We recently received the following question:
The consensus of health experts is that drug companies won’t do vaccines because it’s unprofitable relative to other health issues, such as cancer. Therefore, the gov’t needs to protect drug companies from lawsuits and agree to buy extra supply in order to assure sufficient vaccine availability. I know little about health care but wonder why making vaccines is unprofitable. The natural suspicion is that prices are being held below market. Do you know anything about this?
The answer: a market distortion, tracing to 1993’s “Vaccines for Children Program,” is to blame. The problem is that government displaced private markets and made market distribution financially unviable—a classic case of perverse results from a program attempting the opposite result. The government even offers a FAQ: “Is there any financial incentive?“ The real answer is: not enough to make a difference. But before getting too worked up about the loss of the flu vaccine, see this revisionist view.
