[Senate Hearing 108-775]
[From the U.S. Government Publishing Office]



                                                        S. Hrg. 108-775

                COMBATING THE FLU: KEEPING SENIORS ALIVE

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

                                HEARING

                               before the

                       SPECIAL COMMITTEE ON AGING
                          UNITED STATES SENATE

                      ONE HUNDRED EIGHTH CONGRESS

                             SECOND SESSION

                               __________

                             WASHINGTON, DC

                               __________

                           SEPTEMBER 28, 2004

                               __________

                           Serial No. 108-45

         Printed for the use of the Special Committee on Aging


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                       SPECIAL COMMITTEE ON AGING

                      LARRY CRAIG, Idaho, Chairman
RICHARD SHELBY, Alabama              JOHN B. BREAUX, Louisiana, Ranking 
SUSAN COLLINS, Maine                     Member
MIKE ENZI, Wyoming                   HARRY REID, Nevada
GORDON SMITH, Oregon                 HERB KOHL, Wisconsin
JAMES M. TALENT, Missouri            JAMES M. JEFFORDS, Vermont
PETER G. FITZGERALD, Illinois        RUSSELL D. FEINGOLD, Wisconsin
ORRIN G. HATCH, Utah                 RON WYDEN, Oregon
ELIZABETH DOLE, North Carolina       BLANCHE L. LINCOLN, Arkansas
TED STEVENS, Alaska                  EVAN BAYH, Indiana
RICK SANTORUM, Pennsylvania          THOMAS R. CARPER, Delaware
                                     DEBBIE STABENOW, Michigan
                      Lupe Wissel, Staff Director
             Michelle Easton, Ranking Member Staff Director

                                  (ii)



                            C O N T E N T S

                              ----------                              
                                                                   Page
Opening Statement of Senator Larry E. Craig......................     1
Statement of Senator Evan Bayh...................................    33

                                Panel I

Stephen M. Ostroff, M.D., deputy director, National Center for 
  Infectious Diseases, Centers for Disease Control and 
  Prevention, Washington, DC; Accompanied by: Lance Rodewald, 
  director, Immunization Services Division, National Immunization 
  Program, Centers for Disease Control and Prevention............     2
Pamela M. McInnes, DDS, MSc, deputy director, Division of 
  Microbiology and Infectious Diseases, National Institute of 
  Allergy and Infectious Diseases, Bethesda, MD..................    18

                                Panel II

Janet Heinrich, director, Healthcare and Public Health Issues, 
  Government Accountability Office, Washington, DC...............    41
Carol M. Moehrle, district director, North Central District 
  Health Department, Lewiston, ID................................    59
Howard Pien, CEO and president, Chiron Corporation, Emeryville, 
  CA.............................................................    68

                                Appenidx

Testimony submitted by Aventis Pasteur...........................    95

                                 (iii)

  

 
                COMBATING THE FLU: KEEPING SENIORS ALIVE

                              ----------                              --



                      TUESDAY, SEPTEMBER 28, 2004

                                       U.S. Senate,
                                Special Committee on Aging,
                                                    Washington, DC.
    The committee met, pursuant to notice, at 10:04 a.m., in 
room SD-628, Dirksen Senate Office Building, Hon. Larry E. 
Craig (chairman of the committee) presiding.
    Present: Senators Craig, Bayh, and Carper.

     OPENING STATEMENT OF SENATOR LARRY E. CRAIG, CHAIRMAN

    The Chairman. Good morning, everyone, and welcome to 
today's hearing, which deals with an especially appropriate 
topic, as we find ourselves in the first days of the National 
Adult Immunization Awareness Week. This year's theme is 
building a path for a healthier tomorrow. I suppose we could 
say that we are here this morning to find out how that path is 
being built and where it leads, and just how safe is that path 
for today's older Americans?
    Last year's vaccine shortages combined with an unusually 
early flu season resulted in heightened awareness of the 
importance of immunization. With news reports of people 
standing in line for hours to be immunized, many of us 
questioned for the first time whether we can assume that 
everyone who needs a vaccine can obtain one.
    Today's hearing will focus on adjustments that have been 
made to the public health system as a result of last year's 
challenges. We will hear testimony as to what announced delay 
in production might mean for the flu season and the 
implications for America's seniors as we move forward in 
pandemic preparedness planning.
    I realize that flu does not limit its attacks to the aging 
population exclusively. However, this potential killer 
certainly poses a high risk for this country's seniors. Last 
year, 36,000 Americans died from exposure to flu. Approximately 
90 percent of them were over age 65. I think there are those in 
the community who say this is a killer of our old.
    In my own state of Idaho, with the exception of one victim, 
all of those who died were over the age of 50. Another 200,000 
people were hospitalized across the country. Influenza is a 
serious disease. We cannot underestimate the danger it poses to 
the seniors of today and the boomers of tomorrow.
    Because of this concern for our citizens, I joined with 
Senator Bayh, who I think will be with us in a few moments, and 
who certainly was instrumental in encouraging this hearing 
today, I joined with him in introducing Senate 2038, the Flu 
Protection Act of 2004. I look forward to hearing how elements 
of this legislation are currently being addressed in the public 
health system and by vaccine manufacturers.
    We are pleased to be joined today by experienced public 
health officers or officials including one from my home state 
of Idaho and the Government Accounting Office. We are also 
joined by the President and CEO of one of the few manufacturers 
who continue to provide vaccines in the United States.
    I believe many of you here are particularly interested in 
hearing more about the announcement their company made earlier 
this morning on the topic.
    We have two panels this morning. On our first panel we will 
have Dr. Ostroff, deputy director for the National Center for 
Infectious Disease at the Center for Disease Control and 
Prevention. We will have also Dr. Pamela McInnes, deputy 
director of the Division of Microbiology and Infectious 
Diseases at the National Institute of Allergy and Infectious 
Diseases.
    Our second panel, we will hear from Janet Heinrich, 
director of Healthcare and Public Health Issues at the 
Government Accounting Office. She will be joined with a 
consultant from my home state, or constituent I should say from 
my home state, Carol Moehrle, district director of the North 
Central District Health Department, located in Lewiston, ID. 
Finally, we will have Dr. Howard Pien, CEO and president of 
Chiron Corporation.
    We want to welcome all of you this morning for taking the 
time to be with us. I think you have an important and valuable 
message to America and especially to America's seniors. So with 
that, Dr. Ostroff, we will start with you.

    STATEMENT OF STEPHEN M. OSTROFF, M.D., DEPUTY DIRECTOR, 
 NATIONAL CENTER FOR INFECTIOUS DISEASES, CENTERS FOR DISEASE 
            CONTROL AND PREVENTION, WASHINGTON, DC;

ACCOMPANIED BY LANCE RODEWALD, DIRECTOR, IMMUNIZATION SERVICES 
 DIVISION, NATIONAL IMMUNIZATION PROGRAM, CENTERS FOR DISEASE 
                     CONTROL AND PREVENTION

    Dr. Ostroff. Thank you very much, Mr. Chairman, and let me 
thank you and this committee for their leadership on this and 
many other important public health issues. Let me also 
introduce Lance Rodewald, who is the director of our 
Immunization Services Division in the National Immunization 
Program, who will be here to answer questions.
    The Chairman. Lance, welcome to the committee.
    Dr. Rodewald. Thank you.
    Dr. Ostroff. Let me begin by thanking you for a very timely 
hearing since we are now entering the new influenza season. 
Many of our public health issues particularly strike older 
Americans, and therefore we look forward to working jointly 
with you to find solutions that impact this population. This is 
especially true for flu.
    CDC analysts, as you pointed out, recently published a 
report in the Journal of the American Medical Association 
updating data on the burden of influenza as measured by 
hospitalizations in the United States. This analysis 
unfortunately revised upward the annual number of 
hospitalizations to 200,000.
    As you mentioned, in addition we estimate that 36,000 
Americans die each year from the flu, and this is just during 
an average flu year. The seeds of this bad news lie in the 
otherwise good news that today Americans live longer. Fully, 90 
percent of deaths from complications of the flu occur in 
persons over the age of 65 years, as do about two-thirds of 
those hospitalizations.
    Therefore, as Americans live into their eighties, nineties, 
and even reach the century mark, the number of persons at 
highest risk for severe consequences of the flu rises too. Far 
too many of these hospitalizations and deaths are avoidable, 
even those that occur among our oldest citizens.
    The keys to prevention when it comes to flu are 
vaccination, vaccination, and vaccination. Let me explain. 
First, all senior citizens should be vaccinated against the 
flu. This vaccine clearly reduces the chance someone will get 
the flu. Even if they do get the flu, their chances of having 
serious complications are much, much lower.
    Second, we need to make sure that older Americans get other 
vaccines that work in concert with the flu. This is especially 
true of the pneumococcal vaccine which many people commonly 
refer to as the pneumonia vaccine.
    Third, we need to make sure that the people who spend time 
around older Americans during flu season are themselves 
vaccinated. When such persons themselves do not get the flu, 
they cannot spread it to others who are around them. That is 
why we target those who share the same household with, and 
those who provide services to, older Americans.
    When it comes to flu vaccine, the news is often good and 
bad at the same time. As you can see on the poster here, 
without question, we have made steady progress in getting flu 
vaccine to persons over the age of 65. Today, about two-thirds 
of these persons get an annual flu vaccine, but that also means 
that about a third of them do not, and that we have a ways to 
go to reach our Healthy People 2010 goal of 90 percent.
    We also see a clear equity gap. African American and 
Hispanic seniors are far less likely to be vaccinated against 
flu than are the others. As for healthcare providers who are 
not shown on this graph, our surveys show us that only about 
one in three get an annual flu shot. So clearly, we have our 
work cut out for us.
    As you know, last season was especially difficult. First, 
it came on more rapidly and earlier than almost any recent flu 
season. Second, several locations suffered from a series of 
very highly publicized and tragic deaths in young children. 
Third, there was rising concern about avian influenza, or bird 
flu, in Asia.
    These factors drove an unprecedented demand for flu 
vaccine, a demand that could not be met, resulting in a run on 
remaining vaccine and coast-to-coast shortages.
    Unfortunately, last season came on the heels of several 
years of fairly mild flu activity. As a result, as seen here on 
this graph, in those years, vaccine supplies began to far 
exceed demand and many doses went unused and had to be 
unfortunately thrown out. So in 2003, the two primary domestic 
manufacturers cut back their production to balance the supply 
with the demand. At CDC, we have been working to reduce the 
chance of a similar problem this year.
    First, we have improved our surveillance. In addition to 
having better monitoring systems for flu itself, we are now 
working closely with the manufacturers and distributors to 
better monitor the vaccine supply. This way we can be more 
certain we know how much is out there, where it is, and can 
anticipate problems, and we have created a buffer stockpile of 
4.5 million doses should any shortages arise.
    The manufacturers have also responded by increasing 
production to a record 100 million doses. As a result, the 
potential for similar problems this season is much lower. But 
more needs to be done. We would like to see more people get 
vaccinated against the flu.
    Shown here are some of the posters we have used in this 
year's educational activity. This one targeting seniors and the 
next poster targeting healthcare workers. Meeting our goals 
will require work on all of our parts: policymakers, public 
health, the health care system, and industry.
    This is why for the past few years, we have been working 
through a coalition known as the Influenza Summit. We have also 
partnered with CMS on a project to allow standing orders for 
flu vaccine.
    Before closing, let me just touch quickly on more issue 
which is pandemic flu. Given the ongoing problems in Asia, many 
believe today we are closer to the next influenza pandemic than 
we have been in decades. These strains in Asia have already 
demonstrated two of three requirements for a pandemic.
    First, there are flu strains that have not been widely 
circulating in humans, and second, they produce very high 
fatality rates. All they now need to do is acquire the ability 
to easily spread from person to person. HHS has been taking 
steps to address this threat. We have expanded our monitoring 
systems in Asia and with WHO. We have assured year-round egg 
availability for vaccine production. We are stockpiling 
antiviral drugs, and we are developing and purchasing pilot 
lots of vaccines against the strains of most concern. In 
August, we published the draft HHS Pandemic Plan which is now 
undergoing a 60-day comment period.
    So, in summary, flu has been and will remain a very serious 
concern to the health and well-being of all Americans but 
especially older Americans. We look forward to working with the 
committee and with Congress to meet this challenge.
    Thank you very much and we will be happy to take questions.
    [The prepared statement of Dr. Ostroff follows:]

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    The Chairman. Well, Doctor, thank you very much for that 
testimony. Now let us turn to Pamela McInnes, deputy director, 
Division of Microbiology and Infectious Diseases, National 
Institute of Allergy and Infectious Diseases. That is a great 
title, Pamela. Welcome to the committee.

  STATEMENT OF PAMELA M. MCINNES, DDS, MSC, DEPUTY DIRECTOR, 
  DIVISION OF MICROBIOLOGY AND INFECTIOUS DISEASES, NATIONAL 
   INSTITUTE OF ALLERGY AND INFECTIOUS DISEASES, BETHESDA, MD

    Dr. McInnes. It is long. Thank you, so much. Mr. Chairman, 
thank you for the opportunity to discuss with you and the 
committee the role of the National Institutes of Health in 
combating influenza. The National Institute of Allergy and 
Infectious Diseases, fondly known as NIAID, a component of the 
NIH, is the lead Federal agency for conducting, supporting, and 
coordinating resource on influenza and other infectious 
diseases.
    Influenza is a classic example of a reemerging disease. It 
is not a new disease but it continually changes. In most years, 
flu viruses that infect humans globally undergo small changes. 
If enough of these changes accumulate, the virus is able to 
escape the human immune response that resulted from prior 
exposure to influenza viruses or vaccination.
    These changes are the basis of well-recognized patterns of 
influenza disease that occur every year. One of the population 
groups at risk of the serious complications of influenza is the 
group over 65 years of age.
    Only three types of influenza viruses routinely circulate 
amongst humans. However, all known influenza A subtypes are 
common in the gastrointestinal tract of wild ducks. Because the 
replication machinery of the influenza virus is prone to errors 
as the virus multiplies, avian flu viruses can emerge that may 
be able to jump species into domestic poultry, farm animals and 
humans. H5N1 avian flu viruses made the jump directly from 
birds to humans in 1997 in Hong Kong, but because the virus did 
not acquire the ability to spread from human to human, only a 
limited number of deaths occurred.
    Currently, H5N1 avian influenza virus in Vietnam and 
Thailand also have made the jump directly from bird to humans 
and has resulted in a 72 percent mortality rate. The fear is 
that the avian H5N1 and a commonly circulating human influenza 
virus might recombine resulting in the global spread of a new 
deadly influenza virus that can be spread among humans and to 
which the majority of the world will be susceptible, referred 
to as a pandemic strain.
    The overall goal of the NAIAD influenza program is to 
support research that leads to more effective approaches for 
controlling influenza. This program has two major components, 
both of which are specified in the nation's draft Pandemic 
Influenza Preparedness and Response Plan.
    The first component reflects long-standing programs for 
inter-pandemic influenza, including basic research, 
surveillance for the detection of animal and bird influenza 
viruses with pandemic potential, and the identification, 
development, and evaluation of rapid diagnostics new antiviral 
drugs and vaccines.
    Because influenza is so easily transmitted, effective 
vaccines are essential to the control of annual flu epidemics. 
Although the current egg-based system used to produce licensed 
flu vaccines has been reliable, there is room for improvement. 
NIAID is supporting a number of research projects to develop 
flu vaccines that can be manufactured more rapidly and are more 
effective.
    Recently, NIAID supported a clinical trial in older adults 
of a new influenza vaccine produced in a cell culture system as 
an alternative to manufacturing the vaccine in eggs. The 
positive results of this trial suggest that this new vaccine 
approach could be a viable alternative to the traditional egg-
based influenza vaccine.
    Although vaccination in the elderly population is very 
effective in preventing severe illness, complications and 
death, we know that elderly individuals are protected less 
effectively by vaccination that younger individuals. There is 
early research evidence that increased doses of vaccine in the 
elderly result in a higher level of protective antibodies 
against influenza virus.
    NIAID is also supporting research to determine if a novel 
booster vaccination strategy would improve the efficacy of flu 
vaccines in the elderly.
    The second component of NIAID's influenza program is geared 
to address the emergence of influenza viruses with pandemic 
potential in humans. NIAID has already begun to implement this 
carefully planned process in response to the H5N1 avian 
outbreak in southeast Asia.
    An NIAID contract investigator used reverse genetics 
technology to generate a reference virus that has the 
characteristics of the H5N1 wild type virus but is safe for 
researchers and manufacturers to work with in the laboratory 
and in the manufacturing plant.
    NIAID has provided this reference strain to the currently 
licensed and activated flu vaccine manufacturers, Aventis and 
Chiron. Under contract to NIAID, both of these manufacturers 
are developing pilot lots of the inactivated H5N1 vaccine. 
NIAID will test this vaccine in people for safety and the 
ability to raise antibodies. It is planned that one of the 
groups in the studies will be older adults. These actions are 
critical steps which will help prepare the Nation to respond to 
a pandemic influenza outbreak.
    Mr. Chairman, thank you again for inviting me to discuss 
NIH's efforts to address the threat of influenza. In addition 
to the significant toll exacted by flu each year in the United 
States, the risk of pandemic influenza is significant and the 
consequences could be very serious.
    Influenza is one among many ever-changing infectious 
disease threats confronting our nation and the world. 
Fortunately, much of what we learn from the study of one 
pathogen can often be applied to others. NIAID as the lead 
Federal agency for infectious diseases research constantly 
strives to improve its ability to respond to any infectious 
disease threat in concert with our colleagues at CDC and FDA.
    I would be pleased to answer your questions. Thank you.
    [The prepared statement of Dr. McInnes follows:]

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    The Chairman. Pamela, thank you very much. But before I do 
question either of you, let me turn to my colleague Evan Bayh 
who has joined us. I had mentioned in my opening statement that 
Evan was instrumental in introducing S. 2038, the Flu 
Protection Act of 1904. I joined with him as co-sponsor.
    Evan, any opening comments you would wish to make, and then 
if you want to start, you can lead off with questions.

                 STATEMENT OF SENATOR EVAN BAYH

    Senator Bayh. Well, thank you very much, Mr. Chairman. Only 
to say I appreciate your leadership on this issue and I 
appreciate the time of the panelists, both on this panel and 
panel two.
    We are really here today because of some of the problems 
uncovered as a result of the flu season last year. We want to 
encourage those who are in at-risk populations to receive 
immunization and to really ensure that the shortage that 
occurred and the ensuing sort of mini-panic on the part of the 
public does not happen again.
    So Mr. Chairman, I appreciated our opportunity to work 
together and this hearing really before the advent of flu 
season to try and encourage. Basically we have one message to 
people at home today. It is go out and get immunized. Vitally 
important.
    I would like to begin, I just have a couple of questions, 
Mr. Chairman. You know the old adage, ``fool me once, shame on 
you; fool me twice, shame on me.'' Can any of you assure us 
that we have enough doses of vaccine to get us through this flu 
season after the shortage we experienced last year?
    Dr. Ostroff. Well, the answer to that question is that we 
ultimately will not know until we are actually through the flu 
season. As I mentioned in my statement, we feel that we are in 
much better shape than we were last year, given that the amount 
of vaccine that is being produced far exceeds what was produced 
last year, and we know that that vaccine is now being 
distributed.
    Senator Bayh. Mr. Ostroff, forgive me. If everyone who we 
are recommending were to receive the vaccine, how many vaccine 
doses would that be in our country?
    Dr. Ostroff. Well, that would be 185 million.
    Senator Bayh. How many doses are we estimating it will 
produce this year?
    Dr. Ostroff. Currently 100 million.
    Senator Bayh. So we know that we are 85 million short of 
the number of doses needed to cover all the people we are 
encouraging to get vaccinated?
    Dr. Ostroff. You are absolutely correct, Senator.
    Senator Bayh. That seems to me to be a little cognitive 
dissonance here.
    Dr. Ostroff. The difficulty is that there is always a 
conflict between supply and demand, and certainly with the 
current production of the vaccine, the amount that is produced 
is the amount that is anticipated to be demanded by the public.
    We had several seasons in a row before last season where 
the supply far exceeded the demand and unfortunately a lot of 
that vaccine did not go into people's arms.
    The Chairman. Yes. Could we put up that chart because Evan 
asked a very important question, and you brought a chart along 
that I thought was interesting.
    Dr. Ostroff. Right.
    The Chairman. That reflected the difference here.
    Dr. Ostroff. As you can see, for several years, there was 
an excess that was building up.
    Senator Bayh. Sure. That is the tension, as I understand 
it.
    Dr. Ostroff. Correct.
    Senator Bayh. The companies, of course, need to keep an eye 
on the bottom line and if they have had an experience of 
producing too many doses, then obviously they have learned from 
that, but then you get a year like last where we are caught 
short and so the trick is to either have better forecasting 
tools or to try to assure the producers that they are not going 
to get left holding the bag if we have a year like last year.
    That is why I thought the mechanism included in our bill, 
Mr. Chairman, was the right way to approach this, to basically 
lend some certainty to the producers. I gather that instead we 
have gone down a different path of the government purchasing a 
fixed number of doses--is that correct--to try and make up any 
shortfalls should one occur?
    Dr. Ostroff. That is correct.
    Senator Bayh. How many doses did the government purchase?
    Dr. Rodewald. We have a contract for eight million doses of 
vaccine through the routine program, and then as an insurance 
policy in response to what happened last year, we have a 
contract for 4.5 million additional doses of influenza vaccine, 
half of which will be available December 1 and half of which 
will be available before January 1.
    We think that will go a long way to help if there is 
unanticipated emergency late season demand like we had last 
year. I think this point about demand and supply is a very 
important one because I believe the best way to increase the 
production of vaccine is to increase the demand of vaccine, but 
it has to be done in a way that is orchestrated such that we do 
not outstrip the production by expanding our recommendations 
and thereby, pushing too much demand at one time.
    For example, the new childhood recommendation will help 
raise the demand for vaccine and ultimately we would like to 
weave influenza vaccination much more closely into the fabric 
of society. Increased demand will increase production and will 
not leave the manufacturers with a lot of unused vaccine at the 
end of each season.
    Senator Bayh. What was the reasoning behind choosing to 
purchase a fixed number as opposed to purchasing the unused 
numbers of doses?
    Dr. Rodewald. I do not know the answer to the question 
whether it was presented as an option, but we thought that a 
fixed number of----
    Senator Bayh. It was the option in our bill.
    Dr. Rodewald. The fixed number was selected because we were 
able to fund this through the Vaccines for Children program, 
which is an entitlement program to children, and this allowed 
us to buy vaccine that we could guarantee to be distributed in 
December.
    Senator Bayh. I am curious, Mr.--again, we all want the 
same things here. We all want to ensure that there is enough 
supply to cover people in years that are a little, hopefully, 
aberrant like last year, and at the same time minimize the cost 
to the taxpayers.
    I am just curious as to why the method of selecting or 
trying to divine a fixed number to purchase was chosen over 
instead of ensuring the producers that we would purchase any 
unused quantities?
    Just curious as to why one was chosen over the other? We 
all want to choose the right course, whatever that might be.
    Dr. Ostroff. Well, again, our ultimate goal is to make sure 
that we do not have some of the same problems that we did last 
year. We all want to make sure that there is an adequate supply 
of vaccine, and in response to your earlier comment, when we 
have a goal of 90 percent coverage, we all want to be able to 
work together to move toward that 90 percent or even 100 
percent coverage, and there is no question that that is going 
to take a concerted effort on everybody's part to encourage 
people to get vaccinated as well as to assure that there is 
vaccine available to be able to deliver to them.
    Senator Bayh. Mr. Chairman, you have been very gracious, 
and I see the red light is on, so I would like to thank the 
panelists again for your work in this area and your presence 
here today.
    The Chairman. Evan, thank you very much. Let me turn to 
another one our colleagues who has joined us, Senator Tom 
Carper. Tom, do you have any opening comments and questions of 
this first panel?
    Senator Carper. I have a couple of questions, if I could.
    The Chairman. Please proceed.
    Senator Carper. To our panelists, thanks very, very much 
for joining us this morning and for your good work in this 
effort. I am not sure who to direct this question to. Maybe I 
should direct it to you, Ms. McInnes, and if I am wrong, then 
maybe one of your colleagues will take it on.
    Could you just start off by talking to me about the nature 
of the disease itself, the diseases, the viruses that we are 
trying to contain here?
    Dr. McInnes. Sure. Influenza is one of the important 
respiratory viruses. It is spread by a respiratory route. It is 
a disease that affects the mucosal, the lining of the 
respiratory tract, and it replicates when in human and it also 
has an unfortunate----
    Senator Carper. When you say it replicates, just explain to 
us.
    Dr. McInnes. To multiply, copies itself and multiplies.
    Senator Carper. Once it is inside of a body?
    Dr. McInnes. Yes.
    Senator Carper. OK.
    Dr. McInnes. It has an unfortunate part of its disease 
progression where it actually, in the cells that line your nose 
and your epithelium and your tissues in your lungs, there are 
little hair-like fibers that are called cilia, and they are 
very important in protecting your body against infection, and 
one of the byproducts of influenza is that it actually 
paralyzes those cilia so you end up with a respiratory system 
that is now vulnerable to so many things in addition to 
influenza, and many of the deaths associated with influenza are 
started with flu and then you will have a secondary bacterial 
infection that may come in on top of that influenza infection.
    Classically, people have fevers, they have muscle aches, 
chills, sort of almost bone-cramping kinds of muscle pains can 
happen. The fever goes on for several days and then normally 
healthy people who have normal immune systems will mount an 
immune response to that and recover.
    People who do not have a normal and high functioning immune 
system very often go on and develop secondary infections and 
have a much harder time dealing with influenza as a disease.
    Senator Carper. How does a vaccine work to combat the 
infection?
    Dr. McInnes. Most of the vaccine that is used in this 
country is the inactivated vaccine, and that is a killed 
vaccine.
    Senator Carper. A what?
    Dr. McInnes. It is a killed vaccine.
    Senator Carper. What does that mean?
    Dr. McInnes. So we grow up the influenza virus in eggs, and 
then it is taken out of the eggs, and it is inactivated with a 
procedure whereby the virus is actually killed.
    So you have an inert virus and pieces of the virus in the 
vaccine, and what that does is that it stimulates the antibody 
response without itself causing an infection. So what you do is 
you hope that you have--we know very well that antibodies are a 
very, very important protective mechanism against the live 
virus, and so by vaccinating you induce an immune response with 
good antibodies so that if you encounter the virus, you then 
have a heightened way to respond to the virus and hopefully not 
become ill.
    Senator Carper. The vaccine that was developed, for 
example, to fight the flu last year----
    Dr. McInnes. Yes.
    Senator Carper [continuing]. Is it likely to work this year 
and next year and the year after that? Do we have to continue 
to, I guess, are we looking for continuous improvement in our 
vaccine?
    Dr. McInnes. Flu is one of those things where every year we 
monitor for what we think may be the next viruses and, no, 
there are subtle changes that happen in these influenza viruses 
every year, and so very early in the year, we are looking at 
the data that have come out from other parts of the world and 
we may make recommendations to change the virus a little bit. 
There are three virus components in each annual year's flu 
vaccine. Sometimes they stay the same. Sometimes they are 
changed. Sometimes just one strain is changed. This year 
actually two of the strains will be changed from last year's 
vaccine.
    Senator Carper. All right. To your colleagues and to you, 
Ms. McInnes, what would be your take-away for us as we walk out 
of this hearing knowing that we are going out and face the 
challenges the world poses for us and our country? What would 
you want to be our take-away from this hearing? If we remember 
nothing else, what would you want us to remember?
    Dr. Ostroff. My message as we sit here on September 28, is 
that we need to roll up our sleeves. We need to roll up our 
sleeves and all work together to build the vaccine supply and 
we need to roll up our sleeves and get vaccinated. Now is the 
time to get started.
    Senator Carper. All right.
    Dr. Rodewald. Influenza vaccination is the safest and most 
effective way to protect not only yourself from influenza 
disease but also your loved ones from influenza disease.
    Senator Carper. All right. Thanks. Ms. McInnes?
    Dr. McInnes. I think those are wonderful.
    Senator Carper. Were you born in Delaware? Is that a 
Delaware accent I hear or is that Idaho or is that Indiana?
    Dr. McInnes. Actually, no, I was born in a very small town 
in South Africa.
    Senator Carper. No kidding. I thought you might be. How did 
you end up here?
    Dr. McInnes. I married an American.
    Senator Carper. So did I. [Laughter.]
    That is good. We are glad you are here. We are glad you are 
all here. Thank you very much for your testimony and for your 
help. Thank you.
    The Chairman. Well, let me ask some questions because I 
think the thing that is most profound, and I think both of my 
colleagues and I realize this, that this is a killer of elderly 
Americans. It ought to be viewed like that, and I would wish 
that older Americans would view it, that as they age, they 
develop a higher risk and the statistics are just black and 
white when it comes to that issue.
    Doctor, you stated that the majority of influenza strains 
that CDC has characterized this year are well matched to the 
vaccine that has been produced for the coming season. What is 
the possibility that an unmatched strain could still appear?
    Dr. Ostroff. Well, Senator, in response to that question, 
the one thing that we always know about flu is that it can be 
very unpredictable. So predicting what might happen during the 
coming flu season is always an imperfect science: when the flu 
season will really get started, where it will occur first in 
the country, and which strain is going to be causing the 
majority of disease.
    The Chairman. When that begins to appear, what do you do?
    Dr. Ostroff. Well, we work year-round monitoring for cases 
of influenza. We used to just do it starting on October 1 and 
then we would continue to monitor through May 1, but we've now 
been moving towards year-round monitoring because we recognize 
that even up here in the temperate part of North America there 
is the occasional case of flu that occurs during an unusual 
time of the year, so we need to know about that.
    We need to know what the strain is that is causing the 
disease and be prepared to respond to that. So we are 
constantly in this country monitoring for influenza, and we are 
looking for just the circumstances that you mentioned is the 
problem that we have is that we need to let the manufacturers 
know so far in advance which strains we predict are going to be 
circulating six to eight to nine months later, so that they can 
go through the entire manufacturing process and end up with 
enough vaccine in the fall to be able to vaccinate.
    The Chairman. From the time you discover or let us say you 
or a discovery occurs that you have got a different form and 
you notify the manufacturer, how long does it take for a 
vaccine to be able to get to the street?
    Dr. Ostroff. Well, the short answer to that is it depends, 
and so there is no single answer. It depends when during the 
season that strain is recognized in relation to where the 
manufacturers happen to be in the manufacturing process.
    In general, it will take a good four to six months to make 
those types of changes given the current system for vaccine 
production in this country. However, I will point out that our 
predictive capacity is much, much better than it used to be 
because the monitoring systems, not only here in North America, 
but also especially in Asia, are much, much better than they 
used to be, and so the predictions in virtually all years, and 
I say virtually because nothing is 100 percent, between what 
strains should go into the vaccine and what actually circulates 
have been extremely good essentially every year. Last year, 
unfortunately, was one of the anomalies.
    The Chairman. What is--I guess let me put it this way--how 
do we deal with only 38 percent of our health care providers 
receiving flu vaccinations? I mean the connectivity between a 
healthcare provider and his or her client, the senior citizen?
    How do we address that?
    Dr. Ostroff. Well, I must confess all of us have been 
perplexed about why we have such difficulty getting that number 
higher. I certainly get my flu vaccine every year and have done 
so for years. I am a healthcare provider and it is the 
appropriate thing to do, not only to protect myself so that I 
do not have lost work time, but in particular, to protect those 
around me that I care for, who are at higher risk of developing 
the complications.
    I myself find it in inexcusable that a healthcare worker 
would not heed that message and do something to protect their 
patients in that way. We know, I think from experience, that 
the more opportunities that there are, and the easier that we 
make it for healthcare workers to get the vaccine, the more 
likely they are to actually accept it. So having organized 
vaccination campaigns in healthcare facilities, particularly 
acute healthcare facilities, nursing homes, et cetera, is the 
way to boost coverage.
    The Chairman. How many states have developed contingency 
plans in light of the whole influenza issue; do you know?
    Dr. Ostroff. It depends what you mean by contingency plans 
and I will ask Dr. Rodewald to amplify my answer. We have been 
encouraging all states to develop plans to deal with shortages, 
yes.
    The Chairman. By that, I mean obviously if we get into a 
shortage environment and you have a limiting factor out there 
being the availability of vaccines----
    Dr. Ostroff. Right.
    The Chairman [continuing]. How do we deal with that more 
frail or fragile or susceptible population, and what is being 
done in that regard if we get caught once again?
    Dr. Ostroff. Right. Go ahead.
    Dr. Rodewald. We have asked all the states to develop 
contingency plans in order to handle vaccination and vaccine 
shortages and the states respond in their grant applications to 
CDC for how they are going to do this.
    The Chairman. How many have done this to date?
    Dr. Rodewald. I do not know the exact number, but I think 
pretty much all of the states have plans for how they will 
handle a shortage, but I think the other part of the equation 
is to recognize that about 95 percent of this vaccine goes out 
through the private sector, and so close collaboration between 
the private sector distributors for the vaccine and the vaccine 
manufacturers in the Public Health Department and providers is 
essential, so we are working with the top 20 distributors to 
monitor how the vaccine is going out and in the case of a 
shortage what we will end up encouraging to have happen is that 
the distributors will send some vaccine to all the providers so 
that all the vaccinators can be working as best they can rather 
than giving a few providers a lot of vaccine, and some 
providers no vaccines.
    So I think working collaboratively with the private sector 
has been a key to this, and the lessons for how to meter out 
this vaccine were learned in the childhood program where we 
have had to deal with shortages over the past two to three 
years, and metering out vaccine has been one of the more 
successful strategies there.
    The Chairman. All of us are concerned about shortages or 
availability to a vulnerable population. So let me ask this of 
all of you because this is a question where we probe a bit. 
Media reports of influenza caused deaths seemed last year to be 
a significant factor in the shortage because with that alarm 
sent off, people rushed out. How can the media cover the 
seriousness of this issue without causing undue panic because 
clearly it is my opinion that the seriousness of it has to be 
understood or we should try to have it understood?
    Dr. Ostroff. My answer to that would be to report 
responsibly both information on flu as well as what people can 
do to reduce their risk. You want to avoid having a large 
cohort of individuals that did not heed the message to get flu 
vaccine at a time when the flu vaccine was widely available, 
and then at the last minute have a large deluge of individuals 
who then have to shop around looking for a place that has 
remaining vaccine.
    The Chairman. Sure.
    Dr. Ostroff. This is the time to start getting your flu 
vaccine. The other important message is that not everybody has 
to get the vaccine at the same time. So we strongly encourage 
that people should be vaccinated well into the influenza season 
and one should never think that it is too late to get 
vaccinated.
    The Chairman. Pamela, any additional comment to that?
    Dr. McInnes. No, I think if any message could go out about 
heeding what happened last year and not waiting until too late 
would be very, very welcome.
    Dr. Ostroff. Then one other message that I would get out 
there.
    The Chairman. Yes.
    Dr. Ostroff. There is still a widespread belief that you 
can get the flu from getting the vaccine. As was pointed out, 
this is not the case. So we should not have anyone out there 
that has any concerns about developing the flu after getting 
the vaccine.
    The Chairman. Well, that is a great lead-in to my next 
question, and the question is of you, Dr. McInnes, the 
available literature in this area raises the question of 
vaccine effectiveness for older people. It concerns me that the 
population in greatest need responds more poorly to the 
available vaccines, and I have heard it said in elderly 
populations that I know, ``Well, I don't know that I want that, 
it might cause me to get it,'' type of thing. Can you tell us 
more about new vaccines being produced that are especially for 
the elderly?
    Dr. McInnes. Yes, I think we know very clearly that the 
more antibody you can stimulate with the vaccine, the better 
will be your chances of not becoming ill from influenza. You 
may become infected, but the disease may not be as severe, and 
we know the biggest impact from flu vaccine in the elderly is 
to prevent serious disease, hospitalizations, and death.
    We still get people who are vaccinated who become infected 
with influenza, but one hopes that they have a more mild form 
of the disease. Clearly, the efficacy of the vaccine in terms 
of preventing any disease in the elderly is lower than in 
younger adults. We have very nice data to show that if you 
increase the amount of the components of the flu vaccine, you 
can stimulate more antibody in the elderly, and this is now a 
strong focus of ours in collaboration with the manufacturers to 
look at alternative formulations of vaccine that perhaps need 
to be twofold, threefold, fourfold in concentration compared to 
what is currently delivered now. So that is something that I 
think is quite practical and will probably have a good payoff.
    The effect of adjuvants, which enhance the response, have 
been somewhat disappointing with regard to influenza vaccine in 
general, not just in the elderly. There is also the question on 
whether one might need to give a booster dose of vaccine to the 
elderly, and so instead of a one-dose regimen, could you do a 
two-dose regimen.
    So both of those strategies are being explored currently.
    The Chairman. I appreciate that, but we are still dealing 
with the complication of getting the first vaccination.
    Dr. McInnes. Absolutely.
    The Chairman. Let alone a second vaccination.
    Dr. McInnes. Absolutely.
    The Chairman. Yes. If you have to choose the most promising 
area of research, what are you most excited about? What shows 
the greater promise at this point?
    Dr. McInnes. In terms of influenza, we are very excited 
about, in fact, three areas, one of which is this tantalizing 
data about the ability to mount an improved immune response in 
the elderly by concentrating the vaccine, and that is something 
we will explore very aggressively.
    The live attenuated influenza vaccines which are on the 
market now and last year were out for the first time, 
unfortunately do not look that promising for the elderly. The 
response does not look that promising, but shows great promise 
in the pediatric population which might help alleviate some of 
the vaccine availability issue. More of the inactivated vaccine 
could be available for the other populations.
    Then third, in terms of new technologies, both in how we 
manufacture vaccines that might increase the amount of vaccine 
that is available, the speed of our ability to make vaccines by 
being able to engineer the starting viruses will be probably 
critical, not only in producing inter-pandemic vaccines, but 
certainly in being able to respond to a pandemic situation.
    The Chairman. Well, we thank you all very much, and Dr. 
Ostroff, we are going to let you have the last word, and ask 
you to repeat. The most important part of your message to the 
public today was?
    Dr. Ostroff. Roll up your sleeves and get vaccinated.
    The Chairman. Repeat that, please, and louder.
    Dr. Ostroff. Roll up your sleeves and get vaccinated, and I 
will add that hopefully we can encourage all Members of 
Congress that fit into one of those high-risk groups to help us 
do that.
    The Chairman. I thank you all very much for being here.
    Dr. Ostroff. Thank you, Senator.
    Dr. McInnes. Thank you.
    The Chairman. I will ask our second panel to please come 
forward. Well, again, welcome to our committee. As I said 
earlier, our second panel, is comprised of Janet Heinrich, 
Director of Healthcare and Public Health Issues at the 
Government Accounting Office. I am also pleased to welcome 
Carol Moehrle, one of my constituents from Idaho, District 
Director for the North Central District Health Department, 
located out of Lewiston, ID, in the north end of our state. 
Last, and I think very importantly for this committee and for 
our public to hear, from Dr. Howard Pien, CEO and President of 
Chiron?
    Dr. Pien. Perfect.
    The Chairman. Chiron Corporation. So again, to all of you 
welcome. Janet, would you please proceed?

 STATEMENT OF JANET HEINRICH, DIRECTOR, HEALTHCARE AND PUBLIC 
HEALTH ISSUES, GOVERNMENT ACCOUNTABILITY OFFICE, WASHINGTON, DC

    Ms. Heinrich. Mr. Chairman, it is a pleasure to be here 
today as you discuss issues regarding the annual production and 
distribution of flu vaccine and preparedness for an influenza 
pandemic. Each year, influenza viruses are associated with 
deaths and hospitalizations, as we have heard, especially for 
persons age 65 and over.
    The best way to prevent influenza is to be vaccinated each 
year. In the past, this country experienced periods when the 
demand for flu vaccine exceeded supply. There has also been 
increased concern about the prospect of an influenza pandemic 
which many experts believe to be inevitable.
    Experts have raised concerns about the ability of our 
public health system to detect and respond to emerging 
infectious diseases such as pandemic flu. You have asked us to 
comment on these issues based on our previous work.
    I will discuss issues related to supply, demand, 
distribution of flu vaccine, and review the pandemic plan 
recently released. For the current flu season, CDC is 
recommending that about 185 million people receive vaccine. It 
is generally widely available in the fall, and in the past 
about two-thirds of flu shots were administered in healthcare 
settings such as doctors' offices and clinics.
    About a third were given in other locations such as stores 
or community settings. Most vaccine distribution and 
administration are accomplished within the private sector, with 
relatively small amounts being purchased by CDC or by state and 
local health departments.
    Ensuring an adequate and timely supply of vaccine is a 
difficult task that has become more challenging with only a few 
manufacturers. Problems at one or more companies can upset the 
fall delivery of and flu vaccine cause unnecessary fluctuations 
in who has ready access to the vaccine.
    Matching supply and demand is also a challenge. For 
example, in 2000-2001, when a substantial portion of flu 
vaccine was distributed much later than usual because of 
manufacturing problems, temporary shortages were followed by 
decreased demand as more vaccine became available later.
    Last year's shortages, as we have heard, were attributed to 
an unexpected severe flu season and concerns about the deaths 
of children.
    Our work has also found that there is no mechanism in place 
to ensure distribution of flu vaccine to high risk individuals 
before others when there is a short supply. For example, when 
the supply was not sufficient in the fall of 2000, focusing 
distribution on high risk individuals was difficult because all 
types of providers served at least some high risk individuals. 
Some physicians and public health officials were upset when the 
local grocery store was offering flu shots to anyone when they, 
the healthcare providers, were unable to obtain vaccine for 
their high-risk patients.
    While CDC has taken some steps to recommend targeting 
vaccine when there are shortages, the situation is no different 
today.
    In regards to pandemic planning, the new plan describes 
Federal roles and responsibilities in responding to a pandemic 
and provides guidance to state and local health departments. 
Although the draft plan is comprehensive in scope, it leaves 
some important decisions about the purchase, distribution, and 
administration of vaccines unresolved.
    Consequently, states are left to make their own decisions, 
potentially compromising the timing and adequacy of a response 
to a pandemic. For example, the draft plan does not establish a 
definitive Federal role in the purchase and distribution of 
vaccine. Instead, different options are discussed.
    The plan delegates to the states responsibility for 
distribution of vaccine. Among the current state plans, and 
there are only a few of those, we found no consistency in terms 
of their procurement and distribution of vaccine and the 
relative role of the Federal Government.
    In addition, the plan does not identify priority groups to 
receive initial doses of vaccine. According to HHS officials, 
prioritization would be an iterative process and will be tied 
to vaccine availability in the progression of the pandemic. 
While recognizing that there is a need for flexibility, state 
officials have consistently told us that a lack of detailed 
guidance makes it difficult for states to plan.
     In conclusion, ensuring an adequate and timely supply of 
vaccine to protect seniors and others from flu-related 
complications continues to be a challenge. Despite efforts by 
CDC and others, there remains no system to ensure that persons 
at high risk for complications receive flu vaccine first.
    These vaccine supply and distribution problems may become 
especially acute in a pandemic. The absence of more detail in 
such issues as purchase and distribution creates uncertainty 
for the states with implications for adequate preparedness for 
a pandemic.
    That is my statement. I am happy to answer any questions.
    [The prepared statement of Ms. Heinrich follows:]

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    The Chairman. Janet, thank you very much. Now let us turn 
to you, Carol. Please proceed.

STATEMENT OF CAROL M. MOEHRLE, DISTRICT DIRECTOR, NORTH CENTRAL 
            DISTRICT HEALTH DEPARTMENT, LEWISTON, ID

    Ms. Moehrle. Thank you. Good morning, Mr. Chair. It is my 
pleasure to address you today with the prospective of a local 
public health department as it relates to flu vaccinations and 
the elderly. I am also honored to represent the National 
Association of County and City Health Officials, NACCHO, our 
national organization representing the nation's nearly 3,000 
local health departments.
    As we all know, the old adage, says, ``It's at the local 
level where the rubber meets the road,'' when we talk about flu 
vaccine, it is also the local level where that needle finally 
meets the arm of each of those receiving that vaccine.
    I am particularly proud to share with you some of our 
collaboration that our health district has been doing with the 
Idaho Commission on Aging. Our health district, along with two 
others in the state, have joined with the Commission on Aging 
to develop outreach to our senior citizens in our most rural 
areas of Idaho.
    The public health districts are providing information and 
oftentimes flu vaccine clinics at the senior meal sites in 
these rural areas. The commission is helping us by identifying 
certain homebound seniors that are not able to attend these flu 
clinics and we are sending a public health nurse into those 
homes to give those seniors their vaccine.
    This joint effort is to increase the flu vaccination rate 
amongst those very fragile, very elderly in our state of Idaho. 
However skilled we are at locating these high-risk individuals 
and administering the vaccine, we cannot achieve optimal 
protection for our communities unless the vaccines are 
available to us.
    The nation's local public health departments have 
experienced distribution issues in four out of five of the last 
flu seasons. We do not yet know what challenges await this 
year, but we are hopeful that maybe we will not have to be as 
worried as we have been in the past.
    In the five counties that my health district covers in 
north Idaho, we are already hearing flu concerns, and receiving 
questions, and dozens of phone calls each week from citizens 
wanting to know about the flu vaccine for this year. Will there 
be shortages? Will there be an ample amount?
    I spoke with one elderly woman just recently who was quite 
distressed. She insisted that she get her vaccine first. She is 
elderly, has frail health concerns, and wanted to receive it 
before the lines start forming that oftentimes do in the 
clinics.
     She was worried also about the safety of the vaccine given 
the most recent media telling us about some of the vaccine 
being recalled. She wanted to know if we had the good vaccine 
or the bad vaccine?
    I reassured her that even though we were hoping that we 
would have ample doses, we were convinced that we would have 
enough to serve the population, and all the doses that we had 
were safe doses of vaccine. She did not leave that call very 
settled. She was quite disturbed still that I would not just 
let her have her vaccine today when she called and that I could 
not give her more reassurance that she wanted.
    Those are some of the calls that we are already receiving. 
It is clear to me that many elderly residents, do not trust the 
ability of the public health system to deliver the vaccine when 
they need it, where they need it.
    We have a lot of work to do to rebuild that trust because 
of the last few years and the issues that have happened. Idaho 
also experienced a flu shortage last year, as many of the 
health departments in our nation did.
    We didn't receive the full amount of vaccine as that we 
ordered. We knew that we would run out. So we early on started 
prioritizing who the vaccine would be given to, and we used the 
CDC's guidelines for the high risk population. Many of the 
people that we customarily give flu vaccine to were quite 
disturbed and panicked that they were not among the highest 
risk that we were giving the vaccine to.
    There was much emotion, confusion and even some anger in 
our communities that they could not receive this. Some people 
were so upset that they offered to pay more just so they could 
get a dose of vaccine.
    During some of the clinics that we held, we were actually 
turning some people away that were not qualified in the high 
risk categories, only to find out that they showed up for the 
next clinic with made-up diseases so that they would then be 
able to receive their vaccine.
    This pains me greatly that we have placed people in a 
situation where they have to lie about their health concerns in 
order to be amongst that high risk population when we have 
people that want to do the responsible thing to receive their 
flu vaccine.
    It also demonstrates some of the most critical concerns we 
have about the supply. We do not believe that anyone has a 
clear understanding of the reason for the supply and 
distribution problems that we have seen in the recent years.
    Every entity that gives flu shots, whether it is the large 
chain stores, the physicians or public health, we all order the 
vaccine from the same distributors and wholesalers. There does 
not seem to be a discernable rhyme or reason why some who place 
orders receive it early and in a full amount while others 
receive partial shipments sporadically throughout the flu 
season.
    Two years ago, a local nursing home called me at the health 
department and said, ``It is flu season, I have no vaccine.'' 
This was very concerning, a nursing home to call and not have 
received vaccine yet. I made more calls to other nursing homes 
and our senior living centers in our five counties, and lo and 
behold, we had others, other nursing homes that did not have 
flu vaccine.
    We called a meeting with our local medical community. We 
had physicians and healthcare providers arrive and voluntarily 
turned over doses of vaccine to Public Health so we could 
redistribute to the most at-risk, our elderly seniors in those 
living centers.
    The cooperative spirit that we had with our medical 
community helped us to address this distribution problem 
successfully, but on the contrary, we had two large chain 
stores that had received their full amount of vaccine early on. 
When asked to come to the table, they said that they were 
continuing to give the vaccine to anyone who walked through 
their stores and could not spare to give this to the public 
health when we thought it needed to be distributed elsewhere.
    In times of shortage, we all need to be working together 
with the same guidelines and the same rules as we use the 
vaccine very responsibly. Public Health urges stronger Federal 
leadership to bring all the parties together to find ways to 
rationalize the current chaotic distribution system, and to 
collaborate to assure optimal distribution of all the flu 
vaccine.
    If a nightmare of a flu pandemic ever arrives, we believe 
that the Federal Government will need to step in to take a 
strong hand in vaccine distribution because only optimal 
distribution will be essential to stemming outbreaks and to 
saving lives.
    Senator Craig, thank you for holding this hearing and for 
your support of public health. I will stand for questions.
    [The prepared statement of Ms. Moehrle follows:]

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    The Chairman. Carol, thank you very much. Now let us turn 
to Howard Pien, president and CEO of Chiron Corporation. 
Howard, please proceed.

      STATEMENT OF HOWARD PIEN, CEO AND PRESIDENT, CHIRON 
                  CORPORATION, EMERYVILLE, CA

    Mr. Pien. Mr. Chairman, thank you for the opportunity to 
appear at this hearing. Today I would like to focus on three 
key messages. First, Chiron reiterates our expectation that we 
can deliver between 46 and 48 million doses of flu vaccine this 
season as we previously announced. We expect to make an 
announcement on our shipment plans in the next few days. We 
profoundly regret that we have caused uncertainties in this 
year's flu vaccine supply. However, in considering all of the 
dimensions of our responsibility as a vaccine supplier, we 
ultimately place the heaviest weight on the preservation of the 
trust of Americans that when they get the flu shot, the product 
is safe.
    This is the reason that we have been deliberate, thorough 
and extremely careful. The issues we encountered this year do 
highlight some of the important and valuable principles.
    First, the system in place to test flu vaccine does work. 
The problem was identified before release of a single dose of 
the vaccine to the public. So to Ms. Moehrle's comment and 
phone call that she got, there is no bad vaccine. There is not 
going to be a recall because we will not release a single dose 
of the vaccine, until we are certain that the quality issues 
have been put to bed.
    But we also learned that when there is unexpected 
disruption in supply, timely and transparent communication is 
most important. We have benefited enormously from the guidance 
and the advice of the men and women serving the public health 
interest at the FDA, the CDC, and the other parts of Health and 
Human Services.
    We pledge always to be open in our communication and to 
help ensure that there are concerted efforts to coordinate 
communication to the public at large. Without that kind of 
communication, there is every risk of misinformation, possible 
panic, and erosion of public confidence in vaccines.
     My second message today is that while significant advances 
have been made in increasing immunization rates in older 
Americans, greater enhancements are possible, particularly for 
individuals between 50 and 64 years of age and healthy adults 
in close contact with people at high risk. The threat of flu to 
public health makes the enhancement of vaccination rates one of 
the clearest and most accessible ways to improve the health of 
Americans, and we applaud this committee in holding this 
hearing.
    Progress has been made in raising flu coverage rates, but 
as Dr. Ostroff pointed out, we still have a long way to go. 
Only 65 percent of the high-risk population over 65 are 
immunized. It is estimated that only 34 percent of those 
between the age of 50 and 64 have received vaccine, and the 
immunization of healthcare workers is less than 40 percent as 
we heard.
    Chiron believes that the following are paramount in 
importance to expand the rate of immunization. Education is 
critical. Public/private partnerships, such as that of National 
Influenza Vaccine Summit, need to undertake substantial and 
innovative efforts to raise flu immunization coverage rates in 
any individuals over the age of 50 as well as their contacts. 
We can and we should reduce the disparities between geographic 
areas and between racial and ethnic groups.
    Also, vitally important is a recommendation for universal 
immunization. Expanding today's recommendations to cover more 
than the 60 percent of the population currently covered will 
enhance our pandemic readiness as a nation. The Canadian 
province of Ontario has already done this and so can the United 
States.
    Finally, we need better incentives for immunization when it 
comes to flu and its terrible complications, the best medicine 
is preventive medicine. Therefore the best health economic 
policy is for the CMS to continue to encourage physicians to 
actively immunize against flu by setting adequate 
administration fees and reimbursement rates.
    My third message is that over the past year, collaboration 
between the public sector and industry has led to significant 
progress in both flu vaccine supply and pandemic preparedness. 
It is imperative that these efforts are sustained because they 
have led to improvements already and we should maintain the 
momentum.
    Here are some of the examples:
    The CDC has worked with flu vaccine manufacturers to 
establish a reserve of over four million doses to be delivered 
at the end of the flu season. Chiron will deliver two million 
doses to this buffer stock.
    The National Institute of Allergy and Infectious Disease 
with the leadership that we have grown to expect from the NIH 
has supported the production and testing of candidate vaccines 
against pandemic strains of avian flu that was described by Dr. 
McInnes. Chiron is manufacturing pilot lots of H5N1 and H9N2 
vaccine to enable NIH's evaluation.
    A draft pandemic influenza preparedness and response plan 
was recently published by the National Vaccine Program Office. 
The document will stimulate discussion and set priorities to 
enhance our preparedness including distribution against the 
pandemic threat. Chiron pledges to contribute to this important 
discussion.
    Our recommendation on pandemic readiness has already been 
incorporated in our written testimony. Briefly, the tenets are:
    Educating the public to increase the uptake of flu vaccine 
in the aged and their contacts and caregivers;
    Increasing research and development to enable higher 
certainty of sufficient pandemic vaccine supply;
    Proactively removing the obstacles in pandemic vaccine 
production including indemnification to the suppliers and well-
defined government purchase, contractual arrangements and 
distribution plans.
    Finally, and perhaps most importantly, sustaining the 
political will to address the threat that flu represents to 
America's health beyond this flu season and beyond this 
congressional session.
    In summary, on behalf of Chiron Corporation, I respectfully 
submit the following thoughts:
    First, Chiron expects to deliver between 46 to 48 million 
doses of the vaccine this season. Second, increasing the 
willingness of the public to be immunized this season and in 
the future is critical. Public-private partnerships are the 
best mechanisms for maintaining the momentum. Third, the public 
sector and the industry have the opportunity in the next 
Congress to build on progress that has already occurred this 
year in both vaccine supply and in pandemic preparedness. We 
should seize on that spirit of collaboration with zeal.
    Thank you, Mr. Chairman, for the opportunity to represent 
Chiron's views.
    [The prepared statement of Mr. Pien follows:]

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    The Chairman. Howard, thank you very much, and again to all 
of you I appreciate your presence here. I have several 
questions for each of you. Janet, in regard to the gaps in the 
draft plan that you have mentioned, which areas do you believe 
or area is most important to address?
    Ms. Heinrich. There are several, and it really is settling 
the issues of: is it the private sector or the public sector 
that will be purchasing the vaccine, who will be distributing 
it, how, and then the issue of prioritizing the populations 
that will be at risk knowing that there is going to be a short 
supply is absolutely critical.
    The Chairman. Yes. Of those areas that you have identified 
or expressed concern about, which would be the easiest to fix?
    Ms. Heinrich. I think that the discussions have been 
ongoing about the public-private sector purchase and 
distribution, and I know from health departments, state and 
local, there really is an interest in having a Federal 
Government system in place or that could be used to distribute 
the scarce vaccine.
    It would seem to me that with the growing cooperation 
between manufacturers and the public sector that that would be 
the area that probably could be determined.
    The Chairman. Then let me ask this question. Do you believe 
then that CDC should dictate which population should be 
prioritized and make decisions for states on how they 
distribute and administer vaccines?
    Ms. Heinrich. I do not think that approach would be 
welcomed by the states or the localities. There has to be 
dialog. There has to be conversation, and what we are hearing, 
though, is that the states want guidance, and in terms of 
setting priority populations, there needs to be a discussion 
among all the stakeholders about which populations would 
receive the vaccine.
    The Chairman. Well, Carol, with that question, we will turn 
right to you, and let me ask the same question of you. In your 
relationship or the relationship of states to CDC and how we 
make these priorities, what would some of your recommendations 
be?
    Ms. Moehrle. The priority I think that I would have 
personally would be the distribution issue.
    The Chairman. Yes.
    Ms. Moehrle. There needs to be some bigger oversight of 
where that vaccine goes first or to make sure that those 
administering vaccine to the highest risk, wherever that 
population is, has their vaccine. The distribution seems to be 
an issue that is of most concern at the local level.
    The Chairman. Yes. It is disturbing to me that large chain 
store might have it and you do not.
    Ms. Moehrle. Or physicians do not.
    The Chairman. Or physicians do not.
    Ms. Moehrle. Or nursing homes do not. Yes, where those high 
risk are.
    The Chairman. I mean that is obviously tremendously 
frustrating for the public to call in and say, ``I need help or 
I need to be vaccinated,'' you say, ``I cannot,'' and Wal-Mart 
is saying, ``I can.'' That is an interesting juxtapose here.
    Do local providers usually order their entire supply from 
one manufacturer or do they spread the risk and order from more 
than one; do you know?
    Ms. Moehrle. From my perspective and what we do at the 
health districts in Idaho, we usually order from more than one. 
Because of the variations over the past years, where we get a 
partial shipment from the manufacturer or our distributor, at 
different times during the season, if we order from several 
companies or both companies, we sometimes get a larger shipment 
right up front, so we do not have to wait till the end to 
receive those doses. Most of us in Idaho order from several or 
from both companies.
    The Chairman. Any reaction to what Howard has mentioned 
today as it relates to supply?
    Ms. Moehrle. We are hopeful this supply will be there. I 
also appreciated his comments about getting the message to the 
media, that everything is safe, they didn't take the chance. 
They are making sure that things are safe before our public 
receives that dose.
    The Chairman. That phone call that you got from that one 
elderly person, bad versus good?
    Ms. Moehrle. Right. I think there is a negative sentiment 
out there----
    The Chairman. Yes.
    Ms. Moehrle [continuing]. In our communities, and then we 
need to do some real hard media work to make sure that they 
understand how safe that vaccine truly is.
    The Chairman. Yes, I think that is very important. I think 
you are to be commended for your partnership efforts to expand 
your outreach efforts in addition to the program you have 
mentioned.
    Where are the hard-to-reach senior citizens most? In the 
ruralist of populations?
    Ms. Moehrle. Well, I am from very rural, as you know. The 
ones that we see----
    The Chairman. Actually we call that urban in Idaho.
    Ms. Moehrle. Urban, yeah. [Laughter.]
    I think it is frontier in a lot of areas.
    The Chairman. I think you are right.
    Ms. Moehrle. Some of them it is a transportation issue, 
which you know in Idaho, they just cannot get to their 
physician or their clinic in a timely manner. So by having some 
of our nurses go out to them is very helpful. I think we have 
definite populations in our cities that do not take advantage 
of the vaccine either, and it is a personal choice sometimes as 
well as an option for them not to be able to travel, but we are 
trying real hard.
    This was a pilot in our rural areas, specifically, to see 
if we could increase the flu availability to those that are in 
those very, very rural areas.
    The Chairman. How much authority does a local health 
department have to reallocate vaccine supply when shortages 
occur?
    Ms. Moehrle. Authority--partnerships, different. We have 
lots of partners in our communities and are respected highly 
with our medical partners, and I think that is why we have seen 
the willingness for them to actually turn over doses to the 
public health district to reallocate where they are needed 
most.
    I am sure that partnership is different state to state and 
jurisdiction to jurisdiction.
    The Chairman. Are you suggesting this is all largely done 
on a voluntary basis then----
    Ms. Moehrle. Totally voluntary.
    The Chairman [continuing]. Or collaborative voluntary 
basis?
    Ms. Moehrle. Exactly. Totally voluntary, based upon the 
respect in the partnership.
    The Chairman. It works?
    Ms. Moehrle. It has worked well in Idaho.
    The Chairman. Well, again, thank you very much for being 
with us today, greatly appreciated.
    Howard, again, thank you for being with us. Will you delay 
in shipment the Fluvirin; is it?
    Mr. Pien. Fluvirin.
    The Chairman. Fluvirin vaccine composed--let me see. Now I 
understand what I am trying to say here. Will this delayed 
shipment compromise the ability of older Americans to obtain 
the influenza vaccine this year; do you think?
    Mr. Pien. We expect not. As you had heard from a gentleman 
representing the CDC, there are guidelines and recommendations 
out of there that says that vaccination, even as late as 
December, will do good. We expect that in the next few days we 
can make our distribution plans and shipment plans, in which 
case the majority of the doses that I spoke of, 46 to 48 
million doses, will be shipped in the month of October. Most 
Americans do get vaccines in the month of October and November.
    I should say one more word about supply. This is only our 
second year as a supplier of flu vaccine to the United States. 
Nonetheless, last year, our first year, we increased the output 
by 50 percent. This year if our expectation proves true, as we 
currently expect that it would turn true, 46 to 48 million 
doses, that would raise the supply by yet another 20 or so 
percent.
    Therefore, for the total industry, we expect this season we 
will have about 20 to 25 percent more doses in the United 
States. So while indeed there are reasons to be concerned about 
the pandemic situation, as to whether or not enough vaccines 
will be made, the truth of the matter is that, and a lot of 
work needs to be done there, as we have already testified, but 
in the so-called normal flu season, we certainly believe that a 
commitment of manufacturers to step up to the plate and make 
more products are clear and present and well demonstrated.
    The Chairman. Has a delay occurred in the delivery of 
Fluvirin to the U.S. market previously and what guarantees do 
we have that Chiron will not have a similar situation again 
next year? I say that because it is obvious that you are a 
major player in the market.
    Mr. Pien. I have said already in my testimony, we are 
greatly pained by any disruption and uncertainty that we may 
have caused. We hope that in due course and in the next few 
days when we make an announcement, that that issue would no 
longer be. But let me just say that since a year ago, we began 
to make the investment to the tune of about $100 million for 
this year and next to upgrade our manufacturing capacity, to 
obtain more equipment and machinery, to train our workforce 
even better, to increase the state-of-the-art capacities of 
managing the process of making flu vaccines.
    It is our deep and unerring commitment that we are going to 
do better and be a reliable and consistent supplier.
    The Chairman. Well, Howard, your presence here today 
probably answers this question because you have heard it said--
I have asked the question as a result of what Carol has 
mentioned--but out in the public, we have heard about people 
asking for the good vaccine and their lack of confidence in the 
availability, and you have expressed it very clearly as it 
relates to the safety of the vaccine.
    I think for all to hear, it would not be bad to say it 
again.
    Mr. Pien. Thank you, Senator. Let me just go back a little 
bit on what happened in this situation. The flu vaccine, as you 
heard, is a different product every year.
    The Chairman. That is right.
    Mr. Pien. To reflect the different patterns.
    The Chairman. In saying that, tell us what the shelf life 
is of a flu vaccine?
    Mr. Pien. Theoretically, it could be longer than one 
season, but as the virus mutates or drifts every year, the 
product is actually different every year.
    The Chairman. Obsolete.
    Mr. Pien. Obsolete. Reflecting the fact that the resistant 
pattern, mutation pattern has changed. Now, it turns out of 
course that flu vaccine is made up of three strains, so 
actually it is not one product that is different every year, 
but three products that are different every year. For that 
reason, the manufacturing process is complex, and for that 
reason, there has to be robust consistent routine testing 
procedures to ensure that the product that is made is indeed 
safe.
    In our situation, we detected some small number of batches 
of the products that we made appeared to have had contaminated, 
and the testing procedure and protocol calls for a program that 
has three components. The first one of which is to retest all 
of the products that we have made. The second thing is to 
identify all of the possible hypotheses as to why there might 
be contamination. The third is to do all of the experiments to 
rule out all of the alternative explanations such that we lock 
in on a root cause, as it is called in the trade. Root cause is 
what we now have come to, and we are doing the documentation 
literally on thousands of pieces of data and submitting in our 
final write-up of those testing results to the regulatory 
authorities, and have the discussion with the regulatory 
authorities on what it is that we have looked at what we had 
encountered early on these testing anomalies.
    That is why it takes all this time, and that is why I think 
it is critically important that Americans understand that there 
is a huge amount of routine testing protocols and procedures 
and system in place to ensure that there is not going to be any 
unsafe product that is released.
    The Chairman. I appreciate your walking us through that. I 
think the average person does not even begin to comprehend the 
complication and the sophistication of arriving at that, if you 
will, new designer vaccine literally every year that fits the 
circumstance and the mutation of the change of the virus we are 
dealing with.Thank you.
    Your testimony cites the importance of public-private 
partnerships in addressing the important policy issues 
surrounding influenza and pandemic planning. Can you provide 
for the committee some of your thoughts with regard to 
priorities that should be considered?
    Mr. Pien. We really think that the most important thing is 
before the pandemic arrives, that we increase the uptake for 
flu vaccine during the normal season. I think as that happens, 
the manufacturers are able to make more and more investments 
and increase their manufacturing capacity. I think that is the 
first and most important point.
    The Chairman. Capacity in other words?
    Mr. Pien. Capacity to make more products. I think there are 
several obstacles that are along the way before all of these 
investments are going to take shape, that is in the overall 
system. One obstacle is indemnification or coverage from an 
insurance standpoint. Another one is to define very clearly 
with the guidance of the Centers for Disease Control and the 
FDA on how a pandemic vaccine can be made in a short period of 
time, and once it is made, how the product will be purchased 
and therefore how it will be distributed.
     I think that to wait until the pandemic is upon us, will 
be too late. The reaction time will be too short. There are new 
technologies that we have heard descriptions of from NIH and 
the one that is most promising is called cell culture, which 
mean that you can make vaccines without a reliance on eggs. 
Right now it takes 5 months to make vaccines because of the big 
amount of time it takes to get the eggs and to grow the seeds 
in the eggs, so that you can harvest the vaccine.
    There is the potential that a cell culture vaccine can 
reduce the reaction time from what is about 5 months now to 
maybe 2 months, and those kinds of research and development 
programs need to take place. Chiron is one of the companies 
that is in this field, and we hope that in a short period of 
time, we will have things to report on the progress in that 
area.
    The Chairman. Well, you just mentioned indemnity, 
liability, compensation programs that are necessary to 
establish in advance of a pandemic. If these programs are not 
in place, will Chiron be able to initiate production of the 
kind that we see necessary for the pandemic flu vaccine?
    Mr. Pien. Senator, the fact is that we are committed in 
this field. But our commitment right now is to come up with 
this new product that I have just described, cell culture 
product that reduces the amount of the manufacturing time to 
something that is more acceptable. That will cost to something 
in the range of $100 million of R&D investment.
    Beyond that, we have to make a capital investment. We need 
to make sure that we have the facilities and the machinery and 
equipment that will make this new generation of cell culture 
product. That round number is another $100 to $200 million 
worth of investment.
    Now, we are committed to coming up with a new product. If 
we do not come up with a new product, then all of the questions 
about incremental investment is theoretical. But certainly, as 
we get to the point of being able to say with some high degree 
of certainty that a cell culture product is in our hands, we 
can actually get registration, and get FDA approval, then it 
comes a time to make the next chunk of significant commitment, 
and that is the time we hope that would mature much of this 
policy discussion and advance many of the policy issues that we 
have submitted in our testimony. Once again, we think that with 
political will and with the leadership that certainly this 
committee represents, what you have just asked me, we would 
never have to confront.
    The Chairman. Well, I hope that is the case. You heard 
Carol express the frustration of local health officials that a 
seemingly random order in which vaccine deliveries occur. Can 
you shed some light on this for us and how does this 
distribution process work for you all?
    Mr. Pien. I am not sure that I have a clear answer. Let me 
give you the background on why. We are still young at being a 
supplier in the United States. What we do is we work through 
seven national distributors. We do not ship the products 
ourselves directly, except in the case of CDC, CDC's safety 
stock stockpile, as well as CDC's order, which is actually a 
competitive tender.
    So with CDC, we do ship directly, but otherwise, we rely on 
the distributors. It is the distributors that end up shipping 
the products to physician's offices, to the public health 
clinics, or to the retail outlets.
    The Chairman. I see.
    Mr. Pien. Generally, based on our relatively young 
experience, we believe that we are getting the vaccines to the 
physicians' offices and I am distraught to hear that we are not 
getting it to important pockets in different parts of the 
country. It is possible that there may have to be special 
consideration as to how we satisfy the needs in areas that are 
not served well by the distributors. But I would have to submit 
to you in later testimony as to what our thoughts are. It is 
outside my range of expertise.
    The Chairman. Well, thank you. Before I close out this 
panel, are there any additional comments that anyone of you 
would like to make? Janet?
    Ms. Heinrich. I just wanted to say something more about the 
distribution----
    The Chairman. Yes.
    Ms. Heinrich [continuing]. Of vaccine going to physicians' 
offices, clinics, health departments, and healthcare providers. 
We know that the 65 and over population primarily gets their 
immunizations through healthcare providers. But we also have 
heard that because of the distribution through intermediaries, 
that vaccines do not always go to healthcare providers first.
    In fact, it was interesting, in today's Post, in the Health 
section, there was a little ad about finding a flu shot, and 
they talk about the Maxim Health System, and how that is where 
to go, and they are in fact supplying the Coscos and the large 
stores. So I just want to reemphasize that distribution is 
currently a concern.
    The Chairman. Carol, anything additional you would to make?
    Ms. Moehrle. From a public health perspective where we do 
prevention, flu vaccine is one of the most common-sense things 
we can do for our citizens is help them realize what a 
preventive nature that vaccine does in helping us stem 
outbreaks and death from something that is preventable like the 
flu.
    So, the push to get the vaccine, for people to roll up 
their sleeve is a great public health message. We are here to 
protect the public, so anytime that we can get more of that 
vaccine at the local level where those people are, we need to 
let them know where those clinics are and who is there to help 
protect them. Most of the citizens that have a primary care 
physician, that is where they get their vaccine. For those that 
cannot access that, we need other clinic options for them.
    The Chairman. Thank you. Howard.
    Mr. Pien. I would just say even on the distribution issue 
that we have identified and discussed, CDC in its 
characteristic way of wanting to contribute has been conducting 
conference calls on a weekly basis with ourselves and our 
distributors. As you heard in the earlier testimony, I think 
that while this is true, that there is more to be done. The men 
and women in public health service really need to be 
congratulated for the great advance and deep dedication that 
has already exhibited. This is not an issue that can be 
addressed overnight.
    It requires persistence and resolve and leadership that 
will ultimately lead to a much more salubrious condition than 
what we have today.
    The Chairman. Well, I thank you all, both our first and 
second panelists, for being with us today. We will monitor this 
closely and hope that not only in shaping public policy, this 
kind of record helps. We think it does, but also importantly, 
it again expands the exposure to our citizens of the need to 
get vaccinated. It is obviously critical, especially in certain 
vulnerable populations, and this committee tries to be an 
advocate of a particular one.
    We do appreciate it very much. The committee will stand 
adjourned. Thank you.
    [Whereupon, at 11:37 a.m., the committee was adjourned.]


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