Saturday, October 16, 2004
Why did the Flu Vaccine Fly the Coop?
The government has dictated prices to manufacturers that are often below costs, and many suppliers have been forced out of the market, unable to make a profit at 15 cents a dose, in some cases. At the same time, the cost of manufacturing and the cost of complying with increasingly burdensome regulation have gone up.
Other manufacturers watched and saw that this clearly is not a good business to be in.
The Manhattan Institute held a forum in 2002 to analyze the problems, and it forecast today's shortages. At that forum, Wayne Pisano of Aventis said that just two decades ago, there were a dozen companies making vaccines, most of which have left the market or been driven out by a variety of pressures.
Henry Miller, M.D., of the Hoover Institution said this "should be the golden age of vaccine development" because new biologic technologies are available. "But there is scant enthusiasm for vaccine development in the drug industry."
This is a clear warning to those who would try to impose price controls on the pharmaceutical industry. They would predictably force many companies out of business, supplies would be dislocated and even vanish, and, most importantly, research for tomorrow's medical miracles would dry up.
So when you hear John Kerry blame Bush, just remember this stems from Clinton era legislation...between being caught between the tort lawyers and the government dictating prices too low, why should a company want to be in this business?