The Vaccine Bubble

Remember the tech stock bubble? The housing bubble? Now a world-renowned financial forecaster reveals the profit motive inflating the impending vaccine bubble.

My business involves advising portfolio managers about asset allocation in global financial markets. During my career, I have observed several extreme speculative bubbles, including the Japanese stock market in the late 1980s, the NASDAQ frenzy in 1998–2000 and the U.S. housing bubble from 2006–2008.

These bubbles all ended in tears. I see the same elements now in the pharmaceutical industry’s preoccupation with vaccines. I coined the term “vaccine bubble” (in the book Vaccine Epidemic) to describe the economic and psychological factors that are driving the obsession with and over-investment in vaccines. The psychology of making big profits is causing a lemming-like rush into vaccine research and production. Ultimately, many of these companies and vaccine products will likely turn out to be flash-in-the-pan nobodies and nothings that simply waste investment and get discarded on the ash heap of medical history. In the meantime, families and individuals need to educate themselves and make informed decisions about vaccine acceptance or refusal.

The business model of vaccccine manufacturers relies on compulsion—you must take their product, or else.

Investing in Health

Taking pharmaceutical company advice about vaccine safety and efficacy is like trusting a stockbroker or real estate agent to tell you the market is in a bubble. As investors and homeowners have learned the hard way, those with corrupt financial or professional incentives cannot be relied upon to provide trustworthy advice.

From a financial and industry perspective, here is what you need to know. Vaccines are licensed by the FDA and recommended by the CDC’s Advisory Committee on Immunization Practices (ACIP). Vaccine manufacturers perform (or outsource) their own efficacy and safety studies, so there is plenty of wiggle room for juggling the data. Manufacturers can choose their own placebo to either flatter efficacy or safety. If you think vaccine safety studies use saline solution for a placebo, think again.

The Merck Manuals (the pharmaceutical company’s best-selling series of medical textbooks) defines an adverse reaction to a vaccine: “Encephalitis is inflammation of the brain that occurs when a virus directly infects the brain or when a virus or something else triggers inflammation…. Encephalitis can occur in the following ways: A virus directly infects the brain. A virus that caused an infection in the past becomes reactivated and directly damages the brain. A virus or vaccine triggers a reaction that makes the immune system attack brain tissue (an autoimmune reaction).”

Thus, an adverse vaccine reaction that causes brain damage (encephalitis) has the same result as a complication from an infectious disease like measles. In vaccine safety studies, manufacturers can disguise the neurological damage caused by the vaccine they are testing by using another vaccine (or another substance that contains an aluminum adjuvant) known to cause neurological adverse reactions as placebo. The standard language they use is: “Adverse reactions were no different than placebo.” They don’t mention that the placebo causes neurological adverse reactions.

Another trick they use is to compare adverse reactions to a fully vaccinated population that has neurological damage from those vaccines. They claim it is unethical to compare vaccine adverse reactions in their new product being tested to unvaccinated controls, because the unvaccinated would supposedly miss out on all the great benefits of vaccines. This is a cheap statistical trick to camouflage adverse neurological reactions from vaccines.

Products in the Pipeline

The Pharmaceutical Research and Manufacturers of America’s (PhRMA) 2010 Report on Medicines in Development for Infectious Diseases boasts, “Among the medicines now being tested are…145 vaccines to prevent or treat diseases such as staph infections and pneumococcal infections.” The report didn’t include “medicines in development for HIV infection,” and stated, “A 2009 survey by PhRMA found 97 medicines and vaccines are in testing for HIV/AIDS and AIDS-related conditions.”

The current CDC-recommended vaccine schedule contains 70 doses of 16 vaccines by age 18. PhRMA obviously would love to double or triple that vaccine burden by cramming the new vaccines under development into the ACIP-recommended schedule.

A Government-Subsidized, Captive Market

ACIP vaccine recommendations are a godsend to pharmaceutical manufacturers. The simple ACIP recommendation that so many doses of such-and-such vaccine should be given at such-and-such age is transformed into public school attendance mandates by the alchemy of drug industry sales reps, state health officials and gullible state legislatures. The business model of vaccine manufacturers relies on compulsion—you must take their product, or else. Imagine you were in business selling something and you could snap your fingers and compel everyone to be your customer. Normal businesses have to attract customers with an attractive product and compete with other providers of that product. Compulsion is a nice way to capture an involuntary market, isn’t it?

Since most people won’t pay hundreds of dollars out-of-pocket for every vaccine, manufacturers must find someone to foot the bill. They have been very effective in coercing federal and state governments and health insurers into subsidizing their products. One little-noticed feature of the Affordable Care Act (the Obama administration’s healthcare reform program) is that health insurers must provide subsidized vaccines to their customers. Big Pharma’s vaccine business model consists of taking choice away from the individual and getting someone else to foot the bill.

Filling the Profit Void

Pharmaceutical companies are losing patent protection on about $140 billion of blockbuster drugs (such as Lipitor) over the next few years. Their research departments have produced few product replacements with blockbuster potential (sales greater than $1 billion/ year). This pending loss of business is causing a wave of layoffs and restructurings within the industry. Also, disastrous drugs like Vioxx have caused between 88,000 and 139,000 heart attacks and about 40,000 deaths, according to FDA estimates cited by epidemiologist David Michaels, current head of OSHA for the Obama Administration, in his excellent book Doubt Is Their Product.

According to Michaels’ book, Merck exploited the FDA drug approval process by gaming the placebo and claiming that the higher rate of heart attacks observed in Vioxx clinical trials was due to the placebo (naproxen) preventing heart attacks. According to Michaels’ book, “Merck chose the interpretation that implausibly credited naproxen over the one that more plausibly indicted its own drug and it embarked on a four-year defense of this almost ridiculous hypothesis.” Incidentally, Merck is a primary manufacturer of U.S. vaccines. Its corporate behavior with Vioxx certainly discredits its ethical credibility with regard to pharmaceutical safety studies.

Pharmaceutical companies now tout vaccines as the Holy Grail that will help replace the lost revenues from expiring patents on blockbuster drugs that will face generic (cheap) competition. But the numbers don’t add up. Vaccines are currently about a $25 billion market. As previously mentioned, patent expirations amount to about $140 billion. Pharmaceutical companies desperately need to grow that $25 billion vaccine market in a hurry. Hence the big push to create, license and mandate new vaccines.