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Retracted

posted by cmn32480 on Tuesday March 15 2016, @10:59AM   Printer-friendly
from the toxic-news dept.

From the (boneheaded) editor: My apologies. I pooched this one in a way that is exceptional, even for me. I humbly beg your forgiveness. The line for torches is on the left, and pitchforks is on the right. Please, move on to the next story and don't waste any further time on this one.

Regards,
cmn32480

Original Submission

 
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  • (Score: 3, Interesting) by Anonymous Coward on Tuesday March 15 2016, @06:51PM

    by Anonymous Coward on Tuesday March 15 2016, @06:51PM (#318669)

    "Vaccine Manufacturers were indemnified against any lawsuits in the 1980's"

    This isn't exactly true. The Wikipedia article is worth reading (I don't want to rehash the details when you can simply read them on Wikipedia).

    https://en.wikipedia.org/wiki/Vaccine_court [wikipedia.org]

    To think of this from an economics perspective there is a difference between

    Manufacturing Cost
    Producer surplus
    Consumer surplus

    So lets say the cost of a drug is $10 million (hypothetical numbers for simplicity of course).

    Lets say the drug company receives $20 million in revenue

    That's $10 million profits.

    Now the key here is consumer surplus. Say consumers pay $20 million but the net social benefit is $100 million. That's $80 million in consumer surplus (gross consumer surplus) that the drug manufacturers do not get money for. Which is a good thing, consumer surplus is why we have economies.

    Now lets say the people that are negatively impacted by vaccines are damaged by $20 million. So the net consumer surplus is then $80 gross - $20 million damages = $60 million.

    If the pharmaceutical corporations had to pay those damages out directly their cost would be $30 million vs a $20 million revenue. They would operate at a loss by $10 million.

    So they threaten to stop producing vaccines. If they stop producing vaccines the total loss in net consumer surplus would then be $60 million. So the government offers to step in and help pay for some of the damages to maintain the overall benefits in consumer surplus.

    At least that would be the theory behind why it might make sense for the government to help.

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