A family weekend at Disneyland costs less than getting your children vaccinated — unless, of course, they come down with the measles. Today, it takes $2,192 to fully vaccinate a child, but 30 years ago, it cost the same amount as a ticket to Disneyland does today: $100. Part of this dramatic increase is intuitive: We simply have more vaccines for more diseases today. Since the 1980s, the number of vaccines required for children has jumped from three to 12, and these new vaccines are considerably more expensive than their older peers. As a result, families now find it increasingly difficult to fully vaccinate their kids, not only because the families themselves can’t afford it, but because their doctors can’t either. The lack of access to vaccines — not the vocal minority of parents who actively choose not to vaccinate their children — is the true problem facing most Americans when it comes to preventing childhood illness.
The United States has bumped up against a vaccination deficit before. From 1989 to 1991, cost-driven scarcity of vaccines led to an outbreak of measles that left 55,000 people infected and 123 children dead. Dr. Lance Rodewald, head of the Immunization Services Division at the Centers for Disease Control and Prevention (CDC), attributed the outbreak to a shortage of vaccines caused by doctors incapable of affording a full vaccine inventory. Pediatricians, unable to vaccinate their patients, increasingly encouraged parents to get their children vaccinated at public clinics instead. However, few parents showed up at the clinics, and many children went unprotected.
The problem of vaccine financing mechanisms has gotten worse as the price of shots has skyrocketed and insurance companies’ reimbursement rates have failed to keep up. Take Prevnar 13, a pneumococcal bacteria vaccine that has become the poster child for runaway vaccine inflation. Prevnar 13’s price has increased by a hefty 6 percent each year since the Food and Drug Administration approved it in 2010. Currently the vaccine’s recommended schedule of four doses — required by public schools in most states — costs $544 to provide.
Increasing prices are the product of technological advances and evolving business practices. New developments in medical technology are — rather obviously — a good thing. Without scientific progress spurred by pharmaceutical research, we would not have many of the vaccines we have today, including Prevnar 13. The research for Prevnar 13 took 14 years, and it is, according to a Pfizer spokesperson, “one of the most complex biologic products ever developed and manufactured.” It takes two years to create one batch of Prevnar 13; meanwhile, drug companies can roll out flu vaccines yearly. Companies like Pfizer, therefore, argue that they have to charge high prices in order to recoup the costs they pump into the production process.
However, drug development costs don’t tell the full story of why your pneumonia shots cost more than buying the whole bar a round of shots. When Singapore included Prevnar 7 in its required schedule, the price jumped from $80 a dose to $120 a dose. That’s because forcing parents to purchase a pharmaceutical company’s product allows the company to raise its prices. Parents can’t boycott the drug or turn to competition; it’s required and patented.
This story holds true in the United States as well, as state governments and schools have come to require more and more vaccines. Currently, vaccines become preconditions for school entrance when the Advisory Committee on Immunization Practice (ACIP) recommends that all children use them. Such recommendations are powerful: They can give drug companies a major windfall in profits. Last year, Prevnar, which is required for public school enrollment in most states, brought in $4 billion for drug company Pfizer — approximately double what two of its other products, Viagra and Lipitor, earned in the same year.
When deciding whether to recommend a new vaccine, the ACIP conducts a cost-benefit analysis. But determining whether a vaccine’s cost is worth its benefits is a complicated process that often boils down to how much we value a human life. That is an understandably messy business to be in, and the ACIP is known to make recommendations that are not cost-effective, even by its own analyses. For example, when the ACIP first evaluated Prevnar 7 in 2000, the committee initially decided its provision wouldn’t be cost-effective unless each dose was priced at $46. But when Prevnar 7 debuted on the market, it cost $58 per dose, and the ACIP still decided to recommend it.
It then falls to pediatricians to undertake the expensive process of delivering the vaccines that the ACIP recommends. Most children in the United States — 85 percent — receive at least some of their vaccines from a private physician. This includes the 55 percent of children whose vaccines are paid for by the federal or state governments.
Unfortunately, it costs more than just the sticker price for physicians to provide vaccines — something insurance companies often don’t consider when reimbursing doctors. Reimbursement rarely covers other costs associated with vaccinating children, like refrigerated storage, record-keeping systems and insurance covering a doctor’s expensive vaccine vault; On average, doctors keep somewhere between $100,000 and $150,000 worth of vaccines on hand every year. The American Academy of Family Physicians estimates that insurance companies typically reimburse pediatricians for somewhere between 40 and 100 percent of the purchase price of vaccines. But even the higher percentages don’t include coverage for associated costs. The total cost of vaccinating patients is 17 to 28 percent higher than the cost of the vaccine itself.
In the past, some physicians have tried charging patients a fee to fill the gap between the reimbursement rates offered by insurance providers and the actual price of providing the vaccine. Other pediatricians have taken this a step further, issuing patients a prescription for the vaccine and making the patient procure it independently before the pediatrician administers it.
But the Affordable Care Act (ACA) has eliminated both practices. As part of its emphasis on preventative care, and in recognition of vaccines’ vital role in maintaining public health, the ACA prohibits doctors from charging patients any out-of-pocket fees for childhood vaccinations. This policy was designed to encourage more parents to get their children vaccinated, but in practice, it forces pediatricians to depend on the meager reimbursements insurance companies currently provide for vaccinations.
Unaffordable vaccines have serious consequences for doctors trying to vaccinate their patients. One survey found that one-third of family doctors are considering no longer administering immunizations because of the expense. Another found that 40 percent of pediatricians don’t offer at least one of the required childhood vaccines for public school enrollment. These numbers are worrisome and, if the trend continues, may lead to the same type of vaccine shortage that caused the early 1990s measles outbreak. Clearly, today’s system for vaccine delivery is not working, and something must be done to fix it.
Solutions fall into one of two categories: either making vaccines more affordable or making fewer mandatory. There are a variety of ways to lower the cost of vaccines — though none seem to be all that feasible. Some suggest that the government should pay for all required vaccines. Others advocate for legislation that would make insurance companies more accountable for the actual costs of vaccine purchase and delivery. A third proposal suggests a changed vaccine payment system that does not make physicians purchase vaccines from manufacturers until the vaccines are delivered to patients, thereby reducing the overhead and risk associated with purchasing and storing vaccines. Since all of these policies shift the current cost of providing vaccines from pediatricians to the government, insurance companies or pharmaceutical manufacturers, their successful implementation seems unlikely.
Encouraging drug companies to voluntarily reduce their prices is a fool’s errand. The companies have been consistently intractable, arguing that they need high prices to afford the costly research, development and production of modern vaccines. Furthermore, pharmaceutical companies argue that when prices and profits have been lower, vaccine development has stagnated because of a lack of incentives.
If the private sector won’t decrease its prices due to the high cost of research, some suggest that the government should take a larger role in the funding of vaccine research. Governmental and charitable funds are used to pay for the research behind most vaccines. For example, the National Foundation for Infantile Paralysis (now known as the March of Dimes Birth Defects Foundation) funded the research that resulted in the development of the first polio vaccine. Public money was driven into vaccine research because, back then, patents could not be issued for natural products. When this changed after a Supreme Court ruling in 1980, drug companies suddenly had a profit incentive to invest in vaccine research, and the role of government funding became less significant. That said, public research institutions still play a significant role in the development of vaccines. A 2007 study found that almost all the “important, innovative vaccines that have been introduced during the past 25 years have been created by public-sector research institutions.”
If we cannot make vaccines more affordable, the natural solution would instead be to limit the number of vaccine recommendations made by the ACIP. If the threshold for cost effectiveness were higher, perhaps fewer expensive vaccines would need to be administered. Making such calls is not easy, though, especially when it comes to public health. As described by Mark Pauly, a health economist at the University of Pennsylvania: “You do have a rough idea that if it’s $1.98 per life saved that sounds like a good thing to do, and if it’s $198 million per life saved, that sounds like not a good thing to do. But where to draw the line is the part that any sensible person will run away screaming from.”
The recent measles outbreak shows just how important vaccinations are for the health and safety of our society. Though today’s antivaccination movements pose a significant danger, if Americans and their doctors continue to be unable to afford vaccinations, this problem will only get worse. In order to make a dent in vaccines’ soaring costs, the government must either mandate that pharmaceutical companies deliver more affordable vaccines or provide a financing system that does not force pediatricians to face losses when they are vaccinating children. If we believe that the required list of vaccines plays a crucial role in the maintenance of public health — and it does — then we should be doing all we can to ensure that these vaccines are delivered where they are needed. Otherwise, Mickey might catch the measles.
Art by Kwang Choi.