Consultant Says Flu-Shot Shortage A Lesson In Bad Pricing

By Peter Strozniak Although flu shots are plentiful now, manufacturers have been taking the heat for a delay in delivery of the vaccines that caused a mild panic in the fall. Although it's been reported that production problems and plant shutdowns caused the vaccine shortage, that's not true, says David L. Webster, a medical consultant and former director of pricing for Aventis Pasteur, one of the world's largest drug manufacturers. The vaccine's low price -- $2 to $3 per dose -- is the real culprit, Webster contends. He explains: The low price prompts vaccine manufacturers to produce only what they know they can sell; otherwise, they risk losing money. By the time manufacturers learn that actual production needs are different from original projections, as they did this summer, it's difficult to make up the shortage because vaccine production is so complicated. For example, chicken eggs are a critical component of the vaccine, and it is difficult to make chickens lay several hundred thousand eggs on short notice. Webster recommends adjusting the vaccine's price so that manufacturers are less fearful about overproduction. "This year's shortage once again draws attention to the issue of pharmaceutical pricing and how it can severely impact public health," Webster says. "The shortage creates an opportunity for pharmaceutical companies and public health officials to develop a strategy to better meet the needs of the consumers."

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