More flu vaccine spray on the way.

Today, the manufacturers of FluMist, announced that they will be able to offer 1 million more flu vaccine doses to the public. FluMist is a nasally inhaled flu vaccine that contains weakened live virus, therefore making the doses approved for those ages 5 to 49 only. The vaccine is recommended for health care workers that work with children and high risk elderly patients. The government has been desperately seeking extra doses since 46 million doses from Chiron Corp. Were barred from distribution.

The demand for these doses is highly inelastic, and the supply is limited to what is produced between flu seasons. The conditions caused by the cancellation of 46 million flu vaccine doses could have been catastrophic to average middle class Americans - if there weren't government regulations and oversight in the matter of healthcare. This a strong example of government regulations being of great benefit to the general welfare of the American public.


pramahaphil said...

Oops, my internet was on the fritz and I thought I lost the first draft. I ended up posting all three.


Bryce Larkin said...

This is another classic example of why the government should not regulate an industry. If there was a profit to be made with flu shots, then more companies would pay attention in making these flu vaccines, but the government wants to help the poor (less fortunate) and by doing it they will hurt the same people they were trying to help.

John West said...

I wouldn't go as far as to thank the government for doing anything great in their quest to combat the annual, well-known need for flu vaccines and its now vast shortage. The fact is that it is the government that is to blame for the shortage in the first place. Every year they are told that this very thing could take place and their consistent failure to recognize this, is what put this country in the place that it is. Now seniors and little children will have a greater chance of dying and you can indeed thank the government for this.

Maudi said...

The government should have known ahead of time that the demand for the flu shot was going to be big. They give flu shots every year and every year it seems that more and more people get them. So why on earth would the government not plan ahead? We should not have to thank them, they are just trying to get more shots in so they don't look as bad as they did when they ran out the first time.

Dr. Tufte said...

The government's approach is correct, but the goofed up one part of the implementation.

What they want to do is twofold: 1) shift the demand for flu shots to the right (increasing Q), and 2) shift the supply of flu shots to the right (increasing Q).

The problem is that they are browbeating the companies into selling the product at a price that doesn't allow them to remain in business for long.

If the government really wanted this to work they would do something to explicitly reduce the marginal cost of producing the shots. This could be a straight subsidy.