The topic of discussion at Table Talk this week was vaccines. In light of the controversy surrounding vaccines and school mandates, I thought this would be an particularly interesting discussion. Although the 1998 paper blaming thimerosal preservatives used in vaccines for causing autism had long been disproved in many subsequent studies, the anti-vaccine camp has grown increasingly vocal since. Understandably, people do not like being told that they must vaccinate their child. Moreover, vaccines are not 100% effective and have a non-zero probability for serious side effects. But the vaccine mandates debate pertains not only to an individual’s health: it concerns the health of everybody who interacts with that individual as well. With 100% vaccination, everybody can benefit from herd immunity. Perhaps it is a right to refuse vaccination, but is it also a right to put other’s health at risk in the name of freedom?

Our discussion then transitioned to the pharmaceutical industry. Patients usually find that vaccines are not very expensive because most insurance plans  cover them: a wise decision as the cost of disease/loss of life can far exceed drug costs. But why do vaccines/drugs have such high wholesale prices? As an economics major who took Pharmaceutical Management and Policy, I was familiar with this question. Vaccines are goods that have very high fixed costs (in research/development), but the marginal cost of production may be very low. If companies were required to only charge for the cost of production, then they would not be able to recoup the enormous R&D costs and lose profit. There would then be no incentives for vaccine innovation and no new vaccines on the market. Patents give drug firms an opportunity to recover these enormous costs and make a profit. The challenge we face in policy is to find a balance between controlling drug prices/saving money now and future innovation.