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The Economics of Vaccines

By Dr. Moghissi - September 2005

Vaccines are extremely important from a public health standpoint. Vaccines and antibiotics together are the major reason life expectancy in the western world has almost doubled in the past 100 years. People, especially young healthy people, just don’t die of infectious diseases anymore. Vaccines are actually a wonderful way of preventing disease - they use the body’s own immune system to fight off disease. How cool is that?

Vaccines cause the body to make antibodies to specific diseases (called immunity) so the body can fight the invaders off before getting sick. In addition, when enough people in the community are vaccinated we get something called herd immunity. That occurs when most people are immune to an illness and there are not enough people to pass the disease around to those who are not immune. So vaccines can even protect those people who are not vaccinated! Therefore, it is very important to vaccinate as many people as possible in a community.

Anything can have adverse affects, including vaccines. All vaccines in use today rarely have adverse effects, especially compared to the benefits. (Of course, if you are the person who has the adverse effect, you may feel differently!) As you can tell by the tone of this article, I am generally a proponent of vaccines. I think they should be made available to everyone, preferably at no cost. The benefits are so tremendous, that no one should be denied the right to have any vaccine available.

Every couple of years flu vaccine distribution is chaotic. So, what happens? Each year is different, for instance in 2004 there were only 2 companies producing and distributing flu vaccine to the US. One company had some issues with contamination, and their vaccine production was shut down. So we ended up with almost half the expected doses - and mass panic. The next year that manufacturer was deemed to be free of contamination, but not until late in the season. That year there was delay in shipment of vaccine. In 2009 the manufacture of seasonal flu vaccine was diverted to making H1N1 halfway through the season, so once the initial flu vaccines were shipped, they never made anymore.

Unfortunately, vaccine distribution in this country is very dependent on $. Big companies who order lots of doses get first priority, and better rates. When there are plenty of doses for everyone, that may be fine. But if there is a shortage it’s important for those at highest risk to get the vaccine first. The CDC often recommend only high risk people get the flu vaccine first. I find it hard to believe that those giving vaccines at Costco, Giant, or CVS really restricted the vaccine to those who are high risk during that time. As a matter of fact, I know they don’t, as many of my (non high risk) patients receive the vaccine early.

While I’m still on my soapbox, I have one more issue I’d like to address. Many physicians aren’t even giving vaccines anymore. That’s because we lose money on almost every vaccine we give. First, we have to buy the vaccine from a distributor or from the manufacturer. (That’s another issue; I actually have to do comparison shopping to find the best rate for vaccines. What a waste of time!) We have to pay for the vaccine when we buy it, and if it expires or a it a patient changes their mind at the last minute (after it's been drawn up) we eat the cost. We have to pay for the syringe, needle, alcohol pads, gauze and bandaids. We have to pay someone to administer the vaccine,document it, then someone to bill the insurance company. Then we wait for a check. Here are some examples of the what I paid (vaccine only) and was reimbursed in 2005:

Chickenpox vaccine: cost of vaccine-$77 reimbursement-$66.82 to $78.86
Hepatitis B vaccine (adult): cost of vaccine-$60 reimbursement-$41.25 to $52
MMR: cost of vaccine-$42.15 reimbursement-$38.05 to $43.64

We also bill for administration of the vaccine, and received anywhere from $0 to $14.40 ($6 on average).

Can you blame some physicians for not administering vaccines?

We are fortunate that new vaccines are continuously being developed to protect us. I hope you all consider these vaccinating yourselves and your family. Finally, I’d like to leave you all with some links to reliable information about vaccines.

www.vaccine.org -- Allied Vaccine Group
http://www.cdc.gov/vaccines/ -- CDC’s National Immunization Program
www.cispimmunize.org -- American Academy of Pediatric’s Immunization info
www.immunize.org -- Immunization Action Coalition
www.vaccineinformation.org
www.immunizationinfo.org -- Nat’l Network for Immunization Info
www.hhs.gov/nvpo -- US gov’t National Vaccine Program Office
www.vaccine.chop.edu -- Vaccine ed at the Children’s Hospital of Philadelphia

Jasmine Moghissi, M.D.

Focus - Health Tips » The Economics of Vaccines

The Economics of Vaccines

By Dr. Moghissi - September 2005

Vaccines are extremely important from a public health standpoint. Vaccines and antibiotics together are the major reason life expectancy in the western world has almost doubled in the past 100 years. People, especially young healthy people, just don’t die of infectious diseases anymore. Vaccines are actually a wonderful way of preventing disease - they use the body’s own immune system to fight off disease. How cool is that?

Vaccines cause the body to make antibodies to specific diseases (called immunity) so the body can fight the invaders off before getting sick. In addition, when enough people in the community are vaccinated we get something called herd immunity. That occurs when most people are immune to an illness and there are not enough people to pass the disease around to those who are not immune. So vaccines can even protect those people who are not vaccinated! Therefore, it is very important to vaccinate as many people as possible in a community.

Anything can have adverse affects, including vaccines. All vaccines in use today rarely have adverse effects, especially compared to the benefits. (Of course, if you are the person who has the adverse effect, you may feel differently!) As you can tell by the tone of this article, I am generally a proponent of vaccines. I think they should be made available to everyone, preferably at no cost. The benefits are so tremendous, that no one should be denied the right to have any vaccine available.

Every couple of years flu vaccine distribution is chaotic. So, what happens? Each year is different, for instance in 2004 there were only 2 companies producing and distributing flu vaccine to the US. One company had some issues with contamination, and their vaccine production was shut down. So we ended up with almost half the expected doses - and mass panic. The next year that manufacturer was deemed to be free of contamination, but not until late in the season. That year there was delay in shipment of vaccine. In 2009 the manufacture of seasonal flu vaccine was diverted to making H1N1 halfway through the season, so once the initial flu vaccines were shipped, they never made anymore.

Unfortunately, vaccine distribution in this country is very dependent on $. Big companies who order lots of doses get first priority, and better rates. When there are plenty of doses for everyone, that may be fine. But if there is a shortage it’s important for those at highest risk to get the vaccine first. The CDC often recommend only high risk people get the flu vaccine first. I find it hard to believe that those giving vaccines at Costco, Giant, or CVS really restricted the vaccine to those who are high risk during that time. As a matter of fact, I know they don’t, as many of my (non high risk) patients receive the vaccine early.

While I’m still on my soapbox, I have one more issue I’d like to address. Many physicians aren’t even giving vaccines anymore. That’s because we lose money on almost every vaccine we give. First, we have to buy the vaccine from a distributor or from the manufacturer. (That’s another issue; I actually have to do comparison shopping to find the best rate for vaccines. What a waste of time!) We have to pay for the vaccine when we buy it, and if it expires or a it a patient changes their mind at the last minute (after it's been drawn up) we eat the cost. We have to pay for the syringe, needle, alcohol pads, gauze and bandaids. We have to pay someone to administer the vaccine,document it, then someone to bill the insurance company. Then we wait for a check. Here are some examples of the what I paid (vaccine only) and was reimbursed in 2005:

Chickenpox vaccine: cost of vaccine-$77 reimbursement-$66.82 to $78.86
Hepatitis B vaccine (adult): cost of vaccine-$60 reimbursement-$41.25 to $52
MMR: cost of vaccine-$42.15 reimbursement-$38.05 to $43.64

We also bill for administration of the vaccine, and received anywhere from $0 to $14.40 ($6 on average).

Can you blame some physicians for not administering vaccines?

We are fortunate that new vaccines are continuously being developed to protect us. I hope you all consider these vaccinating yourselves and your family. Finally, I’d like to leave you all with some links to reliable information about vaccines.

www.vaccine.org -- Allied Vaccine Group
http://www.cdc.gov/vaccines/ -- CDC’s National Immunization Program
www.cispimmunize.org -- American Academy of Pediatric’s Immunization info
www.immunize.org -- Immunization Action Coalition
www.vaccineinformation.org
www.immunizationinfo.org -- Nat’l Network for Immunization Info
www.hhs.gov/nvpo -- US gov’t National Vaccine Program Office
www.vaccine.chop.edu -- Vaccine ed at the Children’s Hospital of Philadelphia