With Few Suppliers of Flu Shots, Shortage Was Long in Making

The New York Times
October 17, 2004

With Few Suppliers of Flu Shots, Shortage Was Long in Making
By DENISE GRADY

This article was reported by Denise Grady, Lizette Alvarez, Gardiner Harris and Andrew Pollack and was written by Ms. Grady.

Scene by disheartening scene, the spectacle of a severe shortage of flu vaccine is unfolding around the country.

Last week, elderly and chronically ill people waited in line for hours to get flu shots; some were turned away. One died, after hitting her head when she passed out or fell while waiting. Price gougers demanded $800 for $60 vials of vaccine. States threatened to fine or jail doctors and nurses who gave shots to anyone not in the high-risk groups. Congress, the Justice Department and the Securities and Exchange Commission began investigations into how the nation has been left, on the brink of flu season, with half the flu vaccine it needs.

The shortage caught many Americans by surprise, but it followed decades of warnings from health experts who said the nation's system for vaccine supply and distribution was growing increasingly fragile.

"We're in the middle of a crisis that could have been averted,'' said Dr. Irwin Redlener, associate dean of the Mailman School of Public Health at Columbia University and director of its national center for disaster preparedness.

In particular, public health experts have long cautioned against the country's dependence on a few vaccine makers, and yet this has become standard practice. There are now only two major manufacturers for the nation's supply of flu vaccine, and at least a half-dozen other vaccines are made by single suppliers. Britain, by contrast, has spread its order for flu vaccines among five suppliers, precisely to avoid the kind of predicament America now faces.

In recent years there have been many significant disruptions of vaccine supplies. Between November 2000 and May 2003, there were shortages of 8 of the 11 vaccines for childhood diseases in the United States, including those for tetanus, diphtheria, whooping cough, measles, mumps and chicken pox. There have been flu vaccine shortages or miscues for four consecutive years.

In recent decades, many drug companies in the United States abandoned the manufacture of vaccines, saying that they were expensive to make, underpriced and not profitable enough. Flu vaccine can be a particular gamble, because the demand for it varies from year to year and companies throw away what they do not sell because a new vaccine must be made each year to deal with changing strains of the virus. Some companies dropped out because of lawsuits, and others because they determined that it would not pay to retool aging vaccine plants to meet regulatory standards.

The government did little to stop companies from quitting the business, and in some cases may have created policies that made matters worse. A report last year by the Institute of Medicine, a unit of the National Academy of Sciences, noted that 30 years ago, 25 companies made vaccines for the United States, whereas today there are 5.

Dr. Jesse Goodman, director of the branch of the Food and Drug Administration that oversees vaccines, acknowledged that it was risky to have only one or two suppliers for products so essential for public health. "The more quality, licensed manufacturers we have, the more protected the system is if a problem occurs with one of them," he said.

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.

When companies began to leave the market, Dr. Redlener said, government health officials should have tried to find ways to keep them in it, in order to avoid shortages and dependence on too few suppliers.

Bill Pierce, a spokesman for Health and Human Services Secretary Tommy G. Thompson, acknowledged that vaccine supplies in the United States were vulnerable to disruptions. But he blamed years of neglect by previous administrations.

Mr. Thompson has made fixing the system a priority, Mr. Pierce said. The administration has increased financing for handling the flu, including considerably more money for research into more reliable manufacturing techniques for vaccines, and has also explored measures to lure more manufacturers into making flu vaccine, he said.

The government cannot force companies to make vaccines, however. Legally, of course, manufacturers are free to quit the business. But, Dr. Redlener said, "When there is a vital public health issue at stake here like protection against the flu, that's not good enough." The government, he added, "had an ethical obligation to work with manufacturers."

A Shortage and an Apology

Influenza can be dangerous. It kills 36,000 people a year in the United States and puts about 200,000 in the hospital. The very old, the very young and people with chronic illnesses are particularly likely to become severely ill from the flu, and in recent years health officials have recommended wider use of the vaccine. The message seems to be reaching the public: demand for the vaccine has grown greatly in the past decade, to more than 85 million doses a year in 2003 from around 20 million in the early 90's.Just as people had begun to appreciate the value of flu shots, the worst vaccine shortage yet struck. It was announced on Oct. 5, when bacterial contamination led British regulators to suspend the license of a vaccine plant in Liverpool on which the United States was depending for 46 million to 48 million doses, nearly half of America's supply. The plant is owned by Chiron, an American company.

A second supplier, Aventis Pasteur, with a plant in Pennsylvania, is providing about 55 million doses, and a third, Medimmune, 2 million doses of vaccine in the form of a nasal spray - but that still leaves the nation with only about half the vaccine it needs.

At a news conference on Tuesday, the director of the Centers for Disease Control and Prevention, Dr. Julie L. Gerberding, apologized for the vaccine shortage, but had little to offer the public beyond a plea to people who get sick to stay home and cover their mouths when they cough.

"We're sorry for the people who need flu vaccine and may not be able to get it this year," Dr. Gerberding said. "That's disappointing for all of us."

Regulatory Obstacles

The problems this year are not a surprise. Indeed, on Sept. 28, exactly one week before Chiron's license was suspended, the Government Accountability Office offered a prescient warning of potential disruptions in the flu vaccine supply.

With few suppliers, the report said, if one's production was cut off there would be great imbalances, with some providers unable to vaccinate even those at highest risk and others able to hold mass immunization clinics even for people at low risk.

The report said that even though the disease control centers had begun monitoring the projected supply of flu vaccine more aggressively since the shortages of 2000, "there is 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."

One reason companies have given up making vaccine, industry officials and other experts say. is the difficulty in meeting regulations for quality control and safety. A change in the approach to regulating vaccine production might also have contributed to problems in meeting the standards.

In the 1990's, contamination of blood products by the AIDS virus and other incidents led to criticism of the agency's inspections of so-called biologic products, which are made from living cells. In the late 90's the agency tightened its inspections of factories making biologics.

The new system, which took effect for vaccines in 1999, led to more compliance violations and contributed to the spate of shortages in pediatric vaccines that began in 2000, according to a 2002 report by the General Accounting Office, now known as the Government Accountability Office.

Older factories have had particular trouble meeting standards, experts say.

"Over time the barriers to make vaccines and stay in this business have gone up, but the prices for old vaccines haven't gone up that much," said J. Leighton Read, the founder of Aviron, the company that developed the nasal spray flu vaccine.

The Warner Lambert factory in Rochester, Mich., had made Fluogen flu vaccine for at least 20 years, but had increasing problems complying with government rules in the 90's. In 1998, the company decided to quit the business and sold the factory to King Pharmaceuticals in Bristol, Tenn. But the F.D.A. continued to find violations, including some it considered so serious that it shut down the plant twice in 2000. After the second time, King said it would stop making Fluogen rather than commit more money to trying to bring the plant into compliance.

King did not return calls seeking comment.

Dr. Peter Paradiso, vice president for medical affairs at Wyeth, said his company ended production of its FluShield vaccine in 2002 because the company sold only half the 20 million doses that it manufactured every year. It was forced to throw out the remaining 10 million doses, he said.

Worse, he said, the new federal regulations would have required the company to spend huge sums upgrading its facilities. With little or no profit projected, the company quit making flu vaccine.

But Dr. Goodman of the F.D.A. defended its policies, saying that they were the "gold standard" for safety worldwide and that if companies could not measure up or chose not to, it might be better for them to pull out.

What Happened at Chiron

Chiron acquired the Liverpool factory in 2003 through its purchase of PowderJect Pharmaceuticals, a British company, for $878 million. Chiron, which sold vaccines mainly overseas, saw the acquisition as a chance to vastly expand its vaccine business, particularly in the American market.

Howard Pien, the chief executive of Chiron, said that with two manufacturers having dropped out of the American flu vaccine business, the company saw a need for more vaccines in the United States and a good business opportunity.

But the factory was aging and had been through a series of owners, and it had also had some quality control problems. Still, Chiron rapidly expanded production there. It was planning to ship more than 50 million doses of flu vaccine to the United States this year, compared with 26 million in 2002, the year before it bought the factory.

But Chiron said it would invest $100 million to upgrade the factory.

In June 2003, just as Chiron was buying the factory, an F.D.A. inspection found quality control problems similar to what the British government found this year: bacterial contamination in vaccine in the early production stages but not in the final product after sterilization.

F.D.A. officials have said the problems were corrected to their satisfaction, and they let the plant continue to operate. But one question likely to be raised by Congressional investigators is why the British found problems so soon after the agency had deemed them resolved.

Chiron announced on Aug. 26 that during routine testing it had found bacterial contamination in a small number of lots of flu vaccine that should have been sterile, a more serious contamination than what the agency had found a year earlier. It said it would delay shipping vaccine until early October and cut its supply forecast from about 50 million doses to between 46 and 48 million. Both the F.D.A. and its British counterpart, the Medicines and Healthcare Products Regulatory Agency, were informed.

Chiron began its own investigation and also began holding weekly conference calls with officials at the F.D.A. and the disease control centers to report on its progress.

In written testimony to the House Committee on Government Reform on Oct. 8, Mr. Pien said Chiron had completed its internal investigation on Sept. 27. The results, he said, confirmed that the contamination was limited to the initial lots identified. Indeed, on Sept. 28, a confident Mr. Pien told a Senate committee that Chiron expected to start shipping the vaccine in early October.

But British regulators visited the factory again and on Oct. 5 suspended its license, saying it was not being operated in accordance with regulations on good manufacturing practice. Only after the suspension was the nature of the contamination revealed: it was a type of bacteria called serratia, which, though found in the environment and usually not harmful there, can cause illness if injected into the body, especially in a frail elderly person or someone chronically ill.

The bombshell reached Chiron's California headquarters at 3 a.m. Company executives than called and awoke officials in Washington, who have said they were also shocked.

Chiron has said it is now under investigation by federal prosecutors in New York and by the Securities and Exchange Commission. The investigations are apparently concerned with whether the company misled investors and federal health authorities about the conditions at its factory. The company, while saying it would cooperate with the investigations, has denied any deception.

"Chiron did not at any time mislead public health stakeholders or the public," Mr. Pien said in written testimony to the House. He added, "The results of Chiron's internal investigations confirmed our belief that our product was safe."

But inspectors from both Britain and the F.D.A. disagreed, saying they could not be confident that Chiron had identified all the sources of contamination. On Friday, health officials in the United States said that none of the vaccine in the plant could be salvaged.

The remaining question is whether Chiron can repair its problems in time to prepare sterile vaccine for next year's flu season. The company has said it expects to do so.

Dr. Goodman said "a lot of hard work on their part" would be needed. But, he added, "I think they are serious about this business, and from everything I've heard I expect they will be eager and effective about addressing these things."

But he and other government officials said they were also looking for other sources of flu vaccine for next year.

Solutions

Many experts say one way to avert vaccine shortages is to charge more for vaccines, so that more companies will want to produce them. To some extent, that was already starting to happen. Aventis Pasteur, now the major source of flu vaccine in the United States this year, noted that prices for flu vaccines have been rising steadily in recent years and are likely to be higher next year. In 1996, they sold for $1.80 a dose. The list price this year is $8.50.

Several companies, including GlaxoSmithKline and ID Biomedical, a Canadian company, have said they hope to begin selling flu vaccines in the United States soon. Dr. Goodman said the F.D.A. was encouraging some foreign manufacturers to apply for licensing here.

Dr. Robert B. Belshe, director of the center for vaccine development at Saint Louis University, said many experts in infectious diseases and vaccination believe that ultimately, the only way to control influenza will be to vaccinate nearly all school-age children every year.

If the medical profession does make that recommendation, and the public follows it, there will be a greater need than ever for vaccines - and possibly a more stable market to tempt manufacturers.

Government health officials said in interviews that they would propose other ways to avert vaccine shortages to Congress within weeks. Among the possible initiatives, said Dr. Anthony Fauci, director of the National Institute for Allergy and Infectious Diseases, are measures to guarantee that the government will buy a certain amount of vaccine each year, buy larger vaccine stockpiles and increase research into different ways to make the vaccines.

The disease control centers this year for the first time bought 4.5 million doses of flu vaccine for $40 million as an emergency reserve. It was not nearly enough, acknowledged Dr. Bruce Gellin, director of the National Vaccine Program Office. The government may buy a bigger reserve next year, he said.

But flu reserves can be expensive. Unlike reserves for other vaccines, which can be held for years and refreshed with new product, a flu vaccine reserve must be used or thrown away and replaced every year.

Dr. Fauci said the Bush administration had increased financing for research and other efforts to fight flu to $283 million this year, from $47 million in fiscal year 2002. Among the initiatives is a $60 million effort to develop new ways to manufacture flu vaccines, which are currently made in a laborious process that requires the use of hundreds of thousands of eggs.

But those sums are small compared with what the nation plans to spend on vaccines against diseases that the government fears terrorists might use. William Schaffner, chairman of the department of preventive medicine at Vanderbilt Medical School in Nashville, noted that the Bush administration last year promised to spend $5.6 billion to help develop vaccines for anthrax and other biological agents.

"They're creating a very expensive program against diseases that don't exist anywhere in the world," Dr. Schaffner said. "What we need is an adult immunization program for diseases that kill tens of thousands every year."