Editore"s Note
Tilting at Windmills

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October 18, 2004
By: Kevin Drum

FLU VACCINE UPDATE....Two companies say they may jump into the U.S. flu vaccine market next year:

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.

....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...."It is a very attractive business," said Anthony Holler, ID Biomedical's chief executive.

....U.S. public health officials have said they are unsure the FDA could move swiftly enough to approve the shots. The FDA will clear a drug only if the manufacturer can demonstrate that the product is safe and effective, a process that typically takes years.

So: demand is high and growing; prices have quadrupled recently, which means government price caps aren't an issue; and it's an "attractive business," which mean liability lawsuits must not be scaring anyone too badly.

However, FDA approval could be a problem. This leads me to think that my tentative conclusion yesterday was probably correct: out of all the reasons on offer to explain why the United States relies on only two main suppliers for its flu vaccine supply (small market, low price, risky business, lawsuit worries), it's probably FDA regulatory hurdles that explain the most.

Are those hurdles reasonable? I don't know. But it does seem as if they're the most likely reason that the United States, with a huge market, has only two approved suppliers, while Britain, with a market 10% the size, has half a dozen.

Kevin Drum 12:12 PM Permalink | Trackbacks

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