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Why are doctors complaining about the rising cost of vaccines?

The San Diego Union-Tribune recently reported (“Doctors balk…“) on pediatricians concerns regarding the rising costs of vaccines. The article begins:

“The soaring cost and rising number of new vaccines, doctors say, make it increasingly difficult for them to buy the shots they give their patients. They also say that insurers often don’t reimburse them enough, so they can lose money on every dose they deliver. As a result, some pediatricians aren’t offering the newest and most costly vaccines. Some public health experts say if the situation worsens, it could lead to a breakdown in the nation’s immunization program, with a rise in otherwise preventable diseases.”

New high cost vaccines include Gardasil, which prevents HPV, and RotaTeq, which protects against the diarrhea-causing rotavirus. These vaccines cost $360 and $190 respectively for the full dose sequence. In fact, the Union-Tribune states, “a child who receives the recommended vaccines would receive as many as 37 shots…by the 18th birthday – at a cost exceeding $1,600.”

Since private insurance or the Vaccine for Children program covers the cost of most vaccines for patients, the people who are really bearing the burden of the extra cost are pediatricians. Pediatricians complain that too much of their capital is tied up in paying for their vaccines.

“If we simply purchased Gardasil for every eligible girl each year, it would cost 25 percent of every dollar I collect,â€? said Dr. Herschel Lessin, medical director of Children’s Medical Group, a practice with more than 20 doctors based in Poughkeepsie, N.Y.

What is the solution? Even larger physician practices may be necessary. Groups such as Kaiser or the VA likely can take advantage of economies of scale and better inventory management systems in order to more efficiently administer the vaccines. In fact, some physicians are sending patients to pharmacies in order to receive their vaccines. Since pharmacies are experts in logistical and inventory management issues, they may provide a more cost effective setting to serve patient’s vaccination needs than in a private physicians office. One drawback is that taking the vaccines out of the doctors office will likely reduce the immunization coverage rate.

In general vaccines are one of the most cost effective measures to increase public health and efficient distribution of these life-saving vaccines is imperative to the future health of America’s children.