More than one side to every story...


I'm not the only one posting on the vaccine shortage. Russ Roberts has some great stuff in posts here and here. (While the good Professor obviously does a far better job than I, I would like to note that he too suggests the mess may have something to do with the way government buys vaccines).

This is all from the US perspective, however. What I also find interesting is looking at the issue from another side. What about Canada? They have a far more socialized health care system than we do, but it appears they have a small surplus they'd be willing to sell.

How can that be? To be honest, I'm not entirely sure. If I had the time, I'd look into their department of health and see how they go about purchasing to provide some comparison to the US method.

One thing I will note, however, is that the company that is poised to provide the extra vaccines is a domestic Canadian company. While I admit to drawing inference from a very thin source, might it be possible that the domestic company is financed largely by the Canadian government (cough --PEOPLE-- cough)? The US has no company that is producing flu vaccine, and looks to international producers for its supply. If this is, in fact, the case for Canada, then the cost of the vaccine is largely irrelevant for the production level, since the company may never have to worry about covering costs. Should that be true, it doesn't invalidate the claim that government purchasing is at the heart of the US vaccine shortage. Since the US is using its position as a near monopsonist to change prices, the private company is induced to produce less because of falling margins. A state-owned company doesn't have as much to worry about if funding from the government is available. (All else equal, of course, since there are plenty of cases where a state enterprise can fail even with the possibility of loan guarantee, bailout, whathaveyou.)

UPDATE: I stand corrected. Thanks to Tom North for pointing out that ID Biomedical is a public company in Canada. I tried looking for their ticker, but came up empty. Chalk it up to being too ignorant of Canada to make the search effective. I will admit, however, to being skeptical that this means that the company isn't otherwise guaranteed by the government, or that the cost structure for the company is radically different because of the more socialized system. I say that because in an environment where the end product is tightly controlled, and the product is (as almost everyone has mentioned elsewhere) tough to make and realizes thin returns, it's interesting that a publicly traded company can afford to exist where companies across the world failed. I'll have to look into it more. Hey, I'll be the first to admit it when I get it wrong...


Um, no, ID Biomedical is a public company listed on the Toronto Stock Exchange, and I quote:

"ID BIOMEDICAL CORPORATION is a biotechnology company focused on the development of proprietary subunit vaccine products including those based on its platform intranasal adjuvant/delivery technology, Proteosomes. ID Biomedical has also developed a proprietary genomics analysis system, Cycling Probe Technology."

Not that this invalidates your point that government purchasing is at the heart of the US vaccine shortage....

I did a bit more digging myself and here are some of the results, mostly from Canada Newswire:

It has received a ten-year mandate from the Government of Canada in 2001 to assure a state of readiness in the case of an influenza pandemic and provide influenza vaccine for all Canadians in such an event. It also currently supplies over 75% of influenza vaccine to the Canadian public market. (Couldn't find a $ figure for this)

It has a contract with the Canadian government to supply meningitis C vaccine with a guaranteed purchase of $20,000,000 Can$ over two years.

Awarded up to $8 million from the U.S. National Institutes of Health to develop a nasally delivered plague vaccine based on the company's proprietary Proteosome adjuvant/ delivery technology.

Obtained a $9.5 million grant from the U.S. National Institutes of Health to develop its cell culture- based influenza vaccine

Awarded up to US $5.6 million by the U.S. National Institutes of Health (NIH) to develop a nasally administered sub-unit vaccine to protect against Severe Acute Respiratory Syndrome (SARS)

Hmmm... Socialism rearing its head on both sides of the border?

Sample is small but you just might not have to admit that you were wrong.....

Tom -- thanks for the continuous flow of info and the constant comments. Nice to hear from the people out there.

It's definitely an interesting situation. From the sounds of it, the grants awarded by US firms could well have been competitively won. Or, to incorporate the process used frequently by the USG, a FIRST contract was competitively won, and follow-on work potentially comes through no-bid contracts. It's the guaranteed contracts through the Canadian government that make me suspect about the production pressures facing ID Bio. Vaccine production would be targeted at a level that can be afforded by the amount of the contract. From the sounds of it, they've been surpassing demand for a while (a pernicious problem in some regards, but not as bad what the US has now). I imagine the quickly shifting demographics of the US play into the problem as well. Since the elderly are more at risk from the flu, the demand for the vaccine would grow as our older population is growing. Imagine what the shortfall is going to be when the BabyBoom all hits retirement age...


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This page contains a single entry by published on October 19, 2004 1:12 PM.

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