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Why One Corporation

Summary:
Scanning the headlines, one might notice that there is now a multitude of articles on the measles virus in most major media outlets. Outbreaks in places like New York City have led to what the AP calls “extraordinary police powers” to mandate vaccinations or quarantine those suspected of the disease. Proponents of mandatory vaccines defend these measures while contended there is too much resistance to measles vaccination based on a variety of philosophical or religious concerns. They want new state laws eliminating the possibility of opting out of any vaccination for any non-medical reasons. Why So Few Choices in Vaccines? But why are some people resistant to the measles vaccine? And more importantly, are there any ways that

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Scanning the headlines, one might notice that there is now a multitude of articles on the measles virus in most major media outlets. Outbreaks in places like New York City have led to what the AP calls “extraordinary police powers” to mandate vaccinations or quarantine those suspected of the disease.

Proponents of mandatory vaccines defend these measures while contended there is too much resistance to measles vaccination based on a variety of philosophical or religious concerns. They want new state laws eliminating the possibility of opting out of any vaccination for any non-medical reasons.

Why So Few Choices in Vaccines?

But why are some people resistant to the measles vaccine? And more importantly, are there any ways that manufacturers of vaccines can address some of these issues?

There are, not surprisingly, a wide variety of reasons given by patients and guardians for choosing to not be vaccinated. Many of these involve debates over the science of vaccines and their effects and risks.

I’ll leave those debates up to the biologists and their critics.

What will interest me in this article is how government regulation — and government-created monopolies — have limited the types and varieties of measles vaccines available, and how these decisions have been made explicitly to limit consumer choice in favor of embracing a certain public-policy agenda. In turn, these policy choices have discouraged some patients and parents from being vaccinated.

This is illustrated in the response to some parents and patients who have opposed use of the measles vaccine in response to fears the composite MMR vaccine is more dangerous than a “single-antigen” or “monovalent” vaccine. In other words, some people would prefer a measles vaccine that has not been combined with vaccines for mumps and rubella. This concern is apparently widespread enough to show up frequently in “Q and A” publications on measles vaccination.

Government officials and doctors, meanwhile, insist that there is no scientific basis for these fears.

Let’s assume they are correct, and there is no additional risk.

But what should be the proper response to continued patient and parent fears in this regard?

It would seem the most productive and efficient response would be to overcome this objection by simply offering a non-composite vaccine. If the need to obtain more measles vaccinations is so urgent, it would make sense to — at least in the short term — circumvent fears over the MMR by meeting consumers where they are. The result would be more people being vaccinated specifically for measles — the disease we’re told warrants an immediate response.

This, however, has not been the strategy employed by policymakers. Instead, government officials and doctors has been almost universally united in telling resistant patients and parents to just shut up and get the composite vaccine. The stock response in the Q and As is simply that the separate measles vaccine “is no longer available.” No further explanation is ever given. Those who persist in asking questions about other options, it is implied, endanger public health.

Some may remember, though, that up until 2009, a separate measles vaccine was still available in the United States from Merck Corporation, the only company licensed to produce the vaccine in the United States.1

This was discontinued, however, much to the cheers of many pro-vaccination activists. For example, writing for a site called “Science-Based Medicine,” physician John Snyder declared Merck’s plan “great news,” even though Snyder admits that a single-antigen vaccine had has been in continued production “for various reasons.” These included the fact “a monovalent measles vaccine has been recommended during measles epidemics to protect infants 6-12 months of age.”

So why would it be “great news” that this additional option will no longer be available?

Apparently, the reason was based not on any medical problem with the separate vaccine, but was a public-policy decision pushed by lobbyists — and possibly by Merck itself. Writing for the American Association of Pediatrics (AAP), physicians David Kimberlin and Joseph Bochini write:

[The AAP] was very concerned that availability of monovalent measles, mumps, and rubella vaccines would increase the number of at-risk children by enabling parents to elect to spread out immunization…

In other words, if patients are given choices, lobbyists theorized some of them might receive only partial vaccinations, based on individual assessments of risk. Thus, the AAP has opted to reduce choices — and reduce opportunities to evaluate risk — and embrace an all-or-nothing plan designed to force patients into adopting a certain vaccination schedule.

The general idea being pushed here is that doctors only have access to patients intermittently. Thus, in order to increase “efficiency” in vaccines, the ideal is to pack as many immunizations into a single doctor visit as possible.

Faced with a choice of the composite vaccine or nothing, some people have opted for nothing. This is not surprising since their preferred option has been removed from the menu of choices.

The result has likely been fewer measles vaccinations among those who dislike the composite vaccine. Lobbyists deliberately pushed for the removal of a non-coercive option that could have been used to vaccinate more people. Not surprisingly, many of those same people are now pushing for explicitly coercive laws to force the use of a specific vaccine preferred by a single huge pharmaceutical company.

Merck’s Government-Created Monopoly

But why should patients be only able to access treatments provided by a single corporation?

In a functioning marketplace — which the US pharmaceutical industry certainly is not — it is highly unlikely this sort of power would be enjoyed by a single firm.

In a functioning marketplace, if there is a demand for other types of vaccines, it is likely other companies would step in to provide those services. Competition could be offered by new startups, or by foreign firms entering the marketplace.

Unfortunately, we find the US government makes this sort of competition extraordinarily difficult.

In Financing Vaccines in the 21st Century: Assuring Access and Availability, (published by the National Academies Press) the authors note the plethora of barriers to entry that preclude the entrance of other firms into the vaccine market.

Some of these are market-based. The cost of producing and delivering vaccines is costly in terms of fixed costs. But many of these costs are government created as well. In an examination of how government-created limitations on vaccine production has led to bottlenecks and fragility in vaccine distribution, the authors write:

Perhaps the most important long-run solution to the fragility of vaccine supplies is to ensure that multiple companies have access to the U.S. market. Although a large number of small domestic R&D firms and foreign companies have applications pending for vaccine licenses in the United States, regulatory and cost barriers may inhibit the entry of many of these producers. For example, a company that has had a successful vaccine product in use for many years in Europe and Canada must conduct full clinical trials as part of its U.S. license application rather than drawing on efficacy and safety data from its current product experience. GAO (2002) has recommended expedited FDA review procedures. Implementing this recommendation would accelerate approval of new and competitive vaccines in the case of shortages and also reduce the total cost of bringing a vaccine to market.2

Defenders of the status quo insist that regulations are necessary to ensure public safety, but experience suggests “the impact of regulation has been costly, without clear evidence of corresponding improvements in quality.”

The effect has been to cut off patients and parents from options that might have been available without government policy artificially raising costs to so high an extent. Particularly illustrative is the fact that American consumers do not have the option of accessing foreign vaccines that have already been in wide usage outside the US.

This is especially relevant to the case of the MMR since the Japanese manufacturer Takeda Pharmaceutical company already produces an alternative composite vaccine containing only measles and rubella antigens. (It was specifically produced to provide an alternative to the MMR which some Japanese researches contended led to too many adverse reactions.) Moreover, at least as late as 2007, a single-antigen measles vaccine in the UK was “obtainable on a private basis” (i.e., not through the National Health Service) at least partially through imported vaccines.

These options have been essentially abolished by government regulation in the US.3

Moreover, many medical professionals appear happy to embrace and push these monopolies, since monopoly power can be easily used to force certain politically-popular composite vaccines. Monopolists like Merck are happy to play along since this can help increase revenues by simultaneously reducing administrative costs and marketing only costlier composite vaccines.4

The end result is an excellent illustration of how partnerships between government regulators and private companies can be used to reduce consumer choices, and even, ultimately, to push coercive medical policies which mandate acceptance of what few choices remain.

1. See table 5-1 in Financing Vaccines in the 21st Century: Assuring Access and Availability.: https://www.ncbi.nlm.nih.gov/books/NBK221811/

2. See chapter 5, “Vaccine Supply.” Available online through the National Center for Biotechnology Information. Chapter 5 also describes how market concentration toward a small number of providers has been significant in recent decades. https://www.ncbi.nlm.nih.gov/books/NBK221811/

3. See Caves, Kevin W. and Singer, Hal J., “Bundles in the Pharmaceutical Industry: A Case Study of Pediatric Vaccines” (August 11, 2011).  “the FDA’s requirement that vaccines currently sold in other markets undergo costly additional clinical trials before entering the U.S. market (to meet potentially more stringent regulatory requirements) ‘often discourages manufacturers from launching vaccines in the U.S.'” https://papers.ssrn.com/sol3/papers.cfm?abstract_id=1908306

4. See Financing Vaccines in the 21st Century: Assuring Access and Availability: “Much current R&D and product testing is directed toward expansion of combination vaccines because they generally reduce the number of doses and the administration costs of vaccination, even though they may be more expensive.”

Ryan McMaken
Ryan W. McMaken is the editor of Mises Daily and The Austrian. He has degrees in economics and political science from the University of Colorado, and was the economist for the Colorado Division of Housing from 2009 to 2014.

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