Update of Federal Activities Regarding the

Use of Pneumococcal Vaccine

May 1984

NTIS order #PB85-128155
Recommended Citation:

Update of Federal Activities Regarding The Use of Pneumococcal Vaccine—A Technical

Memorandum (Washington, D. C.: U.S. Congress, Office of Technology Assessment, OTATM-H-23, May 1984).

Library of Congress Catalog Card Number 84-601069

For sale by the Superintendent of Documents

U.S. Government Printing Office, Washington, D.C. 20402
Preface

The legislation that established Medicare in 1965 excluded from coverage immunizations and certain other technologies used for prevention. In 1981, Congress began

coverage of pneumococcal vaccination, but has not extended the same coverage to other

preventive vaccines, such as influenza.

In its deliberations regarding pneumococcal vaccine, Congress referred to a 1979

report by the Office of Technology Assessment (OTA) entitled A Review of Selected

Federal Vaccine and Immunization Policies. This report used the case of pneumococcal

vaccine to illustrate policy issues and included a cost-effectiveness analysis. In December

1983, the Subcommittee on Health and Long-Term Care of the House Select Committee on Aging requested OTA to provide current information on the efficacy and safety

of pneumococcal vaccine and on Federal involvement in the vaccine’s use.

This technical memorandum presents that updated information. The memorandum

describes Federal activities that have taken place since 1979; reevaluates the 1979 costeffectiveness analysis of vaccination against pneumococcal pneumonia, including new

information on vaccine efficacy; and discusses policy implications. Although exact data

are not available, it is estimated that about 25 percent of people older than age 65 may

have received pneumococcal vaccine. The report concludes that, if the Government wishes

to promote the use of pneumococcal vaccine, efforts beyond Medicare coverage will

be needed to reach elderly adults.

This memorandum benefited from the consultation and review of a large number

of persons in the Federal Government, universities, private industry, and medical community (see app. A). Richard K. Riegelman of George Washington University was particularly helpful in evaluating the medical literature. Key OTA staff involved in the

preparation of the document were Jane E. Sisk, Elliott Pickar, and Katherine E. Locke.

~ JOHN H. GIBBONS

Director

. . .

Ill
OTA Study Staff

Roger C. Herdman, Assistant Director, OTA Health and Life Sciences Division

Clyde J. Behney, Health Program Manager

Jane E. Sisk, Project Director

Elliot Pickar, Senior Analyst

Katherine E. Locke, Research Assistant

Virginia Cwalina, Administrative Assistant

Rebecca Garza, Secretary

Brenda Miller, Word Processing/P. C. Specialist

Consultant

Richard K. Riegelman

School of Medicine

George Washington University

Contractor

IMS America Ltd.

Rockville, Md.

iv
——

Contents

Chapter Page

l. Introduction and Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

Background and Scope of the Study . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

Federal Activities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

Reconsideration of the Cost Effectiveness of Vaccination Against

Pneumococcal Pneumonia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

Policy Implications . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7

2. Reconsideration of the Cost Effectiveness of Vaccination Against

Pneumococcal Pneumonia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11

Incidence of Pneumococcal Pneumonia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13

Proportion of Pneumococcal Pneumonia Caused by the Pneumococcal

Types in the Vaccine . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15

Efficacy Rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16

Antibody Responses of High-Risk Groups With Chronic Disease . . . . . . . . . . . . . . 16

Antibody Responses of Immunocompromised People . . . . . . . . . . . . . . . . . . . . . . . . 17

Antibody Responses of Elderly People . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17

Use With Influenza Vaccine . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17

Comparison of Antibody Levels . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17

Assessing Vaccine Efficacy. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18

Duration of Immunity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20

Safety: Side Effects . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20

Cost of Vaccination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21

Medical Costs unextended Years of Life . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22

Reconsideration of the Cost-Effectiveness Results . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23

Reconsideration of Costs to the Medicare Program . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24

3. Federal Activities Regarding Appropriate Vaccine Use . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27

Testing and Licensure of Pneumococcal Vaccine . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27

Postmarketing Surveillance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27

Formulation of the 23-Valent Pneumococcal Vaccine . . . . . . . . . . . . . . . . . . . . . . . . . 27

Testing and Licensure of the 23-Valent Vaccine . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28

Research on pneumococcal Vaccine . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29

Surveillance Activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30

Recommendations for Use of Pneumococcal Vaccine . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31

National Objective for 1990 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31

4. Medicare Coverage of Pneumococcal Vaccine. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37

Implementation of Medicare Coverage . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37

Pneumococcal Vaccination Under Medicare Payment by

Diagnosis Related Groups . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39

Estimated Use of Pneumococcal Vaccine . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39

Appendix A: Acknowledgments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45

References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49

Tables

Table No. Page

l. Assumptions for OTA’s Base Case and Sensitivity, 1978 . . . . . . . . . . . . . . . . . . . . . . . . . 12

2. Cost-Effectiveness Results With Lower Estimates for Incidence and Duration of

Immunity and 1983 Relative Prices, for Pneumococcal Vaccinees > 65 Years . . . . . . . 23

v
Table No. Page

3.

4.

5.

6.

7.

8.

9.

10.

11.

12.

13.

14.

Estimated Net Medicare Expenditures for Pneumococcal Vaccinees > 65 Years,

1978 and 1983 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24

Pneumococcal Types in the 14-Valent and 23-Valent Vaccines . . . . . . . . . . . . . . . . . . . . 28

Recommendations of the Immunization Practices Advisory Committee,

1978 and 1981 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32

Total Sales of Pneumococcal Vaccine, Net of Returns, 1979-83 . . . . . . . . . . . . . . . . . . . 40

Persons in the United States With Certain High-Risk Conditions by Age, 1982 . . . . . 40

Physician Mentions of Pneumococcal Vaccine in the National

Drug and Therapeutic Index, 1979-83 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40

IMS America Data on Pneumococcal Vaccine Purchased by

Hospitals and Drug Stores, 1978-82 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40

Physician Mentions of Pneumococcal Vaccine in the National Drug and

Therapeutic Index by Specialty . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41

Physician Mentions of Pneumococcal Vaccine in the National Drug and

Therapeutic Index by Physician Age, 1979-83 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41

Physician Mentions of Pneumococcal Vaccine in the National Drug and

Therapeutic Index by Patient Age, 1979-83 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41

Diagnoses Associated With Physician Mentions of Pneumococcal Vaccine in the

National Drug and Therapeutic Index, 1979-83 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41

Physician Mentions of Pneumococcal Vaccine in the National Drug and

Therapeutic Index by Month, 1979-83 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42

Figure

Figure No, Page

1. Announcement to Beneficiaries of Medicare Coverage of Pneumococcal Vaccine,

January 1982 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38

vi
Chapter 1

Introduction and Summary
Chapter 1

Introduction and Summary

BACKGROUND AND SCOPE OF THE STUDY

Since 1881 when Pasteur in France and Sternberg in the United States independently isolated

the pneumococcus, studies of this bacterium have

been associated with pathbreaking discoveries in

the sciences of bacteriology and immunology. In

1981, the pneumococcus was also associated with

a pathbreaking event in health policy when pneumococcal vaccine became the first preventive technology to be covered by the Medicare Program.

According to legislation creating the Program in

1965, Medicare, like most other health insurance,

explicitly excluded preventive technologies (e.g.,

vaccines) from coverage. Although legislation has

repeatedly been introduced to cover influenza vaccine, and bills now before Congress would extend

coverage to hepatitis B vaccine, to date pneumococcal vaccine remains the only preventive technology covered.

At the time that polysaccharide pneumococcal

vaccine 1 was marketed in 1978, the Office of Technology Assessment undertook a study entitled A

Review of Selected Federal Vaccine and Immunization Policies. Published in 1979, that report used

pneumococcal vaccine as a case study and included a cost-effectiveness analysis of the vaccine’s

use against pneumococcal pneumonia. In December 1983, as an outgrowth of their interest in preventive services for elderly people, the Subcommittee on Health and Long-Term Care of the

House Select Committee on Aging requested OTA

to update that work. The Subcommittee expressed

particular interest in evaluation of the vaccine’s

efficacy and safety and in Federal activities regarding its use, including experience with Medicare

coverage.

In the time allotted for this technical memorandum, it was not possible to totally recalculate

‘The vaccine is composed of purified polysaccharides from the

capsules of different types of pneumococci. When injected into

humans, these capsular polysaccharides stimulate the formation of

serum antibodies that provide immunity against those types of pneumococci (77).

OTA’s previous cost-effectiveness analysis of

pneumococcal vaccination against pneumococcal

pneumonia (77). However, the memorandum

contains current information about many of the

variables in the analysis and an evaluation of the

degree to which previous predictions remain valid

in light of new evidence. Particular attention is

given to the vaccine’s efficacy, which has been the

subject of some uncertainty in recent years. Familiarity with the earlier report would be helpful

because this technical memorandum concentrates

on the literature and other developments after

1979.

Although there is great policy interest in compensation for recipients who suffer severe adverse

reactions from vaccines, this technical memorandum does not consider that subject. As a polysaccharide (as opposed to a whole killed or attenuated live) vaccine, pneumococcal vaccine has been

associated with a low rate of adverse reactions

and few severe ones (see ch. 2). In addition, pneumococcal vaccine, unlike many other vaccines,

especially those intended for children, is not recommended for general use, and its use in the general population has not been supported with Federal grant funds.

pneumococcal bacteria may cause disease in

different parts of the body: pneumonia in the

lungs, otitis media in the middle ear, meningitis

in the brain, and bacteremia as a blood-borne infection. Although pneumococcal pneumonia is the

most common form of pneumococcal disease (58),

such a diagnosis is difficult to differentiate from

other forms of pneumonia because pneumococcal bacteria exist in the upper respiratory tract

without causing disease.

At the time of the OTA report on vaccine policy, two pneumococcal polysaccharide vaccines

were being marketed, each with capsular polysaccharides of 14 of the 83 pneumococcal types. Merck

Sharpe & Dohme began marketing PNEUMOVAX

in February 1978, and Lederle Laboratories in3

74-750 0 - 84 - 2
4

troduced PNU-IMUNE in August 1979 (77). The

Food and Drug Administration (FDA) in 1977 had

approved the vaccine for immunization against

pneumonia and bacteremia caused by the types

of pneumococci in the vaccine in certain high-risk

people 2 years of age or older. These groups, who

were at higher risk of developing complications

or dying from pneumococcal pneumonia, were

identified as people 50 years or older; people with

diabetes mellitus or chronic heart, bronchopulmonary, renal, or metabolic disease; residents of

chronic care facilities; or people recovering from

severe diseases. FDA also stated that data suggested efficacy for people over age 2 with sickle

cell anemia, splenectomy, or impaired splenic

function.

In 1978, the Advisory Committee on Immunization Practices (ACIP) (now the Immunization

Practices Advisory Committee), a body of nongovernmental experts who advise the Public

SUMMARY

Federal Activities

Since 1979, Federal activities regarding pneumococcal vaccine have concentrated on developing a new vaccine with broader coverage of pneumococcal disease and on refining information

about appropriate use.

In June and July 1983, the FDA approved for

marketing two additional pneumococcal vaccines,

each with antigens (polysaccharides) of 23 pneumococcal types. The two vaccines were marketed

in July 1983, PNEUMOVAX-23 by Merck Sharpe

& Dohme and PNU-IMUNE 23 by Lederle Laboratories. FDA established the 23-valent formulation based on the latest epidemiology and collaborative studies with the two manufacturers.

FDA coordinated its activities with the World

Health Organization, which adopted the same formulation for international standardization. The

23-valent vaccine contains more stable antigens

for some pneumococcal types and provides coverage against 90 percent of the types causing pneumococcal bacteremia. By contrast, the 14-valent

vaccine contained types responsible for 75 percent of pneumococcal bacteremia (see ch. 2).

Health Service, issued recommendations on the

use of pneumococcal vaccine (59). The ACIP

stated that limited information on efficacy prevented definitive recommendations, but did indicate certain high-risk groups that might benefit from the vaccine. Although the statement noted

that incidence and mortality from pneumococcal

disease, and presumably the benefits from vaccination, increase with age, it did not indicate a specific age.

The remainder of this chapter summarizes material presented in the body of this technical

memorandum on developments that have occurred since 1979 in refinement of the vaccine,

recommendations for its appropriate use, and

Medicare coverage. Also summarized is the reexamination of the 1979 cost-effectiveness

analysis. The chapter concludes with a section on

implications for policy.

The National Institutes of Health (NIH) and

particularly the Centers for Disease Control

(CDC) have funded or gathered information on

the immunogenicity and efficacy of the vaccine,

especially for elderly and other high-risk groups

(see ch. 3).2 The ACIP has used this and other information to reformulate their recommendations.

An ACIP statement in 1981 again noted the lack

of definitive information on which to judge vaccine efficacy for many high-risk groups, including

elderly people. But the 1981 recommendations

stated that certain high-risk people “should be

considered” for vaccinations or “should benefit”

instead of the 1978 language that they “might benefit” (58). In both years, the ACIP noted that mortality from pneumococcal disease increases with

age, but did not cite a particular age group as be-

‘Immunogenicity refers to the production of an immune response,

such as the production of antibodies in response to the antigens in

the vaccine. Efficacy is the probability that the vaccine will protect

against disease under ideal conditions of use, such as clinical trials.

Although a vaccine may also reduce the seventy of disease, the only

data for pneumococcal vaccine relate to prevention of disease. Effectiveness refers to the probability of vaccine protection under average conditions of use, such as clinical practice.
5

ing at high risk. The ACIP did identify people at

high risk of developing pneumococcal disease or

having more severe complications because of certain underlying conditions: sickle cell anemia,

multiple myeloma, cirrhosis, renal failure, splenic

dysfunction, splenectomy, and organ transplant.

In addition, people with other chronic conditions

may be at higher risk: alcoholism, diabetes milletus, congestive heart failure, chronic pulmonary

disease, or conditions associated with immunosuppression. People with cerebrospinal fluid leakage may be at higher risk of pneumococcal meningitis (59).

In light of additional data on the efficacy of the

vaccine, the ACIP in February 1984 expressed a

much more positive attitude regarding the use of

the vaccine (see ch. 2) and stated the intention of

reevaluating its recommendations. After a subcommittee report at the April 1984 meeting, the

ACIP began to draft a revised statement.

As a result of legislation passed in December

1980, the Medicare Program began covering pneumococcal vaccination as a Part B service on July

1, 1981. Unlike most other Part B services, which

are subject to a deductible and copayment by the

beneficiary, Medicare pays 100 percent of the reasonable charge for the vaccine and its administration.

No data are available on the use of pneumococcal vaccine by Medicare beneficiaries or expenditures by the Medicare Program for pneumococcal vaccination (see ch. 4). On the basis of sales

reported by vaccine manufacturers and different

definitions of the target group, 20 to 25 percent

of the people over age 65 or as many as 6.6 million Medicare beneficiaries may have received

pneumococcal vaccine.

Reconsideration of the Cost

Effectiveness of Vaccination

pneumococcal Pneumonia

Against

OTA’s cost-effectiveness analysis calculated the

expected changes in health effects and medical care

costs produced by vaccination against pneumococcal pneumonia as compared with continuation

of the situation before the vaccine was available,

in which the disease was treated if it occurred.

The analysis first took a societal perspective and

included all medical care expenditures, whether

paid by patients or third parties. The subsequent

analysis included only expenditures that would

be paid by the Medicare Program. The base case

used estimates of variables that were considered

most likely in 1978, and a sensitivity analysis

tested the effect on the results of varying the

values of certain factors over reasonable ranges.

No data were available for this technical memorandum on the current incidence of pneumonia,

which has declined substantially over recent decades in all age groups. It is therefore not known

whether the use of pneumococcal vaccine has prevented pneumococcal pneumonia to such a degree that the secular decline in pneumonia has

been accelerated.

Reconsideration of OTA’s analysis confirmed

the base case estimates for all the variables except the incidence of pneumococcal pneumonia

and the duration of immunity for elderly people.

Although most of the information concerned the

14-valent vaccine, available data on the 23-valent

vaccine were incorporated as well.

OTA’s base case estimated that 15 percent of

all pneumonia is pneumococcal, which corresponds to about 2.2 cases per 1,000 U.S. population per year. The low estimate was 10 percent

of all pneumonia. Because of the difficulty of

distinguishing pneumococcal from other pneumonias, estimates of incidence have been extrapolated from data on the incidence of pneumococcal bacteremia. Data on bacteremia that have been

accumulated since 1979 suggest that the rate of

pneumococcal pneumonia is closer to the low estimate of 10 percent of all pneumonia or 1.4 cases

per 1,000 population per year (see ch. 2). By

calculating incidence as a percentage of all pneumonia, OTA’s analysis had incorporated the fact

that incidence and complications are higher for

elderly people.

Although OTA’s base case estimate of 8 years

duration of immunity from the vaccine continues

to apply for healthy adults, it may be somewhat

shorter for elderly and chronically ill people. No

data relate directly to the duration of immunity

that has been observed for these groups; instead,

the new information comes from declines in an-
6

tibody levels over time. For pneumococcal vaccine as for immune responses in general, people

with disease causing immune suppression are

likely to have much shorter durations of immunity. For most groups, the duration of immunity

is likely to be well above OTA’s low estimate of

3 years.

With the introduction of the 23-valent vaccine,

OTA’s base case estimate that pneumococcal vaccine has an efficacy rate of 80 percent continues

to appear reasonable (see ch. 2). This conclusion

is based on information regarding efficacy that

has been reported by the CDC and other investigators. The 14-valent vaccine has been about 65

percent effective in preventing pneumococcal bacteremia in people over age 2, including those who

are elderly. On the basis of the increased coverage

against pneumococcal types in the 23-valent vaccine, it is estimated that the new vaccine will have

an efficacy rate of about 80 percent against pneumococcal pneumonia.

In 1978, OTA estimated that each vaccination

cost $11.37, including the vaccine and its administration. 3 The current estimate of $14.65 incorporates a lower vaccine price and higher administration fee. The Medicare Program, which

reimburses only for reasonable charges, may pay

less than this amount. In one State, for example,

Medicare is currently reimbursing $9.60 for a

pneumococcal vaccination. The current estimated

cost of vaccination under a public immunization

program is $3.80, compared with the 1978 estimate of $3.45 (see ch. 2).

If the medical costs of survivors are excluded,

OTA’s 1978 analysis indicated that pneumococcal vaccination against pneumonia would be cost

saving to society for people 65 years or older.

31deally, a cost-effectiveness analysis measures the actual cost of

resources used. In practice, charges for services, especially for physician services, are often used as a proxy for costs.

With survivors’ medical care costs included, vaccination was estimated to gain a year of healthy

life for an elderly person for $1,000.

With the 1978 base case estimates, but excluding

survivors’ medical costs, vaccination for an elderly person would be even more cost saving in 1983

because treatment costs have risen more than vaccination costs. Excluding survivors’ medical costs

but incorporating the updated assumptions, a

lower incidence of pneumococcal pneumonia (10

percent of all pneumonia) and a shorter duration

of immunity (3 years), raises the net cost of gaining a year of healthy life. For a person 65 years

or older, the net cost would then range from about

$300 to $6,200 per year of healthy life gained by

vaccination against pneumococcal pneumonia (see

ch. 2). Continuing research and surveillance will

be able to clarify the duration of immunity for

elderly people, which has the most effect on these

estimates.

The 1978 analysis estimated that the Medicare

Program would incur a net cost per elderly beneficiary vaccinated of about $5 for a gain in 1.59

healthy days of life. The results for the Medicare

Program parallel those for society except that Program costs include survivors’ medical costs and

do not include all savings in treatment costs (see

ch. 2). With the 1978 base case estimates and 1983

costs, including $9.60 as the vaccination cost,

Medicare would realize net savings of about $2.40

per elderly beneficiary vaccinated. With $9.60 as

the reasonable charge paid by Medicare, a lower

incidence of pneumococcal pneumonia (10 percent of all pneumonia), and a shorter duration of

immunity (3 years), Medicare would incur net

costs of about $5.50 per elderly beneficiary vaccinated or about $4,400 per year of healthy life

gained. If 25 percent of elderly beneficiaries were

vaccinated (about 6.6 million), the net cost to the

Medicare Program over time in 1983 dollars

would total about $37 million to gain about 8,400

years of healthy life.
7

POLICY IMPLICATIONS

As the adoption and use of a medical technology proceed, the evolution and refinement of indications for its use are a common and worthwhile

phenomenon. This process is continuing for pneumococcal vaccine with the involvement of NIH,

which is funding research to assess vaccine immunogenicity and efficacy; the Veterans Administration (VA), which is supporting a clinical trial;

the CDC, which is conducting surveillance activities; and the ACIP, which is reconsidering its recommendations in light of new information.

Uncertainty concerning the duration of immunity and the immunogenicity and efficacy of the

vaccine for high-risk groups remains (see ch. 2).

It has been estimated that clinical trials to establish vaccine efficacy more definitively would require more than 100,000 people and large research

expenditures (69). Alternative, less expensive

methods are available and being used, such as

retrospective case control studies. Although immunogenicity is only a proxy for efficacy, it

would be less costly to reexamine the antibody

levels of people in earlier clinical trials. These

alternatives would be appropriate for NIH to consider in the context of its grant solicitations. The

results of the VA clinical trial of high-risk veterans

will bear on both the duration of high antibody

levels and efficacy over at least a 3-year period

(73). In light of these uncertainties, it is disturbing that the new 23-valent vaccine was not tested

on elderly or other high-risk groups before FDA

licensed it in 1983.

Approximately 25 percent of the target group

has received pneumococcal vaccine since 1978,

with a range from 20 to 35 percent, depending

on the definition of high-risk groups and the size

of inventories. This level of use may appear low

considering the health benefits to be gained from

greater use and the cost-effectiveness results.

From another vantage point, however, it is surprising that use has reached even this level considering the impediments faced by preventive

technologies in general and pneumococcal vaccine in particular. The use of preventive technologies for adults has characteristically been low.

Both influenza and pneumococcal vaccines have

had low levels of use, even among the patients

of physicians who support them (55). Neither

adults nor the clinicians who care for them have

been attuned to prevention in the way that parents

and pediatricians have been for children. The

strategies appropriate for preventive technologies

for adults may also differ by being targeted to specific high-risk groups instead of to the general

population. For childhood immunization, entry

to elementary school has served as a review point

for vaccination, and the promotion of vaccines

for adolescents and young adults has increasingly

involved other institutions, such as colleges and

the military. It is more difficult to conceive of institutional strategies for older adults.

pneumococcal vaccination has faced additional

barriers. Uncertainty has surrounded the efficacy

of the vaccine since it was first marketed in 1978,

as indicated by the ACIP statements on its use.

This situation may well have discouraged clinicians from vaccinating their patients. There is also

a low level of public awareness of pneumococcal

disease. Elderly people are therefore unlikely to

feel at great risk of such disease and to seek the

vaccine from their physicians. It is also not clear

that clinicians perceive the greater risk of complications for elderly or other high-risk groups.

Because of these general and specific constraints, wider use of pneumococcal vaccine

would require that further steps be taken. One

is a clearer statement by the ACIP on whether or

not the vaccine is recommended for certain highrisk groups, including elderly people. Primarily

because of the uncertainty regarding efficacy and

the tone of the ACIP recommendations, the CDC

has not moved to implement the objective of the

Department of Health and Human Services to

have 50 to 60 percent of the target population vaccinated by 1990. The ACIP is working on a revised statement, which should be published this

year.

If the Government wishes to promote the use

of pneumococcal vaccine, efforts beyond Medicare coverage will be needed to reach elderly

adults. The hospital may represent an institution

through which pneumococcal vaccination could
8

be provided. On the basis of the percentage of

patients with pneumococcal pneumonia or bacteremia who were hospitalized within the previous

3 years for any cause, it has been estimated that

vaccinating certain patients on discharge from

their previous hospitalization could avoid 10 percent of hospital admissions for all pneumonia (22).

Since revaccination poses some hazard (see ch.

2), such an approach would require some precaution so that patients who have already received

the vaccine are not mistakenly revaccinated. Since

pneumococcal vaccination, unlike almost all other

services, is excluded from the new system of payment by diagnosis related groups, Medicare will

reimburse hospitals for the cost of vaccinating inpatients (see ch. 4).

Another possible mechanism is providing Federal grant funds for pneumococcal vaccine like

those for childhood vaccines. This mechanism has

been used for influenza vaccine, another vaccine

targeted to specific segments of the population,

although only for 1978-79 and 1979-80. The CDC

would then administer these grants to States. In

contrast to Medicare coverage, which takes a passive stance, this approach sets up at the Federal

level a cadre of people interested in promoting

vaccine use by working at State and local levels.

The cost of vaccination under such public programs is also much lower than under private provision and hence Medicare, an estimated $3.80

compared with $9.60 or $14.65 (see ch. 2).

Certain measures regarding preventive technologies for adults relate to pneumococcal vaccine.

Segments of the medical profession are taking

steps to promote the use of preventive technologies by physicians who care for adults. The ACIP

has developed detailed guidelines for adult immunization and expects to publish them in CDC’s

Morbidity and Mortality Weekly Report in 1984.

The Committee on Immunization of the American

College of Physicians is developing guidelines for

internists regarding adult immunizations and has

coordinated its activities with the ACIP (74). The

Committee intends to publish its statement in a

medical journal and may channel information into

medical schools through the Society for Research

and Education in Primary Care and Internal Medicine. Both of these guidelines will include statements on pneumococcal vaccine.

Although special factors apply to pneumococcal vaccine, in many respects it typifies the problems of a preventive technology for adults. With

increases in life expectancy, more adults have

more years in which to benefit from prevention

of disease and disability. As the percentage of the

population that is elderly continues to grow, policy issues regarding such preventive technologies

promise to take on added importance. More definitive findings about preventive technologies for

adults and for the general population, however,

would require a more exhaustive study of the literature and public policy than is possible in this

technical memorandum.
Chapter 2

Reconsideration of the Cost

Effectiveness of Vaccination

Against Pneumococcal

Pneumonia
Chapter 2

Reconsideration of the Cost

Effectiveness of Vaccination Against

pneumococcal Pneumonia

A 1979 OTA report on Federal vaccine policy

included as a case study a cost-effectiveness analysis of vaccination against pneumococcal pneumonia (77). That analysis calculated the expected

changes in health effects and medical care costs

produced by vaccination against pneumococcal

pneumonia as compared with continuation of the

situation before the vaccine was available, in

which the disease was treated if it occurred. The

results, expressed as cost-effectiveness ratios,

represented the net medical cost per year of

healthy life that would be gained by a person who

was vaccinated.

The analysis first took a societal perspective and

included all medical care expenditures, whether

paid by patients or third parties. The subsequent

analysis from the perspective of the Medicare Program included only expenditures that would be

paid by that program. Children under age 2 were

excluded because the vaccine has not been shown

to be uniformly efficacious for them. A sensitivity

analysis tested the effect on the results of varying the values of several uncertain factors over

reasonable ranges.

This technical memorandum draws on information accumulated since 1979 to reevaluate several

assumptions in that analysis. Also incorporated

is information on the 23-valent pneumococcal

vaccine which, has been marketed since July 1983.

Specifically examined are assumptions regarding

the following variables outlined in table 1:

●

●

●

●

●

incidence of pneumococcal pneumonia,

proportion of pneumococcal pneumonia

caused by the types of pneumococci against

which the vaccine is directed,

efficacy rate,

duration of immunity,

safety,

● cost of vaccination, and

• medical costs in extended years of life.

This chapter first reexamines the estimates of

those variables and then uses the revised estimates

to reexamine the cost-effectiveness results and the

costs to the Medicare Program of paying for pneumococcal vaccination. It was not possible within

the confines of this technical memorandum to obtain current information on some of the assumptions made in the cost-effectiveness analysis. No

new information was obtained on deaths from all

pneumonia cases or on the rate at which mortality

from all pneumonia cases is declining. Nor was

there a reexamination of the way pneumonia cases

are treated, including the extent to which people

are treated as inpatients or on an ambulatory

basis, the use of diagnostic procedures such as

chest X-rays and laboratory tests, and the use of

antibiotics. It was also not possible in this

technical memorandum to recalculate the sensitivity analysis, with high and low ranges of uncertain variables.

Although discount rates and the weights used

for the morbidity-mortality index (quality-adjusted life years or QALYs, ) were not specifically

reexamined, their values continue to appear reasonable. The discount rate takes into account the

preference that people have for obtaining benefits

now instead of in the future and the fact that funds

can be invested in alternative ways (78). The discount rate, which concerns time, is distinct from

inflation, which concerns the level of prices.

OTA’s cost-effectiveness analysis expressed all

costs in terms of 1978 dollars. Although it was

not possible to reexamine the use and price of

treatment for pneumonia, the section on the cost

of vaccination reviews changes that have occurred

in the relative prices of hospital and physician

services.

11

74- 7~fl n - QA - 7
Table I.–Assumptions for OTA’s Base Case and Sensitivity Analysis,a 1978

Sensitivity analysisa

Variables Base case High Low

Proportion of pneumonia that

is pneumococcal

Deaths from pneumonia

Decline in mortality from

pneumonia

Cases of inpatient pneumonia

Cases of ambulatory

pneumonia

Proportion of pneumococcal

pneumonia caused by

vaccine types

Efficacy rate

Duration of immunity

Safety:

General side effects

Guillian-Barré syndrome as

side effect

Cost of vaccination

Medical costs in extended

years of life

QALY weights for disability

days

Discount rate

15%

Death certificates with

pneumonia as the

underlying cause

Same decline as overall death

rate

First listed diagnoses of

pneumonia from Hospital

Discharge Survey

Based on pneumonia visits

from National Ambulatory

Care Survey and adjusted

data from Health Interview

Survey

75%

800/0

8

1

yrs.

case of severe systemic

reaction per 106,000

vaccines, 5 cases of fever

per 100 vaccines

No incidence

$11.37

Included

Day in bed 0.4; day out of bed

0.6

5%

35%

Death certificates with

pneumonia mentioned

Fast declineb

All listed diagnoses of

pneumonia from Hospital

Discharge Survey

Based on data from Health

Interview Survey

100%

100%

72 yrs. (lifetime)

Base case estimate

Incidence same as with

swine-flu vaccination

Base case estimate

Base case estimate

1976

Day in bed ~ day out of

bed J~

10%

10%

Base case

estimate

No decline

Base case

estimate

Base case

estimate

500/0

40%

3 yrs.

Base case

estimate

Base case

estimate

$3.45

Base case

estimate

Day in bed 0.42

;

day out of bed

0.62

0%

aFor some var{ables, the reasonable range of values was bounded by one alternative value, and fOr other vartables, by two Fdternath value%

blmplied elimination of 97 percent of pneumonia deaths within 40 Years.

SOURCE: J. S. Willems, C. R. Sanders, M. A. Riddiough, and J. C. Bell, “Cost Effectiveness of Vaccination Against pneumococcal Pneumonia,” N. Errg/. J. Med.

303(10):553-559, Sept. 4, 19S0.

The QALY weights to calculate the morbidity- In an evaluation of the efficacy of pneumococmortality index were used only to illustrate the cal vaccination against pneumonia, several clinieffect on the results of different values (77). An cal points should be kept in mind. The pneumoimplicit assumption is made that continued life coccal bacteria may cause disease in different parts

is preferable to death, an assumption that seems of the body: pneumonia in the lungs, otitis media

reasonable for a fairly short acute illness, such as in the middle ear, and meningitis in the brain. An

pneumonia. infection may spread from one of the local sites
13

to a bacteremic or blood-borne infection. Pneumococcal vaccine contains the types of pneumococci most likely to cause pneumococcal bacteremia, a severe disease with a high incidence of

death and disability. But the pneumococcal types

frequently causing bacteremic disease maybe different from the types responsible for local infections. Thus, vaccination may not reduce the incidence of pneumococcal pneumonia by so high

a percentage as pneumococcal bacteremia. The

reduction in bacteremic disease, however, may

disproportionately reduce morbidity and mortality and may reduce the severity of infections that

would otherwise progress to bacteremia.

pneumococcal pneumonia is the most common

form of pneumococcal disease. pneumococcal

pneumonia can be a severe form of pneumonia

frequently worse in terms of morbidity and mortality than other community-acquired pneumonias. The diagnosis of pneumococcal pneumonia

is difficult since the pneumococcal organism may

be carried in the upper airways without producing pneumonia. As a result, culture of the organism does not always indicate that the pneumococcus is the cause of a pneumonia case.

Three different concepts relate to protection

against disease and, specifically, the protection

that pneumococcal vaccine confers against pneumococcal pneumonia. The efficacy of a vaccine

is considered to be the probability that it will protect against disease under ideal conditions of use,

such as those in clinical trials. Although a vaccine may also reduce the severity of disease, the

only data for pneumococcal vaccine relate to disease prevention. Immunogenicity refers to the

production of an immune response, in this case

the production of antibodies in response to the

antigens in the vaccine. Antibody levels may be

an indicator of protection against pneumococcal

disease, but are not conclusive evidence. Despite

certain antibody levels, a person may not be protected against disease if other components of the

immune system are not operating normally. Conversely, a person maybe protected in spite of low

rises in antibody levels. Effectiveness, the third

concept, refers to the probability of protection

against disease, but under average conditions of

use, such as that of clinical practice.

INCIDENCE OF pneumococcal PNEUMONIA

OTA’s cost-effectiveness analysis assumed that

15 percent of all pneumonia was pneumococcalo

This percentage was assumed to be constant for

all age groups. OTA estimated that in 1978 there

were 3.2 million cases per year of pneumonia in

the United States (77). For the 1978 U.S. population of 222.6 million (80), OTA’s assumption for

the base case is tantamount to an annual incidence

of approximately 2.2 cases per 1,000 population.

The low estimate assumed that 10 percent of pneumonia was pneumococcal or about 1.4 cases per

1,000 population.

The actual incidence of pneumococcal pneumonia still remains uncertain. The vaccine recommendations of the Immunization Practices Advisory Committee (ACIP) provided a broad range

of estimates from 0.68 to 2.6 cases per 1,000

population per annum (58). Three different methods for estimating incidence of pneumococcal disease have been used. Estimates at the low end of

this range are based on recent studies of pneumococcal isolates of blood and cerebrospinal fluid

from studies of entire communities. Estimates at

the upper end of the range were obtained from

selected populations using respiratory secretions

of patients with and without pneumonia.

Mufson, et al. (54), conducted a prospective

study of blood and cerebrospinal fluid from individuals admitted to hospitals providing 80 percent of the beds for a population base of 300,000

in Huntington, W. Va., and surrounding counties. They found an overall bacteremia rate of 7.5

cases per 100,000. This overall rate was similar

to rates obtained by Filice, et al. (24), of 8.5 cases

per 100,000 population in a retrospective study

in Charleston County, S.C.

The studies of bacteremia do not provide a direct incidence of pneumococcal disease unless one
14

knows the percentage of pneumococcal disease

that becomes bacteremic. In addition, these studies may underestimate the incidence of pneumococcal disease because not all patients with pneumococcal disease receive blood cultures, and prior

antibiotic therapy rapidly renders blood cultures

negative. In addition, studies of bacteremia do not

provide an adequate assessment of the effects of

meningitis due to pneumococci.

Conversion of bacteremic data to pneumococcal incidence data requires an assumption about

the percentage of pneumococcal disease that becomes bacteremic. Older estimates assumed that

20 to 30 percent of cases of pneumococcal pneumonia developed bacteremia. Recent studies

(5,8,50) have found rates of bacteremia below 20

percent. The newer estimates of bacteremia may

reflect a lower rate of bacteremia among those

who seek or are provided care early in the course

of their disease.

In applying these lower estimates of the percentage of individuals who develop bacteremia,

one obtains rates of pneumococcal disease consistent with the low end of the ACIP incidence

estimates.

Incidence rates at the high end of the range are

based on studies at selected sites. Estimates from

health maintenance organizations (HMOs) provide data on populations not necessarily at high

risk or high incidence of pneumococcal pneumonia. According to Austrian’s data from the KaiserPermanente Medical Care Program, San Francisco

area enrollees over age 45 had an annual rate of

about 1.5 cases of pneumococcal bacteria per

1,000 population (5). Patrick and Woolley (56)

found a rate 2.3 cases per 1,000 population among

about 10,000 patients 18 years and older at the

Salt Lake City Family Health Program, a staff

model HMO. Despite efforts to carefully define

pneumococcal pneumonia, these studies may

overestimate the frequency of pneumococcal

pneumonia since, as mentioned earlier, pneumococci are frequently carried in the upper airways

without being the cause of pneumonia.

A third method of estimating the incidence of

pneumococcal pneumonia relies on isolates of

pneumococci from the throats of those with pneumonia v. control individuals. These studies develop measures of attributable risk. Fey, et al.

(25), used this method to estimate a rate of 1.3

cases per 1,000 population among patients at

Group Health Cooperative, a ‘prepaid group in

Seattle. But as David Fraser formerly of the Centers for Disease Control (CDC) noted, the “delicate balance” of the bacterial flora of the throat

“can be tipped by the use of antibiotics or the occurrence of various infections” (77). This situation renders questionable the meaning of the presence or absence of pneumococcus in the upper

respiratory systems of people with and without

pneumonia.

The American College of Physicians in their

Clinical Efficacy Assessment Project concluded

that overall incidence probably lies between the

higher and lower estimates, in the range of 1 to

2 annual cases per 1,000 population per year (67).

In an evaluation of incidence data, it is important to remember that all available studies indicate

a considerably increased incidence of pneumococcal pneumonia and bacteremia among elderly people. The population-based bacteremia data of

Mufson, et al. (54), and Filice, et al. (24), suggest

that the rate for those older than age 60 is more

than two times the overall rate (with no control

for confounding medical conditions) and that elderly people are more likely to die if they experience pneumococcal bacteremia.

In summary, the overall incidence rate of pneumococcal pneumonia probably approximates the

rate of 1.4 cases per 1,000 population used as the

low estimate in OTA’s cost-effectiveness study.
15

PROPORTION OF pneumococcal PNEUMONIA CAUSED

BY THE pneumococcal TYPES IN THE VACCINE

OTA’s base estimate relied on data from Austrian, Fey, and Valenti suggesting that the 14-

valent vaccine would be directed against the pneumococcal types causing 75 percent of the cases of

pneumococcal pneumonia. This estimate in turn

depended on additional assumptions, which are

evaluated below:

1.

2.

3.

The distribution of types of pneumococci

occurring in bacteremia and meningitis

would resemble that occurring in

pneumonia.

The use of the vaccine would not result in

a significant shift of pneumococcal types

causing infections.

For those pneumococcal types with two or

more subtypes, use of the most frequent subtypes would provide good cross protection

against the other subtypes.

Assumption 1: The distribution of types of pneumococci occurring in bacteremia and meningitis

would resemble that occurring in pneumonia.

Because of the difficulty of acquiring reliable

data on the frequency of pneumococcal types and

subtypes that cause pneumococcal pneumonia, selection of vaccine antigens and evaluation of the

frequency of disease have been based on bacteremia and meningitis data. This situation may represent a significant limitation in formulating the

vaccine and evaluating its efficacy and effectiveness against pneumococcal pneumonia.

Bentley, et al.’s, study (8) of institutionalized

elderly patients found that the majority of the

pneumococcal disease among those not vaccinated

(as well as those vaccinated) was due to types not

included in the 14-valent vaccine. This observation may have been attributable to the high percentage of vaccinated patients or may have reflected a preexisting tendency for nonvaccine

types to cause pneumonia. The data from surveillance at Dorothea Dix Hospital (67) before introduction of the vaccine showed that 80 percent of

the bacteremic cases but only 43 percent of all

pneumococcal isolates from patients with pneumonia were included in the 14-valent vaccine.

Thus, it seems that the pneumococcal types included in the vaccine on the basis of frequency

data from bacteremia and meningitis may not accurately reflect the frequency of types causing

pneumonia.

Relying on data from blood and cerebrospinal

fluid isolates, one cannot expect to include in the

vaccine so high a percentage of the types of pneumococci causing pneumonia as was assumed in

OTA’s cost-effectiveness analysis. Because people with bacteremic disease have much higher

mortality (4), it is still worthwhile to direct the

vaccine against the types that most frequently

cause bacteremia.

Knowledge of the frequency of isolates, the

cross-reactivity of subtypes, and the stability of

constituents have allowed the formulation of the

23-valent vaccine, whose components should be

directed against almost 90 percent of the worldwide isolates from the blood and cerebrospinal

fluid. With the same criteria, the 14-valent vaccine covered between 70 and 80 percent of the isolates. Again, only blood and cerebrospinal fluid

specimens were used to assess the frequency of

pneumococcal disease. The increased number of

types included in the 23-valent vaccine are expected to provide increased protection against

pneumococcal pneumonia as well, but at present

no data confirm or refute this expectation.

Assumption 2: The use of the vaccine would not

result in a significant shift of pneumococcal

types causing infections.

The CDC has acquired evidence regarding stability of the distribution of types of pneumococci

causing bacteremia despite the use of the vaccine

(12). Since 1978, the CDC has collected approximately 2,500 pneumococcal blood and cerebrospinal fluid isolates from 37 hospitals in 22 States.

These isolates show no evidence of a shift of pneumococcal types among vaccinated and unvaccinated patients at the current level of utilization

of the vaccine.
16

Assumption 3: For those pneumococcal types with

two or more subtypes, use of the most frequent

subtypes would provide good cross protection

against the other subtypes.

Data on the degree to which one subtype provides cross coverage against another have been

acquired as a result of a worldwide surveillance

system and studies conducted in preparation for

the 23-valent vaccine (62). Most of the work on

cross-reactivity has been directed at selection of

new subtypes for inclusion in the 23-valent vaccine. These data, however, suggest that the subtypes included in the 14-valent vaccine have not

always provided adequate cross-over protection

against the other subtypes.

EFFICACY RATE

OTA’s base case estimated that the 14-valent

vaccine would be 80 percent effective in clinical

practice against the types contained in the vaccine. Since 1979, additional information has been

accumulated on the responses to the vaccine of

high-risk people with chronic diseases, the responses of people with impaired immune systems,

the responses of elderly people, and simultaneous

use with influenza vaccine.

Most of the data on antibody response to the

vaccine are based on levels of total antibody

assessed by radioimmunoassay. Absolute levels

required for protection have not been definitively

determined, but levels below 300 ng antibody nitrogen/ml are not generally considered protective

(45). Many studies report successful vaccination

based on a doubling of the antibody levels. For

individuals who double their antibody levels from

low preexisting levels but fall under 300 ng antibody nitrogen/ml, questions of efficacy remain.

Antibody Responses of High-Risk

Groups With Chronic Disease

The short-term antibody response of patients

with sickle cell disease, renal disease, diabetes, and

chronic obstructive pulmonary disease have been

investigated. These diseases are believed to preIn summary, the 14-valent vaccine could be expected to cover almost 75 percent of the types of

pneumococci causing bacteremia but may not

cover 75 percent of the types causing pneumococcal pneumonia. OTA’s low estimate of 50 percent

would appear to more accurately reflect the coverage against pneumococcal pneumonia provided

by the 14-valent vaccine. This may underestimate

the health benefits, however, since a vaccine

directed against bacteremia and meningitis should

disproportionately reduce death and disability.

Since the 23-valent vaccine covers types that cause

90 percent of bacteremic cases, the new vaccine

may also cover a higher percentage of the types

responsible for pneumococcal pneumonia as well.

However, there are no studies that bear directly

on pneumococcal pneumonia.

dispose people to pneumococcal disease or to

cause increased mortality if it develops (58).

Sickle cell patients over 2 years of age have been

shown to have a generally adequate antibody response (l). Unfortunately, responses, especially

to certain pneumococcal types, have not been uniform for those under 2 years of age in whom a

large proportion of the pneumococcal disease

among sickle cell patients occurs. Sickle cell patients appear to respond suboptimally to type 6

pneumococcal antigen (7), and clinically, cases of

type 6 bacteremia have been observed despite vaccination.1 For most pneumococcal types tested,

sickle cell patients over age 2 produce a twofold

or greater increase in their antibody levels and are

probably protected (7).

The situation for renal disease patients must be

separated into the response of those in renal failure, those on dialysis, and those who have undergone transplantation with immune suppression.

Cosio, et al. (18), have shown that renal failure

patients respond poorly and dialysis patients reIThis situation is not specific to children with sickle cell disease;

many children do not make antibodies to certain pneumococcal types

until age 6 to 10. Conjugated vaccines (see ch. 3) are being developed to address such problems (4).
77

spend quite well. Renal transplant patients respond less than dialysis patients, but the majority

reached adequate short-term levels of protection.

Thus, assuming that most patients with renal disease can be vaccinated while on dialysis or before

renal failure develops, one can assume that protection in renal disease is quite good. Linnemann,

et al. ’s, study (49) agrees with these findings.

Davis, et al. (19), have demonstrated good

short-term antibody responses in chronic obstructive pulmonary disease and Lederman, et al. (47),

have demonstrated similar data for diabetes.

Thus, there is reason to believe that those with

chronic diseases not associated with immunosuppression will be able to obtain effective protection from the vaccine, at least in the short-term.

Antibody Responses of

Immunocompromised People

In contrast, patients with diseases causing immunological suppression have been shown to have

a poor response to the vaccine. Hosea, et al. (34),

demonstrated poor antibody responses among

splenectomized patients, but found that the pattern of antibody response paralleled that of normal volunteers in terms of height and rate of increase. Schmid, et al. (64), found a similar pattern

of poor response among those with multiple myeloma. The ability of myeloma patients to increase

their low preexisting levels of antibodies caused

them to recommend pneumococcal vaccine for

myeloma patients despite their suboptimal responses.

Patients with Hodgkin’s disease have been

shown by Siber, et al. (72), and Ammann, et al.

(2), to have a good response to vaccine before

treatment. Antibody levels, however, decrease

during subsequent therapy proportionally to the

intensity of the therapy. Higher levels of antibodies are present in immunized v. nonimmunized

Hodgkin’s disease patients, and vaccine is recommended 2 weeks or more prior to beginning

therapy.

Thus, it appears that individuals with a disease

or undergoing therapy that impairs their immunological response have lower levels of antibodies

and may well have substantially reduced protection from the vaccine.

Antibody Responses of Elderly People

Antibody responses for elderly people who are

currently free of chronic disease have been assessed. For antigen types 3 and 8, Ammann and

his colleagues found that elderly individuals had

lower baseline levels of antigens, but usually

responded with a greater than twofold increase

in their antibody titers (3). Hilleman, et al. (31),

cite similar data for five pneumococcal types. Immediate post-immunization antibody titers were

generally above the 300 ng antibody nitrogen/ml

levels considered protective.

Bentley, et al. (9), studied the antibody response

of elderly individuals to 11 pneumococcal antigens

contained in the 14-valent vaccine. For most

types, the post-immunization levels were above

the 300 ng antibody nitrogen/ml level even among

those over age 80. Low prevaccine antibody levels, reduced response to vaccine, and decline in

titer over the subsequent year left many elderly,

especially those over 80, with levels below those

considered protective at 1 year.

Use With Influenza Vaccine

Use of pneumococcal vaccine simultaneously

with influenza vaccine has been studied in terms

of antibody levels and side effects (31,51). The

levels of antibody after simultaneous use were

nearly as high as when each vaccine was used

alone. There was only a minimally greater frequency of side effects compared to the use of

pneumococcal vaccine alone.

Comparison of Antibody Levels

Comparisons of relative antibody levels among

groups are complicated by different methods of

detecting, reporting, and combining the antibody

levels from individual pneumococcal types. A

standard method of comparison has recently

evolved. This method uses the geometric mean

antibody levels and combines these levels from

individual types to obtain an overall Grand Mean

antibody level. This method permits comparisons

among groups, but does not allow a direct estimate of the efficacy rate. It can be presumed, however, that when the Grand Mean is less than 300

ng antibody nitrogen/ml, a majority of antibody
18

levels will be below those adequate for protection.

The short-term efficacy rate should increase as the

Grand Mean increases.

Reported geometric mean or Grand Mean levels for selected groups are as follows:

●

●

●

●

●

●

Healthy adults: 834 ng antibody nitrogen/ml

(47) to 2,344 ng antibody nitrogen/ml (3).

Elderly: 537 to 912 ng antibody nitrogen/ml

(3).

Diabetics: 1,009 ng antibody nitrogen/ml

(47).

Chronic obstructive lung disease: 662 ng antibody nitrogen/ml (19).

Hemodialysis: 592 ng antibody nitrogen/ml

(49).

Multiple myeloma: 91 ng antibody nitrogen/

ml (45).

Thus, the data from individual groups suggest

only a slight reduction in immunogenicity among

most groups at increased risk of pneumococcal

disease or those at risk of increased mortality if

the disease develops. Individuals with immunosuppression, however, are an exception, with evidence suggestive of poor antibody response even

in the short term.

Assessing Vaccine Efficacy

In assessing the clinical use of pneumococcal

vaccine, one must distinguish between measures

of antibody levels and clinical protection against

disease. Clinical effectiveness against pneumococcal disease is the end point that one wishes to

measure.

Clinical studies to assess the overall efficacy of

the vaccine are hampered by the lack of reliable

data on the incidence of pneumococcal pneumonia and the extremely large numbers of people that

would be required for a controlled clinical trial,

except in high-risk groups. Because of relatively

low incidence rates, studies in healthy elderly people would require large numbers.

A controlled clinical trial utilizing the 14-valent

vaccine is currently underway as a cooperative

study among five Veterans Administration Medical Centers. The study, which began in 1981 and

will continue through 1985, has enrolled almost

2,300 patients considered at high risk because of

at least one of the following characteristics: age

55 years or older; chronic renal, liver, cardiac,

or pulmonary disease; alcoholism; or diabetes

mellitus. This trial is the only current randomized

prospective study designed to assess the efficacy

of the 14-valent vaccine. Although the study is

expected to provide information on efficacy in

these high-risk people as a whole, the number of

people in the trial is probably not sufficient to indicate efficacy for elderly people or other highrisk groups separately. (The study will also develop information on adverse reactions to the vaccine and distribution of pneumococcal types) (73).

The CDC (12,13,15) has developed a retrospective method of assessing efficacy that does not require data on the incidence of pneumococcal disease. This method compares the frequency of

type-specific isolates from blood and cerebrospinal fluid among vaccinated and unvaccinated patients. It thereby assumes that without the vaccine, different populations would have the same

distribution of pneumococcal types and that the

vaccine itself leads neither to a shift in types in

the unvaccinated group nor a change in the incidence of disease caused by nonvaccine types in

the vaccinated group. Since the method utilizes

isolates from blood and cerebrospinal fluid, it does

not directly assess efficacy against pneumococcal pneumonia.

The CDC has collected almost 200 pneumococcal blood isolates from individuals who have received the vaccine and over 1,000 pneumococcal

blood isolates from individuals who have not received the vaccine. The data suggest that the efficacy of the vaccine for type-specific bacteremia

for those over 2 years of age is in the range of

60 to 70 percent. Those older than age 60 had a

clinical effectiveness rate similar to the rate for

those under 60 (12). Because of the relatively small

number, confidence intervals are still large (10).

The CDC has also assessed efficacy for people

with conditions that predispose them to complications, including death, from pneumococcal infection. Included are sickle cell disease, splenectomy,

nephrotic syndrome, renal failure including those

on dialysis, multiple myeloma, and cirrhosis of

the liver. Based on comparatively small numbers
19

that result in wide confidence intervals, the CDC

estimate of efficacy for these groups overall is

about 35 percent (10,12).

Shapiro and Clemens (69) have applied retrospective case-control study methods to the assessment of vaccine efficacy and obtained efficacy

rates very close to the CDC’s estimates. Shapiro

and Clemens matched 90 cases of systemic pneumococcal disease with individuals of similar age

and indications for pneumococcal vaccine. Their

overall estimate of efficacy was 67 percent with

a similar rate for those over 55 years of age.

The new 23-valent vaccine contains antigens

that attempt to protect against all types in which

multiple antibiotic resistance has been reported.

Increased knowledge about stability of individual

antigens has been used to select a subtype antigen

(type 6B) to replace a previously unstable antigen

(type 6A) for one of the common pneumococcal

types. It is hoped that this change will increase

the clinical effectiveness of the vaccine against

type 6 pneumococcal infections.

Despite the increased number of antigens, the

total dose of antigen in the 23-valent vaccine is

actually less than in the 14-valent since 25 μg of

each antigen is used instead of 50 μg. The reduced

dosage of each antigen has not been tested on the

elderly, the chronically ill, or the immune suppressed. Despite its adequacy in immunogenicity

studies for producing antibody levels among

healthy adult volunteers, there is insufficient

evidence to assure its adequacy in the groups most

likely to need or benefit from the vaccine.

The studies of cross-reactivity regarding the

23-valent vaccine have demonstrated that for selected types the rabbit sera data do not correlate

well with human data. Only limited human data

were available to assess cross-reactivity. Thus, the

estimates of potential efficacy may somewhat

overestimate the clinical effectiveness.

In assessing the overall efficacy of the vaccine,

one must recognize that pneumococcal vaccine is

in fact composed of multiple vaccines (i.e., 14 for

the 14 valent and 23 for the 23 valent). Even if

each of the individual vaccines has 99 percent efficacy, the overall vaccine would have a substantially lower overall efficacy. For instance, if each

of the 14 vaccines in the 14-valent vaccine had

99 percent efficacy, the overall rate would be less

than 87 percent (4).

In summary, the overall efficacy of the 14-valent pneumococcal vaccine for the pneumococcal types included in the vaccine has been found

to be lower than the 80 percent efficacy rate used

in OTA’s base case. The overall efficacy rate

against bacteremic disease is probably between

60 and 70 percent. The rate for those older than

age 60 is also consistent with this rate. Those with

diseases associated with immune suppression that

predispose them to pneumococcal pneumonia

have substantially reduced efficacy rates. Since

these efficacy rates are based on data from pneumococcus isolated from the blood, it is likely that

the efficacy rate of the 14-valent vaccine against

pneumococcal pneumonia is somewhat lower because of the probable disparity between types of

pneumococcus causing pneumonia and the types

which predispose to bacteremia.

There is reason to hope that with the 23-valent

vaccine, the overall efficacy rate will increase to

close to 80 percent of bacteremic disease among

people older than age 2. This figure is derived by

direct extrapolation with the following assumptions:

1.

2.

3.

4.

Elderly, chronically ill, and high-risk people will respond as well to the 23-valent vaccine as to the 14-valent vaccine.

The 14-valent vaccine provides coverage

against 75 percent of the pneumococcal types

causing pneumococcal bacteremia.

The 23-valent vaccine provides coverage

against 90 percent of the pneumococcal types

causing pneumococcal bacteremia.

The 14-valent vaccine has an effectiveness

rate of 65 percent against pneumococcal bacteremia among those older than 2 years of

age.

Under these assumptions, the expected efficacy

rate with the 23-valent vaccine would approach

the 80 percent rate used as OTA’s base estimate

in the cost-effectiveness analysis.

34-750 0 - 84 - 4
20

DURATION OF IMMUNITY

OTA’s base case assumed an average 8-year immunity provided by the vaccine. This figure was

based on data from previous vaccines tested by

Heidelberger in the 1950’s (77). There are no data

to challenge this assumption among young

healthy adults. Mufson’s data (53) confirmed the

persistence of adequate antibody levels for at least

5 years. Hilleman, et al. (31), presented data on

11 of the types in the 14-valent vaccine suggesting

that beyond 2 years, levels of antibody remain

relatively stable in normal adults.

Elderly individuals and those with chronic diseases not causing immune suppression tend to

have a lower level of antibodies after vaccination.

Bentley, et al. (9), have demonstrated that during the 12 months after vaccination, the rate of

decline in antibody levels among the elderly tends

to parallel those of young individuals. The lower

post-immunization levels for the elderly, however,

left many elderly with 1 year antibody levels below the 300 ng antibody nitrogen/ml level considered protective. This effect was most evident

for those over 80. Preliminary data on dialysis

patients (18) suggest that the level of antibody

may decline at a rapid rate. It should be expected

that the duration of protection for elderly and

chronically ill people without immunosuppressive

disease will be shorter than the estimate of 8 years

for healthy young adults.

For patients at high risk of pneumococcal disease due to immune suppression, such as renal

transplant patients, multiple myeloma patients,

and patients undergoing immune suppressive therSAFETY: SIDE EFFECTS

Recent data based on experience from the first

4 million doses of pneumococcal vaccine distributed have helped clarify the side effects of the

14-valent pneumococcal vaccine:

Local reactions are frequent with local redness developing in approximately 30 percent

of vaccinees, local discomfort in 40 percent,

and local swelling in up to 3 percent. Those

reactions are self-limiting (67).

apy for cancer, the response to the vaccine is poor

and the duration of protection maybe very brief

(45). Of course, such people have generally impaired immune responses that extend beyond

pneumococcal infection or pneumococcal vaccine.

In addition, children who have their spleens removed for hereditary spherocytosis (a disease affecting the shape and survival of the red blood

cells ) or after trauma have been shown to have

a rapid rate of decline of their antibodies during

the first year after vaccination (28). Thus, patients

whose immune system is impaired by immune

suppression or removal of the spleen may have

a reduced duration of protection. Consideration

of revaccination of these patients requires further

evaluation. At the present time, it seems appropriate to conclude that the duration of protection

afforded by the vaccine to these high-risk, lowprotection patients is lower than for healthy,

young vaccinees.

The effect of lower doses of the antigens in the

23-valent vaccine on the duration of antibody levels is unknown. If the duration of adequate antibody levels is reduced in elderly and immunosuppressed people using the 50 μg dose, there may

bean even shorter duration of effective immunity

produced by the 25 μg doses of the 23-valent

vaccine.

On the basis of very preliminary data, elderly

and chronically ill people without immunosuppressive disease most likely have a duration of immunity between 3 years (OTA’s low estimate) and

8 years (the base case estimate).

● Three to seven percent of vaccinees develop

a mild fever of 1 to 2 days duration (67).

● Approximately 1/100,000 vaccinees develop

high fever and generalized symptoms that are

also self-limiting (58).

● Three cases of possible anaphaylaxis have

been reported among the first 4 million doses

distributed (67).

● The American College of Physician’s Clinical Efficacy Assessment Project found that
21

no cases of Guillain-Barré syndrome have

been reported as of 1982 (67). The Food and

Drug Administration does indicate that Guillain-Barré syndrome has rarely been reported

in temporal association with pneumococcal

vaccine, but that no cause and effect relationship has been established (82).

● The ACIP does not recommend the vaccine

for use during pregnancy “unless the risk of

infection is substantially increased” (58).

● Local and systemic reactions are more frequent when revaccination occurs within 5

years. The ACIP recommends against revaccination of adults (58). Vaccine manufacturers also recommend against revaccination.

● Adults of blood group O or B immunized

with pneumococcal vaccine manufactured by

Merck Sharpe & Dohme prior to 1980 responded with an elevation of their anti-A antibodies. This reaction had the potential for

inducing hemolytic disease of the newborn.

The substance causing this response was

found to be an impurity and was removed

from subsequent vaccines. This episode does

illustrate the potential for unpredictable side

effects of current and future vaccines (62).

● Two patients with thrombocytopenia have

been reported to have relapses after receiving the vaccine (43).

● Theoretical concerns that existed about vaccinating individuals with autoimmune disCOST OF VACCINATION

For OTA’s base case with costs expressed in

1978 dollars, vaccination by a private physician

was expected to cost $11.37, $4.90 for the vaccine and $6.47 for the physician’s fee to administer the injection.

For this technical memorandum, costs were recalculated in 1983 dollars. Until December 1983,

both manufacturers of pneumococcal vaccine continued to list the price of 5-dose vials at $24.50

or $4.90 per dose. The price was then raised 8 percent to $26.50 or $5.30 per dose. Since 1979, most

sales (about 80 percent) have been at discounts

averaging about 20 percent off the list price. With

such a discount, the average price charged at the

eases have not been substantiated in studies

of Sjogren’s syndrome (42) or systemic lupus

erythematosus (39). No evidence of reduced

renal function resulting from deposition of

antigen-antibody complexes has been observed (42).

OTA’s cost-effectiveness analysis assumed an

incidence of fever of 5 cases per 100 vaccinees and

an incidence of severe systemic reactions of 1 case

per 100,000 vaccinees. The base case estimate of

Guillain-Barré syndrome was zero. These estimates correspond closely to those subsequently

observed in clinical practice.

Local reactions are related to total dose, and

severe reactions on revaccination may be related

to antibody levels. Since the total dose of 23-

valent vaccine contains fewer micrograms than

the 14-valent one (575 v. 700 μg), the potential

for adverse reactions is expected to be the same

or less than with the 14-valent vaccine.

Revaccination of patients who have received

the 14-valent vaccine with the 23-valent vaccine

is contraindicated due to the higher frequency of

severe local and systemic reactions that has been

observed with booster doses (82). If the 23-valent

vaccine proves substantially more effective than

the 14-valent one, a new preparation will be required to deal with this problem.

end of 1983 was $4.43, an actual decrease of 9

percent over the 1978 price.

From 1978 to 1983, the Consumer Price Index

for physician services increased 57.9 percent (38).

If the injection fee increased at that rate, it would

have reached $10.22 in 1983. The 1983 estimate

for the total cost of vaccination is therefore $14.65

per person, an increase of 28 percent over the 5-

year period, entirely because of the increased injection fee.

The important cost consideration in reexamining the assumptions of the cost-effectiveness analysis is the relative cost of preventing pneumococ-
22

cal pneumonia through vaccination versus the

cost of treating the disease if it occurs. The 1978

analysis, which expressed all costs in constant

1978 dollars, projected through 2050 the medical

care costs that would be incurred with and without vaccination. Although the specific costs of

treating pneumonia in 1983 have not been derived, the per capita costs of medical care and

especially hospital care have risen much more

rapidly than the cost of pneumococcal vaccination. From 1978 through 1983, the medical care

component of the Consumer Price Index rose 62.9

percent and the index for hospital and other medical services rose 82.6 percent (38). As noted

above, the price index for physician services rose

more slowly than for hospitals.

It is possible that reductions in the extent to

which pneumonia patients were hospitalized, in

their lengths of stay, or in their inpatient or ambulatory use of diagnostic tests could have offset

these price rises. From 1964 to 1971, for example, the number of laboratory tests and X-rays fell

for an ambulatory pneumonia patient (68). But

during that period, use of these same services rose

for a pneumonia patient treated in a hospital as

an outpatient or an inpatient. More information

is needed to determine whether or not changes in

technology use offset all or part of the price increases from 1978 to 1983.

OTA’s cost-effectiveness analysis included as

a low estimate of vaccination cost an estimate of

the cost under a public immunization program

($2.45 for the vaccine and $1.00 for its administration). In 1983 dollars, the estimated cost would

be $3.80 ($2.22 for the vaccine and $1.58 for its

administration), a sum substantially lower than

private provision.

As noted in chapter 4, each Medicare carrier

establishes its own reasonable and customary

charge that it will reimburse for a pneumococcal

vaccination given to its beneficiaries. At least one

State carrier in January 1984 was paying $9.60

for the vaccine ($7.50 for the vaccine and $0.10

for the syringe) and its administration ($2.00), a

figure substantially below the $14.65 estimated

for private provision.

MEDICAL COSTS IN EXTENDED YEARS OF LIFE

The 1978 cost-effectiveness analysis included in

all of its calculations the added costs of medical

care during the extended years of life gained by

vaccinated persons who avoided death from pneumococcal pneumonia. These costs of treating

other illnesses during survivors’ extra years of life

varied by age and were adjusted for decreased expenditures for treating pneumococcal pneumonia.

Before adjustment for decreased pneumococcal

pneumonia, for example, annual medical expenditures for a person 65 years or older averaged

$1,689 in 1978 dollars.

There is no consensus on whether a cost-effectiveness analysis that takes a societal perspective

should include medical costs of survivors as they

live out their life expectancies (61). Medical costs

of survivors’ additional years provide information about the cost implications for the medical

care sector of the program being analyzed, and

another cost-effectiveness analysis included such

costs (90). However, these costs are secondary effects of vaccination and reflect the fact that people who live will continue to incur expenses, for

medical care as well as for other items. There is

concern that it may be misleading if not inconsistent to include one secondary and costly financial effect of vaccination, but to exclude other similar effects, such as expenses for food and clothing

or improvements in production (89).

Agreement does exist on two points. One is that

the effects of the medical intervention being analyzed should be followed through time. That situation does not pertain to pneumococcal vaccination against pneumonia because the disease is

acute and fairly short in duration. The other point

of agreement is that the factors that are appropriate to include vary if the perspective is one of

a program such as Medicare. In that case, it is

clearly relevant to include the present and future

costs that the Program will incur because of the

medical intervention. In the case of pneumococcal vaccination, those costs include the costs of
23

vaccination, treating side effects, and of treating life as well as savings in the costs of treating pneuother illnesses throughout the vaccinated person’s mococcal pneumonia.

RECONSIDERATION OF THE COST-EFFECTIVENESS RESULTS

OTA’s cost-effectiveness analysis indicated that

vaccination against pneumococcal pneumonia

would improve health at the rate of $4,800 per

healthy year of life gained across all age groups.

The net gains in health were positive but small:

0.43 day for a vaccinee age 45 to 64 and 1.59 days

for a vaccinee age 65 or older, for example. The

net cost in 1978 dollars, which included the cost

of vaccination, the cost of treating side effects,

the saving in reduced costs of treating pneumococcal pneumonia, and the cost of other medical

expenses in survivors’ extended years, was also

small: $6.80 for a vaccinee age 45 to 64 and $4.40

for a vaccinee age 65 or older. Expressed in terms

of years, vaccination was estimated to gain a year

of healthy life for a person age 45 to 64 for $5,700

and for a person age 65 or older for $1,000.

If medical costs in survivors’ extended years

were excluded and the analysis limited to the direct effects of the vaccination, the net costs of vaccination in 1978 were estimated to be lower for

a person age 45 to 64 ($5.65 per vaccinee or $4,780

per healthy year gained) and to be slightly cost

saving for a person age 65 or older (a saving of

about $0.013 per vaccinee or $3.25 per healthy

year gained).

Evaluation of the assumptions of the 1978 analysis, including available information on and the

potential of the new 23-valent vaccine, has concluded that the base case assumptions are reasonable for the proportion of pneumonia caused by

the vaccine types, the efficacy rate, and side effects from the vaccine. On the contrary, the low

estimate seemed more likely for the incidence of

pneumococcal pneumonia and for the duration

of immunity. With the low estimates for these

variables, health benefits would be lower and net

costs higher (see table 2). For a vaccinee 65 years

or older, the lower incidence of pneumococcal

pneumonia would raise the cost-effectiveness ratio

to $1,300 per healthy year gained, and the shorter

duration of immunity would result in $3,000 per

healthy year gained. If the lower incidence of the

disease and shorter duration of immunity applied

at the same time, an elderly vaccinee would gain

about 0.5 of a healthy day for a net cost of $7.60

or about $6,000 per healthy year gained.

These figures change if allowance is made for

the rise in treatment costs relative to the cost of

vaccination (table 2). With the relative costs of

care that prevailed in 1983, treatment costs and

the savings in them from preventing pneumococTable 2.—Cost-Effectiveness Results With Lower Estimates for Incidence and Duration of Immunity and

1983 Relative Prices, for Pneumococcal Vaccinees > 65 Yearsa

Results per elderly vaccinee

1978 dollars 1983 dollarsc

Net cost per Net cost per

Healthy days Net medical healthy year Net medical healthy year

Variable gained costs gained costs gained

1978 base case estimates . . . . . . . . . . . . . . . . . . . . . 1.59 –$0.01 b –$6.05 b

10 percent pneumonia as pneumococcal . . . . . . . . 1.05 3.78 $1,300 0.84 $ 291

3-year duration of immunity . . . . . . . . . . . . . . . . . . . 0.69 5.75 3,000 4.33 2,286

3-year duration of immunity and

10 percent of pneumonia as pneumococcal . . . 0.46 7.60 6,000 7.81 6,154

aAll net medical costs exclude medical expenditures in survivors’ extended Years of life.

bCost saving.

CFrom 1978 t. 1g63, the price of medical care rose 62.g percent, of physicians’ services 57.9 percent, and of hospital and other medical semices 826 Percent (u)

All estimated net medical costs and net cost per healthy year gained would have cost savings if vaccination was administered under a public program (with a cost

of $3.60 per vaccination) instead of private provision (with a cost of $14,65 per vaccination).

SOURCE: Office of Technology Assessment,
24

cal pneumonia are relatively greater. In the case

of the lower incidence of pneumococcal pneumonia, the savings in treatment costs almost offset

the cost of vaccination so that the net cost per

elderly person vaccinated would be less than $1

for a healthy day or about $300 per healthy year

of life gained. With a shorter duration of immunity, the savings in treatment costs offset about

two-thirds the vaccination cost for a net cost per

elderly person vaccinated of $4.33 for 0.7 healthy

day or about $2,300 per year of healthy life

gained. With both a lower incidence of pneumococcal pneumonia and a shorter duration of immunity than used in the 1978 analysis, but the different relative costs that prevailed in 1983, an

elderly vaccinee would gain about 0.5 of a healthy

day for a net cost of about $8 or about $6,000

per healthy year gained.

RECONSIDERATION OF COSTS TO THE MEDICARE PROGRAM

The 1978 analysis concluded that the Medicare

Program would incur a net cost per elderly beneficiary vaccinated of about $5 if the Program

covered 100 percent of the vaccination cost. Based

on the general results for elderly people, a vaccination was also expected to gain 1.59 healthy days

of life.

Since the Medicare Program does not pay for

the total medical expenditures of its beneficiaries,

Medicare’s expenditures per enrollee are a fraction of these totals. In 1978, Medicare paid 72.8

percent of hospital costs, 56.7 percent of physician charges, and 42.8 percent of the total medical expenses of their beneficiaries (27). OTA’s 1978

estimate of Medicare expenditures was therefore

$760 per elderly beneficiary. Medicare subsequently reported that it had actually spent $864

per elderly enrollee in 1978 (83). By 1981, the most

recent year available, Medicare was paying 74

percent of hospital and other medical services,

57.9 percent of physician services, and 45.3 percent of the total personal health care of aged

beneficiaries.

As described above, if pneumococcal pneumonia accounted for only 10 percent of all pneumonia cases and immunity from the vaccine lasted

only 3 years for elderly people, each vaccinee

would gain about 0.5 of a healthy day of life. The

net result for the Medicare Program of the reduced

effect on pneumonia cases and of changes in relative prices of treatment and vaccination costs

would be an increase in net program cost to about

$5.50 to $10.50 per elderly vaccinee (table 3). If

about 25 percent of elderly Medicare beneficiaries

received pneumococcal vaccination (about 6.6

million people), the net cost to the Medicare Program over time in 1983 dollars would be $37 million to $69 million to gain about 8,400 years of

healthy life.

Table 3.—Estimated Net Medicare Expenditures for Pneumococcal Vaccinees > 65 Years, 1978 and 1983a

Results per elderly vaccinee

1978 dollars 1983 dollarsb

Net cost per Net cost per

Healthy days Net medical healthy year Net medical healthy year

Variable gained costs gained costs gained

1978 base case estimates . . . . . . . . . . . . . 1.59 $5.02 $1,153 –$2.38 –$ 2.67 ‘ –$ 613

10 percent pneumonia as pneumococcal 1.05 7.14 2,477 1.60 – 6.65 555 – 2,307

3-year duration of immunity . . . . . . . . . . . 0.69 8.14 4,298 3.51 – 8.56 1,853 – 4,520

3-year duration of immunity and

10 percent of pneumonia

as pneumococcal . . . . . . . . . . . . . . . . . . 0.46 9.21 7,258 5.54 – 10.59 4,366 – 8,345

aAll net medical costs Include medical expenditures in survivors’ extended years of life.

bSame price increases assumed as in table 2. Lower cost estimates were based on cost per vaccination of $9.60, and higher cost estimates on $14.65.

Ccost saving.

SOURCE: Office of Technology Assessment.
Chapter 3

Federal Activities Regarding

Appropriate Vaccine Use
Chapter 3

Federal Activities Regarding

Appropriate Vaccine Use

Since 1979, Federal activities regarding the research, development, and use of pneumococcal

vaccine have related to refining information on

its appropriate use and developing a vaccine with

broader coverage of pneumococcal disease. In

coordination with international activities, the

Food and Drug Administration (FDA) promoted

the development of a new 23-valent vaccine. Two

institutes of the National Institutes of Health—

the National Institute of Allergy and Infectious

Diseases (NIAID) and the National Institute on

Aging (NIA)—have sponsored studies on efficacy

among high-risk groups. At the same time, the

Centers for Disease Control (CDC) and its Immunization Practices Advisory Committee (ACIP)

have evaluated the efficacy of the vaccine for certain high-risk people and made recommendations

regarding its use.

TESTING AND LICENSURE OF PNEUMOCOCCAL VACCINE

Postmarketing Surveillance

Within FDA, the Office of Biologics (formerly

the Bureau of Biologics) of the National Center

for Drugs and Biologics is responsible for the licensure of new vaccines to ensure that manufacturers

comply with established requirements governing

their manufacture and distribution. Manufacturers are required to maintain and submit reports

of adverse reactions experienced during prelicensure testing as part of product license applications

to FDA. FDA does not currently have the authority to mandate reporting of adverse reactions by

physicians. Once a product license is issued, the

system for monitoring adverse reactions becomes

passive. Pharmaceutical manufacturers are required to maintain reports of adverse reactions

that are voluntarily submitted to them. Although

manufacturers are not required to transmit those

reports of adverse reactions to FDA or any other

Federal agency, they must make them available

to FDA inspectors during annual inspections of

establishments.

The detection of adverse reactions to the marketed vaccine thus relies primarily on individuals

and organizations external to FDA. For example,

a problem with the manufacture of one vaccine

was discovered as a byproduct of independent researchers’ investigating whether pneumococcal

vaccine would induce protective immunity against

group B streptococcus serotype 3 (11,71). The

problem was solved by subsequent changes in

manufacturing procedures.

Formulation of the 23-Valent

pneumococcal Vaccine

The formulation of the 14-valent vaccine was

based on epidemiologic studies conducted in the

United States, Europe, and South Africa. Additional knowledge gained since the licensure of that

vaccine in 1977 enabled the development of a 23-

valent vaccine designed to be more efficacious.

The development of the new vaccine was based

on the following types of new information

(62,81,82):

1.

2.

A worldwide surveillance system of typespecific pneumococci isolated from blood

and cerebrospinal fluid conducted by the

World Health Organization, the Centers for

Disease Control, and the laboratory of Robert Austrian.

Studies of cross-reactivity within types using

rabbit antisera and small-scale studies of

healthy adults to address specific cross-reactivity questions.

27
28

3.

4.

5.

Reported data on the emergence of pneumococcal types and subtypes with resistance to

multiple antibiotics.

Increased information on the stability of

component antigens of the pneumococcal

vaccine.

Limited testing of dose-response relationships

on healthy adults to determine the adequacy

of the 25 μg dose per antigen compared to

the 50 μg dose used in the 14-valent vaccine.

Representatives of the Office of Biologics and

the CDC participated as members of the World

Health Organization’s (WHO) Expert Committee

on Biological Standardization, which developed

proposals for a pneumococcal vaccine with greater worldwide applicability. That committee considered the development of a vaccine to supplement the 14-valent vaccine (i. e., a vaccine that

would not include any of the types in the 14-valent

vaccine) to provide protection against other pneumococcal types (92). However, there was concern

that with multiple vaccines on the market, confusion might result about which pneumococcal

vaccine had been administered to a patient and

revaccination might occur inadvertently. The

WHO Committee ultimately recommended that

a single formulation be developed and accepted

as an international standard (92). The Committee also recommended that new types be added

to that formulation if the World Health Organization identifies them as public health problems.

WHO organized laboratories worldwide to

identify the frequency with which the 83 known

pneumococcal types cause pneumococcal disease.

More than 13,000 isolates of blood and cerebrospinal fluid, including some from the CDC, were

analyzed to provide data for the development of

the reformulated vaccine (62). Based on these

data, the WHO Committee proposed a new polyvalent vaccine formulation containing 23 polysaccharide types. Table 4 summarizes the formulations of both pneumococcal vaccines and the rank

order of the frequency of the pneumococcal types

in the specimens that were analyzed. After reviewing WHO’s recommendation, FDA’s Vaccines and

Related Biological Products Advisory Committee concurred with the suggested reformulation

of the vaccine, and FDA advised the two manuTable 4.—Pneumococcal Types in the 14-Valent

and 23-Valent Vaccines

pneumococcal 14-valent 23-valent Rank order in

type vaccine vaccine worldwide specimens

1 . . . . . . . . . . .

2 . . . . . . . . . . .

3 . . . . . . . . . . .

4 . . . . . . . . . . .

5

6A : : : ; : : : ; ; :

6B . . . . . . . . . .

7F . . . . . . . . . .

8

9N : : : : : : : : : :

9V . . . . . . . . . .

10A . . . . . . . . .

11A . . . . . . . . .

12F . . . . . . . . .

14 . . . . . . . . . .

15B . . . . . . . . .

17F . . . . . . . . .

18C . . . . . . . . .

19F . . . . . . . . .

19A . . . . . . . . .

20 . . . . . . . . . .

22F . . . . . . . . .

23F . . . . . . . . .

25F . . . . . . . . .

33F . . . . . . . . .

aThe ranka for 6A and 6B are based on the frequency Of the observations for

both types together.

%he rank for 15B is baaed on the frequency of observations for both 15B end 15C.

SOURCE: J. B. Robbins, R. Austrian, C. J. Lee, et al., “Conaideratlons for Formulating the Second-Generation pneumococcal Capsular Polysaccharide

Vaccine With Emphasis on the Cross-Reactive Types Within Groups,”

J. Infect. D/s. 146(6):1136-1159, 1963.

facturers licensed to sell pneumococcal vaccine in

the United States of the changes (81,82).

Testing and Licensure of the

23-Valent Vaccine

Subsequent to notification of the recommended

formulation of the 23-valent vaccine by FDA,

Merck Sharpe & Dohme and Lederle Laboratories

both submitted product license applications for

reformulated vaccines. The Lederle application included the 23-valent formulation that was agreed

upon internationally. The Merck Sharpe &

Dohme application, which called for a 22-valent

vaccine (excluding type 33 F), was subsequently

amended to conform to the recommended 23-

valent formulation.

Subsequent approval of these vaccines was

based on the following studies performed by the

manufacturers (81,82):
29

Ž manufacturing and control tests to verify the

identity and purity of the inoculum and polysaccharides and to demonstrate the consistency of production of the 23 types of pneumococcal capsular polysaccharides,

Ž immunogenicity studies to assess adverse

reactions and antibody response to the vaccine, and

Ž stability studies to determine the rate of degradation of the individual pneumococcal capsular polysaccharide types.

The immunogenicity studies performed by

Merck Sharpe & Dohme used three separate

groups of healthy volunteers (81,82). One group

of 23 adults (ages 21 to 64) was vaccinated with

a 22-valent vaccine (excluding type 33f) containing 50 μg per antigen, and a second group of 29

adults (ages 21 to 64) was vaccinated with a 22-

valent vaccine containing 25 μg of each antigen.

Since the studies used a 22-valent vaccine, Merck

Sharpe & Dohme performed a third immunogenicity study of type 33F polysaccharide alone. In

that study, 25 adult volunteers (ages 22 to 29) received a single injection of 0.5 ml of the 23-valent

vaccine containing 25 μg of each antigen. The

results of these studies showed that the level of

immune response was acceptable in all cases (a

twofold or greater rise of antibodies for all pneumococcal types in 87 to 100 percent of the recipients) and that the immune response to the 25 μg

dose was essentially the same as the response to

the 50 μg dose.

Lederle Laboratories used a 23-valent vaccine

with 25 μg per type for its immunogenicity studies

(81,82). Thirty-one healthy subjects between the

ages of 45 and 65 were vaccinated with the vaccine. The results showed a twofold or greater rise

of specific antibody levels in 93 to 100 percent of

the subjects. Another study performed by Lederle

using a 14-valent vaccine containing 10, 25, or

50 μg of the 14 types showed acceptable and essentially the same immune responses for the 25 and

50 μg doses.

It is disturbing that no prelicensure immunogenicity studies for the 23-valent vaccines involved people who were older than 65 or members

of other high-risk groups. The small sample sizes

also raise concerns about whether the study group

is representative of the larger population and

whether the results can be reproduced among

larger numbers of people. FDA notes, however,

that recent data compiled by the CDC suggest reasonable levels of efficacy for the 14-valent vaccine (see ch. 2).

Studies of the stability of the vaccines were

based in part on studies of the stability of the two

manufacturers’ 14-valent vaccines. Since the 23-

valent vaccines were newly developed at the time

the applications were submitted, studies of the

long-term stability of the vaccines could not be

completed and are still ongoing.

Based on the results submitted by the manufacturers, FDA determined the vaccines to be safe.

The adverse reactions (e.g., swelling or soreness

at the sight of the injection, low-grade fever)

observed in the recipients were not considered

serious (81,82).

FDA approved PNEUMOVAX-23 (Merck Sharpe

& Dohme) on June 30, 1983, and PNU-IMUNE

23 (Lederle Laboratories) on July 15, 1983. The

approved indications for use of the vaccine specified on the package insert follow the recommendations for use of the 14-valent vaccine that were

made by the ACIP in 1981 (see below).

RESEARCH ON pneumococcal VACCINE

The National Institutes of Health has been a University of Pennsylvania, recognized as the

major sponsor of pneumococcal vaccine research leader in the development of this vaccine (85).

through NIAID and NIA. NIAID initiated a program to develop a polysaccharide pneumococcal Two major studies of the efficacy of pneumovaccine in 1967. Its involvement in the early stages coccal vaccine in the United States were also conof pneumococcal vaccine development included ducted under contract to NIAID: one that inproviding support for Robert Austrian of the volved more than 13,000 essentially healthy
—

30

volunteers at the Kaiser-Permanante Medical Center in San Francisco, and the other of more than

1,300 long-term institutionalized patients at the

Dorothea Dix Hospital in Raleigh, N.C. Neither

of these studies demonstrated significant differences between vaccine and placebo recipients in

the attack rates of radiographically documented

pneumonia. During the Kaiser-Permanente trial,

the incidence of pneumococcal pneumonia was

very low. The results from Dorothea Dix Hospital

were interpreted as suggesting that either the efficacy of the vaccine was low for the groups studied or the attack rate of pneumonia due to vaccine-susceptible pneumococci was very low (13).

NIAID is currently supporting basic research

into the development of conjugated polysaccharide vaccines (coupling polysaccharide antigens

to protein carriers). It is hoped that these vaccines

will achieve greater efficacy for children and people with immunological deficiencies (30). Numerous clinical trials in infants and young children

have been conducted. Although the initial work

in the development of conjugated vaccines is being performed with Hemophilus influenza type

b, the basic research is expected to be relevant to

the development of other conjugated polysaccharide vaccines, such as pneumococcal vaccine.

NIAID has supported a large number of studies

of the immunogenicity of pneumococcal vaccine

SURVEILLANCE ACTIVITIES

Since licensure of pneumococcal vaccine in

1977, CDC’s activities have related to refining information on the vaccine’s effectiveness and appropriate use for specific high-risk groups. The

only surveillance system for pneumococcal infection in the United States is the CDC’s Pneumococcal Surveillance System in the Center for Infectious Disease, Division of Bacterial Diseases.

Since 1978, a group of hospitals (currently 37)

have submitted subcultures of all pneumococci

isolated from blood and cerebrospinal fluid to the

CDC for serotyping (14). This sample of hospitals

was nonrandomly chosen to include hospitals of

different types in 22 different States. Most of the

hospitals (25 of the original 37) were also particithrough a contract with Gerald Schiffman of the

State University of New York, who conducts assays to measure the levels of antibody stimulated

by pneumococcal vaccine (44). Through that contract, NIAID is supporting the clinical trial of

pneumococcal vaccine in the Veterans Administration (see ch. 2).

NIA has expressed concern about the absence

of acceptable data on the effectiveness of pneumococcal vaccine for elderly people. Proceedings

of a 1981 conference cosponsored by NIA and

NIAID note that there are no published randomized placebo-controlled trials that conclusively

show the efficacy of the vaccine in elderly people (65). NIA is supporting a study by Bentley and

Schiffman, which is extending their preliminary

findings on the immune response of elderly people to pneumococcal vaccine.

Concluding that more definitive studies were

needed to determine the efficacy of pneumococcal vaccine in elderly people, NIA together with

NIAID in 1982 issued an announcement calling

for research and grant applications on the subject. The announcement specifically called for

studies on the efficacy of pneumococcal vaccine

in various subpopulations of the elderly and on

the presence of nonvaccine serotypes of pneumococci in the immunized and nonimmunized elderly

(84).

pants in the CDC National Nosocomial Infection

Study (15).

The original purpose of the pneumococcal Surveillance System was to examine the distribution

of pneumococcal types and any change in that distribution with vaccine use. CDC data indicate that

no shift in the distribution of pneumococcal serotypes has occurred since the introduction of the

14-valent vaccine (15). The CDC has also used

information from its Surveillance System to estimate the type-specific efficacy of the 14-valent

vaccine for elderly and other high-risk people (16).

The methodology entailed comparing pneumococcal types associated with disease in vaccinated

and unvaccinated people (see ch. 2).
31

RECOMMENDATIONS FOR USE OF PNEUMOCOCCAL VACCINE

The ACIP, an advisory group to the Public

Health Services, is responsible for making recommendations on the use of new vaccines and for

periodically revising recommendations on existing

vaccines. ACIP members are selected from nominations made by professional and academic societies and represent experts in relevant disciplines

(e.g., epidemiology, microbiology, public health,

immunology) (20). Representatives of the FDA

Office of Biologics and NIAID serve as ex-officio

members. The ACIP also has liaison members

from professional organizations such as the American Academy of Pediatrics and the American

Medical Association.

The ACIP has issued two sets of recommendations on the use of pneumococcal vaccine: one in

January 1978, shortly after a 14-valent vaccine

was licensed, and the second in August 1981. The

ACIP reviewed additional information regarding

pneumococcal vaccine in February 1984.

The 1978 and 1981 statements reflected the

Committee’s sense that it had insufficient information about vaccine efficacy. The 1978 recommendations clearly stated that because of insufficient information on the efficacy of pneumococcal vaccine, “ . . . definitive recommendations

for its use cannot be formulated at the present

time” (59). However, they also concluded that

pneumococcal vaccine induces satisfactory antibody response in persons over 2 years of age, antibody titers are likely to remain high for several

years, and the potential exists for reducing pneuNATIONAL OBJECTIVE FOR 1990

The 1979 Surgeon General’s draft report on

health promotion and disease prevention established reduction in the number of premature

deaths from pneumonia and influenza as a primary goal (88). The goals established in 1979 were

reaffirmed when a series of “1990 Immunization

Objectives” were published in 1983. Among the

objectives to implement that goal was one regarding pneumococcal vaccine:

By 1990, at least 60 percent of high-risk populations. as defined by the ACIP. should have -, - J

mococcal disease in the United States through use

of the vaccine (59).

The 1981 statement also noted that available

data were not yet sufficient for conclusive recommendations. Although it included a statement that

the 14-valent vaccine had been shown in selected

young healthy populations to reduce the incidence

of pneumonia caused by types contained in the

vaccine, the statement went on to say that the data

upon which these findings were based came from

adults who were at increased risk of disease but

were not chronically ill (58).

Table 5 compares the two sets of recommendations for six groups. Neither list includes elderly

people per se. This omission contrasts with the

vaccine labeling, which includes people 50 years

or older, whether or not they have underlying

medical conditions.

The ACIP does issue unequivocal statements

about the use of a vaccine when sufficient data

supporting those recommendations are available.

For example, in its 1982 recommendations on influenza vaccine, the ACIP “strongly” recommended the vaccine for all older persons, particularly those over age 65, and for five other high-risk

groups (37). Thus, the tone of the 1978 and 1981

pneumococcal vaccine recommendations is a reflection of the ACIP’s perception that definitive

evidence on the efficacy of pneumococcal vaccine

did not exist at that time.

received vaccination against pneumococcal

pneumonia; at least 50 percent of people in populations designated by the ACIP should be immunized within 5 years of licensure of new vaccines for routine clinical use.

This objective was given a medium priority for

Federal activity and assigned to the CDC for implementation. The working groups that developed

this and other national objectives foresaw their

attainment through the active participation of or-
Table 5.–Recommendations of the Immunization Practices Advisory Committee (ACIP), 1978 and 1981

Target groups 1978 1981

Persons older than 2 with splenic Should benefit from being immunized Should benefit from immunization. Failures

dysfunction or anatomic asplenia have been reported, perhaps due to

(absence of spleen) impaired antibody responses, but vaccine is

recommended because patients are known

to be at high risk of developing fatal

bacteremia

Persons older than 2 with certain chronic Might benefit from immunization. Because Should be considered candidates for

illnesses associated with a greater risk of risk and case fatality increase with age, vaccination. Vaccine may be increasingly

pneumococcal disease benefits of vaccination should increase beneficial as these patients grow older

with age because of increased fatality rate from

pneumococcal infections. Vaccine efficacy

in these groups needs further evaluation “.

Healthy populations Mass immunization is not currently Insufficient data to formulate a

recommended recommendation on routine use of the

vaccine for the general population,

including the elderly. This should not

preclude health care providers from

immunizing healthy persons whom they

believe may benefit

Closed populations such as those in nursing Immunization of the entire closed population Vaccination of the entire closed population

homes or residential schools when there might be an effective control measure should be considered

is an acute outbreak or high rate of

endemic pneumococcal disease

Populations living in areas where there are Selective immunization of groups in the Selective immunization of those at high risk

localized outbreaks of pneumococcal community epidemiologically believed to should be considered

disease caused by types represented in be at particular risk may be useful

the vaccine

Patients at high risk of influenza Consideration should be given to pneumococcal and influenza vaccines can be

complications (particularly pneumonia) vaccinating such patients given at different sites at same time

without increased side effects

Pregnant women Theoretically should not be harmful but in Safety for pregnant women has not been

view of recommendations that evaluated. Should not be given during

unnecessary drugs and vaccines should pregnancy unless risk of infection is

not be given during pregnancy, substantially increased

pneumococcal vaccine should only be

used when there is substantial risk of

infection

Second or booster doses There appears to be no booster effect with Should not be given at this time because of

additional doses marked increase in adverse reactions with

reinfection of pneumococcal vaccine

SOURCES: “Recommendation of the Immunization practices Advisow Committee (AClp): pneumococcal Polysaccharide Vaccine,” Morb. Morfal. Weekly Rep. 30:410-419, 1981; and “Recommendation of the

Public Health Service Advisory Committee on Immunization practices: pneumococcal PolYsaccharide Vaccine,” Morb. Morial Weekly Rep. 27(4):25-31, Jan. 27, 1978.
—

33

ganizations and interested parties at all levels of

Government and within the private sector (41).

At the time the objective was set, it was noted

that baseline data for measuring progress toward

the objective were not available. Periodic sample surveys were noted as the source of data for

future assessment of whether or not the objective

was being approached (86). The CDC has at least

two potential sources of information: the Annual

Immunization Survey and Biologics Surveillance.

Through the Bureau of the Census, the CDC collects information on the use of vaccines in its annual U.S. Immunization Survey. Using a random

sample of 35,000 housing units, the survey reports

the percent of the population that have had rubella, measles, diphtheria-tetanus-pertussis, poliomyelitis, mumps, and influenza vaccinations. Although the U.S. Immunization Survey has not

covered pneumococcal vaccination, the CDC

plans to include it in the survey beginning this year

(21). However, because of the small numbers of

people who receive pneumococcal vaccine each

year, the survey may not be able to provide statistically significant data about use in the target

population.

The CDC also compiles “Biologics Surveillance”

on a semi-annual basis. This document lists sales

net of returns for the major vaccines marketed in

the United States by three or more manufacturers.

Although data on pneumococcal vaccine have not

been included to date, they maybe added in the

future. Since only two manufacturers market

pneumococcal vaccine in the United States, this

step would require special arrangements between

the CDC and the manufacturers.

Despite the existence for several years of the

objective of vaccinating 60 percent of the target

group, the CDC has only recently begun to collect baseline data and has not actively promoted

vaccine use. This passive posture has been consistent with uncertainty regarding efficacy (33),

appropriate target groups, and the indefinite recommendations of the ACIP. However, at its recent meeting, the ACIP began to reconsider pneumococcal vaccine and expressed an intention to

change substantially its previous statement. In

light of data that suggested efficacy of about 60

to 70 percent for elderly people and some other

high-risk groups (see ch. 2), the Committee stated

a desire to develop more definite recommendations for specific target groups. It also charged a

subcommittee to prepare draft recommendations

for the April 1984 meeting.
Chapter 4

Medicare Coverage of

pneumococcal Vaccine
Chapter 4

Medicare Coverage of

Pneumococcal Vaccine

As a result of the enactment of Public Law

96-611, in December 1980 pneumococcal vaccination became a reimbursable service under the

Medicare Program, effective July 1, 1981. Pneumococcal vaccination thus became the first and

to date the only preventive service paid by Medicare. With the exception of pneumococcal vaccine and its administration, the Social Security Act

specifically excludes payment for preventive immunizations.

Bills to extend coverage to pneumococcal vaccine were first introduced into Congress in fall

1979. Subsequent consideration of the legislation

focused on the fact that Medicare was then paying for the treatment of pneumococcal pneumonia but not for its prevention and that the vaccine had few and relatively minor side effects (60).

There was also substantial interest in the financial implications for the Medicare Program. Besides the OTA cost-effectiveness analysis, a study

by the Congressional Budget Office (CBO) provided relevant information. The CBO study concluded that Medicare would incur additional net

costs during the initial years of coverage, but net

reductions in future years. 1

Since 1980, two other vaccines have been considered for Medicare coverage: hepatitis B vaccine for end-stage renal disease patients and influenza vaccine. Coverage of hepatitis B vaccine

is included in the House and Senate reconciliation bills now before Congress. Inclusion of influenza vaccine was considered along with pneumococcal vaccine in 1980 and with hepatitis B

vaccine in 1983. But despite the stronger statements of the Immunization Practices Advisory

Committee (ACIP) regarding the advisability of

influenza vaccine for elderly people (58), influenza

vaccination has not become reimbursable under

Medicare. Like payment of pneumococcal vaccine, the exclusion of influenza vaccination and

serious consideration of hepatitis B vaccine may

hinge on the implications for Medicare costs. Although hepatitis B vaccine is more expensive per

dose, the Program costs of paying for hepatitis

B vaccine would most likely be lower than for influenza vaccine because coverage would be limited

to a much smaller number of beneficiaries, endstage renal disease patients, rather than all aged

or chronically ill ones.

IThe analysis was conducted including and excluding survivors’

medical costs.

IMPLEMENTATION OF MEDICARE COVERAGE

At the same time that Medicare coverage of

pneumococcal vaccine was being enacted in late

1980, there was discussion in the administration

about rescinding that measure. Concerns were

raised about the efficacy of the vaccine and, in

the early part of 1981, about the additional costs

to Medicare during initial years of coverage (60).

Efforts to rescind coverage were defeated in the

summer of 1981.

In implementing coverage of pneumococcal

vaccination, Medicare applied the same procedures as for other services covered under Part B.

The Bureau of Program Operations in the Health

Care Financing Administration (HCFA) notified

the carriers through changes in the Carrier Reimbursement Manual (94). The carriers in turn were

responsible for adjusting their systems for paying claims. Presumable special procedures were

37
38

necessary for pneumococcal vaccination because

it is not subject to the deductibles and coinsurance

that usually apply to Part B services. Although

information is not available on how all of the carriers handled the change, the carrier2 for the Commonwealth of Virginia assigned a separate procedure code to pneumococcal vaccination (75).

After consulting the American Druggist Blue

Book, that carrier has set the reimbursable charge

for vaccination at $9.60: $7.50 for the vaccine,

2Carners throughout the United States set reasonable charges, implement changes, and pay claims for Medicare Part B services.

$0.10 for the syringe, and $2 for physician time

(the rate paid for injections) (17).

In January 1982, the Social Security Administration included information about coverage of

pneumococcal vaccination as a “stuffer” with Social Security checks. This medium is commonly

used to inform beneficiaries about notable Program changes. The notice thus appeared 6 months

after coverage had begun. More importantly, it

occurred in January, after the fall, the peak of

public and medical concern about respiratory diseases, such as pneumonia and influenza, and it

did not mention diseases, such as pneumonia, that

might be prevented by the vaccine (see fig. 1).

Figure 1 .—Announcement to Beneficiaries of Medicare Coverage

of Pneumococcal Vaccine, January 1982

An important message

for beneficiaries who

plan to work in 1982

Beginning January 1, 1982, you can earn

more and still receive all your Social

Security checks.

● If you are now 65 or older, or you will

reach 65 in 1982, you can earn $6,000

and still receive all your checks, If your

total yearly earnings go over $6,000,$1

in benefits may be withheld for each $2

of earnings above $6,000.

. If you are under 65 all of 1982, you

can earn up to $4,440 and still receive all

your checks. If your total yearly earnings

go over $4,440,$1 in benefits maybe

withheld for each $2 of earnings above

$4,440.

In 1981, the annual exempt amounts

were $5,500 for people 65 and over and

$4,080 for people under 65.

If you worked and earned more than

the annual exempt amounts in 1981

while receiving benefits, you must complete an annual report of earnings by

April 15, 1982, unless you were 72 or

older all year.

Note: Beginning with the month you

reach age 72, you get your full check

each month no matter how much you

earn.

Different rules apply to people receiving Social Security disability or SSI

payments if they work. Please see other

side.

If you receive Social Security disability

or SSI payments, you must report all

work, no matter how much you earn. (If

you are a payee for someone receiving

these benefits, you must report for him

or her.)

You can make your report by phoning,

writing, or visiting any Social Security office. Look up "Social Security Administration” in the phone book to find the

office nearest you.

pneumococcal

vaccine shots

pneumococcal vaccine shots are now a

covered service under Medicare. Ask

your doctor’s advice about your need for

this vaccine.

Medical insurance

deductible

Starting in 1982, the annual deductible for the medical insurance part of

Medicare is $75, instead of $60.
39

PNEUMOCOCCAL VACCINATION UNDER MEDICARE PAYMENT

BY DIAGNOSIS RELATED GROUPS

Although Medicare has historically paid hospitals for the costs that they have incurred, a new

system is being implemented that bases payment

on the costs set in advance for diagnosis related

groups (DRGs). HCFA has interpreted Public Law

98-21, which mandated DRG payment, and Public Law 96-611, which covered pneumococcal vaccination, as permitting Medicare to pay hospitals

separately from the DRG system for pneumococcal vaccination. A hospital maybe reimbursed for

the reasonable costs of providing pneumococcal

vaccination to patients, including inpatients, who

are Part B beneficiaries. The rationale is that DRG

payment applies to Part A services, while pneumococcal vaccination is covered only as a Part

B service. Public Law 98-21 specifically excluded

physician services to hospital patients from the

DRG system. Besides physician services, only two

other services are covered under Part B but not

Part A and hence are excluded from the DRG limits for payment for inpatients: pneumococcal vaccination and ambulance service to transfer patients from one prospectively paid hospital to

another (35).

HCFA gave public notice of these decisions in

the September 1, 1983, statement in the Federal

Register on interim final regulations for prospective payment to hospitals. Although that notice

did not include the specific implications for pneumococcal vaccination, a subsequent notice to intermediaries in October 1983 listed pneumococcal vaccination and ambulance transfer of patients

as exceptions to DRG payment (29).

Although HCFA’s decision was based on statutory language, the resulting payment procedure

has avoided creating a financial incentive for a

hospital to not provide pneumococcal vaccination. If pneumococcal vaccination were included

in DRGs (as other preventive technologies are),

its use would add to the hospital’s costs, but not

to its revenues (48). This situation is important

for pneumococcal vaccination because the hospital has been suggested as an institution through

which pneumococcal vaccination could be provided (22). On the basis of the percentage of patients with pneumococcal pneumonia or bacteremia who were hospitalized within the previous

3 years for any cause, Fedson has estimated that

vaccinating certain patients on discharge from

their previous hospitalization could avoid 10 percent of hospital admissions for all pneumonia.

ESTIMATED USE OF PNEUMOCOCCAL VACCINE

HCFA’s present data systems do not permit the

development of aggregate data at the national

level on Part B services, such as pneumococcal

vaccination (76). It is, however, an identifiable

line item (a separate payment record) that the carriers submit to HCFA. New procedures are now

being implemented to permit national samples of

such services to be derived. HCFA is requiring all

carriers to use a standard set of codes by the end

of 1984 and to notify HCFA if they create new

ones. Starting in July 1984, HCFA will sample the

standardized data available on Part B services,

and by July 1985, data from all carriers will be

on the system (93).

Two sets of information do pertain to the use

of pneumococcal vaccine: sales of the two vaccine manufacturers and IMS America data on

physician mentions of the vaccine in the National

Drug and Therapeutic Index (NDTI) and on purchases by hospitals and drug stores. The data indicate that at the most 35 percent of high-risk people have received the vaccine.

Manufacturers report sales of about 11.1 million doses of pneumococcal vaccine, net of returns, since 1978, when the first vaccine was marketed (table 6). The precise number of people at

high-risk of pneumococcal disease is unknown.

An approximation, however, are the people at

high risk of influenza because of certain chronic

conditions: diabetes, kidney disease, asthma, emphysema, tuberculosis, bronchitis, heart condition, rheumatic heart condition, hypertension, or
40

Table 6.—Total Sales of Pneumococcal Vaccine,

Net of Returns, 1979-83

Year Number of doses

1978 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,964,000

1979 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,565,605

1980 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,774,135

1981 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,283,240

1982 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,152,510

1983 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,313,105

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11,052,595

SOURCE: Unpublished data, Lederle Laboratories and Merck Sharpe&Dohme,

January and February 1964.

hardening of the arteries. According to responses

from a household survey, about 32 million people in the United States had such chronic conditions in 1982, including 12 million 65 years or

older (table 7). If that population is indicative of

the target group forpneumococcal vaccine, that

vaccine has been sold for about 35 percent of the

high-risk population. Including all elderly people

would add 13.5 million people to the target group

(87) and reduce the coverage of doses sold to

about 24 percent. Including people 50 to 64 years,

in accordance with the Food and Drug Administration’s approved labeling, would add an additional 10.4 million to the target group for a coverage rate of 20 percent.

All of these percentages should reconsidered

high estimates of use because they relate to doses

sold rather than doses used. Doses sold include

unknown quantities of inventories and of wastage. Since the labeling and ACIP recommend

against reimmunization, it is unlikely that many

people have received more than one dose.

Additional information on vaccine use comes

from the NDTI of IMS America, Ltd. That survey

Table 7.—Persons in the United States With Certain

High-Risk Conditions by Age, 1982

Percent of total

Number with conditions population in

Years of age (thousands) that age group

18-24 . . . . . . . . . 1,530 5

25-44 . . . . . . . . . 6,030 9

45-64 . . . . . . . . . 12,448 28

> 65 . . . . . . . . . . 12.031 47

Total. . . . . . . . . . 32,039 19

%onditions include diabetes, chronic kidney disease, asthma, emphysema, tuberculosis, chronic bronchitis, or chronic heart condition such as heart attack,

rheumatic heart condition, high blood pressure, or hardening of the arteries.

SOURCE: Unpublished data, “U.S. Immunization Survey, 19S2,” Centers for

Disease Control, Division of Immunization, Atlanta, January 1984.

asks a sample of physicians from a panel to indicate the pharmaceutical products related to their

physician-patient encounters, regardless of location. The survey indicated that private physicians

(excluding those in health maintenance organizations) had used only about 1.1 million doses of

pneumococcal vaccine from 1979 to 1983 (table

8). Even after allowance for a sampling error of

about 32 percent because of the small sample size

(63), the figure differs markedly from manufacturers’ sales, and there is no apparent explanation

for the great disparity. IMS America data on purchases by hospitals and drug stores add fewer than

1 million doses (table 9). However, this data base

has generally been considered more useful for

qualitative as opposed to quantitative information on physician practice (40).

The NDTI data indicate several interesting patterns of use. As one would expect, primary care

physicians (general or family practitioners, internists, and pediatricians) accounted for almost all

of the vaccine mentions (table 10). Similarly,

physicians age 50 to 64, who are most likely to

have elderly patients, accounted for over half of

the vaccine mentions (table 11), and patients 65

Table 8.—Physician Mentions of Pneumococcal

Vaccine in the National Drug and Therapeutic

Index (NDTI), 1979-83

Table 9.—IMS America Data on Pneumococcal

Vaccine Purchased by Hospitals and

Drug Stores, 1978-82 (thousands)

Hospitals Drug stores

Number of Number of

Year doses Dollars doses Dollars
41

Table 10.—Physician Mentions of Pneumococcal

Vaccine in the National Drug and Therapeutic

Index (NDTI) by Specialty, 1979-83

Specialty Percent

General or family practitioners. . . . . . . . . . . . . . . . . 54.3

Internists . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28.2

Osteopaths . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.3

Allergists . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.7

Pediatricians . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.0

General surgeons . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.7

Cardiologists . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.1

Gastroenterologists . . . . . . . . . . . . . . . . . . . . . . . . . . 0.3

Urologists . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.3

Ear, nose, and throat specialists . . . . . . . . . . . . . . . 0.2

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100.0a

aT~tal ~aY not add to 100 percent because of rounding

SOURCE IMS America, Ltd, Rockville, Md, unpublished data, February 1984

Table 11 .—Physician Mentions of Pneumococcal

Vaccine in the National Drug and Therapeutic

lndex (NDTl) by Physician Age, 1979-83

Age Percent

20-39 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14

40-49 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20

50-64 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52

> 65 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100

SOURCE IMSAmerica, Ltd, Rockville, Md, unpublished data, February 1984,

years or older accounted for 60 percent (table 12).

Almost 90 percent of the vaccine mentions were

associated with no specific diagnosis (table 13).

This result may reflect that healthy people were

receiving the vaccine or may simply bean artifact

of the survey procedure,

Data from a large prepaid group practice in California are consistent with the sales reported by

manufacturers. From 1979-83, the group used

about 42,000 doses for its members, who consisted

of about l10,000 people 65 years or older (70).

Data are not available on the characteristics of

the people who received the vaccine. If the members had the same rate of chronic conditions by

age as the general population, which may be a

high estimate, the group had vaccinated about 16

percent of its high-risk members or 13 percent if

all members over 65 years are also included. That

percentage would be higher to the extent that fewer high-risk people were represented in the membership,

It is difficult to identify a vaccine whose use

may be compared with that of pneumococcal vaccine. Influenza vaccine is intended for similar

Table 12.—Physician Mentions of Pneumococcal

Vaccine in the National Drug and Therapeutic

Index (NDTI) by Patient Age, 1979-83

Age Percent

0-2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2

3-4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

5-24 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7

25-44 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

45-64 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25

65-99 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100

SOURCE IMS America, Ltd , Rockville, Md., unpublished data, February 1984

Table 13.—Diagnoses Associated With Physician

Mentions of pneumococcal Vaccine in the National

Drug and Therapeutic Index (NDTI), 1979-83

Diagnoses Percent

pneumococcal immunization . . . . . . . . . . . . . . . . . .

Immunization mixed . . . . . . . . . . . . . . . . . . . . . . . . . .

Rhinitis allergic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Chronic obstructive pulmonary disease . . . . . . . . .

Surgery after spleen . . . . . . . . . . . . . . . . . . . . . . . . . .

Influenza inoculation . . . . . . . . . . . . . . . . . . . . . . . .

Allergic disorder . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Emphysema without bronchitis . . . . . . . . . . . . . . . .

Perennial rhinitis. . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Fibrosis of lung. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Disease of the mitral valve . . . . . . . . . . . . . . . . . . . .

Otitis media . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Bronchiectasis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Fibroid disease of lung . . . . . . . . . . . . . . . . . . . . . . .

Pneumonia unspecified . . . . . . . . . . . . . . . . . . . . . . .

Hay fever with asthma . . . . . . . . . . . . . . . . . . . . . . . .

Congestive heart failure . . . . . . . . . . . . . . . . . . . . . .

Sinusitis allergic . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Asthma allergic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Stenosis of aorta . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Other. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

64.7

24.2

1.1

0.9

0.8

0.6

0.5

0.5

0.5

0.5

0.5

0.5

0,4

0.4

0.4

0.4

0.2

0.2

0.2

0.1

L2 7

100.0a

aTotal may not add to 100 percent because of rounding

SOURCE IMS America, Ltd , Rockville, Md., unpublished data, February 1984

high-risk groups, primarily adults, but since it

should be given every year, coverage of the target

group (about 20 percent) is indicated by annual

use rather than cumulative use over several years.

Existing data on other vaccines pertain to those

recommended for universal childhood immunization, a situation quite different from the selective, primarily adult use of pneumococcal vaccine.

Of all the childhood vaccines, the case of mumps

vaccine is the most similar to pneumococcal. By

1973, about 35 percent of the preschool population (1 to 4 years) had received mumps vaccine,

which was first marketed in 1968 (21), The initial

statement by the ACIP was vague, and the medical community did not promote mumps vaccine
42

because it did not consider the disease severe (66).

Government funding for mumps vaccine began

in 1973 (32), but doses sold jumped 18 percent

after a multiple vaccine containing mumps, measles, and rubella was marketed in 1971 (21).

A striking feature of sales of pneumococcal vaccine is the spurt in 1981 followed by a sharp decline in 1982 (table 6). The manufacturers reported

no increase in returns of vaccine during 1982. That

NDTI data, which pertain to physician use rather

than sales, have the same pattern suggests that

the phenomenon applied to use of the vaccine,

although the changes in use may have been less

dramatic.

The manufacturers had undertaken public service announcements or advertising in the medical

and lay publications to promote the vaccine. They

reported no substantial change in expenditures between 1981 and 1982, but more may have been

channeled to lay publications and less to direct

promotion to physicians. The 1981 ACIP statements mentioned that pneumococcal and influenza vaccines could be administered at the same

time, but the use of pneumococcal vaccine had

already been much heavier in the fall, when influenza vaccine is given, than at other times of

the year (table 14). Medicare’s notice to beneficiaries of coverage did not appear until 1982.

The most likely explanation for the increase in

1981 was the start of Medicare coverage of pneumococcal vaccine. Although the level of promotional activities may not have changed, in 1981

Table 14.—Physician Mentions of Pneumococcal

Vaccine in the National Drug and Therapeutic

Index (NDTI) by Month, 1979-83 (percent)a

Month 1979 1980 1981 1982 1983

aT~t~l~ nlay not add to 100 percent because of rounding.

SOURCE IMS America, Ltd., Rockville, Md , unpublished data, February 1984

the material included as a prominent feature the

fact that Medicare would pay for the vaccine and

its administration (26). In general, studies have

found that the use of medical services is greater

when patients bear lower costs (79). The Rand

Health Insurance Study has found that this pattern applied to preventive services, which consist

mostly of childhood care and prenatal services

(57). However, studies specifically of immunizations have been inconsistent, with many confounding variables (79).

If Medicare coverage accounted for an increase

in sales and use during 1981, that effect was transitory and not sustained even into 1982. Part of

the swings may have been changes in inventories.

pneumococcal vaccine does not expire for 2 years.

Physicians and other providers may have ordered

heavily in 1981, anticipating much greater demand because of Medicare coverage. If substantial supplies remained at the end of the year, they

may have carried them over to 1982 and decreased

their 1982 orders.

It is also possible that the physicians who were

receptive to prevention and to pneumococcal vaccine administered it to their patients during the

initial years after the vaccine became available

(23). Since reimmunization is not advised, this

hypothesis would predict that use would soon decline, as it did in 1982.

None of these data applies specifically to use

by Medicare beneficiaries. Their use may have

ranged from 5.3 million to 6.6 million vaccinations based on 20- to 25-percent use rates respectively. (The 35-percent use rate does not apply

because it was derived by excluding people over

age 65 who did not have certain high-risk conditions. ) Assuming that people 65 years or older

have received 60 percent of the vaccinations

(NDTI data, table 12) also results in an estimate

of 6.6 million vaccinations. At a cost of $9.60 per

vaccination for 6.6 million, Medicare would have

spent about $175 million on vaccination cost

alone, and beneficiaries would have gained about

8,400 additional years of healthy life (see ch. 2).

With savings in the cost of treating pneumococcal pneumonia and survivors’ additional medical

costs over time, the net Program cost in 1983

dollars would range from $37 million to $69

million.
Appendix A

Acknowledgments
Appendix A

Acknowledgments

OTA staff have appreciated the advice and review of this technical memorandum by the following individuals:

Robert Austrian Evan Hadley

University of Pennsylvania National Institute on Aging

School of Medicine Bethesda, Md.

Philadelphia, Pa. Carolyn Hardegree

Bill Bailey Office of Biologics

Merck Sharpe & Dohme Food and Drug Administration

Washington, D.C. Bethesda, Md.

Marshall Becker James Hill

University of Michigan National Institute of Allergy and

Ann Arbor, Mich. Infectious Diseases

Bethesda, Md.

David Bentley

Monroe Community Hospital Maurice Hilleman

Rochester, N.Y. Merke Sharpe & Dohme

West Point, Pa.

Gary Bridi

Merck Sharpe & Dohme Alan Hinman

West Point, N.Y. Centers for Disease Control

Atlanta, Ga.

Claire Broome

Centers for Disease Control Joel Kavet

Atlanta, Ga. Office of the Assistant Secretary for Health

Bethesda, Md.

Frank Cano

Lederle Laboratories David L. Klein

Pearl River, N.J. National Institute of Allergy and

Infectious Diseases

James Chin Bethesda, Md.

State Department of Health Services

Berkeley, Calif. Jeffrey P. Koplan

Centers for Disease Control

Dack Dalrymple Atlanta, Ga.

American Cyanamid Co.

Washington, D.C. Sidney S. Lee

Michael Reese Hospital

Donald Eddins Chicago, Ill.

Centers for Disease Control

Atlanta, Ga. Maurice Mufson

Marshall University

David Fedson Huntington, W. Va.

University of Virginia

Charlottesville, Va. Gary R. Noble

Centers for Disease Control

Laurie S. Feinberg Atlanta, Ga.

Health Care Financing Administration

Washington, D.C. David L. Rabin

Georgetown University School of Medicine

David Fraser Washington, D.C.

Swarthmore College

Swarthmore, Pa.

45
46

Michael A. Riddiough Henry R. Shinefield

Syntex Corp., Inc. Kaiser-Permanente Medical Program

Springfield, Va. San Francisco, Calif.

John Robbins Michael Simberkoff

National Institutes of Health Veterans Administration Medical Center

Bethesda, Md.

Barry Robinson

American Association of Retired Persons

Washington, D.C.

Paul E. Ryser

IMS America, Ltd.

Rockville, Md.

Claudia Sanders

Washington State Hospital Association

New York, N.Y.

Paul Stessel

American Cyanamid

Wayne, N.J.

Gene H. Stollerman

Boston University

School of Medicine

Boston, Mass.

Milton Weinstein

co.

Seattle, Wash. Harvard School of Public Health

Stephen Schoenbaum Boston, Mass.

Harvard Community Health Plan Donald Young

Boston, Mass. Health Care Financing Administration

J. Sanford Schwartz Baltimore, Md.

American College of Physicians

Philadelphia, Pa.
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