The cost of the nation’s strategy to protect its citizens from a global flu pandemic has been substantial. And, its critics claim, hundreds of millions have been misspent in the effort — largely in support of highly profitable multinational drug companies.
The benefit, most observers say, has been that despite delays in swine-flu vaccine production, the national policy helped the government respond more quickly to a major public-health threat than ever before.
Taxpayer-funded research aided companies developing new vaccines, and foreign drug giants were given hundreds of millions to build vaccine plants in the United States. The government also committed to pay vaccine makers billions more to guarantee a supply for Americans.
Without such a global, public-private enterprise, the nation would have lacked an established infrastructure to respond effectively to the swine-flu outbreak, said Michael T. Osterholm, director of the Center for Infectious Disease Research and Policy at the University of Minnesota and an unpaid adviser to both the government and pharmaceutical companies.
“If we didn’t do that, we wouldn’t have any vaccine at all. This is not a product that’s readily commercialized,” Mr. Osterholm said. Private companies will not invest large sums to produce vaccines that might not be needed, he said.
“This is clearly a historic effort to get vaccine out ahead of a rapidly spreading pandemic influenza,” he said.
However, this hand-in-glove partnership between government and capital has its critics — especially among those who feel the threat of the virus was overstated from the outset.
Such “hype,” critics say, led the government this year to pay two foreign companies $698 million for vaccine boosters called adjuvants, which it now says it won’t use.
Adjuvants can be used to stretch vaccine supplies by making smaller amounts of vaccine more effective. They have never been approved for use in the United States, although they are used in Europe. Some activists claim adjuvants are linked to autoimmune disorders.
The adjuvant contracts, to GlaxoSmithKline of Great Britain and Novartis of Switzerland, were part of the more than $2 billion effort this year, involving all five licensed U.S. producers, to rush vaccine supplies to the public.
Thus nearly 40 percent of the government’s resources for the effort went to buy not vaccine, but the adjuvant now sitting idle in warehouses. Officials say it can be resold overseas or approved for U.S. use in the future.
Barbara Loe Fisher, founder of National Vaccine Information Center in Vienna, Va., said the government has known since the summer that swine flu, or H1N1, is “a very mild pandemic” but has continued “promoting fear.”
Ms. Fisher said that when she attended a Food and Drug Administration advisory board meeting in July, multinational drug companies beat the drum for accelerated approval of adjuvants.
“It was very clear that the vaccine companies who were using the inactive virus were very much pressuring the FDA to issue an emergency-use authorization to fast-track those adjuvants, which would not have met usual FDA requirements,” she said.
As it happened, FDA and other agency officials decided that the clinical trials necessary to approve adjuvants would have further slowed vaccine production, and they were keenly aware that public was already wary of the H1N1 vaccine.
“I think they made the right call this time in terms of not reacting to pressure,” Ms. Fisher said.
“When you look at everything in balance, it’s been an expensive project, yes. Some would argue it was worth the expense because it was a drill,” she said, adding that she did not share that view.
Ms. Fisher’s group has long criticized U.S. vaccine policies and advocates vaccine safety.
Of the five licensed vaccine producers, all but MedImmune LLC of Gaithersburg make injected vaccines in which adjuvant could be used.
These companies — GlaxoSmithKline PLC, Novartis Corp., Sanofi-Aventis of France and CSL Ltd. of Australia — use dead virus cells to make their vaccines. The unexpectedly slow growth of dead swine-flu cells in eggs caused the government to fall well short of its vaccine targets and resulted in widespread criticism of the government effort.
MedImmune’s FluMist uses a live virus in vaccine production, and the company was able to grow the vaccine more quickly. MedImmune was purchased by British-Swedish drug maker AstraZeneca in 2007.
Dr. Anthony S. Fauci, a pioneering AIDS researcher and head of the National Institute of Allergy and Infectious Diseases, said many, including members of Congress, could not understand the vaccine delays given years of spending on the effort.
“The question you keep getting asked, and this is a valid question that I got asked [Nov. 4] at a congressional hearing, ‘We put all this money in 2006, 2007, etc., why are we still left with this antiquated technology?’” Dr. Fauci told reporters and editors at The Washington Times last month.
He was referring to efforts to promote cell-based vaccine production, which is faster than egg-based methods.
“And the reason is that it takes years to make that transition. And you’re not going have egg-based this year, give us a couple a hundred million dollars and next year its going to be all cell-based; it just doesn’t work that way,” Dr. Fauci said.
The government awarded a $487 million federal contract to Novartis last January to build a plant in North Carolina that will use cell-based technology.
Novartis’ plant was not completed in time to help with this year’s swine-flu effort. But the fact that it is in the United States gives the government more control over its output, Dr. Fauci said.
The government also gave Sanofi-Aventis a $77.4 million contract in 2007 to retrofit an existing plant near Philadelphia.
GlaxoSmithKline opened a high-tech vaccine packaging plant also in the Philadelphia-area this spring.
“The decision was made years ago, when we were preparing for both deliberate and naturally occurring biological catastrophes, to partner with companies and take away some of their investment risk,” Dr. Fauci said.
“The wheels got set in motion, billions of dollars were invested in partnership with the companies to move the technology — you know probably at least $2 or $3 billion,” he said.
FluMist is an earlier example of taxpayers aiding development of a product later sold by a for-profit company.
Funding from the National Institutes of Health in the 1990s helped create the unique spray vaccine, which is now among the better vaccine alternatives in the swine flu pandemic.
FluMist was originally developed at the University of Michigan School of Public Health in Ann Arbor, Mich., by Professor Hunein “John” Maassab, and later by biotechnology company Aviron. MedImmune bought Aviron in 2002, and FluMist went on the market the following year.
The 2005 pandemic flu strategy was implemented not with swine-flu in mind, but in the aftermath of a severe vaccine shortage the previous year and when avian flu was the primary concern. The goal was to be ready for any emerging pandemic threats.
It was also developed in a post-Sept. 11, 2001, atmosphere. Government efforts for flu preparedness were ultimately merged with those for dealing with nuclear, chemical and biological threats in an agency called the Biomedical Advanced Research and Development Authority.
Dr. Fauci said the vaccine business is not reliable enough for private companies.
“The driving force for them — there’s a degree of altruism in that — but, by necessity, they’re driven by their shareholders; they’re driven by the business model,” he said.
“You’re talking about hundreds and hundreds of millions of dollars. So when a company makes a decision that they want to invest in a product, vaccines have been the stepchild because they are used infrequently and sporadically.
“They generally are not considered to be something that you can charge a large amount for. You are always involved in having to supply it to those who cannot afford it, particularly in the developing world. Microbes mutate and vaccines need to be made over again, and the profit margin is irregular,” he said.
It’s true that many companies left the vaccine market during the past 10 years — but a lot has changed during that period.
New technology, greater potential profits and government support (including increased recommendation of vaccines) is drawing companies such as Johnson & Johnson back to the market.
Vaccine sales are expected to double in five years, to nearly $40 billion, driven in part by influenza, while prescription drug sales are expected to rise just a third, according to research firm Kaloroma Information.
Still, observers say vaccines are a low-profit business, in general.
“Flu vaccine’s not one of the most profitable. It’s a volume business, but it’s not bad if it’s a rush and the government is willing to give the contracts to do the work,” said Cole Werble, editor-in-chief of the RPM Report, a biopharmaceutical industry newsletter published in Rockville.
MedImmune spokeswoman Karen Lancaster said the company is going above and beyond the requirements of its $151 million contract.
During the summer, MedImmune was able to produce vaccine faster than its supplier could produce sprayer devices. The company made contingency plans to make droppers to administer the vaccine, which would require FDA approval.
“We are reinvesting any potential [profits from the contract] at our own risk in developing the multidose droppers for the potential benefit of the public,” Ms. Lancaster said in September.
“We have no contract in place to purchase any droppers, so we believe that we have a responsibility in seeing how we can make this additional supply of doses available,” she said.
Mr. Osterholm of the University of Minnesota said the national pandemic strategy and its public-private partnership is like keeping emergency workers on call.
“It’s like how we support fire departments,” he said. “We don’t pay fire departments just on the time they’re out fighting fires. We pay them 24/7,” he said.