Authors: Patricia M. Danzon, Nuno Sousa Pereira, and Sapna S. Tejwani
Organization: Health Affairs
Year: 2005
Document Type: Peer-reviewed article
Abstract/Summary: In U.S. vaccine markets, competing producers with high fixed, sunk costs face relatively concentrated demand. This tends to lead to exit of all but one or very few producers per vaccine. Detailed evidence of exits and shortages in the flu vaccine market demonstrates the importance of high fixed costs, demand uncertainty, and dynamic quality competition. A comparison of vaccine suppliers in four industrialized countries compared with the United States shows that smaller foreign markets often have more and different vaccine suppliers. High, country-specific, fixed costs, combined with price and volume uncertainty, plausibly deters these potential suppliers from attempting to enter the U.S. market.
Disease/Therapeutic Area: Vaccines
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Global Health Market Dynamics 