Thursday, October 21, 2004

Government's Gonna Get Your Granny!

I don't think Dan Weintraub gets it:

I am intrigued by the important argument that the government's involvement in the vaccine industry has helped lead to the current shortage. Particularly the idea that government purchasing in bulk has lowered the profit margin to such a point that companies no longer had an incentive to produce the vaccines. But I have yet to see any data supporting this hypothesis. Does anybody out there know where to find good data on the percentage of the flu vaccine purchased by the government (versus the private sector) over the years, and the price paid for that vaccine? I'll be checking the usual government sources but if anybody has quick access to this data I would love to see it.
______

But those statistics don't exist. The vaccine is in short supply for various reasons, partly because of legal restrictions on mass production. That's the kind of legal restrictions that Cafe Hayek types like -- excessive patent protection. You're going to tell me that you can't make it economical to sell a vaccine that costs $.02 a unit to produce? If that's true, it's because drug companies have an unconscionable policy of giving up on a product just because it has a smaller or smallish profit margin. (No, it's not unconscionable, it's just capitalism!) That may be a reason just to nationalize completely the vaccine production and distribution system.


Link