Accounting for Vaccine Shortages

Today the Wall St. Journal ran an opinion piece by John Berlau, entitled "Death By Accounting?" His thesis is that our vaccine shortages are partly caused by a 1999 SEC accounting rule.

The new accounting rule applied to all sorts of businesses, but hit vaccine makers hard.

Here's how it works. Uncle Sam gives you money to make vaccines. You spend a lot of the money during the manufacturing process. On your books, you have to show the money you spent. But you are forbidden to show the money you already took in - until you actually deliver the vaccines. So your books look like you are losing money. And most companies hate looking unprofitable.

Berlau writes: "While one part of government is urging manufacturers to have a reserve on hand for a flu outbreak, another is telling them that they won't show any gain on their books for doing so."

Earlier in the year the Washington Post ran a story about the problem: "Although opinions differ, it appears that the Pediatric Vaccine Stockpile has become an innocent bystander wounded in the government's crackdown on deceptive accounting practices."

It looks to me
Like the books
Were cooked
By the SEC.