November 28, 2009
The government wrecking ball
Out of the dinsome effervescences of the endless inanities comes a single clear explanation of the flu vaccine shortage:
The 1993 Vaccines for Children program gave the Centers for Disease Control power to set the price for childhood vaccines. In the 1990s, it paid as little as 25 percent of the list price, according to a 2003 study by the Institute of Medicine (IOM), a branch of the National Academies of Science.
That led a number of firms to stop making vaccines; those remaining did not invest in new technology. The IOM study said, "The desire to maximize short-term savings in purchasing current vaccine products … is directly opposed to the goal of creating financial incentives" for commercial firms to make and improve vaccines.There is at present only one flu vaccine manufacturer in the United States, and it uses a 50-year-old chicken-egg technology that often fails. In 1996 there were eight U.S. vaccine manufacturers.
Vaccine shortages were so prevalent in the years between 2000 and 2005 that they became an issue during the 2004 presidential campaign. In 2005 Congress gave President George W. Bush $7.1 billion to develop a vaccine production base and stockpile other medicines to meet the demands of pandemic flu.
The government gave contracts to six firms to build U.S. plants to produce vaccines using a new cell-based technology. But the plants will not come on line until 2012 or later. Because of the withered size of the vaccine industry, gearing up for a pandemic has already cost billions in public subsidies and will cost more in the future.
Meanwhile, vaccine prices charged by the small number of active suppliers to the market have risen sharply between 2004 and today.
Could those problems be repeated on a larger scale? Congress reportedly is considering forcing the pharmaceutical industry to reduce its prices. The New York Times recently reported that drug companies are raising prices in possible anticipation.
There you have it. Do you really need to know any more?
