Flu Vaccine Makers Are Few Because of Economics – Not Lawsuits

[G_j]

Public Citizen Press Releases
Providing the latest information about Public Citizen activities
-------------------------------------------

Public Citizen released the following Oct. 27, 2004:

Flu Vaccine Makers Are Few Because of Economics – Not Lawsuits

Liability Has Nothing to Do With Flu Vaccine Shortage, Public Citizen
Finds

WASHINGTON, D.C. – Lawsuits are not the reason that so few drug
companies make the flu vaccine – few lawsuits have ever been filed
over the flu vaccine. Instead, the problem is based on a lack of profit
and the economic risks associated with making the vaccine, according to
a Public Citizen fact sheet released today.
To read the press release, visit
http://www.citizen.org/pressroom/release.cfm?ID=1817.

###

[aquart]

1. Our health should not be at the mercy of the "free market."

[CAcyclist]

8. That's not it either

it's the consolidation in the market due to non-use of antitrust laws
and lax FDA oversight since Bush got into office


The reasons put forward - liability, lack of profitability - by the Bush Administration and conventional wisdom are flatly untrue

My proof is below:
RE:The profitability factor:

A. Initial research and production of vaccine seed stock is provided by the public and given to the vaccine manufacturers. These companies do not have to pay for this initial cost.

B.They also do not pay for liability because the CDC has a vaccine injury compensation program from vaccines which the CDC recommends to be given.

C. Manufacturers thus actually have a highly profitable product with most of the risk removed.


Initial research and production of vaccine seed stock is provided by the public and given to the vaccine manufacturers. These companies do not have to pay for this initial cost.


http://www.fda.gov/ola/2002/childhoodvaccines0612.html

Every year FDA scientists help to provide to manufacturers new strains for the yearly influenza vaccine as well as biological standards for assessing the vaccine's potency. Ongoing FDA research on influenza is also designed to prepare for the possibility of another global influenza pandemic. These efforts by FDA reduce the need for duplicative efforts by manufacturers and shorten the time frames required for vaccine production every year.

They also do not pay for liability because the CDC has a vaccine injury compensation program from vaccines which the CDC recommends to be given.

http://www.cdc.gov/nip/ACIP/minutes.htm

Vaccine Injury Compensation Program. Dr. Evans reported the VICP’s status, now in its
fifteenth year of operation.

Manufacturers thus actually have a highly profitable product with most of the risk removed.

http://insidebayarea.com/businessnews/ci_2424311


Vaccine debacle clouds the future of Chiron
By Marni Leff Kottle, Bloomberg News

<snip>
               The company depends on vaccine revenue to help pay for developing new drugs,
said A.G. Edwards & Sons analyst Alexander Hittle.

"There's nothing Wall Street loves more than a good drug," said Hittle. "Investors were
counting on Chiron's vaccine unit to replenish their investment in their biopharmaceutical
business."



http://www.iht.com/articles/542541.html

. The suspension has cost Chiron not only three-quarters of the profit it expected this year, but some of its credibility with investors and customers.
.<snip>

Vaccines accounted for about $700 million of the company's $1.75 billion in revenue last year. Fluvirin, the flu vaccine, accounted for $219 million of the total.
With the big increase in production, analysts had expected more than $300 million in revenue from Fluvirin this year.


And this statement by Paul Drayson, the CEO of Powderject before it got taken over by Chiron:

http://www.science-enterprise.ox.ac.uk/html/PaulDrayson.asp
Moreover, unlike firms in the first category, since the second group marketed their own pharmaceutical products they could make 50% to 80% mark-ups.”  

“Naturally, we decided to join the second group and focus both our business and the application of our technology on vaccines.
.######################################################
RE: Corporate mergers: This particular manufacturing plant is a case in point. Prior to
You also need to know how this lab has changed names.

Sometime previous to 1999, the lab was run by GlaxoWellcome and by 1999, it was owned by Medeva.
Medeva was bought by Celltech which sold the vaccine business to Powderject and Chiron bought Powderject in June 2003.

In 2000, there were 4 flu manufacturers that the FDA was contracting with. (See FDA website)
By 2004, there were 2 and these were due to mergers.

There was no evidence that I could find of government oversight to look into these mergers as anticompetitive and harmful to the public as they turned out to be .


http://stg.syndnet.thomsonfn.com/InvestorRelations/PubNewsStory.aspx?partner=5425&storyId=87791
<snip>
The combination of Chiron and PowderJect will build on the two companies' existing positions as the fifth and sixth largest vaccines businesses in the world, respectively, and will represent a major advance in the vaccines business strategy of both companies. Chiron and PowderJect had combined total annual revenue of over $1.5 billion for the year to March 31, 2003.

The combined companies will be the world's second-largest provider of flu vaccines. PowderJect's product, Fluvirin(R), is a leading flu vaccine in the United Kingdom and is one of only two available injectable flu vaccines in the United States. PowderJect's strong position in the United States is complemented by Chiron's prominent position in Europe. With its three brands -- Agrippal(R) S1, Begrivac(TM) and Fluad(R) -- Chiron is currently the second-largest producer of flu vaccines outside of the United States. As governmental and supranational programs and policy increase public awareness of flu and advocate increased immunization, the combined companies' flu vaccines sales should continue to grow.<snip>
###########################################################
RE:Lack of FDA oversight:

In 1999,Medeva suffered a British recall of its polio vaccines due to possible exposure to BSE(mad cow disease) and subsequently, the FDA inspected the plant and issued the following Warning Letter:


http://www.accessdata.fda.gov/scripts/wlcfm/company_archive.cfm?FL=M 10/21/99 Medeva

As an aside, Glaxo also got another Warning Letter for a different plant of theirs in Italy for similar problems:

http://www.fda.gov/foi/warning_letters/m4208n.pdf
Glaxo Wellcome, S.p.A.


I contacted the FDA and was told that they inspect the plants every six months. However, the inspections haven't resulted in improvement. Instead, the corporations want to have the FDA loosen its requirements. They can do this because they know there is really nowhere else for the FDA to go to get vaccines. In addition, back in 2000, evidently, they didn't reinspect six months later. I am not at all convinced the FDA spokesperson told me the truth. I have a FOIA request for the inspection records.

http://observer.guardian.co.uk/uk_news/story/0,6903,386177,00.html

Martin Bright and Antony Barnett
Sunday October 22, 2000

The FDA confirmed that it had not reinspected the plant since its October (1999) warning letter, but was satisfied that problems were now being dealt with. It has authorised the import of the flu vaccine this year.

A spokeswoman said: 'The FDA would not allow this vaccine to enter this country if it was not safe.'

[Tennessee Gal]

2. Thank you, thank you, thank you!

Been looking for something like that to send to a freeper!

[zbird]

4. Snopes has a page too.

http://www.snopes.com/politics/business/flushot.asp

I got some bushbot e-mail about the flu vaccine shortage being due to John Edwards' multimillion dollar lawsuit against a vaccine manufacturer, found this to debunk it.

[jwirr]

3. I think drugs that

do not make money for the manufacturer are called "Orphan Drugs". There are many of them. At one time years ago they were the subject of congressional investigations but I don't remember what the outcome was. I seems to me that if the drug companies do not want to make them then maybe we could set up a government program that would provide American jobs doing it. Two birds with one solution.

[mbperrin]

7. Actually, we have a program set up by the government to research

drugs - virtually 100% of all basic research done on drugs is done and paid for by the government.(Such as the HIV root of AIDS). The industry takes this vital basic research and tweaks it into marketable drugs. They are then free to deduct all of that from taxes,which pushes the costs back to us. We (the taxpayer-suckers) pay for all of it and get a tiny royalty back that never pays back the costs.

This is why the drug makers OWE it to us to make less-profitable drugs. (Or maybe they'd like to pay for all their own research in the future.) (Hey, Hal, how's that licorice-flavored aspirin comin'?)

[G_j]

9. that is true, the tax payers pay for much

of the research.

[eridani]

5. Speaking of 'market' bullshit--

--the three most important medical discoveries of the 20th century were insulin, penicillin, and the Salk polio vaccine. Their discoverers didn't make a dime from their inventions. So much for the notion that people motivated for scientific discovery are necessarily also motivated to put up access barriers to their discoveries and charge the highest possible tolls. Most are perfectly happy to get research funding to go on to more discoveries.

[Mandate My Ass]

6. Why is it that ultra-expensive corporate bailouts

and tax cuts to the rich, which are very expensive and benfit few, are touted as good for America? At the same time, something as relatively inexpensive as a flu shot, that will raise overall productivity and lower unnecessary loss of life, we are led to believe, is of no concern to our government and should be trusted to outsourcsing by American corporations to overseas manufacturers. This process creates a situaion which endangers Americans while protecting the profit-making capacity of American pharmaceutical companies.