CDC currently recommends routine immunizations against 11 childhood diseases: diphtheria, tetanus, pertussis (whooping cough), haemophilus influenzae type b (most commonly meningitis), hepatitis B, measles, mumps, rubella (German measles), invasive pneumococcal disease, polio, and varicella (chicken pox). Some vaccines protect against multiple diseases. By combining antigens (the component of a vaccine that triggers an immune response), a single injection of a combination vaccine can protect against multiple diseases. Examples include the MMR vaccine (for measles, mumps, and rubella) and the DTaP vaccine (for diphtheria, tetanus, and pertussis). As a result of these combinations, eight vaccines are normally used to provide protection against the 11 childhood diseases. To build and maintain sufficient immunity, multiple doses of each of these vaccines are usually needed through infancy and early childhood. CDC’s suggested vaccine timetable calls for children to receive up to 23 doses of these vaccines through the first 6 years of life. An additional tetanus- diphtheria booster is recommended during adolescence. When very large shares of the general population are immunized, vaccines are successful at preventing major outbreaks of disease. Vaccines also offer some degree of protection to individuals not immunized, because a high immunization rate in a population gives a disease less opportunity to take hold and spread—a concept known as “herd immunity.” Development of vaccines and establishment of large-scale immunization programs have virtually eliminated some diseases and drastically reduced the impact of others. Finally, with the ease of international travel, wide-scale vaccination programs help protect against infected travelers transmitting diseases, such as measles, from foreign countries where the diseases are still common. Making vaccines is a complicated and time-consuming process. In contrast to drug manufacturing, vaccine manufacturing entails the use of biological organisms, including viruses and bacteria, which requires adherence to strict and complex manufacturing controls to ensure that they grow and react during processing as expected. Under current technology, vaccines typically require long production times. Manufacturers report that a typical production schedule, including growing the antigen, purifying, testing, packaging, and performing final quality checks, can exceed a full year for some vaccines. Virtually all routine childhood vaccines are made by commercial manufacturers. Reflecting the challenges of vaccine production, the vaccine-manufacturing base in the United States has been marked by substantial consolidation over the past three decades. According to HHS, there were 26 manufacturers licensed to distribute vaccines in 1967. Due in part to acquisitions and mergers, at present there are 12 manufacturing entities that hold U.S. licenses, four of which produce almost all of the routine childhood vaccines on the U.S. market. Two of these companies— Merck & Company and Wyeth—are headquartered in the United States, and two—Aventis Pasteur and GlaxoSmithKline—are headquartered in Europe. The federal government has a role both as a purchaser of vaccines and as a regulator of the industry. The federal government is the largest purchaser of vaccines in the country. CDC negotiates large purchase contracts with manufacturers and makes the vaccines available to public immunization programs under the Vaccines for Children (VFC) program. Under VFC, vaccines are provided for certain children—Native Americans/Alaska Natives, those eligible for Medicaid, those who are uninsured, and, when vaccinated in federally qualified health centers or rural health clinics, those who are not insured with respect to the vaccine. Participating public and private health care providers obtain vaccines through VFC at no charge. Under a second program, known as the section 317 grant program because it was established under section 317 of the Public Health Service Act, project grants are provided for preventive health services including immunization programs. Currently, participants include 64 state, local, and territorial immunization programs. These grants are intended to help states maintain immunization infrastructures or purchase vaccines not covered by private insurance or not available through VFC. In addition, state immunization programs can use their own funds to buy vaccines through CDC contracts. In total, about 50 percent of all the childhood vaccines administered in the United States each year are obtained by public immunization programs through CDC contracts. The cost of the full schedule of recommended vaccines under the CDC contracts has increased substantially in recent years, with a large share attributable to new higher-cost vaccines that have been added to the childhood immunization schedule. For example, as of May 2002, the CDC contract price for vaccine doses needed to complete the immunization schedule was about $413. Over half of this amount is attributable to the most recent ACIP-recommended vaccines—varicella (recommended in 1996) and pneumococcal conjugate vaccine (recommended in 2001). In addition to purchasing vaccines, the federal government is responsible for ensuring the safety of the nation’s vaccine supply. FDA, an agency within HHS, regulates the production of vaccines. It licenses all vaccines sold in the United States, requiring clinical trials to demonstrate that a vaccine is safe and effective, and thoroughly reviews the manufacturing process to ensure that vaccines are made consistently in compliance with current good manufacturing practices. Once vaccines are licensed, FDA also conducts periodic inspections of production facilities to ensure that manufacturers maintain compliance with FDA manufacturing requirements. Other HHS agencies and programs also provide support for national, state, and local immunization efforts nationwide. The National Vaccine Program Office (NVPO), within the Assistant Secretary for Health’s office, is responsible for coordinating the efforts of all federal agencies, states, providers, industry, and other stakeholders involved in immunization activities. CDC’s National Immunization Program, in addition to purchasing vaccines for VFC, conducts a number of activities to strengthen the nation’s immunization infrastructure, such as monitoring the delivery of vaccines to state immunization programs and providing technical assistance to help health departments implement immunization programs. In times of vaccine shortages, several federal agencies and advisory committees play key roles (see table 1). States also have an important role in setting immunization policy and establishing an immunization infrastructure. Policies for immunization requirements, including minimum school and day care entry requirements, are made almost exclusively at the state level, although cities occasionally impose additional requirements. For example, the state of New York requires students to have three doses of DTaP upon entering day care or school, while New York City requires an additional fourth dose. Each state also establishes an immunization infrastructure to monitor infectious disease outbreaks, administer federal immunization grants, manage centralized supplies of vaccine, direct professional and public education efforts, and otherwise promote immunization policies. The recent incidents of vaccine shortages began in fall 2000 when supplies of the tetanus and diphtheria booster (Td) fell short. Over the course of a year, supplies of other vaccines also declined and by fall 2001, CDC reported shortages of five vaccines that, because some are combination vaccines, protect against eight childhood diseases (see table 2). In July 2002, updated CDC data indicated supplies were returning to normal for most vaccines. The shortage of pneumococcal conjugate vaccine (PCV), however, was expected to continue through at least late 2002. Recent vaccine shortages have necessitated temporary modifications to the recommended immunization schedule and have caused states to scale back immunization requirements. Federal health officials and experts responsible for the development of immunization guidelines have temporarily scaled back their recommendations regarding the timing of immunizations for vaccines in short supply. At the state level, immunization programs are rationing the amount of vaccines distributed to providers. Many states have also suspended existing immunization requirements, allowing children who have received fewer than the previously recommended number of vaccinations to attend day care or school. Data to capture the full impact of the shortages on vaccination coverage are not yet available; however, public health officials are concerned that shortages raise the potential for disease outbreaks. In response to recent vaccine shortages, ACIP and CDC issued temporary recommendations to defer immunizations for some groups of children, so that the available supply can be directed to those considered at higher risk for contracting vaccine-preventable diseases. Five vaccines are included: Td, DTaP, PCV, MMR, and varicella (see table 3). The revisions give guidance to providers that are facing shortages and are intended to help ensure vaccine availability for priority needs. For example, the shortage of PCV, which began in 2001, prompted ACIP to recommend that the full series of doses be given only to high-risk children, such as those with chronic diseases, and that fewer doses be given to healthy children. In the case of varicella immunizations, where only one dose is generally needed to confer long-term immunity, ACIP has recommended that doses be delayed. The shortages that prompted federal officials to scale back their immunization recommendations have also affected programs at the state level. In our survey of 64 state immunization programs, administered through the Association for State and Territorial Health Officials (ASTHO), all 52 responding programs indicated that they had experienced shortages of two or more vaccines and had taken some form of action to deal with the shortages (see table 4). Officials from 31 of these 52 programs indicated that they had experienced shortages of five or more of the vaccines routinely recommended for children. The most frequently cited vaccines in short supply—DTaP, Td, varicella, MMR, and PCV—protect against eight diseases: diphtheria, tetanus, pertussis, varicella, measles, mumps, rubella, and pneumococcal disease. Forty-nine state immunization programs reported taking steps to ration the vaccines they distribute to providers due to the shortages. Under normal supply conditions, states maintain vaccine inventories that allow providers to keep at least a 1-month supply on hand. With a limited supply of vaccine available, states reported not receiving enough vaccine to maintain ideal inventories, and filling only partial orders to ship to providers.