Liability and flu vaccine

Liability law appears to be a critical factor behind the vaccine shortage:

As legal liabilities have chased many vaccine-makers out of the market, there are fewer manufacturers. This means less overall ability to produce additional doses, and less investment on new, faster ways to make vaccines.

In the US about 185m people risk serious flu-related illness each year.

At one time the US had 20 flu vaccine manufacturers. Today there are just four: Aventis, GlaxoSmithKline, Merck and Wyeth.

After the second world war the science of cell cultures led a boom in vaccine production. But gradually profit margins thinned on vaccines, as the government became a big buyer of them. Increasing legal liability drove many makers out of the vaccine business.

Today smaller biotech companies have entered the game. But they lack the capacity and the distribution to solve near-term shortages, experts say.

"One of the problems with vaccines is you put them in healthy people," says Louis Galambos, history professor at Johns Hopkins University and an expert on vaccine manufacturing. "Now we're in a situation where we have too few producers."

Congress passed a law in 1986 to limit liability on vaccines for children. There are no such liability limits for adults, however.

Pharmaceuticals companies are inhibited by the particular structure of the US vaccine market, experts say. The US government is a large buyer of vaccines, leaving relatively poor profit margins on vaccines.

Here is the full story from The Financial Times.