Justinian Lane

Don’t blame lawyers for the lack of new vaccines - blame the free market

It's not uncommon to hear corporate shills and other tort "reform" advocates claim that the reason we don't have more vaccines is because of the threat of litigation.  Like most reform claims, this one isn't based on facts.

"Simply stated, the reason is limited profit and large risk. At best, vaccines bring in $6 billion worth of revenues, about 1.5% of the current total annual pharmaceutical market worldwide. The market is splintered among more than a dozen pediatric vaccines and another dozen or so for travelers, other at-risk individuals, and the military. As a result, the market for any given vaccine is substantially below the $500 million per year threshold that a pharmaceutical company considers as a viable product to develop.

While companies may start to see an expanded return on R&D investments for certain products due to the over-the-counter market, that is not currently possible for vaccines due to requirements for parental administration (except for some oral and nasal) and the requirement for a "cold-chain" of most vaccines due to stability issues. Thus, the current average cost of bringing a vaccine to market is larger than can be borne by the market for most of the current vaccines. Although there are some vaccines which have the potential for a greater than $1 billion dollar market (e.g., hepatitis B virus, human papilloma virus), the total vaccine market is so limited that the required return on investment for commercial pharmaceutical and biotech companies does not justify investment in vaccine development."  (Emphasis added.)

Source: The Scientist : The Vaccine Conundrum

Does the tort system deter the development of vaccines?  Perhaps to some extent.  But the real deterrent must be the fact that there isn't enough demand for vaccines for them to be profitable!  

The authors make several suggestions on how to bridge the funding gap so as to encourage the development of new vaccines.  That pharmaceuticals are busy pumping out weight loss and impotence drugs instead of developing life saving vaccines would make Jonas Salk roll over in his grave.

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Posted at 9:18 PM, Apr 26, 2007 in Product Liability
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