Sloan FA, Bereman S, Rosenbaum JD. The Fragility of the U.S. Vaccine Supply. N Engl J Med 2004; 351:2,443-2,447.

With influenza vaccine as the latest example, it’s becoming clear that action is necessary to prevent recurrent shortages of vaccines for children and adults. Vaccines have eradicated smallpox, eliminated major outbreaks of diseases, and prevented thousands of deaths annually. That success can be attributed to a private vaccine industry that has produced many important new vaccines and to an aggressive public health program that annually immunizes more than three-quarters of children and more than half of all adults in the United States

The successes now are threatened by systemic problems in the development, purchase, and distribution of vaccines. "Most proposals would increase government intervention in the vaccine market with the goal of stabilizing supplies through direct control," the authors noted. "But they also run the risk of discouraging the development of vaccines and entry into this market by companies that are wary of federal regulation."

The other approach is a federal mandate that insurers must cover immunizations, which would increase coverage of underinsured children. But if insurers increase premiums to cover the higher expected expenditure, families may lose or drop coverage altogether. "However, inaction also has costs: recurring shortages, missed opportunities for vaccine innovation, perpetuation of a fragmented financing system for vaccines, and increased financial burdens on public health departments. Incremental reforms can improve the current system, but structural changes are needed to ensure a stable vaccine supply in the long term. It may take repeated disruptions in the supply of vaccines to create political momentum for change of this magnitude," the authors noted.

They cited an Institute of Medicine (IOM) report (Financing Vaccines in the 21st Century), which tried to find a balance that limits governmental intervention while ensuring market stability. The report identified the large, growing government share of the vaccine market (55% of childhood vaccines) as a key disincentive for investment and market entry.

It, consequently, recommended elimination of the Vaccines for Children program to remove government from the business of directly purchasing vaccines. Because research and development are driven by anticipated profits, the IOM report recommended that the government subsidize the costs of vaccines to further stimulate private investment in the field.

"The administration of vaccines often results in both health benefits and cost savings," the authors concluded. "By preventing disease, the use of vaccines can achieve reductions in the costs of treating disease that far exceed the costs of immunization."