Craig Westover: "To better understand the current flu vaccine shortage and the dangers of proposed policy changes for the way Americans purchase medication, it’s necessary to understand a bit about vaccine production and pricing.
Unlike pills, vaccines are developed using virus and bacteria cultures, which don’t grow on demand. Adding more people on a production line can’t shorten delivery times any more than nine women working together can have a baby in one month. A vaccine has an 8-12 month production cycle. Add to the mix a regulatory approval process, and the production to shipping cycle for a vaccine might run from 11 to 16 months or longer.
Current production methods are not responsive to changing market conditions. “Unbelievable technology” is available, but high implementation cost and low profit make it uneconomical to implement.
Why the low profit on vaccines? Consider a policy like the 1993 Vaccines for Children (VFC) program. (VFC is similar to the prescription drug program in Canada.)
Under the VFC program, the Centers for Disease Control (CDC) purchases nearly 70 percent of all childhood vaccines at deeply discounted government-set prices. It then distributes the vaccines to states according to a federal formula. The result is some states wind up with a surplus of vaccines (with a limited shelf life) while other areas experience a shortage. Price control plus limited shelf-life discourages vaccine makers from producing more doses than the government orders."
Unlike pills, vaccines are developed using virus and bacteria cultures, which don’t grow on demand. Adding more people on a production line can’t shorten delivery times any more than nine women working together can have a baby in one month. A vaccine has an 8-12 month production cycle. Add to the mix a regulatory approval process, and the production to shipping cycle for a vaccine might run from 11 to 16 months or longer.
Current production methods are not responsive to changing market conditions. “Unbelievable technology” is available, but high implementation cost and low profit make it uneconomical to implement.
Why the low profit on vaccines? Consider a policy like the 1993 Vaccines for Children (VFC) program. (VFC is similar to the prescription drug program in Canada.)
Under the VFC program, the Centers for Disease Control (CDC) purchases nearly 70 percent of all childhood vaccines at deeply discounted government-set prices. It then distributes the vaccines to states according to a federal formula. The result is some states wind up with a surplus of vaccines (with a limited shelf life) while other areas experience a shortage. Price control plus limited shelf-life discourages vaccine makers from producing more doses than the government orders."
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