Vaccines Don't Protect Against the State
The Illinois House of Representatives impeached Governor Rod Blagojevich yesterday for "abuse of power," offering 13 specific examples. In addition to the well-publicized allegations regarding Blagojevich's attempted "sale" of a U.S. Senate seat, the House cited "[t]he Governor's actions with regard to, and responsibility for, the procurement of flu vaccines . . ." His what now?
According to the House's impeachment report, four years ago Blagojevich's office tried to purchase flu vaccines on behalf of Illinois - and several other states - in defiance of federal authorities. The problem started when the FDA declared half of the potential U.S. vaccine supply "unsafe," which prompted Blagojevich's administration to try and purchase the vaccines itself "in order to ensure vaccine availability for Illinois' priority population, which would be residents who are over the age of 65, chronically ill, pregnant women, etc." That conflicted with the Centers for Disease Control, which was hoarding the remaining vaccine supply for itself and redistributing it to the states, including Illinois.
The "priority population," according to the House report, only required 160,000-200,000 vaccine doses. Blagojevich's administration tried to purchase and import more than 250,000 doses from Ecosse Hospital Products, Ltd., a European manufacturer. But the amount was irrelevant, since "[t]he FDA never gave State officials approval to import the vaccine; on the contrary, the FDA indicated it would not improve importation of the vaccine." No FDA approval, no vaccine. Even if you've already placed the order and agreed to pay for it, as Blagojevich's aides did - without bothering to follow the state's normal procurement and contract rules.
Blagojevich knew he would never receive any of the vaccines ordered, yet his aides told him to pay Ecosse for its "commitment to locate and secure the vaccine." Thus, Blagojevich "proceeded to obligate the State to pay for a product that could not be delivered to the State without violating federal law."
But wait, there's more! According to the House, "Not only did the Governor's office lead the charge to procure unnecessary vaccine for Illinois residents, it also sought to procure flu vaccine for other states and cities," including 200,000 doses for New York City, 150,000 doses for New Mexico and 4,000 doses for Cleveland. None of these other places received any vaccine either, and Blagojevich's administration "did not have any written agreements or contracts in place with the other governments, which left the State potentially liable for $8.2 million . . ." Ecosse later billed Illinois $2.6 million and sued the state for collection after the Illinois comptroller refused to pay.
And whatever happened to all the vaccine that Blagojevich ordered? "It is believed that the State, a year after the contract was signed, donated the vaccine to Pakistan where it was later destroyed because the vaccine had expired." Oh, the humanity.
If ever there was a textbook case of how government intervention fails - particularly in the health care market - this is it. Keep in mind, the federal government simultaneously increased demand for flu vaccine while decreasing the supply. The whole "priority population" concept is FDA and CDC propaganda, not an expression of market demand. And the 2004 shortage merely reflected the successful efforts of U.S. and European regulators to make vaccine manufacturing horribly unprofitable. Between the FDA's criminalization of risk and government purchasing driving down the price, there's little incentive for any firm to enter or stay in the market. (For more, see Russ Roberts' excellent 2004 overview of the government's role in the flu vaccine shortage.)
On a related note, during a short press conference responding to his impeachment, Blagojevich tried to turn the tables on the House for "standing in the way" of his efforts to personally provide health care for Illinois residents using taxpayer funds. He literally trotted up cancer and organ donation patients and claimed that he used the powers of his office to help these people when the House balked. Of course, what Blagojevich grants, he also denies; recall that one of the federal allegations against Blagojevich - echoed in yesterday's impeachment resolution - said the governor withheld nearly $8 million in funding for Illinois pediatricians because a hospital executive refused to make a $50,000 campaign contribution. The function of state-run health care is not to ensure that every person receives health care; it's to prevent anyone except the government from providing health care.