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A Shot In the Arm

Is someone to blame for the flu vaccine crisis, or is it really just one of those unanticipated and unforeseen events that disrupt our day-to-day lives?
 
 
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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.

Last year, on the other hand, almost all of the 87 million doses of flu vaccine produced were sold.

As more and more companies abandoned vaccine markets, production became increasingly concentrated and thus supply lines became increasingly vulnerable. The Institute of Medicine, a unit of the National Academy of Sciences, noted that 30 years ago, 25 companies made vaccines for the U.S. Today there are five. Dr. Greg Poland, director of the Mayo Clinic's vaccine research group, said that a single manufacturer makes more than 20 vaccines, including those for measles, tuberculosis and polio.

Between November 2000 and May 2003 there were shortages of eight of the 11 vaccines for childhood diseases in the U.S., including those for tetanus, diphtheria, whooping cough, measles, mumps, and chicken pox. In 2004 the GAO noted, "In the 2000-2001 flu season and again in the 2003-2004 flu season, this country experienced periods when the demand for flu vaccine exceeded the supply and there is concern about the availability of vaccine for this and future flu seasons."

Since 2000, the Government Accountability Office (GAO) has published three reports on the vaccine supply problem. The most recent was issued Sept. 28, 2004.

In 2001, the GAO concluded, "a production delay or shortfall experienced by even one of the three remaining manufacturers can significantly impact overall vaccine availability."

A year later the three became two when Wyeth abandoned the market. Compounding the problem of supply disruptions, the GAO noted in 2004, was that the Department of Health and Human Services had "no system in place to ensure that seniors and others at high risk for complications receive flu vaccinations first when vaccine is in short supply."

Today the U.S. is dependent on only two companies to supply flu vaccine. Intriguingly, the only remaining supplier is Aventis Pasteur, a French company that manufactures the vaccine in Pennsylvania. Aventis sells the vaccine for $8.50 a dose. A recent survey by American Society of Health Systems Pharmacies found that because of the current crisis the price is up more than fourfold and in some cases more than tenfold.

Unless a miracle occurs, the nation will be spending twice as much for its flu vaccine this year while receiving only half as much. Hundreds, if not thousands of people will be hospitalized or may even die because of the shortage.

This is the fourth year of vaccine shortages of one sort or another. These have precipitated many commissions and the issuance of a number of good recommendations.

These include having the federal government purchase a set amount of doses, say 100 million. This will encourage more manufacturers to enter the market because they can be guaranteed sales of their production. Another is to accelerate the approval and use of new vaccine production techniques that rely on making medicine from cell cultures rather than from fertilized chicken eggs. This process is more sterile and has a much quicker turnaround.

These recommendations have been in place for a number of years. Why haven't they been implemented? Perhaps because they require government intervention. The Bush administration strongly supports allowing private corporations to enter or leave markets freely and to make the ultimate decision about what to produce and in what quantities. This crisis has spurred many, including most recently, Tommy Thompson, the Secretary of Health and Human Services, to come out for a stronger and more central role of government in the production of vaccines.

This piece originally appeared on American Voice, a web site of non-partisan analysis of national issues.

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