Vaccine Crisis Developing
Global Security Newswire
By Marilyn Werber Serafini, National Journal
WASHINGTON - In 2004, a 16-month-old boy died of pneumonia at the Children's Hospital of Philadelphia. He shouldn't have passed away - and therein lies a cautionary tale about the threat of avian flu. The toddler was infected by a bacteria called pneumococcus. Before 2000, pneumococcus was often a death sentence. Worldwide, more than 1 million children died every year, according to the World Health Organization. The situation changed dramatically in 2000, when the pharmaceutical giant Wyeth brought to market a revolutionary vaccine that guarded against pneumococcus in young children. Suddenly, parents and doctors with access to the vaccine no longer had to fear pneumococcus as a killer (see GSN, Feb. 22).
But in 2004 the vaccine was in short supply, and the Philadelphia toddler received only two of the recommended four doses. "The pneumococcus isolated from the child's blood was a type that could have been prevented by the vaccine," Paul Offit, chief of the division of infectious diseases at Children's Hospital, wrote in a 2005 book called "The Cutter Incident," named after a vaccine manufacturer that was sued in the 1950s over its polio vaccine. If the vaccine were made by several companies, he wrote, "children wouldn't have to rely on the production efficiency of one company to save their lives."
To the dismay of public health officials, vaccine shortages have become routine in the United States. Most vaccines now come from only one producer, and that leaves no margin of error when things go wrong in the production process - and they sometimes do. Between 1998 and 2004, nine of the 12 vaccines routinely given to children were in short supply at one time or another. The Centers for Disease Control and Prevention reported shortages of vaccines for chickenpox, diphtheria, flu, measles, mumps, pertussis, rubella (German measles), pneumococcus, and tetanus.
Over the past three decades, the vaccine infrastructure in the United States has steadily crumbled, and as Americans learn more about the deadly avian flu, concern about vaccine availability has escalated to fear, and even panic. The companies that would make vaccines for pandemic flu are the same ones that make seasonal flu vaccines, and only one of those suppliers - Sanofi-Pasteur, the vaccine division of Sanofi-Aventis - makes it entirely in the United States.
"We have very limited manufacturing capacity right now as a world or as a nation" to make flu vaccine, Bruce Gellin, director of the national vaccine program office at the Health and Human Services Department, told National Journal. And many experts worry that in the event of a pandemic, flu vaccine makers in other countries would be forced to keep their supplies at home.
In the 1950s, 26 companies made vaccines in the United States. By 2004, only four - GlaxoSmithKline, Sanofi-Aventis, Merck, and Wyeth - remained. The winter of 2000-01 was the last flu season in which the United States had more than one domestic flu vaccine supplier, and after that it didn't take long for demand to outstrip supply. The first shortage came the following year, when only Sanofi-Pasteur was making vaccines in the United States. The situation got worse in 2003-04, when influenza hit early and media reports of children dying sent both the young and the old scrambling to vaccine clinics. Sanofi made 48 million doses that season, and a small British company - Liverpool-based Chiron - produced 35 million doses for the U.S.
market. Clinics had to turn away many vaccine-seekers. The next year proved even worse, when Chiron had to scrap its entire lot because of bacterial contamination.
The shortages are "a warning signal, a harbinger," Offit said. If a flu pandemic struck today, Sanofi could make a vaccine, Gellin said, but only enough for about 15 million to 20 million of America's 300 million people. "If there's a pandemic, who else would make [the vaccine] but us?" asked Wayne Pisano, Sanofi's senior vice president of commercial operations.
Offit recalled how scientist Maurice Hilleman softened the blow of the Hong Kong flu pandemic in the 1950s. Hilleman discovered the new flu strain and quickly sent the virus to six U.S. vaccine makers, who produced a total of 40 million doses in five months. But today, Offit said, "if you picked up the phone you would get zero U.S. manufacturers. Everyone thinks this is the modern age - ventilators, ICUs. It doesn't matter. Prevention is the only way you can stop this."
As alarm about avian flu intensifies, lawmakers are starting to pay attention. "This has caused a teachable moment where policy-makers begin to listen - Democrats and Republicans," said Senate Majority Leader Bill Frist (R-Tenn.) In December, Frist, who is a heart-lung transplant surgeon, pushed a bill through Congress to grant vaccine makers protection from liability in a pandemic. He plans to advance two more pieces of legislation this year aimed at spurring vaccine producers to step up development and production. "We need to shorten the bug-to-drug interval ... because it's the difference between life and death," Frist said. "We are going to see [avian flu] in our birds here sometime in the next year. ... There's an immediate crisis coming at us right now."
But legislating this year won't be easy. Even Frist's liability protections became law over the opposition of a number of lawmakers. Consumer groups complained that the government is bowing to the drug industry and leaving little legal remedy for people who might be injured by vaccines.
In October, President George W. Bush made a personal plea to drug industry leaders at the White House, urging them to make more vaccines. The Health and Human Services Department has approved a handful of grants to help get them started, and drugmakers are beginning to respond. Sanofi is building a new plant and expanding capacity; GlaxoSmithKline has purchased a flu vaccine facility in Quebec that would supply the United States. But there's a long way to go, and company executives say that in addition to liability protections, they need antitrust exemptions in an emergency, so that they can talk, plan, and even produce together. They also want some guarantee
that their vaccines will be purchased, even if they are never needed.
Economics 101
Everything comes down to money, and vaccine production hasn't traditionally been a lucrative business. Why build an expensive plant to make a vaccine that requires only one or two doses, or a vaccine for a pandemic flu or bioterrorism-related event that may never materialize? Pharmaceutical companies would rather invest in a drug that people take every day for a chronic condition such as high cholesterol.
The cost of researching and developing a vaccine can be high. Because scientists must grow the viruses in live eggs or cells, ensuring consistency is difficult. Regulatory oversight is rigorous. But the biggest deterrent to vaccine production, according to pharmaceutical company executives, is the threat of multimillion-dollar lawsuits.
"The vaccine industry today is [worth] $6.7 billion, approximately, and lawsuits out there add up. Damages being sought exceed $30 billion, total," said Sanofi's Pisano, citing a compilation of drug manufacturers' annual reports. Drugmakers say that the new law championed by Frist only partially fixes the problem. The liability shield operates only when the HHS secretary declares a pandemic or the threat of one. The legislation doesn't address, for example, whether the liability protection would cover seasonal flu vaccines.
Liability wasn't always a big concern. Drugmakers were generally willing to produce vaccines until the first polio vaccine generated expensive lawsuits. To combat a virus that was paralyzing more than 21,000 Americans a year, five companies introduced vaccines for polio in 1955. But some of the first vaccines produced by Cutter Laboratories infected 220,000 people with polio; 164 were permanently paralyzed, and 10 died.
In 1956, Josephine and Robert Gottsdanker sued Cutter for injuring their daughter Anne, who became paralyzed after taking a Cutter vaccine. In 1958, a jury, acknowledging that the company had not acted negligently, nevertheless found Cutter liable. "The Gottsdanker verdict meant that if pharmaceutical companies made a product according to industry standards, using the best science that was available, and found months or years after its sale that it caused harm -- a harm not predictable -- they were liable for the damage," Offit wrote in "The Cutter Incident," which traces today's vaccine crisis back to the polio epidemic.
Legal experts at the time predicted that the precedent of "liability without fault" would discourage drug companies from taking on the risk of developing new vaccines. Cutter was faced with dozens of suits but managed to pay off the $3 million in liability through insurance and loans. A company called Lederle, though, didn't fare as well. Lederle's vaccine for pertussis, or whooping cough, became the target of controversy in the 1970s when a British researcher charged that the vaccine caused swelling of the spinal cord. The claim was never substantiated, but by 1987, plaintiffs had filed 800 lawsuits totaling more than $21 million against the manufacturer. A jury in the United States awarded $1.13 million to Kevin Toner, who became paralyzed from the waist down after receiving the vaccine in 1979 at the age of 3 months. The award equaled more than half of the $2 million in gross sales from pertussis vaccines in the United States.
While awards were growing larger, federal regulation was getting tougher, making it even more expensive for vaccine makers to stay in business. "Vaccines are arguably held to a higher standard of safety than any other product given to children, including antibiotics and cough-and-cold preparations," Offit wrote. "Vaccines undergo thousands of tests to make sure that they contain exactly what they are said to contain; they are tested in tens of thousands of people before they are licensed, to make sure that they are safe and that they work; and they are watched very carefully after licensure - when they are given to millions of people - to make sure
that they don't cause any rare side effects."
After pharmaceutical companies began abandoning vaccines, Congress responded in 1986 with the National Vaccine Injury Compensation Program: If a panel of experts found that a child had been injured by a vaccine recommended by the CDC, the government - not the producer - would compensate the family for medical expenses and damages.
The law improved the liability situation for makers of children's vaccines, but drug companies say that it still doesn't give them all the protection they need. They add that the program also caused another problem when it authorized the government to purchase vaccines for low-income children. The government established low prices for staple vaccines years ago, and drugmakers complain that no system exists to adjust the prices for inflation. As a result, doses of vaccines that were introduced years ago cost $10 to $20, while newer vaccines are priced from $50 to $70. The government's Vaccines for Children Program purchases about half of all vaccines recommended for kids, including flu vaccines.
Drugmaker Pfizer is a "poster child for the unintended consequences of vaccine policy in this country," wrote Pfizer Chairman Hank McKinnell in his 2005 book "A Call to Action." Pfizer is a top producer of vaccines for animals, but it stopped making vaccines for humans. "The difference between the two sectors could not be starker. Animals don't file lawsuits, and there is no single-source buyer for animal health vaccines," McKinnell said.
"No industry is likely to invest in complicated research projects if it has little reason to think it will recoup its costs, much less show a return," McKinnell maintained. Warner Lambert (now Pfizer) sold its flu vaccine business in 1998 to King Pharmaceuticals, which ceased production because bringing its plant into federal compliance was too costly, according to an article by Alexandra Minna Stern and Howard Markel in the May/June 2005 issue of the journal Health Affairs.
People are less willing to accept risks with vaccines than with other medications, according to McKinnell. "Because vaccines are given to large numbers of healthy people," he wrote, "safety and liability concerns can seem greater than with drugs that are given to sick people, who are willing to bear some risk of side effects to get better."
Billy Tauzin, a former Republican House member from Louisiana who is now president of the Pharmaceutical Research and Manufacturers of America, took a risky drug a couple of years ago when he was facing an aggressive cancer. "I had to decide with my oncologist to take a medicine that could have killed me. ... We judged the risk-benefit, and it was a good one, and I'm alive. With vaccines, you're basically giving this medicine to a healthy patient. And you know in advance that a certain percentage of those patients are going to have a bad reaction," he said.
"Everyone needs to think about how awkward an economic model we're talking about here," Tauzin added. "We're talking about products we hope people will never need and people will never buy. And spending research-and-development money on these new products, and building manufacturing facilities for them, and maintaining those factories ... having to revise your molecules to keep up with a mutating virus. And all that in an economic model that says you hope people never have to buy" the vaccine.
First Steps
To jump-start vaccine production, policy-makers are focusing on three areas: limiting drugmakers' burdens of legal liability; increasing government investment; and easing antitrust restrictions in an emergency. The struggle will be to find the right balance of helping the drug industry while protecting consumers.
The Frist-backed bill that became law in December shields vaccine makers from liability if the secretary of Health and Human Services declares a pandemic or epidemic, or certifies a risk of pandemic or epidemic. The shield would apply to all medical devices, drugs, or vaccines used to prevent, treat, or cure the illness or its side effects.
Without liability protections, Sanofi would take the usual 10 years or so to run through full development and extensive clinical trials to ensure the safety of a pandemic vaccine - and that would be too late, acknowledged Pisano. But with the protections, "for something like a pandemic, we would [make a vaccine] in less than two years. We wouldn't go through all the rigorous testing we would like to do."
Some members of Congress and consumer advocates say that the Frist bill, which was attached to a Defense Department appropriations bill as Congress rushed to adjourn for the year, went too far. Opponents may try to revisit the issue on Capitol Hill. "It's outrageous. It was special-interest legislation put in in the dead of night," Senator Edward Kennedy (D-Mass.) told National Journal. Representative Henry Waxman (D-Calif.), who sits on the Energy and Commerce Committee's Health Subcommittee, complained, "Industry greed is running rampant. ... A lot of people should be worried about it."
Jillian Aldebron, legislative counsel for Public Citizen's Congress Watch, complains that the law leaves little recourse for injured vaccine takers. "If you're taking Tylenol for a headache that you get from avian flu," for example, "you cannot sue if you got Tylenol from a defective batch. Moreover, she said, while the law has a provision to compensate injured people, it is meaningless because Congress hasn't funded it. "They can point to it and say they provided compensation, but you can't sue anyone. ... Imagine talking about an avian-flu pandemic - you know things will be rushed out to market under relaxed [Food and Drug Administration] approval
standards," she said. "How do we know these things will be safe? Killing people in the name of saving them from another deadly disease hardly seems rational."
The liability shield is also unnecessary, Aldebron argues. She contends that HHS already had the authority to indemnify companies so that the federal government would shoulder the responsibility for injuries. And even before the Frist bill passed, she said, Sanofi had signed a $100 million contract and Chiron had signed a $65 million contract with HHS to deliver more flu vaccine.
Frist said his next step will be to bring up legislation that Senator Richard Burr (R-N.C.) is preparing. Burr's bill would create a Biomedical Advanced Research and Development Agency within HHS to coordinate research priorities. BARDA would get around what Burr calls the "valley of death." He explains that after a pharmaceutical company completes the basic research into a vaccine, oftentimes it cannot afford to take the next steps: advanced research and expensive clinical trials. Burr proposes moving $1 billion from the federal government's Bioshield program to BARDA. Bush signed Bioshield into law in 2004 to authorize the Homeland Security and Health and Human Services departments to purchase medicines and vaccines to guard against chemical, biological, radiological, or nuclear attacks. Bioshield does not cover a naturally occurring pandemic.
Burr's bill has stirred a debate about whether Bioshield money should be invested at the "back end," to buy products already on the market, or be used to encourage promising research into new medicines and vaccines. The Bioshield Act permits HHS to use $500 million for advanced research, but, said a Burr aide, "HHS is reluctant to do so because it takes away from their procurement dollars. If they use [their budget] for advanced development, they can buy less stuff. But you pay for it either way.
"Procurement includes basic research and everything else that goes into it. The point of paying for it now is to ensure no delays, to expedite the development of this product," the aide argued. But Burr acknowledged that persuading his colleagues to support using Bioshield money for advanced pharmaceutical research instead of procurement will be a hard sell.
Separate from Bioshield, the Bush administration already is promoting advanced research on vaccines. The Burr aide reported that he was told by National Institutes of Health staff that one-third of the $4.3 billion budget of the National Institute of Allergy and Infectious Diseases goes to advanced research. And Bush's fiscal 2007 budget request asked Congress to cut spending for all NIH institutes except NIAID, and to give the NIH director $160 billion to spend on advanced research. This shows that Bush "understands the need," Burr said. But the senator argues that NIH is the
wrong entity to guide advanced research and that it should return to its traditional mission of basic research.
After Frist moves Burr's legislation forward, the majority leader plans to bring back a second Bioshield bill to address other issues. In its current form, the legislation would give lengthier patents to pharmaceuticals and vaccines that are considered countermeasures to terrorism-related illnesses. It would establish a commission on countermeasure and vaccine regulation, and would allow tax credits for vaccine and countermeasure manufacturing and research. The legislation also would ease antitrust rules for companies working on countermeasures, so that companies could join efforts to quickly develop and produce countermeasures in an emergency. Meetings between the Health and Human Services secretary and entities developing priority countermeasures would be exempt from antitrust law.
Who's Paying?
Even while Congress this year tries to prod drug companies to produce vaccines, a longer-term problem is escalating. Whether drugmakers are entering the vaccine business for the first time or expanding existing capacity, new vaccines will cost more to produce, and all parties are already showing a reluctance to pay.
"The concern is, at some time this will break the bank," said Walter Orenstein, director of Emory University's program for vaccine policy and development. He asserts that policy-makers need to begin grappling with the question of who should foot the bill. "The big issue to me that needs to be solved is financing," he said. Over the last 10 years, the CDC has greatly expanded the number of vaccines it recommends for children, including varicella, pneumococcal, flu, adolescent meningococcal, pertussis, hepatitis A, and rotavirus vaccines. A human papillomavirus vaccine for adolescents is expected shortly.
The federal government's Vaccines for Children Program spent $500 million in 2000 and $1 billion in 2002, according to a 2004 report, "Financing Vaccines in the 21st Century," from the National Academies' Institute of Medicine. Despite the benefit of vaccines, Bush in his fiscal 2007 budget proposal recommended a decrease in funding for one subsidy program, Orenstein complained.
The Institute of Medicine's report also addresses the reality that insurers are spotty in their vaccine coverage. The institute recommends a new mandate for all public and private insurers to cover vaccines, and it proposes that the federal government reimburse insurers for the cost of purchasing vaccines and provide vouchers so that uninsured people could be vaccinated.
"It's going to have to be a partnering," Frist countered. "I would have the federal government be a partner in the purchase of vaccines, and not the sole purchaser. We need to have the element of the marketplace in it. If we say the federal government will take care of this, it will discourage the private sector."
Toward that end, PhRMA's Tauzin is floating an idea to get consumers more involved. He proposes that people buy insurance for various vaccines, even ones that are not yet on the market. Insurance companies would use those premiums to invest in vaccine manufacturers' research and production. The insured consumer would then win a place on a list if one of the vaccines goes on the market.
With avian flu looming, the federal government is stepping in with contracts to buy pandemic vaccine. But whether it's government, insurance companies, or individuals writing the checks, Orenstein emphasizes, the price is getting higher. The cost of vaccines is the main issue, he says.
Ultimately, many Americans believe that the federal government should take the responsibility to ensure an adequate supply of flu vaccine, according to a survey by the Harvard School of Public Health during the flu vaccine shortage of 2004. Nearly half (45 percent) of respondents said that the federal government's public health agencies should be primarily responsible; 26 percent put the onus on vaccine manufacturers and pharmaceutical companies.
Public health officials are relieved that the issue of vaccine capacity has finally grabbed the spotlight. But even with Washington working feverishly, it's impossible to say whether policy makers and the private sector can beat the arrival of the next pandemic.
By Marilyn Werber Serafini, National Journal
WASHINGTON - In 2004, a 16-month-old boy died of pneumonia at the Children's Hospital of Philadelphia. He shouldn't have passed away - and therein lies a cautionary tale about the threat of avian flu. The toddler was infected by a bacteria called pneumococcus. Before 2000, pneumococcus was often a death sentence. Worldwide, more than 1 million children died every year, according to the World Health Organization. The situation changed dramatically in 2000, when the pharmaceutical giant Wyeth brought to market a revolutionary vaccine that guarded against pneumococcus in young children. Suddenly, parents and doctors with access to the vaccine no longer had to fear pneumococcus as a killer (see GSN, Feb. 22).
But in 2004 the vaccine was in short supply, and the Philadelphia toddler received only two of the recommended four doses. "The pneumococcus isolated from the child's blood was a type that could have been prevented by the vaccine," Paul Offit, chief of the division of infectious diseases at Children's Hospital, wrote in a 2005 book called "The Cutter Incident," named after a vaccine manufacturer that was sued in the 1950s over its polio vaccine. If the vaccine were made by several companies, he wrote, "children wouldn't have to rely on the production efficiency of one company to save their lives."
To the dismay of public health officials, vaccine shortages have become routine in the United States. Most vaccines now come from only one producer, and that leaves no margin of error when things go wrong in the production process - and they sometimes do. Between 1998 and 2004, nine of the 12 vaccines routinely given to children were in short supply at one time or another. The Centers for Disease Control and Prevention reported shortages of vaccines for chickenpox, diphtheria, flu, measles, mumps, pertussis, rubella (German measles), pneumococcus, and tetanus.
Over the past three decades, the vaccine infrastructure in the United States has steadily crumbled, and as Americans learn more about the deadly avian flu, concern about vaccine availability has escalated to fear, and even panic. The companies that would make vaccines for pandemic flu are the same ones that make seasonal flu vaccines, and only one of those suppliers - Sanofi-Pasteur, the vaccine division of Sanofi-Aventis - makes it entirely in the United States.
"We have very limited manufacturing capacity right now as a world or as a nation" to make flu vaccine, Bruce Gellin, director of the national vaccine program office at the Health and Human Services Department, told National Journal. And many experts worry that in the event of a pandemic, flu vaccine makers in other countries would be forced to keep their supplies at home.
In the 1950s, 26 companies made vaccines in the United States. By 2004, only four - GlaxoSmithKline, Sanofi-Aventis, Merck, and Wyeth - remained. The winter of 2000-01 was the last flu season in which the United States had more than one domestic flu vaccine supplier, and after that it didn't take long for demand to outstrip supply. The first shortage came the following year, when only Sanofi-Pasteur was making vaccines in the United States. The situation got worse in 2003-04, when influenza hit early and media reports of children dying sent both the young and the old scrambling to vaccine clinics. Sanofi made 48 million doses that season, and a small British company - Liverpool-based Chiron - produced 35 million doses for the U.S.
market. Clinics had to turn away many vaccine-seekers. The next year proved even worse, when Chiron had to scrap its entire lot because of bacterial contamination.
The shortages are "a warning signal, a harbinger," Offit said. If a flu pandemic struck today, Sanofi could make a vaccine, Gellin said, but only enough for about 15 million to 20 million of America's 300 million people. "If there's a pandemic, who else would make [the vaccine] but us?" asked Wayne Pisano, Sanofi's senior vice president of commercial operations.
Offit recalled how scientist Maurice Hilleman softened the blow of the Hong Kong flu pandemic in the 1950s. Hilleman discovered the new flu strain and quickly sent the virus to six U.S. vaccine makers, who produced a total of 40 million doses in five months. But today, Offit said, "if you picked up the phone you would get zero U.S. manufacturers. Everyone thinks this is the modern age - ventilators, ICUs. It doesn't matter. Prevention is the only way you can stop this."
As alarm about avian flu intensifies, lawmakers are starting to pay attention. "This has caused a teachable moment where policy-makers begin to listen - Democrats and Republicans," said Senate Majority Leader Bill Frist (R-Tenn.) In December, Frist, who is a heart-lung transplant surgeon, pushed a bill through Congress to grant vaccine makers protection from liability in a pandemic. He plans to advance two more pieces of legislation this year aimed at spurring vaccine producers to step up development and production. "We need to shorten the bug-to-drug interval ... because it's the difference between life and death," Frist said. "We are going to see [avian flu] in our birds here sometime in the next year. ... There's an immediate crisis coming at us right now."
But legislating this year won't be easy. Even Frist's liability protections became law over the opposition of a number of lawmakers. Consumer groups complained that the government is bowing to the drug industry and leaving little legal remedy for people who might be injured by vaccines.
In October, President George W. Bush made a personal plea to drug industry leaders at the White House, urging them to make more vaccines. The Health and Human Services Department has approved a handful of grants to help get them started, and drugmakers are beginning to respond. Sanofi is building a new plant and expanding capacity; GlaxoSmithKline has purchased a flu vaccine facility in Quebec that would supply the United States. But there's a long way to go, and company executives say that in addition to liability protections, they need antitrust exemptions in an emergency, so that they can talk, plan, and even produce together. They also want some guarantee
that their vaccines will be purchased, even if they are never needed.
Economics 101
Everything comes down to money, and vaccine production hasn't traditionally been a lucrative business. Why build an expensive plant to make a vaccine that requires only one or two doses, or a vaccine for a pandemic flu or bioterrorism-related event that may never materialize? Pharmaceutical companies would rather invest in a drug that people take every day for a chronic condition such as high cholesterol.
The cost of researching and developing a vaccine can be high. Because scientists must grow the viruses in live eggs or cells, ensuring consistency is difficult. Regulatory oversight is rigorous. But the biggest deterrent to vaccine production, according to pharmaceutical company executives, is the threat of multimillion-dollar lawsuits.
"The vaccine industry today is [worth] $6.7 billion, approximately, and lawsuits out there add up. Damages being sought exceed $30 billion, total," said Sanofi's Pisano, citing a compilation of drug manufacturers' annual reports. Drugmakers say that the new law championed by Frist only partially fixes the problem. The liability shield operates only when the HHS secretary declares a pandemic or the threat of one. The legislation doesn't address, for example, whether the liability protection would cover seasonal flu vaccines.
Liability wasn't always a big concern. Drugmakers were generally willing to produce vaccines until the first polio vaccine generated expensive lawsuits. To combat a virus that was paralyzing more than 21,000 Americans a year, five companies introduced vaccines for polio in 1955. But some of the first vaccines produced by Cutter Laboratories infected 220,000 people with polio; 164 were permanently paralyzed, and 10 died.
In 1956, Josephine and Robert Gottsdanker sued Cutter for injuring their daughter Anne, who became paralyzed after taking a Cutter vaccine. In 1958, a jury, acknowledging that the company had not acted negligently, nevertheless found Cutter liable. "The Gottsdanker verdict meant that if pharmaceutical companies made a product according to industry standards, using the best science that was available, and found months or years after its sale that it caused harm -- a harm not predictable -- they were liable for the damage," Offit wrote in "The Cutter Incident," which traces today's vaccine crisis back to the polio epidemic.
Legal experts at the time predicted that the precedent of "liability without fault" would discourage drug companies from taking on the risk of developing new vaccines. Cutter was faced with dozens of suits but managed to pay off the $3 million in liability through insurance and loans. A company called Lederle, though, didn't fare as well. Lederle's vaccine for pertussis, or whooping cough, became the target of controversy in the 1970s when a British researcher charged that the vaccine caused swelling of the spinal cord. The claim was never substantiated, but by 1987, plaintiffs had filed 800 lawsuits totaling more than $21 million against the manufacturer. A jury in the United States awarded $1.13 million to Kevin Toner, who became paralyzed from the waist down after receiving the vaccine in 1979 at the age of 3 months. The award equaled more than half of the $2 million in gross sales from pertussis vaccines in the United States.
While awards were growing larger, federal regulation was getting tougher, making it even more expensive for vaccine makers to stay in business. "Vaccines are arguably held to a higher standard of safety than any other product given to children, including antibiotics and cough-and-cold preparations," Offit wrote. "Vaccines undergo thousands of tests to make sure that they contain exactly what they are said to contain; they are tested in tens of thousands of people before they are licensed, to make sure that they are safe and that they work; and they are watched very carefully after licensure - when they are given to millions of people - to make sure
that they don't cause any rare side effects."
After pharmaceutical companies began abandoning vaccines, Congress responded in 1986 with the National Vaccine Injury Compensation Program: If a panel of experts found that a child had been injured by a vaccine recommended by the CDC, the government - not the producer - would compensate the family for medical expenses and damages.
The law improved the liability situation for makers of children's vaccines, but drug companies say that it still doesn't give them all the protection they need. They add that the program also caused another problem when it authorized the government to purchase vaccines for low-income children. The government established low prices for staple vaccines years ago, and drugmakers complain that no system exists to adjust the prices for inflation. As a result, doses of vaccines that were introduced years ago cost $10 to $20, while newer vaccines are priced from $50 to $70. The government's Vaccines for Children Program purchases about half of all vaccines recommended for kids, including flu vaccines.
Drugmaker Pfizer is a "poster child for the unintended consequences of vaccine policy in this country," wrote Pfizer Chairman Hank McKinnell in his 2005 book "A Call to Action." Pfizer is a top producer of vaccines for animals, but it stopped making vaccines for humans. "The difference between the two sectors could not be starker. Animals don't file lawsuits, and there is no single-source buyer for animal health vaccines," McKinnell said.
"No industry is likely to invest in complicated research projects if it has little reason to think it will recoup its costs, much less show a return," McKinnell maintained. Warner Lambert (now Pfizer) sold its flu vaccine business in 1998 to King Pharmaceuticals, which ceased production because bringing its plant into federal compliance was too costly, according to an article by Alexandra Minna Stern and Howard Markel in the May/June 2005 issue of the journal Health Affairs.
People are less willing to accept risks with vaccines than with other medications, according to McKinnell. "Because vaccines are given to large numbers of healthy people," he wrote, "safety and liability concerns can seem greater than with drugs that are given to sick people, who are willing to bear some risk of side effects to get better."
Billy Tauzin, a former Republican House member from Louisiana who is now president of the Pharmaceutical Research and Manufacturers of America, took a risky drug a couple of years ago when he was facing an aggressive cancer. "I had to decide with my oncologist to take a medicine that could have killed me. ... We judged the risk-benefit, and it was a good one, and I'm alive. With vaccines, you're basically giving this medicine to a healthy patient. And you know in advance that a certain percentage of those patients are going to have a bad reaction," he said.
"Everyone needs to think about how awkward an economic model we're talking about here," Tauzin added. "We're talking about products we hope people will never need and people will never buy. And spending research-and-development money on these new products, and building manufacturing facilities for them, and maintaining those factories ... having to revise your molecules to keep up with a mutating virus. And all that in an economic model that says you hope people never have to buy" the vaccine.
First Steps
To jump-start vaccine production, policy-makers are focusing on three areas: limiting drugmakers' burdens of legal liability; increasing government investment; and easing antitrust restrictions in an emergency. The struggle will be to find the right balance of helping the drug industry while protecting consumers.
The Frist-backed bill that became law in December shields vaccine makers from liability if the secretary of Health and Human Services declares a pandemic or epidemic, or certifies a risk of pandemic or epidemic. The shield would apply to all medical devices, drugs, or vaccines used to prevent, treat, or cure the illness or its side effects.
Without liability protections, Sanofi would take the usual 10 years or so to run through full development and extensive clinical trials to ensure the safety of a pandemic vaccine - and that would be too late, acknowledged Pisano. But with the protections, "for something like a pandemic, we would [make a vaccine] in less than two years. We wouldn't go through all the rigorous testing we would like to do."
Some members of Congress and consumer advocates say that the Frist bill, which was attached to a Defense Department appropriations bill as Congress rushed to adjourn for the year, went too far. Opponents may try to revisit the issue on Capitol Hill. "It's outrageous. It was special-interest legislation put in in the dead of night," Senator Edward Kennedy (D-Mass.) told National Journal. Representative Henry Waxman (D-Calif.), who sits on the Energy and Commerce Committee's Health Subcommittee, complained, "Industry greed is running rampant. ... A lot of people should be worried about it."
Jillian Aldebron, legislative counsel for Public Citizen's Congress Watch, complains that the law leaves little recourse for injured vaccine takers. "If you're taking Tylenol for a headache that you get from avian flu," for example, "you cannot sue if you got Tylenol from a defective batch. Moreover, she said, while the law has a provision to compensate injured people, it is meaningless because Congress hasn't funded it. "They can point to it and say they provided compensation, but you can't sue anyone. ... Imagine talking about an avian-flu pandemic - you know things will be rushed out to market under relaxed [Food and Drug Administration] approval
standards," she said. "How do we know these things will be safe? Killing people in the name of saving them from another deadly disease hardly seems rational."
The liability shield is also unnecessary, Aldebron argues. She contends that HHS already had the authority to indemnify companies so that the federal government would shoulder the responsibility for injuries. And even before the Frist bill passed, she said, Sanofi had signed a $100 million contract and Chiron had signed a $65 million contract with HHS to deliver more flu vaccine.
Frist said his next step will be to bring up legislation that Senator Richard Burr (R-N.C.) is preparing. Burr's bill would create a Biomedical Advanced Research and Development Agency within HHS to coordinate research priorities. BARDA would get around what Burr calls the "valley of death." He explains that after a pharmaceutical company completes the basic research into a vaccine, oftentimes it cannot afford to take the next steps: advanced research and expensive clinical trials. Burr proposes moving $1 billion from the federal government's Bioshield program to BARDA. Bush signed Bioshield into law in 2004 to authorize the Homeland Security and Health and Human Services departments to purchase medicines and vaccines to guard against chemical, biological, radiological, or nuclear attacks. Bioshield does not cover a naturally occurring pandemic.
Burr's bill has stirred a debate about whether Bioshield money should be invested at the "back end," to buy products already on the market, or be used to encourage promising research into new medicines and vaccines. The Bioshield Act permits HHS to use $500 million for advanced research, but, said a Burr aide, "HHS is reluctant to do so because it takes away from their procurement dollars. If they use [their budget] for advanced development, they can buy less stuff. But you pay for it either way.
"Procurement includes basic research and everything else that goes into it. The point of paying for it now is to ensure no delays, to expedite the development of this product," the aide argued. But Burr acknowledged that persuading his colleagues to support using Bioshield money for advanced pharmaceutical research instead of procurement will be a hard sell.
Separate from Bioshield, the Bush administration already is promoting advanced research on vaccines. The Burr aide reported that he was told by National Institutes of Health staff that one-third of the $4.3 billion budget of the National Institute of Allergy and Infectious Diseases goes to advanced research. And Bush's fiscal 2007 budget request asked Congress to cut spending for all NIH institutes except NIAID, and to give the NIH director $160 billion to spend on advanced research. This shows that Bush "understands the need," Burr said. But the senator argues that NIH is the
wrong entity to guide advanced research and that it should return to its traditional mission of basic research.
After Frist moves Burr's legislation forward, the majority leader plans to bring back a second Bioshield bill to address other issues. In its current form, the legislation would give lengthier patents to pharmaceuticals and vaccines that are considered countermeasures to terrorism-related illnesses. It would establish a commission on countermeasure and vaccine regulation, and would allow tax credits for vaccine and countermeasure manufacturing and research. The legislation also would ease antitrust rules for companies working on countermeasures, so that companies could join efforts to quickly develop and produce countermeasures in an emergency. Meetings between the Health and Human Services secretary and entities developing priority countermeasures would be exempt from antitrust law.
Who's Paying?
Even while Congress this year tries to prod drug companies to produce vaccines, a longer-term problem is escalating. Whether drugmakers are entering the vaccine business for the first time or expanding existing capacity, new vaccines will cost more to produce, and all parties are already showing a reluctance to pay.
"The concern is, at some time this will break the bank," said Walter Orenstein, director of Emory University's program for vaccine policy and development. He asserts that policy-makers need to begin grappling with the question of who should foot the bill. "The big issue to me that needs to be solved is financing," he said. Over the last 10 years, the CDC has greatly expanded the number of vaccines it recommends for children, including varicella, pneumococcal, flu, adolescent meningococcal, pertussis, hepatitis A, and rotavirus vaccines. A human papillomavirus vaccine for adolescents is expected shortly.
The federal government's Vaccines for Children Program spent $500 million in 2000 and $1 billion in 2002, according to a 2004 report, "Financing Vaccines in the 21st Century," from the National Academies' Institute of Medicine. Despite the benefit of vaccines, Bush in his fiscal 2007 budget proposal recommended a decrease in funding for one subsidy program, Orenstein complained.
The Institute of Medicine's report also addresses the reality that insurers are spotty in their vaccine coverage. The institute recommends a new mandate for all public and private insurers to cover vaccines, and it proposes that the federal government reimburse insurers for the cost of purchasing vaccines and provide vouchers so that uninsured people could be vaccinated.
"It's going to have to be a partnering," Frist countered. "I would have the federal government be a partner in the purchase of vaccines, and not the sole purchaser. We need to have the element of the marketplace in it. If we say the federal government will take care of this, it will discourage the private sector."
Toward that end, PhRMA's Tauzin is floating an idea to get consumers more involved. He proposes that people buy insurance for various vaccines, even ones that are not yet on the market. Insurance companies would use those premiums to invest in vaccine manufacturers' research and production. The insured consumer would then win a place on a list if one of the vaccines goes on the market.
With avian flu looming, the federal government is stepping in with contracts to buy pandemic vaccine. But whether it's government, insurance companies, or individuals writing the checks, Orenstein emphasizes, the price is getting higher. The cost of vaccines is the main issue, he says.
Ultimately, many Americans believe that the federal government should take the responsibility to ensure an adequate supply of flu vaccine, according to a survey by the Harvard School of Public Health during the flu vaccine shortage of 2004. Nearly half (45 percent) of respondents said that the federal government's public health agencies should be primarily responsible; 26 percent put the onus on vaccine manufacturers and pharmaceutical companies.
Public health officials are relieved that the issue of vaccine capacity has finally grabbed the spotlight. But even with Washington working feverishly, it's impossible to say whether policy makers and the private sector can beat the arrival of the next pandemic.
