Vaccines Are Profitable, So What?

Wednesday, February 11, 2015

By now, the numbers on the recent U.S. measles outbreak are well known. In 2014, America had more than 600 cases of measles—the highest number in 20 years. In the month of January 2015 alone, 84 people in 14 states reported having measles, with most cases linked to an incident at Disneyland. The reason for the resurgence? More and more people are opting to not vaccinate their kids.

While the main fixation of anti-vaccine groups is an old, discredited study linking vaccination to autism, another is a conspiracy theory circulated onlinethat both doctors and pharmaceutical companies stand to profit financially from vaccination—which supposedly leads to perverse incentives in advocating for the public to vaccinate.

But that argument is historically unfounded. Not only do pediatricians and doctors often lose money on vaccine administration, it wasn’t too long ago that the vaccine industry was struggling with slim profit margins and shortages. The Economist wrote that “for decades vaccines were a neglected corner of the drugs business, with old technology, little investment and abysmal profit margins. Many firms sold their vaccine divisions to concentrate on more profitable drugs.”

In fact, vaccines were so unprofitable that some companies stopped making them altogether. In 1967, there were 26 vaccine manufactures. That number dropped to 17 by 1980. Ten years ago, the financial incentives to produce vaccines were so weak that there was growing concern that pharmaceutical companies were abandoning the vaccine business for selling more-profitable daily drug treatments. Compared with drugs that require daily doses, vaccines are only administered once a year or a lifetime. The pharmaceutical companyWyeth (which has since been acquired by Pfizer) reported that they stopped making the flu vaccine because the margins were so low.

“Historically vaccines were produced at a relatively low price and sold with a low profit margin. They were add-ons to other products—mostly drugs—that pharmaceutical manufacturers were producing,” explains Neal Halsey, professor of pediatric infectious diseases and international health at Johns Hopkins Bloomberg School of Public Health. “The people working in vaccines described themselves as the stepchild of others, and they had to fight hard for the resources to develop new vaccines.”

Source: The Atlantic (link opens in a new window)

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