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Wyeth quits flu manufacturing?
http://www.chron.com/cs/CDA/ssistory.mpl/front/2863594
Oct. 24, 2004, 12:57AM
Shortage illustrates precarious balance of flu vaccine system
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Suppliers fled the unpredictable market, saying it's too difficult to profit
By TONY FREEMANTLE
Copyright 2004 Houston Chronicle
After about 20 years in the difficult business of producing flu vaccines, the
decision by Wyeth Pharmaceuticals to stop doing so boiled down to quite
simple math. For the 2002 flu season, the company made and delivered 21
million doses to the U.S. market. But it was a mild season, and relatively
few people wanted shots. Wyeth ended up throwing away 7 million doses, losing
$30 million in the process.
That capped a string of five years in which the pharmaceutical giant lost $50
million on flu vaccines. The decision to bail out of the business altogether
came quickly and easily. Wyeth's departure from the market in April was
another blow to an already fragile flu vaccine supply system in the United
States. It left only two companies with the task of making the 100 million or
so doses needed to fight an illness that on average kills 36,000 people each
year in this country and sends 200,000 more to the hospital.
The supply system was further shaken earlier this month when British
regulators abruptly suspended the license of one of the surviving
manufacturers, San Francisco's Chiron Corp., because of contamination
at its plant in Liverpool, England.
In one fell swoop, the supply of vaccines for this year's flu season was cut
in half, leaving public health officials scrambling to redistribute the
medications to those most at risk and raising the troubling question of why
the richest nation on Earth is not able to guarantee an adequate supply
of such a vital commodity.
Wyeth's unhappy experience in the flu vaccine market may provide at least
some of the answers. Financially, it simply wasn't worth it. "Wyeth found
itself in a situation where we were producing a vaccine that in the end we
were unable to sell," said Peter Paradiso, Wyeth's vice president for
scientific affairs. "The difficulties with vaccines in general are they are
biological products. There's not a lot of margin, there's a lot of
regulation, and there are issues of litigation."
The number of U.S. companies making vaccines against a wide range of
diseases, including influenza, has been steadily declining for at least three
decades, and shortages of one type or another are becoming increasingly
common. In the 1970s, at least 25 companies were in the vaccine business;
today only six companies supply the country, and one company is the sole
provider of 21 different vaccines, according to the National Network for
Immunization Information.
Part of the reason, again, is simple economics. Developing a single vaccine
for the market can cost a company as much as $350 million before a single
dose is sold. Globally, the vaccine market is worth about $6 billion, while
the market value of a single prescription drug, like Lipitor, can be $10
billion, said Gary Poland, director of the vaccine research group at the Mayo
Clinic in Rochester, Minn., and an adviser to the Centers for Disease Control
and Prevention in Atlanta.
'No way' to profit
"The profit margin is just so slim," Poland said. "There is no way they
(manufacturers) can sell enough to make a return on their investment."
Because of the mutability of the virus that causes it, vaccines for the flu
stand apart from other vaccines in that they have to be manufactured from
scratch each season based on the best guess of public health officials as to
what strain may be lurking around. Surpluses of the flu vaccine cannot be
stockpiled, as with other vaccines, meaning that the unused doses each season
are returned to the manufacturers and destroyed.
In addition, using technology that is at least 50 years old, it takes up
to eight months to produce each season's vaccine, rendering suppliers unable
to respond to fluctuations in demand or to unforeseen disruptions in supply.
U.S. public health officials estimated about 100 million doses would be
needed for this year's flu season. Chiron was to supply 46 million to 48
million doses, and the French pharmaceutical company Aventis Pasteur was to
produce 54 million.
Changing demands
But fluctuations in demand are almost as much of a problem and are one of the
main reasons why in some years there are surpluses and in others shortages.
The CDC recommends vaccination for the at-risk population only, which
includes, among others, very young children and people older than 65. Experts
estimate that on average only about 50 percent of the over-65 population
takes heed.
They also believe that flu vaccines are "undervalued" by the general
population, which is not included in the CDC's recommendation. "The problem
is we don't value the vaccine enough," said Paul Offit, an immunology expert
at Children's Hospital in Philadelphia who is writing a book about the
vaccine industry. "It's somewhat of a Beanie Baby phenomenon. People get
excited about the flu vaccine when they don't think there is going to be
enough of it. If there was a universal flu vaccine recommendation, and we had
sufficient infrastructure to deliver it, I think more companies would make
it." Universal recommendation might go some way toward increasing and
stabilizing the market, experts agreed. But it won't solve the problem
entirely.
New technology
One solution, though not a short-term one, could be the development of new
technologies to manufacture the vaccines, which would increase flexibility
and cut the time it now takes to make them. Researchers are looking at two
possible approaches: growing the vaccines in mammalian cells instead of eggs
and genetically engineering flu strains.
"Government is at least starting to encourage new technology," said Paul
Glezen, a professor of molecular virology and microbiology at Baylor College
of Medicine and an epidemiologist at the college's Influenza Research Center.
"That would provide a lot more flexibility. But we are not anywhere near
tooling up for production."
In the interim, Glezen said, the Food and Drug Administration should
streamline the process of licensing more production facilities to make the
flu vaccination business more attractive to drug companies.
Apart from having to toss out millions of dollars worth of unused vaccine
doses, Wyeth's decision to bail out of the market was in part prompted by the
fact that to update its 120-year-old plant in Marietta, Pa., and comply with
FDA regulations would have cost in the order of $300 million.
Before 1986, one of the main reasons manufacturers left the market was the
question of liability. But Congress then created the National Vaccine Injury
Compensation Program, a no-fault system that compensates people for injuries
or other conditions caused by vaccines the government recommends.
Government's remedies
The current shortages of flu and other vaccines are not liability related, in
the opinion of the National Vaccine Advisory Committee. There is, however,
now some movement in the Bush administration to
strengthen the compensation program.
Health and Human Services Secretary Tommy Thompson has also floated the idea
of a "guaranteed market" for flu vaccines so manufacturers do not have to
throw out unused doses at their own expense. Whether this would be enough to
get companies like Wyeth back into the flu vaccine business in the future is
far from certain, but for the present the company has no interest.
tony.freemantle@chron.com
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