US Vaccine Program "Will Penalize R&D"

Claims by US drug companies that expansion of the Vaccine for Children Program is creating an open-ended entitlement that could harm research by draining profits are now being taken seriously by health officials.

Some states already allow insurers to buy vaccines at the same deep discounts used for vaccines for the poor, or permit free immunization for all children, regardless of income. The VFC can buy up to 65% of many states' vaccine for as low as half price and, if states buy 100% at these discounts, says Thomas Vernon of Merck & Co, companies will be drained of profits that finance new vaccines. The Delaware Division of Public Health, which is considering allowing insurers these discounts, agrees that companies stand to lose money but a spokesman for Tennessee, which proposes giving free shots to all children, says they will still make money.

At its April meeting, the National Vaccine Advisory Committee will hear outside consultants' views on the situation and possible consequences; it may begin looking into how to lower the program's cost without denying the poor these benefits.