Merck (MRK) issues recall for childhood vaccines

The most important thing to pay attention to at this time is that Merck has stated there is no danger to children who have already been vaccinated with the recalled vaccine. So far there has been no evidence discovered by federal health officials that any of the vaccines were actually contaminated, but Merck is not taking any chances, and will pull all shipments made between April and November.

Since this is such a widely used vaccine, concern over today's recall is probably going to revolve more around future availability than over any risks from the currently recalled vaccines. Merck typically supplies the market with around 7 million doses of the Hib vaccine annually, which is about 50% of the market's demand. The company has stated that it does not expect to start to ship new vaccines until late 2008, so there is more than likely going to be a shortage of the vaccines for children next year.

Other than Merck, there is only one other company that provides the vaccines, Sanofi Aventis (NYSE: SNY). The company has stated that it is going to be upping its production to help counter balance the supply shortage created by Merck's recall, but that there will likely be shortages next year of the vaccine.

Merck shares are reacting to the news, declining 1.3% to $58.97 by midday.

Michael Fowlkes has worked as a stock trader for seven years and spent the last two years working as an analyst for the online investment advisory service Investor's Observer.