Posted by: bridget | 24 March 2007

NYT Reports that Vaccines Cost Money

The NY Times reported, in a very distressed tone, that vaccines, contrary to popular belief, are not free. Apparently, the good intentions of the government have not stopped the ruthless machinations of economic forces.

As government mandates have increased the number of vaccines that children take, the cost of supplying children with required vaccines have increased; paediatricians have absorbed a significant amount of those costs. The (very rational) result is that paediatricians are losing money, cannot afford to stock all vaccines (one practice group reported having $150,000 worth of vaccines on hand at any moment), and fewer medical students want to go into primary care practices.

If the states or the federal government mandate that children receive certain vaccines, the demand for those vaccines is artificially increased, which allows pharmaceutical companies to charge more money for them. If the vaccines in question are under patent protection, the costs for those far exceed their market price (demand is nearly unlimited and the lack of competition prevents any downward pressure on prices – a double state-sanctioned monopoly). Understandably, insurance companies do not see it as their job to cover fully every conceivable, discretionary vaccine; they pass the costs on to physicians, who often cannot pass the costs to their patients.

“Spending by the federal Vaccines for Children program, which pays for immunizations for Medicaid children and some others, has grown to $2.5 billion, up from $500 million in 2000.”

Guess who pays for that? Paeditricians and taxpayers. Now, states recommend or require thirty-seven shots and two oral vaccines before children reach the age of majority. Such requirements (as the one for Gardasil in Texas) amount to an unfunded mandate; the costs are absorbed either by the patient, the doctor, or insurance companies.

“More radical proposals, like mandating that insurance companies cover vaccines or having the government buy all vaccines, are not likely to gain political traction, experts said.”

Of course! The solution to too much government interference is more government interference. A less radical proposal would be to reduce the number of required vaccines to those necessary for public health (i.e. highly communicable, lethal diseases which would shut down school systems); market forces would reduce the costs of discretionary vaccines as demand drops.

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Responses

  1. Do you know how much the HPV vaccines cost per person or in total for a given state?

  2. Yes. $400 per person. I did out the math for Texas here:
    https://helvidiuspachyderm.wordpress.com/2007/02/25/texans-sue-to-stop-vaccinations/

    It’s $70 million for Texas, every year.

  3. Thanks! That’s a lot of $$$. I know this sounds awfully corporate, but I think with health initiatives it is worth calculating the cost per life saved. That doesn’t mean we would only address the diseases with the lowest cost per life saved, but it can help frame the issues.

    I have to wonder what the net effect on all STDs, pregnancies, abortions, etc. would be if the money were spent on abstinence training instead. Imagine what kind of great commercials could be made with that money.

  4. When I was in ninth grade, one of my teachers said that government debates are about meeting unlimited needs with limited resources.

    Given that our resources ARE limited, even in America, I think it’s important to at least focus our efforts in a rational manner. Cervical cancer costs a million dollars per case to prevent. Before we mandate that, we ought to ensure that this is the best use of the money.

    More than that, there’s the issue of rising insurance premiums. I would rather have a really mediocre insurance policy that covered accidents and illnesses, but left everything else up to me, than to not be able to afford a premium policy that covers all of the government recommended and required vaccines.

    While it sounds “corporate,” the result is that, by spending $70 million annually in Texas alone to stop an STD, we are NOT spending $70 million in other places that would save far more lives.


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