How 'Negative Subsidy' Affects Vaccine Supply

By ACSH Staff — Dec 19, 2003
Your Dec. 8 articles "Health Officials Say Flu Shots Should Go to the Most Vulnerable" and "Lack of Vaccines Goes Beyond Flu Inoculations," dealing with the shortages in influenza (flu) vaccine as well as others, re-inforce two important points:

Your Dec. 8 articles "Health Officials Say Flu Shots Should Go to the Most Vulnerable" and "Lack of Vaccines Goes Beyond Flu Inoculations," dealing with the shortages in influenza (flu) vaccine as well as others, re-inforce two important points:

First, when the government gets involved in pharmaceutical pricing, consumers should expect disastrous consequences. Recent shortages in children's vaccines can be traced directly to the government's power, as sole purchaser, to dictate below-market prices. This "negative subsidy" has a chilling effect on manufacturers' incentive to produce and market vaccines, which explains why so few continue to make these vaccines. (Unfounded but attention-getting lawsuits against vaccine makers have similar effects.)

Second, even with public health and government education efforts, only around half of vulnerable Americans get their flu shots, despite an average death toll of 36,000 annually over the past few years and an expected higher mortality this flu season. Yet this carnage, almost completely preventable, gets much less publicity than, say, the toll of smallpox and SARS in this country, which together have accounted for a grand total of zero deaths in the U.S.

This must not be allowed to continue. More efforts must be made to get those in need vaccinated, which will require more efficient production and distribution of flu vaccine. The government should focus its efforts on educating the public about the need to get a flu shot and allow the vaccine makers to market vaccines unencumbered by price controls.

Gilbert Ross, M.D.

Medical/Executive Director

American Council on Science and Health

New York

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