Chef Ragout has some thoughts, based on more expertise than I own, debunking the standard conservative line that shortages of vaccine result from price controls and litigation.
One imporant point he makes that I missed: external benefits. Since flu is infectious, everyone who gets sick becomes a threat to others. Thus vaccination helps not only the person vaccinated, but those around him. (The technical term in epidemiology is “herd immunity.”) That multiplies the cost of a shortage, since not only do we have more susceptible people around but each of them is more likely to become infected because there are more sick people around.
That means that the theoretical free-market solution to the problem woudln’t produce an optimal level of vaccination, and probably argues for a subsidy of some kind.
One question not raised so far: Did the UK regulators do the right thing? What was the actual risk to patients of getting vaccine from the Chiron plant in Liverpool? Was it really greater (especially factoring in the herd-immunity externality) than the benefit of vaccination (the cost of not being vaccinated)?
Note that the regulators have a complicated problem to deal with. They’re not just regulating the safety of current batches of medicine, but maintaining a deterrent system against corner-cutting by drug companies. It might well be the case that Chiron fully deserved to be spanked, and yet that the net short-term public health effect of taking its product off the market this year is in the wrong direction.
Unless we really think the Chiron stuff is actually bad, rather than merely being the product of an unduly sloppy manufacturing process, there ought to be a way to get it on the market without rewarding Chiron for makig it badly. Is someone thinking about this?