INFLUENZA

Progress Made in 

Responding to Seasonal and 

Pandemic Outbreaks

Statement of Marcia Crosse

Director, Health Care

Testimony 

Before the Subcommittee on Oversight 

and Investigations, Committee on 

Energy and Commerce, House of 

Representatives

For Release on Delivery 

Expected at 10:00 a.m. EST

Wednesday, February 13, 2013

GAO-13-374T

United States Government Accountability Office

GAO
United States Government Accountability Office

Highlights of GAO-13-374T, a testimony 

before the Subcommittee on Oversight and 

Investigations, Committee on Energy and 

Commerce, House of Representatives

February 2013

INFLUENZA 

Progress Made in Responding to Seasonal and 

Pandemic Outbreaks

Why GAO Did This Study

Influenza—in both its seasonal and 

pandemic forms—is an ongoing public 

health concern. In the United States, 

seasonal influenza has been 

associated with thousands of deaths 

each year, according to CDC. In a 

pandemic, such as the 2009 H1N1 

influenza pandemic, the disease 

causes a global disease outbreak with 

the potential for many more deaths. 

HHS has responsibility for coordinating 

the nation’s response to public health 

emergencies, including an influenza 

pandemic. Within HHS, CDC makes 

recommendations on vaccination, 

tracks the disease, and disseminates 

public health messages on influenza. 

This testimony discusses (1) lessons 

learned from federal responses to prior 

influenza outbreaks and (2) federal 

investments to strengthen the U.S. 

vaccine supply and production 

capacity. 

This testimony is based on prior GAO 

work on issues related to influenza 

vaccine supply and distribution; federal 

investments in domestic vaccine 

production capacity and production 

technologies; and the federal response 

to the 2009 H1N1 pandemic. This prior 

work includes analyses of information 

and interviews with officials within 

HHS, CDC, and FDA, as well as 

officials from vaccine manufacturers, 

medical supply distributors, state and 

local governments, provider groups, 

and other stakeholders. GAO also 

obtained updated information from 

HHS on the severity of the past three 

seasons, the numbers of vaccine 

doses distributed, and the status of 

advanced vaccine technology projects 

funded by HHS. HHS reviewed 

updated information and provided 

technical comments, which are 

incorporated as appropriate.

What GAO Found

GAO’s prior work has identified a number of lessons from federal responses to 

seasonal influenza vaccine shortages and the 2009 H1N1 pandemic that carry 

implications for future influenza seasons or another influenza pandemic. These 

lessons include the value of planning that involves the Department of Health and 

Human Services (HHS); the importance of effective communication among all 

levels of government and with the public; and the difficulty of matching vaccine 

supply with the public’s demand for it. First, planning is critical to an effective 

response, and it particularly helped in responding to the H1N1 pandemic. 

Planning activities, such as exercises and interagency meetings, built 

relationships that positioned the government to respond effectively. Second, 

clear and consistent communication, especially regarding the availability of 

vaccine, is key. The failure to effectively manage public expectations of vaccine 

availability can undermine government credibility and contribute to individuals’ 

failure to seek or receive an influenza vaccination. Recognizing the importance of 

sharing updated information, HHS’s influenza website includes a vaccine finder 

for individuals, and the Centers for Disease Control and Prevention’s (CDC) 

website helps providers find vaccine available for purchase. Third, predicting all 

of the influenza virus strains that will be circulating in a given season and their 

likely severity is difficult. Finally, matching influenza vaccine supply to demand is 

challenging, as the supply of and demand for vaccine can vary throughout 

seasons and across multiple seasons. HHS has taken a number of steps to 

address these lessons learned; however, the department continues to face 

challenges, particularly in communicating messages in changing circumstances 

and in facilitating the matching of available vaccine supply with public demand.

HHS has taken steps to strengthen the U.S. influenza vaccine supply by making 

investments in the development of vaccine production technologies and by 

enhancing domestic production capacity. Influenza vaccine has generally been 

produced in a complex egg-based process that poses limitations in timeliness 

and the susceptibility of the egg supply to certain influenza viruses. Prompted by 

these disadvantages, HHS has made investments in alternative vaccine 

production technologies, including cell-based and recombinant technologies. 

Since fiscal year 2005, HHS has awarded over $1 billion in contracts to 

manufacturers to develop cell-based technology. One of these manufacturers 

recently received approval from HHS’s Food and Drug Administration (FDA) for 

its cell-based seasonal influenza vaccine, which it intends to produce for the 

2013–2014 influenza season. In addition, in fiscal year 2009, HHS entered into a 

contract worth approximately $81 million with one manufacturer for the continued 

development of recombinant technology; that manufacturer’s seasonal influenza 

vaccine made using this technology is expected to be available for the 2013–

2014 influenza season. HHS has complemented its investments in vaccine 

production technologies with its investments in domestic manufacturers’ 

production capacity. Since fiscal year 2005, these investments have contributed 

to the doubling of the number of domestic influenza vaccine manufacturers and a 

general increase in the number of influenza vaccine doses produced and 

View GAO-13-374T. For more information, distributed.

contact Marcia Crosse at (202) 512-7114 or 

crossem@gao.gov.
Page 1 GAO-13-374T 

United States Government Accountability Office

Washington, DC 20548

Chairman Murphy, Ranking Member DeGette, and Members of the 

Subcommittee:

I am pleased to be here today as you reflect on the current influenza 

season and examine issues related to influenza preparedness. Influenza, 

in both its seasonal and pandemic forms, is an ongoing public health 

concern. In the northern hemisphere, seasonal influenza may begin as 

early as August and generally diminishes by April. It has been associated 

with 3,000 to nearly 50,000 deaths each year in the United States in 

recent decades, according to the Department of Health and Human 

Services’s (HHS) Centers for Disease Control and Prevention (CDC).1 In 

a pandemic, such as the recent 2009 H1N1 influenza pandemic, influenza 

causes a global disease outbreak with the potential for many more deaths 

than in a typical influenza season.2

My remarks today focus on (1) lessons learned from federal responses to 

prior influenza outbreaks and (2) federal investments to strengthen the 

U.S. vaccine supply and production capacity. My testimony is based on 

multiple GAO reports and testimonies in relation to seasonal and 

pandemic influenza.3

 

1

CDC, “Estimates of Deaths Associated with Seasonal Influenza—United States, 1976–

2007,” Morbidity and Mortality Weekly Report, vol. 59, no. 33 (2010): 1057-1062.

Specifically, this body of work includes issues 

related to influenza vaccine supply, distribution, and shortages; federal 

investments in the U.S. vaccine supply and alternative technologies for 

influenza vaccine production; and the federal response to the 2009 H1N1 

pandemic. This prior work includes analyses of information and interviews 

with officials within HHS, such as those from CDC and the Food and Drug 

Administration (FDA); as well as officials from influenza vaccine 

manufacturers, medical supply distributors, state and local governments, 

provider groups, and national associations such as the Association of 

State and Territorial Health Officials. In preparation for this testimony, we 

obtained updated information from HHS, including on the numbers of 

2

Pandemics occurring in the past 100 years include the “Spanish flu” of 1918, which killed 

an estimated 675,000 people in the United States; the “Asian flu” of 1957, responsible for 

approximately 70,000 deaths in the United States; the “Hong Kong flu” of 1968, which 

caused an estimated 34,000 deaths in the United States; and the 2009 H1N1 pandemic, 

which caused from 8,870 to 18,300 deaths in the United States. Influenza pandemics can 

have successive “waves” of disease and last for up to 3 years.

3

See a list of related GAO products at the end of this statement.

 
 

Page 2 GAO-13-374T 

vaccine doses produced and distributed, the severity of the past three 

seasons, and the status of advanced technology projects funded by HHS. 

We conducted our work in accordance with generally accepted 

government auditing standards.4 Those standards require that we plan 

and perform the audit to obtain sufficient, appropriate evidence to provide 

a reasonable basis for our findings based on our audit objectives. We 

believe that the evidence obtained provides a reasonable basis for our 

findings based on our audit objectives. We provided HHS with a copy of 

updated facts in this statement for its review. HHS provided technical 

comments, which we incorporated as appropriate.

Influenza is characterized by cough, fever, headache, and other 

symptoms and is more severe than some viral respiratory infections, such 

as the common cold. Most people who contract seasonal influenza 

recover completely in 1 to 2 weeks, but some develop serious and 

potentially life-threatening medical complications, such as pneumonia. 

Groups at higher risk of developing serious influenza-related 

complications include those aged 65 years and older; those with chronic 

medical conditions; young children, particularly those under 2 years of 

age; and pregnant women. During an influenza pandemic, different 

groups may be affected. For example, some past influenza pandemics 

have affected healthy young adults who are not typically at high risk for 

severe influenza-related complications.

Annual vaccination is the main method for preventing seasonal influenza. 

Since 2010, CDC and its Advisory Committee on Immunization Practices 

have recommended annual influenza vaccinations for everyone aged 

6 months or older.5

 

4

We conducted our work from November 2000 to June 2011, and February 2013. See the 

list of related products at the end of this statement for more information on our work.

After vaccination, the body takes about 2 weeks to 

produce the antibodies that protect against infection. Vaccination in the 

fall, before the U.S. influenza season begins, is preferable; however, 

because influenza in the United States typically begins to increase in late 

December or early January and peaks in February most seasons, 

5

Some people should not get a flu vaccination without first consulting a physician, 

including people who have had a severe reaction to an influenza vaccination and people 

who have a severe allergy to chicken eggs. See 

http://www.cdc.gov/mmwr/preview/mmwrhtml/mm6132a3.htm for ACIP’s 

recommendations for the 2012–2013 influenza season (accessed Feb. 7, 2013).

Background 
 

Page 3 GAO-13-374T 

vaccination in December or later can still be beneficial. The influenza 

season peaked in February in nearly half (14) of the influenza seasons 

over the past three decades (see fig. 1).

Figure 1: Month of Peak Influenza Activity, 1982–1983 through 2011–2012 Seasons

Note: This figure shows peak influenza activity for the United States, by month, for the 1982–1983 

through 2011–2012 seasons.

Within the federal government, HHS has primary responsibility for 

coordinating the nation’s response to public health emergencies, such as 

an influenza pandemic. Additionally, as the principal department for 

protecting the nation’s public health, HHS is the primary department 

funding the research and development of influenza vaccines. Within HHS, 

CDC makes recommendations on who should be vaccinated, tracks the 

spread of influenza and vaccination rates, and disseminates public health 

messages encouraging vaccination and other protective measures, such 
 

Page 4 GAO-13-374T 

as hand washing. FDA is responsible for selecting the influenza strains to 

include in the annual influenza vaccines and for licensing vaccines.6

In a typical season in the United States, influenza vaccine production and 

distribution are largely the purview of private manufacturers and 

distributors. Manufacturers sell seasonal influenza vaccine directly to 

providers who administer vaccination, including physicians, hospitals, 

pharmacies, federal agencies, state and local health departments, and 

mass immunizers. In addition, manufacturers sell vaccine to medical 

supply distributors, who in turn sell it to providers and other customers. 

Providers administer vaccinations in a variety of locations, including 

physician’s offices, public health clinics, nursing homes, and nonmedical 

locations such as workplaces and retail stores. Millions of individuals 

receive influenza vaccinations through mass immunization campaigns in 

these nonmedical locations, where organizations such as visiting nurse 

agencies under contract administer the vaccine. The reliance on this 

private-sector system affects when and how vaccine is distributed—that 

is, when a provider receives vaccine can depend on which manufacturer 

that provider ordered from and the distribution route the vaccine takes 

from the manufacturer to the provider. Because the influenza vaccine 

production process typically takes 6 or more months to complete, 

manufacturers must estimate the potential demand for vaccine and what 

their production levels will be well before the start of the season.7

 

6

Each year, public health experts, including those from FDA, the World Health 

Organization, and CDC, study influenza virus samples and global disease patterns to 

identify virus strains likely to cause the most illness during the upcoming season. Based 

on that information and the recommendations of FDA’s Vaccines and Related Biological 

Products Advisory Committee, FDA selects the strains for inclusion in the annual influenza 

vaccine for the United States. FDA has traditionally selected three strains of influenza 

virus—two strains of influenza type A and one strain of influenza type B—to include in the 

annual influenza vaccine.

At the 

end of the influenza season, any unused vaccine doses expire and 

therefore cannot be used in subsequent years. Accordingly, 

manufacturers seek to match their vaccine production to expected 

demand for the vaccine so that no doses remain unsold at the end of the 

influenza season. Manufacturers may decide to limit or stop production if 

they do not believe there is sufficient demand to sell all of the vaccine 

7

Influenza vaccine has generally been produced in a complex process that involves 

growing viruses in millions of fertilized chicken eggs. This egg-based process has been 

used to make vaccine in past influenza seasons, the current season, and the 2009 H1N1 

pandemic.
 

Page 5 GAO-13-374T 

doses they have the capacity to produce—thereby limiting the quantity 

produced for that season and how late in the season the vaccine is 

available.

Although the production and distribution of seasonal influenza vaccine is 

largely a private-sector endeavor, federal, state, and local governments 

may become more involved, particularly when there is a vaccine shortage 

or in the event of a pandemic. For example, during a period of vaccine 

shortage in the 2004–2005 season, the federal government worked with a 

major manufacturer and with state and local health officials to help

prioritize how to distribute available vaccine to provide better access for 

those at high risk for influenza related complications.8 In the event of a 

pandemic, the federal government may assert more control over vaccine 

production and distribution than in a nonpandemic influenza season. For 

example, in response to the 2009 H1N1 pandemic the federal 

government purchased vaccine directly from manufacturers and worked 

with state and local governments to determine the distribution of that 

vaccine. In a pandemic situation when the federal government purchases 

all of the vaccine, the federal government can guarantee manufacturers 

that they will sell a certain number of doses.

 

8

Of the three manufacturers of seasonal influenza vaccine for the 2004–2005 influenza 

season, two produced and distributed vaccine and one ceased production and did not 

distribute any vaccine for the U.S. market after its license was suspended by the United 

Kingdom in October 2004. As a result, close to half of the 100 million doses estimated for 

the 2004–2005 season—approximately 47 million doses—were not produced. Instead 

only 61 million doses were produced, of which 57 million were distributed. 
 

Page 6 GAO-13-374T 

Our prior work has identified a number of lessons from the federal 

response to seasonal influenza vaccine shortages and the 2009 H1N1 

pandemic that carry implications for future influenza seasons or another 

influenza pandemic. The primary lessons can be grouped into four broad, 

interrelated categories: the value of planning, the importance of effective 

communication, the difficulties in predicting all of the influenza virus 

strains that will be circulating in a given season, and the challenge in 

facilitating the matching of available influenza vaccine supply with public 

demand.

First, our work found that planning is critical to an effective response.

• A lesson learned from the 2004–2005 season, when there was an 

abrupt and unexpected loss of nearly half of the nation’s expected 

vaccine supply, was that planning is critical to ensure timely delivery 

of vaccine to those who need it when demand for vaccine exceeds the 

available supply. That season, CDC’s lack of a contingency plan 

contributed to delays and uncertainty about how to ensure that highrisk individuals had access to vaccine.

• We also found that planning paid off in the response to the 2009 

H1N1 pandemic. For example, planning activities—including planning 

exercises, and interagency meetings prior to the H1N1 pandemic—

built relationships that were valuable and positioned the government 

to respond effectively.

HHS has taken action in planning for future seasons or pandemics. For 

example, following the shortage of the prior season, CDC published 

ordering and distribution strategies for the 2005–2006 season, when 

there was uncertainty in vaccine production, encouraging the distribution 

of vaccine in multiple shipments as vaccine became available so 

providers could have some vaccine for their high-risk patients when 

vaccine was initially distributed.9

 

9

See CDC, “Influenza Vaccine Prebooking and Distribution Strategies for the 2005–06 

Influenza Season,” Morbidity and Mortality Weekly Report, vol. 54, no. 12 (2005): 307-

308.

CDC continues to encourage this type of 

multiphased distribution strategy. Additionally, following the 2009 H1N1 

pandemic, HHS reported that it would incorporate lessons learned from 

the pandemic response into its plans for responding to such incidents in 

Lessons Learned on 

Influenza Response 

Include the 

Importance of 

Planning, Effective 

Communication, and 

the Difficulty of 

Matching Vaccine 

Supply with Public 

Demand 
 

Page 7 GAO-13-374T 

the future. These included lessons that we identified, as well as other 

lessons HHS identified in its after-action report.

Second, our work found that clear and consistent communication—

between all levels of government and with providers and the public—is 

key. Because the failure to effectively manage public expectations can 

undermine government creditability, it is essential that vaccine production 

efforts be paired with effective communication strategies by the federal 

government regarding the availability of the vaccine. The effect of 

communication is illustrated by past seasons:

• During the 2004–2005 season, in some instances, uncoordinated 

communication from federal to state and local jurisdictions, and to 

providers and the general public, contributed to confusion, frustration, 

and individuals’ failure to seek or receive an influenza vaccination.

• During the summer of 2009, HHS conveyed to state and local 

jurisdictions, and to the public, that a robust H1N1 vaccine supply, 

about 120–160 million doses, was expected to be available in October 

2009. Ultimately, however, fewer than 17 million doses were shipped 

out that month, which did not meet the expectations of state and local 

governments or the public. Consequently, the public had an 

unfavorable view of the federal government’s ability to provide the 

country with the H1N1 vaccine. A Gallup survey of U.S. adults from 

early November 2009 found that 54 percent of adults said the federal 

government was doing a poor (41 percent) or very poor (13 percent) 

job of providing the country with adequate supplies of the vaccine.

• In our work on past influenza seasons and the 2009 H1N1 pandemic, 

state and local health officials emphasized the value of 

communication, including updating information when responding to 

changing circumstances, using diverse media to reach diverse 

audiences, and educating the public about nonpharmaceutical 

interventions, such as hand washing and covering coughs.

Recognizing the importance of sharing updated information, in response 

to problems in the past, HHS has taken steps to work with stakeholders to 

communicate on vaccine availability. For example, HHS’s influenza 

website, www.flu.gov, includes an influenza vaccine finder for individuals 
 

Page 8 GAO-13-374T 

seeking to find providers offering vaccination in their area.10 In addition, 

CDC’s website has links to help health care providers find available 

vaccine to purchase.11

While these efforts, along with regular communication and sharing of 

information between CDC and other stakeholders—including public 

health officials, providers, manufacturers, and distributors—have 

improved influenza-related communication, effective and consistent 

communication is a challenge. For example, as we reported in October 

2007, one CDC official involved in communicating messages about 

influenza told us that it is difficult to maintain a consistent message during 

or between influenza seasons, because messages need to adapt to the 

dynamic and complex situations that constitute influenza seasons. For 

example, messages need to be modified to account for changes in the 

Advisory Committee on Immunization Practices’ recommendations, which 

could result in the public hearing different messages before and after 

these revisions are made.

Third, our work found that ensuring that the annual influenza vaccine 

protects against the influenza virus strains that will cause serious illness 

for a given influenza season is difficult, because it is not possible to 

predict with certainty which influenza viruses will predominate that 

season. Traditionally, the influenza vaccines licensed by FDA for use in 

the United States contain three different influenza virus strains. FDA must 

pick which viruses to include in the vaccine many months in advance in 

order for vaccine to be produced and delivered on time, so there is 

always a possibility of a less than optimal match between circulating 

viruses and the virus strains in the vaccine. In recent years, the match 

between the viruses in the vaccine and those identified during the season 

has been good; however, in some seasons, this has not been the case. 

For example, for the 2007–2008 season’s vaccine, FDA did not select the 

 

10CDC initially created a version of the Flu Vaccine Finder to help state and local officials 

direct available vaccine to certain high-risk groups; this system provided state and local 

officials with information on where vaccine had been shipped and also allowed them to 

order available vaccine.

11During influenza seasons when vaccine supply is challenged, the Influenza Vaccine 

Availability Tracking System (IVATS) becomes operational. IVATS, which is on the 

website of the National Influenza Vaccine Summit (www.preventinfluenza.org), enables 

health care providers to view at a glance which distributors have vaccine available to sell. 

IVATS was initiated in 2006.
 

Page 9 GAO-13-374T 

influenza A virus strain that became the predominant virus in the United 

States that season for the vaccine, and the vaccine was not well-matched 

with the strains circulating in the United States that season During a 

typical influenza season, including the current season, there may be two 

different influenza B strains circulating, or the B strain selected for 

inclusion in the vaccine may not be the influenza B strain that eventually 

circulates and causes illness. To increase the likelihood of adequate

protection against circulating influenza strains, FDA approved two new 

vaccines that can protect against a total of four influenza strains—one 

more strain than traditional seasonal influenza vaccines. These new 

vaccines—called quadrivalent vaccines—are expected to be available for 

the 2013–2014 season.12

Finally, another lesson learned is that matching influenza vaccine supply 

with the public’s demand is challenging, particularly as the supply of and 

demand for vaccine can vary throughout the season and across multiple 

seasons. For instance:

• While the roughly 78 million doses eventually produced for the 2000–

2001 season were about the same amount produced in the previous 

year, a delay resulted in a shortage of vaccine during October and 

November when people normally receive their vaccination. During the 

shortage, many providers who wanted to purchase vaccine faced 

rapidly escalating prices from distributors with an available supply.

• For the 2003–2004 season, shortages of vaccine occurred when there 

was an earlier and more severe influenza season and higher than 

normal demand, likely resulting from media coverage of pediatric 

deaths associated with influenza. Manufacturers that season had 

produced about the same number of doses used in the previous 

season—about 87 million doses total—which was not adequate to 

meet the increased demand, according to CDC officials.

• Even in seasons when there were few licensed manufacturers or 

periods when demand exceeded the available supply, more doses of 

 

12FDA approved MedImmune’s FluMist Quadrivalent in February 2012 and 

GlaxoSmithKline’s Fluarix Quadrivalent vaccine in December 2012 for the prevention of 

seasonal influenza for their intended populations. According to FDA, the approval of these 

quadrivalent influenza vaccines was not for a specific influenza season and the timing of 

the marketing launch of a new vaccine to make it available to the public is a decision 

made by each manufacturer.
 

Page 10 GAO-13-374T 

seasonal vaccine have generally been produced than distributed, 

according to data from CDC, FDA, and the American Medical 

Association. Similarly, overall supply exceeded demand even in the 

2009 H1N1 pandemic; HHS has acknowledged that the doses of 

H1N1 vaccine arrived too late in the response, and local health 

department officials told us that once the H1N1 vaccine became 

available, parents were not interested in vaccinating their children 

because H1N1 influenza vaccine activity had already peaked in their 

area.

The challenges in matching vaccine supply with demand in a given 

season are illustrated in the past two seasons. For the 2011–2012 

season, manufacturers produced about 162 million doses, slightly more 

than the 158 million doses distributed in the prior season. However, the 

2011–2012 season began late, peaked in March, and was mild compared 

to most previous seasons, and manufacturers were left with about 

30 million doses that were produced but not distributed at the end of the 

season. For the current 2012–2013 season, manufacturers are expected 

to produce about 145 million doses. Unlike last season, CDC has 

reported that this season has been characterized by early and intense 

influenza activity throughout much of the country, and there are reports of 

spot shortages. Figure 2 shows the percentage of outpatient visits for 

influenza-like illness by month for influenza seasons in 2010–2011, 2011–

2012, and 2012–2013.
 

Page 11 GAO-13-374T 

Figure 2: Percentage of Outpatient Visits for Influenza-Like Illness by Month, 2010–2011, 2011–2012, and 2012–2013

Figure 3 show the cumulative number of doses of influenza vaccine 

distributed by month for the same seasons.
 

Page 12 GAO-13-374T 

Figure 3: Cumulative Number of Seasonal Influenza Vaccine Doses Distributed by Month, 2010–2011, 2011–2012, and 2012–

2013

Recognizing the potential for a mismatch in vaccine supply and demand 

for vaccinations, beginning with the 2004–2005 season, CDC began 

purchasing a late-season influenza vaccine stockpile to provide a limited 

quantity of vaccine for children using federal Vaccines for Children (VCF) 

program funds. The purpose of this stockpile is to ensure that some 

vaccine would be available in the event of a late-season outbreak of 

influenza and related demand for vaccine.13

 

13Under CDC’s VFC program, vaccines are provided free of charge for certain children 

18 years of age or younger, including those who are Medicaid-eligible, uninsured, or those 

without insurance coverage for vaccinations.

For the current season, CDC 

shipped about 400,000 pediatric doses of vaccines during the week of 

January 21, 2013, to federal depots so that 32 immunization awardees 
 

Page 13 GAO-13-374T 

could place additional orders to protect children.

14 Despite these efforts, 

many challenges remain. Predictions of the severity and timing of a 

coming seasonal outbreak, and the circulating strains, are imprecise. The 

vaccine production process relies on an annual manufacturing cycle that 

has a history of disruption. Given this production cycle, decisions must be 

made months in advance of a seasonal outbreak and vaccine supply 

orders are often placed before providers know what patient demand will 

be. Manufacturers may be reluctant to produce and providers may be 

reluctant to order vaccine that exceeds their projected demand because 

the product must be destroyed at the end of the season if it is not used.

HHS has taken steps to strengthen the U.S. influenza vaccine supply by 

making investments in alternative technologies—including cell-based and 

recombinant technologies—and enhancing domestic production 

capacity.15 (See app. I for additional information on these technologies). 

Potential threats to the egg supply such as from the H5N1 virus, in part, 

prompted HHS to make investments in alternative technologies for 

producing influenza vaccine.16 Specifically, since fiscal year 2005, HHS 

awarded over $1 billion in contracts to manufacturers to develop cellbased technology.17

 

14CDC reported purchasing 517,280 doses for its pediatric influenza vaccine stockpile for 

the 2012-2013 season. CDC reached out to immunization awardees to determine if they 

had the need for any additional VFC vaccine to serve VFC-eligible children in their 

jurisdictions. Based on this request, CDC made available approximately 400,000 doses of 

this stockpiled VFC vaccines to 32 immunization awardees. These doses were shipped to 

the federal depots serving these awardees during the week of January 21, 2013, so that 

the awardees could place orders.

These contracts involved six manufacturers, and, 

according to HHS, established goals for manufacturers to develop cell15HHS refers to this technology as recombinant/molecular technology. According to HHS, 

this technology is also used for researching and developing a universal influenza vaccine. 

HHS’s National Institutes of Health is conducting research on a universal vaccine, which it 

defines as a vaccine that would theoretically provide protection against any strain of 

influenza without needing to be updated or administered every year to protect against 

newly emerging annual or pandemic strains. HHS has also made other investments to 

enhance the U.S. vaccine supply, such as in antigen-sparing technology using adjuvants.

16In addition to human infections, strains of the H5N1 virus have infected chicken flocks 

and other poultry, resulting in the culling of these flocks, raising concern that the egg 

supply for influenza vaccine could be at risk.

17Cell-based technology has the potential to increase the overall amount of vaccine 

available at the end of the production process, but it does not speed up the production 

process itself.

HHS Has Made 

Investments to 

Strengthen the U.S. 

Vaccine Supply
 

Page 14 GAO-13-374T 

based technology for influenza vaccine and obtain FDA licensure for such 

a vaccine.18 One of those manufacturers—Novartis Vaccines and 

Diagnostics, Inc. (Novartis Vaccines)—received FDA approval for its cellbased seasonal influenza vaccine, called Flucelvax, in November 2012. 

According to HHS, Novartis Vaccines plans to produce and distribute this 

vaccine for the 2013–2014 influenza season.19

In addition to investments in cell-based technology, HHS has also 

awarded contracts to manufacturers for the research and development of 

recombinant technology.

(See app. II for more 

information on these contracts.)

20 Specifically, in fiscal year 2009, HHS entered 

into a contract worth approximately $81 million with Protein Sciences 

Corporation (Protein Sciences) for the continued development of 

recombinant technology for use in producing an influenza vaccine.21 In 

January 2013, FDA approved Protein Sciences’s seasonal influenza 

vaccine made using recombinant technology, FluBlok, which will be 

available for the 2013–2014 influenza season.22

HHS’s investments in alternative vaccine technologies have been 

complemented by its investments in domestic manufacturers’ production 

capacity. As we noted in prior work, the lack of U.S. production capacity 

was cause for concern among experts, in part because it is possible that 

countries without domestic production capacity will not have access to 

influenza vaccine in the event of a pandemic if countries where vaccine is 

produced prohibit the export of the pandemic vaccine until their own 

 

18According to HHS, it awarded multiple contracts because it expected some attrition by 

manufacturers as the development of new influenza vaccines progressed.

19According to HHS, Novartis Vaccines has produced 230,000 doses of its cell-based 

influenza vaccine; however, none of these doses have been distributed as of February 

2013. 

20Recombinant technology has the potential to increase the overall amount of vaccine 

available at the end of the production process and speed up the production process itself, 

in part, because unlike egg-based and cell-based technologies, it does not depend on the 

replication of the influenza virus for production.

21HHS has also made investments in the research and development of pandemic 

influenza vaccines using recombinant technology. See table 3 in app. II for more 

information on these investments.

22According to HHS, Protein Sciences has produced 100,000 doses of its recombinant 

influenza vaccine; however, none of these doses have been distributed as of February 

2013. 
 

Page 15 GAO-13-374T 

needs are met.23 Since fiscal year 2005, HHS has made investments in 

enhancing domestic production capacity using egg-based technology by, 

for example, supporting a program to ensure a year-round, secure, 

domestic egg supply. Prior to this funding, manufacturers maintained a 

9-month supply of eggs—enough for production only during the regular 

influenza season without any additional capacity for emergencies, such 

as an influenza pandemic. Additionally, in fiscal year 2007, HHS entered 

into contracts with two manufacturers for the retrofitting of existing 

domestic egg-based production facilities. According to HHS, the 

retrofitting has doubled the production capacity for one of these 

manufacturers and tripled the production capacity for the other. This 

additional capacity was used during the 2009 H1N1 pandemic to produce 

pandemic vaccine. Also, as a condition of receiving funding to develop 

cell-based technology, HHS required manufacturers to have a domestic 

facility where cell-based influenza vaccine can be produced. In fiscal year 

2009, HHS entered into a $486.6 million contract with Novartis Vaccines 

for the construction of a cell-based influenza vaccine production facility in 

the United States to enhance domestic production capacity. This facility 

was completed in November 2009 and is the facility where Novartis’s 

Flucelvax is expected to be produced for the 2013–2014 influenza

season.24 These investments by HHS have contributed to the doubling of 

the number of domestic influenza vaccine manufacturers and a general 

increase in the number of influenza vaccine doses produced and 

distributed. (See table 1.)

 

23See GAO, Influenza Pandemic: Efforts Under Way to Address Constraints on Using 

Antivirals and Vaccines to Forestall a Pandemic, GAO-08-92 (Washington, D.C.: Dec. 21, 

2007). This situation occurred during the 2009 H1N1 pandemic when CSL Biotherapies in 

Australia and GlaxoSmithKline, plc, in Canada were required to fulfill their domestic orders 

for the pandemic vaccine prior to releasing vaccine to the United States.

24According to HHS, Novavax Vaccines is currently producing this vaccine at its facility in 

Marburg, Germany.
 

Page 16 GAO-13-374T 

Table 1: Number of U.S.-Licensed Manufacturers of Seasonal Influenza Vaccine and 

Number of Doses Produced and Distributed for the 2000–2001 through 2012–2013 

Influenza Seasons

Influenza season 

Number of licensed 

manufacturers 

Total number of 

doses produced 

(in millions) 

Total number of 

doses distributed 

(in millions)

2000–2001 3 78 70

2001–2002 3 88 78

2002–2003 3 95 83 

2003–2004 3 87 83

2004–2005 3 61 a 57

2005–2006 4 92 82

2006–2007 5 121 104

2007–2008 6 141 113

2008–2009 6 143-146 111

2009–2010 6 114 114

2009 H1N1 pandemic 5 b 186 173 c

2010–2011

d

6 168 158

2011–2012 6 162 132

2012–2013 6 145 e 134 f

Source: GAO analysis of CDC, FDA, and American Medical Association data.

g

Notes: Table includes the number of doses produced by manufacturers and distributed to customers, 

such as medical supply distributors, physicians, or other types of providers.

a

Of the three manufacturers of seasonal influenza vaccine for the 2004–05 influenza season, two 

produced and distributed vaccine and one ceased production and did not distribute any vaccine for 

the U.S. market after its license was suspended by the United Kingdom in October 2004. In addition 

to these three manufacturers, two foreign manufacturers’ vaccines were purchased by the 

Department of Health and Human Services (HHS) for potential use in the United States under an 

investigational new drug protocol; however, none of these doses were distributed.

b

For the 2009 H1N1 pandemic, vaccine was purchased exclusively by the federal government for 

distribution to state-designated locations.

c

According to HHS, 240 million doses of bulk pandemic vaccine was produced, of which 186 million 

doses were filled.

d

This number includes doses distributed for the U.S. public, the Department of Defense, and for 

international response efforts.

e

This number does not reflect FDA’s most recent approvals for seasonal influenza vaccines using 

cell-based and recombinant technologies.

f

This amount includes the 230,000 doses of cell-based influenza vaccine produced by Novartis 

Vaccines and the 100,000 doses of recombinant influenza vaccine produced by Protein Sciences. 

These doses of vaccine produced using alternative technologies were not distributed, according to 

HHS.

g

This number is as of January 25, 2013.
 

Page 17 GAO-13-374T 

Over the last decade, progress has been made in the federal 

government’s preparation for and response to seasonal and pandemic 

influenza events. Planning activities have helped with response efforts, 

communication with the public regarding where and when to get vaccine 

has been clearer and more effective, and manufacturers have been 

encouraged to enhance domestic production capacity and develop 

alternative production technologies. Yet, the fact remains that when 

facing a typical influenza season, manufacturers must make decisions 

about how much vaccine to produce, providers must determine how much 

vaccine to order, and individuals—who may be influenced by a particular 

season’s perceived severity and media reports—make their own 

decisions about whether, when, and where to seek vaccination. These 

disparate factors, along with challenges inherent in the vaccine 

production process and influenza seasons that are unpredictable in terms 

of duration and severity, can present barriers to successfully making 

desired quantities of influenza vaccine available when and where it is 

needed.

Chairman Murphy, Ranking Member DeGette, and Members of the 

Subcommittee, this completes my prepared statement. I would be 

pleased to respond to any questions that you may have at this time.

If you or your staff have any questions about this testimony, please 

contact me at (202) 512-7114 or crossem@gao.gov. Contact points for 

our Offices of Congressional Relations and Public Affairs may be found 

on the last page of this statement. Kim Yamane, Assistant Director; 

Tom Conahan; Kaitlin Coffey; Cathy Hamann; and Gay Hee Lee were key 

contributors to this statement

Concluding 

Observations 

GAO Contact and 

Staff 

Acknowledgments 
Appendix I: Influenza Vaccine Production 

Technologies

Page 18 GAO-13-374T 

Traditionally, influenza vaccine—both seasonal and pandemic—has been 

produced using egg-based technology. However, the Food and Drug 

Administration (FDA) recently approved two new seasonal influenza 

vaccines produced using alternative technologies—one using cell-based 

technology and a second using recombinant technology.1

Egg-based technology has been used to produce influenza vaccine—both 

seasonal and pandemic—for several decades. Department of Health and 

Human Services (HHS) officials we spoke with described it as a “tried and 

true” production technology with which regulators and manufacturers are 

familiar. This technology is used to make seasonal and pandemic 

influenza vaccine. This technology utilizes fertilized eggs as the medium 

for producing the vaccine.2 Additionally, several decades of safety and 

efficacy data on the influenza vaccine produced using egg-based 

technology are available. However, the timeliness of vaccine production is 

hindered, in part, by egg-based technology’s reliance on seed strain 

development and growth. Another factor affecting the production timeline 

is the amount of antigen produced per egg.3 For example, during the 

2009 H1N1 pandemic, vaccine delivery was delayed, in part, because of 

poorer yields of antigen per egg than expected. Also, the amount of 

influenza vaccine that can be produced depends on the manufacturer’s 

egg supply. It generally takes 12 to 18 months to establish an egg supply 

large enough to meet the demands of either seasonal or pandemic 

influenza.4

 

1

The Department of Health and Human Services (HHS) refers to this technology as 

recombinant/molecular technology. According to HHS, this technology is also used for 

researching and developing a universal influenza vaccine. The National Institutes of 

Health, which is conducting research on a universal vaccine, defines it as a vaccine that 

would theoretically provide protection against any strain of influenza without needing to be 

updated or administered every year to protect against newly emerging annual or 

pandemic strains.

2

Producing these fertilized eggs is more difficult than producing eggs for human 

consumption. The fertilized eggs are typically 9 to 12 days old, and FDA requires that 

these eggs meet particular sanitation and other requirements.

3

Antigen is the active substance in a vaccine that provides immunity by causing the body 

to produce protective antibodies to fight off a particular influenza strain.

4

Since fiscal year 2005, HHS has made investments in enhancing domestic production 

capacity using egg-based technology by, for example, supporting a program to ensure a 

year-round, secure, domestic egg supply.

Appendix I: Influenza Vaccine Production 

Technologies

Egg-Based 

Technology 
Appendix I: Influenza Vaccine Production 

Technologies

Page 19 GAO-13-374T 

The key potential benefit to cell-based technology is the ability to increase 

the overall amount of vaccine available at the end of the production 

process. This technology for influenza vaccines typically relies on the use 

of well-established cell lines, such as those originally derived from the 

kidney cells of monkeys or canines. These cells can exponentially 

increase in number, allowing for the rapid expansion of the medium used 

for influenza vaccine production. Additionally, cells can be stored in 

freezers and prepared for use within days or weeks for large-scale 

production demands. Vaccines using cell-based technology are licensed 

for use in the United States for use against other infectious diseases, 

such as polio. Despite the potential benefits of cell-based technology, 

there are challenges associated with its use. Similar to egg-based 

technology, cell-based technology relies on seed strain development and 

growth to obtain the influenza vaccine’s antigen.

Recombinant technology potentially increases the overall amount of 

vaccine available at the end of the production process and speeds up the 

production process itself. First, this technology can also utilize specialized 

cells—from mammals or from other sources, such as from bacteria, 

yeast, insects, or plants—that can exponentially increase in number as 

the medium for influenza vaccine production, allowing for the rapid 

expansion of the medium used for influenza vaccine production. 

Recombinant technology also has the potential to speed up the 

production process because it does not rely on the development and 

growth of a seed strain to obtain the influenza vaccine’s antigen. Instead, 

antigen is derived from the protein(s) on the surface of the influenza virus 

or from the virus’s genes. Recombinant technology is currently used in 

U.S.-marketed vaccines against other diseases, such as hepatitis B and 

the human papillomavirus, so FDA has experience reviewing licensing 

applications for vaccines produced using this technology.

Cell-based 

Technology 

Recombinant 

Technology 
Appendix II: HHS’s Contracts for the Research 

and Development of Cell-Based and 

Recombinant Influenza Vaccines

Page 20 GAO-13-374T 

Table 2: HHS Contracts Awarded for Research and Development of Cell-Based Influenza Vaccine

Development status as of February 2013

Manufacturer

Fiscal year 

of award

Total obligations

(dollars in millions)

Vaccine 

approved a Application 

pending

Vaccine in 

development

Contract no 

longer active

sanofi pasteur 2005 b $77.0c X

GlaxoSmithKIine

d

2006 274.8 X 

Novartis Vaccines 2006 220.5 Xe

DynPort/Baxter 2006 f 242.3g Xh

MedImmune, LLC 2006 169.5 X

Solvay Pharmaceuticals

i

2006 j 48.6k X

Total

l

$1032.7

Source: GAO analysis of HHS and manufacturer data.

Notes: HHS data are as of February 2013, while manufacturer data are as of June 2011. 

a

Obligations are definite commitments that establish the legal liability of a federal agency to make 

payments for goods or services ordered or received, immediately or in the future. Because payments 

are typically made as goods or services are received, the funds listed may not have been expended. 

Upon termination of a contract, unexpended funds may be deobligated and, depending on the terms 

of their appropriation, may remain available to the agency.

b

The policy of sanofi pasteur is to spell its name without capital letters.

c

This amount reflects a $20 million deobligation in fiscal year 2009. A deobligation refers to the 

cancellation or downward adjustment of previously incurred obligations.

d

The manufacturer concluded that cell-based technology was not more advantageous than eggbased technology and lacked a clear path for further development, and thus the manufacturer chose 

to forgo pursuit of cell-based technology. According to HHS, the department terminated this contract 

for the development of a cell-based influenza vaccine in fiscal year 2009. 

e

This vaccine, Flucelvax, was approved by FDA in November 2012 and is expected to be available 

during the 2013–14 influenza season.

f

HHS contracted with DynPort Vaccine Company LLC (DynPort), which collaborated with Baxter 

International Inc., (Baxter) to develop a seasonal and a pandemic influenza vaccine using cell-based 

technology. Baxter oversaw the development of the vaccine, including supporting licensure efforts for 

the seasonal vaccine. Baxter also oversaw the completion of clinical trials for the pandemic vaccine. 

DynPort managed the overall project as well as clinical trials. For the purposes of this statement, we 

refer to this contract as DynPort/Baxter because of the collaboration between the two manufacturers.

g

This amount includes a modification of $201.3 million made in fiscal year 2007 to the existing 

contract. The original contract was awarded for $41 million.

h

According to HHS, Dynport/Baxter anticipates submitting a licensing application to FDA in 2013.

i

According to HHS, a stop-work order was issued in fiscal year 2010 and discussions related to the 

termination of this contract are ongoing, as of February 2013.

j

Abbott Laboratories purchased Solvay Pharmaceuticals in February 2010.

k

This amount reflects a $250 million deobligation in fiscal year 2009.

l

The manufacturer discontinued plans for the construction of a cell-based influenza vaccine 

production facility in the United States because of lack of commercial viability. HHS terminated this 

contract for the development of a cell-based influenza vaccine in June 2009.

Appendix II: HHS’s Contracts for the 

Research and Development of Cell-Based and 

Recombinant Influenza Vaccines
Appendix II: HHS’s Contracts for the Research 

and Development of Cell-Based and 

Recombinant Influenza Vaccines

Page 21 GAO-13-374T 

Table 3: HHS Contracts Awarded for Research and Development of Recombinant Influenza Vaccine

Development status as of February 2013

Manufacturer

Fiscal year 

of award

Total obligations

(dollars in millions)

Vaccine 

approved a Application pending

Vaccine in 

development

Contract no 

longer active

Protein Sciences 2009 b $81.3 Xc

Novavax 2011 d 97.3 X 

VaxInnate 2011 d 117.9 X 

Total $296.5

Source: GAO analysis of HHS data.

a

Obligations are definite commitments that establish the legal liability of a federal agency to make 

payments for goods or services ordered or received, immediately or in the future. Because payments 

are typically made as goods or services are received, the funds listed may not have been expended. 

Upon termination of a contract, unexpended funds may be deobligated and, depending on the terms 

of their appropriation, may remain available to the agency.

b

According to HHS, this contract requires Protein Sciences to establish enough domestic 

manufacturing capacity to provide finished vaccine within 12 weeks of the beginning of a pandemic 

and to produce at least 50 million doses of pandemic vaccine within 6 months of the beginning of a 

pandemic.

c

This vaccine, FluBlok, was approved by FDA in January 2013 and is expected to be available during 

the 2013–2014 influenza season.

d

According to HHS, this manufacturer is currently conducting clinical trials for its recombinant 

pandemic influenza vaccine.
Related GAO Products

Page 22 GAO-13-374T 

Influenza Pandemic: Lessons from the H1N1 Pandemic Should Be 

Incorporated into Future Planning. GAO-11-632. Washington, D.C.: 

June 27, 2011.

Influenza Vaccine: Federal Investments in Alternative Technologies and 

Challenges to Development and Licensure. GAO-11-435. Washington, 

D.C.: June 27, 2011.

Influenza Pandemic: Monitoring and Assessing the Status of the National 

Pandemic Implementation Plan Needs Improvement. GAO-10-73. 

Washington, D.C.: November 24, 2009.

Influenza Pandemic: Gaps in Pandemic Planning and Preparedness 

Need to Be Addressed. GAO-09-909T. Washington, D.C.: July 29, 2009.

Influenza Pandemic: Continued Focus on the Nation’s Planning and 

Preparedness Efforts Remains Essential. GAO-09-760T. Washington, 

D.C.: June 3, 2009.

Influenza Pandemic: Sustaining Focus on the Nation’s Planning and 

Preparedness Efforts. GAO-09-334. Washington, D.C.: February 26, 

2009.

Influenza Pandemic: HHS Needs to Continue Its Actions and Finalize 

Guidance for Pharmaceutical Interventions. GAO-08-671. Washington, 

D.C.: September 30, 2008.

Influenza Pandemic: Efforts Under Way to Address Constraints on Using 

Antivirals and Vaccines to Forestall a Pandemic. GAO-08-92. 

Washington, D.C.: December 21, 2007.

Influenza Vaccine: Issues Related to Production, Distribution, and Public 

Health Messages. GAO-08-27. Washington, D.C.: October 31, 2007.

Influenza Pandemic: Further Efforts Are Needed to Ensure Clearer 

Federal Leadership Roles and an Effective National Strategy. 

GAO-07-781. Washington, D.C.: August 14, 2007.

Influenza Pandemic: Efforts to Forestall Onset Are Under Way; Identifying 

Countries at Greatest Risk Entails Challenges. GAO-07-604. Washington, 

D.C.: June 20, 2007.

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Page 23 GAO-13-374T 

Influenza Pandemic: DOD Combatant Commands’ Preparedness Efforts 

Could Benefit from More Clearly Defined Roles, Resources, and Risk 

Mitigation. GAO-07-696. Washington, D.C.: June 20, 2007.

Influenza Pandemic: Applying Lessons Learned from the 2004–05 

Influenza Vaccine Shortage. GAO-06-221T. Washington, D.C.: 

November 4, 2005.

Influenza Vaccine: Shortages in 2004–05 Season Underscore Need for 

Better Preparation. GAO-05-984. Washington, D.C.: September 30, 2005.

Influenza Pandemic: Challenges in Preparedness and Response. 

GAO-05-863T. Washington, D.C.: June 30, 2005.

Influenza Pandemic: Challenges Remain in Preparedness. 

GAO-05-760T. Washington, D.C.: May 26, 2005.

Flu Vaccine: Recent Supply Shortages Underscore Ongoing Challenges. 

GAO-05-177T. Washington, D.C.: November 18, 2004.

Infectious Disease Preparedness: Federal Challenges in Responding to 

Influenza Outbreaks. GAO-04-1100T. Washington, D.C.: September 28, 

2004.

Flu Vaccine: Steps Are Needed to Better Prepare for Possible Future 

Shortages. GAO-01-786T. Washington, D.C.: May 30, 2001.

Flu Vaccine: Supply Problems Heighten Need to Ensure Access for HighRisk People. GAO-01-624. Washington, D.C.: May 15, 2001.

(291123)
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