Free Markets and Flu - A Deadly Combo

[Ned]

Originally posted by Mordoch

What fantasy dreamworld to you live in anyways! NONE of the articles in this thread make that claim. Over 90% of the Flu vaccines are sold in the US directly to the private market, and they can be sold to the highest bidder by the flu suppliers.

Read the MF statute, Mordoch. All children's flu doses provided by either the Feds or the States have to be purchased at the price set by the statute. According to Shawn, Flu vaccines have only recently been provided to young children. Doctors and clinics can of course buy the vaccines directly from the manufacturers at the going rate, or get them for free from the Feds or the State, when children are involved. So, when we talk about shortages, we are more likely talking about shortages of low cost or free government-supplied vaccine doses and not the high cost vaccines that can be purchased in the private market.

[Mordoch]

Originally posted by Ned So, when we talk about shortages, we are more likely talking about shortages of low cost or free government-supplied vaccine doses and not the high cost vaccines that can be purchased in the private market.

If you're curious, states negotiate their own rates and basicly can't buy them period right now. You also generally can't walk into a Wallmart or other private institutions, who happen to be willing to pay higher prices than anyone else in many cases, and get a flu shot. You're plain not paying attention to what the current situation is.

[Berzerker]

Shawn, your last link doesn't work.

Mordoch -

Take a reading comprehension class already!

I'll make that my New Years' resolution.

56% is an average presumably involving all types of vaccines if accurate. Flu vaccines have a vastly lower percentage of under 10%.

You're basing that %10 on what the CDC claims to control (in 1 specific year?), not on what all levels of government have controlled over the years. And when the CDC claims %90 of the supply is in "private" hands, that doesn't mean the %90 goes straight from the producer to the retailer to the consumer. It could mean some of it goes from the producer to a government bureaucracy other than the CDC to the private health care provider.

And you still don't understand the point, if %56 of your production is sold to the government at prices set by the government thereby making it less profitable for you to produce your stock, the result is one more reason to get out of the vaccine business. It doesn't matter if flu vaccines are controlled more or less than other vaccines, only that you are in a "market" where government buys more than half of your stock at prices set by the government. So if you produce vaccines like tetanus and flu and the government buys up half your production at rates determined by the government, it doesn't matter which of your vaccines are subject to the controls, you'll have a good reason to get the hell out of the vaccine business and produce something else.

Basicly you're trying to claim that the CDC is continuing to lie under a Republican adminstration, while the Washington Times with minimal citation to support their statistics is the only source anyone can trust.

Gee Mordoch, there are other options than lying. They could be talking about only what the CDC controls, they could be mistaken, or maybe you're just mis-interpreting the CDC article. Every article I can find at google has the same message - the recent (2000 and beyond) shortages in vaccines are a result of several factors among which are price controls and liability costs driving down profitability. But you seem to think that government price controls on %56 of the vaccine supply has nothing to do with why we've seen ~25 vaccine makers drop to ~3.

From your link http://www.cdc.gov/programs/immun9.htm

The VFC program is CDC's largest public/private partnership. The program currently serves about 40% of the population aged birth - 18 years with VFC supplied vaccine totaling $798 M in CY 2002.

And from another of your links: http://www.cdc.gov/od/oc/media/pressrel/r2k1103.htm

State health departments have purchased 2 million doses of influenza vaccine through a CDC-negotiated contract with two vaccine manufacturers. State and local health departments may purchase vaccine through other mechanisms as well.

For this season only, CDC has contracted for the production of an additional 9 million doses of vaccine to help make sure there is enough vaccine for people at highest risk of complications from flu.

That's 11 million out of ~75 million doses just through the CDC and that doesn't even include doses bought by other federal, state, and local agencies. Even the CDC says other government agencies make arrangements with producers. Still wanna claim government controls only %10 of the supply?

More: http://www.cdc.gov/programs/immun9.htm

Legislation being proposed in 2004 would remove the price caps on vaccines and allow Td and DT to be purchased with VFC funds again. Also, the legislation will expand VFC vaccine access to include underinsured children seeking immunization services in state and local public health clinics.

Hmm...price controls to be lifted and vaccine acces to be expanded. I wonder why price controls are being lifted if they have no impact...

Increased VFC funds are being provided in 2003 so that CDC can expand the national stockpile program. A 6 month supply of all recommended pediatric vaccines will greatly reduce the potential public health consequences associated with supply disruptions.

Which I assume means an even larger percentage.

[Ned]

Originally posted by Mordoch
If you're curious, states negotiate their own rates and basicly can't buy them period right now. You also generally can't walk into a Wallmart or other private institutions, who happen to be willing to pay higher prices than anyone else in many cases, and get a flu shot. You're plain not paying attention to what the current situation is.

The statute requires states to pay no more than the statute price for children's vaccines. There is no choice here.

I haven't tried to get a vacination for me personally, so I don't know.

I have no idea why any clinic would pay for vaccine that it can get for free from the government. But there obviously does appear to be a shortage of free vaccine.

[Mordoch]

Originally posted by Ned


The statute requires states to pay no more than the statute price for children's vaccines. There is no choice here.

I haven't tried to get a vacination for me personally, so I don't know.

I have no idea why any clinic would pay for vaccine that it can get for free from the government. But there obviously does appear to be a shortage of free vaccine.

Ok here's absolutely conclusive proof that the premise of your argument is BS.

Flu vaccine is becoming a hot commodity, with the tiny vials selling for up to $300, 2 times the normal price, in some parts of the country.

At the beginning of the season, manufacturers on average charged $85 for a vaccine containing 10 doses.

Things aren't quite so bad in Colorado. State health officials recently paid $165 a vial, nearly double the early-season $85.

http://www.denverpost.com/Stories/0,1413,36~53~1840354,00.html

In other words, Flu vaccine makers can charge whatever they want, and can actually make a killing on the vaccine. If they were losing money selling to the feds, they would not choose to do so.

Another article in which the State Attorney General is making noises about price gouging, but is talking about a state law that could apply to any commodity such as gas in a shortage, and which lists prices within the article.

A 10-dose vial of flu vaccine, which sold for $40 to $80 in October, is being offered to health agencies this week for up to $215...

As vaccine supplies dwindle, demand for flu shots remains unusually high so late in the flu season, which runs from October to May, health officials say. The U.S. government has stepped in to purchase 625,000 flu shots for distribution to state public health agencies, but private companies also are looking to unload vaccine.

Health departments in several states have received offers of flu vaccine for sale at significantly inflated prices, such as $165 a vial from an Arkansas company and $215 a vial from a California company.

http://www.stltoday.com/stltoday/news/stories.nsf/News/0547FF5C3E418BF486256E00001A2665?OpenDocument&Headline=Missouri+is+on+the+lookout+for+flu+vaccine+price+gouging++

Give it up! Clearly states ordinarily have to pay market prices for flu vaccines, and the flu vaccine makers can charge whatever the hell they want. Since flu makers are never compelled to sell to the government, if they couldn't make money doing so, they would refuse to sell to any government agency implementing price controls that would cause them to sell each vial at a loss, and just sell to private institutions instead.

[Mordoch]

Originally posted by Berzerker

That's 11 million out of ~75 million doses just through the CDC and that doesn't even include doses bought by other federal, state, and local agencies. Even the CDC says other government agencies make arrangements with producers. Still wanna claim government controls only %10 of the supply?

In other words, in ordinary years the supply remains far lower than 10%, this year is anomaly which didn't affect flu maker's decisions when they decided how much vaccine to make for this year. More importantly, I just shot the price control argument completely to hell with the articles I just posted.

[Mordoch]

Just to drive a final stake through the heart of the price control argument, here's a case in which the State of Georgia agreed to pay twice the usual price for what turned out to be non-existant flu vaccine.

With the $1.65 million purchase, the state health director's foray into the murky vaccine market was not normal procedure, according to Toomey spokesman Jed Nitzberg. Usually, Georgia's 19 health districts purchase their own vaccine from various wholesalers and medical suppliers. But this year's flu crisis had local health officials pleading with Toomey's office to buy more vaccine. So state officials went shopping...

Georgia received photographs of and information about the vaccine shipment, including national drug code numbers, expiration dates and other details. Satisfied that all was in order, the health department reached an agreement Dec. 17 to pay Elliott $1.65 million for 100,000 doses of the vaccine -- twice the usual cost.

http://www.ajc.com/metro/content/metro/flu/1228flu.html

[Mordoch]

A final article emphesizing how the flu vaccine market is trully pretty much a free market situation rather than one with price controls.

Shot in arm for vaccine industry
By Marsha Austin
Denver Post Business Writer

The world's two major manufacturers of flu vaccine, not public health officials, decide how many doses to manufacture each year and how much consumers will pay.

After years of being overshadowed by more profitable drugs, the vaccine industry is making a recovery that could lead to increased production and innovation, said Len Lavenda, a spokesman for Aventis, one of two major flu vaccine makers.

"The economics of vaccine manufacture have changed," he said.

The once vibrant industry has dwindled to a handful of companies, giving the remaining firms more control over supply and pricing.

As a result, prices have risen from about $2 a dose to $7 or $8 a dose, Lavenda said.

http://www.denverpost.com/Stories/0,1413,36~33~1828104,00.html

[Berzerker]

Mordoch -

In other words, in ordinary years the supply remains far lower than 10%, this year is anomaly which didn't affect flu maker's decisions when they decided how much vaccine to make for this year. More importantly, I just shot the price control argument completely to hell with the articles I just posted.

Where did you read in my post that year was an anamoly? I'm quoting from your link, you know, the link you claim proves the CDC has ~%10 or less control? Even your link shows the CDC bought or negotiated for at least %14 of the supply and the CDC says that number has been increasing since 2000-1.

Ok here's absolutely conclusive proof that the premise of your argument is BS.

That isn't proof. Why do you keep ignoring Ned? He has cited the actual law and you just keep dodging him. No one here claimed government buys %100 of the supply with price caps, but you seem to think if you can show a company selling doses at higher rates proves the market is free, i.e., no price controls. In fact, when government walks in and gets doses at negotiated prices, the rest of us get to pay more to make up for the loss. That's how Medicare works, doctors et al don't always receive full re-imbursement for Medicare patients so they shift the cost to paying customers.

The world's two major manufacturers of flu vaccine, not public health officials, decide how many doses to manufacture each year and how much consumers will pay.

The author hasn't been linking your CDC site, not only are we debating with dueling links, you're dueling with yourself.

Just to drive a final stake through the heart of the price control argument, here's a case in which the State of Georgia agreed to pay twice the usual price for what turned out to be non-existant flu vaccine.

Which you just did again. How can you claim government only controls ~%10 of the supply when your own CDC link shows at least %14 and now you post more articles from Colorado and Georgia showing these state/local governments are buying up supply? It ain't a free market when a business sells to politicians.

In other words, Flu vaccine makers can charge whatever they want, and can actually make a killing on the vaccine. If they were losing money selling to the feds, they would not choose to do so.

They can't charge whatever they want when the feds are buying the doses or negotiating the price. And I've explained to you repeatedly that vaccine makers cannot just ignore the government because of what can happen to them if they anger politicians. Don't you grasp the gravity of the WSJ article that pointed out how Bill and Hillary wanted complete control of the vaccine industry back in '93? If you were a vaccine maker and the Prez and her husband were talking like that you'd be running scared. That's partly why some companies continue selling some doses to government agencies (in addition to other considerations). And you're still ignoring the fact that there were ~25 vaccine makers and the reasons why that number has dwindled to ~3. Free market my a$$!

Give it up! Clearly states ordinarily have to pay market prices for flu vaccines, and the flu vaccine makers can charge whatever the hell they want.

I am going to give it up after this, there's just no point in repeating myself when you insist on ignoring facts. That article doesn't prove anything...again... Notice how it mentions the cost of a vial in October and the cost later on in the year? When government/CDC negotiates for vaccine, it does so earlier in the year, not when it has run out of vaccine or is looking to bolster dwindling supplies. If the government "asks" to buy a certain amount, it ostensibly gets that amount. If states seek more doses after the negotiations are over, they don't get the negotiated price. They are no longer getting vaccine from the supply sold to government, they are getting vaccine previously destined for the market.

Btw, you would do well to stop insulting people. You owe Ned an apology for your nastiness...

[Ned]

Mordock, the statute only requires the state to pay the 1993 price when it purchases vaccine for children. Shawn was talking about vaccine for his infant. The state would violate the law, if I read it correctly, if it brought children's vaccine for higher than the 1993 price.

But private physicians, etc., are not the state. They can, if they choose, buy vaccine from anywhere and give it to their patients. It is just that they cannot charge for any vaccine for any child that falls under the Act.

Now, do you see any reason for a shortage of child vaccines?

[Mordoch]

Originally posted by Berzerker
Notice how it mentions the cost of a vial in October and the cost later on in the year? When government/CDC negotiates for vaccine, it does so earlier in the year, not when it has run out of vaccine or is looking to bolster dwindling supplies. If the government "asks" to buy a certain amount, it ostensibly gets that amount.

I'll give up too since I've proven this to everyone on this forum but you and Ned. The flu vaccine companies can also choose to tell the government to go f*ck themselves and choose to only be willing to deal directly with the states or private companies. Supplying even 14% of the market is not worthwhile for them if they were actually selling at a loss. The only reason flu companies would be willing to negotiate with the government, or agree to sell at a certain price point, is if it is in fact profitable to sell to them since its a large volume purchase they know for certain about early on, (thereby reducing potential business costs to meet the order) or if they are trying to unload vaccine which they can't otherwise sell. The government's negotiating power is quite limited under these circumstances and the situation certainly comes extremely close to being a true free market.

The government can't ordinarily prevent flu companies from selling to different suppliers, and while they can say that the Federal Government will only buy the vaccine at a certain price, the companies are under no obligation to agree to make any sales to the government.

What you've missed for a huge amount of time now is that the number of flu vaccine purchases by the CDC this year is exceptional and far above the average percentage. This situation only occured once it became clear there was a shortage, and did not dictate earlier business decisions by the flu vaccine companies on how much vaccine to make. There is roughly a 6 month lag from when these decisions are made until the product becomes available to the market.

The absolutely most questionable comment by you is that when the government buys some of a product its not a free market. If the government is bidding for the vaccine along with a variety of other states and private organizations, it certainly has the charactoristics of a free market. You seem to fail to understand what the definition of a free market actually is. (Particularly given that in virtually any market you can find some government agencies interested in buying some of the product.)

An unusual thing the CDC did this year was arrange from vaccine from a British company that would not ordinarily be approved for the US market to be approved on this occassion, and then bought the extra flu vaccines they still had around. The British company could have easily refused to agree to such a sale if it didn't make business sense for them, they could have even justified it from a PR standpoint by saying they needed the supply to meet the demand of the British market. This action added to the percentage of CDC bought vaccine for the US in this particular year.

[Mordoch]

Originally posted by Ned
Mordock, the statute only requires the state to pay the 1993 price when it purchases vaccine for children. Shawn was talking about vaccine for his infant. The state would violate the law, if I read it correctly, if it brought children's vaccine for higher than the 1993 price.

I guess virtually everyone state in The United States of America must have broken this law this year, some multiple times. Read the news articles I posted, or do a google search for more examples. Basicly you fail to understand the law, what the Washinton Times was even claiming, not to mention the realities of the current market. Its not really a true price control because all the flu vaccine companies have the option not to agree to the government's set price and only sell to agencies willing to pay more money. Given how the market currently basicly resembles on oligopoly, the flu makers can basicly force the government to change the law and pay them more by all refusing to sell to them period if necessary.

[Ned]

Mordoch, none of the articles you quote say anything about children. The Statute only applies to children. Vaccines for everyone else are not price regulated.

[Mordoch]

Originally posted by Ned
Mordoch, none of the articles you quote say anything about children. The Statute only applies to children. Vaccines for everyone else are not price regulated.

Read more carefully, you're simply wrong. He's the key passage from one of the articles again again.

The first 375 vials came from a Los Angeles company, FFF Enterprises, that charged the state only $70 each - likely cheaper than what the supplier paid, according to manufacturer's sales figures.

When that supplier ran out, the state paid a Houston company $165 a vial, the cheapest price available anywhere, said Benevento of the state health department.

The vaccines the state purchased - another 2,000 doses are expected next week - will be sent to county health departments with the greatest need, all part of the state's Vaccines for Children program, which targets the under- and uninsured.

http://www.denverpost.com/Stories/0,1413,36~53~1840354,00.html

[Berzerker]

I'll give up too since I've proven this to everyone on this forum but you and Ned.

In case you haven't noticed, there are only 3 people debating this and Ned and I are two of them. I've only seen maybe 1 person claim you are right and they didn't offer evidence. But I guess popularity counts more than facts now, that should ensure leftist victories at Apolyton for perpetuity.

I see you are still ignoring the law cited by Ned. Pointing to vaccines that are outside the domain of the price controls as proof there are no price controls at all is illogical.