Economic Issues in Vaccine Purchase Arrangements

43 Pages Posted: 26 Jul 2000 Last revised: 19 Mar 2008

See all articles by David S. Salkever

David S. Salkever

UMBC, Department of Public Policy

Richard G. Frank

Harvard Medical School; National Bureau of Economic Research (NBER)

Date Written: September 1995

Abstract

Federal purchases of major childhood vaccines account for roughly half of the total market for these vaccines. This paper examines Federal purchasing practices in the context of the recent literature on bidding and procurement, and compares these practices to UNICEF vaccine procurement arrangements. Federal contracts were awarded to a single winner and the firms eligible to bid were limited in number (since the number of U.S. licensed firms is small). Since production capacity cannot be expanded quickly, and the Federal share of purchases is large, it is hypothesized that firms' bid prices will be higher for larger contracts. The paper analyzes contracts over the period 1977 through 1992 to determine the contract size-price relationship, as well as effects on contract prices of 1) the National Vaccine Injury Compensation Program enacted in 1987 and 2) changes in numbers of firms in the market. Results provide equivocal support for a positive size-price relationship and evidence of a positive price effect of the injury compensation program.

Suggested Citation

Salkever, David S. and Frank, Richard G., Economic Issues in Vaccine Purchase Arrangements (September 1995). NBER Working Paper No. w5248. Available at SSRN: https://ssrn.com/abstract=225312

David S. Salkever (Contact Author)

UMBC, Department of Public Policy ( email )

1000 Hilltop Circle
Baltimore, MD 21250

Richard G. Frank

Harvard Medical School ( email )

Department of Health Care Policy
Boston, MA 02115
United States
617-432-0178 (Phone)
617-432-1219 (Fax)

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

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