Tuesday, October 26, 2004

Hoax: The Flu Vaccine Shortage is Not Attributable to a John Edwards Lawsuit

American manufacturers did not produce flu vaccine until liability lawsuits made it impossible for them to continue doing so. Most American pharmaceutical companies got out of the flu vaccine market because a variety of factors (not related to lawsuits) make it an unattractive line of business:
Flu viruses mutate easily, so new flu vaccine formulas have to be made up every year.
Because a different flu vaccine is used each season, unsold doses cannot be saved and end up being destroyed (along with any potential profits).
The production of flu vaccine (and the requirement of meeting Food and Drug Administration standards) is a labor-intensive process. Flu vaccine is made by injecting virus into fertilized chicken eggs — each egg must be hand-inspected and hand-injected and produces only 4 or 5 doses of vaccine.
Because flu vaccine is a commodity (i.e., the same product can be made by many different companies) and much of the available supply is bought up in large orders by the government, the market price of vaccine — and the profit to be made from selling it — has been quite low. (The global market for vaccine is about $6 billion a year, while the global market for drugs is about $340 billion a year. Which of these two markets a pharmaceutical company should concentrate on is a no-brainer.)
Sometime within the next several years, the flu vaccine industry will switch to growing vaccine in cell cultures rather than eggs, a much easier and cheaper process. No new entrant to the flu vaccine market is going to spend several years and millions of dollars investing in a process that will soon become obsolete.

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