Flu Vaccine Market In The United States: A Case Study

Abstract

The recent experience in the United States with a shortage in available doses of flu vaccine demonstrates a heavy reliance on a limited number of suppliers for the flu vaccine.  The announcement by the Centers for Disease Control and Prevention  of the Department of Health and Human Services (hereinafter “Centers for Disease Control”, or “CDC”) in early October of 2004 that the total amount of flu vaccine prepared by a leading manufacturer at a plant in England had become contaminated and would not be available for distribution in the United States during the 2004-2005 season created an immediate shortage and challenge for the United States Department of Health and Human Services and its Centers for Disease Control and Prevention (Health and Human Services, 2004)(a).    Literally overnight, federal officials were faced with the prospect of having their anticipated supply of approximately 100 million vials of injectable flu vaccine reduced by 46 to 48 million vials, with insufficient time to produce more for the imminent flu season.  The reaction was reminiscent of the oil and gasoline shortages of the early 1970’s, where motorists waited in long lines for gasoline pumps during the oil crisis.  In 2004 reports surfaced of senior citizens waiting hours in long lines, often enduring poor conditions during such wait, in hopes of receiving one of the rare flu shots.   Several states filed lawsuits against a flu vaccine distributor, essentially charging the distributor with price gouging on vials of vaccine.  According to the allegations contained in these lawsuits, in some instances distributors increased prices for vials of vaccine to more than ten (10) times the market value prior to the announced shortage.  (Weissman, 2004).