When it comes to getting flu shots for its citizens, the United States may someday soon look like a giant version of Canada, its national-health-plan neighbor to the north.
Like the United States, Canada has only two suppliers of influenza vaccine, fluctuating public enthusiasm for flu shots and a lot of wasted doses at the end of winter. What it doesn't have is any question about who pays for uncertainty or miscalculation. It is the government.
Ron Cygan of Bothell, Wash., gets a flu shot from Shirley Connelly in Victoria, B.C., on Saturday. About 200 Americans have gone to Victoria for shots due to a U.S. shortage.
(Chuck Stoody -- AP)
Canada's public works ministry orders about 90 percent of the influenza vaccine the country uses each year. The Ottawa office tells vaccine manufacturers how much to make, based on the share of the national total the firms have won by bidding on long-term contracts.
The companies make extra doses. This "on-spec" production is sold in the small, private market operating outside Canada's national health system, or overseas on the world market. But the vast bulk of vaccine is made without financial risk.
The United States appears headed toward such an arrangement.
Many experts believe this season's vaccine calamity -- half the nation's supply evaporated overnight on Oct. 5 -- is proof the government needs to be more involved in ensuring a stable supply of flu shots. Health and Human Services Secretary Tommy G. Thompson, the Bush administration's top health official, is one of them.
At a news conference last week, Thompson was asked whether he favors the federal government guaranteeing a market for a specified number of doses of flu vaccine each year. "Yes, I do," he said, without elaborating.
An assured market would mean vaccine makers would no longer face discarding and not being paid for 10 to 20 percent of their yearly production for the United States. That occurred in the 1990s when several companies quit in frustration and disgust, leaving Aventis Pasteur and Chiron Corp. the only makers of injectable vaccine for the United States.
A guaranteed market would not have prevented this season's scarcity of flu shots, which occurred when British regulators impounded 48 million Chiron doses because of bacterial contamination. What it might do, though, is lure other vaccine companies back into the U.S. market, making the supply less easily disrupted.
The flu shot is a combination of three vaccines, each to a different strain of influenza virus. It takes six months to produce, is sold for three months and cannot be used in the next flu season because the viral recipe changes annually.
The Canadian system is as fragile as the American in one sense, however. It is also dependent on only a pair of vaccine producers -- Aventis Pasteur and ID Biomedical. But with a total production of 9.7 million doses this year -- compared with 100 million anticipated for the United States -- Canada's significantly smaller population of 33 million would never face a problem of U.S. magnitude.
"Because of Canada's smaller total market, it would be relatively easier to find the needed quantities on the world market," said Aggie Adamczyk, a spokeswoman for the Public Health Agency of Canada.
ID Biomedical, which is headquartered in British Columbia but makes vaccine in Quebec, has a contract to fill 75 percent of Canada's order. This year, that is 7 million to 8 million doses. The company made an additional 500,000 for the private market. It is sold to doctor's offices, which can vaccinate people who fall outside the priority groups covered by the national health plan, or to companies that offer it to their employees.
ID Biomedical has an additional 1.2 million doses "that are still available," a spokeswoman, Michele Roy, said last week. In addition to Canada, the vaccine is licensed for use in Argentina, Mexico, the Philippines, Romania, China and Taiwan. Although the vaccine is not licensed for use in the United States, the Food and Drug Administration may allow it in as an "investigational drug," the agency's acting director, Lester M. Crawford, said last week.
ID Biomedical is building a new plant in Quebec City that will increase production capacity from 12 million doses to 50 million. The company hopes to have U.S. approval of its flu vaccine in the 2007-2008 flu season, Roy said.
Aventis has a contract to make 25 percent of the Canadian order, about 2 million doses. Those shots were made at a factory north of Paris, not at Aventis's Pennsylvania plant, where all the U.S. doses are made.
Although Canada's purchasing is centralized, key decisions on vaccine distribution and use reside with the provinces. For example, Ontario -- the largest province, with 12 million people -- offers free flu shots to everyone, while other provinces do so only for specific risk groups, such as people 65 and older, or children 6 to 23 months.
Ontario's innovative policy, which began in the 2000-2001 season, has been both successful and wasteful.
The year before it began, Ontario used 1.9 million doses to vaccinate 16 percent of its people. The next year, the province ordered 7.9 million doses and vaccinated 5.8 million people. The immunization rate jumped to 44 percent, but 25 percent of the vaccine was discarded.
More than 1 million doses went unused in each of the next two years. Last year, the excess was down to 500,000 doses. Coverage was still 44 percent.
"We obviously don't want to spend money on vaccine that won't be used," said Dan Strasbourg, of the Ontario Ministry of Health and Long-Term Care. But the province is willing to absorb the loss for a public health effort he termed "tremendously successful."
In contrast, vaccine use in target groups in the United States in 2002 was 66 percent for people age 65 and older, 34 percent for people ages 50 to 64, 38 percent for health care workers and 12 percent for pregnant women, according to the Centers for Disease Control and Prevention.
Vaccine makers for the U.S. market used to discard as much as 20 percent of their production, said Wayne Pisano, executive vice president for commercial operations at Aventis. There were many reasons.
With a large number of manufacturers, it was difficult for any single company to predict how much vaccine it would sell. The companies all offered contracts in which buyers could return unused vaccine, generally as much as 10 percent of an order, for a full refund. About 10 percent of customers double-ordered vaccine in non-binding agreements, paying for the first batch that arrived and canceling the other.
Those days are gone. The shrinking of the manufacturing base in the last decade has brought rationality -- but also fragility -- to the market.
Because there is less competition, there is less uncertainty about how much vaccine to make. Injectable vaccine can no longer be returned for refund, and customers who double-order go to the bottom of next year's list. Buyers of the new nasal spray "live" virus vaccine made by MedImmune -- 3 million doses will be available this season -- can get returnable vaccine if they pay a higher price per dose.
Today, vaccine makers produce little vaccine beyond what is ordered. Of Chiron's ill-fated 48 million doses, "everything that we expected to deliver was spoken for," spokeswoman Alison Marquiss said.
Consequently, it appears that a government-guaranteed market would add little stability to the flu vaccine market beyond what it has gained on its own in recent years. But that could change.
Healthy People 2010, the federal government's disease-prevention agenda for the decade, has a flu-vaccination target that would require about 150 million doses a year, roughly double current usage.
To meet that demand -- or an even bigger one if the government adopts a recommendation of "universal vaccination" against flu, as many experts expect -- the flu vaccine industry would have to expand. The market is "high-volume and low-price . . . and there is not a lot of idle capacity lying around," Pisano said. A big plant may cost $100 million to build and equip.
"I don't think anyone is going to do that without some assurances that we will be able to sell the product," he said.