As Industry Profits Elsewhere, U.S. Lacks Vaccines, Antibiotics

Tuesday, November 8th, 2005

According to As Industry Profits Elsewhere, U.S. Lacks Vaccines, Antibiotics, “By itself, Lipitor, an anticholesterol drug, brings in more revenue — about $12 billion this year — than the entire vaccine market.” That’s because vaccines are drugs with low profit margins, infrequent use and a high likelihood of liability lawsuits. Some history:

Wyeth, Madison, N.J., started making smallpox vaccine in 1885 and was a principal supplier of childhood vaccines in the U.S. for most of the 20th century. But beginning in the 1980s it became the target of lawsuits linking vaccines to a wide range of illnesses without obvious causes such as epilepsy and attention deficit disorder. Wyeth estimates the industry has spent more than $200 million defending itself against hundreds of lawsuits alleging that a preservative in some vaccines called thimerosal causes autism and other diseases. Scholarly studies have failed to find a thimerosal-autism link. The lawsuits haven’t gone to trial.

In 2000, Wyeth discontinued its vaccine against diphtheria-tetanus-pertussis and soon after began to reassess flu vaccines. Vaccines against flu take months to produce and have to be reformulated each year depending on which flu strains are deemed most dangerous. When Wyeth failed to get its vaccine on the market first, it often was forced to discard millions of doses of unsold product.

All this would have been a manageable burden if Wyeth could have charged a high price for its flu vaccine. But government intervention in the market made that impossible. The federal government has long played a big role in mandating use of vaccines and paying for them. [...] In 1993 a federal program was created to provide vaccines to families who couldn’t afford them. The federal government now buys 60% of all pediatric vaccines in the U.S., and it has often used its buying power to drive down prices. It pays just $16.67 a dose to Merck for a triple vaccine that protects against measles, mumps and rubella, according to the Centers for Disease Control and Prevention. The price for private buyers is $40.37.

Wyeth could charge only $6 a dose for its flu vaccine, says Dr. Paradiso, who is vice president for scientific affairs and research strategy. It pulled out of the market, which left the U.S. vulnerable when contamination at Chiron’s flu-vaccine plant in England forced it to shut down last year.

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