A Shot In the Arm

By David Morris, AlterNet. Posted October 22, 2004.

The current flu vaccine shortage caught everyone by surprise, but the underlying problems that led to this crisis have been recognized for many years.

In late August, Chiron Corporation, a California company with a vaccine factory in Liverpool, England, notified British and U.S. health authorities that it had discovered some contaminated doses and would be able to supply only 44 to 46 million of the previously expected 50 million doses. Nevertheless, on Oct. 4, Chiron told the public it would receive a clean bill of health from British inspectors, possibly because the U.S. Food and Drug Administration (FDA) had given approval for its quality control initiatives.

But on Oct. 5, the British Medicines and Healthcare Products Regulatory Agency suspended Chiron's license for three months. Five days later, the U.S. FDA sent in inspection teams and concluded that none of the 48 million doses that had been produced were salvageable.

Suddenly, just as flu season started in the U.S., 50 percent of our flu vaccine disappeared.

The Oct. 5 announcement by the British regulatory agency stunned the world. But the underlying problem that resulted in this crisis has been known for quite some time. As Dr. Julie Gerberding, the Bush-appointed director of the Centers for Disease Control and Prevention, succinctly observes, "Our entire vaccine production system is fragile in our country."

Why is this so?

In a nutshell, we have a classic situation in which the public health need is very high but the private economic incentives are not. With the vast majority of the production and distribution system in the hands of private companies, the result has been an increasingly unreliable and precarious production and distribution system.

The New York Times adds, "The heart of the problem, experts say, may be that no one person or agency is in charge of making sure the United States has an adequate vaccine supply. The production, sale and distribution of vaccines, particularly those for flu, are handled almost entirely by pharmaceutical companies."

The flu causes about 36,000 deaths and more than 200,000 hospitalizations every year. Many observers worry that another flu pandemic is quite possible, on the scale of the one that cost tens of millions of lives in 1918.

But vaccines are small potatoes in the pharmaceutical industry, and flu vaccines are even smaller. In 2003, for example, Merck's seven vaccines had global sales of a little over $1 billion. In contrast, Singulair, Merck's respiratory drug, had sales of $2 billion all by itself. Fosamax, Merck's osteoporosis medicine, grossed $2.6 billion. The entire U.S. flu vaccine market is $300 million a year.

To private companies, flu vaccines offer many challenges and little profit. The vaccine production process must occur six to eight months in advance. Which means one has to predict the demand. And if one overestimates demand, the inventory must be discarded because every year the flu vaccine is modified to deal with new strains of the virus.

The Wisconsin State Journal describes the long production process. "Flu vaccine production begins nearly a year in advance, when health officials from around the world predict which flu strains will be active in the following seasons. World Health Organization scientists then design a vaccine to defend against those strains in a months long process that involves growing benign versions of the flu virus in chicken eggs and sifting through the offspring viruses to find the right combination for a vaccine. Then the benign virus strains are given to manufactures, who mass produce them, again growing them in chicken eggs – about 90 million specially purified, fertilized eggs."

In 2002, a mild and short flu season led to a lower than expected demand for the vaccine. Wyeth had to throw away half of the 20 million doses it had made. This, along with the high level of investments it would have had to make to improve quality control, led Wyeth to abandon the market.

David Morris is co-founder and vice president of the Institute for Local Self Reliance.

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