# Presentation: 519053

- Bronwen Kaye
- Senior Director, Government Relations
- Wyeth

## WE AGREE WITH IOM THAT 

- Vaccines are under-valued in our society and that under-valuation discourages companies from participating in the vaccine business.
- 2)  Private insurance coverage of immunization is the ideal scenario and the more government (or any monolithic purchaser) is involved as a purchaser in a market, the less desirable that market becomes.

## WE AGREE WITH IOM THAT

-  3) More effort should be directed towards improving immunization rates among adults and adolescents.
-  4) The ACIP does and should play an important role in overseeing immunization policy.
- HOWEVER, WE BELIEVE THAT THE IOM FINANCING RECOMMENDATION IS FLAWED.

## THE IOM COMMITTEE WAS CHARGED TO IDENTIFY FINANCIAL BARRIERS TO IMMUNIZATION

- IOM admitted a lack of data to support the premise that financial barriers are the major reason people are not immunized.
- For example, Medicare provides coverage of influenza, Hepatitis B, and pneumococcal vaccines, but the elderly remain significantly under-immunized.

- 3)  While vaccines have always been available free  of charge at public health clinics, even after VFC which provided free vaccine in physician offices, immunization rates for 2 year olds have remained relatively constant.

## PRACTICAL CONSIDERATIONS – INSURANCE MANDATES 

- Insurance is regulated by states.  Thus to have an effective universal insurance mandate, 50 different state legislatures (and the District of Columbia) would have to pass bills which would have to be signed by 50 governors and one mayor.
- Multi-state employers are governed by the        federal law ERISA, which would need to be amended by Congress and signed by the President in order to have full mandated coverage.

## PRACTICAL CONSIDERATIONS – SUBSIDIES 

- The IOM report contemplates utilizing a complex formula to determine the value of a vaccine which would then translate into both a subsidy to insurers to cover the cost of the mandate and into a voucher for the uninsured to use to purchase vaccine.
- BUT calculating the value to society of a vaccine is fraught with obstacles.

## PRACTICAL CONSIDERATIONS - SUBSIDIES 

- For example...
- Current vaccines would be impossible to value.
- What is the value of a vaccine that prevents a disease that no longer circulates in this country?  Would we value a polio vaccine at 0?
- What factors would be included in this calculation?   A parent’s lost time at work? The investment in special education for a child with the sequelae of meningitis?  A child’s lost wages for the future?  A societal reduction in antibiotic resistance attributable to reduced antibiotic usage?

## PRACTICAL CONSIDERATIONS - SUBSIDIES

- What about benefits that are unforeseen prior to use in the market – such as the reduction of pneumococcal disease in the adult population as recently observed subsequent to utilization of Prevnar?
-    Query:  Will we question the value of providing antibiotics, physical therapy, special education to a survivor of Hib meningitis or only question the value of preventing disease in the first place?

## PRACTICAL CONSIDERATIONS – SUBSIDIES 

- The IOM contemplates funding from the federal government to provide vouchers for the uninsured and subsidies to insurers to fulfill their mandate.
- This means the U.S. Congress will have to annually appropriate an adequate amount of money for this purpose.
- How likely is that to happen?

## PRACTICAL CONSIDERATIONS – SUBSIDIES

- If the funding is insufficient to cover the “value” of mandated vaccines
- will the mandates disappear and we will then have no coverage of immunization ?
- or will the price of vaccines be forced down over and over again to fit the available pot of money?

## THE NEW PARADIGM 

- Currently, manufacturers determine a price and then must negotiate discounts for various government markets, which runs to about a 55-60% share of the market, a significant portion of which is price controlled.
- Under the IOM proposal, the government would control the price of every dose of vaccine used in both the private and the public sector through its process of determining “value”.

## THE NEW PARADIGM

- Worse still, even the “value” price is never likely to be realized given the uncertainty of government funding.

## A REAL WORLD CASE STUDY – PREVNAR in the PRIVATE SECTOR 

- Once Prevnar was approved by FDA and recommended by ACIP, but PRIOR to publication in MMWR:
- 98% of managed care plans in the northeast covered Prevnar
- 95% of managed care plans in the Midwest covered Prevnar
- 76% of managed care plans in the west covered Prevnar
- 75% of managed care plans in the south covered Prevnar

## A REAL WORLD CASE STUDY – PREVNAR in the PUBLIC SECTOR

- Post official usage publication,
- virtually 100% of managed care plans cover Prevnar
- some states still have inadequate 317 funds to cover Prevnar 4 years later
- some universal purchase states still do not have state funds to cover Prevnar
- Private sector funding has been timely.  Government funding has not.

## Manufacturers do not agree with IOM Recommendation 

- IOM envisions the federal government determining a price for all vaccines in the U.S.
- 2)  Even the pre-determined government price is not likely to be realized given the unreliability of government funds for purchase.

## Manufacturers do not agree with IOM Recommendation

- Were the IOM recommendation implemented, it would be more difficult to be successful as a vaccine manufacturer.
- It is in the best interest of public health for the maximum number of individuals to be immunized AND for manufacturers to have strong incentives to continue to provide current vaccines and to invest in future vaccines.

## Our Suggestions 

- The system is not so broken that it needs to be completely overturned.
- 2)  Hard data need to be collected as to why people are not immunized.
- 3)  Insurers who do not cover immunizations could be encouraged to do so through such quality measurements as HEDIS ...AND

## Our Suggestions

- 4)  Insurers must reimburse physicians adequately for this service
- 5)  Employers who do not purchase insurance with immunization coverage could be encouraged to do so through such mechanisms as tax credits

## Our Suggestions

- 6) Those children whose economic circumstances require them to be immunized with government purchased vaccine should be served through entitlement programs rather than discretionary spending programs

## Our Suggestions

- 7)  Public service announcements should be used to remind people of the horrors of the diseases that vaccines prevent
- 8)  Pending collection of hard data, targeted solutions for under-immunized adults and adolescents should be crafted