THE GREAT FLU VACCINE SHORTAGE

Washington Monthly ^ | October 17, 2004 | K. Drum

[huac]

This article was published in the Washington Monthly, a decidely Left of Center magazine. It's author, Drum, is a fervent Kerry supporter. He narrows down the potential reason for America's lack of flu vaccine to liability lawsuits and over regulation by the FDA. Drum plays down the effect of the first (which is a mistake-Drum is obviously a MSM liberal, and they love trial lawyers) and argues that FDA regulations are the problem. While Kerry castigates Presidenty Bush for the current flu vaccine shortage, this article makes the argument that two mainstays of Kerry's constinuency, trial lawyers and government regulation, are responsible for vaccines not being produced domestically. An interesting (if inadvertant) admission from a Kerry supporter and liberal.

[huac]

As everyone knows by now, the proximate cause of the flu vaccine shortage was contamination at a plant in England owned by Chiron, one of only two companies that manufacture flu vaccine for the U.S. market (the other is Aventis Pasteur). But why are there only two manufacturers of flu vaccine in the first place? After reading a slew of articles, here's a rundown of all the explanations on offer:

1. For starters, it's a pretty small market. The total vaccine market (for all vaccines, that is) is about $6 billion out of a market of $340 billion for drugs of all kinds.

2. The flu vaccine business is risky: some years you sell out, but other years you make 50 million doses and only sell 20 million. That makes it fairly unattractive, especially since....

3. It's a commodity market, so profit margins are thin to begin with.

4. What's more, the biggest buyer is the government, which buys in bulk at a very low price. So profit margins are even thinner than they might be.

5. FDA regulations have gotten tighter over the years, and vaccine makers have had an increasingly hard time meeting them because it requires expensive plant upgrades.

6. But nobody wants to invest a lot of money to upgrade their flu vaccine plants because there's new technology coming down the road in a few years that will render the current manufacturing technique (which uses chicken eggs) obsolete.

7. Finally, huge awards in liability lawsuits have scared vaccine makers out of the market. About 50-70% of the cost of most vaccines is taken up by the cost of liability insurance.

I got all this from reading about half a dozen different stories purporting to tell the story of the flu vaccine shortage. But something important was missing from all of them: with two exceptions, all of these explanations apply to every country in the world — but the United States is the only one with a problem. So most of them don't actually explain anything.

That leaves the two exceptions, and only one of them seems to hold water. Explanation #7, liability costs, is certainly something that could be unique to the United States, but liability costs wouldn't drive companies out of the flu vaccine market unless liability insurance were unavailable, and this must not be the case since both Chiron and Aventis presumably have liability insurance. It might be expensive, and therefore drive prices up, but it wouldn't force companies out of the market. (It would — potentially — be a big problem if the price of the vaccine were capped, but while that's the case for some vaccines, flu vaccine is not price capped.)

That leaves explanation #5, and at first glance it seems the most likely to be the real deal. The FDA has a famously tight regulatory regime, made even tighter in the late 90s, and as a result the United States has only two approved manufacturers of flu vaccine while Britain has half a dozen. (Although, ironically, it's worth noting that a breakdown of the regulatory regime seems to be a more likely explanation for Chiron's immediate problem.) The bottom line is that there are other flu vaccine manufacturers besides Chiron and Aventis, but they don't sell into the U.S. market because the cost of complying with FDA regulations is higher than the narrow profits they could expect to make from selling flu vaccine.

Anyway, that's my best guess, although it's practically impossible to be sure since not a single article I read even attempted to make an international comparison even though it's the most obvious question to ask. If anybody can point me toward a more authoritative report that explains what makes the U.S. market so much different from every other country's, leave a link in comments.

[valkyrieanne]

I remember reading years ago (no links, sorry) that some European countries with socialized medicine, like France, basically protect the government from *any* liability from drugs or medical procedures. (That's why RU-486 was developed and tested in France: the patients couldn't sue.)

Other countries, like Japan, are at the forefront of vaccine development because it's less customary in Japan to sue than in the US.

One reason vaccine lawsuits have proliferated so wildly in the US is because of our practice of vaccinating young infants. In both Japan and most of Europe, children are vaccinated between ages 2 and 6, and vaccination is *not* required for school attendance in many countries. Their thinking is that breastfeeding & the mother's own immunities will prevent childhood diseases in infants, and they don't seem to be terribly concerned about children getting the childhood diseases. They also note that children who get childhood diseases have immunity *for life,* and mothers will temporarily pass on some of that immunity to their breastfeeding infants. By contrast, shot-based immunity disappears after time.

Here in the US, by contrast, we're totalitarian about infant immunization, and consequently we have had many instances of side effects, often generating major lawsuits.

This litigiousness slops over to affect *all* vaccines. Notice too that flu vaccine started going short after it became recommended not only for oldsters but for children under age 2. This creates a demand for more shots, and also opens the door to more lawsuits, because courts are more sympathetic to damaged children than damaged 85-year olds.