In a story that sounds like a repeat of last winter’s flu vaccine shortage, the Washington Post reported in a story that the federal government admitted recently that the Pediatric Vaccine Stockpile, designed to prevent shortages of the 8 shots that prevent against 11 childhood diseases, is desperately low. In fact, there are no doses for 2 of the shots.
Some of the contributors to this shortage might surprisingly be the corporate villains of the last few years. No, Bernie Ebbers and Ken Lay didn’t steal any vaccine (at least, they haven’t been formally charged with that…) but their alleged shenanigans led the Securities and Exchange Commission (SEC) to crack down on bad accounting. This crackdown led to a change in the way companies can recognize revenues and that is hurting the Vaccine Stockpile.
As part of the program, vaccine manufacturers would sell the federal government millions of doses of vaccine and then keep the vaccine in their warehouses until the government requested it. As the vaccines expired, the companies would replenish them. In the past, those companies could recognize revenue when the vaccines were sold to the government, not when the government actually took possession of them. Now however, auditors are saying that revenue can’t be recognized until the government actually takes possession of the vaccines. This means that vaccine providers must set aside and warehouse doses today that they might not be able to claim as sales for several years. The prospect of all the upfront work and hassle with only a future shot at revenue is hardly appealing to any company.
According to the Post, representatives from the CDC (which manages the program), the SEC, and the vaccine companies are in discussions with ending this impasse. For a more in-depth look at the problems and some of the proposed solutions, read the status report from Eddie Wilder, the Project Officer, Pediatric Vaccine Stockpile. If this drags on, expect political fireworks over the issue…