Why Do Vaccines Cost So Much?

When I was in kindergarten, vaccines were apparently free, or at least I never saw any money exchanged when we received them at school. Granted, we lived in a poor area of Appalachia, but I assume that the Public Health Service was responsible. We would line up in mass as the school nurse (my neighbor) would give us shots, one after another. We all winced in pain...some cried, some tried to run off. We didn't mind the sugar cube (oral polio vaccine), but we sure didn't like those school shots, even if the price was right. The costs of vaccines were kept low to increase the widest possible use. Some were federally subsidized, and of course the federal government was the largest customer. Vaccines were definitely cost-effective, since those preventable diseases cost untold billions in direct medical costs alone.

Many of the childhood illnesses that are not prevented were commonplace in the 1950s. We received most of our antibodies the good 'ol fashion way -- we got the diseases. I remember getting measles (AKA, the "big measles", the "red measles"), mumps, and whooping cough. Everyone got chicken pox. My cousin, Danny, developed polio and nearly died. Unless you travel beyond the borders of the United States into Mexico and Central or South America, you are unlikely to see most of these illnesses today.

Everything goes up in price, but vaccines have climbed astronomically in cost to the consumer or insurance company. Twenty years ago, the full array of childhood vaccines used to cost about $84. Now, those same vaccines, along with the increasing number of newer vaccines costs, about $1,200 or more -- a 14-fold increase. Since the cost of medical care and hospitalization has also skyrocketed, vaccines are still a good deal. This year, we added RotaShield for the infants and Gardasil for the young girls -- they are not cheap. Gardasil alone will cost someone about $360 for the series.

There used to be about two dozen companies producing vaccines. We are now down to five major players that account for 80% of the vaccine market. Perhaps we should call them the Vaccine Cartel, since the free-market allows them to set their own fees. In the overall scope of revenue, vaccines still account for only a few percent of pharmaceutical company profits. The sale of drugs is still the cash cow.

Vaccines are inherently safe, but when rare adverse events happen, some people head for an attorney. However, winning a suit against a large pharmaceutical company is not that simple. The cost of liability may be an underlying factor in the cost of vaccines, but it is a small one, since companies are aided by liability protection enacted by Congress. Manufacturing costs have also increased over the last twenty years, but biotechnology has made vaccine production even easier. Actual production and marketing costs do not drive this market -- we do, by our desire to prevent more and more diseases. When you see lines forming to get the annual influenza vaccine, you know you have a good product.

Many years ago, I worked part-time at a busy urgent care center. Wanting to drive up business, the doctor-owner decided to give away free flu shots to the first one hundred people one fateful Saturday. As I looked for a place to park, I saw a line stretching the entire length of the shopping center. We opened the doors at 9 a.m. and the rush began. Angry senior citizens loudly complained about the wait and lack of seating. Tempers flared when it was determined that we were not giving the shots fast enough. By noon, we narrowly avoided a riot when we ran out of those one hundred free doses. At that time, the going price for a flu shot was about ten dollars.

For the last two years, there seemed to be a suspicious shortage of flu vaccine. Last year, millions of doses were contaminated and had to be destroyed. The year before, it was a manufacturing shortage. Personally, I look at these shortages the same way I perceive gasoline shortages. Shortages increased demand. We start giving flu vaccines at the end of the month and, already, people are clamoring for early appointments; perhaps expecting another unforeseen shortage. We ordered 3,000 influenza doses. Oh, by the way, we also have a shortage of a popular meningitis vaccine. I am confident that the supply will eventually increase, along with a corresponding increase in price.

Vaccines are a modern success story and more miracles are on the horizon. We have only seen the tip of this biotechnological iceberg. Can we afford them? Can we afford NOT to have them? I suspect that I will be standing in an angry line some day trying to get my Alzheimer's Vaccine.

Related Topics: Treating Disease with Vaccines, Are Vaccines Safe for Your Child?

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