[House Hearing, 109 Congress]
[From the U.S. Government Printing Office]





 THE PERPLEXING SHIFT FROM SHORTAGE TO SURPLUS: MANAGING THIS SEASON'S 
              FLU SHOT SUPPLY AND PREPARING FOR THE FUTURE

=======================================================================

                                HEARING

                               before the

                              COMMITTEE ON
                           GOVERNMENT REFORM

                        HOUSE OF REPRESENTATIVES

                       ONE HUNDRED NINTH CONGRESS

                             FIRST SESSION

                               __________

                           FEBRUARY 10, 2005

                               __________

                            Serial No. 109-1

                               __________

       Printed for the use of the Committee on Government Reform


  Available via the World Wide Web: http://www.gpo.gov/congress/house
                      http://www.house.gov/reform



                                 ______

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                     COMMITTEE ON GOVERNMENT REFORM

                     TOM DAVIS, Virginia, Chairman
CHRISTOPHER SHAYS, Connecticut       HENRY A. WAXMAN, California
DAN BURTON, Indiana                  TOM LANTOS, California
ILEANA ROS-LEHTINEN, Florida         MAJOR R. OWENS, New York
JOHN M. McHUGH, New York             EDOLPHUS TOWNS, New York
JOHN L. MICA, Florida                PAUL E. KANJORSKI, Pennsylvania
GIL GUTKNECHT, Minnesota             CAROLYN B. MALONEY, New York
MARK E. SOUDER, Indiana              ELIJAH E. CUMMINGS, Maryland
STEVEN C. LaTOURETTE, Ohio           DENNIS J. KUCINICH, Ohio
TODD RUSSELL PLATTS, Pennsylvania    DANNY K. DAVIS, Illinois
CHRIS CANNON, Utah                   WM. LACY CLAY, Missouri
JOHN J. DUNCAN, Jr., Tennessee       DIANE E. WATSON, California
CANDICE S. MILLER, Michigan          STEPHEN F. LYNCH, Massachusetts
MICHAEL R. TURNER, Ohio              CHRIS VAN HOLLEN, Maryland
DARRELL E. ISSA, California          LINDA T. SANCHEZ, California
GINNY BROWN-WAITE, Florida           C.A. DUTCH RUPPERSBERGER, Maryland
JON C. PORTER, Nevada                BRIAN HIGGINS, New York
KENNY MARCHANT, Texas                ELEANOR HOLMES NORTON, District of 
LYNN A. WESTMORELAND, Georgia            Columbia
PATRICK T. McHENRY, North Carolina               ------
CHARLES W. DENT, Pennsylvania        BERNARD SANDERS, Vermont 
VIRGINIA FOXX, North Carolina            (Independent)
------ ------

                    Melissa Wojciak, Staff Director
       David Marin, Deputy Staff Director/Communications Director
                      Rob Borden, Parliamentarian
                       Teresa Austin, Chief Clerk
          Phil Barnett, Minority Chief of Staff/Chief Counsel


                            C O N T E N T S

                              ----------                              
                                                                   Page
Hearing held on February 10, 2005................................     1
Statement of:
    Boozman, Dr. Fay W., president-elect, Association for State 
      and Territorial Health Officials; Dr. Robert B. Stroube, 
      commissioner, Virginia Department of Health; Dr. Walter A. 
      Orenstein, associate director, Emory Vaccine Center; and 
      Dr. Alan Wasserman, chairman, Department of Medicine, 
      George Washington University Medical Center................    88
        Boozman, Dr. Fay W.......................................    88
        Orenstein, Dr. Walter A..................................   107
    Stroube, Dr. Robert B........................................    97
        Wasserman, Dr. Alan......................................   116
    Gerberding, Dr. Julie L., Director, Centers for Disease 
      Control and Prevention; and Dr. Jesse L. Goodman, Director, 
      Center for Biologics Evaluation and Research, Food and Drug 
      Administration.............................................    18
        Gerberding, Dr. Julie L..................................    18
        Goodman, Dr. Jesse L.....................................    52
Letters, statements, etc., submitted for the record by:
    Boozman, Dr. Fay W., president-elect, Association for State 
      and Territorial Health Officials, prepared statement of....    90
    Davis, Hon. Tom, a Representative in Congress from the State 
      of Virginia, prepared statement of.........................     4
    Gerberding, Dr. Julie L., Director, Centers for Disease 
      Control and Prevention, prepared statement of..............    22
    Goodman, Dr. Jesse L., Director, Center for Biologics 
      Evaluation and Research, Food and Drug Administration, 
      prepared statement of......................................    56
    Miller, Hon. Candice S., a Representative in Congress from 
      the State of Michigan, prepared statement of...............   128
    Orenstein, Dr. Walter A., associate director, Emory Vaccine 
      Center, prepared statement of..............................   109
    Stroube, Dr. Robert B., commissioner, Virginia Department of 
      Health, prepared statement of..............................   100
    Wasserman, Dr. Alan, chairman, Department of Medicine, George 
      Washington University Medical Center, prepared statement of   118
    Waxman, Hon. Henry A., a Representative in Congress from the 
      State of California, prepared statement of.................     8

 
 THE PERPLEXING SHIFT FROM SHORTAGE TO SURPLUS: MANAGING THIS SEASON'S 
              FLU SHOT SUPPLY AND PREPARING FOR THE FUTURE

                              ----------                              


                      THURSDAY, FEBRUARY 10, 2005

                          House of Representatives,
                            Committee on Government Reform,
                                                    Washington, DC.
    The committee met, pursuant to notice, at 10 a.m., in room 
2154, Rayburn House Office Building, Hon. Tom Davis (chairman 
of the committee) presiding.
    Present: Representatives Tom Davis, Shays, Mica, Gutknecht, 
Duncan, Marchant, Dent, Waxman, Maloney, Cummings, Clay, 
Watson, VanHollen, and Norton.
    Also present: Representative Boozman.
    Staff present: Melissa Wojciak, staff director; David 
Marin, deputy staff director/communications director; Jennifer 
Safavian, chief counsel for oversight and investigations; Anne 
Marie Turner, counsel; Rob White, press secretary; Drew 
Crockett, deputy director of communications; Susie Schulte, 
professional staff member; Teresa Austin, chief clerk; Sarah 
D'Orsie, deputy clerk; Corinne Zaccagnini, chief information 
officer; Kristin Amerling, minority deputy chief counsel; Karen 
Lightfoot, minority communications director/senior policy 
advisor; Anna Laitin, minority communications and policy 
assistant; Sarah Despres, minority counsel; Josh Sharfstein, 
minority professional staff member; Jean Gosa, minority 
assistant clerk; and Cecelia Morton, minority office manager.
    Chairman Tom Davis. Good morning. A quorum being present, 
the Committee on Government Reform will come to order.
    I want to welcome everybody to today's oversight hearing 
regarding this year's U.S. influenza vaccine supply.
    This hearing will consider how public perceptions and needs 
will be managed and addressed for the remainder of this flu 
season and discuss what actions are being taken to begin 
planning for next year's flu season.
    As many of you know, this flu season has been an unusual 
and difficult one. As a result of last fall's vaccine shortage, 
millions of healthy people and thousands in the high-risk 
population were unable to get vaccinated in a timely manner. 
Phones to doctors' offices, clinics, and hospitals rang off the 
hook with questions of where to seek flu vaccine, and hundreds 
of clinics were either forced to turn away or cancel 
altogether.
    Public health authorities responded immediately, 
demonstrating coordination and cooperation between Federal, 
State, and local public health officials and private providers. 
Officials scrambled to identify and prioritize groups for 
vaccination and redistribute vaccine to areas where none 
existed. They were also able to procure additional vaccine from 
foreign sources to help compensate for the loss of Chiron's 
vaccine. The two remaining Food and Drug Administration 
licensed flu vaccine manufacturers increased production 
capabilities to maximize the number of doses produced for the 
season.
    Recently the Nation's flu vaccine shortage turned into a 
surplus, with approximately 4.4 million doses remaining to be 
administered. The current surplus has led to confusion among 
Americans, with immunization recommendations varying from State 
to State and uncertainties of where ample supplies of vaccine 
exist.
    As the peak of the flu season approaches, it appears demand 
for the flu vaccine has all but disappeared and the public has 
lost motivation to get vaccinated. Only a few months ago our 
senior citizens were waiting for hours in long lines to get 
vaccinated, and now there are no lines at all. We can't afford 
for Americans to underestimate the seriousness of the flu or 
take the importance of vaccination against the flu lightly. An 
unconcerned public will only provide to make future flu seasons 
more difficult. Vaccines are life-saving devices, and 
administering them is an easy way to prevent contracting and 
spreading a disease.
    In previous committee hearings we had discussed proposed 
solutions to fixing the supply side of the equation. We have 
considered whether new mechanisms and incentives are necessary 
to guarantee that an adequate number of safe and effective flu 
vaccines are produced and delivered annually. Today we also 
need to consider the demand side of the equation. Without a 
steady demand from a public that is confident the flu vaccine 
will be available to them each year, precious vaccine will be 
thrown out at the end of each flu season.
    Questions continue to mount, and hopefully some will be 
answered. How did we go from a shortage of vaccine to a surplus 
in just a matter of months? What happened to demand for 
vaccine? Are new public awareness campaigns or programs needed 
to increase and stabilize demands for the flu vaccine? What are 
we doing now to minimize the amount of vaccines thrown away at 
the end of this flu season? As we approach next year's flu 
season, will the message on who should be vaccinated change 
again?
    We also need to consider if new mechanisms and incentives 
are necessary to guarantee that an adequate number of safe and 
effective flu vaccines are produced and delivered annually.
    I look forward to our witnesses' testimony today and a 
constructive dialog on this matter.
    I said this before and reiterate today that we all share 
the same goal at the end of the day: a public health system 
prepared to deal with the annual influenza season. Let us not 
let the efforts to respond to this season's flu shot shortage 
be in vain. Everyone should continue to seek immunization, as 
it is not too late and the flu season has yet to peak.
    As you will hear our witnesses testify, there are still at 
least two more months of the flu season. As a result I am 
pleased to announce that today in Rayburn 2247 from 1 to 3 
p.m., the George Washington Medical Faculty Associations will 
be sponsoring a flu shot clinic. This clinic is open to anyone 
and the shot is free of charge. I would encourage those who 
chose to forego receiving the flu shot because of the shortage 
to take advantage of this important opportunity.
    The committee thanks the George Washington Medical Faculty 
Associates for offering to sponsor the clinic and for its 
continuing motivation to protect the public by encouraging flu 
vaccinations.
    We have an excellent roster of witnesses today and I want 
to thank all of them for appearing before the committee. I look 
forward to their testimony.
    [The prepared statement of Hon. Tom Davis follows:]

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    [GRAPHIC] [TIFF OMITTED] T9512.002
    
    Chairman Tom Davis. I would now like to yield to Mr. Waxman 
for an opening statement.
    Mr. Waxman. Thank you very much, Mr. Chairman. I want to 
thank you, Chairman Davis, for your continued interest in the 
flu vaccine and the need to assure a stable vaccine supply for 
the United States. Because of your leadership, our oversight on 
flu has been more sustained than that of any other committee of 
Congress.
    When we held our last hearing in November, it was a time of 
crisis. There was not enough vaccine to protect the most 
vulnerable Americans. There were lines of panicked citizens in 
grocery stores and pharmacies, and local health officials did 
not have a clear understanding of who had vaccine in their 
communities.
    During that hearing we heard from administration officials 
about emergency plans to cope with the shortage. The 
administration also expressed a commitment to taking steps to 
make sure our public health system is better prepared in the 
future.
    Today we are meeting at a time when there is no crisis. 
While there is still not enough vaccine to immunize the entire 
high-risk population, there appears to be enough to meet 
demand. Furthermore, at least for the moment it seems that this 
flu season has not been particularly severe.
    This moment provides an important opportunity to make plans 
to avoid future shortages. The challenges are no secret. We are 
forced to rely on too few companies to produce vaccines, 
leaving us vulnerable to the kind of shortage we experienced 
this year with the flu vaccine. We have not been able to 
maintain adequate stockpiles of important pediatric vaccines. 
And, finally, there are major gaps in immunization coverage 
because of inadequate Federal support of State and local 
immunization efforts.
    It is a mystery what happened to this administration's 
resolve. Earlier this week the President presented his fiscal 
year 2006 budget to Congress. This budget cuts the Center for 
Disease Control's budget by over $500 million and slashes 
funding for public health preparedness at the State and local 
level by almost $130 million. The budget eliminates the 
preventive services block grant, which has been used to support 
immunization activities. And while the budget provides for some 
increase in funding for State and local efforts on flu 
immunization, it provides no new funding for States that cannot 
now provide other lifesaving pediatric vaccines. The budget 
also fails to propose any solution to the problem of 
maintaining adequate stockpiles.
    This budget ensures for another year that there will be 
children who will go without access to critical vaccinations 
such as a lifesaving vaccine against the most common cause of 
childhood meningitis.
    In place of vital public health programs, the President 
wants to boost funding for so-called ``abstinence only'' 
education programs by 40 percent. Many of these programs teach 
erroneous and false information to thousands of teenagers, 
including that tears and sweat can transmit HIV infection. 
These programs also teach gender stereotypes as scientific 
fact: for example, that boys need respect and value 
accomplishments while girls need financial support and value 
relationships. Well, public health threats are frightening and 
real. We need to confront them with the best possible science 
and policy. We also cannot afford to have anything less than 
strong oversight over vaccine manufacturing by the Food and 
Drug Administration.
    Today's ``USA Today'' contains a detailed analysis of what 
went wrong at the flu vaccine plant at the center of this 
year's shortage. Experts who reviewed documents released 
publicly by this committee found a history of serious problems 
with the vaccine, including contamination, improper filtering, 
and potency failures. ``USA Today'' also reported that the 
facility had a history of failing to investigate its errors 
appropriately and then failing to tell FDA about the problems 
promptly. Yet, despite this record and despite the fact that 
our country was depending on the facility for half of our flu 
vaccine, FDA's oversight lapsed.
    In June 2003, FDA rejected the initial recommendations of 
its own inspectors to pursue official enforcement action 
against the facility. ``USA Today'' quotes a former senior 
executive at GlaxoSmithKline, ``If you look at what is in FDA's 
own documents, it is stunning they didn't get a warning letter 
or something worse'' after the 2003 inspection. Instead, the 
company received a letter stating FDA would not return to the 
plant for full inspection for 2 years. ``USA Today'' concluded 
that problems persisted from 2003 to this year when British 
regulators shut the facility and triggered the shortage.
    This year's flu vaccine shortage is not just a wakeup call 
for those of us concerned about vaccine supply; it is a wakeup 
call for an agency and for an administration that appears to 
give companies the benefit of the doubt at every turn. The next 
FDA commissioner must change this approach and empower expert 
and dedicated FDA scientists and inspectors to do their jobs 
well.
    I look forward to the hearing today. I plan to use the 
information presented at this hearing to design legislation to 
fix the gaps in our vaccine system before the next crisis hits.
    I look forward to working with you, Mr. Chairman, and our 
colleagues, and hearings such as this serve such a valuable 
role. I want to thank the witnesses for coming in. I look 
forward to their testimony.
    Chairman Tom Davis. Thank you.
    [The prepared statement of Hon. Henry A. Waxman follows:]

    [GRAPHIC] [TIFF OMITTED] T9512.003
    
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    [GRAPHIC] [TIFF OMITTED] T9512.008
    
    Chairman Tom Davis. Any other Members wish to make opening 
statements? Yes, Mr. Cummings.
    Mr. Cummings. Thank you very much, Mr. Chairman. I want to 
thank you, too, for holding this critically important hearing 
to discuss the current status of our Nation's influenza supply.
    As we are all aware, in October 2004 Chiron Corp., one of 
the three flu vaccine manufacturers licensed by the Food and 
Drug Administration, announced that the company would be unable 
to supply the United States with the flu vaccine we anticipated 
for the 2004-2005 flu season. Chiron was expected to provide us 
with some 46 to 48 million doses of flu vaccine, representing 
approximately 50 percent of the nationwide supply. One 
facility's failure to meet product sterility standards in 
Liverpool, England, did a great deal to expose the fragility of 
our flu vaccine system.
    As one might expect, such a shortage in flu vaccines and 
the resulting long lines and lotteries that followed in some 
areas garnered much-deserved attention. Inquiries into who knew 
what and when, what was done to prevent and mitigate the flu 
vaccine shortage, and who should be held accountable have been 
thoroughly debated within this very committee. In fact, I 
personally asked many of these questions, myself.
    While we may continue to disagree about the answers to 
those central questions, we must agree to look forward in the 
best interest of the Nation and achieve our ultimate objective 
of ensuring that the American people have ready access to a flu 
vaccine that is safe, affordable, and effective. To that end, 
Mr. Chairman, every year 36,000 people die and over 200,000 
more are hospitalized from complications arising from the flu, 
so let us never forget the importance of getting it right this 
time around for the upcoming flu season.
    Looking forward, we need to ensure that we have a diversity 
of suppliers that can meet our flu vaccine needs so that we are 
not overly reliant on any one of them. We need to explore what 
the Federal Government can do to provide meaningful incentives 
to encourage and retain the production of flu vaccines. Some 
have suggested tax credits and patent extensions for companies 
that manufacture vaccines, and we should probably explore those 
options.
    In the upcoming flu season, we must also address any 
uncertainty that may exist in the public about the availability 
of flu vaccines and any confusion about who should be 
vaccinated. I was troubled to read in a recent survey conducted 
by the Harvard School of Public Health entitled, ``Experiences 
with Obtaining Influenza Vaccination Among Persons in Priority 
Groups During a Vaccine Shortage,'' that over 50 percent of 
high-risk adults believed that they would not successfully 
receive a flu vaccination and therefore never tried to get one.
    The fact that we are experiencing flu surplus today is not 
necessarily good news. We must ask how many vulnerable seniors 
and other high-risk individuals attempted to get vaccinated but 
were unable to do so due to demanding waits and distribution 
problems.
    We should also ask how many Americans are still not 
vaccinated that need to be. While I am somewhat pleased that we 
can report a flu vaccine surplus today, it seems too 
bittersweet to celebrate in light of the fact that so many 
Americans needlessly suffered due to poor planning for the flu 
season.
    We must also be mindful that the Federal Government cannot 
assume today's vaccine surplus safeguards the Nation from 
another potentially devastating shortage. Our Nation must be 
prepared to safeguard our citizens by providing them with 
either the proper treatment for disease or a means to prevent 
infection in the event of an outbreak.
    If the American people are to expect excellence of our 
public health preparedness, then we must provide the proper 
means by which this can be accomplished. With that said, I was 
troubled to see that the administration's budget for fiscal 
year 2006 proposes cuts in funding to the Centers of Disease 
Control and Prevention and the Health Resources and Services 
Administration for State and local public health preparedness.
    It should also be noted that, while the budget would 
positively increase funding for pandemic influenza programs, it 
also proposes an overall cut of approximately 7 percent or $530 
million to the CDC.
    Our citizens depend on us to ensure that adequate vaccines 
or other medicines are available to protect them.
    I look forward to hearing from our witnesses.
    Once more, thank you, Mr. Chairman, for holding this 
hearing. I yield back the balance of my time.
    Chairman Tom Davis. Thank you very much.
    Do any other Members wish to--Mr. Mica.
    Mr. Mica. Thank you, Mr. Chairman. And thank you for 
continuing this series of hearings that we began when there was 
a so-called ``shortage,'' and now we are facing a surplus. I 
sometimes wonder what the public thinks when they hear all 
this. First they are told not to get vaccinations. First they 
are told that the supply is limited. We have women, children, 
people at health risk, elderly who don't know which way to go. 
And now we are told there is a surplus.
    One of the great things about serving for a number of years 
in Congress is--and I am to 12 on this committee and in my 
service--that you see things from the long-term perspective. I 
remember--again, I repeat this--when we held hearings on lack 
of childhood vaccination, immunization vaccines, and we have 
heard the drug companies bashed then, that the problem was the 
drug companies and that they were charging too much. Then we 
heard the accusations against the insurers. Well, certainly 
they are price gouging and making huge profits on vaccination, 
vaccines. Soon we had no drug companies or almost no one in the 
United States producing these vaccines, and soon we had no one 
insuring. So our next round when we found out there was an 
alleged shortage was to blame the bureaucrats, blame the 
agencies, because certainly they should have anticipated all of 
this.
    It was interesting. Over the weekend I attended a 
conference and heard the head of our State and local medical 
society. I heard their speeches and their plea was for 
physicians not to leave the State of Florida and for physicians 
really not to even leave their profession. I was thinking this 
is sort of a microcosm of what we are creating for health care. 
We are forcing providers and people who produce things like 
vaccine offshore or out of our States or jurisdiction.
    I think you have to go back and look at the basic things 
that have created this situation: still tort medical 
malpractice; liability reform for manufacturers, whether it be 
vaccines or other products; the regulation of the industry and 
some of the things that we have artificially imposed. Why would 
you manufacture if you can't make a profit?
    I was pleased to hear the previous speaker, who I respect, 
Mr. Cummings, say maybe it is time to look at incentives and 
some other things. That is certainly what we need to do. But we 
need to get to the core of the problem so that we are not 
flying people to Great Britain or to France or some place else 
to see what the problem is; that we actually manufacture and we 
have incentives to produce vaccines, to provide medical 
services in this country.
    I think we have to look at some solutions. We are going to 
hear from the bureaucrats, and God bless the CDC. I think they 
have done as good a job as they could. But the way we are 
operating is wrong, and the lack of again reliance on domestic 
production or domestic medical services or domestic medical 
professionals, having them here in the United States and 
available is the only long-term solution. I am anxious to hear 
from them. We do need to plan ahead, but we do need to look a 
that core of the problem.
    Thank you.
    Chairman Tom Davis. Thank you.
    Do any other Members wish to make opening statements? The 
gentlelady from the District of Columbia?
    Ms. Norton. Mr. Chairman, I want to thank you and Ranking 
Member Waxman for focusing in on this hearing. I think it is 
very important to do so, because I think what we have had is a 
loss of confidence in the two agencies that have been 
responsible, and part of our job is to help restore confidence 
across America when up became down and down became up. People 
were asking what happened, and they expect us to find out what 
happened. The reason I want to know what happened is because if 
you don't know what happened you don't know how to keep it from 
happening again.
    I think that the two agencies, FDA is already undergoing 
great scrutiny and huge bipartisan criticism which may, indeed, 
be related, or at least not unrelated, to the failure to act 
when they could have acted at the manufacturing level overseas. 
It calls into question the competence of the agency, their 
diligence in pursuing any hints of problems.
    Then, of course, the public turned to the CDC, which showed 
it didn't have a clue about what to do, had no worst case 
scenario, and were no further along than Members of Congress 
who asked them questions as they tried literally to cobble 
together a way to deal with a crisis that was absolutely 
predictable. Half your supply is overseas. Guess what? 
Something could happen to it. What would you do? Very 
troublesome.
    In a real sense, it was like the anthrax scare, except that 
who could have predicted that? But you would have thought that 
the anthrax scare would have helped us prepare for this kind of 
emergency, which, indeed, was predictable.
    Mr. Chairman, I am concerned because of larger issues 
raised here and that have been raised in the Homeland Security 
Committee. We don't do a lot on health systems, but I don't see 
any evidence that we are able to deal with unanticipated health 
emergencies. This was a test case. We failed it. For those of 
us who think it doesn't matter, this is an epidemic. I don't 
know what the number of deaths are, but we do know that tens of 
thousands of people die every year from flu, so it was 
important.
    The problems at the plant in England are so deep. 
Inspections still have to go on, and apparently we still don't 
know whether it will be able to produce, so I am sure we must 
have a plan as to what to do next year.
    I want to embrace what my colleagues have said about 
incentives. Nobody expects that the pharmaceutical industry is 
any different from any other industry: they go for the highly 
profitable drugs. We have known for a long time that there is 
little or no profit in flu. Why haven't we done something about 
it? It is our responsibility on this side of the podium, and it 
is the responsibility of the agencies and of the administration 
to push us to do something about it. If this crisis doesn't do 
that, I don't know what will.
    I believe the most important thing the two witnesses could 
tell us today would be what their worst case scenarios are 
given a set of circumstances and whether they have taken 
themselves through worst case scenarios so that, indeed, they 
are prepared for whatever comes along. That is what the 
American people expect from their public health system.
    I appreciate that both of you have come, and I particularly 
appreciate the chairman calling this early hearing.
    Chairman Tom Davis. Thank you.
    Mr. Duncan.
    Mr. Duncan. Mr. Chairman, very briefly, I don't have a 
formal opening statement but I just would like to say this: now 
that this shortage has turned into a surplus, you know, we have 
certainly found out that the way to get everybody to take their 
flu shots is to tell them that they can't have one. Human 
nature--people always want something they don't have or can't 
have. We certainly found that is true, even in regard to flu 
shots. I know the Knox County Health Department, my largest 
county, gave out more than double their ordinary number of flu 
shots this year.
    Leading from that, we need to make sure in all of this that 
I know we are going to do everything possible to make sure 
there is no shortage next year, but I am wondering if, in doing 
that, when people think there is no shortage will the numbers 
drop off once again that get these flu shots. I think that is 
something we need to take into consideration when we are going 
through all this.
    Thank you. This is very important, and I appreciate very 
much that you are continuing to hold hearings on this. Thank 
you.
    Chairman Tom Davis. Thank you very much.
    We are going to move now to our first panel of witnesses: 
Dr. Julie Gerberding, who is no stranger to this committee, is 
Director of the CDC; and Dr. Jesse Goodman, the Director of the 
Center for Biologics Evaluation and Research at FDA, will 
discuss efforts taken at the Federal level to manage the flu 
vaccine situation this season with focus on the most recent 
strategies announced by CDC in January. They will also describe 
their efforts to coordinate distribution recommendations with 
local and State authorities and what steps are being taken in 
preparation for next year's flu season. Additionally, Dr. 
Goodman will provide the committee with a status report 
regarding the implementation of Chiron's remediation plan and 
how FDA is working with both British health authorities and 
Chiron to ensure Chiron is capable to manufacture for next flu 
season.
    Let me thank both of you for reacting to this crisis. 
Whatever mistakes people think that could have gone on before, 
it certainly doesn't lie with the two of you. You have been 
most cooperative, and we have taken a deficit into a surplus. 
Maybe we will send you over to OMB next at the administration. 
But I personally appreciate the efforts that you have made on 
this and we look forward to your testimony and answering some 
questions. Thank you both for, I think, taking something that 
potentially could have been worse. I think we have been lucky 
so far with a mild flu season, but turning this around and 
reacting. We can have a talk about what happened and why, but 
most importantly where we are going next year.
    As is our policy, we swear you in first.
    [Witnesses sworn.]
    Chairman Tom Davis. Thank you both for being here. You know 
the rules. Your entire statement is in the record and the 
questions will be based on your entire statement. Take about 5 
minutes. You have the lights in front of you--orange after 4 
minutes, red after 5. I won't cut you off, but we want to leave 
time for questions and the next panel.
    Again, thanks for your efforts and thank you for being with 
us this morning.
    Dr. Gerberding, we will start with you.

 STATEMENTS OF DR. JULIE L. GERBERDING, DIRECTOR, CENTERS FOR 
   DISEASE CONTROL AND PREVENTION; AND DR. JESSE L. GOODMAN, 
 DIRECTOR, CENTER FOR BIOLOGICS EVALUATION AND RESEARCH, FOOD 
                    AND DRUG ADMINISTRATION

                  STATEMENT OF DR. GERBERDING

    Dr. Gerberding. Thank you. We really do appreciate your 
continued interest in this issue. It has been a very 
challenging flu season for all of us, and I think very 
frustrating for the people who have been unable to get vaccine.
    I have a map here showing the current distribution of 
influenza in the United States. As you can see, there are many 
red States. Those are States that are now showing widespread 
flu activities.
    Chairman Tom Davis. So red States are not the good States 
in this thing? I mean, Mr. Waxman would agree with that, but I 
just want to get that on the record.
    Dr. Gerberding. I am not going to comment on that.
    The activity----
    Chairman Tom Davis. Who chose what is red and blue on this? 
I am just kidding. Go ahead.
    Dr. Gerberding. We really wanted to confuse the political 
process.
    What we are seeing is that there is an increase in 
widespread flu activity across our Nation week by week by week. 
This morning we checked and we know that there is widespread 
flu activity in Virginia and we do not know yet whether the 
season has peaked, so there still is a need to immunize people 
against this infection.
    We have three big challenges. One is that flu, itself, is 
unpredictable. We can't say at the beginning of the year what 
this map is going to look like or how fast the flu is going to 
spread across the country.
    On the next graphic I also remind people about the 
evolution of flu viruses. We don't know from year to year what 
virus will emerge. We don't know what strain will be causing 
the majority of disease. And of course now we are also worried 
about the avian influenza in Asia. So we are dealing with a 
very unpredictable virus and one that remains a biological and 
sociological challenge.
    We have a second big challenge, and that, of course, is the 
unpredictable nature of the vaccine supply, itself. That is, in 
part, because we are still using antiquated manufacturing 
methods that impart enormous risk to the manufacturers. We also 
do not have a stable market and historically we have had low 
prices for the vaccine and low rates of reimbursement.
    Last, we have the challenge of the unpredictable demand for 
vaccine, and that is something, as you pointed out, the 
shortage certainly drives demand. We saw last year that a 
severe flu season drove demand, at least at the beginning of 
the season. But we also know that no matter where we are in flu 
season and how much we encourage immunization, it is very 
difficult to create demand late in the season, and that is what 
has created this national shortage of vaccine, but a local 
mismatch between supply and demand, and in some cases excess 
vaccine beyond the demand of the population.
    So what can we do about that? Well, first, we can't change 
the virology of the virus, per se, but we can innovate. There 
are a number of innovations that have occurred even in the last 
year that will help us get a better handle on flu.
    I will just point out that the laboratory capability for 
flu detection has expanded dramatically throughout our public 
health system this year, our ability to detect H-5 strains, the 
avian strain, but in addition CDC is conducting enormous 
amounts of research related to characterization of the virus, 
conducting the reverse genetics to look for novel ways to 
create vaccine strains, doing studies to look for drugs, and 
trying to understand why older people are more vulnerable and 
less successfully immunized against the flu.
    We have also initiated a system to track in real time the 
emergence of vaccine in cities using biosense, which is an 
electronic surveillance system including data from the 
Department of Defense medical facilities and the VA medical 
facilities. This year for the first time we were able to see 
flu emerge on a jurisdiction-by-jurisdiction basis much earlier 
than we could through some of our traditional tracking 
mechanisms.
    We also for the first time got proprietary information from 
Aventis, now known as sanofi pasteur, to tell us who is 
receiving the vaccine, where it was being utilized, and how we 
can do a better job of reapportioning and reallocating that 
vaccine to treat people's needs. So while we can't change the 
virus, we can improve our abilities to detect and respond to 
it.
    On the next graphic I have illustrated the changes in 
funding for flu. I know this doesn't show up well, but I think 
you can see that trends over time do show a steady and dramatic 
increase culminating in the President's 2006 budget with a 
request for $197 million for influenza. That is an 
unprecedented budget request, and it includes dollars to 
purchase vaccine, it includes purchase of drugs for the 
stockpile, it includes expansion of the vaccine for a 
children's program to include 5,500 immunizationsites that 
aren't currently covered, and a number of other steps to 
support CDC and the NIH research and science enterprises.
    So we are making investments to help stabilize the supply. 
We know that the manufacturers need a modern production 
facility capability, and we know that manufacturers need a 
market.
    Over the last decade, the recommendations about who should 
receive vaccine have steadily increased so that now we 
recommend vaccine to about 188 million Americans. This in 
itself incentivizes manufacturers. We have also raised the 
reimbursement rate for administration at CMS from less than $4 
to more than $18, and we have increased the price we pay for 
vaccine to more than $10 through our Medicare program. So some 
of these efforts underway will certainly help stabilize the 
market, and we think help incentivize. That, with the advent of 
our capability to purchase vaccine and guarantee part of the 
market, at least, is something that the manufacturers tell us 
is very important in their progress.
    The last challenge is the challenge of demand. This has 
been very difficult. I have detailed our communication efforts 
in my written testimony, but we do still need to work very hard 
to reach out to all cultures and all people and explain the 
need for vaccine.
    Let me end with a picture of what our achievements have 
been this year. I think it is very important to notice that, 
compared to last year, the vaccine coverage rates across the 
United States in some cases are better for high-risk groups. 
For example, we have immunized about 50 percent of children 
between the ages of 6 and 23 months of age, compared to a very 
low immunization rate last year. Of course, it in part is due 
because we didn't recommend vaccine for this group last year. 
Also, compared to last year we have improved the coverage of 
high-risk children and we have improved the coverage of health 
care workers for flu vaccine. We haven't quite achieved the 
same level of immunization of our population over 65, but we 
have come close. About 60 percent of those individuals have 
received the vaccine.
    Importantly, our targeting worked in that immunization of 
the non-risk people was less than half that it was last year, 
and we thank those people who stepped aside. So, despite having 
50 percent of the doses we thought we needed to begin the year, 
we have achieved almost the same coverage of high-risk groups 
this year as we did last year. This represents a public health 
success and is in large part due to our public health system, 
our clinicians, and the vaccine manufacturers, and particularly 
the heroic people who stepped aside to let the high-risk people 
go first. So we thank all of those individuals, as well as the 
team at CDC and NIH and FDA for their efforts.
    Thank you.
    Chairman Tom Davis. Thank you very much.
    [The prepared statement of Dr. Gerberding follows:]

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    Chairman Tom Davis. Dr. Goodman, thanks for being with us.

                    STATEMENT OF DR. GOODMAN

    Dr. Goodman. My pleasure, Mr. Chairman. Mr. Chairman and 
members of the committee, I am Dr. Jesse Goodman. I am the 
Director for the Center for Biologics and Evaluation at FDA. I 
am also an infectious disease specialist and I think we share 
many common goals here today.
    I do appreciate the opportunity to be here today with Dr. 
Gerberding and to update you on FDA's efforts to address 
influenza vaccine needs and what we are doing to prevent the 
kinds of problems we have had this year from recurring.
    I do want to assure the American public also that the 
safety, effectiveness, and availability of vaccines are among 
FDA's highest priorities.
    As we have emphasized in previous testimony, influenza 
vaccine manufacturing is complex and challenging and the market 
is very fragile, in part because increasing demand has been 
coupled by a decline in the number of manufacturers. For the 
2004-2005 season, only three licensed manufacturers began 
production. As you know, on October 5, 2004 the British 
Medicines and Health Care Regulatory Agency, MHRA, suspended 
Chiron's license without prior notice to FDA.
    FDA also concluded that the safety of Chiron's vaccine 
could not be assured. As soon as we learned Chiron's vaccine 
would not be available, we worked with great urgency and close 
cooperation with CDC and the private sector--and I want to 
emphasize this was really a public/private effort--to explore 
all viable options to get additional doses. With sanofi pasteur 
and MedImmune we got approximately 5 million additional doses 
of U.S.-licensed vaccine, increasing the availability of supply 
to 61 million doses. I think that helped us come close to the 
kind of coverage results of previous years.
    Because there was a concern, though--and we were all very 
worried, because this is still a lot less vaccine than we have 
had in previous years, and because of that concern we sought 
additional vaccine licensed in other countries that, if needed, 
could be made available under investigational new drug 
applications.
    We immediately sent teams to facilities of potential 
sponsors in multiple countries to evaluate their manufacturing 
processes, and we reviewed a huge volume of manufacturing and 
clinical data, all within a few weeks. These efforts resulted 
in FDA being able to approve INDs that permitted the potential 
use of 4 million from GlaxoSmithKline and 1 million doses from 
Berna Biotech if we needed them.
    These interactions and those with other influenza vaccine 
manufacturers who also were highly cooperative provided 
valuable information, and they have created and strengthened 
relationships that we think importantly will lead to successful 
U.S. licensure of new vaccines.
    I want to also say that is one of the constructive outcomes 
of the challenges we have faced and that I am extremely proud 
of all this hard work from over 50 FDA employees, as well as 
our colleagues at HHS and CDC who worked very collaboratively 
for long hours, often on weekends and during vacations, to help 
meet this challenge. We took this quite seriously, because we 
share all your concerns.
    I wanted to mention that it is often overlooked that 
pneumococcal pneumonia is one of the most important and common 
serious complications of influenza, and it, itself, is 
preventable through use of inexpensive yet, even more than flu 
vaccine, under-utilized vaccine. In cooperation with HHS, Merck 
tripled its production of its vaccine from 6 to more than 17 
million doses, and availability of that vaccine can help 
further protect Americans from that complication.
    Well, you want to know about what our plans are, what we 
are doing, what the plans are for 2005 and future years. First, 
we are doing everything we can to improve supply for future 
years. We are doing this with a dual-track strategy. Because 
Chiron is a major issue, our first track refers to trying to 
help Chiron be able to produce again. We are doing everything 
we can to facilitate that effort of its correcting its 
manufacturing problems.
    In a dramatic change from where we were in October, FDA and 
MHRA, the British regulatory agency, now have an agreement with 
Chiron that allows full information sharing. We have used that 
agreement to collaboratively review Chiron's remediation plans 
and activities, and we are providing continuing and extensive 
feedback to both Chiron and MHRA in all directions. We are 
working together and actively communicating, in addition, on 
inspection activities.
    Only after passing MHRA and FDA inspections will Chiron be 
able to provide vaccine to the U.S. market. In the spring, when 
critical stages of manufacturing are taking place, we plan a 
comprehensive inspection to verify whether Chiron has 
adequately addressed its problems. While much work remains to 
be done, I am pleased to report that it appears that Chiron is 
making progress.
    While working with Chiron, it is important to emphasize 
that we are also working on a second track to facilitate 
overall greater capacity and diversification in the U.S. 
influenza vaccine supply, something several of the Members 
identified as important in their remarks. It is important to 
recognize--and you have also remarked on this, but I want to 
emphasize it--that the demand for vaccine, the demand and other 
economic issues are the primary factors that determine whether 
a manufacturer will seek and maintain a license in this 
country, the strength of our manufacturing infrastructure here, 
and the amount of vaccine that manufacturers will produce.
    One important and often overlooked strategy that CDC and us 
are in full agreement on is to encourage vaccination throughout 
the flu season, including January and February. To increase the 
total doses available, manufacturers can produce vaccine over a 
longer time period, and that becomes available during these 
months. Because influenza cases usually continue well after 
November and December when most people are seeking 
immunization, later vaccination is beneficial. We need to 
better communicate this important public health message, and 
the clinic that you have sponsored today is a great way to do 
that.
    In addition, we have also been doing everything we can to 
stimulate foreign license manufacturers to provide or, where 
needed, develop the safety and effectiveness data to get U.S. 
licensure. We have actively engaged with several interested 
companies. We have informed manufacturers that we are willing 
to consider creative approaches to licensing, such as 
accelerated approval based on surrogate markers like the 
patient's immune response to the vaccine.
    Finally, while we are doing all we can to have licensed 
vaccines for next year's needs, the experience and 
relationships we have built this year will help us if we again 
need to obtain additional vaccine under INDs.
    I just want to conclude with a few remarks on something I 
think is very important, which is we have challenged ourselves 
to identify other lessons learned from this year's influenza 
season and how we can use this experience to prevent similar 
events in the future. It is not all under our control, but we 
are making significant changes in response to our sort of 
after-action and continuing analysis. One is that we plan to 
conduct inspections of influenza vaccine manufacturers on an 
annual basis. Another is this need to share more information. 
We are completing or have completed agreements that allow 
information sharing with numerous foreign regulatory agencies. 
We have also initiated a vulnerability analysis of other 
licensed products that we regulate that are critical to public 
health to identify other areas where actions to support supply 
might be needed, and we have increased efforts at global 
regulatory collaboration on approvals and standards.
    I think it is very important, because I know you are 
interested in pandemic flu, to know that the insights gained 
from these experiences are critical in informing us on pandemic 
preparedness. This is something we all care a great deal about, 
given the eventual likelihood of pandemic and the outbreaks of 
avian flu Julie mentioned in Asia. It is very, very important 
to emphasize that more widespread vaccination during periods 
before pandemics has not only its direct health benefits but it 
increases vaccine production capacity and it will help America 
and the global community better prepare for an influenza 
pandemic.
    As Julie mentioned, the administration is making the 
largest investment ever made by the Federal Government in these 
areas. I do want to mention a couple of specific things that 
were not in her testimony.
    In November 2004, HHS awarded a contract to sanofi pasteur 
to help ensure year-round availability of increased egg supply 
in case it is needed for the pandemic or for this kind of 
future vaccine shortage. Research supported by HHS through the 
National Institutes of Allergy and Infectious Disease will help 
us move from egg-based production technology to newer 
technologies. While much work remains, these newer technologies 
provide important alternatives that could potentially shorten 
the time needed to produce vaccines.
    We welcome the continued support of Congress for this work, 
and we view preparedness as a critical responsibility and an 
opportunity. I see this as a teachable moment. What have we 
learned? What do we need to do to prepare for the future?
    In conclusion, when an adequate vaccine supply supplemented 
by effective anti-viral medicines is available, we can greatly 
decrease our vulnerability and provide protection against 
influenza. We recognize the need to work with multiple 
partners, including manufacturers, to increase supply and move 
toward more modern, dependable methods of production. All of 
the steps we have described will not only help address our 
current challenges, but help protect us from flu every year and 
prepare us for future seasons or in the event of a pandemic.
    All of us welcome the opportunity to work with Congress to 
accomplish these shared public health goals.
    Thanks very much.
    Chairman Tom Davis. Thank you very much, Dr. Goodman.
    [The prepared statement of Dr. Goodman follows:]

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    Chairman Tom Davis. Let me start with you. ``USA Today'' 
had an article discussing how a couple years ago some batches 
of the flu vaccine might have lost their potency too soon. I 
know that you can't talk about specifics because it is against 
the law for you to do that, but could you explain generally 
about potency and what it would mean to an individual who had 
received a shot that was less potent?
    Dr. Goodman. I would be happy to. Every year we actually 
assist the manufacturers by providing standards and the agents 
needed to assess potency. The major thing there is it helps the 
manufacturer of the vaccine. They have to decide how much of 
each component to mix into the vaccine, so we help get them to 
the appropriate amount.
    But then, in addition, they are required to perform testing 
on the vaccine to show how its stability is maintained over 
time, that it doesn't lose large amounts of that potency so 
that a person might not have the protective response you would 
want them to have. We require them to monitor that and report 
those events to us.
    We also require other testing. For instance, we test every 
new large lot ourselves for potency, but the stability testing 
is then what happens thereafter.
    In this case there was a problem. The company noted 
diminishments in excursions from the specified stability 
limits. This is information that our inspectors found during 
that inspection they performed a complete analysis of, and they 
determined that this is a concern, particularly that they were 
not reported to us, but that, given the way this vaccine is 
rapidly utilized and the nature of the excursions and all the 
other information available to them, they did determine that 
they did not believe this was at that time a threat to the 
effectiveness of the vaccine. But that is still saying we were 
concerned and told them to correct that.
    Chairman Tom Davis. Should there have been a recall of 
those flu shots?
    Dr. Goodman. That possibility was certainly examined, but, 
again, because it was believed that these changes, while of 
concern and outside of their specification--I want to emphasize 
we were not happy with these, but the analysis was that these 
would not affect the efficacy of the vaccine at that point in 
such a way as to make a recall needed. I should also point out 
that would not affect safety of the vaccine.
    Chairman Tom Davis. What does FDA do to ensure a 
manufacturer properly tests and reports its findings to FDA?
    Dr. Goodman. Things that we think are critical are 
specified in the license, itself, of the manufacturer. In fact, 
there are a broad number of tests that manufacturers are 
required to do as part of their license and as part of the 
quality assurance, and these occur at multiple, multiple steps 
during manufacturing, and then also with the final product.
    If problems develop they have certain procedures. For 
example, for certain procedures they have to reject that 
vaccine for the U.S. market if certain kinds of test results 
are obtained. For others they are supposed to notify us within 
a certain amount of time or perform an analysis of those 
results and decide whether in their judgment the vaccine is 
acceptable. So all those are things that are required.
    In addition, we do testing, as I mentioned, on the bulk 
lots and at other parts and final vaccine and other parts of 
the process as we deem needed. In this case, the manufacturer 
did not report these excursions in stability to us in a timely 
manner as required, and they were cited for that.
    Chairman Tom Davis. OK. Thank you very much.
    Dr. Gerberding, CDC has been telling the public that it 
isn't too late to get vaccinated, as the flu season can last 
through April. If we are stuck with a surplus every year, why 
doesn't the CDC consider extending the flu shot campaign 
through at least February or March to avoid throwing away 
vaccine? Would this help, or does it just vary with the flu 
season?
    And another question: how many deaths have we had this year 
due to flu in the United States? Can anybody tell me?
    Dr. Gerberding. The truth is we are working very hard to 
try to continue to encourage vaccine. One of the things we have 
done is make the emergency supply of CDC's vaccine on loan to 
the manufacturer available to clinicians, and if they don't use 
it they can get a rebate, as an effort to get them to reach out 
and get the vaccine, especially for these high-risk people. So 
every year we put out information and communications around 
late-season vaccine, but it is human nature, apparently, not to 
be interested in that immunization, despite what we think is a 
pretty gold standard campaign.
    We have to work on that. We have to do the formative 
research to find out why and change our communication strategy 
accordingly, and we need to also work with clinicians and the 
public health system to make this a visible priority.
    In terms of the number of deaths overall from flu, it is 
too early for us to have that accurate information. Influenza 
per se is not a reportable disease. We do know that there have 
been at least four pediatric deaths from influenza this year, 
which is less than we saw last year but still unnecessary and 
tragic.
    Chairman Tom Davis. Thank you very much.
    Mr. Waxman, you have 5 minutes.
    Mr. Waxman. Thank you, Mr. Chairman.
    Before I get into the topic for today I just want to tell 
Dr. Gerberding my appreciation for the work that the CDC did in 
coming to terms with the obesity issue and reviewing the matter 
internally, convening further discussions, making pledges to 
changes so similar problems wouldn't occur in the future. I 
just want to commend you for the work your agency did on that.
    Dr. Gerberding. I am very grateful to hear that, and I will 
take that back to Atlanta, as well. Thank you.
    Mr. Waxman. Thank you.
    I want to ask you about immunization funding, because we 
have seen an increase of $1.5 billion over the last decade, 
largely due to the congressionally mandated vaccines for 
children program, but there is another immunization program 
that is called the 317 program. This is run by the States, and 
the States are supposed to make up for those who don't qualify 
for the vaccines for children program to make sure they are 
eligible for vaccines, as well as some adults.
    I think this is an important program, and I am sure you 
share that concern, as well.
    Dr. Gerberding. Absolutely.
    Mr. Waxman. A number of States are telling us that they 
can't ensure that all kids get the vaccines they need, and we 
are going to hear today from the health commissioner of 
Virginia who has testified a number of times to this committee 
that his State cannot provide the life-saving prevnar vaccine. 
Is it true that by expanding the 317 program we could ensure 
that all children in the United States get all their shots?
    Dr. Gerberding. It is very difficult to do that on the 
basis of 317. What is proposed but not yet approved is that we 
expand the eligibility for the VFC so that we could immunize 
these under-insured kids in facilities that are run by State 
and local health delivery programs. Right now those kids have 
to go outside of the system and they can't afford to pay for 
the vaccine so they essentially don't get it. So the proposal 
is that we add to the VFC eligibility to achieve this kind of 
coverage. If that proposal doesn't pass or isn't approved, then 
we would certainly need to rely on 317 to continue that effort.
    Mr. Waxman. I guess my concern is I think we are not 
funding adequately the 317 program, and that will provide a gap 
where some people who could be covered by it are going to fall 
through it. I just hope we can find more funding for that 
effort.
    Dr. Gerberding. Thank you.
    Mr. Waxman. Before I go to Dr. Goodman, there is another 
very peculiar issue that you are dealing with with the 
stockpiling of childhood vaccines. There is some SEC issue that 
is preventing some of the companies--this may be too esoteric 
an issue, but I just hope that this issue is being approached 
with some urgency, because it looks like the money that was 
allocated for the stockpile is not going to be used because the 
companies are not going to be able to do this because the SEC 
is not allowing them.
    I guess the only point I would make there is that we have 
to do something to straighten this out. It seems absurd to let 
it go on and start making assumptions that we are never going 
to get that stockpile for those vaccines, which will assure 
that we have the supply for.
    Dr. Gerberding. Thank you. That is a revenue recognition 
issue and it is complicated. We have to figure a way through 
that, and I know the companies are eager to do that, too. Thank 
you.
    Mr. Waxman. Dr. Goodman, I have been critical of the FDA. 
At our last hearing this certainly came out, and I think the 
``USA Today'' article also was pretty damning of the FDA's 
inaction in light of the FDA's own inspectors coming back in 
2003 and saying they were learning about problems at that 
Chiron facility and recommending that some action, enforcement 
action, be taken.
    Just to review the facts, the plant had a terrible record 
of compliance with FDA regulations, even a history of failing 
to report problems to the agency. This potency issue is one of 
the problems they evidently failed to report to the agency. The 
plant was making half our flu vaccine supply. And in June 2003, 
the inspectors found serious problems again and recommended 
enforcement action, yet FDA decided not to conduct a full 
inspection for another 2 years. We learned at the last hearing 
FDA refused to even request to meet with the company to provide 
guidance on how to improve, and then eventually the plant was 
shut down by the British.
    I reviewed this because I think we need to learn from this, 
and I appreciated your testimony that the FDA is taking that 
constructive approach. I think there is a silver lining. If FDA 
is able to increase its enforcement and if the agency can 
empower its inspectors and scientists, then FDA can prevent 
situations like this from developing in the first place, but it 
is going to take a commitment from FDA leaders like you and 
whoever the new Commissioner will be. I want to underscore that 
point.
    You don't disagree with me, do you?
    Dr. Goodman. No. I don't think, unless you have specific 
questions, it would be constructive for me to go over the old 
ground. I know Dr. Crawford answered your questions about that 
before. But I would just reiterate we are--and I can speak for 
him and myself--totally committed to doing everything we can to 
get high-quality manufacturing and also to get the appropriate 
kind of inspectional enforcement activities. I am working 
closely with John Taylor, the head of Office of Regulatory 
Affairs. We have considered this issue very carefully of 
whether the annual inspections I talked about, which is a real 
change, may be helpful. We think if it may be, given the 
dwindling number of manufacturers and how vulnerable this all 
is, that even if it just may be and we can approach it in a 
very preventive manner it is a good thing to do.
    Mr. Waxman. Let me just say I appreciate that approach and 
I think it is constructive and I think there are certainly good 
intentions on everybody's part, but I was very disappointed in 
Dr. Crawford's testimony. I don't think he took responsibility 
for FDA's pretty much hands-off approach, just trusting the 
company and not going out there to the British plant, itself. 
But I don't think we have time to go over all the past record. 
It may not be all that helpful. I just do want to register my 
concern.
    Dr. Goodman. I appreciate that. One comment I would make, 
without wanting to re-engage the whole thing, is that in 2003 
when the inspectors went in there they did find significant 
issues and concerns. A number of the ones that were of most 
concern were from 2001 and 2002, and when they were in there on 
the ground a number of those problems had been corrected. The 
initial recommendation of the inspectors was as you discussed, 
but the normal FDA--they did follow the normal FDA process. 
They came back, discussed those internally, looked at the 
company's response, looked at the company's record, met with 
the scientists in the center and the additional scientific 
specialists, and they did make that decision.
    Mr. Waxman. But rejected the recommendation of the 
inspectors to do more.
    Dr. Goodman. Again, I would just characterize it as 
actually the inspectors, themselves--this is my understanding, 
because I have asked about that. I think it is a legitimate 
question. Everybody looked at all the data, and my 
understanding is they unanimously agreed, including the 
inspectors, that there were a number of important observations, 
but this wasn't a situation where they had a safety concern at 
that time or--and I think it is important to say, and I have 
heard this from the people who were on the ground that the 
situation that we found in 2004 going in there was different by 
order of magnitude and from a situation where, with an 
extensive inspection such as in 2003, you would find 
significant observations, you would want to make improvements 
in quality. We would expect those changes. But in 2004 it was 
very quantitative and qualitative. The basic systems weren't 
working.
    Mr. Waxman. My time is up. I just want to make one sentence 
here. From 1999 to 2001, FDA sent 36 warning letters to 
biologic manufacturers for manufacturing violations. From 2002 
through 2004 FDA has sent six. This is a decline of over 80 
percent. I think we need to do more, not less. That is why I 
believe we ran into the problem we did. You may disagree with 
me, but that is my view.
    Dr. Goodman. Well, I appreciate your input.
    Chairman Tom Davis. Thank you.
    Mr. Gutknecht.
    Mr. Gutknecht. Thank you, Mr. Chairman.
    First I will ask the question the chairman wanted to ask 
and didn't get a chance. First, will the CDC follow the lead of 
some of the States and drop the remaining restrictions on who 
should or can be vaccinated?
    Dr. Gerberding. The decisions about the high priority 
groups are made in collaboration with the Advisory Committee on 
Immunization Practices, and though we see coverage rates that 
are close to what we normally perceive, we still have millions 
of very high-risk people who haven't been vaccinated. So from a 
national perspective, we have been consistent from day one. The 
highest priority still has to be our seniors and the people who 
are at very high risk from death or severe complications.
    But at a local level where some providers have it and 
others don't, it is the local health officer or the State 
health officer who has to make the decision in their 
jurisdiction what is the most common sense way to make the best 
use of the vaccine. We don't want to waste it. So we are really 
encouraging them to use what they have if they need it. If they 
can't get the high-risk people, then give it to whoever wants 
it.
    Mr. Gutknecht. So that was kind of a no. It was a good 
answer, but I think the answer is no, you are not going to 
follow the lead of the States.
    Second, doesn't that create confusion among the public 
about who should be vaccinated and who shouldn't?
    Dr. Gerberding. The dilemma is that there are areas where 
there still is a vaccine shortage. We have surveyed all the 
States, and there are specific jurisdictions where they need 
vaccine and they can't get it. So for us to say it is wide open 
for whoever wants it nationally really creates an additional 
burden on those places that are still desperately seeking 
vaccine.
    So we have tried to equalize that by moving vaccine from 
one State to another or one jurisdiction to another, but it is 
not feasible to do that with the kind of precision that would 
allow us to give a single recommendation for the Nation. So our 
dilemma is how do we support making sensible use of the vaccine 
and still protect those areas that have shortages and are even 
still talking about using the investigational vaccine if they 
can't get what they need through the manufacturer.
    So we still have a shortage, and that I think is something 
that--I know the committee is talking about a surplus, and 
there are areas where we have excess vaccine, but fundamentally 
we don't have enough.
    Mr. Gutknecht. Just for my own benefit, when you move 
vaccine around or when it was shipped here from Germany, how 
did they ship it?
    Dr. Gerberding. When we move it from jurisdiction to 
jurisdiction it is generally either Federal Expressed or moved 
through some kind of a courier that meets the FDA's 
requirements for chain of custody, if you will. And likewise, 
when we move it from the international sources to the United 
States, it goes through a similar process to assure that the 
cold temperature is maintained and that we document the 
appropriate transport and storage procedures.
    Mr. Gutknecht. So importing these vaccines from Germany 
caused no concern for health?
    Dr. Gerberding. Well, I will let Jesse answer that question 
because it is really an FDA requirement.
    Mr. Gutknecht. Actually, you don't have to answer that. 
That was a facetious question.
    Dr. Goodman. Well, I think I should answer it because it is 
a good question, too. Vaccines and some of the other biologics 
are particularly sensitive to, for example, cold, other storage 
conditions, handling, so what we want to do--and this is true 
with licensed vaccine or the unlicensed vaccine under the IND 
because, of course, Chiron's vaccine would have been imported 
into the United States because it would have been finished in 
England.
    What we do is we have very detailed--the manufacturer 
actually has to submit to us detailed protocols that they have 
validated that show that the temperature is maintained, that 
the storage conditions are suitable, for example, for shock, 
that the temperature is monitored. Just like those stability 
testing that Congressman Waxman asked me about, if there are 
significant deviations they need to report those, and in 
certain cases they cannot use that vaccine.
    Mr. Gutknecht. I just wanted to get on the record that it 
is possible to move drugs and/or vaccines across State and 
national borders safely as long as you follow the right 
protocols.
    Dr. Goodman. And it is well controlled.
    Mr. Gutknecht. And you can do it with FedEx. That is on 
another subject for another day, which we will pursue perhaps 
in this committee and others.
    The other issue I want to get to--and I am sorry my time is 
almost exhausted here, but I am very concerned about viruses 
that are migrating from one species, particularly from poultry 
to pigs, for example, and then to human beings. I want to know 
how much research you are doing.
    I have a very parochial interest in this. There is a small 
lab in my District that is doing some amazing things on 
vaccines for pigs. Literally you can send them a sample 
overnight FedEx and the next morning they will analyze what 
particular virus that is and they will send the next day out 
the right vaccine for that for your herd of animals. In many 
respects, they have technology at this little lab that is all 
world.
    My interest in this is trying to bring some other 
researchers in because I am concerned. I mean, I don't like to 
use the term ``pandemic'' and I am not a scientist, I am not a 
doctor, I don't play one here in the Congress, but I am 
concerned that we are not doing enough in the event that there 
were some new strain of virus that did begin to jump from 
animals to human beings.
    I am curious in terms of what the CDC is doing on that and 
what we can do to advance that particular kind of research.
    Dr. Gerberding. Thank you for your question. I would 
actually look forward to learning more about the facility in 
your District so we can followup with you on that.
    The problem you are describing is one that we refer to as 
``zoonotic infections.'' Actually 12 out of the last 13 new 
infections in people have arisen from animals, so it is an 
extremely high priority for CDC. In fact, we just recruited the 
dean of the school of veterinary medicine from the University 
of Michigan to CDC to help us, in part, with our strategies and 
our innovations in this area because we think it is so 
important.
    Mr. Gutknecht. I would love to have you come out and visit 
these guys, because it was one of the most amazing things that 
I have seen. As I say, the research stuff, the equipment that 
they have is amazing, and that they can do this that quickly.
    I yield back the balance of whatever time I might have.
    Chairman Tom Davis. Thank you, Mr. Gutknecht.
    Mr. Cummings.
    Mr. Cummings. Thank you very much, Mr. Chairman.
    I just want to followup on something that Mr. Gutknecht was 
talking about. As you all were answering his questions, 
particularly you, Dr. Goodman, about the transfer of medicine 
drugs from one country to another, I want to make sure I heard 
you correctly, because it seems like there are different things 
coming out of the FDA. You said that could be done safely?
    Dr. Goodman. The question that I was answering----
    Mr. Cummings. Then answer my question.
    Dr. Goodman. I will. OK. Your question is: can, in this 
case, all drugs? Or is your question about influenza vaccine?
    Mr. Cummings. Let's just deal with vaccines right now.
    Dr. Goodman. OK.
    Mr. Cummings. Because they seem to be very sensitive.
    Dr. Goodman. Yes, I understand.
    Mr. Cummings. They have shelf life. They have all kinds of 
issues.
    Dr. Goodman. Yes. With all that in mind, with extremely 
careful controls over transportation conditions, including 
monitoring, etc., and in this case there had to be extensive 
FDA and company involvement. In other words, this is normal 
procedures for these companies and all the resources that would 
be involved in that. Two critically important things could be 
dealt with and protected. Those are: is that the product you 
think it is? And has it been under total custody and control? 
It is almost like criminal evidence. You don't want the 
consumers, the people in the District and in Maryland to get a 
vaccine and have that not be flu vaccine. And then is that 
vaccine still going to be safe and effective because of how it 
was handled, etc.? If it is properly made, and then with 
exquisite, appropriate monitored controls, and then FDA 
oversight of that and all the resources that are entailed in 
that, I think that particular transportation issue can be met.
    I want to mention one thing here.
    Mr. Cummings. Let me just say why I asked the question. I 
have seniors who are sitting there right now looking at C-Span 
and they are hearing all this, and I have to go back to my 
District and explain this, that they can't get their 
prescription drugs because FDA says they can't be done safely. 
But let me move on, because I only have a minute.
    Dr. Goodman. OK.
    Mr. Cummings. I, too, was disappointed with Dr. Crawford's 
testimony, extremely disappointed. I want to know. Let's say we 
go through all the things we are supposed to go through in 
making sure Chiron is doing what it is supposed to do, and 
let's say we find out that we do have a major problem, what 
exactly are our contingency plans?
    Dr. Goodman. That is an excellent question.
    Mr. Cummings. Thank you.
    Dr. Goodman. We are working with CDC and HHS--and I do want 
to mention that coordinating and planning function is in the 
Secretary's office at HHS, but let me tell you what we are 
doing in answer to that. You are absolutely right. While we are 
doing all we can to get Chiron on board to produce, and if they 
do and they do it in a timely manner that would be a good 
situation and it might be able to restore supply to a 
reasonable level.
    There is a lot of uncertainty in there. Ultimately it is up 
to Chiron to succeed, and it is a really complex, demanding 
process. They are making huge changes. Also, our British 
counterparts have to do their job and decide that it is OK, 
too, and then we do. So there is a lot of unpredictability so 
we need to do what we can to prepare.
    Some of the things we are doing that I mentioned; we are 
extensively interacting with several foreign manufacturers who 
have been working with us and who have indicated their interest 
in seeking U.S. licensure. We are hopeful that at least in one 
case that may be possible in time for the coming year. It is 
not guaranteed because again it has to meet the standards of 
safety and effectiveness that your constituents and I as a 
physician would expect.
    The other thing, as I mentioned--and I think it was 
valuable--we did go out and get additional vaccine under all 
these controls and I would say spent thousands of hours 
reviewing the manufacturing, the clinical records, the adverse 
event records in these facilities of vaccines licensed by what 
we would consider competent regulatory authorities in other 
countries, and we did decide, as you know, that in at least two 
cases our sponsors who were interested in providing vaccine in 
an emergency, that it could meet standards to be used under 
what we call an IND, where people would know they are not 
getting licensed vaccine. They would have to consent, but it 
could be available, and we believe it would be safe.
    So we have that system in place now, and if we have signals 
that Chiron or the other manufacturers we are hoping to get 
onboard, if that isn't working out we would plan to engage 
that.
    Finally, I have to say that both the other licensed 
manufactures, Aventis, now known as sanofi pasteur, and 
MedImmune have been incredibly cooperative and had indicated 
their willingness, if needed, to do what they can to increase 
production.
    There is still uncertainty. I am very concerned about the 
risk. There are bad scenarios like those that played out this 
year. But what I am here to say is we are all doing everything 
we can to be prepared and, in the long term, to diversify this 
vaccine supply, strengthen it, and prevent those problems.
    Mr. Cummings. Thank you.
    Chairman Tom Davis. Mr. Shays.
    Mr. Shays. Thank you.
    I have three organizations that are on the top of my list 
of groups that I admire. One is the World Health Organization, 
the other is the FDA, and the other is the CDC. I think you 
have extraordinarily difficult jobs and I think you do it quite 
well. And I also believe we are never going to get supply and 
demand to be equal. We are not a communist society. We can't 
make people do things that they don't want to do. And so in the 
realm of things I would rather have surplus rather than a 
shortage, but I don't want this surplus to be created because 
we encourage people not to take a vaccine they should take.
    The first question I just want to ask you is about the 
avian flu. When I was at the World Health Organization this 
past month, they talked about this flu basically being in 20 
countries. I want to know what kind of representation--and they 
said it could become a pandemic if we are not careful. I just 
want to know the views that each of you have.
    Dr. Gerberding. We are very concerned about the avian virus 
in West Asia right now. We know at this moment it is present in 
at least nine countries, and there is a new cluster of 
transmission from chickens to people, although we still have 
not seen efficient transmission from one person to another. The 
virus has not evolved significantly over the past year, but it 
could do that at any time, and when that happens there is an 
increasing probability that it could adapt and become something 
capable of causing a pandemic.
    Mr. Shays. They basically said it was more likely than less 
likely to happen; that the trend lines are in the wrong 
direction.
    Dr. Gerberding. The situation there is you have an amazing 
juxtaposition of pigs, people, and poultry, and those are the 
three ingredients for creating new strains of flu virus that 
can be very effectively transmitted. We have so much virus 
there in this incubator of new strains that there is a very 
strong statistical probability that we will see emergence. We 
can't say for sure, but we are certainly doing everything we 
can to be on top of it.
    Mr. Shays. In Thailand I am told there is one farm that has 
5 million chickens, and I am told that a country like Ireland 
no longer produces chickens because it is just so cheap to get 
it from a place like Thailand. So it is something I just want 
to register my concern to both of you.
    Dr. Goodman, did you want to comment on that?
    Dr. Goodman. I did. When the pandemic subject came up 
before I wanted to mention one thing that I think we are all 
involved in doing that is very positive. I mean, first of all 
this is an absolutely huge threat and we are taking it very 
seriously, and CDC and us and our colleagues at NIH are at 
frequent communication, including the WHO, etc. We are tracking 
this, but we are also trying to say what more can we do to be 
better prepared.
    I mentioned more vaccine production capacity. I also wanted 
to mention one accomplishment of HHS that I truly think is a 
bell weather and remarkable, and that is that we have begun 
production of vaccines and testing of vaccines that may never 
be used. The HHS let contracts to two different companies to 
produce pilot lots of vaccine that might be able to help 
protect against that avian flu were it to become pandemic.
    Mr. Shays. Just a quick answer on this. The flu shot that 
people take here, would that protect them against it?
    Dr. Goodman. No.
    Dr. Gerberding. No.
    Dr. Goodman. That is the whole problem is that this is a 
new coat on the outside of the virus that our generation of 
people have never been exposed to, so when you are exposed, you 
don't have the existing antibody, nor is it in our current 
vaccines.
    Mr. Shays. Let me quickly get an answer to this. How far 
behind are we in planning for the next flu season? I have been 
made aware that major vaccine distributors have refrained from 
taking pre-orders because they are unable to calculate next 
season's market.
    Dr. Gerberding. At the moment discussions are underway 
about what strains should be in the new vaccines, and that is 
an important step toward predicting the timing of the 
manufacturing.
    Mr. Shays. Is that guesswork or is that----
    Dr. Gerberding. It is based on what strains are emerging at 
the end of this season here, as well as what strains are in the 
southern hemisphere as we speak. So the first step is the 
experts meet in Geneva at WHO to look at all the data, and then 
they meet with FDA here, I think in about 2 weeks----
    Dr. Goodman. Yes.
    Dr. Gerberding [continuing]. To put their heads together 
and pick the combination of the three strains that would go 
into the vaccine.
    If I can just add one very quick thing, that is that 
Secretary Levitt has just been on the job for a few days as 
secretary of HHS, and already I have had two opportunities to 
brief him about avian flu and influenza preparedness with my 
colleagues, so I can tell you that this is a very high priority 
for the Department and we are all focused on it.
    Mr. Shays. Thank you for all of your good work.
    Dr. Gerberding. Thank you.
    Dr. Goodman. Thank you.
    Chairman Tom Davis. Ms. Norton.
    Ms. Norton. Thank you very much, Mr. Chairman.
    It is clear from both of your testimony that you are doing 
the things that one would expect one to do to try to make up 
for problems beyond your control, things that can be planned 
for, and I appreciate that you are doing that.
    I am interested far more in the meaning of this crisis for 
the future of the flu vaccine and for other similar crises that 
could come up. Dr. Gerberding, I remember that when this crisis 
arose CDC did not even have access to the purchaser list, even 
though the purchaser list of the company that had produced 
vaccine, and thus initially CDC was unable to account for who 
had vaccine and who did not have vaccine in the first place. 
Apparently after some time Aventis did share its list with you. 
Are Aventis and other such companies required to give you their 
lists now as a matter of course?
    Dr. Gerberding. I would ask Dr. Goodman to answer that from 
the FDA perspective since they regulate that. But we are hoping 
that, even if the law does not mandate it, that we would be 
able to engage their cooperation in the future. We had a very 
successful cooperation. They provided us with very important 
market information of a highly competitive nature. We kept it 
confidential, utilized it for public health purposes, and I 
think established some real trust between the public health 
system and the manufacturer.
    I will let Dr. Goodman talk about the regulatory 
perspectives.
    Dr. Goodman. Yes. We don't actually control who they 
distribute or to whom, and as Dr. Gerberding said, that is an 
important part of their marketing strategy and it is protected 
information. So I think you identify an issue that in a public 
health crisis as occurs can be a challenge.
    Dr. Gerberding could comment more because she was involved 
in those difficult distribution issues, but when faced with 
this problem my impression is that they have been forthcoming 
and shared information. But I think this is an issue. You have 
a system where the private distribution system is efficient 
under normal circumstances, and then when it is stressed by 
extraordinary circumstances it is a challenge to figure out how 
you deal with that.
    Dr. Gerberding. I would add that I can imagine in our 
scenario planning situations where we would very much like to 
have additional proprietary information about other products, 
so it is a gap in our capability of managing a public health 
emergency.
    Ms. Norton. Even through your regulatory authority, even 
saying in the event of a finding by the FDA or the CDC or 
whoever is the appropriate authority, the list had to be turned 
over, then surrounding those lists with the appropriate 
protections in advance seems to me would be helpful.
    Again, my concern is with worst case scenarios. The fact is 
that Aventis did not immediately say, ``Here is my list.'' They 
did eventually give it, but the fact is that should have been 
forthcoming instantly. And you were left there, Dr. Gerberding, 
without any basis to proceed because you didn't even know where 
the vaccine was. This vaccine is going to continue to be in the 
private sector. This is the United States of America. It is the 
kind of gap I would have expected by now you would have begun 
to move on.
    I would like to ask you, since I think that one is obvious, 
what exercises have you gone through in the nature of worst 
case scenarios? I have read both of your testimony. They do 
indicate that you are doing the proper planning. My concern is 
with unanticipated health emergencies and with restoring the 
confidence of this committee and of the public that, given 
anthrax, now given flu, if there is an unanticipated emergency 
these are the kinds of things we do.
    I hate to use this analogy, but that is how the military, 
for example, prepares for the unforeseen. That is how the, God 
help them, Secret Service and security officials prepare for 
the unforeseen. Well, some of us regard health emergencies as 
more likely and at least as important, so I would like to know 
if you have a regimen of what to do----
    Mr. Duncan [presiding]. Let me just say, Ms. Norton, we 
have a vote, so make this answer very, very short if you can 
please.
    Dr. Gerberding. The answer is we are constantly exercising 
scenarios. Just this week we had an anthrax scenario. This is a 
part of our preparedness planning for terrorism as well as for 
avian influenza and other health events. So on an ongoing basis 
around the tabletop and around the country we are engaged in 
scenario-based exercises. That is one of the backbones of 
preparedness.
    Mr. Duncan. I would like to ask just a couple of quick 
questions. I am assuming that the United States has a much 
higher vaccination rate than most other countries, and 
particularly the countries in southeast Asia, and I am 
wondering what that comparison is, if you know. And second, how 
much higher is the rate of flu in some of those countries where 
they have almost no or very low vaccination rate.
    Dr. Gerberding. We have three things: we have the best 
ability to measure vaccination, we have the most vaccine, and 
we have the highest vaccination rates. Totally in the world we 
produce each year about 300 million doses of vaccine, and we 
had 61 million of those doses in the United States this year, 
so you can see we really do have very high rates compared to 
the developing world.
    Mr. Duncan. Is the rate of influenza much, much higher in 
those countries?
    Dr. Gerberding. It is difficult to say because the 
surveillance systems aren't there with the kind of high-tech 
capabilities we have here, but flu is a ubiquitous problem in 
all societies, and it certainly is a problem in Asia.
    Mr. Duncan. As far as we know, the flu shots that people 
have gotten this year, are they for the strains of flu that are 
out there?
    Dr. Gerberding. It is a good match this year.
    Mr. Duncan. A good match.
    Dr. Gerberding. The Fujian strain has been the dominant 
strain, and that is the strain that the vaccine is targeted to.
    Mr. Duncan. And you said earlier you will put three strains 
in the vaccine for next year, but I remember from another 
hearing--how many strains are there? There is a large----
    Dr. Gerberding. There is an infinite number of flu strains. 
It is constantly evolving. But each year we pick two A 
influenza strains and a B strain based on our scientific 
evidence that suggests what the most likely circulating strains 
will be.
    Mr. Duncan. All right. We are going to have to be in a very 
brief recess. Chairman Davis will be back in just a very few 
minutes. We will be in recess.
    [Recess.]
    Chairman Tom Davis [presiding]. Our meeting will come to 
order.
    Dr. Gerberding and Dr. Goodman, let me just say thanks for 
staying here, but I think I am going to do everybody a favor at 
this point and allow you to go and move to the next panel. You 
have been very, very helpful.
    If there is anything you would like to add before you go 
that maybe you didn't get to say or answer?
    Dr. Gerberding. Just thank you. Thank you for your 
interest.
    Chairman Tom Davis. Thank you very much. Thanks for the job 
you are doing.
    Dr. Goodman. I would second that thank you. This is an 
important subject. We are very committed to working with you.
    Chairman Tom Davis. All right. We will get you a better 
microphone next time. Thank you.
    We are going to move to our second panel now. I want to 
thank these witnesses for appearing. We have invited our second 
panel. We have Dr. Fay Boozman. We also have Dr. Robert 
Stroube, the Virginia State Health Commissioner. He is here to 
discuss Virginia's response to the shortage turned surplus over 
the past few months. Dr. Walter Orenstein is associate director 
of the Emory Vaccine Center, who will discuss recommendations. 
And last but not least, Dr. Alan Wasserman, chairman of the 
Department of Medicine at George Washington University Medical 
Center, who is here to provide an academic perspective into 
issues surrounding the annual influenza vaccine. He will also 
share with us his experience last month when GW sponsored a 
free flu clinic at the Foggy Bottom Metro Station and they 
couldn't give away all their shots.
    Before we swear in, Mr. Boozman, would you like to make an 
introduction, the gentleman from Arkansas, our colleague from 
the Third District.
    Mr. Boozman. Thank you, Mr. Chairman. It is a pleasure to 
have my brother here with us, Dr. Fay Boozman.
    Chairman Tom Davis. Obviously, your younger brother, right?
    Mr. Boozman. Obviously.
    Chairman Tom Davis. And former State Senator.
    Mr. Boozman. I thought that you would say, ``Isn't this 
your Dad?'' But my brother and I, I am an optometrist and my 
brother is an ophthalmologist, and we practiced together for 
many, many years. We were in an area that is one of the 
fastest-growing areas in the country, so whatever you did, you 
were successful at, and we were blessed in that way.
    His background is such he was a pediatrician before he 
became an ophthalmologist. After practicing for many, many 
years he got interested in public service and became the Health 
Department director for the State of Arkansas for Governor 
Huckabee. True to form, he went back and got his master's in 
public health from Tulane. I guess he is probably one of the 
longest-serving continuous public health directors in the 
country right now. Evidently they don't last very long.
    It really is a pleasure to have him here, both panels 
talking about such an important topic.
    Thank you, Mr. Chairman.
    Chairman Tom Davis. That is the best you can do for your 
brother?
    We are happy to have all of you here. Dr. Stroube has 
survived a long time in Virginia, and before that in Fairfax 
County, my home county, where he grew up and had our public 
health. We are happy to have all of you here.
    Dr. Wasserman, thank you for being here from G.W. I want to 
thank the medical faculty associates for being able to offer 
the flu shots this afternoon. I hope you can give them away 
here, Dr. Wasserman. Thank you.
    It is the policy of this committee that we swear everyone 
in, so please rise with me and raise your right hands.
    [Witnesses sworn.]
    Chairman Tom Davis. Dr. Boozman, I will start with you and 
we will work our way down. We have lights there. The orange 
light means 4 minutes are up, red light means 5. Your entire 
written statement is in the record and questions will be based 
on that.
    Were you in the House or the Senate in Arkansas?
    Dr. Boozman. Senate.
    Chairman Tom Davis. So you know how to talk. If we can keep 
it to 5 minutes here, we usually have a tough time, but do your 
best. Say what you need to say and then we will get on to 
questions. Thank you very much for being here today. Your 
brother is doing a good job, by the way.

STATEMENTS OF DR. FAY W. BOOZMAN, PRESIDENT-ELECT, ASSOCIATION 
   FOR STATE AND TERRITORIAL HEALTH OFFICIALS; DR. ROBERT B. 
   STROUBE, COMMISSIONER, VIRGINIA DEPARTMENT OF HEALTH; DR. 
WALTER A. ORENSTEIN, ASSOCIATE DIRECTOR, EMORY VACCINE CENTER; 
   AND DR. ALAN WASSERMAN, CHAIRMAN, DEPARTMENT OF MEDICINE, 
          GEORGE WASHINGTON UNIVERSITY MEDICAL CENTER

                STATEMENT OF DR. FAY W. BOOZMAN

    Dr. Boozman. Thank you, Mr. Chairman and distinguished 
members of the House Government Reform Committee. I am Fay 
Boozman, director of the Arkansas Department of Health, and I 
am honored to be testifying before you today on behalf of the 
Association of State and Territorial Health Officials.
    I want to thank the chair and the Members for convening 
this hearing on this very important public health topic.
    Let me begin by noting that from the start there has been 
tremendous cooperation among Federal, State, and local public 
health agencies. The experience this year is a classic example 
of how our Nation's governmental public health system can and 
should work.
    In October 2004 Arkansas and every other State and 
territory faced an unanticipated public health challenge when 
we learned that we would receive only half of our flu vaccine 
orders. Over the next few days we worked with our partners to 
formulate a plan to deal with this shortage. We used the health 
alert network to contact health providers throughout the 
States, telling them about the situation, asking them to 
provide us with information about how much vaccine they had 
ordered, how much they had on hand, and how much they needed 
for their high-risk patients.
    The Arkansas Department of Health typically purchases about 
40 percent of flu vaccine supply in Arkansas, which meant that 
from the start we controlled a substantial portion of the 
vaccine that had been delivered to the State. I need to point 
out that in many cases most flu vaccine is purchased by the 
private sector, so some of my colleagues initially had much 
less control over the vaccine supply in their States and the 
distribution of that than I did.
    In Arkansas we decided to exercise our mass vaccination 
plan which we developed with the CDC bioterrorism preparedness 
funds to distribute our supply of vaccine. November 3rd was the 
day that we chose to do that. We enlisted the help of media 
outlets and health care professionals to get the word out. 
Thousands of people called our newly created 1-800 hotline or 
logged onto our Web site to get information about where to go 
for the shots. Thankfully, the plan worked. On November 3rd in 
a matter of hours we administered over 53,000 doses of vaccine 
to high-risk individuals in 83 clinics.
    Despite everyone's best efforts, we may experience future 
vaccine shortages. A national plan should be developed that 
would provide guidelines for Federal, State, and local health 
departments to follow when Federal Government determines that a 
shortage exists. For example, when Health and Human Services 
determines that a shortage exists, it should immediately create 
a secure data system that provides each State department with 
reliable and up-to-date information about vaccine orders and 
supplies in the States. The sooner public health officials have 
that information, the sooner they can work with their local 
health departments and health care providers to get information 
out to combat the public panic.
    ASTHO agrees that we should provide incentives to 
manufacturers to stay in or enter the U.S. market. Under a 
vaccine for adult program similar to vaccines for children 
program now in place, the Federal Government would purchase flu 
vaccine and supply to States for use by uninsured, high-risk 
adults for whom flu vaccine is recommended. That would help 
needy Americans get vaccine while creating a market entry 
incentive by growing and stabilizing the flu vaccine market.
    Last but not least, we need to increase the CDC's 317 
national immunization program funding so that State and local 
departments can build adult immunization infrastructure, as 
recommended by the Institute of Medicine in its Calling the 
Shots Report.
    CDC immunization funding should be sufficient to allow 
States and local health departments to purchase flu and other 
recommended vaccines for all under-insured children, 
adolescents, and adults.
    I wish to thank this committee for its continuing interest 
in this important issue. The public health community is 
committed to ensuring that all individuals in need of vaccine 
receive it. We look forward to working with you to ensure that 
we have the resources and tools to do our job of protecting the 
public's health.
    Thank you, Mr. Chairman.
    Chairman Tom Davis. Thank you very much.
    [The prepared statement of Dr. Boozman follows:]

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    Chairman Tom Davis. Dr. Stroube, thank you for being back 
with us.

               STATEMENT OF DR. ROBERT B. STROUBE

    Dr. Stroube. Thank you.
    Mr. Chairman, distinguished members of the committee, my 
name is Dr. Robert Stroube. I am the State Health Commissioner 
for Virginia. I am honored to be testifying before you today. I 
would like to thank the chair and the committee members for 
convening this hearing and for the amount of time you have 
devoted to this critical issue.
    Since news broke that British regulators suspended the 
license of flu vaccine manufacturer Chiron last October, State 
and local public health officials have been working to ensure 
the best use of available vaccine. Initially that meant 
prioritizing vaccine availability to individuals at greatest 
risk for developing serious complications from the flu. More 
recently it has included responsible relaxation of vaccine 
recommendations to include individuals outside the original 
high-risk groups to ensure the use of the remaining doses.
    VDH had ordered 90 percent of its total flu vaccine from 
Chiron, approximately 110,000 doses. However, the Health 
Department provides a very small proportion of flu vaccine that 
is typically provided to the public. During our typical year, 
we provide about 70,000 doses of vaccine. Most of the vaccine 
is through the private sector.
    In response to the vaccine shortage, we immediately 
implemented the ACIP's recommendations regarding the 
prioritization of flu vaccine. In addition, every effort was 
made to educate the medical community about the recommendations 
and urge compliance. A message was sent out to health care 
providers through our health alert network. We issued press 
releases, including information about the vaccine shortage, and 
encouraged prioritization of available flu vaccine.
    State and local health departments received hundreds of 
phone calls from concerned citizens and numerous media 
interviews were conducted. We diligently worked to provide the 
best information available. From the beginning of the flu 
vaccine shortage, CDC has worked closely with Aventis to 
allocate and distribute all the remaining doses of vaccine.
    In the weeks and months following, VDH received four 
shipments of redistributed vaccine, with each targeting a high-
risk population. In November we received 80,000 doses of flu 
vaccine. The decision was then made to distribute the vaccine 
to each health district based on its population. Local health 
districts in Virginia developed flu vaccine distribution plans 
tailored to meet the needs of their high-risk populations in 
their area.
    As the first doses of flu vaccine from the CDC allocations 
began to arrive in late October and early November, the health 
districts began to implement their plans. Individuals not 
included in the priority groups were asked to defer vaccination 
in order to preserve the limited amount of vaccine. We received 
approximately 77,000 doses in mid-November, and this was 
primarily given to long-term care facilities across the State. 
This enabled nursing homes and assisted living facilities to 
vaccinate their vulnerable residents.
    In mid-November we began to request vaccine through CDC's 
Web-based secure data network. This network allowed State 
public health officials the ability to order flu vaccine on 
behalf of private health care providers directly from CDC. As a 
result, we were able to distribute approximately 98,000 doses 
to Virginia's doctors and pharmacists.
    By the end of November, CDC and Aventis had distributed 
about 255,000 doses in Virginia. We sought to reach as many 
high-risk populations as possible, providing flu vaccine to 
health departments, long-term care facilities, and private 
doctors. By late December it appeared that the majority of 
high-risk persons in most parts of Virginia who wished to be 
vaccinated had obtained vaccine.
    A late December inventory revealed an ample supply of flu 
vaccine in many parts of the State. To help ensure that 
available flu vaccine did not go to waste, I authorized the 
expansion of vaccine recommendations to include individuals age 
50 to 64 and household contacts of those in high-risk 
categories. This took effect on January 10th. The expansion was 
in agreement with the revised ACFB recommendations. Even with 
expansion, there was little interest by private providers in 
placing an order for Virginia's fourth allocation of vaccine of 
approximately 55,000 doses. By the time the CDC orders were due 
to CDC on January 13, only 30,000 doses had been requested.
    In late January, CDC began to support the expansion of 
vaccine eligibility for States and localities with ample 
supplies; on January 26, authorized district health directors 
to lift their flu restrictions in the localities if they 
thought the demand for vaccine within priority groups had been 
met.
    On January 27, CDC made VFC vaccine available to health 
departments for non-VFC children and adults in localities where 
demand for flu vaccine among eligible children had been met. 
Local health departments were then authorized to redistribute 
this vaccine to other public facilities, free clinics, 
community health centers, and private nonprofit facilities. 
Despite VDH's effective response to unexpected shortage of flu 
vaccine, the continuing problems with flu vaccine availability 
caused great difficulties for our State in planning for the 
next flu season. We do not know what the availability of flu 
vaccine will be next year. Will there be enough for everyone, 
or high-risk groups only? If there is a continuing shortage, 
what will be the role of State and local health departments in 
vaccine distribution? Will things be done as in previous years 
with private sector handling most of the distribution? Or do we 
need to build on this year's ad hoc system using State and 
local health departments to coordinate distribution?
    Historically in Virginia the private sector has 
administered the great majority of flu vaccine. This crisis led 
to much government intervention in the distribution and 
administration of vaccine. We wonder will the private sector 
return to its former level of involvement.
    In Virginia the trend has been for large businesses such as 
WalMart, drug chains, grocery store chains to provide much of 
the vaccine. Long lines, traffic congestion, unfavorable 
publicity this season may make them wary of continued 
participation. Private health care providers have been less 
active in flu administration over the last few years, and 
shortage may make them even less willing to deliver vaccine 
through their practices.
    The public has received many mixed messages about flu 
vaccines as the crisis developed. There were public campaigns 
urging widespread immunization, then campaigns to ask people 
not at high risk to defer vaccine. There was a severe shortage 
of vaccine, then a surplus of vaccine, with changing 
recommendations.
    Fortunately, to date we have had a light flu season; 
however, this confusion has led to the belief in some of the 
public that there was less vaccine but we have less flu and 
maybe we didn't really need the vaccine in the first place. How 
willing are they going to be to take flu vaccine in future 
years?
    Throughout the crisis our State and local health 
departments devoted incredible amounts of our time to get to 
our most vulnerable citizens the vaccine they need. CDC has 
provided national leadership in a difficult and changing 
environment and worked very closely with us to meet the needs 
of our citizens, and we are appreciative of their efforts.
    The ultimate solution is development of adequate, secure, 
and stable supply of vaccine, as we have stated in previous 
testimony. We appreciate the amount of time and effort your 
committee has devoted to these issues, and we thank you for the 
opportunity to speak today.
    Chairman Tom Davis. Thank you very much.
    [The prepared statement of Dr. Stroube follows:]

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    Chairman Tom Davis. Dr. Orenstein, thank you for being with 
us.

              STATEMENT OF DR. WALTER A. ORENSTEIN

    Dr. Orenstein. I am Dr. Walter Orenstein, association 
director of the Vaccine Center at Emory University. Prior to 
joining Emory in March 2004 I was the Director of the National 
Immunization Program at the CDC. I want to thank the Committee 
on Government Reform for the opportunity to address public 
health implications of the recent influenza vaccine shortages, 
assess strategies used to minimize their impact, and recommend 
potential steps that may be taken to avert future shortages.
    Averting future shortages includes providing incentives, 
one to manufacturers to enter or stay in the U.S. market, to 
providers to order and administer influenza vaccine, and to 
people for whom influenza vaccine is recommended to seek and 
accept vaccination.
    A critical incentive for manufacturers is to decrease 
financial risk for vaccine that is produced but must be 
discarded each year, since last year's influenza vaccine cannot 
be used for the following season. One way to accomplish this is 
through a back-end guarantee program in which the Federal 
Government asks manufacturers to produce more doses than they 
usually would and pays the manufacturer at the end of the 
season for those extra doses that go unsold on the private 
market.
    For example, if usual production is 80 million doses and 
the Federal Government wants 90 million doses produced to cover 
more of the 188 million persons for whom influenza vaccine is 
already recommended, then the Government can guarantee the 
companies that they will pay some discounted price for each of 
the 10 million doses that may go unsold.
    As a further incentive to the companies, an effort should 
be undertaken to increase demand for influenza vaccine and 
thereby increase the size of the market. This should include at 
least three components: first, a national, State, and local 
educational effort directed at both the medical community and 
the public to promote use of vaccine; second, an adult 
immunization grant program modeled after the successful 
childhood immunization program should be undertaken, which 
provides grants to States and localities to build immunization 
infrastructure for immunization of adults. This would include 
components such as outreach workers who can perform educational 
efforts, staff who can provide technical assistance to health 
care providers to improve their performance, development of 
data systems to track and monitor vaccine supply and use and 
measure immunization coverage, and personnel who can assist 
nursing homes in conducting immunization programs.
    Third, influenza vaccine should be purchased by the Federal 
Government and supplied to States for uninsured, high-risk 
adults for whom influenza vaccine is already recommended to 
minimize financial barriers to access and increase vaccine use.
    Incentives for providers include provision of free vaccine 
for their uninsured patients, decreasing their financial risk 
of potentially ordering vaccine that goes unused; access to 
technical assistance from State and local health departments; 
and provision of educational materials for their patients from 
those health departments.
    The major concern about the present problem is the 
potential for backsliding in our efforts to prevent the 
significant burden of influenza. While it is too early to tell 
if this season will be mild, if it turns out to be, many of the 
people who might have received the vaccine in the past but were 
unable to receive it this year may have a false sense of 
security that they do not need vaccine. Unfortunately, 
influenza is difficult to predict, and if a mild season were to 
occur this year it does not mean next year will be mild. If it 
turns out the season is moderate to severe, unfortunately many 
people who might have gained benefits from vaccination may 
suffer, either because they did not seek it or because they 
were unable to obtain vaccine.
    One of the more effective strategies in reducing influenza 
is to reduce exposure of high-risk persons to influenza by 
vaccinating their close contacts. Many more high-risk persons 
may be exposed because their contacts were not vaccinated due 
to supply problems.
    Given the shortage, could anything have been done 
differently to minimize its burden? I think CDC did the best it 
could under the circumstances. There was a need to prioritize 
vaccine and priorities chosen by the experts on the Advisory 
Committee on Immunization Practices were reasonable. This meant 
delivering messages to others to forego vaccination.
    In conclusion, the influenza virus can cause a substantial 
health burden. Influenza vaccination is the best way to prevent 
this burden. The shortages are a result of lack of manufacturer 
incentives to enter and stay in the U.S. market. Averting 
future shortages and averting the influenza burden involves 
providing incentives to manufacturers to produce vaccine, 
providers to order and administer it, and the general public to 
seek and accept vaccine.
    Thank you.
    Chairman Tom Davis. Thank you very much.
    [The prepared statement of Dr. Orenstein follows:]

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    Chairman Tom Davis. Dr. Wasserman, thanks for being with 
us.

                STATEMENT OF DR. ALAN WASSERMAN

    Dr. Wasserman. Thank you, Mr. Chairman and members of the 
committee.
    At the height of influenza season last year, more than 10 
percent of all deaths were related to pneumonia and influenza. 
In 12 of the past 21 years, the peak month for flu activity in 
the United States has been in February or March. We may get 
lucky this year and see fewer cases, but the chances are the 
greatest threat from influenza is still before us, and yet we 
cannot give away flu vaccine.
    We are only now seeing our offices filled with patients 
with flu-like symptoms, and our hospitals had to close on 
multiple occasions in the past week because beds are filled to 
capacity with patients with flu and complications from flu. It 
is not just the Pope who has been hospitalized with influenza-
induced pneumonia. And yet we cannot give away free flu 
vaccine.
    After treating our high-risk patients, we have been left 
with approximately 3,600 doses of vaccine, and when the city 
relaxed restrictions we hastily convened an all-day flu vaccine 
fair at the Foggy Bottom Metro Station on February 13th. Thanks 
to the local media, we were able to publicize this event 
widely, with constant radio reminders that included a live 
telecast onsite throughout the day. Our doctors, nurses, 
interns, and residents spent the day administering free flu 
shots, but in the end we were left with over half our remaining 
supply.
    The headline in the ``Washington Post'' had it correct, 
``G.W. Stuck it to 1,889 People,'' but where were the others? 
Where was the passion, the anxiety, the response that we saw in 
November and December to those free sessions that were offered 
before restrictions were put in place?
    We stood outside for over 8 hours, and yet we couldn't give 
away all our free flu vaccine. We will probably end up the year 
with over 1,500 doses going unused. Therefore, we and many 
health care organizations like us will be left with incurring 
the cost of unused vaccines, but, more importantly, thousands 
of Americans will get sick needlessly.
    Now this has been a very unusual year and this is a 
complicated issue involving the health of our community and our 
country, but it is our hope that this committee could address 
some important questions that have health care workers and 
probably the public perplexed.
    If vaccinating our population for influenza is such a 
priority, why is there no safeguard in producing vaccine? Which 
would cost more, redundancy in vaccine production with risk of 
over supply, or the significant added cost to the Government in 
Medicare and Medicaid payments for flu-related illnesses and 
hospitalizations? Why does our country's grocery stores receive 
their vaccine shipment well before most health care providers? 
Is that the way we will assure that high-risk patients will be 
vaccinated?
    Debilitated patients, those on oxygen, and others usually 
do not have the stamina to fight their way in line and stand 
for hours. Is this really a public service, or a setup for 
public panic?
    Can we continue giving mixed messages to the public? One 
year it is, ``Get your vaccine in October and November,'' and 
the next year the public is told it is still OK to get a shot 
in January or February.
    Skepticism is very high among the public now that we are 
pushing vaccine at this very late date. Some may think that we 
are only doing so not to look foolish ending the season with a 
surplus, while others certainly may think it is just the greedy 
physician out to make the extra dollar.
    To add to confusion, the District of Columbia, Maryland, 
and Virginia each had different regulations, some with monetary 
penalties, for flu vaccine distribution. In such inter-related 
areas where patients from one jurisdiction often see physicians 
in another, shouldn't uniform policies be considered?
    There is much to be learned from what happened this year, 
but this year is not over. People remain at risk for what could 
be a virulent next 2 months. Earlier this year Members of 
Congress and their staff set the example by not being 
inoculated, thereby encouraging the public to refrain from 
getting flu shots so there would be enough for the high-risk 
group. I believe now the time has come for Congress to once 
again lead the way in getting inoculated now to encourage 
others to come forward while there is still time.
    Throwing away vaccine and filling our hospital beds would 
be a sad ending to a very difficult season.
    On that note, Mr. Chairman, as you mentioned, we will be 
administering free flu vaccine starting today at 1 p.m., 
upstairs in room 2247. We will be here until we run out of 
vaccine. I hope that is not too long.
    Thank you very much.
    Chairman Tom Davis. Thank you very much.
    [The prepared statement of Dr. Wasserman follows:]

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    Chairman Tom Davis. Again I want to thank the generosity of 
George Washington University Medical Faculty Associates for 
making this available. We are going to get the word out here.
    I will start questioning with Mr. Dent. Mr. Dent, are you 
ready?
    Mr. Dent. Thank you.
    Dr. Orenstein, I represent eastern Pennsylvania just south 
of the Aventis pasteur plant in Swiftwater, PA. I know you have 
talked a lot about incentives. Are you satisfied with what has 
been done to date to make sure that Aventis and perhaps any 
other pharmaceutical manufacturers will be ready to deal with 
this situation next season?
    Dr. Orenstein. I think there has been some major progress 
that has been done. I think very good collaborative 
relationships have been developed. I think it potentially can 
be done. I know we are focused very much on high-risk 
individuals, but if you look at for whom the vaccine is 
recommended, it is recommended for contacts of those people. 
There are substantially more people who need to get vaccinated. 
It is not clear to me that we have enough incentives right now 
in order to really boost production.
    I think in essence we ought to be considering perhaps a 5-
year plan to get to close to the 188 million Americans for whom 
we already recommend vaccine. I think to me the people who can 
actually answer that question best are the manufacturers, 
themselves, but I am concerned that perhaps we have some but 
not all the incentives we need.
    Mr. Dent. I guess I am somewhat concerned, too, in that 
beyond Aventis it doesn't seem that there are too many domestic 
manufacturers of this particular product, and selfishly I would 
certainly like to see Aventis get the business because my 
constituents work in that plant where they manufacture it, it 
would probably be in the public's interest and this country's 
interest to diversify the base.
    Thank you.
    Chairman Tom Davis. Thank you very much.
    Mr. Waxman.
    Mr. Waxman. Thank you, Mr. Chairman.
    Dr. Boozman, your brother and the chairman had very nice 
things to say about you, and I am pleased that you are here. I 
just want to say something nice about your brother, because he 
and I have been working together on legislation to protect 
children from harm from contact lenses that have not been 
prescribed and not appropriately placed in their eyes. He has 
been a great legislative ally.
    As the person in charge of the State and territorial health 
officials, could you tell us about the financial difficulties 
States have in providing all the routinely recommended vaccines 
to children?
    Dr. Boozman. Yes, sir. Thank you.
    Mr. Waxman. And let me follow that up with another question 
at the same time. Does the President's budget fully address the 
problems that you do have at the State level?
    Dr. Boozman. The problems that we are having and have had--
and we have all tried to solve them in different ways--is that 
we are getting more and more vaccinations, most recently 
prevnar, and the cost per child keeps going up. Now, we have 
the vaccine for children's program, which enables us to give 
that eligible child a full complement of vaccination, but many 
children fall through that crack, and so then we are left with 
the 317 side of the system to try and serve children.
    For a year in Arkansas we had a two-tiered system where we 
simply couldn't fill that gap. Now the way we solved that was 
through the federally qualified community health centers. They 
deputized our clinics, the health department's clinics, and 
that made children coming in to us eligible on the vaccine for 
children's side.
    We have new vaccines coming even more, and so I think this 
problem is going to get bigger. So the answer to your question 
is: no, we don't have enough funding right now to be able to 
vaccinate everybody the way we ought to. As somebody that comes 
from a pretty conservative perspective, there are not many 
things that Congress can spend money on that they get a better 
return on.
    Mr. Waxman. Absolutely.
    Dr. Boozman. Every dollar that you spend--I think I saw a 
figure this morning of $27 in reduced medical costs, and it was 
mentioned about what it is costing for people to be in the 
hospital with pneumonia and things like that.
    Mr. Waxman. Certainly less expensive to prevent the disease 
than to have to pay to treat a disease that could have been 
prevented.
    Dr. Boozman. That is exactly right.
    Mr. Waxman. You testified that you would support a vaccines 
for adults program modeled on the very successful vaccines for 
children program. That certainly seems like a sensible idea to 
me. If the Federal Government could expand and guarantee a 
vaccine market like it does with pediatric vaccines, this could 
be, I think, a powerful incentive for the manufacturers, the 
companies to get into the business and stay in the business, 
because we do have this question of what business decision they 
will make if they have this uncertain market.
    Do you think that this would shore up our fragile vaccine 
supply?
    Dr. Boozman. I think it certainly would be a great step in 
the right direction, because, as you have said, it creates a 
market. Our country has a history of where there is a market 
people fill in. Just as Representative Dent mentioned, I think 
there will be other people that see that potential and I think 
other manufacturers would enter in. I think it is certainly a 
first step, and see what happens. Other things may be 
necessary, but that certainly to me is a very important first 
step.
    Mr. Waxman. We have heard from local health officials that 
they can't provide important vaccines such as the hepatitis B 
vaccine even to high-risk people such as people who come to 
sexually transmitted disease clinics. They can't provide it 
because the cost is so high. Do you think that a vaccines for 
adults program should be broad enough to include all routinely 
recommended vaccines for adults, including the hepatitis B 
vaccine?
    Dr. Boozman. Yes, sir, I do.
    Mr. Waxman. Dr. Orenstein, you used to direct the national 
immunization program at CDC. You are an expert on the vaccines 
for children program. In your testimony said you would also 
like a vaccines for adults program. How do you think they would 
differ? And do you think this would help us set up a reliable 
distribution system and expand the number of adults that will 
be vaccinated?
    Dr. Orenstein. What I was proposing in my testimony is a 
beginning vaccines for adults program. It could be expanded to 
cover other groups. The big group that I am concerned about, 
just like the vaccines for children program is concerned about, 
is uninsured adults. The Institute of Medicine has estimated 
that somewhere around 8 million high-risk uninsured adults are 
in need of influenza vaccination.
    I think having a vaccines for adults program that would 
provide vaccine to doctor's offices, potentially other sites 
that are more convenient, such as grocery stores, goes a long 
way to reducing the financial challenges.
    We made a statement when we covered influenza vaccine by 
Medicare that reducing the financial barriers to access was 
really critical. For the uninsured, who may very well be in 
some of these high-risk groups or contacts of high-risk groups, 
I think we also need to reduce that problem.
    The other advantage that takes place with the vaccines for 
children program, and I hope with the vaccines for adults 
program, it establishes a public-private partnership. If you 
bring vaccine to the table and you give it to a physician, it 
allows you to work more effectively with that physician at 
trying to work on their immunization performance. That has been 
a big boon, I think, in terms of the vaccines for children 
program in helping to cement that kind of relationship.
    Mr. Waxman. What vaccines should be included?
    Dr. Orenstein. I think the initial one I focused on is 
influenza. I think certainly others could be added over time. I 
think the one you raise is a very important one. Hepatitis B 
now is primarily a problem among high-risk adults, many of whom 
we access in STD clinics, in HIV clinics, and a variety of 
other places. We don't have the vaccine to provide it. That 
might be one other group to consider.
    Mr. Waxman. Thank you very much.
    Thank you, Mr. Chairman.
    Chairman Tom Davis. Thank you.
    Dr. Boozman, millions of doses of flu vaccine are thrown 
away every year at the end of the season. Have States ever 
considered extending the annual shot campaign, which usually 
takes place in the fall, through January or February to 
maximize the amount of Americans vaccinating?
    Dr. Boozman. Yes, sir, we have. The problem is--and Dr. 
Gerberding alluded to this--is that the demand just falls off. 
No matter, it seems like, what we do, we are conditioned almost 
that in October and November you get your flu shot, and after 
that you don't--again, no matter what we say. We have tried----
    Chairman Tom Davis. Maybe at this time of year they think 
they have made it.
    Dr. Boozman. They think they have made it. And, again, the 
testimony that you have just heard, this is the time we are the 
most worried about is right now. But in the past we have hoped 
that we could get people covered so that they can go into this 
time of the year without.
    The rock and the hard place this year was we didn't have 
vaccine and so we pushed and got the high risk. I think we have 
a better cover of high risk. In Arkansas anyway we have better 
coverage of high-risk people than we have ever had. But then 
you have a little vaccine left over and you are afraid to open 
it up too much because you get a run.
    Chairman Tom Davis. I guess, Dr. Stroube, you have the same 
problem in Virginia--that there is just little interest by 
private providers in placing an order after our fourth 
allocation?
    Dr. Stroube. Yes. And they are scared that they are going 
to get stuck with the vaccine and people aren't wanting it any 
more. I know my wife hasn't even gotten a vaccine. I haven't 
been able to talk her into getting one and she is at high risk, 
and she has deferred, even though she shouldn't have. I am 
going to have to take a dose home and shoot her, myself.
    Chairman Tom Davis. I am not going to touch that one, but 
good luck. If you need a place to stay, you know where I am.
    Dr. Stroube. She is from Fairfax County, too.
    Chairman Tom Davis. Exactly.
    Well, let me ask you also, Dr. Stroube, we have had 
problems--and also Dr. Wasserman--Dr. Wasserman talked about 
confusion of patients living in the different regions, that we 
really weren't very regionally coordinated at this point. Is 
there anything we can do to try to get better regionally 
coordinated? A lot of Virginia patients have doctors in 
Maryland and vice versa. Anything we can do on a regional 
basis? And I will ask Dr. Wasserman the same thing.
    Dr. Stroube. What we tried to do was go by what the ACIP 
and CDC were saying so it would be a uniform message that we 
would match up with the country. I was under pressure from 
different areas and different situations to do different 
things, and I resisted that. I think the more all the States 
follow the national guidelines, the better off you are.
    Now, some of the issues had this with the regulatory part. 
In Virginia we didn't have a regulation that said that you had 
to give it only to high risk. We did it only by public 
information and getting information out to the doctors, and 
other places went ahead and made it actually a violation of the 
rules and regulations if you gave it to people outside. So 
there is probably some need there for uniformity.
    Chairman Tom Davis. OK. Dr. Wasserman, have you got any 
thoughts on that?
    Dr. Wasserman. Well, there has to be some standardized 
policy. We had some jurisdictions that were assigning monetary 
penalties to physicians if they gave it to the wrong patients, 
and they had a surplus of vaccine, and therefore they couldn't 
use it for fear of being fined.
    Chairman Tom Davis. That is what happens when the 
government gets involved legislatively. You lose your 
flexibility, I think. You can get the wall of unintended 
consequences. But you have a lot of Virginia patients at MFA 
and a lot of Maryland patients that come down.
    Dr. Wasserman. That is correct. Is it fair for only 
Virginia patients that come to us to be able to get it and not 
the Virginia patients that stay in Virginia? It just seems to 
me that we are so closely knit here that there has to be some 
way to coordinate.
    Chairman Tom Davis. Is there a consensus this has been a 
fairly mild year by flu standards across the country?
    Dr. Wasserman. Up to now, but if you look at the recent 
papers, look at the recent reports, CNN just reported yesterday 
the Governor of Maryland has asked the public to stop calling 
9-1-1 because of the overwhelming calls because of flu. I mean, 
we are just starting to see a greater peak now than we have 
ever seen, so this may turn out to be mild and it may not. I 
think the next couple of weeks will tell.
    Dr. Stroube. It is similar in Virginia. We are beginning. 
This week we went to widespread flu for the first time this 
year.
    Chairman Tom Davis. So this is a good time to get your 
shot, actually.
    Dr. Stroube. Sure.
    Chairman Tom Davis. Dr. Orenstein, you state in your 
written testimony that you believe CDC did its best under the 
circumstances earlier this year, but you still recommend 
establishing an education effort at the national, the State, 
and the local levels. How would the educational effort you 
envision add to the work of CDC to inform the public?
    Dr. Orenstein. I think what it would do is develop a cadre 
of people, a cadre of materials, and an ability on a year-round 
basis to continue to educate.
    One of the great hurdles is dealing with the medical care 
community. The coverage rates in the medical community have 
only been about 43 percent, I think was the last data that I 
saw from CDC. A few years ago it was only 38 percent. We have 
some real re-education to do, and that I think is where the 
grant program will be helpful, because these are the kinds of 
people who would go into hospitals and give grand rounds to 
work with Dr. Wasserman and others in terms of trying to 
champion it among his staff. One of the most effective 
interventions that has occurred was in Rochester a number of 
years ago where staff from the health department went in and 
reviewed doctors' records and set up a target population for 
them to reach in vaccination. That significantly improved their 
coverage.
    So the educational effort is not simply a media campaign, 
although that is probably an important part of it. It involves 
a whole series of kinds of education efforts.
    Chairman Tom Davis. Thank you.
    Ms. Watson.
    Ms. Watson. I am sorry that I wasn't here for panel one, 
but with panel two what are we doing to be able to plan for 
future flu seasons? And are we doing enough here in our country 
to manufacture the flu vaccine so we don't have to depend on 
foreign suppliers? Anyone on the panel who feels they can 
tackle that?
    Dr. Orenstein. I can talk about the manufacturing issue and 
perhaps one of the health officers will talk about the other.
    Ms. Watson. OK.
    Dr. Orenstein. I think at the moment it is going to be very 
difficult to try and get a U.S. manufacturing base back.
    Ms. Watson. Explain.
    Dr. Orenstein. What we have had is we had in 2000 three 
U.S. manufacturers and one foreign manufacturer. Two dropped 
out of the market. I think to try and bring the two that 
dropped out back might be very difficult at this point because 
you would have to redo their plants, you would have to give 
substantial investments. There is some hope with some foreign 
manufacturers coming into the U.S. market. GlaxoSmithKline has 
a plant in Germany, and they have announced interest in coming 
into the U.S. market. I.D. Biomedical has a plant in Canada. 
They are interested in coming in.
    I think if we provide incentives there may be more 
manufacturers that come in, but we have to provide substantial 
incentives. I think the 188 million person market, which is 
what potentially is there, if it could begin to move forward in 
that way, more companies would come in. I think we are getting 
the interest from the two European manufacturers--Canadian and 
European manufacturer--purely because they see a much bigger 
market here.
    Ms. Watson. Anyone from CDC at the table? Well, maybe I can 
ask this of the chair. Why is it that we could not put in CDC's 
budget a line that would start to promote the manufacturing 
here in this country? You said we had four and two have dropped 
out. Why couldn't we pump up American manufactures of the flu 
vaccine? Do you have any idea?
    Chairman Tom Davis. I can just say on the CDC side, CDC's 
budget has gone up nine-fold, I think, nine times since 2001, 
but it is really the FDA that would be responsible for that, 
and I think that as a result of this year no one had planned on 
the Chiron plant being closed down, which supplied about 45 
percent of what was going on, and now we are looking for other 
folks. But it is a risky business, as you know. You produce 
vaccines, and you may end up producing stuff that can't be 
sold. It is not a high margin material. Once you produce it, 
you don't make a lot on each dose the way you do with a 
prescription drug or something like that.
    Ms. Watson. Let me ask this: can the vaccines that are in 
the surplus supply now be held over to another season?
    Chairman Tom Davis. You can hold them over, but they won't 
be any good because you get a different strand every year. That 
is the difficulty with this.
    Ms. Watson. It seems to me some of the big pharmaceutical 
manufacturers here in this country would maybe take this on as 
one of their divisions, so if it is a slow year 1 year and they 
lose money it can be compensated for in another division. But I 
think we need to be able to monitor the development of the 
vaccine right here in this country because it was a supply that 
we were counting on Chiron that had some problems. I don't know 
how we anticipate this, but I think that if we had it, if we 
had the supply--and I would say at least if it is not the 
majority supply, a supplemental supply--constantly being 
developed here by our manufacturers we would be able to guard 
against the foreign manufacturers who run into problems in 
their research labs. This is something that I am just throwing 
out.
    Chairman Tom Davis. Right. FDA in their testimony earlier 
talked about how they are trying to find more product and make 
sure that we get more product coming in. A lot of these 
facilities are done overseas because it is, frankly, cheaper to 
produce them that way. Why would you overpay for something if 
you can produce it and keep it as clean? And for the most part 
there is no evidence that vaccines that are produced wholly or 
partly abroad have any less power or potency.
    Ms. Watson. My concern in this particular era is always 
going on the cheap, and I have that concern in other products 
that are produced abroad and we consume here in this country. 
We have very little control over the process of production. So 
I want to start the debate of not always looking for the 
cheapest way out. I think this flu vaccine problem heightens 
our motivation to start looking at is cheaper always better and 
should we not invest in quality when it comes to a life-saving 
or a life-sustaining product like a flu vaccine?
    I just throw that out, Mr. Chair, as food for thought and 
as continuing debate.
    Chairman Tom Davis. Nothing like a crisis to get everybody 
to put their thinking caps on and see what can happen on this.
    Ms. Watson. Exactly.
    Chairman Tom Davis. I think you gentlemen have worked under 
extraordinary circumstances. You said, if anything, we have 
done a better job than we thought. We found supply that we 
didn't think we would find. Now the people that were demanding 
flu shots, we can't get people to take them. There is still 
time to tell. In a couple months we could still hit the peak.
    Let me just ask this question. Can you tell from what is 
happening in other parts of the world how virile and tough the 
flu shot could be by what is happening in other countries, or 
are they just so different when it comes up here there is no 
way of telling? Do you know what I am saying?
    Dr. Orenstein. Last year with the Fujian strain we were 
hearing about outbreaks in other parts of the world that were 
moderate to severe, and so that gave us a picture that we were 
probably going to get a moderate to severe year in the United 
States, which we wound up having.
    There is some potential that what goes on there will have a 
similar impact here, but it is still not 100 percent 
predictability. As Dr. Wasserman said, I think this still could 
turn out to be a problematic year. We just don't know yet. It 
is still fairly early. Most flu seasons peak in February. In 
fact, we have had flu seasons peak in March, April, and even 
May, so that has potential to occur, but it is difficult to 
predict.
    What is really important in looking at what happens 
overseas is to look at which strains are emerging so that we 
can determine what ought to go in the vaccine. Last year we 
were behind on that, and so we had--although the vaccine was 
effective, we had a mismatch.
    Chairman Tom Davis. Right. I guess if anything, if I have 
any quarrel with today's testimony it wasn't from this panel. 
It was the first panel, where they had the States that had the 
most significant infestation of flu as red States. But you 
would have liked that, Ms. Watson.
    I think everybody has closed ranks pretty much. This has 
been and hopefully stays a mild year so that the damage won't 
be too great. We can use this as a learning experience and 
maybe avert something worse at a later time.
    Thank you all for being here. I think it has been very, 
very helpful to us.
    In closing I want to remind everyone of the free flu shot 
clinic today in the Rayburn Building, 2247, from 1 to 3 p.m., 
and it is open to the public. You don't have to be a Capitol 
Hill employee. You don't have to be a Member of Congress. 
Basically, the last time George Washington University Medical 
School was giving away flu shot they couldn't give enough away 
at the subway station at Foggy Bottom. So it is open to the 
public today in Rayburn 2247 from 1 to 3 p.m.
    Thank you. I again want to thank the witnesses for their 
testimony. I want to thank the committee staff that worked on 
this hearing.
    I ask unanimous consent that the statement of Mark Mlotek 
of Henry Schein, Inc. be included in the hearing record. 
Hearing no objection, it is so ordered.
    This hearing is now adjourned. Thank you.
    [Whereupon, at 12:35 p.m., the committee was adjourned.]
    [The prepared statement of Hon. Candice S. Miller and 
additional information submitted for the hearing record 
follows:]

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