# Presentation: 259916

##    Strengthening the US Supply of Vaccines     

**	****	****	****     ****Martin G. Myers, M.D.**
**                            **

**Strategy: Increasing Financial Incentives **
**	****       ****For Existing Vaccines**

## Recent (2000-2004) U.S. Vaccine Supply Issues - 1

**2 of 4 manufacturers of inactivated influenza vaccine (TIV) have left the market. One of the remaining producer’s supply is not available.**
**There is only a single manufacturer of:**
** ****Td, DT, TT vaccines**
** ****Pneumococcal conjugate vaccine**
** ****meningococcal polysaccharide vaccine**
** ****MMR vaccine**
** ****Varicella vaccine**
**2 of 4 manufacturers of DTaP have discontinued production. **

##    Recent (2000-2004) US Vaccine Supply Issues - 2

**Supply Delays: **
**Influenza**
**MMR**
**Varicella.**
**Shortages: **
**Influenza **
**Tetanus toxoid-containing vaccines **
**Pneumococcal conjugate**
**Anthrax**
**Meningococcal polysaccharide**
**Transition to reduced thimerosal-containing vaccines intended for children <6months.**
**Legislation to require reduced thimerosal-containing vaccines for children.**

## Learning the 2000-2004 Vaccine Supply Lessons:

**The vaccine supply is fragile.**
**Distributing vaccine in short supply leads to health disparities.**
**The needed vaccines must be available to assure the public health.**
**Newer technologies for vaccine production need to be applied to existing vaccines.**
**The incentives for vaccine producers need to be aligned with public health priorities.**
**Regulation of the market protects the public but exerts a powerful  economic force.**
**Public misperceptions about vaccines impact vaccine acceptance.**

##  1. Recurring Vaccine Supply Lessons: 2000-2004

**The supply of all vaccines is fragile.**
**Vaccine production capacity is limited.**
**There continues to be ever decreasing production redundancy.**
**Vaccine production cycles take months.**

##  2. Recurring Vaccine Supply Lessons: 2000-2004

**Redistribution of vaccine in short supply is difficult, especially in the private sector.**
**Vaccine supply is committed in advance:                                                                                    -one manufacturer with a problem = mal-distribution.**
**Because vaccine demand is time sensitive, a delay in availability = shortage.**
**Priority groups for vaccine in short supply must be defined nationally.**
**Implementation of priorities will differ across communities. **
**Production, release & distribution expectations are proprietary data. **
**There is no infrastructure for adult immunizations analogous to that for children.**

## 3. Recurring Vaccine Supply Lessons: 2000-2004

**Some marketplace incentives are aligned with public health needs. **
**Expanded recommendations for vaccine use have increased the market size & increased demand.**
**This in turn has increased vaccine production and production capacity. **
**Allowing the price of TIV to rise has brought new ‘players’ to the US market.**
**An universal recommendation for young children brings influenza vaccines under the VFC and VICP Acts, making TIV an entitlement and limiting liability.**

## 4. Recurring Vaccine Supply Lessons: 2000-2004

**Some vaccine marketplace incentives are not well aligned with public health needs.**
**Established vaccines are undervalued: they have low prices and, therefore, little profitability.**
**Incentives are limited for producers to introduce new technologies once a vaccine has been licensed.**
**Maintaining cGMP – over time – tends to decrease the producers profit margins.**

##  Different Stakeholders have different perspectives!

** ****Different Stakeholders have different perspectives!**

## Vaccine Availability: Business & Public Health Perspectives Differ. 

**Enter the business?**
**Develop the vaccine?**
**Produce vaccine? Quantity?**
**Release the vaccine?**
**Price of the vaccine?**
**How market?**
**Remain in the business?**

**Severity of disease?**
**Public Health impact?**
**Societal costs?**
**Vaccine Supply?**
**Disparity in vaccine distribution?**
**Cost of vaccine?**

_**Public Health:**_

_**Business:**_

## The IOM Cost effectiveness model for setting priorities for Vaccine Development for the US* 

**Level I (saves society money)**
**Level II (<$10,000/QALY)**
**Level III ($10,000-99,999/QALY)**
**Level IV (>$100,000/QALY)**

- * IOM. Vaccines for the 21st Century. 2000.

## What is the value of a Life-Year?*

_**Intervention**_
**MMR for children**
**TIV for all high risk people **
**     ****(over 2 years of age)**
**NICU care, 1000-1499 gm**
**Annual mammogram & exam 40-49 yrs**
**Sea walls to protect against 100 yr storm surges**

_**Cost/life-year saved****_
**Cost saving**
**$570**
**$5,700**
**$62,000**
**$5,500,000**

- *Tengs TO et al. Risk Anal. 1995; 15: 369-90. ** in1993 $.

- Galveston’s life-saving seawall

- 2 Life saving interventions

## Inactivated Influenza Vaccine 

**Pre 2001 Scenario:**
**A commodity vaccine with increasing production costs for cGMP**
**Little incentive to develop new technologies, including a reduced thimerosal formulation.**
**Post 2002 Scenario:**
**Greatly expanded production**
**Production of a reduced thimerosal formulation by 2 producers.**
**BLA applications anticipated for TC derived inactivated vaccines as well as other production strategies.**
**Licensure of LAIV.**
**What happened?**

## In the past few years there have been 

**Increased demand **
**new recommendations expanding the market to 120,000,000.**
**media attention increasing public awareness.**
**The price of TIV/dose was permitted to rise 2-3 fold.**
**DHHS & NIH grants & contracts.**

## Strategies to Strengthen Vaccines Availability

**Set national priorities for vaccine development.**
**Establish government-directed programs.**
**Restructure financial incentives.**
**Streamline the regulatory process.**
**Develop critical vaccine stockpiles.**
**Increase liability protections.**
**Other issues: **
**intellectual property rights. **
**licensing agreements**
**non-US markets. **

## 1.Things that Need Doing

_**Academia**_**: **
**Do what they do best: science.**
**Expand efforts in translational research.**
_**Industry**_**: **
**Do what they do best: produce effective & safe vaccines in response to market forces.**
_**Public Health and Private Providers**_**: **
**Recommend to government.**
**Coordinate and create expanded vaccine delivery infrastructure.**
_**Media**_**: **
**Provide accurate and informed information.**

## 2.Things that Need Doing

_**Federal Government**_**: **
**Establish vaccine priorities.**
**Put the appropriate incentives in place.**
**Build strategic inventories of vaccines.**
**Create a vaccine safety research infrastructure.**
_**Legislators**_**: Recognize that disease prevention is their responsibility.**

## Since the 2002 Workshop - Financial Incentives -

**Summary of workshop has been published and considered by many policy makers.**
**IOM Evaluation of Financing Vaccines in the 21****st**** Century has been published. It identified many of the economic issues. It posed some controversial changes, but they proposed the use of subsidies and causing the price/dose of the established vaccines to increase. **
**Both the demand for and the price/dose of TIV has risen and attracted industry attention.**
**The Federal purchase of biodefense vaccines and Project BioShield has demonstrated the effectiveness of economic incentives for vaccine development and production.**
**We are back together this morning to consider how to more favorably align – within the present system - financial incentives to encourage the further development, production and delivery of existing/established vaccines. From the perspectives of various stakeholders, we will consider: **
**Pricing. **
**Other incentives.**