WSJ - Lack of Vaccines Goes Beyond Flu Inoculations

[Guest guest]

Thank heavens for small favors

Do we feel sorry for them?

" Legal liability also is a problem. Manufacturers are supposed to be

insulated from lawsuits on pediatric vaccines but plaintiffs' lawyers have

found ways around that. "

And what might that be?????? Haven't seen or heard any such thing

Sheri

>Date: Mon, 08 Dec 2003 20:01:52 -0800

>From: Belkin <

http://online.wsj.com/article/0,,SB107083848883637900,00.html?mod=home_page_

one_us

Lack of Vaccines Goes Beyond Flu Inoculations

Eight Shortages Have Occurred Since 2000;

Fewer Shots From Tetanus to Chickenpox

By BERNARD WYSOCKI JR.

Staff Reporter of THE WALL STREET JOURNAL

The almost instant shortage of flu vaccine caused by a bad influenza season

points to a deeper, more chronic problem: The malfunctioning of the small

but vital marketplace for preventive vaccines in America.

The influenza-vaccine shortage, reported Friday by the only two suppliers

of flu shots, is more than a one-time mismatch of supply and demand. This

is the eighth major shortage of preventive vaccines in the U.S. since the

beginning of 2000.

Shortages of vaccines for diphtheria, tetanus, chickenpox and measles have

occurred since then. Flu vaccines have been in short supply for three of

the past four years. Now, doctors and clinics around the country say they

are running low on supply as Americans rush to get some protection from the

most severe outbreak in years, one that already has killed several

youngsters in Colorado and elsewhere.

Vaccine shortages " aren't a one-time act of nature, " says Sloan, an

economist at Duke University, who served as chairman of an Institute of

Medicine study that explored vaccine issues in a report issued last August.

The report by the institute, an arm of the National Academy of Sciences,

noted that there has been a steady erosion in the number of vaccine

producers over the past three decades. In the 1970s, there were 25 vaccine

makers; today -- because of slim profit margins and legislative and

liability issues -- there are just five. With such a small number of

producers, shortages can develop quickly as a result of manufacturing

problems or a bad guess on the expected demand.

Many vaccines, such as those for tetanus and chickenpox, have only a single

supplier in the U.S. market. The flu vaccine has only two: Aventis Pasteur,

a unit of the large French drug company Aventis SA, and Chiron Corp. A

newcomer, MedImmune Inc., has recently launched a nasal spray vaccine,

FluMist. Merck & Co. and Pfizer Inc. are among the drugmakers that no

longer make flu vaccines.

Stockpiling of various vaccines is one solution to reducing the shortages,

at least for some vaccines. The institute's report noted that " of the 10

vaccines that the [Centers for Disease Control and Prevention] has targeted

for stockpiling, only three were stockpiled in 2002. " Among those were

vaccines for measles, mumps and rubella, as well as a small stockpile of

polio vaccine.

The report noted that stockpiling is expensive and that the CDC has been

conservative about developing stockpiles to minimize the financial risk.

However, the flu vaccine can't be stockpiled every season, so manufacturers

have to start every year from scratch, according to public-health officials.

AN ABUNDANCE OF SHORTAGES

Recent supply shortages of major vaccines:

Vaccine Shortage Reason

DTaP (diphtheria, tetanus, acellular pertussis) 4Q 20003Q 2002

Producers Baxter and Wyeth withdrew. Remaining producers had insufficient

capacity to meet demand)

Tetanus 4Q 20003Q 2002 Wyeth withdrew from production

MMR (measles, mumps, rubella) January 2001-Jul-02 Merck, sole producer,

interrupted production over issues related to manufacturing practices

Varicella (chicken pox) 4Q 20012Q 2002 Production ceased because of

unexpected delays in modification to production facilities

Pneumococcal conjugate October 2001present Unexpectedly strong demand

overwhelmed supply, plus a production bottleneck in early 2002

Influenza 20002001 flu season Multiple manufacturers had difficulty

growing flu strains, combined with heightened demand

Influenza 20012002 flu season Production delayed; only two-thirds

available by October

Influenza Began early December 2003 Strong demand, triggered by severe

flu outbreak, outpaced manufacturers' supply

Source: National Academy of Sciences' Institute of Medicine

For makers of all types of vaccines, the Institute of Medicine's report

traced the decline in manufacturers' interest to the fact that the U.S.

government -- predominantly through the Vaccines for Children program run

by the CDC -- buys slightly more than 50% of the vaccines in the U.S., and

keeps prices low. (The percentage is much lower for flu vaccines, which are

given to many more adults than children.) The government's role in the

vaccine market " raises an issue of monopsony power, " says Duke's Dr. Sloan,

referring to the economic situation when a single buyer -- in this case the

government -- has the power to keep prices low.

Under the Vaccines for Children program, the CDC negotiates a discounted

price with the manufacturer. It then allocates to each state a credit

balance, which states can use to buy vaccines from the manufacturer at the

discounted price. The program offers free vaccines to uninsured children

under 18 years of age or to those who are eligible for Medicaid or care

from federally qualified health centers.

The report concluded that the price squeeze, coupled with a heavy

regulatory burden, has discouraged investment and driven drug companies out

of the vaccine business. The U.S. vaccine market is only a couple of

billion dollars a year in sales, and many pharmaceutical companies can make

more money on other products than on hard to make and market vaccines.

Manufacturing vaccines involves the complex transformation of live

organisms into pure, active, safe and stable vaccines. Many vaccines must

remain in a narrow temperature range during storage and delivery, called

the " cold chain. " Moreover, each batch must be tested and approved before

being released.

Legal liability also is a problem. Manufacturers are supposed to be

insulated from lawsuits on pediatric vaccines but plaintiffs' lawyers have

found ways around that.

In addition, the vaccine industry also has a wobbly distribution network,

where at any given time there can be surplus in one region and shortages in

another. This year, for instance, Texas has been hard hit by flu, but there

was a dearth of fall deliveries of vaccines. " There were many places --

doctors, clinics, hospitals -- that told me that they hadn't received the

vaccine. That was in October, " says Glezen, professor of virology at

Baylor College of Medicine in Houston.

The report by the institute also stated that health-care providers such as

doctors and clinics faced unusual burdens in carrying out vaccination

programs, noting that " reimbursements for vaccines and administrative fees

barely cover the costs of vaccine purchase. In many cases, providers lose

money on immunization. "

Besides the problems of the vaccine market overall, the flu vaccine has its

own peculiarities that could bedevil efforts to alleviate shortages. The

government isn't a big buyer of adult flu vaccine; manufacturers emphasize

direct sales to doctors and hospitals. Many employers offer mass

vaccination in the workplace.

At a time when the issue of Medicare coverage of prescription drugs has

dominated debate in Washington, there is little time or interest in

Congress or the White House in wrestling with problems in the vaccine

supply. Meantime, the cost of immunizing children and vulnerable adults is

skyrocketing, as new, expensive recommended vaccines come out of the lab.

The cost of immunizing children has risen to $385 in 2001 from $10 in 1975,

when adjusted for inflation, and may triple to more than $1,000 per child

by 2020.

The Institute of Medicine's blue-ribbon panel wants to require that all

insurers and health plans in the U.S. cover vaccines, with the government

subsidizing these purchases. The poor would get vouchers for vaccines. But

the report recommends that the subsidy would cover vaccines for everybody,

including those with private insurance -- or at least all children, the

elderly and high-risk adults between the ages of 18 and 64.

The hope is that the subsidy, which would cost about $1 billion to $2

billion a year, would improve the low vaccination rates among the poor and

among sick adults. Public-health advocates argue it would be a worthwhile

investment, because each dollar spent on vaccines results in benefits many

times that amount in preventing disease and death.

But many drug companies and insurers, as well as their Republican allies in

Congress, balk at imposing a government requirement. At a conference last

week at the American Enterprise Institute, a conservative think tank in

Washington, some industry officials worried that, even if Congress provided

some money to implement such a plan, it could be cut off in the future and

leave the suppliers in the lurch. Others disliked a proposal in the report

that a panel of " experts " would assess the social value of vaccines,

especially future products, and set the prices to be paid to the makers and

marketers of these drugs.

" We'd rather take our chances with the market, " says Grant, vice

president for public affairs and government relations at Aventis.

About 150 million people are considered at high risk for the flu --

children, people over age 50 and those suffering from chronic diseases. One

of the big uncertainties in forecasting demand for vaccines is that only 70

million to 80 million people annually are vaccinated, leaving a huge number

who might panic and get vaccinated once a severe outbreak begins, as has

happened this year.

Ms. Grant of Aventis says that in the past few years the company produced

too much flu vaccine and ended up throwing away some of it; more-mild flu

seasons produced only modest demand.

Write to Bernard Wysocki Jr. at bernie.wysocki@...