Flu Vaccine for the United States was produced solely by two foreign manufacturers this year, Aventis Pasteur and Chiron Corp. These two manufacturers sell their vaccine to U.S. distributors like Stat Pharmaceuticals Inc. of El Cajon, CA and Meds-Stat based in Ft. Lauderdale, FL who will go on to sell to hospitals, pharmacies, and health care clinics (Flaherty A02). On October fifth the Chiron Corp. announced that their entire supply of Flu vaccine destined for U.S. markets was unfit for use due to a contamination problem at their British manufacturing plant (Flaherty A02). This contamination effectively reduced the U.S. supply of flu vaccine by half (Flaherty A02). Unfortunately for consumers, though profitable to the distributors the drop in supply did not diminish the demand for the vaccine.
The quantity of Flu vaccine demanded in the U.S. was greater than the original supply let alone the reduced supply. The market price for the vaccine was between eight and nine dollars prior to the October announcement by Chiron, that it's vaccine was contaminated, and soon afterwards doubled in price (Flaherty A02). By the eighth of October the vaccine was being offered to pharmacies at prices approaching ninety dollars per-dose a tenfold increase over the original price (Flaherty A02). The demand for the Flu vaccine is shown to be inelastic (the quantity demanded before the... [continues]
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