IDEAS home Printed from https://ideas.repec.org/a/wly/mgtdec/v28y2007i4-5p393-405.html
   My bibliography  Save this article

An industrial organization perspective on the influenza vaccine shortage

Author

Listed:
  • F.M. Scherer

    (John F. Kennedy School of Government, Harvard University Emeritus, USA)

Abstract

This paper analyzes reasons advanced for the recent shortage of influenza vaccine in the United States and numerous other similar shortages in recent years. Explanations have included high regulatory costs, inadequate profitability, and mergers. Using Census data, it shows that vaccine producers realize unusually high price-cost margins, but are probably also unusually capital-intensive. Applying theories of scale economies to existing information, it identifies the extent to which, for diverse types of vaccines, economies of scale limit the number of vaccine producers, exposing the nation to stochastic shortage risk. A benefit|cost analysis explores whether it is economically worthwhile to maintain additional production sources with surge capacity. It is found that under plausible demand, external benefit, and stochastic supply failure conditions, such multiple sourcing yields more benefits than its cost. Copyright © 2007 John Wiley & Sons, Ltd.

Suggested Citation

  • F.M. Scherer, 2007. "An industrial organization perspective on the influenza vaccine shortage," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 28(4-5), pages 393-405.
    • Handle: RePEc:wly:mgtdec:v:28:y:2007:i:4-5:p:393-405
    DOI: 10.1002/mde.1349
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1002/mde.1349
    File Function: Link to full text; subscription required
    Download Restriction: no
    File URL: https://libkey.io/10.1002/mde.1349?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Amy Finkelstein, 2003. "Health Policy and Technological Change: Evidence from the Vaccine Industry," NBER Working Papers 9460, National Bureau of Economic Research, Inc.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Jose Alcalde & Matthias Dahm, 2016. "Proportional payoffs in legislative bargaining with weighted voting: a characterization," Discussion Papers 2016-03, The Centre for Decision Research and Experimental Economics, School of Economics, University of Nottingham.
    2. Alcalde, José & Dahm, Matthias, 2013. "Competition for procurement shares," Games and Economic Behavior, Elsevier, vol. 80(C), pages 193-208.
    3. Ginger Zhe Jin & Thomas G. Koch, 2018. "Learning by Suffering? Patterns in Flu Shot Take-up," NBER Working Papers 25272, National Bureau of Economic Research, Inc.
    4. Patricia Danzon & Nuno Sousa Pereira, 2011. "Vaccine Supply: Effects of Regulation and Competition," International Journal of the Economics of Business, Taylor & Francis Journals, vol. 18(2), pages 239-271.
    5. Amir, Rabah & Liu, Zhiwei & Tian, Jingwen, 2023. "Negative network effects and public policy in vaccine markets," Journal of Economic Behavior & Organization, Elsevier, vol. 216(C), pages 136-149.
    6. Alcalde, José & Dahm, Matthias, 2019. "Dual sourcing with price discovery," Games and Economic Behavior, Elsevier, vol. 115(C), pages 225-246.
    7. Pedro Garcia-del-Barrio, 2017. "Pareto-improving income redistribution: expanding consumer access to the vaccines market," Economics of Governance, Springer, vol. 18(3), pages 275-313, August.
    8. Chung, Sung Hoon & Kwon, Changhyun, 2016. "Integrated supply chain management for perishable products: Dynamics and oligopolistic competition perspectives with application to pharmaceuticals," International Journal of Production Economics, Elsevier, vol. 179(C), pages 117-129.
    9. Sarang Deo & Charles J. Corbett, 2009. "Cournot Competition Under Yield Uncertainty: The Case of the U.S. Influenza Vaccine Market," Manufacturing & Service Operations Management, INFORMS, vol. 11(4), pages 563-576, July.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Patricia M. Danzon & Andrew Epstein & Sean Nicholson, 2007. "Mergers and acquisitions in the pharmaceutical and biotech industries," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 28(4-5), pages 307-328.
    2. Daron Acemoglu & Joshua Linn, 2004. "Market Size in Innovation: Theory and Evidence from the Pharmaceutical Industry," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 119(3), pages 1049-1090.
    3. Christina M. L. Kelton & Robert P. Rebelein, 2007. "A General‐Equilibrium Analysis of Public Policy for Pharmaceutical Prices," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 9(2), pages 285-318, April.
    4. John A. Romley & Neeraj Sood, 2013. "Identifying the Health Production Function: The Case of Hospitals," NBER Working Papers 19490, National Bureau of Economic Research, Inc.
    5. Laura Magazzini & Fabio Pammolli & Massimo Riccaboni, 2009. "Nuove politiche per l'innovazione nel settore delle scienze della vita," Working Papers CERM 03-2009, Competitività, Regole, Mercati (CERM).
    6. Cozzi, Guido & Impullitti, Giammario, 2006. "Technological policy and wage inequality," MPRA Paper 10140, University Library of Munich, Germany.
    7. Tomas Philipson & Stephane Mechoulan & Anupam Jena, 2006. "Health Care, Technological Change, and Altruistic Consumption Externalities," NBER Working Papers 11930, National Bureau of Economic Research, Inc.
    8. Winghan Kwong & Edward Norton, 2007. "The Effect of Advertising on Pharmaceutical Innovation," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 31(3), pages 221-236, November.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:wly:mgtdec:v:28:y:2007:i:4-5:p:393-405. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: http://www3.interscience.wiley.com/cgi-bin/jhome/7976 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.