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Flu Shots Profitable For Retailers; Number of Vaccines Increase, So Do Number of Deaths From Flu
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Influenza vaccinations are almost as easy to get as the flu itself. That’s because retailers, like grocery stores and pharmacies, took one-stop-shopping to the next level when they started offering flu shots on-site in the early 1990s. WOSU takes a look at the economics of the flu vaccine.
The flu – fever, chills, muscle aches, lethargy, cough, headache – yuck. And that’s only if the infection is mild to moderate. Other people can develop complications like pneumonia. In rare cases influenza can be fatal. This is why Federal health officials recommend many of us get a flu shot. It’s supposed to be quick and painless – well there might be a slight pinch…possibly from the $20 to $30 it takes from one’s pocketbook.
The Flu shot has become a big business for retailers. You cannot miss the signs saying “GET YOUR FLU SHOT HERE” at the grocery store or drug store.
Retailers seized a flu shot opportunity after the Visiting Nurses Association had a lot of success administering the flu shot in grocery stores in the early 1990s.
Ann Paulins directs the School of Human and Consumer Sciences at Ohio University. She said there are a number of reasons why retail chains offer the flu shot – the bottom line is one of them. And in a recession when prices are increasing and consumers are watching every dime retailers are even more conscious of it.
“Certainly all companies, retailers, need to be aware of their bottom line. So it is a particularly wise strategy to think about what do consumers need? What will consumers be willing to pay for? And can we offer that and can we promote it in a way that we’re selling the product as opposed to our customers going to a competitor for that product,” she said.
For grocery stores, which operate on thin profit margins for food, flu vaccines are an excellent source of revenue and profit.
Kroger Grocery stores and CVS pharmacies each plan to administer one million doses this year – nationwide.
Neither Kroger nor CVS would disclose how much they pay for their flu shots. But the average wholesale price of a single dose of flu vaccine is about 12 dollars. Kroger sells the shots for $24.99. CVS charges $30 bucks. So if we do the math…with a million does sold…each chain’s profits could be between $13 and $18 million. And profits are likely higher if the retailers get volume discount rates from the vaccine manufacturers.
Widespread use of the flu shot has surged in the last two decades. The number of flu vaccines produced since 1988 has increased 530 percent. The nation’s population only increased 25 percent in that same time period.
Curtis Allen speaks for The Centers for Disease Control and Prevention in Atlanta. Allen said one reason for the increase is manufacturers realize there’s a market for flu vaccines. He said another reason is there are more people that need to be vaccinated.
“We’re learning more about the potential complications of influenza and the science is growing, and as the science grows we recognize that there are more people who should be vaccinated than have been vaccinated in the past,” Allen said.
Doctor Jacob Teitelbaum is an internal medicine physician and graduate of the Ohio State University Medical School. Teitelbaum, who recommends the flu shot, said there’s a perfectly good reason for the large increase in flu shot production.
“How did the Pink Floyd song go? Money, money, money. I mean, fear sells. And if there’s a buck to be made, especially in medicine, it’s going to be made,” Teitelbaum said. While more of us are getting the flu shot, the percentage of the population that dies from the flu has actually increased. While still very rare, flu deaths are up 44 percent since the late 80′s.
Allen said the CDC predicts about 36,000 people will die from flu or complications this year. But he said some scientists think that number is a conservative one.
There are a number of reasons, Allen said, why the number of flu deaths is increasing. He said the U.S. has more people over the age of 65 than ever before, and seniors are more prone to get the flu and develop life-threatening complications. And he adds not every one who needs to get a flu shot is doing so.
“Even under the best of circumstances we’re vaccinating well less than 50 percent of the people who should be vaccinated,” Allen said.
Dr. Tietelbaum agrees that an aging population accounts for the increased number of deaths from flu, but only partially. He adds for the first time in U.S. history people are obese and malnourished. And he said if a person is vitamin deficient the flu shot will not work.
“I think the increased death rate has to do with the American public in general having poor nutrition and poor immune function. I think those statistics are ignored because no one wants to question vaccinations,” he said.
And picking the right flu vaccine is not always easy. Last year millions of Americans opened up their wallets for a flu vaccine that did not match the viruses that were going around. Every year, health officials make an educated guess on which flu strains they think will circulate that season. Allen said the 2007 vaccines were mismatched.
But he said the flu shots were not totally in vain. He says despite the wrong combination, the vaccine was about 50 to 60 percent effective. And Allen said the flu is likely to be less severe if it’s contacted after receiving a flu shot.