U.S. Policy Regarding Pandemic-Influenza Vaccines
References
Public health officials are concerned that a particular strain of influenza, known as H5N1, or "avian flu," which has caused widespread infection of poultry flocks in Asia, Europe, the Near East, and Africa, might become easily transmissible among humans, causing illness and death at rates unseen at least since the early 20th century. In the "Spanish flu" pandemic of 1918 and 1919, more than 500,000 people died in the United States and some 50 million perished worldwide. By contrast, in a typical year, seasonal influenza causes about 36,000 deaths in the United States. Public health officials worry that an influenza pandemic today could cause some 2 million deaths in the United States. It also could lead to substantial adverse economic consequences both here and abroad (CBO 2005, 2006a).
Against the prospect of such an event, the Department of Health and Human Services (HHS) has developed a plan to prepare for and combat an influenza pandemic and has budgeted about $7.9 billion since 2004 for influenza preparedness activities (HHS 2005b). Most of that money—about $5.6 billion—was provided through supplemental appropriation bills in 2006 in response to the HHS plan. About $3.2 billion of the supplemental funds, along with some additional funds that are part of HHS’s annual appropriation, is being spent for vaccine-related activities, reflecting the strong consensus among public health officials that vaccination is the best tool for reducing the consequences—and the costs—of an influenza pandemic.1
HHS planners initially confronted two problems: inadequate capacity for vaccine production and delays in producing vaccine. The emergence of H5N1 as a human health risk found a U.S. production base that had been reduced to a single domestic manufacturer, using an egg-based process developed in the 1940s to produce the vaccine. The current process for delivery of seasonal-influenza vaccine takes about six months from the initial step of isolating the virus strain to the final delivery of the vaccine to the clinic or doctor’s office.
Step one in HHS’s plan was to promote an increase in capacity as rapidly as possible by encouraging the expansion and refurbishing of existing plants. The second, and current, step is to introduce cell-based manufacturing technology to the domestic production of influenza vaccine. (That method uses cells rather than chicken eggs as the medium in which to grow the active ingredient in the vaccine; it is a standard method for manufacturing most vaccines against childhood diseases, for example.)
Because production requires about six months, and an influenza pandemic could spread much faster than that, HHS’s plan includes short- and longer-term approaches to the problem of making vaccines available quickly. In the short run, a small stockpile of vaccines could be used for a limited initial response. Longer-term plans call for the development of "next-generation vaccines," which will draw on advances in biotechnology to speed production. Because developing safe and effective vaccines could take years—perhaps a decade or more—HHS is encouraging pharmaceutical manufacturers to start development now.
In parallel with the efforts to scale up production of egg- and cell-based vaccines, HHS is funding the development of new adjuvants, substances that can be added to influenza vaccines to reduce the amount of active ingredient (also called antigen) needed per dose of vaccine. The use of adjuvants for egg-based and cell-based vaccines could allow domestic manufacturers to produce more doses in existing facilities, and so fewer new facilities would be needed to manufacture cell-based formulations. Moreover, smaller stockpiles could be used to protect larger numbers of people. But adjuvanted vaccines can induce more pronounced side effects than ordinary vaccines can, a definite downside because vaccines, unlike most other pharmaceuticals, are given to healthy people. To date, the Food and Drug Administration has not approved an adjuvanted vaccine for influenza. In contrast, adjuvanted influenza vaccines have been approved for use in Europe.
This paper from the Congressional Budget Office (CBO) focuses on the government’s role, under HHS’s plan, in the development of new vaccines and the capacity to manufacture them. It provides information on progress and on the potential cost of achieving HHS’s vaccine-related goals, the continuing expenditures that are likely to be needed to maintain preparedness, and the experience of other countries in preparing for a possible pandemic. It also presents options for modifying HHS’s 2005 plan. The work is based on a review of the academic literature, on industry data, and on interviews with government and industry experts who are working to improve the response of vaccine producers to a potential influenza pandemic.
The manufacturers of currently approved influenza vaccines made in the United States cannot produce vaccines of sufficient effectiveness, in sufficient quantities, or in the time required to meet public health needs in the event of an influenza pandemic. Several companies, some with funding from HHS, are developing adjuvants that could boost the effectiveness of influenza vaccines and thus reduce the amount of active ingredient needed per dose. In the short term, adjuvants offer the best hope for achieving HHS’s goal of inoculating 300 million people within six months of the onset of an influenza pandemic; adjuvants could allow manufacturers to increase the number of doses produced in existing domestic manufacturing facilities, and their development would substantially affect the cost of most other aspects of HHS’s plan. The extent to which manufacturers can develop safe and effective adjuvanted vaccines will have a major effect on the scope of preparations for a possible pandemic.
Additional Capacity and New Cell-Based Vaccines
By 2011, companies that receive funding from HHS plan to more than triple domestic capacity for production of egg-based influenza vaccines. To augment private investment, HHS has obligated $176 million to provide a year-round egg supply and to retrofit existing facilities. If, in addition to the increased capacity, manufacturers also can develop adjuvanted egg-based vaccines, it is possible that they could make enough to inoculate 225 million people or more. If not, the same facilities could be expected within six months to produce enough vaccine for only 38 million people.
HHS intends to support the modernization of influenza vaccine production by helping manufacturers shift from egg-based to cell-based technology, which HHS believes is more reliable. HHS has obligated $1.3 billion, an amount experience suggests is sufficient to support development of cell-based influenza vaccines.
New facilities would have to be built to produce the vaccines—although less capacity would be necessary for adjuvanted vaccines. CBO estimates that it would cost between $1.2 billion and $1.8 billion to build new production facilities for adjuvanted cell-based vaccines and between $7.6 billion and $11.4 billion for facilities for cell-based vaccines without adjuvants. Pharmaceutical manufacturers are not likely to create that much new capacity on their own because the capacity would exceed that necessary to meet demand for seasonal-influenza vaccine. Moreover, because building those facilities is a complex matter, it is not likely any would be finished in time to meet HHS’s goal of 2011.
The additional capacity would be in excess of that needed in years when there is no pandemic. To keep the factories ready to operate, continuing federal support—in the form of purchases for the stockpile or direct payments— would probably be necessary.
If safe and effective adjuvanted vaccines can be developed, the current stockpile could be stretched to vaccinate well more than HHS’s initial goal of 20 million people. (Information from HHS indicates that it would cost about $350 million annually to replace expired vaccine and adjuvants.) Even if the development of adjuvants is not successful, the stockpile holds enough to vaccinate about 6 million people, and it would cost about $1.1 billion to purchase the remainder necessary to inoculate 20 million people. Once the stockpile is full, annual replenishment of expired vaccine should cost about $1.1 billion. Continued spending to maintain the stockpile could occupy excess manufacturing capacity and obviate much of the need for direct government payments to pharmaceutical manufacturers. However, because it was manufactured with a virus strain that differs from that likely to cause a pandemic, no one knows how effective the vaccine in the stockpile will be for protecting people in the event of a pandemic.
In the long-term, the public health community hopes that entirely new vaccines and production technologies will substantially reduce vaccine production times and create vaccines that offer broad protection against many—or all—strains of influenza virus. Developers expect to use recombinant DNA techniques to manufacture next-generation vaccines that might someday approach the lifetime effectiveness of currently available vaccines against many childhood diseases. HHS’s plan has relatively few incentives for manufacturers to develop new products or production technologies because its funds go largely to support the expansion of existing production facilities for egg-based vaccines and for the development of new cell-based vaccines. Moreover, HHS’s plans now call for supporting the creation of more production capacity than can be sustained by current demand. The excess supply could easily saturate the market, substantially driving down prices for influenza vaccine. Low prices could make the market look unattractive to companies developing next-generation vaccines. Consequently, government funding is likely to be needed to help bring next-generation vaccines to the marketplace.
Several European countries are entering into advance supply agreements with manufacturers to provide vaccines in the event of a pandemic; those governments agree to make advance payments to guarantee the supply of vaccine in the event of an influenza pandemic. It is unknown whether the companies can produce the vaccines promised under their agreements. Several European countries also are stockpiling vaccines, although the size of the stockpiles relative to national populations varies substantially. International organizations and other nations’ governments also are funding the development of influenza vaccines, although not to the extent seen in the United States.
In at least one important regard, the world’s circumstances have changed since HHS published its plan in 2005: Several manufacturers have reported success using adjuvants in influenza vaccines, and some of them have been approved in Europe. Adjuvants have the potential to substantially reduce the amount of antigen needed per dose. That development raises questions about whether the current policy is the most cost-effective approach to meeting HHS’s goals. CBO examined several other options, briefly outlined here.
Scale Back Support for Cell-Based Manufacturing Technology
One option that HHS might consider if adjuvanted vaccines prove successful is to reduce the capacity targeted for manufacturing cell-based influenza vaccine. A reduction could save the $600 million that HHS currently has budgeted for the construction of facilities for producing cell-based vaccines, and it would reduce the amount of spending needed to maintain the new facilities. The resulting reliance on a small number of manufacturers and facilities and on poultry flocks, however, could increase the risk of supply disruptions.
Add Resources to Develop Next-Generation Vaccines
Success with adjuvanted vaccines could have implications for the use of resources devoted to development of the next generation of vaccines and for the mechanisms the government uses to accomplish its objectives. Specifically, if adjuvanted vaccines reduced the near-term risk posed by pandemic influenza because they stretched available and planned production capacity, more resources might be made available to support the development of next-generation vaccines.
Alternative mechanisms for providing that support also could be considered for next-generation vaccines. HHS could use demand-side rather than supply-side incentives to accomplish its goals. For example, HHS could commit to stockpiling next-generation vaccines that proved successful rather than choosing which specific companies and technologies to support. Such an approach would help HHS reduce the likelihood of encountering pitfalls associated with active government intervention in decisionmaking about private investment and commercial production.
Early success in developing next-generation influenza vaccines is unlikely, however. Most of the formulations are in early stages of development, at the start of a long and risky path to approval.
Consider Advance Supply Agreements
HHS could consider entering into advance supply agreements like those used in Europe for procuring the quantities of vaccine necessary to immunize the U.S. population in the event of a pandemic. Such agreements could provide a contractual obligation for manufacturers to supply vaccines to public health officials or physicians in the United States. Although the current U.S. approach of directly subsidizing vaccine development and additional production capacity could result in a more abundant supply of vaccine, it does not ensure that the United States would be able to buy enough vaccine to meet its need in a pandemic. Manufacturers could exhaust their supplies when fulfilling their European agreements before they have the chance to sell any to the United States. If the United States does pursue advance supply agreements, it might be necessary to structure them to recognize that other nations’ governments could temporarily restrict or prohibit exports of pandemic-influenza vaccine until their own populations have been immunized.
The Size of the Vaccine Stockpile
The current goal of 20 million doses for the stockpile could be too large or too small: If, for example, the strain that causes the pandemic influenza does not respond to the stockpiled vaccine formulation, the stockpile could be wastefully large. But it could be too small if a pandemic were to spread through the population more quickly than new vaccines could be manufactured.
Successful development of adjuvanted vaccines could alter the balance of risks in determining the size of the stockpile and potentially reduce the cost of mitigating those risks. Some recent research indicates that adjuvanted vaccines could provide protection against more than one strain of virus, thereby improving the chances that the vaccines in the stockpile would be effective in a pandemic. Moreover, because adjuvants would reduce the amount of antigen required, HHS either could retain its current goal of maintaining a stockpile sufficient to inoculate 20 million people while reducing the amount of stockpiled antigen or it could plan to expand the population it would inoculate with prepandemic vaccine.
The remainder of the spending in HHS’s plan is for developing and stockpiling antiviral drugs that might prevent the spread of a pandemic or diminish the severity of illness in people who become infected; creating stockpiles of other medical supplies, such as surgical masks, respirators, ventilators, and syringes; coordinating state and local preparedness; and monitoring the spread of disease.
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