Flu Meets American Capitalism

[CAcyclist]

http://www.commondreams.org/views04/1023-04.htm
Flu Meets American Capitalism

Katie O'Brien:
<snip>

Now the $64,000 question. Why is all our flu vaccine produced overseas? And why have U.S. manufacturers been slow to conduct the research on more a more up-to-date way to manufacture vaccines?

You hear it every night in ads during your dinner hour -- it is called Viagra.
If you were in business to make the biggest profits (the American way), would you invest in the one-time unpredictable flu shots or the unlimited market for Viagra?

<snip>

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My response to this article: The common misconception that the manufacture of flu vaccine is unprofitable is simply untrue!

My conclusion for the real reasons for this flu vaccine shortage are these:

1. Corporate mergers
2. Ineffective FDA oversight

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.(Addition of Flu vaccine to this program is pending legislation and expected to be approved)

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.
<snip>
"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.
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RE: Corporate mergers:

This particular manufacturing plant is a case in point. 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>
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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.
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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.'

[liberalhistorian]

1. What disgusts me the most is that most

physicians I've heard are on the side of the drug companies, whining and moaning and groaning that they shouldn't have to manufacture the flu vaccine because the profit margin is too low (AWWWWW!!!!!!!!), and then sawing the usual bullshit dead log of "fear of liability lawsuits" due to those horrible lawyers, who actually want to see companies held accountable for the damages they inflict on people, etc., etc.

They have no problem at all with these companies holding the health of Americans hostage in order to increase their corporate profits. They don't seem to give a shit about the millions of people who need the vaccine and who could really suffer if they don't get it. But, of course not. There's no goddamn money in it for them. What the fuck has happened to doctors anymore? The majority are repukes who only care about money and who don't give a damn about the people they're supposed to serve. The Hippocratic Oath has gone out the window.

[CAcyclist]

2. Hey, thanks for replying

It's my first post.

I really think it's the corporate CEOs that are to blame - sometimes the doctors are as clueless as everyone else as to what the causes are. They are often too busy to research stuff like this and instead, just swallow whatever the AMA and their insurance companies say. The AMA is dominated by corporate interests.

I sent this info to factcheck.org, too. They are the best place to correct this misconception and I hope they have time to get to it soon. I am going to send this to Henry Waxman, as soon as I track down his web address. He's on the committee to investigate the flu shortage.

[olebrowser]

3. answered your own question

As you said "why invest in a one-time unpredictable flu shot"

[CAcyclist]

4. Maybe I should have formatted this differently

Sorry that isn't clear that I excerpted her rhetorical question in the article.

But my point is , that's not true - the flu vaccine is extremely profitable to the companies that make it.