By Arnold Kling
Russ Roberts has been all over the vaccine shortage story. In one post among many, he asks,
Normally when there’s uncertainty about demand, price rises to compensate suppliers for the extra risk. And consumers are happy to pay that higher price to make sure the supply is there. Why is this market falling apart?
His answer is that it appears that government has become the largest buyer of flu vaccines, and government has forced the price too low, driving suppliers out of the market.
Russ does a good job of focusing the issue not on the generic characteristics of vaccine supply, but on the question of what is different now that would result in fewer producers.
For Discussion. Vaccines are considered a classic example of public health, that is, something that the government must manage. What are the pros and cons of government involvement in the vaccine business?