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THE STATE OF READINESS FOR THE 2005-2006

FLU SEASON

HEARING

BEFORE THE

SUBCOMMITTEE ON 

OVERSIGHT AND INVESTIGATIONS

OF THE

COMMITTEE ON ENERGY AND 

COMMERCE 

HOUSE OF REPRESENTATIVES

ONE HUNDRED NINTH CONGRESS

FIRST SESSION

MAY 4, 2005

Serial No. 109–79

Printed for the use of the Committee on Energy and Commerce

(

Available via the World Wide Web: http://www.access.gpo.gov/congress/house

COMMITTEE ON ENERGY AND COMMERCE

JOE BARTON, Texas, Chairman 

RALPH M. HALL, Texas 

MICHAEL BILIRAKIS, Florida 

Vice Chairman 

FRED UPTON, Michigan 

CLIFF STEARNS, Florida 

PAUL E. GILLMOR, Ohio 

NATHAN DEAL, Georgia 

ED WHITFIELD, Kentucky 

CHARLIE NORWOOD, Georgia 

BARBARA CUBIN, Wyoming 

JOHN SHIMKUS, Illinois 

HEATHER WILSON, New Mexico 

JOHN B. SHADEGG, Arizona 

CHARLES W. ‘‘CHIP’’ PICKERING, 

Mississippi, Vice Chairman 

VITO FOSSELLA, New York 

ROY BLUNT, Missouri 

STEVE BUYER, Indiana 

GEORGE RADANOVICH, California 

CHARLES F. BASS, New Hampshire 

JOSEPH R. PITTS, Pennsylvania 

MARY BONO, California 

GREG WALDEN, Oregon 

LEE TERRY, Nebraska 

MIKE FERGUSON, New Jersey 

MIKE ROGERS, Michigan 

C.L. ‘‘BUTCH’’ OTTER, Idaho 

SUE MYRICK, North Carolina 

JOHN SULLIVAN, Oklahoma 

TIM MURPHY, Pennsylvania 

MICHAEL C. BURGESS, Texas 

MARSHA BLACKBURN, Tennessee 

JOHN D. DINGELL, Michigan 

Ranking Member 

HENRY A. WAXMAN, California 

EDWARD J. MARKEY, Massachusetts 

RICK BOUCHER, Virginia 

EDOLPHUS TOWNS, New York 

FRANK PALLONE, Jr., New Jersey 

SHERROD BROWN, Ohio 

BART GORDON, Tennessee 

BOBBY L. RUSH, Illinois 

ANNA G. ESHOO, California 

BART STUPAK, Michigan 

ELIOT L. ENGEL, New York 

ALBERT R. WYNN, Maryland 

GENE GREEN, Texas 

TED STRICKLAND, Ohio 

DIANA DEGETTE, Colorado 

LOIS CAPPS, California 

MIKE DOYLE, Pennsylvania 

TOM ALLEN, Maine 

JIM DAVIS, Florida 

JAN SCHAKOWSKY, Illinois 

HILDA L. SOLIS, California 

CHARLES A. GONZALEZ, Texas 

JAY INSLEE, Washington 

TAMMY BALDWIN, Wisconsin 

MIKE ROSS, Arkansas 

BUD ALBRIGHT, Staff Director 

DAVID CAVICKE, Deputy Staff Director and General Counsel 

REID P.F. STUNTZ, Minority Staff Director and Chief Counsel 

SUBCOMMITTEE ON OVERSIGHT AND INVESTIGATIONS

ED WHITFIELD, Kentucky, Chairman 

CLIFF STEARNS, Florida 

CHARLES W. ‘‘CHIP’’ PICKERING, 

Mississippi 

CHARLES F. BASS, New Hampshire 

GREG WALDEN, Oregon 

MIKE FERGUSON, New Jersey 

MICHAEL C. BURGESS, Texas 

MARSHA BLACKBURN, Tennessee 

JOE BARTON, Texas, 

(Ex Officio) 

BART STUPAK, Michigan 

Ranking Member 

DIANA DEGETTE, Colorado 

JAN SCHAKOWSKY, Illinois 

JAY INSLEE, Washington 

TAMMY BALDWIN, Wisconsin 

HENRY A. WAXMAN, California 

JOHN D. DINGELL, Michigan, 

(Ex Officio) 

(II) 

C O N T E N T S 

Page

Testimony of: 

Gellin, Bruce G., Director, National Vaccine Program, Department of 

Health and Human Services ........................................................................ 14

Gerberding, Julie Louise, Director, Centers for Disease Control and Prevention ........................................................................................................... 10

Goodman, Jesse L., Director, Center for Biologics Evaluation and Research, Food and Drug Administration ....................................................... 20

(III) 

(1)

THE STATE OF READINESS FOR THE 2005-2006 

FLU SEASON 

WEDNESDAY, MAY 4, 2005

HOUSE OF REPRESENTATIVES, COMMITTEE ON ENERGY AND COMMERCE, SUBCOMMITTEE ON OVERSIGHT AND INVESTIGATIONS, Washington, DC. 

The subcommittee met, pursuant to notice, at 2:21 p.m., in room 

2123, Rayburn House Office Building, Hon. Ed Whitfield (chairman) presiding. 

Members present: Representatives Whitfield, Stearns, Ferguson, 

Burgess, Blackburn, Barton (ex officio), Stupak, DeGette, 

Schakowsky, Inslee, and Baldwin. 

Staff present: Anthony Cooke, majority counsel; Alan Slobodin, 

majority counsel; Mark Paoletta, chief counsel; Clayton Matheson, 

research assistant; Chad Grant, clerk; Edith Holleman, minority 

counsel; Voncille Hines, minority research assistant; and Chris 

Knauer, minority investigator. 

Mr. WHITFIELD. I would like to bring this hearing to order, and 

I would like to apologize in advance to the witnesses that we were 

a little late. We had a vote on the floor. But we are excited about 

your being here today. We look forward to your testimony on the 

state of readiness for the 2005-2006 flu season. 

At this time, as chairman, I will do my opening statement, and 

we will go through the subcommittee, and then we will get right 

to your testimony. 

On October 5 of last year, one of our Nation’s two largest suppliers of influenza vaccine informed the American public that it 

would be unable to provide any of the 46 to 48 million doses it had 

planned. Overnight, the expected supply of flu vaccine in the U.S. 

was cut nearly in half. Almost immediately there were news reports of imminent delays and shortages that could deprive millions 

of Americans who needed and wanted flu shots from getting them. 

Elderly people, parents of young children, adults with chronic illnesses, and countless other Americans panicked and flocked to 

local doctors’ offices, healthcare clinics, and pharmacies to obtain 

the vaccine before it ran out. Fortunately, the flu season proved to 

be a relatively mild one, and coordination among HHS, the remaining manufacturers and the public turned the concern of a national 

shortage into a matter of some local and regional surpluses. 

In light of last year, this committee must carefully monitor preparations for the 2005-2006 flu season. 

First, we need to look closely at the goals and strategies behind 

our preparations for this season. We need a realistic assessment of 

2

the manufacturers’ capabilities and the vaccine doses they should 

produce, and we must then plan accordingly. Specifically, we must 

ensure FDA’s focus on efforts to confirm the entry, or reentry, of 

all available manufacturers into the vaccine market; and we must 

be certain the U.S. is prepared for all contingencies in which one 

or more of the producers of flu vaccine fail to achieve the necessary 

license or suffer from sterility or quality control problems that prevent distribution of their vaccine. 

Second, we must take advantage of this opportunity to consider 

the manner in which we communicate important flu and vaccination information to the public. This past year, the American people 

listened to the media’s troubling portrayals of the shortage, and 

they panicked. Everywhere in the U.S., including my home district 

as well as others throughout the country, worried people rushed to 

their doctors, rushed to their pharmacists, where they all too often 

were either forced to linger in long lines or were even turned away. 

It is essential that our Nation’s vaccine policymakers persistently 

endeavor to communicate clearly and concisely accurate and up-todate information to the American people so that flu seasons are 

never characterized by unnecessary concern or confusion. 

I welcome today’s witnesses and look forward to their testimony. 

I hope this hearing will leave all of us with a more complete understanding of what to expect for the 2005-2006 flu season and more 

confidence in how our Nation’s public health stakeholders will 

manage the flu manufacture and vaccination process. 

With that, at this time I would like to welcome and introduce 

Mr. Bart Stupak, the ranking minority member, for his opening 

statement. 

Mr. STUPAK. Thank you, Mr. Chairman; and thank you for holding this hearing. 

Last year we had a very difficult flu season. In October, just as 

most people were thinking about getting their flu vaccine, the Centers for Disease Control was gearing up for their vaccine education 

program, and the Nation learned that it would only receive onehalf of the 80 to 85 million doses of flu vaccine that it was counting 

on. Because of sterility problems in the manufacturing process, 

Chiron was not able to produce any of the 46 million doses it had 

promised. If you were not elderly, not very young, not disabled, or 

not with a compromised immune system, you were asked to step 

aside and let the more medically needy have their vaccine. 

Americans did step aside, but the distribution to the medically 

needy was haphazard. Some nursing homes, for example, had trouble getting vaccine doses. Elderly persons lined up in the morning 

at clinics only to find there were not enough doses to go around. 

Health care providers struggled to make value judgments about 

who in the high-risk populations, including themselves, should get 

the limited number of vaccines. In Michigan, for example, there 

were only 2 million doses of flu vaccine available for 3.4 million 

high-risk individuals. 

There are many questions about why the United States had so 

few suppliers. By January, however, after one manufacturer produced extra vaccine, there were available doses but not enough customers. Approximately 3.5 million doses out of the 60 million were 

discarded. 

3

We are now preparing for the next flu season. At this point we 

have no more suppliers than we did a year ago. Sanofi is planning 

to produce 50 to 60 million doses, and MedImmune will produce 

another 3 million of the FluMist. Chiron hopes to produce 25 to 30 

million doses but has not yet been approved to do so. Glaxo may 

enter the market with 10 million doses but has not yet filed for a 

license. If all goes well, that would provide 93 to 103 million doses, 

or 9 to 21 percent more doses than this country has ever used. If 

these vaccine promises are not fulfilled, we will have approximately 

the same amount that we had last year or maybe even less. 

Today I am interested in knowing what changes have been made 

in the distribution and education system so that this year the 

medically needy are served quickly and efficiently and there is no 

waste of vaccine because populations have been discouraged to receive their flu vaccine. 

I also want to know why the drug companies are raising their 

prices by 17 percent, citing market demand, and whether this increased cost will discourage use. 

In addition, I remain concerned that the Department of Health 

and Human Services now seems to be relying on only one domestic 

manufacturer to produce extra vaccine and to develop new methods 

to manufacture flu vaccine. If anything goes wrong with this domestic supplier, like it did at Chiron, America will be in serious 

trouble. 

There has been concern about our flu vaccine policy for some 

time. Two years ago, several members of this committee sent a letter asking for a hearing on our flu vaccine policy. Flu kills 35,000 

people per year even without a shortage. I look forward to hearing 

from the witnesses today about their agency’s plan to ensure an 

adequate supply and appropriate distribution of this life-saving 

vaccine. 

In addition, Mr. Chairman, I am sorry drug companies are not 

here to answer the questions about their intent and interests in 

meeting this Nation’s needs. To get a complete picture of the situation, we need to hear directly from the manufacturers of the flu 

vaccine, and I look forward to such a hearing. 

Thank you, Mr. Chairman. I yield back the balance of my time. 

Mr. WHITFIELD. Thank you very much. 

We will be calling on opening statements in order of appearance 

at the committee. So at this time I would like to call on Mrs. 

Blackburn of Tennessee for her opening statement. 

Mrs. BLACKBURN. Thank you, Mr. Chairman; and I want to 

thank our guests who are with us today for taking the time to be 

here. I will waive my statement and reserve the time for questions. 

Mr. WHITFIELD. Mrs. Blackburn waives her opening statement. 

At this time, I recognize Ms. DeGette of Colorado. 

Ms. DEGETTE. Thank you very much, Mr. Chairman, for holding 

this hearing. I would ask unanimous consent to put my full statement in the record. 

Mr. WHITFIELD. Without objection. 

Ms. DEGETTE. I commend the chairman for having the hearing. 

I also think we need some follow-up hearings on an issue that has 

been of great concern to me, and that is the avian flu, which isn’t 

really the topic for today, but I think it is the kind of the elephant 

4

in the room, if you will, because—and I see our witnesses nodding 

in agreement. So I hope we can do that. 

But, with respect to today’s topic, I am concerned, like my colleagues, about our system for flu vaccine production. We have three 

manufacturers committed to supplying the U.S. with flu vaccine, 

but there have been concerns for many years that our system 

doesn’t adequately support these manufacturers; and, also, the 

danger exists that the yearly destruction of unused flu vaccine creates a disincentive for innovation and adequate supply. 

Last year, Colorado, my State, was among the first States hit by 

the flu strain known as Fujian A, which was not included in the 

2004 flu vaccine. This flu strain for unknown reasons disproportionately affected children and caused at least 11 deaths last year. 

We need to do better, and I hope that the witnesses today can improve our understanding of the public health issues and also describe the technological advances in virus identification and 

antiviral production, because, as we all know, the flu vaccine for 

any given year may not actually cover all the viruses that go 

around. And, finally, I would like the witnesses to talk about how 

prepared the U.S. is for a flu pandemic, not just avian flu but any 

flu. 

In late 2002, the SARS virus disrupted travel and tourism and 

claimed the lives of many people. Now, I know the World Health 

Organization has established a global monitoring system to track 

influenza outbreaks, but the cost of complying with this system is 

certainly too much for the world’s poorer nations where some of 

these viruses originate. I hope the witnesses will talk about the 

adequacy of the surveillance system and also our Nation’s ability 

to cope with the pandemic. 

It is my understanding that countries like Japan, Finland, and 

Australia are stockpiling antiviral treatments against pandemic flu 

for about a quarter of their population. Our stockpile in the U.S. 

is only about 1 percent of the population. So I would hope that we 

can talk about that as well as the other issues raised by the ranking member, the chairman, and others. 

With that, Mr. Chairman, I yield back the balance of my time. 

[The prepared statement of Hon. Diana DeGette follows:]

PREPARED STATEMENT OF HON. DIANA DEGETTE, A REPRESENTATIVE IN CONGRESS

FROM THE STATE OF WYOMING

Flu related spending by the Department of Health and Human Services has risen 

almost sevenfold over the past 5 years. While for some individuals a flu infection 

is merely a few days sick in bed, for other more vulnerable populations, the flu can 

cause serious illness and even death. Even with all the advances of 21st century 

medicine, 30,000 Americans die from flu or flu-related illnesses each year. In some 

studies, vaccination against flu has shown to provide protection to between 70 and 

90 percent of healthy adults. Unfortunately, some of our vulnerable populations, including health workers, have dismal rates of vaccination. We must do better. 

I commend the Chairman for holding this hearing and agree that we need to examine this important issue now, before the next crisis. It is my understanding that 

many of the flu vaccine manufacturing has begun this month in preparation for next 

year’s flu season. I hope that today’s hearing will provide insights that will improve 

our readiness. 

Like many of my colleagues, I remain concerned about the United States system 

for flu vaccine production. We have at least 3 manufacturers committed to supplying 

the U.S. with flu vaccine, but there have been concerns for many years that our system does not adequately support these manufacturers. Additionally, the danger exVerDate 0ct 09 2002 14:59 Jun 09, 2006 Jkt 000000 PO 00000 Frm 00008 Fmt 6633 Sfmt 6621 F:\DOCS\21633.TXT HCOM1 PsN: JOEP
5

ists that the yearly destruction of unused flu vaccine creates a disincentive for innovation and adequate supply. 

Last year, Colorado was among the first states hit by the flu strain known as 

Fujian A, which was not included in the 2004 flu vaccine. This flu strain, for unknown reasons, disproportionately affected children, and caused at least 11 deaths 

of children last year. We clearly need to do better. I hope that the three witnesses 

here with us today will improve our understanding of this public health issue and 

describe the technological advances in virus identification and antiviral production. 

In addition to concerns about flu vaccine supply, I hope that our three expert witnesses will also comment on how prepared the U.S. is for a flu pandemic. 

In late 2002, the SARS virus disrupted travel and tourism and claimed the lives 

of many people. I know that the World Health Organization has established a global 

monitoring system to track influenza outbreaks, but the cost of complying with the 

system is certainly too much for the world’s poorer nations. I hope that the witnesses will comment about the adequacy of this surveillance system and our nation’s 

ability to cope with an outbreak. It is my understanding that countries such as 

Japan, Finland and Australia are stockpiling antiviral treatments against pandemic 

flu for up to one quarter of their nations’ population. The U.S. stockpile is maintained for only 1 percent of our population. We may need to reexamine this strategy. 

Many experts have stated that in addition to surveillance, we need a reliable and 

flexible vaccine production system. Last year, the license suspension of the Chiron 

company’s vaccine manufacturing plant in the U.K. was a wake up call to all of us. 

In addition to a ‘‘shortage’’ of supply, we also were faced with educating the public 

about appropriate distribution and recipients. I hope that the witnesses will help 

us understand what went wrong last year and what lessons were learned. 

This hearing continues this Committee’s examination of FDA’s ability to protect 

the public’s health. It is my understanding that there may be inadequate funding 

for FDA inspectors to travel overseas and scrutinize manufacturing facilities. I hope 

that Dr. Goodman from FDA’s Center for Biologics Evaluation and Research will describe these current challenges. Drug safety has been of great interest to me and 

this Committee for a number of years, and the situation at the Chiron plant is only 

one example of our concerns being realized. We clearly must take steps to ensure 

that history is not repeated.

Mr. WHITFIELD. Thank you very much. 

At this time, I would recognize Dr. Burgess for his opening statement. 

Mr. BURGESS. Mr. Chairman, thank you for calling this important hearing on public health readiness and how it relates to influenza outbreaks. You know, we have to work with our public health 

agencies to ensure access to adequate supplies of vaccines are 

present but at the same time work with the manufacturers to make 

certain that they have the ability to produce flu vaccine. 

Some of the concerns I have regarding the vaccine availability 

aren’t with today’s focus on the flu vaccine supply. Many people 

have forgotten that since 2000 we have also had shortages of vaccine that protect against eight childhood diseases. The flu vaccine 

shortage was only symptomatic of the broader vaccine supply problem: There are only a handful of manufacturers making vaccines 

for Americans. Three manufacturers had licensed products for flu 

vaccines last year, many childhood vaccines have only one manufacturer, and none have more than two manufacturers, increasing 

the risk of shortages. 

The question comes up as to why there are so few manufacturers. Certainly the vaccine business is complex in its development, 

complex in its manufacturing, and certainly complex because of the 

regulatory challenges, many of which Congress has imposed upon 

it. Obviously, that all adds to the cost. Vaccines, however, are a 

fairly low-margin business, and again that may be partly our responsibility as well because there are some price controls on vaccines. 

6

Then, finally, vaccines have one of the greatest liability burdens 

of any medical product; and the statute of limitations, particularly 

for childhood vaccines, is incredibly long. We need to address the 

overall issue of vaccines supply in this country, and I encourage the 

country to take up the broader issue of ensuring a stable supply 

for all vaccines this year. 

I yield back. 

Mr. WHITFIELD. Thank you very much. 

At this time, I recognize Ms. Schakowsky for her opening statement. 

Ms. SCHAKOWSKY. Thank you, Mr. Chairman. 

Thirty thousand people die annually from the flu virus, hundreds 

of thousands of others end up in the hospital, and no American 

should again be asked to compromise their health because of the 

failures of the Bush administration to provide sufficient doses of 

the flu vaccine. 

Last October, we learned that we would have only half the expected supply of influenza vaccine for the fall and winter flu season. When the Food and Drug Administration was told of contamination at the Chiron facility, one the largest flu vaccine producers, 

it failed to act in a meaningful way to address the problem, which 

was secure additional vaccine supplies elsewhere. We saw price 

gouges appear out of the woodwork to profit from a public health 

crisis; and we saw many who would normally seek a vaccination, 

those at greater risks of contracting the flu, foregoing shots. 

Had the FDA taken the appropriate course of action, last year’s 

vaccine shortage and perhaps unnecessary sickness and loss of 

lives in the United States may have been avoided. None of these 

problems occurred in other countries where the government plays 

a far greater role in assuring affordable access to health care. In 

fact, in Canada there was adequate flu vaccine supply to sell to 

those Americans who were close enough to the border to go across 

for a shot. 

Last fall, Illinois Governor Rod Blagojevich, a leader in the fight 

for affordable prescription drugs, including prescription drug reimportation, acted to secure additional vaccine supplies for the 

most vulnerable people in our State. Although in a hearing we held 

last November the FDA indicated to me that it planned to provide 

a decision within 2 or 3 weeks of that time as to whether Illinois 

would be allowed to bring vaccines into the country, Governor 

Blagojevich is still awaiting FDA authorization. 

So I want to know why, 5 months later, Illinois still has not received a response from the FDA; and I want to know why, given 

the fact that we are still entirely relying on foreign sources to meet 

our flu vaccine needs, the Bush administration is still adamantly 

blocking Illinois’ reimportation efforts of other life-saving medications. The FDA allowed politics to trump personal health when it 

undermined Governor Blagojevich’s effort to address a serious 

health crisis. Why would a Federal agency stall an emergency situation like the one we faced last fall? The answer can only be because of their fear that Governor Blagojevich’s success in importing 

flu vaccine would provide validation for his efforts to import prescription drugs for the people of Illinois. 

7

Today, the Wall Street Journal highlights how many doctors, 

pharmacists, and hospitals across the U.S. already fear another 

major shortage of flu shots. The Vice President of Amerinet, Inc., 

a health care purchasing group of St. Louis, termed the shortage 

in order of, ‘‘a feeding frenzy.’’ Manufacturers are already charging 

at least 17 percent more for the flu shots, reflecting this rush for 

advanced orders. According to the Wall Street Journal, this, ‘‘shows 

that the vaccine production infrastructure remains nearly as fragile 

and outdated as it was before last year’s crisis.’’

We should learn from mistakes made last year. I would like to 

hear from the witnesses today what concrete actions the administration is taking to ensure that this same fiasco will not happen 

again. I want to hear what changes have been made to our flu vaccine infrastructure since last year. 

It is clear that we need better cooperation and information sharing not only between the manufacturers and distributors but also 

with the regulatory agencies of other countries where the manufacturing plants are located. Because we are still clearly relying on 

foreign sources to meet our flu vaccine needs, we need to improve 

monitoring of and communication with those sources. I would like 

to see how the FDA and CDC will work with the State and local 

health officials, manufacturers, and the public to improve distribution of available supply; and I want to hear how it is that, after 

news of massive shortages, we actually ended up with regional surpluses of the flu vaccine. That fact is especially troubling because 

it means that many of those who needed the vaccine but couldn’t 

get it could have avoided unnecessary illness. 

At last year’s hearing I questioned the Bush administration’s attitude toward vaccine accessibility. I was disturbed by Vice President Cheney’s explanation that vaccine production just isn’t profitable enough for private companies, and I will ask the same question: Are the administration’s concerns for the high profits of the 

pharmaceutical companies to take precedence over the health of 

the American people? 

I want to be able to assure my constituents that there will not 

be a shortage of flu vaccine in Illinois this fall, and I hope this committee will be made aware in advance and in real time of the status of flu vaccine production at the labs with which we contract so 

that the 2005-2006 flu season will not be a relapse of last year’s 

problems. 

Thank you, Mr. Chairman. 

Mr. WHITFIELD. Thank you. 

At this time, I will recognize the chairman of the Energy and 

Commerce Committee, Mr. Barton of Texas, for his opening statement. 

Chairman BARTON. Thank you, Mr. Chairman; and I am going 

to submit my formal statement for the record. 

I just want to briefly say I appreciate you holding this hearing. 

I look forward to our panelists. We don’t want to have happen next 

year what happened this year. It was very disconcerting to go from 

there was a big shortage and we were rationing flu vaccinations to, 

later in the season, if you wanted one, come in and get it. So we 

have a lot of issues. 

8

But I guess the bottom line issue is going to be, are we prepared 

for next year and will every American who wants a flu vaccination 

next year be able to get one? I hope we get an answer to that in 

the hearing today. 

With that, Mr. Chairman, I would yield back. 

[The prepared statement of Hon. Joe Barton follows:]

PREPARED STATEMENT OF HON. JOE BARTON, CHAIRMAN, COMMITTEE ON ENERGY

AND COMMERCE

It’s hardly seems like the flu season is past. But it is and it was one of the most 

publicized ever. In just six months, it all starts again. Millions of Americans will 

want a flu vaccination come this fall and I think I can promise you that many are 

wondering right now whether their vaccine will be available. 

Last year, men and women in this country, many of them elderly, stood in long 

December lines to get a flu vaccination when production problems shut down the 

Chiron plant in Liverpool, England. 

Almost immediately after the supply was interrupted, this Committee held a 

hearing to try to determine what happened and how it could be prevented in future 

seasons. Well, the future is upon us—vaccine manufacture for the 2005-2006 flu season is well underway. We’ve invited here today three representatives from the Department of Health and Human Services to answer some simple questions: Are we 

ready? How are we doing? 

Let me be more specific. How many doses of flu vaccine do we expect to need for 

the coming season and how many do we anticipate from the companies manufacturing for the American market? When have we last checked the progress of these 

manufacturers and what issues are outstanding? 

Looking back to the problems of last year, what are the specific changes made 

to our flu vaccine policy and practice? Has FDA cleared up its communication problems with the MHRA? What is the status of efforts to introduce more vaccine manufacturers into the U.S. market? What plans and contingencies do we have in place 

so we aren’t caught flat-footed in the event of another production failure like we experienced last year? 

Finally, while I recognize the complexities and uncertainties of flu vaccine manufacture and distribution, I hope HHS can better communicate to the American people the important information about influenza and immunization. Last year, people 

heard warnings about shortages then news of surplus. And each day more stories 

appear in the press about the threats of deadly flu strains. People are worried about 

the flu and whether their shots will be there in the fall. HHS must keep them up 

to date with straightforward, clear, and measured information. 

I want to thank Mr. Whitfield for holding this important hearing. And I look forward to today’s testimony on the state of preparedness for flu.

Mr. WHITFIELD. Thank you, Mr. Chairman. 

At this time I would recognize Ms. Baldwin for her opening statement. 

Ms. BALDWIN. Thank you, Mr. Chairman; and thank you to the 

witnesses who are testifying before us today. 

Like many of my colleagues, I was distressed by the series of 

events last fall that led to the U.S. Having a severe vaccine shortage. We ended up being pretty lucky, but we certainly shouldn’t 

have to be relying on luck to ensure the health and well-being of 

Americans. 

Preparing a flu vaccination strategy certainly seems to be as 

much an art as it is a science. I understand the challenges that we 

face in predicting which flu strains will be most prevalent during 

the upcoming flu season and needing to prepare the necessary vaccines months and months in advance, but I am also interested in 

ways that we can strengthen this line of defense for the health of 

Americans, either through changing the actual vaccine production 

methods or changing the way that we communicate and coordinate 

with other countries and vaccine makers. 

9

I am interested in hearing from our panel of experts today, and 

specifically I am interested in knowing what are the lessons 

learned from last year’s experiences and how their various agencies 

are moving forward to ensure that we have a reliable flu vaccine 

supply. As Dr. Burgess mentioned in his opening statement, I also 

share his interest in ensuring that we have a reliable supply of 

other vital childhood vaccinations. Thank you for being here today. 

Mr. Chairman, thank you for holding this hearing, and I look forward to our discussion. 

Mr. WHITFIELD. Thank you. 

At this time, I will recognize the gentleman from New Jersey, 

Mr. Ferguson, for his opening statement. 

Mr. FERGUSON. Thank you, Mr. Chairman. 

I appreciate our panelists for being here today. We thank you 

very much. 

We certainly have seen some major problems in the supply of flu 

vaccine; and we certainly, as others have already said, don’t want 

a repeat of last year’s problem. We know from history that when 

we have seen severe flu problems literally hundreds of thousands, 

millions of people can lose their lives. Tens of thousands of people 

die in a typical flu season when there is no vaccine problem, so certainly if there is a shortage that exacerbates that problem. I am 

certainly interested in the avian flu and some of the other issues 

that have been described here, and I look forward to getting into 

some of those issues when we have time for questioning. 

I would only say it has been raised here in our opening statements the topic of bringing in vaccines from Canada, and perhaps 

that might be a model for bringing in drugs from Canada or other 

countries on a broader scale. I would only suggest that if we want 

to see similar problems that we have seen with the flu vaccine, if 

we want to see similar problems in the broader drug supply, let us 

start bringing in drugs from all sorts of other countries. 

Some have suggested, well, let us only bring in—why don’t we 

only import drugs from Canada and forget the health and safety 

standards, the very high standards that we have here in this country? Of course, that is a bit of a red herring. Canada can’t possibly 

make and manufacture and supply all the drugs that they use and 

supply all the Americans who want to get their drugs from Canada 

as well, whether it is the State of Illinois or anybody else. Canada 

has simply become a post office, not a manufacturer of drugs; and 

it has become common knowledge that if you go across the border 

into Canada you are not necessarily buying Canadian drugs, you 

are buying drugs from South Africa or China or India or the Czech 

Republic or any one of a host of other countries that don’t have 

close to the health and safety standards that we have in our country or even that Canada has in their own country. 

So I would suggest that if we want to cripple the companies and 

the industry that are making these drugs, these life-saving cures 

and medications in the first place, let us not use the vaccine situation as the example of where we should go. 

One of the problems, certainly one of the reasons we are seeing 

such severe problems with the vaccine situation is because we have 

driven manufacturers out of the business. We have created an environment through our action in the Congress and through other cirVerDate 0ct 09 2002 14:59 Jun 09, 2006 Jkt 000000 PO 00000 Frm 00013 Fmt 6633 Sfmt 6602 F:\DOCS\21633.TXT HCOM1 PsN: JOEP
10

cumstances whereby companies just don’t find it sensible any 

longer to be in the business. If we want to go that route for all 

medications, I would suggest, great, let us just start importing 

drugs from other countries and not worry about the health and 

safety standards, because that is exactly where it is going to lead. 

Thank you, Mr. Chairman. I yield back. 

Mr. WHITFIELD. Thank you. 

As you all are aware, this is an oversight investigation subcommittee, and it is our custom to take testimony under oath. And 

I would like to ask each of you—and before I ask you, I do want 

to introduce all of you. 

First of all, we have with us today Dr. Julie Gerberding, who is 

the Director for the Centers for Disease Control and Prevention; 

and we welcome you. In addition, we have Dr. Bruce Gellin, who 

is the Director of the National Vaccine Program Office at the Department of Health and Human Services; and then we have Dr. 

Jesse Goodman, the Director of the Center for Biologics, Evaluation 

and Research at the Food and Drug Administration. 

We do welcome all of you. We look forward to your testimony, 

your expertise. 

As I stated, we do take testimony under oath; and I would ask 

you, do you have any objection to testifying under oath this afternoon? 

I would also advise you that, under the rules of the House and 

the rules of the committee, you are entitled to be advised by counsel at these hearings. Do you desire today to be advised by counsel 

during your testimony? 

Okay, in that case, if you would please rise and raise your right 

hand, I would like to swear you in. 

[Witnesses sworn.] 

Mr. WHITFIELD. You are now under oath, and we look forward 

to your testimony. 

Dr. Gerberding, we will start with your testimony. 

TESTIMONY OF JULIE LOUISE GERBERDING, DIRECTOR, CENTERS FOR DISEASE CONTROL AND PREVENTION; BRUCE G. 

GELLIN, DIRECTOR, NATIONAL VACCINE PROGRAM, DEPARTMENT OF HEALTH AND HUMAN SERVICES; AND JESSE 

L. GOODMAN, DIRECTOR, CENTER FOR BIOLOGICS EVALUATION AND RESEARCH, FOOD AND DRUG ADMINISTRATION 

Ms. GERBERDING. Thank you. 

I thank the subcommittee for having this hearing. I think this 

is a critical time for us to keep a strong focus on influenza, and I 

appreciate your helping us do that from the congressional perspective. I can assure you we are doing that at the Department of 

Health and Human Services. Secretary Leavitt is having the Department leaders meet every day on this subject, so we are looking 

forward to giving you a perspective on how we are preparing for 

the fall. 

I wanted to start with a graphic that I think illustrates one of 

the most important principles about influenza—on the next graphic, please—and that is the fact that the virus itself is so unbelievably unpredictable. This is kind of a time line of influenza as it has 

evolved over the last century. Each one of those arrows is the beVerDate 0ct 09 2002 14:59 Jun 09, 2006 Jkt 000000 PO 00000 Frm 00014 Fmt 6633 Sfmt 6602 F:\DOCS\21633.TXT HCOM1 PsN: JOEP
11

ginning of the appearance of a new strain of flu, and each circle 

represents a pandemic that started when a new strain appeared. 

So, in the last 100 years, three times we have had major international pandemics as H1, H2, and H3 appeared in the world and 

caused devastating outbreaks. That is a very difficult event to predict. 

Up in the right-hand corner of this graphic are the little mini appearances of the avian isolates. And, of course, as you mentioned, 

right now we are very concerned about avian influenza in Asia, and 

we would look forward to being able to update you on that topic. 

But the point of all of this is that we don’t know in any given 

flu season whether this will be a pandemic year, a mild season, 

when it will start, how long it will go, when it will peak, how severe it will be, how many people will be affected, will it be worse 

in adults or children. There is absolutely no certainty about the 

strain or the characteristics of the flu season on any given year, 

and that is a challenge for all of us, even if we didn’t have to face 

additional challenges. 

But on my second graphic I have illustrated the outcome of this 

past season. In the yellow bars here, the figures for the coverage 

of the high-risk populations are presented. In the far left graph is 

the comparison from this past year to the year before and the number of young infants that were immunized. And you can see that, 

despite our vaccine shortage, we were able to achieve about a 50 

percent immunization of that age group. This is the first year that 

recommendation was made for those children. 

In the high-risk adults, those adults who have other medical conditions, our immunization rates were not quite as good as they 

were the year before. Among adults over 65, they were very close 

to the year before but not quite the same. Among health care workers, they were not quite the same. But, overall, despite having 50 

percent of the vaccine we predicted, we came pretty close to achieving the immunization coverage rates that we would have normally 

achieved in a year where we had plenty of vaccine. 

That is not a success, but it represents an effort of hundreds and 

hundreds of people around the country as well as the government 

and the private sector to really at a late date make the doses that 

we did have available to as many of the high-risk people as we can. 

And of course this illustrates that it is not just the virus that is 

unpredictable, it is the vaccine supply that is unpredictable, and it 

is the demand for vaccine that is unpredictable as well. 

So what are we doing about the vaccine supply? Well, the first 

thing we are doing is buying lots of vaccine. Since 2004, CDC’s dollar investment in vaccines for flu has gone up by $118 million. In 

the President’s proposed budget for fiscal year 2006, that would include $30 million for an insurance policy to buy monovalent vaccine 

as a reserve if something goes awry with one of the other manufacturers as well as the 20 million purchase of vaccine for distribution 

to the States on top of what is included in the Vaccines for Children program. 

We are also providing a fair purchase price for this vaccine. We 

think it is a good thing that over the last decade the price paid for 

flu has gone from pennies to a price that allows manufacturers to 

receive a fair reimbursement; and, also, our government, through 

12

our Medicare and Medicaid services, are reimbursing providers appropriately for providing vaccine. 

We are also planning scenarios. We will start the flu season with 

a focus on high-risk people because we want the flu shot in their 

arms first. Then, if the supply comes forward as we are hopeful it 

will, we will be able to expand in to people who have less risk from 

flu complications and ultimately into healthy people as the season 

unfolds. But we will start the season this way, with a clear message that that is the CDC’s priority. But people will have to understand, just as is true in any year, the communication about flu does 

change as the season progresses. We find out where it is peaking, 

we find out if it is severe, we find out where vaccine supplies are 

short, and we have to adjust our message as we go forward. We 

want people to anticipate that and to expect that they will have to 

pay attention, because the message will evolve. 

I see there are many other steps and progress that I will let my 

colleagues present to you, but, again, I just wanted to say that we 

are very pleased that the committee is interested, and we will do 

everything we can to keep you updated on all of these 

unpredictabilities as we go forward and do as much as we can to 

take the uncertainty out of the system. Thank you. 

[The prepared statement of Julie L. Gerberding follows:]

PREPARED STATEMENT OF JULIE L. GERBERDING, DIRECTOR, CENTERS FOR DISEASE

CONTROL AND PREVENTION, U.S. DEPARTMENT OF HEALTH AND HUMAN SERVICES

Mr. Chairman and members of the Committee, I am pleased to be here today to 

update you on the Centers for Disease Control and Prevention’s (CDC) efforts to address the influenza vaccine supply status and our planning for the 2005-06 influenza season. We faced unprecedented challenges during the 2004-2005 influenza 

season. Due to tremendous collaboration among our public health and private sector 

partners, our collective ability to modify and enhance our response strategy as circumstances changed, and the cooperation of the public, I am pleased to report that 

we have been successful in our effort to promote and protect the public’s health. We 

learned valuable lessons from the 2004-2005 influenza season that are enhancing 

our planning efforts for the upcoming influenza season. 

Vaccination is the primary strategy for protecting people who are at greatest risk 

of serious complications and death from influenza. In the face of this season’s influenza vaccine supply shortage, CDC, state and local public health officials, vaccine 

manufacturers and distributors initiated extraordinary partnership activities to address this public health challenge. For example, sanofi pasteur (formerly Aventis 

Pasteur) provided access to vaccine distribution information to aid in the allocation 

of the available vaccine supply to those people most in need this season. State and 

local public health officials also worked closely with CDC to ensure equitable distribution of vaccine to those areas with the greatest need And we must not forget 

the important service of immunization providers on the front lines in doctors’ offices, 

health clinics, grocery stores, and pharmacies working to prioritize, deliver, and administer vaccine so that it reaches high-risk individuals. Together, we found new 

and effective ways to address the sudden, late emergence of a substantial influenza 

vaccine shortage that had never before occurred. 

Despite the challenges presented by the unexpected shortage of influenza vaccine, 

CDC immediately responded by changing recommendations to focus vaccine efforts 

and then began monitoring the results of those changes. State specific flu vaccination data for adults and children were rapidly collected and reported on an ongoing 

basis from November 2004 through February 2005. CDC’s Behavioral Risk Factor 

Surveillance System reported that 62.7 percent of Americans 65 years of age and 

older reported being vaccinated for influenza between September 2004 and January 

2005. This coverage is comparable to the percentage of older Americans vaccinated 

in previous years without supply shortages. So, many at-risk older Americans were 

vaccinated as a result of effective work of state and local health departments and 

the cooperation of younger, healthier Americans who ‘‘stepped aside’’ to allow the 

older and more vulnerable populations to receive vaccine. In addition, through January of 2005, 48.4 percent of young children (between 6 and 23 months of age) were 

13

vaccinated. This marked the highest vaccination coverage rate in response to a firsttime recommendation of a new vaccine for children. 

PREPARATIONS FOR THE 2005-06 INFLUENZA SEASON

As we prepare for the 2005-2006 influenza season, we are incorporating into the 

planning process successful strategies used this past year. For example, our budget 

request reflects the need to strengthen the influenza vaccine supply. Another example is the inclusion of our state and local public health partners and the vaccine 

manufacturers in the planning process for the next influenza season. Another partnership is the National Influenza Summit, which is cosponsored by the American 

Medical Association (AMA) and CDC and has been meeting annually since 2001. 

The Summit brings together stakeholders to discuss issues of concern regarding the 

annual influenza season, including vaccine supply. Additionally, throughout the 

year Summit partners continue to collaborate to address barriers to increased influenza vaccinations. This year the Summit will be held May 10-11 in Chicago. 

The best strategy for influenza prevention and control both during annual outbreaks and during a pandemic is vaccination. However, the vaccine manufacturing 

system in the United States is fragile. Currently, there are only three influenza vaccine manufacturers producing vaccines for the US market, and only one of those 

manufacturers produces its vaccine entirely in the United States. 

Anticipating and planning for the next influenza season is an enormous and complex challenge, involving numerous public health and private sector entities. The 

production of influenza vaccine is a lengthy and complicated process. Six to nine 

months before the influenza season begins, manufacturers must predict demand and 

decide the amount of the vaccine to produce. Moreover, the onset of the influenza 

season, its severity and duration, as well as the potential public demand for vaccine 

are highly unpredictable from year to year. 

CDC has already begun its planning efforts for the 2005-06 influenza season in 

anticipation of continued challenges in meeting the nation’s vaccine supply needs. 

We have established a planning team that meets almost weekly. The team consists 

of staff from across CDC, as well representatives from state and local public health 

agencies with input from the National Vaccine Program Office and the Food and 

Drug Administration. 

To date, CDC has:

• Developed possible scenarios for vaccine supply for the coming season, including 

the possible disruption of production among the current influenza vaccine manufacturers for the U.S. market, the re-entry of Chiron into the market, and the 

entry of additional influenza vaccine manufacturers into the U.S. market; 

• Worked with the Advisory Committee on Immunization Practices (ACIP) to develop more refined vaccination priority plans that can be used should there be 

another critical vaccine shortage; 

• Met with U.S.-licensed and other vaccine manufacturers to discuss their plans for 

the next season, including production estimates, and distribution strategies and 

anticipated time lines for vaccine availability; and 

• Worked with sanofi pasteur and other prospective manufacturers and distributors 

so that, during the prebooking process, customers indicate both the total 

amount of vaccine they need, assuming an adequate supply, and the number 

of doses needed to vaccinate high priority groups in the event of supply limitations. 

In addition, CDC is:

• Pursuing a vaccine contracting strategy that addresses routine influenza vaccine 

purchase and stockpile purchase. We recently signed contracts for 3.5 million 

doses maximum of sanofi pasteur thimerosal-free vaccine, three million doses 

maximum of sanofi pasteur multi-dose vials and one million doses of 

MedImmune’s FluMist. The stockpile doses are being negotiated now that we 

have the contracts. The bulk purchase solicitation is pending. 

• Monitoring antigen-sparing studies designed to determine if reduced vaccine dosages can provide sufficient immunity against influenza, thereby allowing for the 

protection of more persons with fewer doses of vaccine. 

• Developing infection control strategies to prevent the spread of influenza. 

• Drafting a written plan highlighting key activities that state and local public 

health agencies should consider to prepare for the upcoming season. This plan 

is currently being reviewed by our partners, and we hope to have it finalized 

before the end of summer 2005. This will be complemented with a list of key 

activities CDC will undertake. 

• Preparing communication strategies with appropriate messages to respond to the 

fluctuations in supply and demand anticipated throughout the season. 

14

• Developing and implementing a plan to evaluate the season. 

These comprehensive planning efforts are intended to support the achievement of 

important public health objectives, including increasing the domestic production of 

influenza vaccine, increasing demand for vaccine among persons indicated for annual influenza vaccination, and increasing vaccination coverage, particularly among 

persons in high-risk groups, so that we can protect and improve the public’s health. 

CONCLUSION

Influenza is a serious public health threat, taking the lives of about 36,000 Americans each year and hospitalizing on average more than 200,000 each year. For this 

reason, it is imperative that we continue to refine and improve our capacity to meet 

any challenges that arise in terms of vaccine supply, seasonal severity, or other unusual circumstances. We are applying the lessons learned from the challenging experiences of the 2004-05 influenza season for this upcoming season and have established a mechanism to continue to improve and learn in an effort to assure our nation’s citizens are protected from this disease. 

Thank you for focusing attention on this important public health issue and for the 

opportunity to provide an update on our current efforts. CDC is committed to protecting and promoting health for all Americans, preventing disease and disability 

through public health research and public outreach, and supporting important public health interventions, including vaccination. We appreciate your interest in this 

issue and your support of CDC’s efforts to protect the public’s health. 

I will be happy to answer any questions.

Mr. WHITFIELD. Thank you, Dr. Gerberding. 

At this time we recognize Dr. Gellin for his opening statement. 

TESTIMONY OF BRUCE G. GELLIN 

Mr. GELLIN. Thank you very much, Mr. Chairman and members 

of the committee. 

I am Dr. Bruce Gellin. I’m the Director of the National Vaccine 

Program Office of the Department of Health and Human Services. 

I am glad to have the opportunity to speak to you today about the 

U.S. influenza vaccination program and the role of the National 

Vaccine Program Office, NVPO, in strengthening the U.S. Influenza vaccine supply. 

The NVPO was established in 1988 and has responsibility for coordinating and ensuring collaboration among the many Federal 

agencies involved in vaccine and immunization activities. We accomplish this by communicating and coordinating with our HHS 

agencies as well as with the Department of Defense and the U.S. 

International Agency for International Development, and through 

our National Vaccine Advisory Committee The development, production, and delivery of influenza vaccine every year underscores 

the complexities of vaccine production itself. Because they involve 

living organisms, developing and producing vaccines poses different 

challenges than the development and manufacture of drugs. 

In the United States, as with many other countries, the protection of the population through vaccination depends on vaccines produced by private companies for profit as well as for public good. 

U.S. vaccine manufacturers are faced with substantial challenges, 

including the costs and uncertainties of developing new products, 

limited returns on investment for vaccines compared with pharmaceutical products, a regulatory environment that has very high 

standards for safety and effectiveness, concerns about liability 

issues and, for influenza vaccine, variable demands from one season to the next. 

Consequently, the number of companies that produce licensed 

vaccines for the U.S. Market is small. Each type of vaccine is made 

15

by a limited number of suppliers, as you have already commented 

upon; and, in many cases, a single manufacturer supplies vaccines 

that we rely on. 

Producing the flu vaccine has additional challenges. It is a vaccine that has to be redesigned and produced every year and delivered on time to tens of millions of people who desire it over a several month period in the fall in advance of the annual flu season. 

We all witnessed the fragility of the system last year when one of 

our two large manufacturers could not supply vaccine to the market. In recent years, we have also seen both surges in demand and 

delays in the delivery of influenza vaccine creating mismatches between vaccine availability and enhanced demand, resulting in these 

de facto shortages. 

While we are optimistic that an increased number of manufacturers are now interested in the U.S. influenza vaccine market, presently only three companies are licensed to sell flu vaccine in the 

U.S. Two produce an inactivated influenza vaccine, and a third produces a live-attenuated vaccine that is delivered by nasal spray. 

All U.S.-licensed vaccines are developed from viruses that are 

grown in eggs in a process that is unique for influenza vaccine. In 

a collaborative effort, both CDC and FDA contribute to the influenza vaccine manufacturing every year by providing the vaccine 

companies with vaccine reference strains, the so-called seed viruses, as the starting point for a large-scale manufacturing. 

In addition, FDA supplies reagents that set standards for the 

manufacturers that determine the vaccine’s potency. The number of 

vaccine doses produced is limited by the capacity of the manufacturers’ production facilities, the availability of eggs, the yield of 

virus growth in the eggs, and the length of time the manufacturing 

continues into the season. Although it is possible for production to 

continue beyond the summer and into the fall, there is a substantial risk that late-season vaccine will go unused since the later vaccine is produced, the later it will be available to clinics. 

Companies need to plan the amount of vaccine that they will 

produce well in advance of the flu season so they can secure the 

needed egg supply in which the vaccine viruses are grown. Production of annual flu vaccines takes about 6 to 9 months, and any disruption in the production schedule for any reason may lead to a 

delay in the availability of the vaccine. 

Influenza vaccine supply issues are also critical for pandemic influenza preparedness since the pandemic vaccine supply is directly 

related to existing influenza vaccine manufacturing capacity. Many 

experts believe that the risk of a flu pandemic or a global epidemic 

is higher now than it has been in the past because of the spread 

of avian influenza in wild and domestic bird species across Asia. 

Since January 2004, 89 people, mostly young and otherwise 

healthy, have been confirmed by the World Health Organization to 

have been infected with the H5N1 virus, and 52 of them have died. 

And we heard of a new case reporting a death from Cambodia just 

this morning from the World Health Organization. The people who 

died were known to have died of this infection. We are concerned 

that should this virus develop the capacity to be easily transmitted 

among humans, either through a mutation or mixing genes with a 

human flu virus, a pandemic could result. 

16

Ensuring the ability to meet current annual demand for flu vaccine, to improve prevention of influenza disease, and to prepare for 

a pandemic all require strengthening the flu vaccine supply in the 

U.S. Building on the response to the flu vaccine shortage last year, 

NIH and FDA have worked to facilitate the clinical evaluation of 

a flu vaccine produced by GlaxoSmithKline and to expeditiously develop the data base necessary to allow the company to apply for 

FDA approval in the coming influenza season. 

Several additional HHS flu vaccine initiatives have been put in 

place to address our pandemic preparedness needs and will also 

help to achieve our annual influenza prevention goal. The objective 

of these initiatives are to secure and expand the U.S. influenza vaccine supply, diversify production methods, and establish emergency 

surge capacity. To support these activities, HHS received $50 million in fiscal year 2004 and $99 million in fiscal year 2005. The 

President’s fiscal year 2006 budget includes an additional $120 million to further strengthen this component of overall pandemic influenza vaccine preparedness. 

To enhance our Nation’s ability to produce influenza vaccine at 

any time during the year, we issued a contract with Sanofi-Pasteur 

of Swiftwater, Pennsylvania, for $41 million. This has allowed the 

company to change the way it manages eggs, and they have already begun to change its flock management strategy to ensure 

that eggs are available year-round for the vaccine. 

Diversification of flu vaccine production methods will also help to 

strengthen our system. Cell culture technology is a well-established 

vaccine production method for other vaccines such as the inactivated poliovirus, and two companies have registered their cell culture flu technology in Europe. This technology does not require 

eggs as a substrate, thereby avoiding the vulnerabilities associated 

with an egg-based production system. 

Secretary Leavitt announced last month that HHS issued a 5-

year contract to Sanofi-Pasteur for $97.1 million to develop cell culture influenza vaccine technology and conduct clinical trials with 

the goal of obtaining an FDA license for such a vaccine. Under this 

advanced development contract, the company has also committed to 

develop a plan to manufacture this vaccine at a U.S.-based facility 

that has the capacity to manufacture 300 million doses of 

monovalent vaccine over a 1-year period. 

We have three additional areas where we believe strategic investments will move us toward achieving the annual and pandemic 

influenza supply goals. In addition to providing support for cellbased vaccines, we hope to further diversify vaccine technology by 

supporting recombinant pandemic influenza vaccines. We also are 

going to invest in production technology that will increase the efficiency of manufacturing and planing to support research and development of strategies that will stretch the number of vaccine doses 

produced by decreasing the amount of flu virus antigen that is 

needed in each dose. 

While these are only the first steps toward the development of 

an expanded, diversified, and strengthened influenza vaccine supply, the U.S. is leading the global effort to develop vaccines and 

vaccine technologies to meet this challenge. 

17

Thank you for your attention to this topic, and I look forward to 

your questions. Thank you. 

[The prepared statement of Bruce G. Gellin follows:]

PREPARED STATEMENT OF BRUCE G. GELLIN, DIRECTOR, NATIONAL VACCINE PRO- GRAM OFFICE, OFFICE OF PUBLIC HEALTH AND SCIENCE, OFFICE OF THE ASSISTANT

SECRETARY FOR HEALTH, U.S. DEPARTMENT OF HEALTH AND HUMAN SERVICES

Chairman and members of the Committee, I am Dr. Bruce Gellin and I am the 

Director of the National Vaccine Program Office of the Department of Health and 

Human Services. I am pleased to appear before you today to discuss the U.S. influenza vaccination program and the role of the National Vaccine Program Office 

(NVPO) in strengthening U.S. influenza vaccine supply. 

The National Vaccine Program Office was established in 1988 to improve prevention of disease through vaccination and to improve prevention of vaccine associated 

adverse events. NVPO has responsibility for coordinating and ensuring collaboration 

among the many federal agencies involved in vaccine and immunization activities. 

We have addressed this mission by communicating and coordinating with HHS’ 

agencies, the Department of Defense and the US Agency for International Development, and through the National Vaccine Advisory Committee. 

NVPO’s mission is to:

• Coordinate and integrate activities of all Federal agencies involved in immunization efforts; 

• Ensure that these agencies collaborate, so that immunization activities are carried 

out in an efficient, consistent, and timely manner; 

• Develop and implement strategies for achieving the highest possible level of prevention of human diseases through immunization and the highest possible level 

of prevention of adverse reactions to vaccines; and 

• Ensure that minimal gaps occur in Federal planning of vaccine and immunization 

activities. 

The development, production and delivery of influenza vaccine every year underscores the complexities of vaccine production. Because they involve living organisms, 

developing and producing vaccines poses different challenges than drugs. In the 

United States, the protection of the population through vaccination depends on vaccines produced by private companies for profit as well as for public good. 

U.S. Vaccine manufacturers are faced with substantial challenges including the 

costs and uncertainties in developing new products, limited returns on investment 

for vaccines compared with other pharmaceutical products, a regulatory environment that has high standards for safety and effectiveness, concerns about liability 

issues, and variable demand from one influenza season to the next. Consequently, 

the number of companies that produce licensed vaccines for the U.S. market is small 

and each type of vaccine is made by a limited number of suppliers. In many cases 

vaccines that we rely on in the U.S. are supplied by a single manufacturer. 

Producing influenza vaccine has additional challenges. It is a vaccine that has to 

be redesigned and produced each year and delivered on-time to provide protection 

to tens of millions of people over a several month period in the fall in advance of 

the annual influenza season. The fragility of this system was clearly documented 

during the past influenza season, when one of the two large influenza vaccine manufacturers could not supply vaccine to the U.S. market. Recent years also have seen 

surges in demand and delays in the delivery of influenza vaccine creating 

mismatches between vaccine availability and enhanced demand resulting in de facto 

shortages. 

While we are optimistic that an increased number of manufacturers are interested 

in the U.S. influenza vaccine market by, presently only three companies are licensed 

to sell influenza vaccine in the U.S.; two produce inactivated influenza vaccine while 

the third produces a live-attenuated vaccine that is delivered by nasal spray. All 

U.S. licensed influenza vaccines are developed from viruses that are grown in 

embryonated eggs in a process unique for influenza vaccine. Because of the tight 

time lines to produce influenza vaccine, the influenza vaccine manufacturers begin 

production of the following season’s vaccine even before the FDA’s Vaccine and Related Biological Products Advisory Committee meets in mid-February to review global influenza surveillance data and officially select the components—the virus 

strains—that are projected to be the predominant strains circulating in the U.S. 

during the following season. Both CDC and FDA contribute to influenza vaccine 

manufacturing by providing vaccine companies with vaccine reference strains—socalled ‘‘seed viruses’’—as the starting point for large scale manufacturing In a rotating fashion, each of the three vaccine virus strains selected for the following year’s 

18

vaccine composition are adapted to grow in eggs and are injected separately into 

millions of fertilized eggs, which are subsequently incubated to allow the influenza 

virus to grow. These egg-grown viruses are subsequently inactivated, purified, tested for potency, blended into the trivalent vaccine, and filled into syringes or vials. 

The number of influenza vaccine doses produced is limited by the capacity of the 

production facilities, the availability of embryonated eggs, the yield of influenza 

virus from each egg, and the length of time that manufacturing continues. Companies need to plan the amount of vaccine they will produce well in advance of the 

influenza season so that they can secure the needed egg supply in which vaccine 

viruses are grown. Production of annual influenza vaccines, which contain three different influenza viruses, takes about six to nine months. Any disruption of the production schedule may lead to a delay in vaccine availability. Annual variation in the 

timing and severity of influenza outbreaks has resulted in significant fluctuations 

in demand for vaccine so that in some years supply is tight while in others, millions 

of vaccine doses go unused. Although it is possible for production to continue beyond 

the summer and into the fall, there is a substantial risk that late-season vaccine 

will go unused since the later vaccine is produced; the later it will be available to 

the clinics. Traditionally there has been little interest in ‘‘late season’’ vaccination—

which in the United States is around Thanksgiving. . 

Thus, the current fragility in influenza vaccine supply largely is related to:

• A limited number of U.S.-licensed manufacturers 

• Uncertainty regarding annual demand and the ability to sell all vaccine produced 

• An inability to stockpile trivalent vaccine for longer than a year due to annual 

changes in the influenza viruses that circulate and cause disease such that vaccine not used in one season is generally not useful the following year 

• A solely egg-based production system that has limited flexibility and surge capacity 

• Financial and other barriers, to development and U.S. licensure of new influenza 

vaccines, and 

• Limited interest by most of the public and health care community in providing 

‘‘late season’’ vaccination 

The limitations and disruptions of influenza vaccine supply also must be put within the context of continued high rates of mortality and morbidity each year from 

influenza disease and the need to improve our prevention program. In 2004, Acting 

Assistant Secretary for Health, Dr. Beato, asked the National Vaccine Advisory 

Committee (NVAC) to assess the influenza prevention program and to make recommendations on how this program could be improved. NVAC recommendations to 

strengthen influenza disease prevention included:

• Improving our understanding of influenza vaccine demand—and why so many of 

those for whom annual influenza vaccine is recommended do not get vaccinated 

(e.g., persons > 65 years of age, pregnant women and even health care workers), 

• Reviewing the evidence that would support further expansion of the groups recommended for annual vaccination; 

• Implementing systems to better track the burden of influenza illness and the effectiveness of the vaccination program; and, 

• Conducting a thorough review of the Department’s influenza research program to 

identify gaps, and strengthening of cross-Department collaboration. 

A sufficient and secure influenza vaccine supply is a prerequisite if we are to implement these recommendations and improve influenza disease prevention by increasing vaccination coverage and expanding groups recommended for vaccination. 

Influenza vaccine supply issues also are critical for pandemic influenza preparedness since the pandemic vaccine supply is directly related to existing influenza vaccine manufacturing capacity. Many experts believe that the risk of an influenza 

pandemic—or global epidemic—is higher than it has ever been in the past because 

of the spread of avian H5N1 influenza in multiple wild and domestic bird species 

across much of Asia. Since January 2004, 88 people, mostly young and otherwise 

healthy, have been confirmed by the World Health Organization to have been infected with the H5N1 influenza virus, and nearly two out of three of people who 

are known to have been infected have died as a result of this infection. Should this 

virus develop the capacity to be easily transmitted among humans, either through 

a mutation or by mixing genes with a human influenza virus, a pandemic could result. Because H5 influenza viruses have not previously spread among people, the 

entire global population would be susceptible 

We are all keeping a watchful eye on the current situation in Asia while at the 

same time recognizing that, in recent years, there also have been outbreaks of avian 

influenza infections and sporadic human cases caused by other influenza virus 

subtypes originating in Europe and in Canada as well as in Asia. A pandemic can 

19

unpredictably occur, could be caused by an influenza subtype other than H5, and 

could originate in any country. 

Ensuring the ability to meet current annual demand for influenza vaccine, to improve the prevention of influenza disease, and to prepare for an influenza pandemic 

all require strengthening the influenza vaccine supply in the U.S. Building on the 

response to the influenza vaccine shortage in the 2004-05 season, NIH and FDA 

have worked to facilitate the clinical evaluation of an influenza vaccine produced by 

GSK and to expeditiously consider a licensure application such that this influenza 

vaccine may potentially be licensed for the upcoming season. 

Several additional HHS influenza vaccine supply initiatives have been put in 

place to address pandemic preparedness needs and will also help to achieve annual 

influenza prevention goals. The objectives of these initiatives are to secure and expand U.S. influenza vaccine supply, diversify production methods, and establish 

emergency surge capacity. To support these activities, HHS received $50 million in 

FY2004 and $99 million in FY2005. The President’s Budget for FY2006 includes an 

additional $120 million to further strengthen this component of the overall pandemic influenza preparedness efforts. 

Because influenza vaccine is produced to meet the seasonal demand in the fall, 

production also is seasonal and embryonated eggs have not been available to manufacturers year-round. To enhance our Nation’s ability to produce influenza vaccine 

at any time during the year, HHS issued a five-year contract to Sanofi-Pasteur of 

Swiftwater, Pennsylvania, on September 30, 2004 for $40.1 million. Under this contract, Sanofi-Pasteur has already begun to change its flock management strategy to 

provide a secure, year-round supply of eggs suitable for influenza vaccine production 

at full manufacturing capacity. It also will increase the number of egg-laying flocks 

by 25% to provide contingency flocks in case of an emergency. These eggs may be 

used to support additional production of annual influenza vaccine in the event of 

a vaccine shortage with the doses being delivered later in the fall. 

Diversification of influenza vaccine production methods also will help strengthen 

the system. Cell culture technology is a well-established vaccine production method 

for other vaccines such as the inactivated poliovirus vaccine and two companies 

have registered their cell-culture based influenza vaccine technology in Europe. This 

production technology does not require eggs as a substrate for growth of vaccine 

virus, thereby avoiding the vulnerabilities associated with an egg-based production 

system. It also may be more amenable to surge capacity production when influenza 

vaccine supply needs to be expanded rapidly such as at the time of a pandemic. Additionally, cell culture technology uses a closed system that dramatically reduces the 

possibility for contamination. Finally, the new cell-based influenza vaccines provide 

an option for people who are allergic to eggs and therefore unable to receive the currently licensed vaccines. 

Secretary Leavitt announced last month that the Department of Health and 

Human Services issued a five-year contract on March 31, 2005 to Sanofi-Pasteur for 

$97.1 million to develop cell culture influenza vaccine technology and conduct clinical trials, with the goal of obtaining an FDA license for this vaccine. Under this 

advanced development contract, the company also has committed to develop a plan 

to manufacture this vaccine at a U.S.-based facility with a capacity to manufacture 

300 million doses of monovalent pandemic vaccine over a one year period. 

These important steps to strengthen our national influenza vaccine supply 

through assuring the egg-supply and diversifying and expanding production capacity 

will be followed this year by additional measures to increase influenza vaccine production capacity and expand the number of influenza vaccine doses made using that 

capacity. Supported by the pandemic influenza vaccine initiative in the FY 2006 

budget request for $120 M, we posted synopses of three additional areas where we 

believe strategic investments move us toward achieving annual and pandemic influenza vaccine supply goals in the March 17, 2005 edition of FedBizOpps. On April 

29, 2005, the first of these requests for proposals was posted, providing support for 

the development of cell-culture based and recombinant pandemic influenza vaccines. 

This contract, which we hope will lead to the licensure and U.S. production of a next 

generation influenza vaccine, will further increase production capacity and diversification of the manufacturing base. 

Whereas building new influenza vaccine production facilities is an intermediate 

approach to expand the influenza vaccine supply, other strategies are more short 

term and expand the current vaccine capacity by increasing the efficiency with 

which influenza vaccine doses are produced. Influenza vaccine is manufactured in 

a series of steps—developing an influenza virus master seed for vaccine production, 

inoculating the virus into eggs, growing, harvesting, purifying, splitting, formulating, and filling it into vials or syringes. Improving efficiency at any step in this 

process can increase the eventual yield and number of vaccine doses produced. A 

20

second RFP will be issued this spring and will support improvements of the manufacturing process to increase overall influenza vaccine production at current manufacturing facilities. 

The third RFP that will be issued is to provide support for research and development, leading to licensure of strategies that will stretch the number of vaccine doses 

produced by decreasing the amount of influenza virus antigen that is needed in each 

dose. The concept underlying these ‘‘dose-stretching’’ strategies is that by changing 

either the influenza vaccine or the way it’s administered, you may be able to improve the immune response to vaccination and provide protection while using less 

of the vaccine antigen. By using less antigen in each vaccine dose, the number of 

doses that can be made at any level of production capacity would be significantly 

increased. The two most promising antigen-sparing approaches are either to add an 

adjuvant—a substance that stimulates the immune response to a vaccine formulation, or administering the vaccine into the skin (similar to the approach used in a 

skin test for Tb) where large numbers of immune cells are located. Both strategies 

have been evaluated in clinical trials and have the potential to expand influenza 

vaccine supply several-fold. 

The increases in the FY 2006 President’s Budget request will support ongoing activities to ensure that the Nation will have an adequate influenza vaccine supply 

to respond better to yearly epidemics and to influenza pandemics. While issuing the 

requests for proposals and completing the contracts is only the first step toward the 

development of an expanded, diversified, and strengthened influenza vaccine supply, 

the U.S. is leading the global effort to develop vaccines and vaccine technologies to 

meet this challenge. 

Thank you for your attention to my remarks this morning—and more importantly 

to the attention that you have paid to the prevention and control of annual and pandemic influenza. 

I would be happy to answer any questions from the Committee.

Mr. WHITFIELD. Thank you. 

Dr. Goodman, you are recognized for 5 minutes. 

TESTIMONY OF JESSE L. GOODMAN 

Mr. GOODMAN. Thank you, Mr. Chairman. 

Mr. Chairman and members of the committee, I am Jesse Goodman. I am the Director of the Center for Biologics, Evaluation and 

Research for the FDA. I am also an infectious disease physician. 

I appreciate the opportunity to update you on our readiness efforts 

for the 2005 and 2006 and future flu seasons, and I am actually 

pleased to report continuing progress. I also want to assure the 

American public and yourselves that the safety, effectiveness, and 

availability of vaccines are among FDA’s highest priorities. 

Talking first about last season, flu vaccine is highly cost-effective 

and beneficial to the public, as many of you have emphasized. However, also, as we have emphasized in previous testimony, flu vaccine manufacturing is particularly complex and challenging, and 

the market is also very fragile, in part because of our successes. Increases in demand have been coupled by a decline in the number 

of manufacturers. As Dr. Burgess happened to mention also, this 

is something that we see in other sectors of the vaccine industry. 

As you know, in October 2004, the British regulatory agency, the 

MHRA, suspended the license of Chiron, and FDA also concluded 

that the safety of the vaccine Chiron produced for 2004 could not 

be assured. 

Now, I want to say that as soon as we learned this, really within 

hours, FDA worked with great urgency and in close collaboration 

with HHS and CDC and other components and with the private 

sector. We engaged them very quickly, and we obtained 5 million 

additional doses of U.S.-licensed vaccine, and this increased the 

supply last year to 61 million doses. 

21

We were still concerned that needs could outstrip supply, particularly if we had a significant flu season, so we sought additional 

vaccine licensed in other countries with quality regulatory agencies 

that might be made available as investigational new drugs urgently. FDA immediately sent teams to the facilities of such potential sponsors. Our staff carefully evaluated their manufacturing 

processes and reviewed a large volume of manufacturing clinical 

data, and this was all done within just a few weeks. These efforts 

resulted in INDs that could have permitted the use of approximately 4 million doses of GlaxoSmithKline’s vaccine and 1 million 

doses from Berna Biotech if they were needed. 

The interactions with these and, in fact, other manufacturers 

have provided valuable information that is helping us now. They 

have stimulated interest in a number of companies in pursuing 

U.S. Licensure, and this is at least one constructive outcome of the 

challenges we all faced last year. I am very proud of the efforts and 

accomplishments of more than 50 FDA professionals as well as 

many HHS colleagues in working collaboratively for long hours on 

these challenges. 

Well, what are we doing going forward? We, too, the last thing 

we want to see is this problem recur, whether it is this year or the 

future years, and we need to work both for this year and for future 

years. We are doing everything we can to improve flu vaccine for 

this coming season and in future years, and we are taking a dualtrack approach. 

First, because Chiron’s correction of its manufacturing processes 

is a major factor, FDA is doing all we can to facilitate that effort. 

As Ms. Schakowsky alluded to the problem of information sharing, 

agreements have been put in place with both Chiron and MHRA 

that have allowed full sharing of information, and this has been extremely productive. FDA and MHRA collaborative reviewed 

Chiron’s remediation plans, and these are extensive plans, and are 

providing ongoing feedback as they are implemented and as manufacturing activities startup. So this is a very rich, interactive relationship. 

FDA and the MHRA, the British regulators, are working closely 

together and actively communicating also on inspectional activities. 

We accompanied MHRA on inspections of Chiron Liverpool in December of 2004 and again in February. We are continuing to coordinate with them on these inspectional efforts and plan a joint effort 

again right now; one is in the planning stages for the upcoming 

time period. 

As a result of a great deal of progress at the Liverpool facility, 

as most of you know, the British regulators, MHRA, lifted its license suspension on March 2, 2005, allowing Chiron to proceed 

with manufacturing. To get an updated overview of some of these 

ongoing efforts, last week I met with MHRA leadership in London 

and I also visited Chiron’s Liverpool facility to meet with their senior leadership team onsite. Chiron reported to me on their progress 

and specifically their progress in addressing the issues of concern 

including changes made at their facility, changes in their manufacturing process, and improvements in their quality systems. 

Once Chiron has completed implementation of its key remediation measures and the critical stages of manufacturing are in full 

22

swing and can therefore be adequately evaluated, likely in the late 

spring or early summer, FDA will conduct its comprehensive inspection to assure that Chiron has adequately addressed its problems. 

It is too early to predict the final outcome of Chiron’s remediation activities, but, nonetheless, I can say the company has made 

significant progress in a short time. However, there are great demands in applying the necessary changes that have been made to 

full-scale manufacturing in a very tight timeframe. So this is the 

challenge that remains. 

Because of this, and because of the long-term issues that we have 

all discussed, FDA is simultaneously working on a second track. 

That track aims to facilitate greater capacity and diversification, 

an issue raised by Ms. DeGette, in the U.S. influenza vaccine supply. It is important to emphasize, though, that the demand for vaccine—the demand for the vaccine and other economic issues are 

really the primary factors here that determine whether a manufacturer will seek and maintain a license in a country, including the 

U.S., the strength of the manufacturing infrastructure in the 

United States, and the amount of vaccine that a manufacturer will 

decide to produce. 

Some of the developments in those areas right now, Sanofi-Pasteur, as you know, has indicated that it can produce the same or 

more doses of its vaccine for the coming flu season. MedImmune 

plans to produce a similar amount of vaccine and is also performing studies that, if successful, may allow future further use of 

its vaccine in future years in additional age groups. 

FDA, as Dr. Gellin mentioned, has informed manufacturers that 

it will consider new approaches to influenza vaccine licensing, such 

as accelerated approval based on surrogate markers like the antibody response that are likely to predict benefit. GlaxoSmithKline, 

as a result, has stated that in the near future it expects to submit 

a license application to FDA seeking accelerated approval of this 

influenza vaccine and that, if licensed, it should be able to supply 

10 million doses for the 2005 to 2006 season. 

But also we have challenged ourselves to identify other lessons 

learned, something identified by Congresswoman Baldwin, from 

this past year’s influenza season to do whatever we can from our 

end to help prevent similar future problems. One that many of you 

are aware of is that we are now conducting inspections of flu vaccine manufacturers on an annual basis. This can’t solve all problems, we can’t manufacture the vaccine for them, but what it may 

do is allow earlier recognition and intervention, and perhaps in a 

preventive mode, when problems occur. We have completed additional information-sharing agreements with numerous foreign regulatory agencies focusing on ones where flu and other critical vaccine information sharing is important. 

Finally, again mentioned by Dr. Gellin, in terms of the pandemic 

preparedness, we are extremely actively engaged with sponsors and 

manufacturers who are interested in developing new technologies, 

including cell-culture-based and recombinant vaccines. Although a 

lot of work remains to be done on these technologies, they provide 

important alternatives to egg-based production, and they may help 

23

reduce the time requirements and certain risks of contamination 

inherent in egg-based production. 

So, to conclude, we are doing everything we can in conjunction 

with other public health service agencies and industry to enhance 

the availability of flu vaccine both now and in the future. An adequate vaccine supply supplemented by effective antivirals can 

greatly decrease our vulnerability and provide protection against 

influenza. All the steps we have discussed will not only help protect 

Americans from flu every year but can help strengthen our infrastructure and its capacity and better prepare us for a pandemic, 

and we welcome the opportunity to work with you in Congress to 

accomplish these important health goals. So I thank you for having 

me to discuss this important issue, and I am happy to participate 

in answering your questions. 

Thank you. 

[The prepared statement of Jesse L. Goodman follows:]

PREPARED STATEMENT OF JESSE L. GOODMAN, DIRECTOR, CENTER FOR BIOLOGICS, EVALUATION AND RESEARCH, FOOD AND DRUG ADMINISTRATION, U.S. DEPARTMENT

OF HEALTH AND HUMAN SERVICES

INTRODUCTION

Mr. Chairman and members of the Committee, I am Dr. Jesse Goodman, Director 

of the Center for Biologics Evaluation and Research (CBER) at the Food and Drug 

Administration (FDA) and also a practicing infectious diseases specialist. I appreciate the opportunity to update you on FDA’s recent and ongoing efforts, in collaboration with other Department of Health and Human Services (HHS) agencies and 

with the private sector, to address issues surrounding the influenza vaccine supply 

needs for the next flu season and to do what we can to help prevent the problems 

encountered last season from recurring. These efforts should also better prepare us 

for the next global influenza pandemic. 

FDA is responsible for the regulation and oversight of vaccines in the United 

States. Vaccines are among our most important and cost-effective medical interventions, preventing disease in those who receive them and reducing the spread and 

risk of infections through our communities. I want to assure the American public 

that the safety, effectiveness and availability of vaccines are among FDA’s highest 

priorities and that we work closely with DHHS, the Centers for Disease Control and 

Prevention (CDC) and the National Institutes of Health (NIH), as well as with manufacturers, in addressing this important area of public health preparedness. 

THE 2004-2005 INFLUENZA SEASON

As you know, influenza vaccine is unique because its active ingredients—the virus 

strains used to develop the vaccine—change almost every year. Therefore, manufacturers must produce tens of millions of doses of a new vaccine each year. While 

promising technologies such as cell culture and recombinant protein and DNA-based 

influenza vaccines are in the research and development stages and we are working 

with our HHS colleagues to advance their development, the most efficient vaccine 

production methods currently available involve the use of millions of live, non-sterile 

eggs to grow three different strains of influenza viruses annually. This is a complex 

process that spans several months during which manufacturers cultivate the appropriate strains to make the vaccine. These factors present an enormous challenge for 

manufacturers and create uncertainty for vaccine supply. 

Each year, FDA begins working with manufacturers at the earliest stages of vaccine development, and we continue to assist them throughout the production phase. 

We do this not only through our regulatory evaluations, but also by providing needed influenza strains and standards that can be used for efficient manufacturing. 

Specifically, we provide reagents to assure that the vaccine is potent and we further 

evaluate the vaccine through the use and review of laboratory tests that help assure 

the safety and efficacy of the vaccine. Throughout this process, FDA frequently discusses technical and manufacturing issues with manufacturers. 

Influenza vaccine is highly cost-effective and beneficial to the public. Over the last 

decade, health care providers, CDC and others have been very successful in expanding the number of Americans who receive the vaccine. However, as we have emphaVerDate 0ct 09 2002 14:59 Jun 09, 2006 Jkt 000000 PO 00000 Frm 00027 Fmt 6633 Sfmt 6621 F:\DOCS\21633.TXT HCOM1 PsN: JOEP
24

sized in previous Congressional testimony, the influenza vaccine market is very 

fragile because the increasing demand has been coupled with a decline in the number of U.S-based and U.S.-licensed manufacturers. Importantly, the market returns 

for producing this and many other vaccines are usually minimal, while the financial 

and other risks involved are great. Further, vaccine manufacturing requires careful 

and comprehensive controls, a complex and sometimes unpredictable manufacturing 

process and highly specialized facilities that can be expensive to maintain and update. For the 2004-2005 season, only three U.S. licensed manufacturers began production of influenza virus vaccine: Chiron Corporation and aventis pasteur produced 

inactivated vaccine, the form currently used for most high-risk individuals, while 

MedImmune, Inc. manufactured FluMist, a recently-approved, live, attenuated 

(weakened and safe) influenza vaccine. 

As you know, on October 5, 2004, the United Kingdom’s Medicines and Healthcare 

products Regulatory Agency (MHRA) suspended Chiron’s license to manufacture influenza vaccine due to good manufacturing practice deficiencies that led to sterility 

failures in filled vials of the vaccine. FDA and MHRA’s review of Chiron’s investigation of the root cause of the company’s sterility failures and our own review and 

inspections of their facility pointed to problems that led FDA to the conclusion that 

the sterility, and therefore safety, of the vaccine Chiron produced for the 2004-2005 

influenza season could not be assured. 

Efforts to Obtain Additional Vaccine 

The loss of Chiron’s planned contribution to the U.S. influenza vaccine supply 

posed serious challenges. FDA worked with urgency, aggressiveness and in close coordination with CDC and other components of HHS and the private sector to explore all viable options to secure additional doses. FDA worked with sanofi pasteur 

and MedImmune to secure approximately five million additional doses of U.S. licensed vaccine. Sanofi pasteur increased production to 58 million doses of Fluzone, 

and MedImmune scaled up to produce three million doses of FluMist. FluMist is 

currently recommended for healthy individuals 5 to 49 years of age, and therefore 

provides an option for those who would not receive vaccine under CDC’s priority 

guidelines, such as the U.S. military. Therefore, to expand further the supply of vaccine to those with the greatest need, then-Secretary Thompson, in cooperation with 

the Department of Defense, announced that the military would maximize its use of 

FluMist as a substitute for inactivated vaccine, making an additional 200,000 doses 

of injectable vaccine available to HHS for high-risk civilian populations. Because 

sanofi pasteur produces pediatric dosage forms of vaccine for the U.S. market, the 

supply of vaccine available for high-risk children was, fortunately, not reduced. 

Through these collaborative efforts, manufacturers increased the available supply of 

licensed influenza vaccine for the U.S. population to 61 million doses for this past 

influenza season, compared with approximately 83 million doses distributed in 2003-

2004 and in 2002-2003, 77 million doses in 2001-2002 and 70 million doses in 2000-

2001. 

Because there was a concern that the need and demand could still outstrip supply, particularly if we faced a severe influenza season, we sought additional doses 

of vaccine that could be safely used in an emergency. Thus, in addition to enhancing 

the supplies of vaccine approved for use in the U.S., we were able to rapidly identify 

suppliers of approximately five million doses of additional vaccine, licensed in other 

countries, which could potentially be made available under an FDA investigational 

new drug (IND) application. With remarkable cooperation from several companies 

and from other regulatory agencies (including the Paul Ehrlich Institute, Germany; 

Therapeutic Goods Administration, Australia; Swiss Medic and Health Canada) 

FDA immediately sent inspectors and scientists to the manufacturing facilities of 

potential IND sponsors to evaluate their manufacturing processes. Coupled with 

these efforts, we also reviewed a large volume of manufacturing and clinical data, 

all within a few weeks. These efforts resulted in INDs that would have permitted 

the use of approximately four million doses from GlaxoSmithKline (GSK) and one 

million doses from Berna Biotech, had they been needed. HHS and FDA’s coordinated interactions with these and other influenza vaccine manufacturers and regulatory agencies also provided valuable information and strengthened relationships 

that helped stimulate interest by additional influenza vaccine manufacturers to pursue U.S. licensure. This is one constructive outcome of the challenges we faced this 

past flu season. I am very proud of the efforts and accomplishments of more than 

50 FDA employees, from multiple offices, as well as our HHS and CDC colleagues, 

working collaboratively for long hours to help meet this public health challenge. 

25

Efforts to Enhance Antiviral and Pneumococcal Vaccine Supplies 

Following the loss of the Chiron vaccine, FDA also contacted manufacturers 

worldwide in an effort to identify additional supplies of antiviral medications that 

could be used, if needed, for treatment of millions of influenza cases and for prevention in high-risk individuals in epidemic settings. 

Serious morbidity and mortality from influenza is often due to the complication 

of bacterial pneumonia. In particular, pneumococcal pneumonia is one of the most 

common serious complications of influenza in high-risk individuals. This complication is preventable through use of an inexpensive, yet underutilized, pneumococcal 

vaccine. The influenza vaccine shortage provided an impetus to increase the availability of vaccine against pneumonia. In cooperation with HHS, Merck & Company 

tripled its production of its pneumococcal polysaccharide vaccine from 6 million to 

more than 17 million doses. The beneficial effects of pneumococcal vaccine last for 

five to ten years, and CDC and other public health agencies strongly encourage its 

use. 

PLANS FOR 2005 AND FUTURE YEARS

At the same time that we have addressed the past year’s shortage by facilitating 

the availability of additional vaccine, antivirals, and pneumococcal vaccine, we are 

doing everything we can to help improve supply for future years. We are applying 

a dual-track strategy. 

First, the most important single factor that will affect the status of the U.S. influenza vaccine supply for the coming year will be whether Chiron can correct its manufacturing problems at the Liverpool facility and supply vaccine for the U.S. market. 

To succeed, Chiron must implement extensive improvements needed to satisfy both 

FDA and the U.K. regulatory authority. We have come a long way since October 

5, 2004, when MHRA could not legally communicate with FDA about its pending 

enforcement action. 

After MHRA’s suspension of Chiron’s license to manufacture influenza virus vaccine at the Liverpool facility, Chiron gave MHRA and FDA permission to discuss 

information that could not otherwise be shared. This arrangement allowed free exchange of information as the company initiated efforts to address the problems at 

Liverpool. Then, on February 14, 2005, FDA signed a general information-sharing 

agreement with MHRA that, among other things, permits advance communication 

on important issues and not limited to Chiron’s influenza vaccines. Chiron developed an extremely comprehensive remediation plan which has been undergoing implementation during recent months. FDA and MHRA reviewed and provided extensive input on this plan and the Agency continues to provide extensive feedback to 

both Chiron and MHRA. 

FDA and MHRA are also working together and actively communicating on 

inspectional activities. For example, FDA accompanied MHRA on inspections of the 

Chiron Liverpool facility in December 2004 and February 2005, and has had very 

frequent interactions with both Chiron and MHRA concerning implementation of 

the remediation plan and start up of manufacturing activities. As a result of 

progress in the Liverpool facility, MHRA lifted its license suspension on March 2, 

2005, which has allowed Chiron to proceed with manufacturing plans. FDA is continuing to interact intensively with both MHRA and Chiron as the company further 

institutes its remediation plan and begins to gear up for manufacturing. 

FDA will continue to coordinate with and accompany MHRA on future inspections—one of which is currently in the planning stage. FDA will continue to provide 

MHRA and Chiron with feedback and information. Once Chiron has implemented 

all key remediation measures and critical stages of manufacturing are in full swing 

(likely in late Spring or early Summer), FDA will conduct a complete and comprehensive inspection of Chiron’s Liverpool facility to verify that Chiron has adequately addressed its problems. Our continuing interactions with Chiron indicate 

the significant progress that has been made in a short period of time, but it is also 

clear that full scale manufacturing and all its associated challenges remain and will 

require continuing intensive efforts that will need to succeed under very tight time 

frames. Only after passing MHRA and FDA inspections will Chiron be able to provide vaccine for the U.S. market. Chiron’s vaccine will have to meet all FDA-required standards, including sterility and other safety testing, prior to distribution 

to the public. While it is too early to predict the outcome of Chiron’s remediation 

activities, Chiron is making continuing progress toward its goal of being able to supply vaccine for the US market for the upcoming season. 

While working hard to facilitate Chiron’s efforts to correct its manufacturing problems, FDA is also working on a second track to improve preparedness for this and 

future influenza seasons and facilitate greater overall capacity and diversification 

26

of the U.S. influenza vaccine supply. It is important to recognize, however, that demand for vaccine and other economic factors are, and will, remain the primary factors that determine 1) whether a manufacturer will seek and maintain licensure, 

2) the strength of the manufacturing infrastructure in the U.S., and 3) the amount 

of vaccine that manufacturers produce for the U.S. market. These factors also apply 

to other vaccines and the U.S. vaccine supply infrastructure in general. CDC and 

FDA are working to encourage extending vaccination throughout the flu season, including January and February. If such demand exists, manufacturers can increase 

total doses available by producing vaccine that becomes available during these 

months. Because influenza cases usually continue or peak well after the NovemberDecember time period when most people seek immunization, continuing vaccination 

is beneficial to recipients and should be encouraged. 

MedImmune is performing studies that, if successful, may support future use of 

its vaccine in additional age groups. MedImmune has also stated that, if successful, 

it should be able to produce additional vaccine to support those needs. Sanofi pasteur has indicated that it has the capability to produce the same or more doses of 

Fluzone for the 2005-2006 influenza season as it did in 2004-2005. Greater influenza 

vaccine production capacity and an increase in vaccination rates are also critical for 

improving our preparedness for a global pandemic. In the event of a pandemic, we 

would need the capacity to rapidly produce a new vaccine and make it available to 

all who need it. 

While greater production by currently-licensed manufacturers will enable us to 

meet some of these needs, recent events highlight the potential benefits of having 

more U.S.-licensed manufacturers. In recognition of this, FDA has been doing everything possible to stimulate interested foreign-licensed manufacturers to provide or, 

where needed, develop the safety and effectiveness data required for U.S. licensure. 

FDA has interacted constructively with several interested firms in this regard. FDA 

has informed manufacturers that it is willing to consider new approaches to influenza vaccine licensing, such as accelerated approval based on likely surrogate markers (e.g. the degree of antibody response to the vaccine), followed by post-licensure 

clinical effectiveness evaluation. The National Institute of Allergy and Infectious 

Diseases (NIAID) supported clinical studies of GSK’s influenza vaccine. Thanks in 

part to that research, GSK has stated that it expects to submit the needed data to 

FDA to seek accelerated approval of its influenza vaccine for the U.S. market in the 

near future. GSK has stated that if its vaccine is licensed, it expects to be able to 

supply 10 million doses of vaccine in time for the 2005-6 season. ID Biomedical of 

Canada has also indicated interest in seeking accelerated approval for its influenza 

vaccine. It has stated that it expects to complete needed studies and submit a license application in 2006 and that, if licensed, vaccine would potentially be available in time for the 2006-7 season. 

So, in preparation for the upcoming influenza season, we are continuing to do everything we can to facilitate both Chiron’s remediation and GSK’s licensure efforts 

so that these vaccines can potentially be available to help meet the 2005-6 flu season’s needs. In either case, potential difficulties should become apparent during the 

summer. If it becomes necessary to obtain additional vaccine for use under an IND, 

the experience and relationships built this year through reviewing and obtaining 

vaccines licensed by other regulatory authorities will be helpful. 

OTHER IMPORTANT ACTIVITIES

We have challenged ourselves to identify other lessons learned from this past 

year’s influenza season and to examine how we can use our recent experience to 

help prevent similar problems in the future. For example, as I previously mentioned, we have identified the need to allow free flow of information between FDA 

and our international regulatory counterparts, and vice versa. We committed to do 

so and have now completed confidentiality commitments that allow such information sharing with regulatory agencies in the UK, Australia, Canada, the European 

Commission, Japan, Mexico, Switzerland, Singapore, and South Africa. We are also 

in final negotiations on an agreement with New Zealand. We are undertaking discussions with several additional European countries where vaccine manufacturing 

important to U.S. public health takes place. In addition, we are continuing to inventory foreign manufacturing to identify any additional information-sharing needs. We 

also plan to seek agreements with other national regulatory authorities where necessary. These commitments will help assure that legal barriers do not inhibit critical communication between these agencies and FDA. 

As in past years, FDA will work closely with CDC, WHO and others to develop 

materials for standardization and evaluation of influenza vaccine for the 2005-2006 

flu season. FDA will continue to identify and evaluate influenza virus strains suitVerDate 0ct 09 2002 14:59 Jun 09, 2006 Jkt 000000 PO 00000 Frm 00030 Fmt 6633 Sfmt 6621 F:\DOCS\21633.TXT HCOM1 PsN: JOEP
27

able for manufacturing purposes and provide to manufacturers the high growth 

reassortant viruses they need to help to facilitate efficient, timely and adequate production of vaccine. 

Recent events highlight the importance of FDA’s technical support for the U.S. 

and global vaccine manufacturing infrastructure and the need for manufacturers to 

invest in more efficient, reliable and modern methods for producing influenza vaccine. With adequate supply and widespread immunization, we will be more likely 

to meet the challenge of annual influenza epidemics and future pandemics. 

CBER has also initiated a vulnerability analysis of foreign manufacturing of U.S. 

licensed products that are critical to U.S. public health. This analysis will include 

other vaccines and help to identify areas where consideration of actions to support 

supply may be needed, such as stockpiling or seeking additional licensed manufacturers. In addition, in the hope that more vaccines can be licensed and available 

to multiple regions of the world, FDA has been working with our foreign regulatory 

counterparts and with manufacturers to enhance international communication with 

the goal of more efficient product development. We are also encouraging development of scientific and regulatory standards for safety, potency and effectiveness that 

will help achieve these goals. FDA serves as a designated Collaborating Center of 

the World Health Organization (WHO), and we work closely with our sister agencies 

at HHS and WHO on pandemic preparedness and responding to other emerging infectious diseases. 

Under FDA’s Critical Path initiative, we are working collaboratively with HHS 

agencies and the private sector to facilitate the rapid development, evaluation and 

availability of medical products and related manufacturing, safety and effectiveness 

standards. The rapid development and implementation of a West Nile Virus screening test for the blood supply provides a good example of the effectiveness of this type 

of a collaborative public-private approach to meet the threat of emerging infections. 

To help manufacturers overcome challenges such as the problems Chiron is experiencing, FDA, under its current Good Manufacturing Practice for the 21st Century 

initiative, is working with industry to encourage the use of advanced technologies, 

quality systems and risk-based approaches that build quality into the manufacturing process. FDA is also using the same quality systems and risk-based approaches to modernize its manufacturing-related regulatory responsibilities. Recognizing that clarity and quality in vaccine GMPs is of increasing importance, CBER 

has planned increasing outreach in this area for the coming months, including international workshops and meetings. 

The experiences of the past six months have taught us important lessons about 

manufacturing and inspectional activities with respect to influenza vaccine. The annual changes in the flu vaccine and the increased dependence on a smaller number 

of manufacturers highlight the risks of unexpected manufacturing difficulties. For 

these reasons, in 2005 and the future, we plan to inspect influenza vaccine manufacturers annually. Further, while FDA has always interacted extensively with influenza vaccine manufacturers throughout the vaccine production cycle, we plan additional interactions, including foreign regulatory agencies where appropriate, based 

on findings or events that raise concerns. 

PANDEMIC PREPAREDNESS

HHS is working to help transform the influenza marketplace and reinvigorate the 

influenza vaccine infrastructure by investing in promising new technologies, securing additional licensed vaccines and medicines and preparing stronger response 

plans and capacity. Furthermore, the lessons we have learned and insights gained 

from recent experiences with influenza vaccine are critical in preparing for an influenza pandemic. This is something that FDA and others in the public health community are very concerned about, given the eventual likelihood of a pandemic and the 

recent outbreaks of avian influenza in Asia. More widespread vaccination during periods between pandemics not only has direct health benefits but also will increase 

vaccine production capacity and help America and the global community better prepare for an influenza pandemic. 

As part of HHS’ efforts to support pandemic preparedness, NIAID contracted for 

the production of pilot lots of potential pandemic vaccines from two licensed U.S. 

manufacturers. HHS contracted for the production of two million doses of vaccine 

against H5N1 avian flu, the influenza type of current concern in Southeast Asia. 

NIAID recently initiated critical clinical studies of the first H5N1 vaccine under 

INDs that FDA oversees, and both agencies will be working together to evaluate the 

results. While much work remains, these steps to produce and evaluate pandemic 

influenza vaccines are a critical component of our preparedness efforts. They will 

inform us about the needed dosing and schedule of pandemic vaccine and help pave 

28

the way for evaluation and potential licensure and broader use of a vaccine against 

avian flu if needed. 

In addition, NIH and FDA support studies to develop vaccine strategies that could 

lead to longer-lived immunity and the production of an immune response that could 

potentially allow one year’s vaccine to better provide immunity for multiple flu seasons. FDA is actively engaged with sponsors and manufacturers interested in developing new technologies for influenza vaccine manufacture, including cell-culture 

based and recombinant vaccines. FDA has extensive experience in overseeing the 

development and licensure of cell-culture based and recombinant vaccines including 

those for prevention of other infectious diseases, such as chicken pox, polio, rubella, 

and hepatitis A and B. 

FDA’s goal is to support a process to produce pandemic influenza vaccine in the 

shortest amount of time possible and protect the largest number of people, using 

a vaccine that is safe, effective and easy to deliver. The full details of the draft Pandemic Influenza Preparedness and Response Plan are located on the HHS website 

at: http://www.dhhs.gov/nvpo/pandemicplan/annex5.pdf. Through all these efforts, 

and with enhanced global surveillance by CDC and its partners, we have the unique 

opportunity to effectively intervene and potentially blunt a global pandemic, should 

one occur. 

CONCLUSION

HHS has proposed spending of $439 million Department-wide on influenza related activities in the FY 2006 President’s Budget. This amount is an increase of $397 

million over the FY 2001 level of $42 million, and represents the Administration’s 

commitment to addressing this important public health concern. 

Although we may never completely prevent influenza outbreaks, we can greatly 

decrease our vulnerability and provide protection against influenza with a robust 

vaccine supply supplemented by effective antivirals. FDA recognizes the need to continue to work with multiple partners, including manufacturers, to increase supply 

and to support progress toward more modern, dependable methods of production. All 

of the steps we have discussed will not only help protect Americans from flu every 

year but will help prepare us for future influenza seasons or in the event that a 

pandemic strikes. We welcome the opportunity to work with Congress to accomplish 

these important public health goals. 

Once again, thank you for inviting me to testify on this very important issue. 

I am happy to respond to your questions.

Mr. WHITFIELD. Thank you very much for your testimony. 

I will start the questioning period here. 

First of all, we are dealing with a very complex issue, when you 

consider the limited capacity, because I guess we only have two or 

three manufacturers that are licensed to sell in the U.S., the availability of embryonated eggs is limited, the yield of the influenza 

virus from each egg, and trying to determine the best guess of the 

three strains that should be intermixed to meet the needs for the 

following year. 

I would like to ask you initially, you each represent three different departments in HHS. So, as you plan—could you explain to 

me briefly how you interact with each other? And is there a lead 

agency that, if something goes wrong, that the Secretary of HHS 

could come to this agency and say, I am holding you responsible 

because you are the lead agency in this projection? Could any of 

you—would each of you address the interrelationship between your 

departments on this issue? 

Ms. GERBERDING. I think it would be fair to say that, collectively, 

HHS is accountable for this problem, but we each have specific responsibilities. 

From a CDC perspective, it is our responsibility to identify 

strains that are emerging in this year’s flu season at the end of the 

season that would best predict the vaccine strains that should be 

included in the following season. So we have the responsibility for 

getting those isolates, for characterizing them, for developing the 

29

seed virus that can be used for vaccine, and then getting that to 

the FDA and to the manufacturers in time for them to work on getting the production started. 

Mr. WHITFIELD. So you simply identify the strains and provide 

the seed virus? 

Ms. GERBERDING. Correct. 

Mr. WHITFIELD. And then the vaccine policy? 

Mr. GELLIN. The National Vaccine Program Office, as I mentioned, was established in 1988 to do exactly as you suggested, was 

to keep the arms and legs of the Department of Health and Human 

Services going in the same direction on vaccine and immunization 

issues. I am in the Secretary’s Office, and it is my job to keep everybody connected on this, recognizing that there are different missions of the different agencies of the Department. Missing from this 

table is NIH, who has another piece of this, and their research and 

development piece plays into this as well as broader issues about 

the future of influenza vaccine. 

Mr. WHITFIELD. Then FDA, I am assuming it is your responsibility to make sure that the product is safe. 

Mr. GOODMAN. Yes. Our primary responsibility is to meet the expectation of you and the American people that it is safe and effective and consistently and properly manufactured. 

I will say, on flu vaccine, we go a good bit beyond that, as Bruce 

mentioned, in terms of providing strains from our laboratories, providing the reagents to the manufacturers to help them in manufacturing. Also, in the recent year, in response to this public health 

problem, trying to do what we can to facilitate additional people 

entering the market. 

Mr. WHITFIELD. Now, last year when Chiron had their problem 

and we lost all of their dosages of vaccine, I understand that there 

was some constraints on obtaining information from the MHRA. 

Could someone explain to me specifically what the problem was? 

Mr. GOODMAN. Well, MHRA viewed that under their laws for 

their regulatory body they could not inform anyone of their impending regulatory action until they took that action. So in fact 

they told us subsequently that they did not make the decision to 

suspend Chiron’s license until October 4, the day before; and then 

all the rest is history. But they said subsequently that they felt like 

they could not inform us or any other regulatory body, WHO or 

others, until they had actually taken the action. So the steps we 

have taken are executing a high-level information-sharing agreement between MHRA and the FDA. 

I will say we recognize that, if this problem occurred in vaccines, 

it could occur in other areas. So this is a rather global agreement 

between the agencies; and it has already been used, for example, 

by our drug center for sharing information about drug safety. 

Mr. WHITFIELD. So, prior to October 5, FDA had no idea that 

there was a problem at Chiron? 

Mr. GOODMAN. Oh, no, we knew there was a problem at Chiron. 

But the issue is that we did not know—of course, as I said, MHRA 

said they didn’t make a decision to suspend the license until October 4. But we did not know of that decision or that that was on 

the map. We were working and receiving information about their 

contamination problem and their interpretation of that. 

30

Mr. WHITFIELD. Recognizing that there is a multitude of new 

sources in the U.S., there was quite a bit of confusion among the 

public last year as a result of this shortage. I would like for each 

of you to give your views on the way in which the media or your 

Department handled communications to the public concerning the 

Chiron situation and whether you see any room for improvement 

in the way it was handled last year. 

Ms. GERBERDING. I certainly think there is room for improvement. The challenge that we faced was starting out the flu season 

expecting to have the most-ever vaccine. So, in order to use it, we 

worked real hard to encourage the broadest number of people to 

seek vaccination, and that is what they were doing until October 

5 when suddenly we had to backtrack and start delivering a very 

different message about only the highest-risked people getting vaccinated first. 

Every year, whether we have an ample supply or not, we have 

a terrible time getting people to get vaccinated after Christmas; 

and we typically plan for a late season push. This year, flu actually 

peaked in late February. There was time for people in many communities to get vaccinated in January, and yet we simply could not 

get that done in many communities. 

So what we are doing now is working on the science of communication, working with people trying to understand what do they 

think, what are they worried about, what would help, how can we 

be more effective in engaging clinicians, how can we be more responsive to their needs and be able to get them vaccine faster, all 

of the things that would help us communicate not just to the public 

but also to the clinicians and the suppliers of vaccines that have 

to make decisions in conjunction with their health agencies. 

Mr. WHITFIELD. Do either of you have any comment on this communication issue? 

Mr. GELLIN. I only want to add it is further complicated by the 

avian flu or pandemic flu, because we want to make sure that people have an understanding of each of them. At the same time, it 

is hard for people to often sort those out. I think there is special 

communications, particularly given the reporting on the avian flu 

and the concern that we all have about it. 

Mr. WHITFIELD. Let me ask you, what manufacturers do you expect to produce flu vaccine for this year? 

Mr. GELLIN. Well, the same three that are licensed we expect 

will be able to produce vaccine. Dr. Goodman has provided insight 

into his recent visit to the MHRA and Chiron facility. 

In addition, I think that part of the lesson we learned from last 

year is that other manufacturers are interested in the influenza 

market in the United States. GSK particularly is seemingly the farthest along, and there is a hope that the data that has been assembled will allow them to get a license for a vaccine for this coming 

year. 

Mr. WHITFIELD. But we do expect that Chiron will be on line, correct? 

Mr. GOODMAN. Well, I should be clear there. You know, as I said 

in my statement, I think it is too soon to tell. What I did testify 

to is I think they’ve put into place and made substantial progress 

in a very aggressive, comprehensive remediation plan that deals 

31

with their manufacturing and quality control issues. So what we 

are seeing is a lot of change, a lot of change in the right direction. 

But, also, as I mentioned, the rubber has to meet the road. They 

are going to have to go soon into their full-scale manufacturing, 

and then we are going to go in there, and our inspectors and scientists will do their job and evaluate whether the remediations 

they have put into place have been effective. So I think things are 

in a positive direction, but it is too soon to tell. So we do need to 

be prepared for all possible contingencies. 

Mr. WHITFIELD. One other comment on this communication. I 

know within a week of the October 5 announcement about Chiron, 

there are around 12 different agencies within HHS that do have 

some responsibility for the flu policy, and within a week no fewer 

than five agencies, including the Secretary, weighed in through the 

press on the topic of the flu vaccine supply. And with those five different messages coming, there was confusion out there, and we are 

concerned the public might not know really who to listen to. It 

would seem it would make some sense if possible to try to coordinate these agencies on press releases in the future. I am assuming 

you all would not disagree with that. 

Mr. GOODMAN. I agree. I think I did see—just having been there 

when a lot of this was happening, I am not questioning whether 

some of that happened, but I do know that among those sitting at 

the table, for example, there was quite a bit of coordination under 

very tight timelines and challenging circumstances. But I think you 

have a very important point, and Bruce and Julie are really the 

lead on this. We should coordinate our communication as well as 

we can. 

Mr. WHITFIELD. My time has expired. I recognize Mr. Stupak. 

Mr. STUPAK. Thank you, Mr. Chairman. 

In listening to the answers and the one question the chairman 

asked about how you all do parts of it to get ready for the flu vaccine, it seems like you try to identify the strain you expect, you 

provide the eggs, or at least the seeds for it, and really the impression I got, and correct me if I am wrong, then when you tell the 

manufacturers, here is what we need, they just manufacture it, 

right? There is a lot of preparatory work done by you all beforehand, right? 

Mr. GOODMAN. The only thing I would add, sir, is that they then 

take the seed strains that we provide them, and they have to see 

how that performs under real-scale manufacturing conditions. 

In certain years, even when everything goes well, we might have 

a strain that just doesn’t grow that well. So they sort of take these 

tools, but then they are the experts at industrializing it and producing the vaccine. 

Mr. STUPAK. You give them the seeds, but they are the so-called 

production experts? 

Mr. GOODMAN. Right. 

Mr. STUPAK. Okay. What does an average price per dose of the 

flu vaccine cost? Does anyone know? You tell us it is going up 17 

percent next year. 

Ms. GERBERDING. The average price of the flu vaccine depends on 

whether it is purchased by the government for government use or 

in the private sector. It has continued to evolve over time, and it 

32

varies depending on the product. We can get you the historical 

price list over time. 

Mr. STUPAK. Do you expect the government’s pricing to go up 17 

percent? 

Ms. GERBERDING. I think that those contracts are under negotiation right now, so I am not sure we know exactly what the price 

is going to be. 

Mr. STUPAK. Here is the part that bothers me, and, Dr. Gellin, 

looking at your testimony on page 8, you talk about that HHS received $50 million in fiscal year 2004, $99 million in 2005, and 

2006 includes an additional $120 million. If we are spending all 

this money to strengthen it and make it more available and accessible to people, why is it going up? That is just my quick math 

here. That is a couple hundred million dollars in less than 2 years. 

Why would the price suddenly go up? 

Mr. GELLIN. Let me clarify. Those expenditures are specifically 

directed for pandemic influenza preparedness, to get around the 

vulnerability. 

Mr. STUPAK. You are still going to need a flu vaccine, right, and 

you prepare for both each year. 

Mr. GELLIN. Except what we are really concerned with it is the 

capacity, the global manufacturing capacity. The global capacity for 

influenza vaccine is only 300 million doses a year, and therefore, 

among the things we are trying to do are to make investments and 

to provide incentives for manufacturers to go down roads that they 

might not otherwise go down. 

Mr. STUPAK. If you make those investments and provide incentives for manufacturers to get into business, it should actually stabilize or lower the price for vaccine, shouldn’t it? 

Mr. GELLIN. I can’t speak to the pricing, but I can speak to the 

fact that what we are asking them to do is a broad R&D program 

and investment in facilities, ultimately so that there is production 

in the United States, because we are concerned about that. That 

is a long-range strategy. 

Mr. STUPAK. With the investment of all this money, we are really 

in no different position than we were last year. 

Mr. GELLIN. The investments are for our future investments in 

pandemic preparedness for vaccines that are promising, but aren’t 

there yet. We are trying to move them along faster. 

Mr. STUPAK. But we are in no better position than we were last 

year. In fact, we are in worse shape now than last year. Last year 

at least we had three licensed, until October 5, and then we 

dropped the two, and the status of it now is we have two licensed, 

and Chiron hopefully will be relicensed to produce flu vaccine, 

right? So what has changed since last year, other than our suppliers have gone down by one? 

Mr. GELLIN. Again, let me just clarify these expenditures are 

long-term investments and not responding to last year. 

Mr. STUPAK. My final question was we are actually in worse 

shape than last year, because last year at this time we had three 

suppliers. Right now we have got two and one suspended. So if you 

look at it, we actually have less suppliers or manufacturers of flu 

vaccine than we did at this time last year, correct? 

33

Mr. GELLIN. Dr. Goodman has commented about the remediation 

program of Chiron. I think the other lesson we learned from last 

year is that there are additional manufacturers interested in the 

market. GSK is an example of that. 

Mr. STUPAK. Where is that? GSK hasn’t even applied for a license yet, right? 

Mr. GELLIN. I will let Dr. Goodman address that. 

Mr. GOODMAN. I understand your concern, but they are actually 

engaged in a very active development program, and they have stated publicly that they plan to submit a license application to FDA 

in the very near future, and in time, that if the data are good in 

there, and we review it and approve it, that they would be able to 

bring vaccine for this year. So I do think that is at least on track. 

Another point——

Mr. STUPAK. But it is not a manufacturing license. And when is 

the drop-dead date that Glaxo can get their license and still be 

ready by the flu season this year? 

Mr. GOODMAN. One of the pieces that is relevant to that to share 

with you that is good news there is they are a global manufacturer. 

They are engaged in producing vaccine and are licensed. So they 

are going to go ahead and produce vaccine no matter what. So the 

issue is——

Mr. STUPAK. Flu vaccine no matter what. But that is for Europe. 

They have to be licensed to bring that flu vaccine to the United 

States, and they haven’t even applied for a license yet. 

What is the last possible date they could apply for a license and 

be ready for this flu season here in the United States? 

Mr. GOODMAN. I think they could be licensed by us at any time 

before they distributed the vaccine, and if they are licensed, that 

vaccine could be distributed here. Then, as I said, as far as we 

know, they are on track for their plan of submitting an application 

to us very soon. 

Mr. STUPAK. So if they manufacture 10 million doses, that 

doesn’t necessarily mean they will be licensed and used here in the 

United States? 

Mr. GOODMAN. No, if they don’t meet our safety effectiveness 

standards or are unable to submit their application. 

Mr. STUPAK. So what is the date when they have to meet your 

manufacturing standards and be licensed so they are ready to go 

by this flu season? Because, doctors, there is no difference; in fact, 

we are in worse shape now than we were last year. So what is the 

drop-dead date? 

Mr. GOODMAN. As I said, vaccine is typically delivered in the fall, 

so my view would be as long as they succeed in their license application before the fall, they could bring vaccine to the U.S. market. 

Mr. STUPAK. I heard a couple of ifs there. The part bothering me 

is going back to the statement found in Dr. Gellin’s statement, it 

says, ‘‘Companies need to plan the amount of vaccine they will 

produce well in advance of the influenza season so they can secure 

the needed egg supply in which vaccine viruses are grown. Production of annual influenza vaccines, which contain three different influenza viruses, takes about 6 to 9 months.’’ 

34

If the flu season is October 5, since that seems to be the date we 

all got in trouble last year, that is like 5 months from now. So if 

you are 6 to 9 months, we are lessening that window period. 

Mr. GOODMAN. I understand your concern. Again, to be helpful 

in addressing it, what I could point out is they are producing that 

vaccine. So their plan is to produce it irregardless of our license or 

decision. They are producing it at risk. 

Mr. STUPAK. You are right, because they can produce all they 

want, but if it is not licensed in this country, it couldn’t do us any 

good. GlaxoSmithKline can do 100 million doses, but if it is not licensed for use in this country, it does us, the American people, no 

good, correct? 

Mr. GOODMAN. You are correct. 

Mr. STUPAK. Let me ask you this: Exactly what would an expeditious licensure by the FDA be if Glaxo decided to enter the market, 

6 weeks, 3 months, 6 months? What is expeditious? 

Mr. GOODMAN. You mean the time from when we receive their 

application to the time they approve it or don’t approve it? I think 

that what I can say about that is, again, we have made a commitment that if we can get a high-quality application with the data in 

it that supports the safety and effectiveness of the vaccine, that we 

would be able to review that, and, if the data support approval, approve it before the flu season. 

Mr. STUPAK. How long will it take, 3 months to approve it, 2 

months to approve it? 

Mr. GOODMAN. I think it depends on whether—you know, we are 

doing a scientific job there. It depends on what the data show, 

whether there are any concerns raised and we have to ask the company additional questions, et cetera. There is some positive information there in terms of they were one of the firms that we 

interacted with and inspected back in October-November to try to 

get IND vaccines. So they are not starting from a zero knowledge 

base. 

Mr. STUPAK. The answer would depend upon the quality of their 

application, right? 

Mr. GOODMAN. The quality of the application. 

Mr. STUPAK. Scientific data with it? 

Mr. GOODMAN. Absolutely. 

Mr. STUPAK. Then do you have to do a full-scale investigation as 

to their manufacturing safety? 

Mr. GOODMAN. We were there last year, but we would again go, 

and the American people expect us to review their manufacturing. 

We would do that expeditiously also. 

So you are correct, there are ifs there. I wouldn’t want to promise 

something that basically is a scientific process. 

Mr. STUPAK. Sure. I am just trying to get some kind of timeframe 

here. 

Dr. Gellin, the committee staff talked to the British counterparts. 

They mentioned that Britain did not rely on just one or two manufacturers for their influenza vaccine like the U.S. Does. That was 

a problem we had last year, but the situation again is exactly the 

same. 

Sanofi will be the supplier of at least 75 percent of our flu supply 

if we get the 80 million doses normally consumed, and Chiron will 

35

supply most of the remainder. It looks like the situation will not 

change in the near future. So what are you doing at the policy level 

to sign up new suppliers, or are we still at the mercy of the market? 

Mr. GELLIN. Our goal, I think, beginning last year was to try to 

have a better understanding of the market and particularly what 

was going to be the incentives for new companies to come into this 

market. 

Mr. STUPAK. So what are those incentives? 

Mr. GELLIN. As Dr. Gerberding mentioned, the incentives there 

is increased demand, there is increased interest in the product, and 

the price has gone up substantially to make it a more interesting 

market for them. 

Mr. WHITFIELD. The gentleman’s time has expired. 

At this time I recognize the chairman of the full committee for 

his question period. 

Chairman BARTON. Thank you. 

How many flu shots did we end up giving to American citizens 

this flu season? 

Ms. GERBERDING. We gave approximately 57 million. 

Chairman BARTON. Fifty-seven million. As it turned out, everybody who really needed one got one; isn’t that right? At the time 

we thought there were going to be a lot of people that wanted them 

that couldn’t have them? 

Ms. GERBERDING. Let me distinguish need and want. From our 

perspective as doctors and public health officials, we believe that 

about 185 million people need a flu shot, because the science says 

they would have a serious benefit from it. 

In terms of the number of people who want flu shots, that seems 

to be influenced by concerns about scarcity and concerns about the 

severity of the season. About this year 57 million people wanted a 

shot. 

Chairman BARTON. What is the most inoculations we have ever 

given? 

Ms. GERBERDING. Eighty-three million in the year that we had 

a supply of about 87 million doses. 

Chairman BARTON. When was the 83 million? 

Ms. GERBERDING. That was in 2002-2003 flu season. I should add 

that in every single flu season, regardless of how much we have, 

we always end up wasting somewhere between 4 to 12 million 

doses of vaccine that manufacturers produce but people didn’t 

want. 

Chairman BARTON. Given everything that you all have done in 

the last year to prepare for next year, and you are continuing to 

do, what is the most probable number of flu shot vaccination doses 

that are going to be available in the coming flu season? 

Ms. GERBERDING. We have to plan for all three scenarios. We 

have to plan for the scenario where we don’t get these licensed 

products here and available for us, so we will have about the same 

amount of vaccine that we had last year; we have to plan for the 

scenario where we might have the most ever, if everybody produces 

and brings their vaccine to market here; and, of course, as a 

backup, we have to plan for sort of the worst-case scenario, that 

something goes awry with our primary suppliers. 

36

Chairman BARTON. Give me three answers then. Worst case. 

What is the minimum number? 

Ms. GERBERDING. Well, the worst-case scenario, I would say, is 

we would have somewhere around 53 million doses. 

Chairman BARTON. So the worst case is a little bit less than last 

year. What is the best case? 

Ms. GERBERDING. Probably around 98 million doses. 

Chairman BARTON. Ninety-eight million, which would be more 

than we ever used. 

Ms. GERBERDING. Correct. 

Chairman BARTON. What is the most probable case or the midterm case? 

Ms. GERBERDING. I can tell you what the middle-range scenario 

is. That is 75 to 83 million doses. 

Chairman BARTON. Unless we have a worst-case outcome, this 

committee can be reasonably confident that every American next 

year that really needs a flu shot is going to be able to obtain one? 

Is that a fair statement? 

Ms. GERBERDING. That is not quite true. Again, it is the difference between needing and Americans who want a shot. 

Chairman BARTON. The most we have ever given was 83 million. 

Last year we gave 53 million. You just said the most probable case 

is in the 70 to 80 million range. So probably everybody on this 

panel up here needs a flu shot. I am not going to ask for a show 

of hands, but I didn’t get one last year, because if I had, I probably 

would have been accused of favoritism. Since I have never had a 

flu shot, I figured I could go 1 more year without getting one. 

Ms. GERBERDING. Maybe you would like to talk to me later. 

Chairman BARTON. If you talk about need, I am probably at the 

top of the list of need. 

What we don’t want to do is go through another year like last 

year where at the beginning of the flu season there are all these 

press stories that there is a shortage, and that you kind of have 

panic vaccination mode. And then in the middle of the flu season 

it turns out we have got more doses available, and that is to the 

credit of you three, that you went out, and the Secretary of HHS 

went out, and we talked to our friends overseas, did a lot of good 

work and got more doses. So it turned out to be not as bad as we 

had thought. As people who get elected, we don’t want to go 

through this feast and famine in the middle of a flu season. 

So this subcommittee, the reason of this hearing is to find out 

what you are doing different from last year, what the prognosis is 

for next year, and whether we need to really, really, really do aggressive oversight. If your midcase estimate is right, I am going to 

assume that things are in reasonably good shape, and we need to 

monitor it and touch base with you, but most Americans are going 

to be able to get a flu shot next year. If I am wrong in that assessment, this is the time to tell the subcommittee that, and if we need 

to do something legislatively or in the appropriations process or encourage some sort of negotiations overseas, now is the time to do 

it. 

Ms. GERBERDING. Let me emphasize two things. One is that the 

highest priority is to get those vulnerable people vaccinated. Right 

now, even under the worst-case scenario, we would be able to come 

37

close to having the amount of vaccine we did this year, and we will 

know that at the beginning of the year. So we do feel like our most 

vulnerable people will have a pretty good chance of getting a vaccine. 

Chairman BARTON. Do the other two witnesses share that assessment? 

Okay. 

My last question: If I need to call one person and get the straight 

answer on some of these issues, and we got three of you, but my 

assumption is that one person would be the Secretary of HHS, Governor Levitt. Is that the person I should call, or is there somebody 

else? 

Ms. GERBERDING. I don’t want to speak for the Secretary. He obviously is very engaged and very up to speed on this. I am sure if 

you called him, he would either give you the straight answer immediately or send you to one of us. 

Chairman BARTON. Who would you call? 

Ms. GERBERDING. I would probably call him, too. 

Chairman BARTON. Okay. What about the other two? Is that who 

you would call? 

Mr. GELLIN. Well, he calls me pretty often about these same 

issues. 

Chairman BARTON. He calls me, too. 

Mr. GELLIN. That is where it all gets put together. 

Chairman BARTON. You agree with that? 

Mr. GOODMAN. I think that is appropriate. 

Chairman BARTON. Thank you, Mr. Chairman. 

Mr. WHITFIELD. We have a vote on the floor. We still have 12 

minutes to go. I am going to recognize Ms. DeGette. 

Ms. DEGETTE. Thank you so much, Mr. Chairman. I just have a 

few questions. 

I am wondering, we have been talking about GlaxoSmithKline 

entering the market, and they are not licensed, and are all hoping 

they will be licensed. What backup plan do you have in place if 

they are unable to provide the expected 8 to 10 million doses? 

Ms. GERBERDING. There are two backup plans. One is the one I 

mentioned about the scenario planning, so we are planning as if we 

couldn’t get that vaccine, and that is why we are going to start focusing vaccination early in the season on the high-risk people and 

letting other people know that if everything goes right and we have 

the vaccine supply we think we are going to have, we will make 

clinics available for other people later in the season. 

The second backup is what we refer to as the insurance plan, and that is we have in the proposed budget $30 million so we can 

buy monoviral bulk vaccine from any one of the manufacturers that 

would be available to us, either as a licensed product or as an investigational product, that can be then brought into dosage forms 

if necessary if everything else fails. It is not the ideal backup, but 

it is a way for us to expand our market even further beyond Glaxo, 

beyond Chiron, into anybody in the world who manufactures flu 

vaccine. 

Ms. DEGETTE. Why is that not ideal? 

Ms. GERBERDING. Because it is investigational, and it means we 

would have to get consent from people to be able to use it. 

38

Ms. DEGETTE. It also seems like it could make people really 

nervous and even more upset than they are about the real liability. 

Ms. GERBERDING. It is insurance. It is the backup to the worstcase scenario. 

Ms. DEGETTE. Well, let me ask you this: I am still concerned that 

pharmaceutical companies, as I mentioned in my opening statement, are not motivated to manufacture vaccines, and I am wondering, maybe from you, Dr. Goodman, what we could do to improve this situation? 

Mr. GOODMAN. Well, I think it is an important question, and it 

is something we need to pay a lot of attention to. I think recognizing in pricing and purchasing and in our health care system the 

public health value of some of these interventions can be very helpful. 

Ms. DEGETTE. I don’t know what that means. Does that mean we 

should let them charge higher prices or what? 

Mr. GOODMAN. Well, you know, we at FDA don’t get into the 

pricing issue at FDA, but what I will say is in terms of the public 

health benefit, if we look at the prices charged, if we look at prices 

that are paid for various things in terms of public health benefit, 

vaccines are often very cost-effective. 

One comment I was going to make, although we have identified 

serious problems and fragility in the vaccine infrastructure, and 

you are very concerned about that, there are some positive developments, too. People are making new vaccines against human papilloma virus, which causes human cervical cancer. We have had the 

first ‘‘blockbuster’’ vaccine, pneumococcal vaccine against pneumonia in children, which has huge sales every year. So a number 

of companies are actively engaged in developing new vaccines in 

the vaccine market. 

Ms. DEGETTE. But if the FDA’s job isn’t to get involved in figuring out the public good versus the pricing, then it seems like we 

are acting at odds against the public interest, because if prices of 

these vaccines go up, fewer people will have them, and then when 

we have our pandemic or whatever, it is going to be worse. It 

seems to me there have to be other ways to incentivize the economical and widespread manufacture of vaccines from a public interest standpoint. This is not about can the pharmaceutical companies make a profit on vaccines, it seems to me. 

Mr. GOODMAN. No, I agree that is an important area. For example, in flu vaccine, I know CMS in recent years has, to some degree, done this by its reimbursement policies, and that has affected 

flu vaccine use. 

Ms. DEGETTE. Is that something we should continue to look at, 

that policy, Dr. Gellin? 

Mr. GELLIN. Absolutely. I don’t have the numbers in front of me, 

but that has gone up dramatically as far as reimbursement costs 

of those. I think we can get into that a little bit here, but maybe 

we can have a separate opportunity to talk about the vaccine industry at large. 

I think, as I mentioned, the flu vaccine is somewhat of a special 

case, but I think some of the things going on and the awareness 

that we have of a number of companies that manufacture influenza 

vaccine and are interested in the U.S. market gives us promise 

39

that some of those pieces will attract additional manufacturers to 

the marketplace. 

Ms. DEGETTE. Mr. Chairman, I think this would be a ripe issue 

for a future hearing. 

Ms. GERBERDING. May I just add that the flu vaccine is actually 

the lowest priced of any of the vaccines that we routinely recommend. 

Ms. DEGETTE. As it probably should be. 

Ms. GERBERDING. We have to say why wouldn’t a manufacturer 

be in the market that should be selling 185 million doses? One 

issue is that they are not confident they can get a fair price. Another issue is it is tremendously risky. 

One of the things that I think Dr. Gellin referred to earlier that 

I don’t want to be lost on the committee is the fact that the Department has provided hundreds of millions of dollars to the manufacturers to say, please modernize your vaccine production. Let’s get 

out of eggs into cells. Let’s move forward and build some plants. 

Let’s get the show on the road here. So they have been providing 

these incentives to move this forward. 

Ms. DEGETTE. What is happening with that process? 

Ms. GERBERDING. Those contracts, the most recent round was 

just announced, I think, last week. 

Ms. DEGETTE. Is it working? 

Ms. GERBERDING. Science takes time, so it will be a while before 

the actual research and development gets to the point where we 

have a product, and not before flu season this fall, I am absolutely 

certain of that. But it is an important step. For the government to 

incentivize this kind of R&D in a very targeted way, I think, is the 

appropriate step, and I am glad we are able to do that. 

Ms. DEGETTE. I just have one more question. Dr. Gerberding, 

you were talking about this throughout the afternoon. Part of the 

problem last year, and it is going to be a problem if we have limited supplies again in the fall, is this whole issue of the people who 

should get the vaccine don’t get it. This happened last year where 

we had a shortage, so a lot of the target population didn’t realize 

they were the target population, they didn’t get it, and then as 

time goes by, they just sort of forget. 

I am wondering if you can supplement your answers by providing 

for the record some kind of plan for how you are going to reverse 

that thinking. Just saying you want to reverse it, you know, that 

is not going to solve the problem next year. 

Ms. GERBERDING. We will be happy to provide that. 

Ms. DEGETTE. Thank you very much, Mr. Chairman. 

Mr. WHITFIELD. We have 5 minutes left to go cast a vote, and 

then we will have one more vote, which we will vote on immediately. So we are going to recess this hearing. We will be back 

here in 10 to 15 minutes. We will recess for 10 to 15 minutes. 

[Brief recess.] 

Mr. WHITFIELD. We will reconvene the hearing. I will recognize 

the gentleman from Texas for his questions. 

Mr. BURGESS. Thank you, Mr. Chairman. 

If I might just back up a little bit. I know Mr. Stupak asked the 

question about the cost per influenza vaccine, and I don’t know 

40

that I actually heard the number. Can you tell me that, Dr. Goodman or Dr. Gerberding? 

Ms. GERBERDING. What I have is the catalogue price. So for a 

multidose vial of the Sanofi Pasteur vaccine in 2005, the catalog 

price is $9.95. For the thimerosal-free syringe, a half millimeter is 

$13.25. The MedImmune single dose is $24.50. 

Mr. BURGESS. Okay. I know you went through, Dr. Gerberding, 

a scenario of the various numbers of the flu vaccine that were used 

when the chairman asked the question, but what is the greatest 

number of doses that the market can handle in a given year? Is it 

that upper figure, that 83 million doses are the highest that have 

ever been given? 

Ms. GERBERDING. The most doses that have ever been purchased 

was the 83.1 million. 

Mr. BURGESS. Is that the upper limit for the market? 

Ms. GERBERDING. No, I don’t think so. That number was used in 

a year when we had not yet made the recommendation about immunizing infants, and the number of infants to be included is approximately 6.5 million more. If we got 50 percent of those, that 

would increase that. 

We are also working harder and harder on some of our hardestto-reach risk groups, like children with other medical conditions 

that makes them especially vulnerable to influenza, and all the 

time more data are being scrutinized by our scientists and our advisers that might expand the market indications even further as we 

learn. 

For example, it is possible in the future we may learn for all children there is an advantage to immunization. It may be less days 

missed from school or less days missed from work for their parents. 

But those are the kinds of questions emerging in our research portfolio on an ongoing basis. So it is not a static situation, it will 

evolve over time. 

Mr. BURGESS. Very well. Since you brought it up, I wasn’t going 

to say the word thimerosal, but you brought it up. Will the cost for 

that thimerosal-free syringe, are we reimbursing the manufacturer 

at a rate where they can make a profit on that? 

Ms. GERBERDING. I really can’t speculate. I would assume so, because they wouldn’t do it if they didn’t find it to be a profitable enterprise. But I would have to defer to their economists to answer 

that question. 

Mr. BURGESS. But there aren’t that many of them doing it. Now, 

with thimerosal-free vaccine, is that pretty much what everyone 

has gone to? 

Ms. GERBERDING. The Department and the CDC have recommended for several years now that all vaccines for children be 

free of thimerosal as a preservative, and manufacturers have done 

that with all other vaccines. 

The current flu vaccine manufacturers are converting over to be 

completely thimerosal preservative-free, and I believe the 

GlaxoSmithKline product that is in the pipeline is being formulated that way to start out with. So in a brief period of time, I believe the manufacturers will be utilizing vaccines that do not contain thimerosal as a preservative. 

Mr. BURGESS. For all of us, for adults and children alike? 

41

Ms. GERBERDING. The issue is if you are using a vial of vaccine 

that has more than one dose in it, it needs to have a preservative. 

Mr. BURGESS. Very well. Now, last fall when I wasn’t on this 

committee, but I was on the Government Reform Committee, and 

you testified in front of that committee, we talked a little bit about 

the ability to dilute the vaccine that was available. Were there any 

studies undertaken last fall with diluting the available flu vaccine 

stocks to try to extend them further? 

Mr. GELLIN. I am not certain. I think I need to get back to you. 

The Defense Department may have participated in a study like 

that. We will get the facts back to you. 

Mr. BURGESS. So at this point no data is available. If we come 

up against another crisis, Mr. Stupak is concerned that nothing 

has changed from last year. But one thing that might have 

changed is we might have some data on what happens if we dilute 

the vaccine in the more healthy of the population and extend our 

vaccination range that way. 

Mr. GELLIN. Recognizing that we would have to then apply—if it 

was last year’s vaccine, it would have to make the link between 

next year’s vaccine as well. But I think that is the case. 

Mr. BURGESS. Dr. Goodman, when we heard the testimony last 

year on the Government Reform Committee, the contaminating 

agent, I was told, was a bacteria called Serratia, which is not a 

very pathogenic organization and one that likes to live in water 

baths and so forth in labs. Do you know where the Serratia came 

from that contaminated the vaccine last year? 

Mr. GOODMAN. There is not a definitive answer to that question. 

It was clearly an environmental problem in the facility. I believe 

that we feel it was introduced in the environment most likely at 

steps involved in not the initial growth of the vaccine, but the formulation, and it points out the importance of environmental control 

in this kind of facility. 

Mr. BURGESS. Are there any procedural changes that have been 

undertaken to avoid this happening again, or is that all depending 

upon getting away from the egg-based system to a cell-based system? 

Mr. GOODMAN. No, there are quite a number of steps in terms 

of the manufacturing process that in this case Chiron has improved 

to reduce the risk of that kind of problem. These problems—I 

should state you are correct in asking about egg-based vaccines in 

general. These kind of problems, the egg-based production is more 

prone to them. But what is needed then is the testing and quality 

system in place to, if problems occur, promptly identify, isolate it, 

and assure it doesn’t affect your general production. 

Again, quite a number of the steps that were proposed in their 

remediation address exactly this kind of issue; keeping the clean 

areas clean, assuring prompt and proper action when problems are 

detected, and handling the process in a way that is as aseptic as 

possible. 

Mr. BURGESS. When you say when problems are identified, taking prompt action, what type of action? Would that be to sequester 

that part of the lab or that batch of vaccination? 

Mr. GOODMAN. There could be many different kinds of problems 

detected, and the responses might be different. Let’s say, for examVerDate 0ct 09 2002 14:59 Jun 09, 2006 Jkt 000000 PO 00000 Frm 00045 Fmt 6633 Sfmt 6602 F:\DOCS\21633.TXT HCOM1 PsN: JOEP
42

ple, vaccine manufacturers do frequently and carefully monitor the 

environment in which manufacturing is performed and look for excursions that suggest problems with control of the environment. 

When you find those, it is important to act quickly, investigate the 

cause and prevent further problems. That would be one example; 

then certainly if you note this in a product, very promptly investigating and trying to understand, by looking at safe samples, looking at the process that occurred, where did that occur, and do we 

understand that that is isolated and that the other lots are acceptable. 

Mr. BURGESS. Again, I would just point out, that might be one 

other thing that would fall into the broad category of what has 

changed since last year when we found we didn’t have enough vaccination. 

Let me just state for the record that I did not take a flu vaccine 

last year. The only people that were concerned about it were CNN, 

but they did seem to be very interested if I did have a vaccination. 

I didn’t. If it will help you, Dr. Gerberding, I will take one this 

year. But you tell me if it is okay. I will wait for your word. 

In the brief time I have left, I will ask Dr. Gerberding, you have 

described several scenarios for us, best-case, worst-case scenario. 

Do you have in mind, and I don’t mean to get too far into the 

science fiction aspect, but do you have an idea of what the pandemic scenario would look like? What would we see as Members of 

Congress, what sort of reports would be coming to us from the 

field, what would you all be seeing before we were aware of it, 

what would you be doing and how would you make us aware that 

there was, in fact, a problem creeping up on us of that magnitude? 

Ms. GERBERDING. Thank you. As you know, we are very concerned about the situation with avian flu in Asia. That is a good 

example to use the what if story from. 

The first thing we would expect if this new pandemic unfolded 

the way the previous ones did, we would begin to see more clusters 

of flu in people and evidence that those clusters were expanding in 

time. In other words, one person is infecting their neighbor and the 

next person. So we would see an expanded timeframe for the clustering. 

Often as flu evolves, it doesn’t just make a sudden jump to become very transmissible in people; it gradually gets there over a 

period of weeks or months. So those clusters are very important 

sentinels of impending transition to a virus that could be more easily transmitted and potentially cause a pandemic. 

The main reason we are worried about pandemic with this virus 

is because no human beings around the world have ever seen it. 

None of us have preexisting immunity to it. So that is where we 

are so especially concerned about this avian flu. 

What we would do is identify the clustering and also have the 

viruses themselves so that we would be able to characterize them 

in our laboratories or in the World Health Organization collaborating laboratories and try to make a connection between what is 

going on in the people and what is going on in the virus. We would 

also take those viruses as they emerged and work on making a 

seed virus very quickly so we could put it into the manufacturing 

processes that we have for flu virus. 

43

One scenario is that we would convert from making the regular 

seasonal flu virus, which, incidentally, has three virus strains in 

every vaccine, into a vaccine that had only the pandemic strain in 

it. So instead of having a global capacity to make 300 million doses, 

we would be able to at least get 900 million doses out of it. So we 

would try to expand our supply by making a single-strain vaccine. 

But the timing to do that, as you know, is many months, so in the 

interim, what we would concentrate on is, first of all, containing 

the outbreak at the source through quarantine, isolation and use 

of our antiviral drug Oseltamivir. 

In addition, if we had a limited supply, we which we do now of 

this particular pandemic vaccine, we would use that to help support immunization in the people closest to the exposed cases and 

try to buy some time while we were scaling up our vaccine supply. 

But if you think about SARS where we had no drugs and no vaccine, the world was able to contain that outbreak by using old-fashioned methods of isolation and quarantine. The one difference is, 

of course, that flu is probably transmitted much more efficiently 

than SARS was, in retrospect. 

So it would be a very big challenge, and that is exactly why we 

are spending so much time every day at the Department preparing 

all the steps in the process, the detection steps, the stockpiling of 

the drugs to treat the flu, the development on a fast track of the 

manufacturing processes for an avian vaccine that would allow us 

to scale up and reduce the time to produce it by a few months 

under emergency conditions. 

All of that has to include not just the government at the Federal 

level, but communities across America as well as the globe. 

Mr. BURGESS. Mr. Chairman, I should point out that with the 

SARS situation, NIH identified that virus with gene sequencing 

techniques, and within 30 days they pretty much knew the virus; 

is that correct? 

Ms. GERBERDING. No, actually it was CDC that did that. 

Mr. BURGESS. Oh, was it. I am sorry. Thank you. 

Mr. WHITFIELD. I recognize the gentleman from Washington for 

his questions. 

Mr. INSLEE. Thank you, and thanks to the panel for waiting for 

us. We appreciate that. 

Dr. Goodman, I wonder if you could tell us what incentives exist, 

what you are working on, if anything, both through a commercial 

aspect and through regulatory aspect to really create incentives for 

new entrants into the market domestically? 

Mr. GOODMAN. Well, we at FDA don’t have financial incentives 

to offer. What we can do is try to provide what I would classify as 

a very rich, productive, helpful interaction with manufacturers, and 

also to try to be sure that the expectations that we put forward in 

terms of safety and effectiveness and how manufacturers meet 

them are balanced and get us the information we need without creating undue burdens. So we have been very engaged in that with 

the flu manufacturers. 

Every year, even with the existing manufacturers, we have extensive interactions. As you heard, we provide them with seed viruses and reagents that are helpful to them. 

44

In addition, the other thing we challenge ourselves to do is say 

can we look at the data and say can we help them speed the clinical development program, and that is where we came up with the 

accelerated approval mechanism based on the likelihood that good 

antibody levels against the virus will predict protection. This has 

allowed, for example, in the case of GSK, them to accelerate their 

plan by 1 to 2 years to come to licensure. 

So those are the kinds of things we can do to help make this a 

faster, more economic way to market. But we can’t provide ourselves any economic incentives. The market provides those. 

Mr. INSLEE. Any thoughts from the other two agencies in that regard? 

Mr. GELLIN. Let me add to that. As Dr. Goodman said, there is 

the market piece. It is also important to appreciate the demand 

and use of influenza vaccine over time that Dr. Gerberding has 

mentioned. The peak of our use has been in the mid-80 millions, 

but recognizing just as briefly as maybe 10 years ago, the marketplace was far smaller than that with maybe 30 million doses as the 

annual allotment. 

So I think a big part of it has been not only the increased awareness by the population of protective value of the vaccine, but the 

expansion and recommendations has created a bigger marketplace 

overall. 

Mr. INSLEE. Dr. Gerberding, any thoughts? 

Ms. GERBERDING. I would agree that driving the demand for the 

vaccine is an important and critical step actually. We do this by 

science. We do the research, we find out who is going to benefit 

from the vaccine, what is the benefit, what is the cost-effectiveness 

of the vaccine. And as we identify that in new populations, we 

make recommendations that we should be vaccinating these people. 

That influences what the government pays for; that influences 

what CMS reimburses for. So we can drive forward the market, 

and we have done that over the past 15 years, by expanding the 

number of people that we recommend in the immunization pool. 

There is consideration now, though there has been no decision on 

this, that the pool be expanded even further. I mentioned the possibility that we would end up with enough evidence to recommend 

universal vaccination of children, for example, for flu every year. 

I think ultimately the big payoff will be the manufacturer who 

identifies a better vaccine, and by that I mean a vaccine that we 

don’t have to give every year, a vaccine that could be given once 

or twice in life like all of our other vaccines and really get us beyond this annual challenge that we face. 

That is a matter of basic science, and that is why these investments that the Department is making in motivating the science, 

not just through the research grants that the NIH is putting out, 

but also through these contracts with manufacturers to try to develop a better vaccine, are so critical for the mid to far term of this 

problem. 

Mr. INSLEE. Given this pandemic possibility, which is kind of disconcerting, should we be giving thought to accelerated FDA approval of some of these to try to inspire new entrants into the market? I am told it is about 12 months. Is that realistic? If so, is there 

anything we can do to accelerate that? 

45

Mr. GOODMAN. We are applying similar principles to the pandemic vaccines as we are to trying to bring additional manufacturers in for the routine vaccines. So you are absolutely right, we see 

that as an issue, and we are doing that. 

In fact, with the U.S.-licensed manufacturers, we view a new 

vaccine for a pandemic not as a new vaccine that would require a 

new license, but as a change in strain such as we see each year. 

So the data we require is very different, and we are able to really 

facilitate that process. 

Mr. INSLEE. So what is the time span then from start to finish? 

Mr. GOODMAN. It is primarily related to their ability to manufacture and then submit to us data about that strain. 

Mr. INSLEE. What does that end up in the real world being? 

Mr. GOODMAN. Well, you know, typically, for example, one of the 

things, as Dr. Gellin mentioned, is the Department has funded the 

production of an investigational or new vaccine against the current 

avian influenza strain. Because the immune response to these viruses, one of the issues why it is a pandemic, it is because you or 

I have no experience against that virus or its relative, so we can’t 

always predict how good our immune response will be. 

But in this case, Aventis Pasteur very quickly produced a commercial scale lot. I actually don’t want to give you a number, but 

it just was within a very few months, and that is undergoing testing. Now, in fact, I think most—a bunch of that testing has already 

been completed, supported by the National Institutes of Allergy 

and Infectious Disease. 

So a manufacturer with a licensed existing technology and manufacturing capacity, provided with the right virus, can very quickly 

begin to produce it for the initial testing, and then we would look 

at that data and be able to evaluate it. 

I think the real issue here that we are also concerned about is 

what is the manufacturing capacity out there to produce the millions and millions of doses that would be needed and the time that 

is needed to do that. As you have heard, it typically takes several 

months to ramp up and produce enough vaccine for the whole U.S. 

population. 

Mr. INSLEE. So I am trying to get some sense of the time in days, 

months, weeks, portions of centuries, some timeframe, and if you 

can break it down from the time they have some manufacturing capacity demonstrated, from there, how long would it take the FDA 

to do the evaluation to really get the certification? 

Mr. GOODMAN. As I said, we would not consider it a new vaccine, 

so the major factor there is how long it takes them to produce the 

vaccine. 

Mr. INSLEE. Say it takes 3 months to produce a vaccine. How 

much longer? 

Mr. GOODMAN. They would do a clinical study, for example, to 

show the immunogenicity and safety of that strain. We would probably require limited data, and they would submit that data. They 

could potentially do that study, I think, as has been done, for example, by GSK, within a matter of a couple of months. Then they 

would submit that data, and we would look at it very quickly. We 

do this every year. 

46

So, again, we would not be the limiting factor there, unless a 

problem with the vaccine were to occur. 

Mr. INSLEE. Say it takes 3 months to do the manufacturing capacity, 2 months to do the clinical trials. How long—if you would 

give me some parameters of how long it takes the FDA to finish 

that? I am just looking for parameters. 

Mr. GOODMAN. Each year we review a new strain submitted. For 

example, if they change a strain in a vaccine, each year we review 

that, and we typically do that within a month. This may be more 

complex if there is more data. 

Mr. INSLEE. Okay. Could you give us any thought about the difference between the European system and ours relative to their experience with this? I sense there is—and maybe it is this one difficulty we have run into—is there a different bar, a different screen 

they are running through to have a different experience, and if so, 

does that give us any thoughts on ours? 

Mr. GOODMAN. Regulatory? 

Mr. INSLEE. Yes. 

Mr. GOODMAN. Well, there is not one European regulatory system, so for traditional vaccines, there are multiple countries that 

can review and approve those vaccines. They may do it similarly 

or differently. 

For the routine strains, there are some differences. For example, 

each year clinical studies and clinical information is required by 

the Europeans, so in other words, they take the new vaccine that 

is made each year for annual influenza production and actually require that the manufacturers provide a small clinical trial of that 

vaccine. At FDA we view them as strain changes for licensed vaccine, and we don’t require that. So, that is one difference that each 

year they require clinical data, and we don’t. I would say that is 

a major issue. 

Similar to us, they have inspections, and you can see, for example, with Chiron, there was an independent inspection by the EUK 

regulatory authority of that manufacturer, which was located in 

England. 

But the main difference is—I can’t say there is one systematic 

difference, that one country is tougher or weaker or anything like 

that, but there is this one major difference, which is that they are 

required to provide clinical data there each year. We feel we have 

had enough experience with the routine strain changes and the licensed manufacturers that we are comfortable just making sure 

that strain is exactly what it is supposed to be and the potency and 

safety of it are proper. 

Mr. INSLEE. Great. Thank you very much. 

Mr. WHITFIELD. Thank you. 

I recognize the gentlewoman from Tennessee for her questions. 

Mrs. BLACKBURN. Thank you, Mr. Chairman. I want to thank all 

of you for your patience. I know it is disconcerting sometimes as 

we are in and out and going for floor votes. 

Director Goodman, I think I will come to you first. I had done 

a little bit of reading in preparation for the hearing today, and I 

found a great article, What Is Wrong with Our Flu Vaccine Supply, 

and actually highlighted a few points in here. I found it quite interesting. It seems like basically if you were to say the underlying 

47

problem or the root of the problem goes back to being this, and it 

is because of liability, because of regulation, because of maybe some 

changes in public policy through the 1990’s that the U.S. has become a less friendly environment for U.S. vaccine manufacturers. 

Then you begin to look at some of the situations that arise because 

of that and the liability and the different situations that exist because of that. 

With all that said, taking that as a premise, a question that I 

have got, in reading this, I was looking at the developmental strategy, the multiple developmental strategy of when you are looking 

at a strain, and why is it impossible to have a multiple strategy, 

a multiple developmental strategy, for one of the vaccine formulations? And then how could we get to the point that we have multiple developmental strategies for the vaccines, for a specific vaccine, for a certain flu, to be certain that—I think Dr. Gerberding 

mentioned earlier that sometimes you pull a certain strain, but you 

don’t know if that is going to be what you end up needing or not 

or if it is going to replicate itself well or not. 

So, how do you get to the point that you develop those multiple 

strategies? 

Mr. GOODMAN. I want to be sure I understand your question before I answer it. I can see two questions there. One is would it be 

possible to develop a vaccine that protects against multiple different strains? The other would be if we have problems such as Dr. 

Gerberding mentioned occasionally where a strain is circulating 

and we didn’t predict that it would be important, could one have 

prepared a vaccine against that ahead of time? 

Mrs. BLACKBURN. Right. Take both questions. 

Mr. GOODMAN. The first one is really a science question. It is 

something that the Department and NIH and FDA are all supporting research on. It would be ideal to have a vaccine that protects against multiple strains without having to every year go out 

and find all those strains and grow all those strains. So people are 

trying to find proteins in the vaccine, in the virus, that might provide protection in multiple years or against multiple strains. That 

kind of research is going on. There is some evidence that there may 

be some advantages for live attenuated vaccines in providing that 

kind of protection. 

So there is a lot of work going on in that, and it is a Holy Grail, 

and it would be very desirable and could even help protect us 

against pandemics potentially. But the science isn’t there yet, and 

it has been difficult to achieve. 

The other question is really again limited by the capacity of the 

industry. So as manufacturing gears up, the industry, based on 

CDC and WHO’s surveillance data, FDA’s expert committees, tries 

to examine what has gone on out there in the world and pick the 

strains that are likely to threaten our population and put them in 

the vaccine. In general, they have done a remarkable job at doing 

that, but occasionally there is a strain that circulates in one part 

of the country or another that causes a problem and isn’t well covered by the vaccine. 

As you said, you could deal with that by potentially, if you saw 

something possibly emerging, making some vaccine against that 

strain. The tradeoff there is right now the total capacity is limited, 

48

so you would have to cut back on someone else. So right now we 

are unfortunately in the situation of people making the best educated decision and then going ahead and producing. I don’t know 

if Dr. Gerberding or Dr. Gellin want to add to that. 

Mrs. BLACKBURN. Well, I think that is probably one of the things 

that is just a continuing source of frustration. And I am sure Director Gerberding has a certain amount of that. It seems there is a 

flu virus that you all, if I am understanding that correctly—you 

may identify something in the spring, and then by the fall there 

is another strand that you have nothing for that is actually causing 

the flu, the outbreak, the epidemic, whatever. And then is there 

anything that you can begin to do, either through preparation or 

through science that the CDC can do, to take some steps to forestall that? 

Ms. GERBERDING. The virus is very unpredictable, and it is usually not just one virus circulating during a flu season; there are 

several, usually at least three and often many more variants than 

that. And so we use our experience and our predictions based on 

the past early in the spring to look at what is present at that point 

in time, because in most years what is present in the spring is 

what is going to be present in the fall. That doesn’t always prove 

to be correct. 

But what usually happens—and this example happened last year 

where the vaccine predicted strain was a toss-up. We didn’t know 

if it was going to be a Fujian strain or whether it was going to be 

a different strain, and we wanted to have the best chance of coverage. Unfortunately, the Fujian strain didn’t grow very fast when 

we were trying to create the seed virus. And we had to make the 

decision we had better go with the one we can get a vaccine to because there is no room to wiggle in the timing of getting these 

products to market. 

So the vaccine that was produced that year wasn’t a perfect 

match for what turned out to be the dominant strain that fall. Fortunately, there was crossover. So the strain that we did use was 

a close cousin, and there was some protection afforded to people. 

And that is usually what happens even if it is not a perfect match. 

If it is a cousin instead of a twin, we get reasonably good protection 

of the people who need it the most. 

But there is right now no way to accurately predict which one 

of the swarm of viruses is truly going to emerge, and sometimes 

we don’t get it right. What Dr. Goodman is really describing is the 

fantasy that we all have, that we will find a way to make a vaccine 

against some part of the flu virus that doesn’t change every year, 

some other molecule in the virus that is consistently there that 

would be a good enough source of protection that would allow us 

to just vaccinate using that, and then it didn’t matter about all 

these other changes that go on and on and on. But we have no 

proof of that principle yet, and, believe me, everyone would like to 

find such a vaccine. It is a little bit like the AIDS vaccine, where 

the virus changes so much over time, you can’t pin it down and 

find something that will uniformly protect against all strains. 

Mrs. BLACKBURN. And if I am understanding correct, ma’am, it 

is basically what is happening with this is that you mentioned the 

wiggle room, and you have very little time to move. You do a lot 

49

of work on faith, basically, and informed science and then a little 

bit of faith. And then you move forward into production, but you 

don’t have a lot of time for testing. 

Ms. GERBERDING. That is exactly right. If we pick the strain, let 

us say we find it in February or March, we have to make the seed 

for the vaccine from that in a matter of weeks, get that off to the 

FDA and the manufacturers who have to put it into production 

mode. And it is not just about popping it into some eggs. It actually 

takes time to grow in the eggs. It has to be harvested; it has to 

be processed so that all of the potential contamination from the 

eggs is removed. That was the problem that Chiron was experiencing. And then it has to be packaged. It has to be tested to make 

sure that all of packages have exactly the same amount of antigen 

in them. There are all kinds of quality control steps that have to 

go on in there. Everything has to work exactly right for that vaccine to be available in September when we need it. 

Mrs. BLACKBURN. Okay. Thank you very much. 

Mr. Chairman, I yield back. 

Mr. WHITFIELD. Thank you very much. 

We will begin a second round. And I would recognize Mr. Stupak 

for 8 to 10 minutes of questions. 

Mr. STUPAK. Thank you, Mr. Chairman. 

And, Dr. Gerberding, in response to Mr. Burgess’ questions, you 

had indicated that the cost for the vaccine is—you gave three different costs, 9.95, 13.25, and 24.50. Is that this year’s prices or last 

year’s? 

Ms. GERBERDING. What I am quoting to you are catalog prices for 

2005 for three different manufacturers of vaccine. I would be happy 

to provide you with the list of the catalog prices for your record. 

Mr. STUPAK. Very good. 

Mr. STUPAK. Catalog price, is that the price the government 

would pay for? 

Ms. GERBERDING. Generally we are able to negotiate a slight discount off of those prices. 

Mr. STUPAK. If we want to put—and I think you used the word 

overexpanding our pool of more and more people getting the flu 

vaccine, and ideally we would like everybody to get it, I thought 

you said. So, in a business model, wouldn’t the more we produce 

lower the cost per vaccine? 

Ms. GERBERDING. Ultimately that may be true. I think what we 

are talking about is a market-driven process here. The more people 

you vaccinate, obviously you can commoditize the vaccine if you get 

up to a large enough population. If you were thinking about the 

global community of people who need to be vaccinated, we would 

be talking about large-scale and potentially very cheap vaccine. 

Mr. STUPAK. How about just here in the United States? Because 

I think earlier in your testimony you said we have spent hundreds 

of millions to modernize a facility to develop a new culture, to move 

from the egg to a cell culture. So that would help drive down the 

cost of manufacturing; would it not? 

Ms. GERBERDING. That is an independent investment. We are 

talking about apples and oranges here. One is the process, by simply making more of what we already know how to make, and the 

other is making something completely new. And the investments 

50

we are making is a completely different manufacturing process that 

would involve new factories and a new science and a new regulatory approval process. 

Mr. STUPAK. Here is my problem. Those hundred millions came 

from the U.S. taxpayer, right? 

Ms. GERBERDING. Correct. 

Mr. STUPAK. And if you look at the first chart you had up, and 

the ones who get the immunizations first are the high-risk group, 

people over 65. 

Ms. GERBERDING. Correct. 

Mr. STUPAK. And young babies probably under 2 years old, right? 

And if you look at that, over 65, that means Medicare pays, doesn’t 

it? 

Ms. GERBERDING. That is correct. 

Mr. STUPAK. Under 2, most of that is Medicaid paid, correct? 

Ms. GERBERDING. Not necessarily. It applies to all children. 

Mr. STUPAK. Okay. Well, children are either covered—well, private insurance, of course. But I think you would find most of the 

children are probably covered who are getting these shots through 

either CHIP program, Children’s Health Initiative Program, or 

through a Medicaid program. In my home State of Michigan, that 

certainly is the case. 

Ms. GERBERDING. The children who do not have private insurance are covered under something called the Vaccine For Children 

Program. So it is a special program that applies to all of the other 

childhood immunizations. 

Mr. STUPAK. So we have got another program then. Okay. The 

point being, why can’t then the government negotiate deeper discounts then, if we are putting hundred of millions into the manufacture to modernize the facilities, most of the costs or the payments on these immunizations are coming through the government 

on Medicaid, Medicare, CHIP or the children’s immunization program. I would think we could get bigger discounts, because I am 

really bothered by the 17 percent increase. 

And just a thought there. If we—you also mentioned something 

about 30 million in insurance. Is that 30 million set aside to buy 

immunizations if we should run out in this country? You mentioned 

30 million in insurance. Do I understand that right? 

Ms. GERBERDING. In this fiscal year we have $20 million available to purchase bulk vaccine. And what that means is the manufacturer at the end of the season can continue the production, but 

not necessarily take that big vat of vaccine and convert it into individual vials. So it is a very cheap purchase because we buy it at 

an earlier production process. 

Two things—well, three things could happen. One is we turn out 

to need it, and we would need that late-season vaccine. Maybe it 

is a bad season, maybe we’ve got a failure in somebody else’s manufacturing process and we need it. So they can go ahead and complete the production and utilize it the way we would the regular 

vaccine purchase. 

The second thing is that we may not use it this year, but by luck 

sometimes one of this year’s strains is also the strain in the next 

year’s vaccine. So we are a step ahead of the process; we have already purchased some vaccine for the following year. And when it 

51

is in monovalent form like that, we have got three different strains 

sitting in those formulations, so there is a good chance that one or 

two of them will be able to be used the following year. 

The third thing could happen is that that wouldn’t be the case, 

and that would go to waste. But if we are wasting it, it is a cheaper 

waste than buying the fully manufactured vaccine and wasting 

that. 

So it is a way for us to partition the risk to the taxpayers, but 

the opportunity to develop a little more vaccine at the end of the 

season if it turns out that we need it, and in a year like this we 

would have liked to have had that. 

Mr. STUPAK. So in your strategies development and in your policy development, do you have any monies then set aside in case we 

do have a bad flu season; we use up everything we have, and we 

have to get more into this country to help out that high-risk population? Is there any backup plan? 

Ms. GERBERDING. We have, in addition to the $20 million I mentioned for the monovalent, we have $20 million at least proposed 

in the 2006 budget for vaccine purchase. It is not specific to purchasing at any particular place or time, but we will be negotiating 

contracts for that. We also purchased through the Vaccines for 

Children Program that you mentioned before a stockpile of influenza vaccine again so that if we end up late in the season and we 

need that, the government has purchased some to protect those 

children. 

And, as Dr. Goodman has stated, we have a good chance of getting an international manufacturer interested. And we are not 

stopping there; we are obviously continuing to work with at least 

two other ones to encourage them to get their licenses and their applications. 

Mr. STUPAK. This $20 million for purchase and reserve that you 

sort of are holding on, did you have this in reserve last year, too? 

Did you have that amount of money, $20 million, in reserve to purchase immunizations if you needed it last year? 

Ms. GERBERDING. We had a stockpile for the first time this past 

year. So that was one step that had already been taken. We also 

had a stockpile of drugs for the first time this past year in part of 

our overall flu preparedness, not anticipating. And then during the 

flu season, the additional doses were purchased under the investigational new drug category, which is not the optimal way to get 

vaccine, but if we don’t have it any other way, that is the resort 

we had to use. 

Mr. STUPAK. Well, when you purchased the IND, where was that 

purchased from? 

Ms. GERBERDING. That was purchased from two companies, one, 

the GSK purchase, and then I can’t remember the—Berna Biotech. 

Mr. STUPAK. Berna Biotech, was that the Canadian company? 

Ms. GERBERDING. I think so. 

Mr. GOODMAN. Swiss. 

Ms. GERBERDING. Right. Sorry. That is right, we didn’t buy the 

Canadian. 

Mr. STUPAK. So you have no objections to reimportation of drugs 

then if it is necessary on this flu vaccine if we need it. 

52

Ms. GERBERDING. This would not be considered reimportation. 

This is purchasing vaccine from an international manufacturer in 

a plant that we have certified as having good manufacturing practices and a chain of custody of the product that would assure our 

Americans that it arrived here safely. 

Mr. STUPAK. And we inspect drug manufacturers all over the 

world, don’t we, to make sure that they are safe and there is a 

chain of custody, Correct? 

Ms. GERBERDING. If the drug is going to be sold in the United 

States and licensed in the United States, I believe that is——

Mr. STUPAK. In fact, we get a lot of our drugs from India; do we 

not, Dr. Goodman? 

Mr. GOODMAN. Certainly it is an increasingly global market with 

global manufacturing. One important difference here, of course, is 

those, the GSK and the Berna Biotech that Dr. Gerberding mentioned, were not U.S.-licensed vaccines. And so they were purchased by the government basically for emergency use, and they 

would have been used under the nonlicensed category of investigational new drugs, so they would have required informed consent by 

the recipients. So there is some of the same issues, certainly, but 

these were not licensed products. 

Mr. STUPAK. Sure. And my time is running short here. But we 

have FDA inspectors all over the world inspecting plants all over 

the world to make sure that they meet standards and qualities, 

right? 

Mr. GOODMAN. That is certainly increasingly the case. 

Mr. STUPAK. Sure. So the issue on reimportation is to make sure 

we have people who can do the inspections and make sure the 

chain of custody is intact, right? 

Mr. GOODMAN. I think—I am not an expert in that field, I am 

a biologics person. But certainly a critical requirement would be to 

be sure the product is what you think it is, that it was properly 

made, and that it has been in custody and proper care. And that 

is a very resource-intensive——

Mr. STUPAK. Let me ask you one more question. Mrs. Blackburn 

brought up about the liability issue there and her multistage strategy or whatever it was. In the vaccines that are made for flu, does 

the Federal Government back up or indemnify the manufacturer if 

there is a claim? 

Mr. GELLIN. There is an vaccine injury compensation program 

that is defined by a vaccine that is given universally to children. 

This year for the first year the influenza vaccine was added to that 

list because of the recommendation for this past year that all children 6 to 23 months of age receive it. 

Mr. STUPAK. So medical liability really shouldn’t be an issue in 

this, then, if it is being backed up or indemnified by the Federal 

Government. 

Mr. GELLIN. Again, the flu vaccine is now included in the program. 

Mr. STUPAK. So medical liability would not be an issue. 

Mr. GELLIN. Again, I am not an expert in that. There is always 

the potential for people to go outside that program, given the way 

it is designed, but it is there as really the first stop. 

53

Mr. STUPAK. If we modernize the plants, we are the biggest purchaser, we indemnify them for medical liability, I can’t figure out 

why we can’t gain more entrance into the flu vaccine area. 

Mr. WHITFIELD. Thank you. 

Just to follow up on Mr. Stupak for a minute, is the FDA concerned that, in times of shortage, that State and local agencies 

might look beyond the established U.S. manufacturers to get a vaccine supply? 

Mr. GOODMAN. Well, I think we recognize that with what happened with flu last year, you know, if I were a Governor—I was 

in a State not too long ago and worked with the State health department as part of what I did. I can see that there was really a 

desire to get vaccine quickly. I think what we are concerned with 

is that any vaccine that is administered to the American people 

meet the high standards they expect for safety and efficacy. So if 

that were being done in a way that raised concerns about that, we 

would be concerned. 

Mr. WHITFIELD. But the policy right now is that, as I think Dr. 

Gerberding explained, if you have to go out in these emergency situations now, these plants are licensed, and you have the custody 

issue; and, if not, then you have to have informed consent. Is that 

correct, Dr. Gerberding? I mean, under your insurance policy that 

you were discussing, you can go out and buy additional vaccine and 

if there is a real need. But you do that only under certain circumstances. 

Ms. GERBERDING. We are buying incompletely manufactured vaccine as a backup. 

Mr. WHITFIELD. Okay. At this time I would recognize our doctor 

from Texas for 8 minutes of questions. 

Mr. BURGESS. Thank you, Mr. Chairman. 

Well, let us continue on that line that Mr. Stupak just brought 

up now on the vaccine injury compensation fund. Is that only for 

children? If adults are immunized with the flu vaccine and have an 

adverse reaction, are they also indemnified by the vaccine fund? 

Mr. GELLIN. The program is designed around a vaccine, and if a 

vaccine is recommended for all children or a group of children, then 

anybody who receives that vaccine would be covered by the program. 

Mr. BURGESS. Now, does that limitation of liability, would that 

indemnify a company if they had thimerosal in their vaccine? 

Mr. GELLIN. It is not an indemnification program; it is an injury 

compensation program. 

Mr. BURGESS. Would that cover an injury that was purported to 

be covered by thimerosal? 

Mr. GELLIN. There is a list of compensable reactions to these vaccines, and that is not currently on the list of adverse reactions to 

influenza vaccine. 

Mr. BURGESS. So if a family wished to bring a charge or a case 

against a manufacturer for placing thimerosal in their product, 

that would be outside the compensation range of the injury fund, 

the vaccine compensation injury fund? 

Mr. GELLIN. I am sorry. I guess this gets beyond my expertise 

and the nuance of the program. So I think we should supply you 

with the details about that and about the program. 

54

Mr. WHITFIELD. Did you want to respond to that, Dr. 

Gerberding? 

Ms. GERBERDING. I think that anyone can bring a claim to the 

injury compensation fund. Whether or not it would be settled in 

favor of the claimant is something that would be based on the merits of the claim. So that is the extent of my knowledge of the program as well. 

Mr. BURGESS. Well, Mr. Stupak was making the point that since 

there was complete release of liability, he didn’t understand why 

the manufacturers would not be in the game. But it is my understanding that the additive in the flu vaccine, if that is the target 

of the lawsuit, that that may be outside what is covered by the vaccine injury compensation fund. 

Ms. GERBERDING. I think right now it is important to think of 

risk in an even more comprehensive way. There is certainly the 

risk to the individual who receives the vaccine, a risk that the 

manufacturer experiences as the manufacturer of vaccine that’s 

caused the risk to an individual. But the risk that is really in play 

this past year is the risk to the manufacturer of not being able to 

produce vaccine and get it licensed because the process and the 

methodology used is so prone to problems. And we have seen this 

happen over and over again. 

You are starting with an egg, which is intrinsically not a sterile 

product; you are growing something in it, and in the end you have 

to end up with a vaccine that is free of any kind of contamination. 

So just getting from the egg to the vaccine is a very risky prospect 

from the standpoint of the people who are manufacturing it. And 

I think that is one of the kinds of risks that is very difficult to 

eliminate. You need an insurance policy for that kind of risk to replace the profit that was lost because your license was pulled due 

to a manufacturing methodologic issue. And I am not aware that 

we have that kind of insurance program for vaccine manufacturers. 

Mr. BURGESS. I am not either. We do it for farmers, I think. 

On the issue of the price increase, I guess what is being referenced is a Wall Street Journal article from May 4, which is 

today, and it talks about the 17 percent increase. The actual dollar 

amount of that increase was $1.40 above 2004 prices and the first 

rise in 3 years, if I am reading this article correctly. Any speculation on what amount of that price increase is there because of liability concerns or other manufacturing risk concerns? 

Ms. GERBERDING. I couldn’t speculate about that. I think that 

would have to be addressed to the manufacturer. 

Mr. BURGESS. Mr. Chairman, do we have any way of obtaining 

that information? 

Mr. WHITFIELD. We will submit that question for the record and 

do some follow-up on it and see what we come up with. 

Mr. BURGESS. Well, the line of questioning previously seemed to 

indicate an environment that was free of risk for the manufacturer, 

a guaranteed purchase by the Federal Government, and a guaranteed pool of purchasers. It looks to me to be a field that is fraught 

with a great deal of more peril than was previously outlined. 

Mr. STUPAK. Would the gentleman yield on that point? 

55

Mr. BURGESS. Well, I was going to say I will yield back my time 

because I know the other side has some additional questions. 

Thank you, Mr. Chairman. 

Mr. STUPAK. Would you yield on that point? It was Mrs. 

Blackburn that brought up the liability issue with her questions, 

multistrategy, as she called it. So I was trying to probe the depth 

of it. And I knew that the Federal Government does provide some 

funds there to patient protection. I am not trying to get into a malpractice argument with you. That is for another day. 

Mr. WHITFIELD. But we will note the doctor’s question, and we 

will follow up on that and get that into the record. 

Mr. BURGESS. Well, it really wouldn’t be a malpractice question, 

it would be a products liability question, defective product from the 

thimerosal standpoint. 

Mr. WHITFIELD. Do you have any other questions? 

Mr. BURGESS. No, sir. I will yield back. 

Mr. WHITFIELD. At this time I will recognize for 8 minutes Ms. 

Schakowsky of Illinois. 

Ms. SCHAKOWSKY. Thank you. 

In 2004, knowing that a severe flu season without an adequate 

supply of vaccine could result in a disaster, especially among the 

elderly and the chronically ill and the very young, Illinois Governor 

Rod Blagojevich began looking for additional vaccine for Illinois. He 

asked a licensed regulated wholesaler in Europe to see if they could 

find and secure approved European flu vaccine on our behalf. After 

an intensive search, the wholesaler found vaccine and began securing doses to meet Illinois’ request. 

On October 25, Illinois officials sent a letter to the FDA asking 

it to review and approve vaccine made by Aventis Pasteur in 

France and GlaxoSmithKline in Germany. And 4 days later the officials, Illinois officials, came and met in person with the FDA to 

answer their questions. And that started a dialog between Illinois 

experts and the FDA over the origin, custody, storage of the vaccine, volumes of documentation. And while the FDA didn’t respond, 

Illinois, it gave the CDC approval to import millions of doses from 

the very same German made GlaxoSmithKline vaccine for use in 

the United States. 

And then early December, after numerous exchanges between Illinois experts and the FDA, Acting Commissioner Lester Crawford 

stated in a press conference that Illinois had answered their questions and provided all the information they needed, and that the 

FDA would have a response very soon. As of today, 5 months later, 

Illinois still has not received a response from the FDA. 

I would like an answer, Dr. Goodman. What went wrong, and 

why can’t Illinois, after its best effort in working with you, come 

to an agreement on how to take care of its own constituents, its 

own residents? 

Mr. GOODMAN. Well, a couple of comments. I don’t have all the 

details on the correspondence between or communications between 

the Office of Regulatory Affairs, the inspectorate force, basically, 

who were working most intimately with Illinois to document the 

nature of the vaccine. But what I can tell you is we met very early 

on with the Illinois people. I appreciate, and I told them at the 

time and so did others at the FDA, the demands being made upon 

56

them and their desire to get vaccine for their citizens. So we very 

much appreciate that. 

Ms. SCHAKOWSKY. That is all very nice. 

Mr. GOODMAN. Well, we made the point very early on that apparently the vaccine was extensively in distribution, was not clearly—

they were not clear about whose hands it had been in. Some had 

been shipped to other countries. It was not in the manufacturer’s 

distribution. And we said to them that we would work with them, 

but it was a very difficult task they would have ahead of them to 

provide adequate documentation that the vaccine was what it was, 

had been properly stored so that it would be safe and effective. And 

another important point is this is not U.S.-licensed vaccine, so that 

it would then have to be used under IND. 

My understanding is, to answer your question, that the information—first of all, they told us we would provide that information 

right away. It took quite some time to provide information. The information was reviewed in the Office of Regulatory Affairs. The 

message was given that there were numerous gaps in the documentation. 

Ms. SCHAKOWSKY. And why did Dr. Crawford state in a press 

conference that Illinois had answered all their questions and provided all the information that was needed? 

Mr. GOODMAN. Well, again, my understanding from the Office of 

Regulatory Affairs is that their last information given by them to 

the representatives of the State—and I can’t say whether this was 

a letter or from whom or in what form—was that the documentation provided had deficiencies; and that given concerns about the 

safety of the vaccine, how it had been handled, what it was, that 

additional information would be needed. And I also understand 

that it was suggested and later offered, I believe, through the Centers For Disease Control, that vaccine that had been clearly under 

control, stored, and in the manufacturer’s control, which was why 

we worked on getting that right away at the Secretary’s request, 

would be made available, in fact, to Illinois or others who wanted 

it under the CDC’s IND. So you had the opportunity for a wellcharacterized, well-known vaccine that we knew to be safe, where 

there had been extensive review of the manufacturing and the pedigree of that vaccine. So I think we made a good-faith effort together working with your folks. 

I think there were deficiencies in the data. I think then, when 

that was the case, we also made a good-faith effort to get this other 

vaccine where there were not deficiencies in the data and to make 

it potentially available. I would be happy to talk more with you 

about it or——

Ms. SCHAKOWSKY. I think we need to talk more about it, because 

I think there was a clear understanding in December that Lester 

Crawford had clearly stated that we had—and Illinois met all the 

requirements, and that still there was—and that there would be an 

FDA response very soon, and that none of that happened. So I hope 

that we can clarify that. 

I had to step out for a little while, and I am just wondering if 

you did finally answer the question that Mr. Stupak had asked if 

we—and I am quoting now from the Wall Street Journal: It also 

57

shows that the vaccine production infrastructure remains nearly as 

fragile and outdated as it was before last year’s crisis. 

Let me just say that, hearing Dr. Gerberding’s numbers, it 

sounds to me like even the middle case doesn’t even begin to meet 

what is—your statement of what is a public health need. I understand demand and need are different, but what it also says to me 

is that we need to promote getting the vaccine in a more aggressive 

way to a large population that isn’t even asking for it. And, second, 

were they to ask for it, even under the very best of scenarios, we 

cannot provide it. Now, so are we in as good a shape, better shape, 

worse shape than we were last year? Anybody? 

Mr. GOODMAN. Well, I am happy to take the first crack at that. 

I think we all recognize there is a clear problem with the fragility 

of the flu vaccine manufacturing infrastructure. I think there is 

some progress that has been made, but there is still a problem. The 

progress that has been made is that, as mentioned, 

GlaxoSmithKline, in part because of the work on the IND, has stated that they are going to apply for U.S. Licensure under the accelerated approval mechanism we provided. So they expressed clear 

interest to enter the market for this year. That is potentially more 

diversity. Another bit of progress is the—while the jury is still out, 

the improvements that Chiron has made in its manufacturing. 

Then I would go one step further and say there are at least a couple of other manufacturers that we have been working with who 

have indicated long-term interest in the U.S. market. 

But, yes, you are absolutely correct. Challenges remain both in 

the underlying technology and in the market forces. And it is almost a vicious circle, because if you can’t provide a stable vaccine 

supply, how can you continue to ramp up demand? And if you don’t 

continue to ramp up demand, how do you have a stable supply? We 

are all living that, and we definitely support things to occur on 

both ends, stabilizing the supply and increasing uptake and demand. 

It is helpful to realize that I think about 10 years ago there were 

only about 20 million doses of flu vaccine administered in the 

United States. So while it seems we have a long way to go, and 

as a public health person I think we do and we share that concern, 

there has been progress over a 10-year period. 

Mr. WHITFIELD. Ms. Schakowsky’s time has expired. Do the two 

of you want to respond to her last question, or do you feel—okay. 

One comment that I would just make on this Illinois situation, 

and you can tell me if I am correct or incorrect, but it was my understanding that the FDA, did they actually receive appropriate 

drug master files on the vaccines from Illinois? 

Mr. GOODMAN. I would have to get back to you on the drug master file. The drug master file would be what the manufacturer possesses that says everything about the product. I think—I would 

need to get back to you because there were at least a couple different manufacturers involved. But the manufacturers, to my 

knowledge, signaled a willingness to help in this. 

The issue that was definitely where there was a deficiency was 

in the data that documented every—how that vaccine had been 

handled after it left the manufacturer. And I think that is where 

the Office of Regulatory Affairs had a safety concern. 

58

Mr. WHITFIELD. Okay. Well, that concludes today’s hearing. I 

want to thank the witnesses for your patience. And we are going 

to keep the record open for 30 days, and ask that any questions for 

the record be submitted within 7 days to be answered. 

Obviously this is a particularly important subject, and your testimony today, I think, provided enlightenment not only for the committee members, but also for the general public. And we do commend you for the work that you are doing and look forward to 

working with you as we move forward to address this important 

issue. 

With that, the hearing is adjourned. 

[Whereupon, at 5:12 p.m., the subcommittee was adjourned.]

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