Report on the United States Vaccine Industry

Newly developed vaccines have, by CDC report, provided tangible economic benefits to
society between 6 and 30 times their costs, depending on the vaccine. This makes vaccines an
attractive value, and highlights the importance of raising immunization levels and encouraging
health plans to offer full coverage for vaccinations. From a government perspective, it raises
policy dilemmas.
Should the U.S. pay the highest prices in the world for vaccines, knowing that the U.S.
still receives good value for money and that it contributes directly to the improved
health of children around the world, or should the U.S. seek to reduce the prices of
vaccines and not bear a disproportionate burden for the development of new vaccines
when other developed nations pay far less? If the U.S. should choose to carry the
burden, are there more efficient ways to fund product development than to pay higher
prices?
Exhibit 8 illustrates the large manufacturing cost difference between European and U.S.
suppliers. In Europe it costs about 16 percent of the U.S. cost to manufacture OPV. The
exhibit displays each of the elements of additional costs incurred by the U.S. supplier of OPV
and the percent it contributes to the cost difference. A large portion of the cost disadvantage is
due to the small size of the U.S. manufacturers, lfut other cost disadvantages include the costs
of labor and supplies, and the costs of complexity resulting from the strict U.S. regulatory
environment.
Exhibit 8
European vs. U.S. Production Cost Differentials
- oPv
3 100

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