Natalie Solent

Politics, news, libertarianism, Science Fiction, religion, sewing. You got a problem, bud? I like sewing.

E-mail: nataliesolent-at-aol-dot-com (I assume it's OK to quote senders by name.)

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I also sometimes write for Samizdata and Biased BBC.)

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Tuesday, October 19, 2004
You want vaccines? We ain't got vaccines. There is a shortage of flu jabs in the US this year. The British angle is that the main reason for the shortage is that a batch of vaccine made in a British factory owned by a US company, Chiron, has turned out to be contaminated. The other British angle is, of course, that we in Britain also get flu and ought to have an interest in which systems work for preventing deaths from it and which don't.

Now one vaccine manufacturer slipping up would not be a major problem if there were lots more manufacturers ready to step into the breach. In fact there are now only two left in the US, though there used to be loads more. Why is this?

Instapundit linked to a post covering the current shortage written by generally left-leaning blogger Kevin Drum. Lawsuits and Food & Drug Administration regulations are the two factors Drum identifies as explaining why the US in particular has so few manufacturers.

Though I agree with many points he makes - especially about lawsuits - it looks to me as if he is wrong to discount price controls as a factor. Jim Miller covered the same topic a few days ago. He quotes this Weekly Standard article by William Tucker. If I have understood correctly then before 1993 US doctors purchased vaccine themselves. After 1993 the US government made itself into a monopsony customer. As such it was able to enforce price controls.

The price controls have a pretty name, "The Vaccine for Children Act." Aaaah. It would be better called the "Ten Years Down The Line No Vaccine for Children But We Lawmakers Look Caring Today So Who Cares About The Future Act."

Later, in an update to his post Jim Miller links to what he correctly calls a piece of economic illiteracy from the New York Times.

The heart of the problem, experts say, may be that no one person or agency is in charge of making sure the United States has an adequate vaccine supply. The production, sale and distribution of vaccines, particularly those for flu, are handled almost entirely by pharmaceutical companies.
Would that they were! A bunch of competing companies would mean that not all the eggs were in one basket. In real life the unnamed experts very nearly have their wish for central control already - and looks where it gets them. I quote from the Weekly Standard article:
Each year in February, the Centers for Disease Control meets with the vaccine-makers--all two of them--and decides which strain of the virus to anticipate for next year. Then they both make the same vaccine. Last year the committee bet on the Panama strain, but a rogue "Fujian" strain suddenly emerged as a surprise invader. A mini-epidemic resulted and 93 children died, only two of them properly vaccinated.