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$1 Billion Awarded For Flu Vaccine

By David Brown
Washington Post Staff Writer
Friday, May 5, 2006

The federal government yesterday awarded $1 billion in contracts to five pharmaceutical companies to help them develop modern methods of producing influenza vaccine that would replace the current slow, laborious and unpredictable technique.

The awards mark a huge step forward in the Bush administration's $7.1 billion effort to plan for an influenza pandemic, which many experts believe is likely in the next decade.

"The capacity simply does not exist in the United States to produce vaccine of sufficient quantity to vaccinate everybody. But that's about to change," Michael O. Leavitt, secretary of health and human services, said at a signing ceremony.

Two local companies won contracts: MedImmune Inc., a Gaithersburg biotech firm, was awarded $169 million; and DynPort Vaccine Co. of Frederick received $41 million. The rest of the funding will be split by companies in Belgium, Switzerland and Britain.

The companies each agreed to build or expand a vaccine plant in this country. Each will seek to grow flu vaccine virus in cell cultures rather than in fertilized chicken eggs and apply for Food and Drug Administration approval for its vaccine. Each company is also investing large amounts of its own money -- some have done so already -- although few executives yesterday were willing to say how much.

In five years, if all goes as planned, the companies together should be able to make about 300 million doses of vaccine in six months -- enough to immunize every U.S. resident.

For MedImmune, the government's contract is the latest bit of good news for FluMist, a product that had a disastrous launch. Unlike flu vaccines that contain killed virus, MedImmune's product is a live, weakened strain of influenza. It is squirted into the nose and stimulates a more natural and broader immune response than the conventional flu shot.

MedImmune plans to use the award money in part to convert to cell-based vaccine production a factory in Frederick. It now makes a drug to treat a form of viral pneumonia seen in premature infants and people with immune disorders. That drug will be made in a new plant.

MedImmune now grows its vaccine virus in Liverpool, England, and finishes the product in Philadelphia. Its annual capacity is 90 million doses; the new plant should be able to make 150 million doses in six months, said David M. Mott, chief executive of MedImmune.

The huge U.S. investment does not buy the government a single dose of vaccine or ensure that future purchases will come at a favorable price. Instead, it is an effort to induce the pharmaceutical industry to direct time, manpower and money toward a goal it might not otherwise pursue.

The executives said after the signing ceremony that they plan no price or other concessions in exchange for the government largesse.

"The concession is that we are going to do this in the U.S. That is the big concession," said David M. Stout, pharmaceutical operations president of GlaxoSmithKline PLC, which was awarded $275 million. The company's headquarters is in Brentford, England, near London. The flu vaccine it sells in the United States is made in Dresden, Germany.

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