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Commentary

Editorial: Flu Wars
Washington Post, 10-23-04

Partisan politicking aside, this year's flu vaccine shortage is a long-standing problem that "extends back over several administrations", Republican and Democratic, with plenty of blame to go around. But the lion's share of the blame goes to the federal government itself, which inevitably adopts a miser's attitude when purchasing vaccines from private manufacturers. Currently, the government buys about half of all vaccines nationwide, and uses its enormous purchasing power to drive down prices, pushing manufacturers out of the market and narrowing the field to the point where a single mishap – in this case the closing of a vaccine plant in the U.K. - cost the U.S. half of this year's planned vaccine supply.

The lesson to be learned from this fiasco applies to drug prices generally: prices tell the market how valuable a commodity is, and if the government wants to fix prices on prescription drugs (or vaccines) it is telling the market that drugs just aren’t that valuable to society. The result: fewer drugs and new medicines when we need them the most, exactly the problem we are facing now.



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