis got worse, about 20 drug companies started a working group with the National Institutes of Health and other government agencies, meeting every other week to look at potential therapies and coordinate clinical trials, says Paul Stoffels, the chief scientific officer at Johnson & Johnson, which has a large-scale Covid vaccine trial expected to produce results in January.

An All-Hands-on-Deck Effort

Just a few in the army of scientists and leaders who made the record-fast development of a Covid-19 vaccine happen

Those efforts would eventually be folded into what’s now known as the Trump administration’s Operation Warp Speed program. Warp Speed was revealed at the end of April, when the pandemic had killed close to 60,000 Americans. The goal was to develop and produce enough shots to inoculate 300 million Americans before the new year. Some companies, including Moderna and J&J, would get direct funding for their efforts. Pfizer got an agreement from the government to buy the vaccine it produced if it worked.

Crucially, the government was shouldering some risk, financing the advance production of the experimental vaccines while clinical trials were still going on. “The most risk-averse people on Earth in the riskiest business on Earth” is how U.S. Health and Human Services Secretary Alex Azar describes the drug industry. “Probably the most common words said in a pharma company are, ‘How do you de-risk this?’ ” Azar, whose department helped oversee Warp Speed, says he understood how tricky a bet on vaccines can be for a business. “These companies are looking at making the multibillion-dollar investments in R&D and manufacturing capacity,” he says. “And they had just been through Zika, SARS, they’ve been through MERS”—viruses for which the pharmaceutical industry investigated vaccines that never saw the outside of a clinical trial before those outbreaks dissipated or were squashed.

The government’s backing let smaller players get in the game and take some riskier technologies forward. Smaller companies such as Moderna “don’t have the resources to do this on their own,” Joffe says of large-scale clinical trials. Pfizer, despite its corporate reputation as a rival-consuming shark, said it would offer up any excess manufacturing capacity it might have—potentially producing competitors’ vaccines.

But even a company of J&J’s size—it reported $15.1 billion in profits last year—needs incentives to rapidly start up a costly vaccine development and testing effort, Stoffels says. Pharma companies could reasonably predict that Covid would be bad and that a vaccine would have a market. “But to mobilize a billion, maybe $2 billion to start manufacturing and do the R&D” is daunting, he says. “While we are big companies, nobody can free up $2 billion in their [profit-and-loss statement] overnight.”