Spare swine flu vaccine - government failure or good planning?

Is this an example of government failure, or good planning?

The answer to that probably lies in the future, next winter, when we will discover whether the buffer stocks of 34 million unused swine flu jabs is needed or not.

In the emergency last summer the government contracted to buy 120 million jabs from the two manufacturers, GlaxoSmith Kline and Baxter, but then reduced the order to just 44 million as the emergency petered out. Only 6million of those have actually been used, nearly 4 million are being given to the World Health Organisation for use in Africa, leaving 34 million on the shelf.

There is clearly an opportunity cost involved, not only in the cost of storage but also in the use of funds which are a very scarce resource for the NHS. On the other hand, if the next few months sees an outbreak of a strain of flu which is related to swine flu, we will be very grateful to have that vaccine ready and waiting.

Obviously any issue like this becomes a political election issue in the next few weeks.

The view of Health Secretary Andy Burnham is that “… (this) means that the department has retained a strategic stockpile to protect the UK population without incurring a cancellation fee.” – implying that cost benefit analysis resulted in a decision to pay for a certain amount of supply, avoid the cancellation fee and gain the benefit of a stockpile of vaccine.

The opposition view is that the use of NHS funds to buy vaccine which may not be needed is a waste of resources and that the strategic response to swine flu should have been more measured in order to hold down the cost.

How would an economist evaluate which is correct? As in any issue of government intervention and failure, the answer is going to involve value judgements which have to be justified.

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