Ask most pediatricians about the finances of vaccines, and they’ll tell you that vaccines are not a big moneymaker. Providing them might generate some profit, but generally, “the margin you make is exceptionally small,” Robert Lillard, the medical director of the Cumberland Pediatric Foundation, told me.
Health Secretary Robert F. Kennedy Jr., without citing specific evidence, has claimed otherwise—that vaccination generates massive profits for doctors. In a June interview with Tucker Carlson, he put it at “50 percent of revenues to most pediatricians,” and said those profits create “perverse incentives” to push shots on their young patients. This description is so far from reality that Rana Alissa, the president of the Florida chapter of the American Academy of Pediatrics, told me that any actual vaccine provider would find it laughable. In fact, immunization is a dicey-enough financial proposition that the administration’s anti-vaccine policies already are discouraging providers from stocking some immunizations.
Pediatrics is one of the lowest-paid specialties in medicine. Now the Trump administration’s approach to vaccines “has made the job of being a pediatrician that much more challenging,” Jason Terk, a pediatrician in northern Texas, told me. “Is that going to hasten people leaving the practice? Probably.”
Health-care providers purchase roughly half of the vaccines given to children in the United States directly from manufacturers, sometimes paying hundreds of dollars per dose. They don’t recoup any costs until they administer those vaccines to privately insured patients, and bill the companies. That’s an enormous up-front investment for pediatric practices, generally second only to employees in terms of cost. At Scott Huitink’s pediatric practice in Tennessee, his team spends well over half a million dollars a year purchasing vaccines from manufacturers, he told me.
The other half of pediatric vaccines are purchased by the federal government, then distributed to providers across the country through the Vaccines for Children Program to support the immunization of children whose families can’t otherwise afford it. Regardless of who pays for the doses themselves, pediatricians’ offices must then shoulder the costs of storage and administration: specialized refrigerators, alarms to monitor for temperature issues, highly trained staff. Insurers generally reimburse for some of those costs, but not for unexpected problems—a refrigerator failure, a dropped vial, a dose drawn into a syringe and then declined by a patient’s family. Lose just one vaccine, and providers may have to administer dozens more to break even. In one study from 2017, 12 percent of pediatric practices and 23 percent of family-medicine practices surveyed reported that they had stopped purchasing at least one vaccine because the financial risk was too great. (In those cases, they can refer families to local health departments or pharmacies to receive those immunizations.)
Providers have generally counted on consistent vaccine recommendations from the federal government to create relatively predictable demand. But this year, they cannot. President Donald Trump has advocated for Americans to delay or space out vaccines—waiting until the age of 12 to receive a hepatitis-B shot, normally given on the first day of life, or taking the measles, mumps, and rubella shots separately. Kennedy, meanwhile, has touted the debunked claim that MMR vaccines cause autism, and baselessly described COVID and HPV vaccines as dangerous. He has also repopulated the CDC’s Advisory Committee on Immunization Practices, or ACIP, with researchers who have little to no experience in vaccine science or have publicly endorsed anti-vaccine views and who are now restricting or removing recommendations for various vaccines.
When reached for comment, Andrew G. Nixon, the director of communications at the Department of Health and Human Services, wrote via email, “Claims that this administration is undermining pediatricians or seeking to reduce childhood care are categorically false. Vaccine policy is guided by gold standard science and radical transparency.” The White House did not return a request for comment.
Some of these actions are affecting pediatricians’ vaccine purchasing directly. In its first meeting, for instance, Kennedy’s ACIP voted to remove recommendations for flu vaccines that contain the preservative thimerosal, following the counsel of an anti-vaccine activist. Most flu vaccines in the U.S. were already thimerosal-free. But Terk, in Texas, told me that about 70 percent of his practice’s supply of flu shots contained the compound, which prevents contamination in multidose vials. Switching over to single-dose, thimerosal-free vials eats up far more space in refrigerators, forcing his practice to place more frequent orders of fewer, more expensive doses. Under Kennedy’s leadership, the FDA has also restricted the approvals for COVID shots, while ACIP has substantially softened recommendations for their use—prompting weeks of scramble for pharmacies, doctors’ offices, and patients, as they have tried to figure out who is eligible for the shots and whether insurers will cover them.
For a time, staff at Weill Cornell Medicine were having patients sign waivers pledging to pay out of pocket if insurers wouldn’t cover COVID shots, Adam Stracher, the system’s chief medical officer, told me. That has since stopped, as providers have grown more confident that coverage will come through. (AHIP, the national trade association that represents the health-insurance industry, has pledged to continue covering vaccines, including COVID vaccines, through the end of 2026. But not all insurance plans are expected to fall under that umbrella, experts told me.) Other pediatricians, who might normally place orders for autumn vaccines in the late spring or early summer, waited until Kennedy’s ACIP met to discuss the shots in September. Terk, for instance, didn’t receive his first batch of shots until the end of September; prior to that, he had to turn away families that wanted the vaccine.
Eliza Varadi, a pediatrician in South Carolina, told me that the murkiness around insurance coverage, coupled with lower demand, has prompted her practice to start ordering COVID vaccines just one box at a time—each a batch of 10 doses—to minimize the potential for loss. “We’re very nervously waiting for the claims to go through the insurance companies, to make sure they are being paid,” Varadi told me. “We could be okay, or we could lose several thousand dollars.” (Providers can sometimes return unused vaccines to manufacturers, but in many cases, only for credit or a partial refund.)
Because neither Kennedy nor Jim O’Neill, the CDC’s acting director, has yet signed off on ACIP’s new recommendations for COVID vaccines, states haven’t been able to order the shots through the Vaccines for Children program. “The program basically said, ‘You can’t order COVID vaccines. We don’t know when you can. We don’t know when you’ll have them, or if you’ll have them at all. But at this point, all orders will be denied,’” Varadi told me. The lack of availability is now creating a two-tiered system of vaccine access, Deborah Greenhouse, another South Carolina pediatrician facing similar issues, told me. (Nixon did not respond to questions about this disparity, or when states would be able to order COVID vaccines through VFC.)
The downturn in COVID-vaccine purchasing may be bleeding into other shots. As orders of COVID shots have decreased, so have orders for flu and HPV vaccines, Lillard, of the Cumberland Pediatric Foundation, said. (Several pediatric practices in Tennessee purchase vaccines through Cumberland, which runs its own vaccine buying group.) Greenhouse told me she’s been encountering far more resistance to the HPV vaccine in recent months, with families citing misinformation they’ve heard on social media. “It happens several times a week at this point,” she said.
In general, demand for vaccines had already fallen, especially since the start of the coronavirus pandemic. At the same time, Lillard told me, the cost of labor and the price tag of many individual vaccines have continued to rise, while payments from insurance companies have remained relatively flat. Now that the federal government has adopted an antagonistic stance toward vaccines, the business of immunization looks even worse. Under these pressures, Varadi expects that more pediatricians will soon decide to stop offering certain vaccines.
By helping to keep children healthy, vaccines actually drive down demand for pediatric services, Alissa, of the Florida Chapter of the American Academy of Pediatrics, pointed out. In theory, pediatricians abandoning vaccines would help their businesses. But as the Trump administration continues to feed doubts about shots, doctors are being forced to confront just how costly vaccine hesitance can be. Greenhouse’s visits are now stretching out longer, she told me—putting her behind schedule, or leaving no time for other important discussions about her patients’ health. Families in many parts of the country are now requesting personalized, delayed vaccination schedules, which can drastically increase the number of routine visits that families must make, Huitink told me, as well as provider workloads. Juggling all of these bespoke schedules for families, Stracher said, makes mistakes more likely. Several pediatricians told me they worry that they and their colleagues might eventually need to see fewer patients, or cut other costs at their practice to compensate. “You’re going to see physicians leaving the workforce because of this,” Varadi told me.
Pediatrics has for years been enduring a workforce shortage—to the point where pediatrics training programs are struggling to fill slots. “We cannot find, we cannot hire, we cannot recruit,” Anita Henderson, a pediatrician in Mississippi, told me. And the pediatricians I spoke with told me they expect that deficit to worsen. So when more children fall ill amid rising rates of outbreaks, fewer doctors will be available to care for them.
