Return to Main Page | Ragout: Flu Vaccine: "A Very Attractive Business"
A Spicy Stew of Economics, Politics, Data, Food, Carpentry, etc.
Tuesday, October 19, 2004

Flu Vaccine: "A Very Attractive Business"

Via Political Animal and Denise Gellene of the LA Times, I learn that two new companies hope to enter the US flu vaccine market. Apparently they see great profit opportunities in the US.
GlaxoSmithKline, the largest vaccine maker in the world, and ID Biomedical, a small Canadian company, have announced plans to sell flu shots in the U.S. ID Biomedical could enter the market as soon as next year.

That would reduce the nation's reliance on two vaccine makers — and the odds of another massive shortage.

The competitive interest in making flu vaccines could dispel the notion that there is no money to be made in the business. In fact, over the last five to six years, the wholesale price of a flu shot has jumped to more than $8 from less than $2, far outpacing increases in production costs. What's more, the market is growing. Demand has risen to about 80 million doses annually from half that in the mid-1990s. U.S. public health authorities aim to vaccinate 150 million Americans annually by 2010.

"It is a very attractive business," said Anthony Holler, ID Biomedical's chief executive.
A very attractive business? No doubt that will come as a big surprise to readers of the mainstream media or conservative blogs, which have subjected us to an endless stream of nonsense like the following:

[Wyeth's] exit is part of a long, slow industry-wide flight away from flu vaccine, which has simply become more trouble than it's worth...Even under the best circumstances, vaccines have never been very attractive investments. [David Brown, "How U.S. Got Down to Two Makers Of Flu Vaccine."]
Readers of Ragout, of course, have known all along just how dubious these claims about unprofitability really were. Two weeks ago I cited flu vaccine maker Chiron's pre-contamination optimism:
[The newpaper article's] claim that it's hard to make money selling vaccines is also disputed by a surprising source: Chiron, which says that flu vaccine prices have risen enough to justify substantial investment in the U.S. market. Chiron's president testified before Congress earlier this year, "Pricing of influenza vaccines has reached a level that allows manufacturers to invest in maintaining facilities to meet FDA standards and in expanding manufacturing capacity in order to meet the increased demand." Prices have risen in the past few years because 3 of the 5 former manufacturers have left the U.S. market.
Perhaps the mainstream reporters can be forgiven for not uncovering these facts. After all, I relied on hard-to-find, almost secret sources of information.


Number 1 in Ragout Economics!

March 2004 / April 2004 / May 2004 / June 2004 / July 2004 / August 2004 / September 2004 / October 2004 / November 2004 / December 2004 / January 2005 / April 2005 / May 2005 / June 2005 / July 2005 / August 2005 / September 2005 / October 2005 /

First Team
Angry Bear
Crooked Timber
Brad DeLong
Economist's View
Mark Kleiman
Nathan Newman
Political Animal
Max Sawicky
Brian Setser
Sock Thief
Talking Points Memo
Matthew Yglesias

Second Opinion
Stephen Bainbridge
Marginal Revolution
Andrew Samwick
The Volokh Conspiracy

Third Way

Fourth Estate
Economic Reporting Review
New York Times
Washington Post

Fifth Republic
Le Figaro
Le Monde

Sixth Sense
The Intersection
In the Pipeline
What's New

Politics & Polls
Daily Kos
Donkey Rising
Electoral Vote Predictor
Rasmussen Tracking Polls

Art Sucks
Enzo Titolo
L’esprit d’escalier
A Level Gaze
Approximately Perfect

ragoutchef at yahoo dot com


Powered by Blogger