As the father of a 5-month-old, I am concerned that I still do not have access to the H1N1 vaccine. We as a society have decided that vaccines should be "affordable" and have passed laws to cap prices. At face value, this sounds like a "fair" idea. Everyone should have access to vaccines regardless of income, and no corporation should make huge profits off vaccines. Or should they?
With no price caps, when shortages such as with today's H1N1 vaccine occur, something beautiful happens - price goes up. Why is this good? Higher prices entice additional producers to enter the market. When more producers enter the market, two even more beautiful things happen: supply increases and price declines to "affordable" and "fair" levels. This is true with cars, HDTVs, microwaves, food, clothing and, yes, vaccines.
Politically, though, a knee-jerk decision to cap vaccine prices is easy to sell. After all, limiting pharmaceutical companies' profits is more important than ensuring access to much-needed vaccines. So we are left with few producers with little incentive that employ an archaic and time-consuming production method. And our children are left vulnerable. But at least the price is fair.
