Another Socialist Failure

According to John Kerry, every little thing that is wrong in America is George Bush's fault - including the flu vaccine problem.

But, considering the affects of federal government intervention, the surprise should not be that we are short of vaccine. The surprise is that there is any vaccine at all.

Wyeth Pharmaceuticals withdrawal from the flu vaccine market is typical: Wyeth's decisions go a long way toward explaining why the United States -- the world's richest market for medical products -- finds itself with only half the amount of vaccine it needs to protect its population against a disease that may contribute to more than 50,000 deaths this year.

The company's exit is part of a long, slow industry-wide flight away from flu vaccine, which has simply become more trouble than it's worth.

Costs are high, risks are high, and because the government forces unrealistically low prices upon vaccine makers, returns are low.

Over three seasons, Wyeth lost $50 million from unsold flu vaccine. It was also facing millions of dollars in required improvements to keep its plant up to standards required by the Food and Drug Administration.

Government imposed low prices mean that not just flu, but all vaccine supplies are threatened: Flu vaccine isn't the only product that has had to be rationed in recent years. Several childhood vaccines have been in dangerously short supply, too. The current scarcity of flu shots reflects not only a larger problem but also forces unique to this vaccine.

There was once a time (pre-Hillary that is) when vaccine makers could afford to throw away excess because individual doses could be sold for enough to cover the cost of the waste. No more.

The waste is particularly hard for vaccine makers to stomach because their profit margin is small. Flu shots are essentially commodities -- identical products made by numerous companies and differing only in price. Because much of the vaccine is bought in huge orders by government agencies, the price is low.

Unless we can get the government out of vaccine business, the future does not look good.

"It shouldn't be surprising to anybody," said Gregory A. Poland, director of the vaccine research group at the Mayo Clinic, in Minnesota. "In fact, I marvel that there are companies willing to stay in the business."