Free Markets and Flu - A Deadly Combo

[DinoDoc]

That's what made it classic.

[Mordoch]

Originally posted by Berzerker
chegitz -

I also linked an article from the Wall Street Journal that echoed the Times, but I see by your "rebuttal" of the Times article the WSJ will be duly ignored as well.

Thx Ned, this notion that vaccines are produced and sold in a free market is *******

The Wall Street Journal article is clearly only describing the vacine market in general, it makes no claims whatsoever regarding flu vaccine specificly. The CDC articles I posted link to, definately refute the Time's claims. The only crap going on here is the suggestion that price controls and government regulation have a major role in the current flu vaccine shortage. The only part of the market that price have price controls involved is significantly under 10%, and all the flu companies can choose not to sell to that source and only sell to others if its unprofitable.

[GePap]

Word of advice Mordoch- arguing with Ned is generally counterroductive: better to enjoy the grand mystical qualities of the alternate universe his mind inhabits.

As for profit motive and health care- certaint things are to important to be based on the profit motive- reason why state no longer use private sector armies to defend themselves. Health care is like defense and highways: too important to the body politic to be left to the private sector to run.

[Mr. Harley]

Hello, Ned - read my post on why I delayed having my little girl vaccinated (supporting Mordoch's post prior to him making it ) - the recommending the flu vaccine for infants is NEW, and after debacles like the anthrax vaccine, possible issues like mecury-based preservatives, et al I chose to get it, but to wait until her body was slightly more mature.

However, why are the vaccine companies supplying the government if they are losing money??? The US government cannot compel them to sell them a product, just like they cannot compel a physician to take Medicare (there are rare exceptions, no red herrings PLEASE). They can state that unless you do not charge add-on fees you may not accept Medicare, but at this point they cannot make you accept it. Some physicians have opted it, most have not, for economic reasons.

Nobody has posted any data concerning market consolidation in the vaccine manufacturing arena between 1986 and 1993. If Ned's, Berzerker's, et al supposition was correct, they should have been NO consolidation, or at most minimal, in that market during those years, as they had received protection from the current wave of lawsuits, and it was the pre-Hillary free market.

However, there was extensive consolidation going on in American markets at the time, expecially in the pharma arena. Did the vaccine industry consolidate less, or more, than the rest of their industry. Please note, if my supposition is correct you should have seen more consolidation due to market forces, i.e. a mature market where most patents have expired.

I've just done an hour of searches, no luck on the numbers but here's an interesting, I would suspect unbiased link. http://www.vaccinealliance.org/home/Resources_Documents/Immunization_Focus/Download/update_2.php It turns out that the US companies are not, at least for many of the traditional children's vaccines, competitive any more. Anybody heard about India's pharma industry? So the evidence here supports my mature market hypothesis, with a vengeance. We have a mature, non-patented product, the US manufacturers lose their WHO and UNICEF sales to lower cost foreign generics manufacturers, and you have massive consolidation in the US market. Production levels would support nothing else. I at least found a subsidary source supporting my hypothesis, any of you unregulated free market types willing to find a year-number of manufacturer graph to show I'm wrong? I tried, see what you can find.

[Berzerker]

Mordoch -

The Wall Street Journal article is clearly only describing the vacine market in general, it makes no claims whatsoever regarding flu vaccine specificly.

And flu vaccines aren't included in the vaccine market? If there were ~25 vaccine companies 30 years ago with many making multiple vaccines, then policies that drove that number down to a handfull would have eliminated a number of companies that made flu vaccines as one of their products. True? And the result? Government policies reduced flu vaccine production...

How can you argue that policies resulting in the elimination of ~20 vaccine makers over the years would not impact flu vaccine production? Here's a relevant question: were there significant vaccine shortages in the 1970's? Why do we see these shortages near the end of Clinton's 2 terms in office?

The CDC articles I posted link to, definately refute the Time's claims. The only crap going on here is the suggestion that price controls and government regulation have a major role in the current flu vaccine shortage.

Yeah, such crap. And the CDC article you linked didn't refute anything. The WSJ article claimed the Clinton's wanted %100 control of the vaccine supply and compromised for roughly a third...at "negotiated" prices. That didn't include what state and local governments buy, so if the WSJ article is accurate, it isn't far fetched to say ~%50 of the vaccine supply was under government control in the early 90's. What year(s) was the CDC referencing?

The only part of the market that price have price controls involved is significantly under 10%, and all the flu companies can choose not to sell to that source and only sell to others if its unprofitable

Tell me, how much of these vaccines are bought and distributed
by all levels of government? Do you uinderstand what it means when these articles say the government "negotiated" for lower prices? If there is not enough profit to be made making vaccines - one of the factors in the diminishing vaccine supply - why? Because government "negotiated" with vaccine makers for lower prices. Government promised legislation to provide some protection for vaccine makers against liability - protection since subverted by trial lawyers. If vaccine makers were charging enough to make the endeavor profitable, the Clintons et al would have been screaming bloody murder about those evil pharmaceutical companies gouging the little people.

I don't know if socialists create such shortages as an excuse to nationalise industries but it is dis-ingenuous for liberal Democrats to complain about a shortage they helped create. And the notion we have a free market in vaccine production is nonsensical...

[Berzerker]

Thirty years ago, there were 25 vaccine makers. Now, because of low profit margins, complex manufacturing and a challenging regulatory environment, there are five.

"There are a whole array of barriers keeping companies from the business," said Dr. William Schaffner, chairman of the department of preventive medicine at Vanderbilt University Medical Center and a member of the National Vaccine Advisory Committee, which reports to the Health and Human Services Department.

"And there are no simple solutions," Schaffner said.

Vaccine production is difficult because immunizations are made from live viruses or bacteria, which are trickier to work with than the chemicals used to make most drugs. Profit margins are low, and there's less repeat business than in the drug industry.

The risk of litigation is also higher because unlike drugs, vaccines are given to healthy people. So although a cancer patient may be willing to endure severe side effects from a drug, the same doesn't hold true for someone getting a flu vaccine.

"The safety challenges in this industry are extraordinary," Schaffner said.

In 1986, the government set up the National Childhood Vaccine Injury Compensation Program, which compensated people for injuries or conditions that might have been caused by vaccines recommended for children. The program was intended to provide an incentive for manufacturers to continue making vaccines. Yet the vaccines for polio, chickenpox and measles/mumps/rubella have a single manufacturer each, partly because the government buys 56 percent of childhood vaccines and caps the prices it will pay.

http://www.dfw.com/mld/dfw/business/7538220.htm

And that program to provide manufacturers with an incentive to continue vaccine production was subverted by trial lawyers who found a loophole in the law.

[Ned]

Originally posted by DAVOUT
From professionnal experience in the pharmaceutical industry, and other industries (automotive, books, retail), I can tell that the prices controlled by a government NEVER results in losses for the companies concerned. Price control is a very technical subject, and the cost accounting can be, and was, a very creative discipline. When it was suppressed in France, (in 1983?), for all products except the pharmaceutical drugs reimbursed by the social security, it resulted in a decrease of the price index. For the drugs under control, it is generally a trade off between products enabling the companies to show attractive profits.

The recently authorized *generic products* made only of the active molecule, provides an illustration of how it works really. The generic products are generally sold 20% below the trade marked product. Most of the trade marked products have decreased their price by 20%, after a very short time (about 3 months).

Davout, but read that statute again. The prices are set regardless of cost to produce. THAT can result in killing the vaccine industry to the extent that the price is less than the cost to produce.

[Ned]

Originally posted by Mordoch

You're not very bright are you? I'll repeat this for about the third time. The 40% figure involves other vaccines which are ordinarily given to children. Only a small number of flu vaccines were given to children since until just this year, it was not generally recommended as necessary by various government agencies. This means that its under 10% for flu vaccines being purchased by any governmental sources period. I've also demonstrated with 100% certainty that vaccine makers are not compelled to sell to the government, so they would not do so if they actually lost money doing so due to price controlls. Read my links and posts in this thread again for details.

I read your link. It was to a 2000 press release. Obviously, the situation has changed in a couple of years.

I agree, there is no requirement to sell to the government. However, the prices can be set so low as to strip the profit from the industry - driving out producers and forcing the rest to produce less than the estimated requirements so that they do not run the risk of a loss through overproduction.

[Ned]

Originally posted by GePap
Word of advice Mordoch- arguing with Ned is generally counterroductive: better to enjoy the grand mystical qualities of the alternate universe his mind inhabits.

As for profit motive and health care- certaint things are to important to be based on the profit motive- reason why state no longer use private sector armies to defend themselves. Health care is like defense and highways: too important to the body politic to be left to the private sector to run.

And, GePap, I am sure you DO understand that the REASON we have such good weapons is that NONE of them are actually designed and produced by the government!

Take the profits out of weapons, and what you get is the Russian military.

[Ned]

Shawn, all child vaccines are provided by the State or Feds under the Hillary Clinton program. All these vaccines are purchased by the CDC at 1993 prices (not negotiated). Because there is no profit (or very little profit) in selling to the government, they only make what is estimated. That is why there is a shortage for children if the Flu exceeds expectations.

When a particular region is hard hit and they need more, they providers do not go to the companies to buy more. They go to the CDC who then move doses from regions where they have a surplus or if they really need more, directly buy the doses from the companies. Hasn't anyone found it strange that the CDC is moving Flu vaccine around the country rather than having doctors simply ordering the vaccine from the drug companies.

The vaccine market seems to be dominated by the CDC. There does not seem to be a real free market in vaccines.

Shawn, I was unable to view that link, but I don't think the number of companies producing vaccine has anything to do with shortages. Shortages almost never occur outside of price regulated markets because pricing affects both demand and supply.

When one looks at America's vaccine market, one does see price controls. It is ludicrous to deny that the Hillary Clinton price controls are not causing the shortages.

[Mordoch]

Originally posted by Berzerker
Mordoch -
Yeah, such crap. And the CDC article you linked didn't refute anything. The WSJ article claimed the Clinton's wanted %100 control of the vaccine supply and compromised for roughly a third...at "negotiated" prices. That didn't include what state and local governments buy, so if the WSJ article is accurate, it isn't far fetched to say ~%50 of the vaccine supply was under government control in the early 90's. What year(s) was the CDC referencing?

2001, which certainly refutes it, the whole point that the articles you cited were trying to make was that the 1990s saw the reduction of companies making the flu vaccine. The point is that it may be a high percentage with vaccines that children are ordinarily the ones being vaccinated for the disease, but with the flu this is not the situation at all, I also linked to policies explaining the CDC views in the past which created this situation. The CDC report includes both federal and state sources, I also made it extremely clear that none of this nonsense about negotiated prices not being part of this figure applies. Your claim about vaccine companies losing money selling vaccine to the government still makes no sense since the companies DO refuse to sell to the government in cases where they lose money doing so.

[Mordoch]

Originally posted by Ned
Shawn, all child vaccines are provided by the State or Feds under the Hillary Clinton program. All these vaccines are purchased by the CDC at 1993 prices (not negotiated). Because there is no profit (or very little profit) in selling to the government, they only make what is estimated. That is why there is a shortage for children if the Flu exceeds expectations.

When a particular region is hard hit and they need more, they providers do not go to the companies to buy more. They go to the CDC who then move doses from regions where they have a surplus or if they really need more, directly buy the doses from the companies. Hasn't anyone found it strange that the CDC is moving Flu vaccine around the country rather than having doctors simply ordering the vaccine from the drug companies.

The vaccine market seems to be dominated by the CDC. There does not seem to be a real free market in vaccines.

Shawn, I was unable to view that link, but I don't think the number of companies producing vaccine has anything to do with shortages. Shortages almost never occur outside of price regulated markets because pricing affects both demand and supply.

When one looks at America's vaccine market, one does see price controls. It is ludicrous to deny that the Hillary Clinton price controls are not causing the shortages.

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.

[Mordoch]

Originally posted by Ned
I read your link. It was to a 2000 press release. Obviously, the situation has changed in a couple of years.

Based on what evidence???!!! The Washington Times article is based on the premise that this situation has existed since 1993, if it just changed this last year with the changes in flu shot recomendations, in which case it wouldn't have been that decisive since with a shortage flu vaccine suppliers would sell to the higher paying private market first. The whole point of the Washington Times claim is that since 1993, a situation has existed where the government buys most of the flu vaccine and makes it unprofitable for the flu vaccine companies with price controls. This premise is clearly factually wrong.

I think unless someone else posts here desiring further info, I've proved my case decisively here and don't need to spend further time on this debate. Other than Berzerker and Ned, who seem to treat the Washington Times like its the Bible and they are taking every word in it as the indisputable truth no matter what the evidence against it, everyone else seems to be persuaded here.

[Berzerker]

Mordoch -

2001, which certainly refutes it

No it doesn't. The CDC figure of %10 doesn't explain what has been happening over the last 30 years to the vaccine industry and the CDC only claims it had no involvement with %90 of the vaccine supply, that doesn't mean government everywhere was involved with only %10 of the supply.

the whole point that the articles you cited were trying to make was that the 1990s saw the reduction of companies making the flu vaccine. The point is that it may be a high percentage with vaccines that children are ordinarily the ones being vaccinated for the disease, but with the flu this is not the situation at all

First, it is illogical to presume that the Clinton WH program had control of ~%33 (after wanting %100!!!!!!! Did you see that? What does that tell vaccine producers?) of the vaccine supply for children but little or no control over flu vaccines. Second, a company that produces vaccines for several childhood diseases beset with price controls on some or most of those vaccines (even if flu is not among them) is faced with a decision - drop their vaccine industry because of government regulations (which obviously would include their flu vaccine) or continue making vaccines. And even if they merely dropped the vaccines subject to price controls, that is no guarantee price controls on their flu vaccine won't be imposed if they weren't already enacted into law. Many companies dropped making vaccines and every article I've seen cites low profits and high liability as well as price controls (which explains the low profits). Btw, the reports linked in this thread cite shortages in a number of vaccines in recent years, not just the flu.

I also linked to policies explaining the CDC views in the past which created this situation. The CDC report includes both federal and state sources, I also made it extremely clear that none of this nonsense about negotiated prices not being part of this figure applies. Your claim about vaccine companies losing money selling vaccine to the government still makes no sense since the companies DO refuse to sell to the government in cases where they lose money doing so.

And what happens when they refuse? Politicians and bureaucrats scream bloody murder and threaten companies, that's what government always does. If you don't "agree" to do what the politicians "ask" you to do, you anger people who can screw you.

I'll quote the bold part of my last post again:

the government buys 56 percent of childhood vaccines and caps the prices it will pay.

How does that square with your interpretation of the CDC article? How can you claim there are no price controls on vaccines or that if there are, they have no impact on the number of companies or the supply? C'mon Mordoch! It's one thing to debate the level of blame that should be divied up to every player involved, but it's ludicrous to argue that the vaccine industry exists in a free market.

[Mordoch]

Originally posted by Berzerker

How does that square with your interpretation of the CDC article? How can you claim there are no price controls on vaccines or that if there are, they have no impact on the number of companies or the supply? C'mon Mordoch! It's one thing to debate the level of blame that should be divied up to every player involved, but it's ludicrous to argue that the vaccine industry exists in a free market.

Take a reading comprehension class already! 56% is an average presumably involving all types of vaccines if accurate. Flu vaccines have a vastly lower percentage of under 10%. 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. (If the CDC was simply lying before, you'd think they would have issued a new press release to clarify these facts in order to bolster the conservative's case by now.) I looked for someone under flu vaccines and simply didn't see anything more recent.