Vaccinations

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Vaccines=Big Business?

October 18, 2010 in Vaccinations | No comments

In 2005, the market for pediatric vaccines was about $5 billion and the market for adult vaccines was about $4 billion.  Yet these figures could be small potatoes.  The Economist predicts that pediatric vaccine market will reach $20 billion by 2014; the adult vaccine market won’t be far behind.

What innovations may be on the way?

  • Technology to grow vaccines in petrie dishes rather than in eggs (this will not only allow individuals with egg allergies to receive these vaccines, but the petrie dish techniques can potentially bring vaccines to market faster and at lower cost).
  • Earlier influenza vaccine development lead times using “seed” viruses.
  • A universal flu vaccine.
  • Needle-less vaccines.
  • Vaccines against drug-resistant tuberculosis.
  • Vaccines against non-infectious diseases (e.g., cancer)

New vaccines against pneumococcal disease and human papilloma virus (HPV) are already a huge financial success for vaccine manufacturers. Both vaccines cost more than $100 per dose.

Still, vaccine producers must overcome fears. Many Americans mistakenly believe that vaccines cause autism. Many Nigerians do not get vaccines due to a rumor that the polio vaccine is really a Western plot to sterilize Muslims. This rumor may seem absurd, but Guatemala’s previous experience with U.S. medical care leads one to be weary. Nevertheless, vaccines–if properly administered–have the potential to greatly improve health outcomes throughout the world.

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Delivering Vaccines: A Case Study of the Distribution System of Vaccines for Children

October 13, 2009 in My Papers, Vaccinations | No comments

A paper written by John Fontanesi and myself was recently published in the October 2009 edition of the American Journal of Managed Care. The paper is titled “Delivering Vaccines: A Case Study of the Distribution System of Vaccines for Children.” The abstract of the paper is below:

Objective: To evaluate the efficacy of the central- 
ization by the Centers for Disease Control and 
Prevention of their pediatric vaccine distribution 
system. 
Study Design: In March 2007, the Centers for 
Disease Control and Prevention began a pilot 
program to reform the Vaccines for Children  
(VFC) program. All California VFC providers  
were required to place vaccine orders under  
the centralized logistic system of the Vaccine  
Management Business Improvement Project 
(VMBIP). For this study, VFC ordering, use, 
and delivery data were collected from 2 large 
southern California healthcare providers that 
collectively served more than 200,000 children. 
Data collection occurred between January 2005 
and June 2008. 
Methods: This case study measures the change 
in the mean VFC delivery times before and after 
the VMBIP.  The data underwent simulation to 
estimate the number of days per year a provider 
would have zero VFC inventory before and after 
the VMBIP. 
Results: After the VMBIP was implemented, 
delivery times increased from 1.6 to 12.3 business 
days (P <.001). The probability that VFC deliveries 
took longer than 1 week increased from 7%  
before the VMBIP to 89% afterward. Our simulation 
demonstrates that for 7 of 11 vaccines investigat- 
ed there was a statistically significant increase in 
the number of days a provider would be without 
VFC (P <.01). 
Conclusion: Although the VMBIP was implement- 
ed to save costs, this study finds that during the 
VMBIP’s initial implementation timeline, providers 
experienced longer delivery delays and a higher 
probability of a VFC stockout. 
(Am J Manag Care. 2009;15(10)751-754)
  • Objective: To evaluate the efficacy of the centralization by the Centers for Disease Control and Prevention of their pediatric vaccine distribution system. 
  • Study Design: In March 2007, the Centers for Disease Control and Prevention began a pilot program to reform the Vaccines for Children  (VFC) program. All California VFC providers  were required to place vaccine orders under  the centralized logistic system of the Vaccine  Management Business Improvement Project (VMBIP). For this study, VFC ordering, use, and delivery data were collected from 2 large southern California healthcare providers that collectively served more than 200,000 children. Data collection occurred between January 2005 and June 2008. 
  • Methods: This case study measures the change in the mean VFC delivery times before and after the VMBIP.  The data underwent simulation to estimate the number of days per year a provider would have zero VFC inventory before and after the VMBIP. 
  • Results: After the VMBIP was implemented, delivery times increased from 1.6 to 12.3 business days (P <.001). The probability that VFC deliveries took longer than 1 week increased from 7%  before the VMBIP to 89% afterward. Our simulation demonstrates that for 7 of 11 vaccines investigated there was a statistically significant increase in the number of days a provider would be without VFC (P <.01). 
  • Conclusion: Although the VMBIP was implemented to save costs, this study finds that during the VMBIP’s initial implementation timeline, providers experienced longer delivery delays and a higher probability of a VFC stockout. 

(Am J Manag Care. 2009;15(10)751-754)

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Paying poor people to get vaccinated

June 11, 2009 in Health Care in Developing Nations, Public Policy, Vaccinations | No comments

Conditional Cash Transfer (CCT) programs have become very popular among development economists.  This programs pay poor families to have their children attend school and/or get vaccinated.  Some of the larger programs include Bolsa Família in Brazil and Oportunidades in Mexico.  

Should economists support CCTs that pay the poor to get vaccinated?  This depends on 2 factors: 1) are these program effective and 2) what are the unintended consequences of implementing CCT.  Let us review both issues.

CCT program effectiveness

Barham and Maluccio (2009) review some of the studies on CCTs and vaccination rates.

  • Mexico.  ”Barham et al. (2007) examine the effect of the Mexican CCT program, Oportunidades, in rural areas using data from a randomized experiment…They find small average program effects, on the order of 3 percentage points, and argue that this is due to high coverage rates (above 90%) before the program. They also find…larger effects for those children whose mothers were less educated or who lived further away from a health facility.”
  • Honduras. “Morris et al. (2004) examine the impact of a conditional voucher program in rural Honduras, also using a randomized experiment. They find small significant increases for the first dose of DPT and no effect for MCV, but do not investigate DPT3 or sub-population effects.”
  • Nicaragua. Barham and Maluccio (2009) investigate the Red de Protección Social (RPS) CCT which began in 2000.  They find that ”the program led to large increases in vaccination coverage…Effects were particularly large for those sub-populations that are traditionally harder to reach children who live further away from a health facility or whose mothers are less educated. In terms of achieving eradication, on-time vaccination coverage in the treatment group was close to or greater than 95% for BCG, OPV3 and DPT3 by 2002, whereas it remained below 90% for the country as a whole for OPV3 and DPT3.”

Overall, it does seem that paying individuals does increase vaccination rates.

Unintended Consequences

Below is a list of some of the unintended consequences of CCTs:

  • Weakening the formal sector and stifling tax revenues.  Usually, only poor individuals are eligible for these conditional cash transfers.  This program structure gives poor individuals an incentive to either underreport income or to avoid participating in the formal sector workforce.
  • Using CCTs for political means.  Politicians may vary the CCT by municipality to get votes.  Populist candidates will advocate raising the level of the cash transfer to attract the votes of the poor.  
  • Corruption.  Whenever government officials are handing out cash, one has to worry that some portion of program funds land in the pockets of program administrators.  
  • Weakening of the social contract.  Many individuals may get vaccines to protect their children, but also to protect the health of one’s neighbor.  Gneezy and Rustichini (2000) found that fining parents who are late to pick up their children from school actually increased tardiness.  Similarly, the long term effect of paying people to get vaccines may reduce citizen’s motivation to get their children vaccinate in the absence of payment.
  • Effect on Government Credibility in the cash of a deadly vaccine.  Earlier this month, I blogged about how the rush to produce a flu vaccine in 1976 actually lead to dozens of deaths.  If the government uses a CCT to convince individuals to take an unsafe vaccine, the political backlash will be overwhelming.  Poor citizens may lose faith in a number of other well-intentioned government initiatives.

Conclusion

So what do you think?  Are conditional cash payments to increase vaccination coverage a good strategy?

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San Diego Measles Outbreak: Should parents be compelled to vaccinate their children?

December 22, 2008 in Vaccinations | 6 comments

This American Life has a very interesting show about the San Diego measles outbreak.  Outbreaks decades ago were due to the fact that poor individuals often could not afford to get vaccinated or see a doctor.  Now, this is not a problem since vaccines are generally made available for free for those who cannot pay.  It was rich parents in San Diego who did not get their child vaccinated.

Most parents who do not get their child vaccinated fail to do so because they are worried about the side effects. An 1998 article in the journal Lancet claimed that there was a connection between between MMR vaccination and autism; however, this claim has been refuted and the article has been retracted.  Still, I do sympathize somewhat with these parents.  Even if there is no scientific evidence that vaccination and autism are linked, I understand the parents concern.  Further, I am sympathetic to the attitude that you shouldn’t always just do what people tell you.  However…

The story also shows the side effects of what happens when all kids aren’t vaccinated.  This American Life recounts the story of parents who’s child got the measles.  Most kids receive the MMR vaccine around 1 year of age, so babies younger than twelve months are susceptible to the disease.  The parents recount their harrowing tale of how they help their child in their arms for hours at a time, afraid if they led him lay down his heart would stop beating.  They said that they could not comment in any vaccination related debate since they would become so enraged at the individuals who did not vaccinate that they would lose their friendship.

Overall, I believe that it is right to compel parents to vaccinate their children.  Even if vaccinating would confer some small risk to individual children, the overall benefit to society from the reduction in contagious diseases far outweighs the individual costs.

This American Life Synoposis: “When they decided not to vaccinate their son against measles, two San Diego parents thought they were making the best decision for their child. But when the 7-year-old came home from an overseas trip suffering from the disease (pictured at left: measles virus), his family’s personal decision became a whole community’s problem. The resulting outbreak infected 11 children and endangered many others.“

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Vaccination rate overstated

December 12, 2008 in Current Events, Vaccinations | No comments

The Washington Post reports that the number of children who have been vaccinated in developing countries has been greatly exaggerated.  Political pressure to increase vaccination rates as well as financial incentives from NGOs rewarded increased vaccinations has driven these reporting errors.

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“Spending on bioterror defense has made us less safe”

August 16, 2008 in Pharmaceuticals, Public Policy, Vaccinations | Permalink

Merrill Goozner of GoozNews has an interesting interview with Richard Ebright, a chemistry professor at Rutgers University.  The two discuss the Bruce Ivins, anthrax, and bioterrorism.  A few poignant excerpts.

  • Ebright: “We’ve spent $57 billion in biodefense since 2001. The annual budget for NIH is only $30 billion. The spending has been disproportionate to the level of threat.”
  • Ebright: “There are now 14,000 individuals authorized to handle bioweapons materials.”

Goozner also gets some answers about who benefited from the anthrax attacks of 2001.

  • Ebright: “The administration has milked this for all it is worth by allowing the misperception to remain that this was an external attack, possibly from Iraq…The vaccine industry, particularly BioPort and its successors, have exploited this misperception.”

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Should all children get flu shots?

February 29, 2008 in Current Events, HC Economist Models, Vaccinations | Permalink

According to Reuters (“All U.S. kids…“), the CDC’s Advisory Committee on Immunization Practices (ACIP) is recommending that all kids should receive an influenza vaccination. Previously, the CDC recommended that all children 0-6 receive a flu shot. Now, all children 18 and under should get the shot.

In addition to the direct health benefits the children will receive from a decreased likelihood of getting the flu, the probability that they will spread it to adults, teachers, other children, and senior citizens will decrease.

However, there will be costs to the flu vaccine expansion. According to the U.S. Census, there were 61.3 million children aged 5-19 in the U.S. Getting all these children vaccinated will be very costly and since the vaccines will be given in the fall, the logistics of providing 61 million additional flu shots will be difficult to manage.

Further, one of my working papers (“Adam Smith meets Jonas Salk: Estimating the Social Cost of Third-Party Influenza Vaccination Restrictions“) finds that when kids 0-18 year old must receive a flu vaccine efficiency losses could increase to as much as $560 million if insurance companies continue to prohibiting reimbursement to pediatricians for vaccinating adults.

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Too few US adults get their shots

January 24, 2008 in Current Events, Vaccinations | Permalink

Reuters reports (“Too few…“) on the problem that U.S. adults not receiving necessary vaccines.

“Only 2 percent of U.S. adults last year got a shot that can protect them from painful bouts of shingles, health officials said on Wednesday in a study that shows what they call unacceptably low rates of adult vaccination against a range of diseases.

Adults also failed to get vaccines that can protect them against tetanus, whooping cough and even influenza — despite years of campaigning, the U.S. Centers for Disease Control and Prevention [CDC] found.”

There are a variety of vaccines and different vaccines only apply to certain demographic groups based on their age, sex and risk factors. Some risk factors are obvious (e.g.: being HIV positive, having sex with prostitutes) but others are more mundate (e.g.: working in the healthcare or public safety sectors, being a first-year college student, traveling abroad).
Here at the Healthcare Economist, I don’t just point out potential problems, I offer solutions:

If you do not know which vaccines you need to get, go to the CDC Immunization website and TAKE THIS QUIZ. Childhood immunization schedules are also available.

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