July 03, 2014
It is amazing that a lengthy piece in the NYT discussing the high cost of new vaccines and the efforts of companies to promote them never discussed the possibility of alternatives to patent monopolies as a way to finance the research. Until recent years, most vaccines actually were developed with public funding, so obviously it is possible.
If the research were paid with public funding, then vaccines would be cheap since they would all be generics. And, there would not be a problem with companies misrepresenting their safety and effectiveness. Monopoly profits give companies an incentive to lie, a fact that economists generally recognize in other circumstances.
The impact of misleading promotion campaigns is especially important in the case of vaccines. Many vaccines are required for allowing children into school. In other words, the government will arrest parents who don’t pay companies their monopoly profits on these vaccines. And in the loon tune land of modern economics, this is called a free market outcome.
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