Free Markets and Flu - A Deadly Combo

[DinoDoc]

How do you build a a national vaccine reserve when they make a different form of the thing every year?

[Lefty Scaevola]

You don't.

[Whoha]

Originally posted by shawnmmcc
At my little girl's six month check up, we specifically asked that she receive the flu vaccine at her nine month check up. Six months was a little early, tough on the budding immune system, and since her nine month visit was going to be the first week in December, no problem.

Well, we arrive, and guess what? No vaccine. I call up subsequently, to talk to the office manager. I am more than a trifle upset, to say the least. Now we won't even go into the fact that the office did not log our request, hold vaccine, et cetera. That is an entirely different issue, which we are going to deal with for next year. I found out some interesting items.

I knew that the lead in time was fairly extensive for flu vaccine. The physicians office is required to put in their order a year in advance. Since the production cycle takes six months, I'm not exactly happy with the factoid, though I will grant it doesn't make much practical difference.

However, the company sat on the info that they were running low on the vaccine, especially low on the infant version. Thus, doctor's offices gave the infant version
to children who could take either that or the slightly older children's version, resulting in an even graver shortage of the infant version. I made some of my own luck, and had to stand in cold, 33F drizzling weather for over an hour to get my little girl a vaccine (public health clinic).

Here is the bigger point. This is the second year running we are short on the vaccine. If the profit is only pennies on the dollar,

http://www.wsws.org/articles/2003/dec2003/flu-d22.shtml

than each unused dose can literally eliminate the profit on several dozen vaccinations. When you had state/federal health departments purchasing and adminstering vaccines, you ended up with success stories like smallpox and polio. Now, with the "free market" approach, we have shortages due to the cost incentive factors.

The vaccine companies have an disincentive to produce enough vaccine, by free market doctrine they will always want to produce a slight shortage. If they are going to make an error, the error of slight overproduction can have a massive impact on actual profits. Therefore, they are going to tend to make certain they underproduce for the lowest probable demand. If demand spikes, the underproduction instead becomes a significant shortage.

Myself? I am going to have another "discussion" with the office manager for our pediatrics group. Either I will get a guaranteed vaccine for my little girl (prepaid if the pediatrics group prepays, capital is not free) or I will find a physician whose office staff understands customer relations.

I will also vote against the next moron who tells me just let free markets work, and everything will be alright. I believe in regulated free markets, and am willing to pay in taxes for the services of those regulations, vaccine stockpiles, etc. Unregulated free markets inappropriately applied, especially in areas like vaccines, are deadly. Please, don't spout on about tort reform, the US Congress gave vaccine manufacturers legal relief in 1986 (google 1986 vaccines laws US -site:.com). This is a textbook case against unregulated free markets.

dead wrong, this is a textbook case against socialism:
http://online.wsj.com/article/0,,SB1...ml?mod=opinion

you need a subscription for that, but here is what it says of importance:
"The root of this government role goes back to August 1993, when Congress passed Mrs. Clinton's Vaccines for Children program. A dream of Hillary's friends at the Children's Defense Fund, her vaccines plan was to use federal power to ensure universal immunization. So the government agreed to purchase a third of the national vaccine supply (the Clintons had pushed for 100%) at a forced discount of half price, then distribute it to doctors to deliver to the poor and the un- and under-insured.

The result is a cautionary tale for anyone who favors national health care. Already very high in 1993, childhood vaccination rates barely budged. A General Accounting Office report at the time noted that "vaccines are already free" for the truly needy through programs like Medicaid. Meanwhile, however, the Hillary project dealt the vaccine industry another financial body blow.

Thirty years ago, the Institute report notes, 25 companies produced vaccines for the U.S. market. Today only five remain, and a number of critical shots have only one producer. Recent years have brought shortages of numerous vaccines, including those for whooping cough, diphtheria and chicken pox.

The Institute of Medicine panel seems to assume -- probably correctly -- that it's not politically feasible simply to kill something called Vaccines for Children. But it does suggest that removing the government as a direct purchaser would allow for adequate reimbursement and help the industry to get back on its feet. So it recommends replacing existing vaccination programs with a subsidized insurance mandate for children and seniors, and with vouchers for those who lack coverage. "

[DinoDoc]

Originally posted by Lefty Scaevola
You don't.

Then in what way does Charles Schumer's proposal make more than a bit of sense as JohnT says?

[JohnT]

Any assistance in the research of "faster" vaccine production would be greatly appreciated, if it can be done. Also

How do you build a a national vaccine reserve when they make a different form of the thing every year?

When US manufacturers say that 83,000,000 are needed and will make just the needed amount, Schumers proposal (if I'm reading it right) will buy an additional amount to cover any potential shortfalls. The vaccines, of course, won't be good next year so the "reserve" is a temporary one and will have to be replenished. The CDC considers over 150,000,000 people to be at "high risk" for flu, a number that is almost twice as high as the number of flu vaccines produced.

[Berzerker]

John T -

Problem is, Berz might not have a clue either.

Well now, I did post an article citing some of the problems and I didn't throw a dart to find the article.

Most sources I referenced state that from 10-15% of flu vaccines are purchased by the various US governments.

Including the feds?

Also note that his argument begins with the highly speculative "If", and that the article quoted qualifies its charges with "partly". So "if" the charges are "partly" true, you can blame Hilary... but only partly.

I made an allowance for the possibility the Wash Times is full of ****, hence the "if". And yes, the article cites other reasons, needed tort reform, etc... And "if" this year's supply is based in part on previous years' demand, then more vaccines were produced this year than what would normally be needed because in recent years the anthrax scare has led to a spike in flu vaccine demand.

But I'd love to hear from the lefties how price controls constitute a free market...

[Mordoch]

Originally posted by Berzerker
I made an allowance for the possibility the Wash Times is full of ****, hence the "if". And yes, the article cites other reasons, needed tort reform, etc... And "if" this year's supply is based in part on previous years' demand, then more vaccines were produced this year than what would normally be needed because in recent years the anthrax scare has led to a spike in flu vaccine demand.

But I'd love to hear from the lefties how price controls constitute a free market...

The Washington Times definately is looking a like a bunch of filthy liars.

Despite the threat to public health posed by such a deadly communicable disease, less than 10 percent of vaccine in any given year is purchased by government entities.

http://www.wsws.org/articles/2003/de...-d22_prn.shtml

A very definative confirmation of this info comes from this source.

Does the government control distribution of flu vaccine in the United States?

No. All influenza vaccine for use in the United States is produced in the private sector, and more than 90% of influenza vaccine is distributed in the United States through private-sector distributors for use by health care providers. CDC has no control over the distribution of the private-sector influenza vaccine

http://www.cdc.gov/od/oc/media/pressrel/r2k1103.htm

The price control claims seem to be proven to be completely bogus from this quote.

There are reports that some vaccine distributors are breaking contracts with private providers in order to provide vaccine to mass immunizers, such as chain pharmacies or grocery stores-- and that in many instances, by doing this, they can charge more money for vaccine. What is CDC or DHHS doing about this practice?

HHS and CDC strongly discourage practices that might divert influenza vaccine away from those who need it the most, or that would take advantage of the current situation to make additional profit at others expense. CDC and the ACIP recommend that when influenza vaccine first becomes available, vaccination efforts should be focused on persons at high risk for complications associated with influenza disease, and health care workers.

http://www.cdc.gov/od/oc/media/pressrel/r2k1103.htm

This appears to completely discredit their entire claims. I find it interesting to note that some conservatives are so desperate to ensure a continuation of laise faire economics in all cases, that they simply lie about facts and base their arguments around these lies.

[Berzerker]

Mordoch -

The price control claims seem to be proven to be completely bogus from this quote.

There's no mention of price controls or the lack thereof in that quote.

A very definative confirmation of this info comes from this source.

And that quote doesn't refute the Wash Times article. No where did the Times claim that vaccines aren't produced or distributed thru the private sector. The feds can buy vaccines from the private sector and hand it out to private health care providers. And I suspect the CDC isn't in charge of the feds policy since that would fall under HHS so quoting the CDC denying it controls private distribution is meaningless...

[Berzerker]

Also, your post didn't address the other reasons for any shortage, lawsuits, government licensing/regulations and past price controls under Hillary leading to a shortage of suppliers, all of which adds up to the absence of a free market in vaccine production...

[Imran Siddiqui]

How are lawsuits against a free market? Just about every single free market theorist has had a court with the ability to decide restitution for harms. I'd contest that a functioning court system is a requirement for a free market system.

[Mordoch]

Originally posted by Berzerker
Mordoch -

There's no mention of price controls or the lack thereof in that quote.

WOW! That's really missing the point. Quite simply if 90% of the vaccine is distributed to the private sector, and the CDC can do nothing when private companies sell the vacine to the private companies that are willing to pay the most for the vaccine first, this means no price controls exist at least for 90% of the market, and I've seen nothing to suggest that manufacturers are compelled to sell to government sources, other than vague claims from the Washington Times.

And that quote doesn't refute the Wash Times article. No where did the Times claim that vaccines aren't produced or distributed thru the private sector. The feds can buy vaccines from the private sector and hand it out to private health care providers. And I suspect the CDC isn't in charge of the feds policy since that would fall under HHS so quoting the CDC denying it controls private distribution is meaningless...

The CDC IS STATING AS A FACT that more than 90 OF THE ENTIRE MARKETS supply is sold to non-government sources, this means completely non-federal or state sources, this why the release specifies private distributers. The CDC would have specified that they had some control over distribution or at least conveyed the fact that HHC services does so if the majority of the vaccine is initially sold to the government who sold it to private sources. Read additional info on the site if you want further varification of this information.

[Mordoch]

Originally posted by Berzerker
Also, your post didn't address the other reasons for any shortage, lawsuits, government licensing/regulations and past price controls under Hillary leading to a shortage of suppliers, all of which adds up to the absence of a free market in vaccine production...

Based on the CDC statement, the Hillary situation claimed would be at best a one year event which doesn't explain a drop in suppliers. Far more significantly, 3 manufacturers are perfectly capable of having sufficient facilities to meet demand if they have the financial incentive to do so. Clearly at least some degree of licensing and regulations are needed to ensure that the vaccine is safe and actually works properly. Lawsuits are a components of a free market, and I'm extremely dubious that any lawsuits from private individuals would be sufficient to really hurt the company's profits given fatal complications from flu vaccines would be quite rare. If lawsuits were so bad, it wouldn't make sense that a company would release a flu-mist vaccine product in the US this year, it wouldn't make sense to spend the research dollars to allow entry into an unprofitable market. The argument appears to be a house with a foundation of this air.

Update: The Washington Times argument appears based on the fact that in 1993 the US government started supplying vaccine for free to the elderly. This occured on the side of those administering the shots with Medicare reimbursing physicians and other organizations who deliver the shots . Since any doctor or organization can refuse to accept medicare, this definately was not a price control. This also only affects a few millions elderly Americans, not that significant a percentages out of generally 80 million + vaccines produced for the US market.

Medicare coverage for flu shots for the elderly began in 1993, as the Clinton Administration launched an effort to increase immunization rates among older adults. The shots are free for those enrolled in Medicare Part B from physicians who accept Medicare payment as full payment. Medicare also covers vaccinations against pneumonia. A beneficiary who has not previously received the pneumococcal vaccine can obtain it at the same time as the flu shot.

"Millions have benefitted from the flu and pneumonia shots that Medicare provides, but millions more still need them," said Michael Hash, deputy administrator of the Health Care Financing Administration (HCFA), the agency that runs Medicare. "Too often, people don't get the immunizations that could save their lives. People age 65 and over are more likely to get flu or pneumonia and to experience serious complications. That's why we're reaching out to remind beneficiaries that it's important to get their shots and that they are covered by Medicare."

http://www.cdc.gov/od/oc/media/pressrel/r991007.htm

[Whoha]

Originally posted by Imran Siddiqui
How are lawsuits against a free market? Just about every single free market theorist has had a court with the ability to decide restitution for harms. I'd contest that a functioning court system is a requirement for a free market system.

They aren't, which is why we are talking about tort reform, not eliminating them alltogether.

[Imran Siddiqui]

They aren't, which is why we are talking about tort reform, not eliminating them alltogether.

Well that'd be amusing. Having the government step in capping damages so government won't get involved .

[Whoha]

Are judges part of any private sector area Imran?

[Sarxis]

Haven't we all seen that Free Market doesn't work at all where health care is concerned?

[Imran Siddiqui]

Are judges part of any private sector area Imran?

No, but they are required for the private sector economy to work.

[Whoha]

Ok, so the government reigning back the judical branch imposes on the economy how?

[Imran Siddiqui]

I'm just saying it is ironic. The government restricting amount of damages that can be won, in order to prevent government interference.

[Whoha]

I don't see it.

[Berzerker]

In an article called "Lack of Vaccines Goes Beyond Flu Inoculations," (12/8/2003), reporter Bernard Wysocki Jr. writes about "the malfunctioning of the small but vital marketplace for preventive vaccines in America."

There are only two companies making injected flu vaccines in the US, the article points out, French Aventis SA, and Chiron Corp. There is a third company called MedImmune Inc. with a nasal spray vaccine. But it isn't just a one-time shortage or just about the flu, the article states. "This is the eighth major shortage of preventive vaccines in the U.S. since the beginning of 2000. Shortages of vaccines for diphtheria, tetanus, chickenpox and measles have occurred since then. Flu vaccines have been in short supply for three of the past four years."

The reason behind these problems is a steady oligopolization of the vaccine industry. From 1970, when there were 25 vaccine makers, there are now only five. Companies like Merck, Wyeth, and Pfizer have gotten out of the vaccine business. "With such a small number of producers, shortages can develop quickly as a result of manufacturing problems, poor management, or a bad guess on the expected demand." In fact, flu is better off than diseases tetanus or chickenpox, which have a monopoly supplier in the US.

Part of the reason has to do with exposure to lawsuits for real or perceived vaccine-caused illness, a growing problem or delusion, depending on who you talk to. But the main problem, as the WSJ article makes clear, is price controls, on of the few areas in the US where there are government-mandated controls for pharmaceuticals.

For makers of all types of vaccines, the Institute of Medicine's report traced the decline in manufacturers' interest to the fact that the U.S. government -- predominantly through the Vaccines for Children program run by the CDC -- buys slightly more than 50% of the vaccines in the U.S., and keeps prices low.

http://www.oligopolywatch.com/2003/12/09.html

From a Wall Street Journal article.

This one deals mostly with the trial lawyers.

http://www.manhattan-institute.org/h...ection_flu.htm

And one dealing more with Hillary.

http://www.washtimes.com/op-ed/20031...0326-8427r.htm

Imran -

How are lawsuits against a free market? Just about every single free market theorist has had a court with the ability to decide restitution for harms. I'd contest that a functioning court system is a requirement for a free market system.

Who said lawsuits are against a free market? They can have a damaging impact on the market. It's the level of restitution that matters and one reason why many vaccine producers have left the market is because a certain percentage of vaccinations result in illness and if the restitution costs more than the profit to be had by producing the vaccines (or a large chunk of the profits), you end up with fewer, perhaps ultimately, no (legal)domestic producers.

Mordoch - I'll get back with you, I'm watching Jamal go for the rushing yardage record.

[Berzerker]

Imran -

I'm just saying it is ironic. The government restricting amount of damages that can be won, in order to prevent government interference.

The government is interfering by having courts and laws against contract killing, if the courts are going to impose a financial burden on the producer of a product via lawsuit then the same government is already involved. I see your point but it's not like the government decided to step in after the fact, it's there all along...

[Berzerker]

Mordoch -

Based on the CDC statement, the Hillary situation claimed would be at best a one year event which doesn't explain a drop in suppliers. Far more significantly, 3 manufacturers are perfectly capable of having sufficient facilities to meet demand if they have the financial incentive to do so. Clearly at least some degree of licensing and regulations are needed to ensure that the vaccine is safe and actually works properly. Lawsuits are a components of a free market, and I'm extremely dubious that any lawsuits from private individuals would be sufficient to really hurt the company's profits given fatal complications from flu vaccines would be quite rare. If lawsuits were so bad, it wouldn't make sense that a company would release a flu-mist vaccine product in the US this year, it wouldn't make sense to spend the research dollars to allow entry into an unprofitable market. The argument appears to be a house with a foundation of this air.

The program she and her hubby began is still in effect, "Vaccines for Children". And the Wash Times article mentions several reasons for the shortages, one being government "negotiating" to buy vaccines at lower prices as well as the circumvented effort of politicians to reduce liability by the trial lawyers. There is one class action lawsuit in an article I linked showing that the lawsuit is asking for more than the yearly profit in the vaccine business. How can a company stay in business with such a liability? It's the low profit margin combined with the liability that has been driving companies out of the vaccine business. Now, why is the profit margin so low? Can't they just charge what they want in a free market? There isn't a free market when the government steps in to buy doses at reduced costs... As for your comment about the vaccine mist, the trend is obvious, roughly 25 vaccine producers 30 years ago, maybe 3 today... Something is happening...

[TCO]

I got the flu vaccine atworlk/ O was a manly MAGGGGGNNN

[Oncle Boris]

Originally posted by JohnT


Spoken like a person who doesn't know what he's talking about. How is a governmental cartel raising oil prices by over 400% in a 12 month period (from $2.18/barrel in Dec. 1972 to $11.65 in December 1973), the 1973 Arab-Israeli war, and the ensuing 4-month embargo on ME oil shipments to the US by the OPEC countries (from November 1973-February 1974) the fault of the "free market"?

That was my point here. When there are no regulations to the market, the free market destroys itself because cartels emerge.

Didn't you have reading classes in elementary school? I talked about "circumventing free market laws", which is exactly what a cartel does. Which is exactly the situation that you have described in your post. Which is exactly what you would not have wasted time doing had you read my sentence more carefully.

Now, does it have anything to do with the medications? It may, it may not. But my point was to make an ironic comparison, that's all.

[DinoDoc]

What the hell are you talking about?

[JohnT]

Originally posted by Oncle Boris


That was my point here. When there are no regulations to the market, the free market destroys itself because cartels emerge.

Didn't you have reading classes in elementary school? I talked about "circumventing free market laws", which is exactly what a cartel does. Which is exactly the situation that you have described in your post. Which is exactly what you would not have wasted time doing had you read my sentence more carefully.

Now, does it have anything to do with the medications? It may, it may not. But my point was to make an ironic comparison, that's all.

... But I repeat DinoDoc: What the hell are you talking about?

Secondly, do you always have to use insults in your arguments?

[notyoueither]

I think his point is that some regulation is necessary to stop the worst excesses of 'Free' markets.

[JohnT]

The only "regulation" possible in regards to OPEC was invasion.

And the idea that the petroleum industry in the US isn't/wasn't regulated was laughable in 1912, even more so 81 years later.

[notyoueither]

And he might say that regulation is difficult in international settings where the law of the jungle still prevails.

And I suppose that US anti-trust laws are there without any justification whatsoever. None at all. They're just big meanie gobments intruding on good honest folk trying to get by, right?