Using price to avoid vaccine shortages

No one worries about vaccine supply—until there’s a shortage. New research from Duke University’s Fuqua School of Business studied the market tensions that can keep manufacturers out of the business and the price points needed to entice them in. “The government doesn’t want to overpay,” Professor David Ridley said, “but there’s a tension between responsible use of government funds and giving manufacturers sufficient incentive to get into manufacturing—and stay in.” Ridley found that over the last decade, every 10 percent increase in the price of vaccines was associated with a 1 percent lower probability of a shortage. Ridley worked with Duke colleagues Xiaoshu Bei and Eli Liebman on the research, “No Shot: U.S. Vaccine Prices and Shortages,” published in the February issue of the journal Health Affairs. “Unfortunately, many people forego vaccines and jeopardize herd immunity, putting at risk the health of people with compromised immune systems,” Ridley said. “That’s the demand side. But...