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Vaccine Shortage Spurring Changes

Experts suggest government market guarantees, more research could help

November 15, 2004 | A version of this story appeared in Volume 82, Issue 46


For more than a decade, public health officials have been aware of the fragility of the U.S. flu vaccine supply chain. In 1994, five manufacturers were making injectable flu vaccine for U.S.-customers. But by 2004, three had withdrawn from the market, leaving only two U.S.-licensed manufacturers: the Chiron Corp. facility in Liverpool, England, and Aventis Pasteur in Swiftwater, Pa. In addition, in 2003, MedImmune in Gaithersburg, Md., began making a live-virus nasal spray vaccine called FluMist that can be given to healthy people who are five to 49 years old.


This year, the stresses on the vulnerable system have led to a debacle. On Oct. 5, the U.K. suspended the license of Chiron's Liverpool facility because of widespread bacterial contamination in its flu vaccine. This meant that Chiron could not supply the 46 million to 48 million doses it had planned for the U.S. market--about half the total demand.

The shutdown of Chiron's production has led to near panic among some U.S. patients. Seniors waited in long lines for the limited supplies of vaccine available at supermarkets and clinics. Many health care providers, clinics, and nursing homes received little or no vaccine.

Even among experts who usually disagree about health policy, there seems to be some consensus on the changes needed to ensure an adequate flu vaccine supply. They all agree that these changes are needed quickly. Most say the government needs to guarantee a market for vaccines so producers won't be left at the end of the flu season with unsold supplies that can wipe out their profits. Experts also are calling for stepped-up research on flu vaccines that may lead to faster, more reliable, and more flexible production methods. Currently, up to eight months elapse between identification of virulent virus strains expected to be the most prevalent during the next flu season and distribution of the vaccine.

The Department of Health & Human Services (HHS) has been holding press conferences every few days since Oct. 5 to try to allay concerns about the vaccine crisis. On Oct. 12, it decided to supervise the distribution of unshipped flu vaccine stocks so that they would go to the areas of greatest need. HHS asked members of the public to forgo the flu vaccine unless they belong to high-priority groups--primarily children aged six to 23 months and adults age 65 and older.

HHS ANNOUNCED that Aventis would produce a few more million doses than what was expected and that production of the live-virus vaccine FluMist would be expanded from 2 million to 3 million doses. HHS has also announced that the U.S. may purchase 5 million doses of vaccine from foreign-licensed manufacturers--a GlaxoSmithKline unit in Germany and an ID Biomedical facility in Canada.

Before the Food & Drug Administration decides whether these foreign vaccines can be sold in the U.S., agency officials will be inspecting the production plants. If found satisfactory, the vaccines from foreign suppliers will be distributed as what FDA calls investigational new drugs, meaning that patient consent forms and medical follow-up will be required.

At last count, the U.S. had identified 61 million doses that will be sold in the U.S. market: 58 million doses of vaccine from Aventis and 3 million doses of FluMist. This number does not include the 5 million doses that may be obtained from foreign suppliers. "We're growing stronger each week in our supply of vaccines and medicines. That makes us optimistic about our ability to protect the American public as we go into the flu season," HHS Secretary Tommy G. Thompson said at a recent press conference.

Preventing flu outbreaks is not a trivial matter. According to the Centers for Disease Control & Prevention (CDC), flu kills about 36,000 Americans annually and causes 200,000 hospitalizations, costing the economy about $12 billion in lost wages and productivity. Although most deaths from flu occur among the elderly, some happen in children. Last winter, 143 children died of flu.

Despite this need, drugmakers are reluctant to enter the flu vaccine market because of the financial risk involved.

Flu vaccine production is a long, laborious process. During the summer and fall, world surveillance under the direction of CDC and the World Health Organization (WHO) identifies new antigenic variants of the flu virus. After the variants are sequenced and characterized immunologically, experts try to determine which ones are likely to spread through populations. Most flu strains originate in Asia and travel on a fairly predictable course.

An FDA advisory committee meets in January or February to decide which influenza viruses are likely to cause the most disease during the flu season that begins the next fall. This decision is based on the degree of difference between the new virus strains and previous strains and evidence about how quickly the new virus strains are spreading. Generally, one or two new flu virus variants and one or two from the current year are chosen. In all, three strains are selected each year for the new vaccine.

The three virus strains are then manipulated for high-yield growth and distributed to manufacturers. Manufacturers inoculate seed pools of flu virus into millions of fertilized hen's eggs divided into three groups. This egg-based process has been used for 60 years.

After the viruses multiply, fluids are harvested from the eggs and virus particles are concentrated with centrifugation. The virus particles are then disrupted and chemically inactivated with detergent. Subunit antigenic proteins from the virus particles are purified, and vaccines are put together, each containing proteins from the three types of virus particles.

One source of risk in this process is that there is no way to determine ahead of time exactly how well the viruses will grow in the eggs. Consequently, the drugmaker can't predict exactly how many doses of flu vaccine it will be able to produce.

Another risk is that there is no way of predicting how bad the flu season will be and how many people will decide to get a flu shot. If manufacturers find in mid-flu season that demand is greater than expected, it is too late to ramp up production.

"It is a process that you can't rapidly scale up. You almost have to start from square one," says Anthony S. Fauci, director of the National Institute of Allergy & Infectious Diseases (NIAID).

Producing vaccines in cell cultures is one way to reduce the risk. Drug companies independently and with grants from NIAID have been researching cell culture production for several years. Cell culture is now at a stage where it could be used on a large scale within a few years. "Companies need to build the plants and do the appropriate research to make sure the system works for the flu viruses they are dealing with," Fauci says. "They need to validate the lines, make sure the virus that comes out is essentially identical to the one they put in."

CHIRON IS PRODUCING a limited amount of vaccine with a cell culture method using kidney cells from dogs. The product is being tested in Europe on large numbers of patients for effectiveness and safety. It could be marketed in Europe by 2007.

Cell culture production is not much faster than egg-based production, Fauci says. The advantage of cell culture is that the process can be scaled up if demand is unexpectedly high. "You keep large vats of cells growing in culture year round, so that when you need to scale up, you can do that," he explains. Also, the consistency and predictability of production is greater with cell production, he says. "Companies will make a gradual transition from egg-based culture to cell-based culture. That will take a few years," he says.

NIAID and drugmakers are also doing research on recombinant DNA methods of flu vaccine production. "That is coming along, but it is not as close to commercialization as cell culture," Fauci says.

Over the past four years, NIAID's investment in flu vaccine research tripled from $22 million in fiscal 2001 to $66 million in 2004. "It will likely be ratcheted up in 2005," Fauci says.

But there are inherent risks of vaccine production that companies can't overcome with new technologies. One is that any unused vaccine must be thrown away at the end of the flu season. Because of antigenic drift, at least one new lethal flu variant evolves each year, making the current vaccine ineffective. On average, manufacturers have had to discard 10% of their production, HHS's Thompson says.

Another problem is the limited return on investment: A patient buys the product only once a year for about $15 or less per shot. In contrast, blockbuster drugs often must be taken every day for years, and the costs of each monthly prescription may be more than $100. Fauci calls the value of the vaccine market "trivial." Profits from one blockbuster drug like Lipitor easily exceed profits from 20 different vaccines, he says. ?

Another risk is that the costs of entry and exit from the flu vaccine market are high, both in terms of equipment and human capital, says Jon C. Schommer, an associate professor in the College of Pharmacy at the University of Minnesota. Also, it is difficult to convert the equipment used for flu vaccine production to other purposes. Thompson says, "It can take five years or more to get a new facility into operation."

The cost of potential lawsuits is another risk that Thompson calls a major barrier to entry into the flu vaccine market. "Liability has been a big concern of the companies for the past 10 years, and that's why we've gone from five [producers] down to two," he says.?

The liability risk may now have been nearly eliminated, however: Under a law that President George W. Bush signed on Oct. 22, flu vaccine was added to the Vaccine Injury Compensation Fund created by Congress in 1986. The fund now provides limited compensation to patients who think they have been harmed by flu vaccines. But if they are not satisfied with the compensation the fund offers, they can file a lawsuit.

In contrast to Thompson's view, Peter Lurie, deputy director of Public Citizen's Health Advisory Group, says lawsuits are not an important reason why firms have withdrawn from the vaccine market. A 2003 Institute of Medicine report on barriers to vaccine production barely mentions liability issues as a source of the problem, he notes.

"The underlying problem here," Lurie says, "is that government has ceded to the private sector the kind of responsibilities that really belong in the government sector. It has assumed that the market will somehow guarantee adequate access to vaccines."

In other developed countries, most of which have national health insurance, "the government dictates the number of doses that are to be produced and later how they are distributed around the country," Lurie says.

TO COUNTER THIS, the U.S. government is developing strategies for making flu vaccine production more profitable. There are plans afoot to authorize the government to buy enough flu vaccine to ensure that manufacturers make a profit. "We are considering some guaranteed back-purchases," Fauci says. For instance, he says, "we could tell the vaccine manufacturers that the country needs 100 million doses. If, in fact, only 80 million are sold, we would guarantee the companies that we will buy back the surplus at a reasonable price." New legislation would be required to do this, but it could be easily passed, he predicts.

Alan Goldhammer, associate vice president for regulatory affairs at the Pharmaceutical Research & Manufacturers of America, agrees that "one obvious solution would be guaranteed purchase agreements so that companies wouldn't be left at the end of the flu season in a never-never land with a large number of surplus vaccines."

"We should probably subsidize vaccine makers to make three or four times the amount that is normally sold so that in a year when flu is severe and widespread, everybody has enough," says Daniel P. Carpenter, a professor of government at Harvard University who is leading a research effort on FDA issues.


Even now, the government purchases about 55% of the total flu vaccine sold in the U.S. for Medicare, Medicaid, the Department of Veterans Affairs, and other government programs. However, it has been paying below-market rates.

Other strategies being considered are tax incentives for producing flu vaccine that might help attract companies to the market, Fauci says. Expedited FDA approval of facilities that want to produce vaccines is another idea on the table.

A robust vaccine industry is especially important during a flu pandemic. Every 20 or 30 years, a particularly virulent strain of flu emerges and kills far more than the usual million people worldwide. The pandemic in 1918 killed tens of millions globally.

It is with this possibility in mind that public health officials are watching carefully what is happening with bird flu. This virus, which is becoming established in Asia, has since 1997 been found to be spreading from poultry to humans, killing a significant number of the people infected. Experts say it is only a matter of time before the virus combines with a human virus and can be spread easily among humans. Then, bird flu could cause a severe worldwide flu outbreak because humans would have little immunity to the novel virus.

NIAID already has awarded contracts to Aventis Pasteur and Chiron to devise prototype vaccines for bird flu. Clinical trials on the vaccines may begin later this year.

WHO is convening a meeting in Geneva on Nov. 11 to develop plans for dealing with a flu pandemic. Representatives of governments and 16 vaccine makers will be attending.









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