News is beginning to filter out about do…

News is beginning to filter out about doses of swine flu vaccine beginning to be distributed to the states. This seems a particularly appropriate time to reflect on a discussion from last spring about this:

bxojr 10:08 am on 8 May 2009

I’m confused. WSJ reports that the Obama administration is currently struggling with the decision of whether to order the production of a swine flu vaccine, once manufacturers are finished making this year’s supply of seasonal flu vaccine.

Why is that a decision the government has to make? Seems to me there’s a lot of money to be made from a swine flu vaccine. . . .

Pat 11:57 am on 8 May 2009

You’re kidding, right? Nobody makes a profit on flu vaccines. In fact, most of the companies that used to manufacture those vaccines have stopped, because they were losing money on them. The production of vaccines is heavily regulated and most doses are purchased by the federal government, which insists on deep discounts. . . .

And, unfortunately, it’s worse than “most” doses. From the above WRAL story:

The federal government bought the nation’s entire supply of H1N1 vaccine and is dividing doses as they arrive among states according to population. State health departments submit orders, and doses are shipped to the vaccination sites the states deemed able to quickly get shots into arms and squirts up noses – a mix of doctors’ offices, hospitals, drugstores and public clinics.

The only way that demand can outstrip supply so greatly is if demand isn’t being limited in the traditional manner: rising prices.

On its face, the idea of making people pay for flu vaccine, as opposed to the current system where it is delivered to those who are most at risk, seems like a cruel and barbaric system. But our current system has its own cruelties:


Graph by NCPA

Maybe it’s infeasible for people today to pay for their own vaccine because it would be so expensive at market value. But that high market cost is the direct effect of a government enforcement of price controls.


Nitpick: Listen, NCPA, guys. Line graphs are for showing change over time. Bar graphs are for showing simultaneous differences in magnitude.

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