One Flu Over the Cuckoo's Nest

by Michael Tennant  

“Physicians,” writes J.R. Kent, M.D., to the editor of the Los Angeles Times, “will have the sad task of filling out the death certificates of those who die of influenza as a consequence of this vaccine shortage.  Causes of death?  Primary cause:  the market system.  Secondary cause:  influenza.  That’s what I’ll be signing.”  

Dr. Kent needs to see a competent psychiatrist if his brain is so addled as to believe that the free market is in any way to blame for the current flu vaccine shortage.  Apparently Dr. Kent believes that an industry that is regulated and subsidized from beginning to end is the equivalent of a free market.  That, as even the most ardent Keynesian can tell you, is balderdash.  

Furthermore, if “the market system” is the cause of the vaccine shortage, then what does Dr. Kent propose as a solution?  The only other option is complete government control of the process; but if the government already controls the process almost entirely, how will more government control improve the situation?  

In fact, the solution is not more government control but less.  Let the market do its job, and the problem will vanish.  The alternative is increasingly stultified medical care, as witness Canada’s crumbling socialized health care system.  

The immediate reaction on the part of most people to the suggestion that government simply leave the health care industry alone is one of absolute horror.  Who would protect us from evil insurance companies that would deny us coverage for weight loss classes, or pharmaceutical companies that would deliberately poison us with low-quality, contaminated drugs, all in pursuit of the almighty dollar?  

In the case of the flu vaccine, the answer is clear:  The market protects us.  After all, it was Chiron Corp., the manufacturer of the vaccine, which discovered that some of its vaccine batches had been contaminated with bacteria.  Chiron alerted all government regulators of its discovery back on August 25, and it’s safe to say they didn’t ship out any of the contaminated vaccine.  It took British regulators another seven weeks to get around to meeting with Chiron and deciding to shut down the company’s vaccine manufacturing altogether.  Had Chiron been concerned only with making a quick pound, they would have kept shipping the vaccines; and at the rate government regulators operate, it could have been months or even years before the contamination was discovered.  Most likely people would have become ill from the vaccine long before the government ever got around to investigating.  

Why didn’t Chiron just ship the vaccine for the quick profit and wait for regulators to catch up with its chicanery?  Because Chiron has a reputation to uphold; and as badly as it was damaged by Chiron’s own revelation of contaminated vaccine and the subsequent revocation of its license, it would have been damaged infinitely more so had the company shipped vaccine it knew to be dangerous.  Who would ever have bought a Chiron product again?  The market dictated that Chiron test its own products and ensure that faulty ones not knowingly be sold to customers.  All government regulators did was validate Chiron’s market-dictated decision.  

To make matters worse, the British government then impounded 40 million doses of the vaccine which Chiron had tested and found free of contamination, thus needlessly depriving 40 million people of protection from influenza this season.  Since bureaucrats stick together, the FDA has said it won’t try to get the safe doses for Americans.  Thus, not only did government regulators not discover the problem, but when they were alerted to it, they actually exacerbated the shortage for no other reason than to show that they were in charge.  Some guardians of the people!  

Of course, even without the loss of Chiron’s vaccine doses, which make up half the U.S. supply, there would still have been flu vaccine shortages here because there are shortages every year.  The reason for that, too, is government interference.  The federal, state, and local governments have for years subsidized flu vaccines, meaning that nobody who gets a flu shot is paying the market price.  As a result, many people who don’t genuinely need flu shots get them anyway rather than chance having to suffer through a few days of coughs and sneezes.  

If, on the other hand, the price of flu shots were determined by the dreaded “market system,” then there would be no shortage and, hence, no deaths for Dr. Kent to chalk up to the market.  People who want to obtain a vaccination would then have to weigh the cost against the benefit (which they already do, but their decisions are skewed because the cost is held below market level), with the result that many of those who are now buying up doses for personal convenience rather than necessity would opt to keep their money and take their chances instead, freeing up more doses for those genuinely in need.  A halved supply makes this all the more necessary, for the higher price that the vaccine would bring would further restrict the number of “personal convenience” doses sold, thus conserving the doses for those in high-risk groups, on top of which the profit to be made would encourage increased production of the vaccine, ultimately reducing its price and making it available to more people.  

What about those who need the vaccine but couldn’t afford the presumably higher price that the market would dictate?  Doesn’t allowing the market to determine the price unfairly benefit the rich?  Perhaps, although the history of free markets in other industries indicates that the freely determined price of vaccines would fall in the long run, making it easier for the poor to afford flu shots in the future.  (Plus, there are always charities such as the Red Cross to provide free or low-cost doses to those truly in need, without having to rob fellow citizens of their hard-earned money to pay for them.)  The alternative is the current system, whereby the government creates shortages by both regulations and subsidies and then is forced to ration out doses to those people that bureaucrats in some far-off city, well insulated from the public, deem worthy of receiving them—hardly a fair system in itself, and one destined to become increasingly politicized as time goes by.  

Therefore, to Dr. Kent I say:  When you fill out the death certificates for those who have died from influenza because of the vaccine shortage, you ought not write that the primary cause is “the market system.”  The primary cause is, not surprisingly, government.  The solution is the market.  

To Dr. Kent ’s patients I say:  Find yourself another doctor.  The way this guy diagnoses economic problems, he just might tell you that pain in your big toe is a sign of appendicitis.