Spotlight April 2016
April 12, 2016
WWW.GRAPHICSTOCK.COM
Preventing Vaccine Shortages
Few people worry about vaccine supply until a shortage occurs. New research from Duke University’s Fuqua School of Business focuses on market tensions that can keep vaccine manufacturers out of the business and price points needed to entice them in.
“The government doesn’t want to overpay,” says professor David Ridley, “but there’s a tension between responsible use of government funds and giving manufacturers sufficient incentives to get into vaccine manufacturing — and stay in.” Together with colleagues Xiaoshu Bei and Eli Liebman, he found that over the past decade, every 10% increase in vaccine prices corresponded with a 1% lower shortage probability
“Many people forego vaccines and jeopardize herd immunity,” Ridley explains, “putting at risk the health of people with compromised immune systems. That’s the demand side. But what about supply? How do we encourage suppliers to be in the business?”
Some children visit a doctor only once per year, so if a vaccine is unavailable at that time, they won’t receive it until the following year’s check-up. So the risk of preventable infection spreading grows. In 2004, the Institute of Medicine warned of a fragile vaccine supply, reporting that shortages affected eight of 11 childhood vaccines. That prompted 35 states to suspend school immunization requirements.
Studying the 2004–2013 supplies and prices of 22 vaccines, Ridley and his colleagues found 24 instances of shortage. Those resulted not from increased demand, but from a dwindling of supply. They peaked with seven shortages in 2007. The average shortage lasted 510 days. But the researchers found that the situation has improved since then. Since 2004, no shortages occurred for vaccines priced over US$75/dose. But improving supply is not as simple as the government paying $75 for any vaccine. Some doses are far cheaper.