Flu Vaccine: Supply Problems Heighten Need to Ensure Access for  
High-Risk People (15-MAY-01, GAO-01-624).			 
								 
Until the 2000-2001 flu season, production and distribution of	 
flu vaccine generally occurred without major difficulties. The	 
fall of 2000, however, produced many stories about delays in	 
obtaining flu vaccines. GAO reviewed (1) the circumstances that  
contributed to the delay and the effects the delay had on prices 
paid for vaccine, (2) how effectively current distribution	 
channels ensure that high-risk populations receive vaccine on a  
priority basis, and (3) what the federal government is doing to  
better prepare for possible disruptions of influenza vaccine	 
supply. GAO found that manufacturing difficulties resulted in an 
overall delay of about 6-8 weeks in shipping vaccine to most	 
customers and a temporary price spike. Manufacturers experienced 
unprecedented problems growing a new viral strain, while 2 of 4  
manufacturers halted production--one permanently--to address	 
safety and quality control concerns. There is currently no system
to ensure that high-risk patients have priority when the supply  
of vaccine is short. While the federal government has no direct  
control over how influenza vaccine is purchased and distributed  
by the private sector and state and local governments, the	 
Department of Health and Human Services (HHS) has several	 
initiatives underway to help mitigate the adverse effects of	 
future influenza vaccine shortages and delays. For example, the  
Centers for Disease Control and Prevention (CDC) revised	 
guidelines to extend the recommended timeframe for receiving	 
immunizations, and is helping to bring together manufacturers,	 
distributors, providers, and others in the private and public	 
sectors to explore ways to improve distribution to high-risk	 
individuals.							 
-------------------------Indexing Terms------------------------- 
REPORTNUM:   GAO-01-624 					        
    ACCNO:   A00947						        
  TITLE:     Flu Vaccine: Supply Problems Heighten Need to Ensure     
             Access for High-Risk People                                      
     DATE:   05/15/2001 
  SUBJECT:   Health resources utilization			 
	     Health services administration			 
	     Immunization services				 
	     Medical supplies					 
	     Prices and pricing 				 
	     Swine influenza					 

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GAO-01-624
     
Report to Congressional Requesters

United States General Accounting Office

GAO

May 2001 FLU VACCINE Supply Problems Heighten Need to Ensure Access for
High- Risk People

GAO- 01- 624

Page i GAO- 01- 624 Influenza Vaccine Delay Letter 1

Results in Brief 2 Background 4 Manufacturing Problems Caused Temporary
Shortages and Spikes

in Price 5 Distribution of Vaccine Does Not Ensure Priority to High- Risk

Individuals 11 HHS Has Initiatives Under Way to Prepare for Future Vaccine

Delays and Shortages 17 Conclusions 22 Recommendations For Executive Action
22 Agency Comments 23

Appendix I CDC Advisory Committee Recommendations on Target Groups For
Influenza Vaccination, 2000- 01 26

Appendix II Comments From the Department of Health and Human Services 28

Appendix III GAO Contact and Staff Acknowledgments 32

Tables

Table 1: Flu Vaccine Orders Placed in 2000 by the State of Alabama 7 Table
2: Prices Paid for Influenza Vaccine by Physician Groups

Surveyed by GAO 9 Table 3: Percentage of Population Receiving Influenza
Vaccination 12 Table 4: Percentage of Influenza Vaccine Shipped by

Manufacturers Compared with Percentage Received by Surveyed Physician
Groups, by Month, 2000- 01 Flu Season 16 Table 5: HHS Initiatives in
Response to the 2000- 01 Flu Season 18 Table 6: Updated ACIP Recommendations
on Target Groups for

Influenza Immunization, 2000- 01 27 Contents

Page ii GAO- 01- 624 Influenza Vaccine Delay Abbreviations

ACIP Advisory Committee on Immunization Practices CDC Centers for Disease
Control and Prevention FDA Food and Drug Administration HCFA Health Care
Financing Administration HHS Department of Health and Human Services NVPO
National Vaccine Program Office PRO Peer Review Organization

Page 1 GAO- 01- 624 Influenza Vaccine Delay

May 15, 2001 Congressional Requesters Each year, influenza contributes to
approximately 20, 000 deaths and 110,000 hospitalizations in the United
States. Influenza itself may not be the reason for death or hospitalization,
but it weakens the body?s defenses against other diseases, such as
pneumonia. Those individuals aged 65 years or older, people with chronic
medical conditions, and pregnant women are at particular risk for medical
complications. Annual vaccinations, commonly known as flu shots, are
currently the best defense for these high- risk populations. About one in
every three adults in the United States receives a flu shot, according to
1999 survey data. Of these, the Centers for Disease Control and Prevention
(CDC) estimates that about half are at high risk for medical complications
from influenza.

Until the 2000- 01 flu season, production and distribution of flu vaccine
generally occurred without major difficulties. The fall of 2000, however,
produced many stories about delays in obtaining flu vaccine. News media
reported instances in which medical providers were unable to get vaccine for
patients at high risk for hospitalization or death from complications
resulting from the flu, while other providers had enough vaccine to give
shots even to younger, healthier people at lower risk for medical
complications. The media also reported stories in which vaccine was
apparently available for providers willing to pay considerably higher
prices, while providers that had ordered vaccine at lower prices were still
waiting to receive their orders. You asked us to examine these issues. Our
review focused on the following questions:

 What circumstances contributed to the delay, and what effects did the
delay have on the prices paid for vaccine?  How effectively do current
distribution channels ensure that high- risk

populations receive vaccine on a priority basis?  What is the federal
government doing to better prepare for possible

disruptions of influenza vaccine supply? In response to your request, we
reviewed relevant documents and interviewed officials from three agencies
within the Department of Health and Human Services (HHS): CDC, Food and Drug
Administration (FDA), and Health Care Financing Administration (HCFA). In
addition, we interviewed officials from HHS? National Vaccine Program Office
(NVPO). We also interviewed and obtained documents from all vaccine

United States General Accounting Office Washington, DC 20548

Page 2 GAO- 01- 624 Influenza Vaccine Delay

manufacturers, two trade associations for medical supply distributors, as
well as several distributors, companies that provide flu shots at retail
outlets and work sites, physician and other professional associations, and
other purchasers. Because physicians are the main source of flu shots for
the elderly (who comprise about half of the high- risk population), we
surveyed 58 physician group practices to determine how readily they were
able to obtain vaccine and the prices they paid for the 2000- 01 season. The
groups we selected included a diverse array of primary care groups
nationwide, but they were not a statistically representative sample that can
be generalized to all physician groups. 1 We also interviewed officials of
health departments in all 50 states about their vaccine purchase and
distribution activities. We conducted this work from November 2000 through
April 2001 in accordance with generally accepted government auditing
standards.

For the 2000- 01 flu season, manufacturing difficulties resulted in an
overall delay of about 6- 8 weeks in shipping vaccine to most customers,
creating an initial shortage and a temporary price spike. Manufacturing
difficulties illustrate the fragility of the system to produce a new flu
vaccine each year on a timely basis. Manufacturers experienced problems
growing a new viral strain. At the same time, two of the four manufacturers
halted production- one permanently- to address safety and quality control
concerns. While the roughly 78 million doses eventually produced were about
the same amount produced in the previous year, the delay resulted in a
shortage of vaccine during October and November when people normally receive
their flu shot. Many purchasers who had placed orders received only partial
shipments- and in some cases, no vaccine at all- by this period of high
demand. During the shortage period, providers who wanted to purchase vaccine
often faced rapidly escalating prices from distributors with an available
supply. For example, orders placed by physicians in our sample during the
peak vaccination months of October and November cost an average of $7 per
dose, compared with less than $3 per dose for orders that had been placed
before the end of June 2000. State health officials and providers who had
placed orders early often waited for

1 We selected physician practices that were members of the Medical Group
Management Association. Association members represent 7, 000 to 8,000
physician group practices nationwide that include an estimated 38 percent of
office- based physicians who practice in the United States. Because primary
care practices routinely order flu vaccine, we randomly selected from those
group practices that were coded in the association?s membership database as
family practice and internal medicine specialties. Results in Brief

Page 3 GAO- 01- 624 Influenza Vaccine Delay

delivery of their lower- priced vaccine from manufacturers and distributors
until late November or December. By December, when roughly one- third of the
vaccine became available, vaccine prices declined. However, because the
usual time for vaccination had passed and flu outbreaks were relatively
mild, demand for vaccine had also subsided and about 10 percent of vaccine
eventually produced- or more than 7 million doses- went unsold.

Currently, there is no system to ensure that high- risk people have priority
when the supply of vaccine is short. In a typical year, enough vaccine is
available in the fall to meet total demand, both from high- risk individuals
and from others who simply want to avoid the flu. When the supply became
short in the fall of 2000, however, there was no mechanism to target vaccine
to those who needed it most. For example, while more elderly people tend to
receive flu shots in physicians? offices than at any other location, our
survey of physician practices found that on the whole these physicians
received their shipments at about the same delayed rate that vaccine was
generally available on the market. Efforts to target scarce vaccine are
complicated because all types of purchasers serve at least some high- risk
people. When shortages developed, manufacturers and distributors had limited
ability to identify and give priority to those providers serving more high-
risk individuals.

HHS has several initiatives underway to help mitigate the adverse effects of
future influenza vaccine shortages and delays. For example, CDC revised its
guidelines to extend the recommended timeframe for receiving immunizations,
and is helping bring together manufacturers, distributors, providers, and
others in the private and public sectors to explore ways to improve
distribution to high- risk individuals. The success of these initiatives
relies to a great extent on the cooperation of the many organizations
involved because the federal government has no direct control over how
influenza vaccine is purchased and distributed by the private sector and
state and local governments. This cooperation could be fostered by HHS?
completion of its national plan to distribute scarce vaccine during severe
influenza epidemics- called pandemics. A related step that could help
mitigate the adverse effects of influenza during a shortage of flu vaccine
is to increase immunization rates against pneumococcal pneumonia, one of the
primary causes of deaths and hospitalizations associated with influenza. HHS
has initiated activities to improve these immunization rates, but it has a
long way to go to meet the immunization goals it has set for the year 2010.

Page 4 GAO- 01- 624 Influenza Vaccine Delay

We are making recommendations to the Secretary of HHS to better prepare for
possible future disruptions to the influenza vaccine supply. In commenting
on a draft of this report, HHS identified ongoing or planned actions related
to two of our recommendations, and in response to our third recommendation
commented that CDC supports efforts to use pneumococcal vaccine more widely.

Vaccination is the primary method for preventing influenza and its more
severe complications. Flu vaccine is produced and administered annually to
provide protection against particular influenza strains expected to be
prevalent that year. When the match between the vaccine and the circulating
viruses is close, vaccination may prevent illness in about 70- 90 percent of
healthy people aged 64 or younger. It is somewhat less effective for the
elderly and those with certain chronic diseases but, according to CDC, it
can still prevent secondary complications and reduce the risk for influenza-
related hospitalization and death. 2 CDC estimates that during the average
flu season, for every 1 million elderly persons that are vaccinated
approximately 1, 300 hospitalizations and 900 deaths are prevented.
Information on which groups are at highest risk for medical complications
associated with influenza and recommendations on who should receive a flu
shot are issued by CDC?s Advisory Committee on Immunization Practices
(ACIP). 3

Because the flu season generally peaks between December and early March, and
because immunity takes about 2 weeks to establish, most medical providers
administer vaccinations between October and midNovember. CDC?s ACIP
recommended this period as the best time to receive a flu shot. However, if
flu activity peaks in February or March, as it has in 10 of the past 19
years, vaccination in January or later can still be beneficial.

Producing the vaccine is a complex process that involves growing viruses in
millions of fertilized chicken eggs. This process, which requires several
steps, generally takes at least 6 to 8 months between January and August
each year. Each year?s vaccine is made up of three different strains of
influenza viruses, and typically each year, one or two of the strains is

2 Limited studies have shown influenza vaccine may be about 30 to 70 percent
effective in reducing hospitalization among the noninstitutionalized elderly
population. 3 See app. I for additional information on the recommendations
for the 2000- 01 flu season. Background

Page 5 GAO- 01- 624 Influenza Vaccine Delay

changed to better protect against the strains that are likely to be
circulating during the next flu season. FDA decides which strains to include
and also licenses and regulates the manufacturers that produce the vaccine.
4 Three manufacturers- two in the United States and one in the United
Kingdom- produced the vaccine used during the 2000- 01 flu season. 5

Much like other pharmaceutical products, flu vaccine is sold to thousands of
purchasers by manufacturers, numerous medical supply distributors, and other
resellers such as pharmacies. Purchasers then administer flu shots in
medical offices, public health clinics, nursing homes and pharmacies, as
well as in less traditional settings such as grocery stores and other retail
outlets, senior centers, and places of employment. For the 1999- 2000 flu
season, about 77 million doses of vaccine were distributed nationwide. 6 CDC
estimates that about half of the vaccine was administered to people with
high- risk conditions and to health care workers, and the balance was
administered to healthy people younger than 65 years.

Overall, manufacturing problems led to vaccine production and distribution
delays of about 6- 8 weeks in 2000- 01. Although the eventual supply was
about the same as the previous year?s, the delay limited the amount of
vaccine available during October and early November, the period when most
people normally receive their flu shot. While the effect of the delay and
initial shortage in terms of the number of high- risk persons vaccinated
will not be known for some time, other effects can be observed, particularly
in terms of the price of the vaccine. Providers who decided to purchase
vaccine from those distributors who had it available during the October and
November period of limited supply and higher demand often found prices that
were several times higher than expected. Many providers who decided to wait
for their orders placed earlier eventually received them, and at the lower
prices they had initially

4 FDA decides which strains to include in the annual influenza vaccine based
on the recommendations of its Vaccines and Related Biological Products
Advisory Committee. 5 The two manufacturers with facilities in the United
States were Wyeth- Ayerst Pharmaceuticals, Inc. and Aventis Pasteur Inc. The
manufacturer with facilities in the United Kingdom was Medeva Pharma Ltd.

6 About 3 million doses were returned to manufacturers at the end of the
season, for a net distribution of 74 million doses. Manufacturing

Problems Caused Temporary Shortages and Spikes in Price

Page 6 GAO- 01- 624 Influenza Vaccine Delay

contracted for. By December, as vaccine supply increased and demand dropped,
prices declined.

For the 2000- 01 flu season, manufacturers collectively took about 6- 8
weeks longer than normally expected to produce and distribute all of the flu
vaccine. This delay meant that the bulk of the vaccine was not ready for
market during the period of October and early November that CDC recommended
as the best time to receive flu shots. This is also the time when most
practitioners are used to administering the vaccine and when most people are
used to receiving it. In 1999, more than 70 million doses of vaccine were
available by the end of October; in 2000, fewer than 28 million doses were
available by that date.

Two main factors contributed to the delay. The first was that two
manufacturers had unanticipated problems growing one of the two new
influenza strains introduced into the vaccine for 2000- 01. Because
manufacturers must produce a vaccine that includes all three strains
selected for the year, delivery was delayed until sufficient quantities of
this difficult strain could be produced. The second factor was that two of
the four manufacturers that produced vaccine the previous season shut down
part of their manufacturing facilities because of FDA concerns about
compliance with good manufacturing practices. One manufacturer temporarily
closed on its own initiative to make facility improvements and address
quality control issues raised during an FDA inspection; the other was
ordered by FDA to cease production until certain actions were taken to
address a number of concerns, including issues related to safety and quality
control. The former reopened its facilities but the other manufacturer,
which had been expected to produce 12- 14 million doses for the 2000- 01 flu
season, announced in September 2000 that it would cease production
altogether and, as a result, supplied no vaccine for 2000- 01.

These problems did not affect every manufacturer to the same degree. In
particular, the manufacturer that produced the smallest volume of vaccine
did not experience production problems or delays in shipping its vaccine. By
the end of October, this manufacturer had distributed nearly 85 percent of
its vaccine, while the two other manufacturers had shipped only about 40
percent and less than 15 percent, respectively. Purchasers who ordered their
vaccine from the manufacturer with no major production problems were far
more likely to receive their vaccine on time. For example, the state of
Alabama ordered vaccine directly from all three manufacturers before July
2000 at a similar price per dose. As table 1 shows, the state received its
shipments at markedly different times, reflecting how soon Most Vaccine Was
Not

Ready During Period of Peak Demand

Page 7 GAO- 01- 624 Influenza Vaccine Delay

each manufacturer was able to get its vaccine to market. Purchasers that
contracted only with the late- shipping manufacturers were in particular
difficulty. For example, health departments and other public entities in 36
states banded together under a group purchasing contract and ordered nearly
2.6 million doses from the manufacturer that ended up having the greatest
delays from production difficulties. 7 Some of these public entities, which
ordered vaccine for high- risk people in nursing homes or clinics, did not
receive most of their vaccine until December, according to state health
officials.

Table 1: Flu Vaccine Orders Placed in 2000 by the State of Alabama
Manufacturer Manufacturer?s

rank to market Dates

orders placed

Number of vaccine

doses ordered Price

per dose Date when at

least 75% of order received

Manufacturer #1 First May 3/ June 23

50,000 $2.49 October 3 Manufacturer #2 Second May 1 40,000 $2.37 October 25
Manufacturer #3 Third May 1/

June 23 35,030 $2.37 December 20

Source: Manufacturers? rank based on data provided by influenza vaccine
manufacturers. Alabama?s specific order information based on data from the
state of Alabama?s Department of Public Health.

The 2000- 01 experience illustrates the fragility of the vaccine supply.
Because influenza virus strains take a certain period of time to grow, the
process cannot be accelerated to make up for lost time. When manufacturers
found that one strain for the vaccine was harder to produce than expected,
they adjusted their procedures to achieve acceptable yields, but it still
took months to produce. 8 Because only three manufacturers remain, the
difficulties associated with vaccine production, and the need to formulate a
new vaccine involving one or more new strains each year, the future vaccine
supply is uncertain. Problems at one or more manufacturers can significantly
upset the traditional fall delivery of influenza vaccine.

7 These included nearly 1,000 orders from state health departments, city and
county health departments, and other public institutions such as hospitals,
universities, and prisons. 8 While each manufacturer produces the same three
strains as the others for the annual influenza vaccine, each manufacturer
has its own production processes. As a result, one manufacturer?s experience
in producing a particular strain can differ from another manufacturer?s
experience with the same strain.

Page 8 GAO- 01- 624 Influenza Vaccine Delay

Because supply was limited during the usual vaccination period, distributors
and others who had supplies of the vaccine had the ability- and the economic
incentive- to sell their supplies to the highest bidder during this time
rather than filling lower- priced orders they had already received.
According to distributors, and purchasers, a vaccine order?s price,
quantity, and delivery might not be guaranteed. When no guarantee or
meaningful penalty applies, orders can be cancelled or cut and deliveries
can be delayed when vaccine is in short supply. 9

Because of the production delays, many purchasers found themselves with
little or no vaccine when the peak time came for vaccinations. Many of these
purchasers had ordered vaccine months earlier at agreed- upon prices, with
delivery scheduled for early fall. While some orders were cancelled outright
or cut substantially, many purchasers were told that the vaccine was still
being produced and that their full order would be delayed but delivered as
soon as possible. This left many purchasers with a choice: they could take a
risk and wait for the vaccine they had ordered, or they could try to find
vaccine immediately to better ensure that patients were vaccinated before
the flu season struck. Most of the physician groups and state health
departments that we contacted reported that they waited for delivery of
their early orders. 10 For example, of the 53 physician group practices we
surveyed that ordered vaccine before the end of June 2000, 34 groups waited
for delivery of these original orders. 11

Those who purchased vaccine in the fall- because they did not want to wait
for their early orders to be delivered later, had orders canceled or
reduced, or just ordered later- found themselves paying much higher prices.
The following examples illustrate the higher prices paid to make up for
reduced orders or delayed delivery:

 The state of Hawaii initially ordered 12, 000 doses of vaccine from one
distributor in June at $2. 80 per dose. When the distributor cut the order

9 Alternatively, if meaningful guarantees or penalties are in place,
manufacturers and distributors may have less flexibility to redirect vaccine
in the event of a shortage. 10 Some state health officials, such as those in
New York and Delaware, also ordered additional vaccine to counter the
potential effects of availability problems. 11 The 34 physician groups
placed 36 orders before the end of June 2000 that resulted in shipments.
They waited until November 2000 or later to receive the first shipments for
most of these orders. Limited Availability During

Peak Demand Created Temporary Price Spikes

Page 9 GAO- 01- 624 Influenza Vaccine Delay

by one- third, the state purchased vaccine from another distributor in
September at a price between $5. 00 and $6.00 per dose.

 One physician practice ordered flu vaccine from a supplier in April 2000
at $2.87 per dose. When it received none of that vaccine by November 1, the
practice placed three smaller orders in November with a different supplier
at the escalating prices of $8. 80, $10.80, and $12.80 per dose. By the
first of December, the practice ordered more vaccine from a third supplier
at $10.80 per dose. The four more expensive orders were delivered
immediately, before any vaccine had been received from the original April
order.

The data we collected from 58 physician group practices around the country
provide another indication of how prices spiked during the period of high
demand in October and November. Overall, the price paid by these practices
averaged $3.71 per dose. However, as table 2 shows, the average price paid
for orders placed by these practices in October and November was about $7
per dose, compared with about $3 per dose for advance orders placed in June
or before.

Table 2: Prices Paid for Influenza Vaccine by Physician Groups Surveyed by
GAO Date order was placed Range of price per dose Average price per dose

June 2000 and earlier $1.90 to $6. 35 $2.90 July through September 2000
$2.27 to $4. 90 $4.01 October and November 2000 $2.50 to $12.80 $6.98
December 2000 and later $1.50 to $10.80 $3.48

Note: The 58 physician group practices we surveyed purchased a total of 89,
245 doses of flu vaccine during the 2000- 01 season. This table is based on
prices the groups paid for nearly 77,000 doses of vaccine received in
multidose vials. (The groups received a total of 77,240 doses of vaccine in
vials, but 350 doses were provided at no cost by a state health department
and for 200 doses the price was not known.) The physician groups also
received 12, 005 doses of vaccine in prefilled syringes, which are excluded
from this table because vaccine in prefilled syringes costs roughly double
the price per dose of vaccine sold in vials.

While some vaccine was available to those willing to pay a higher price in
October and November, some purchasers trying to buy vaccine reported that
they were unable to find vaccine from any supplier at any price during that
time. For example, one large health maintenance organization told us that
when delivery of its early order was delayed, it could not find any source
with the large number of doses it needed and ended up waiting until November
and December for delivery of more than a million doses it had ordered in the
spring.

Page 10 GAO- 01- 624 Influenza Vaccine Delay

Vaccine prices came down as a large quantity of vaccine was delivered in
December, after the prime period for flu vaccinations had passed. Vaccine
became increasingly available in December and manufacturers and distributors
delivered the orders or parts of orders that had been postponed. In
addition, recognizing the potential shortfall in production, CDC contracted
in September 2000 with one manufacturer to extend production into late
December for 9 million additional doses. 12 Providers buying vaccine in
December could do so at prices similar to those in place during the spring
and summer. Among the physician groups we contacted, none of which ordered
under the CDC contract, the price for orders placed in December or later
averaged about $3.50 per dose- somewhat above the average price paid through
June, but about half of the average price of orders placed in October and
November.

Although vaccine was plentiful by December, fewer people were seeking flu
shots at that time. According to manufacturers and several large
distributors, demand for influenza vaccine typically drops by November and
it is difficult to sell vaccine after Thanksgiving. Despite efforts by CDC
and other public health officials to encourage people to obtain flu shots
later in the 2000- 01 season, providers and other purchasers still reported
a drop in demand for flu shots in December 2000.

A reason people did not continue to seek flu shots in December and later may
have been that the 2000- 01 flu season was unusually light. Data collected
by CDC?s surveillance system showed relatively low influenza activity and
mortality. While mortality due to influenza and pneumonia- one indicator of
the severity of a flu season- had surpassed CDC?s influenza epidemic
thresholds every year since 1991, it had not done so by April of the 2000-
01 season. 13 Had a flu epidemic hit in the fall or early winter, the demand
for influenza vaccine may have increased substantially.

As a result of the waning demand, manufacturers and distributors reported
having more vaccine than they could sell. Manufacturers reported shipping
about 70 million doses, or about 9 percent less than the previous year. More
than 7 million additional doses produced under the CDC contract

12 The manufacturer began accepting orders under this contract in early
November, and began shipping vaccine from these orders in mid- December
2000. Prices were $2. 99 per dose for public- sector purchasers and $5. 00
per dose for private- sector purchasers.

13 CDC monitors influenza activity through May of each year. When More
Vaccine

Became Available, Demand and Prices Had Already Dropped

Page 11 GAO- 01- 624 Influenza Vaccine Delay

were never shipped at all because of lack of demand. None of the physician
practices that we contacted had ordered from the CDC contract, mainly
because they were waiting for earlier orders to arrive or they had already
received some or all of their vaccine. In addition, some physicians?
offices, employee health clinics, and other organizations that administered
flu shots reported having unused doses in December and later. For example,
the state of Oklahoma reported having more than 75, 000 unused doses of
vaccine.

While it is difficult to determine if any of these events will affect the
price of vaccine in the future, prices for early orders for the upcoming
2001- 02 flu season have increased substantially over prior years? prices.
Physician practices, state public health departments, and other purchasers
reported that their suppliers are quoting prices of $4 to $5 per dose, or
about 50 to 100 percent higher than the early order prices for the 2000- 01
season. Citing expenses associated with expanding the production capacity
and the costs of maintaining a modern and compliant facility, one
manufacturer notified customers of a significant price increase for 2001-
02.

There is no mechanism currently in place to distribute flu vaccine to
highrisk individuals before others. In a typical year, there is enough
vaccine available in the fall to give a flu shot to anyone who wants one.
When the supply was not sufficient in the fall of 2000, focusing
distribution on highrisk individuals was difficult because all types of
providers served at least some high- risk people. Lacking information to
identify which orders should be filled first to serve the population most in
need, manufacturers and distributors who did attempt to target higher- risk
persons used a variety of approaches to distribute the limited vaccine.
According to public health officials and providers, there was confusion in
many communities as some providers were able to administer flu shots to
anyone requesting one, while at the same time, other providers had no
vaccine for even their highest- risk patients.

Like other pharmaceutical products, influenza vaccine is distributed largely
through multiple channels in the private sector that have evolved to meet
the specific needs of different types of purchasers. Those selling and
delivering vaccine include the manufacturers themselves, distributors of
general medical supplies and pharmaceuticals, and other types of resellers
such as pharmacies. According to data from the manufacturers, about half
Distribution of

Vaccine Does Not Ensure Priority to High- Risk Individuals

Influenza Vaccine Is Distributed Through Multiple Channels

Page 12 GAO- 01- 624 Influenza Vaccine Delay

of all flu vaccine is purchased by providers directly from manufacturers and
roughly half is purchased through distributors and resellers.

As a general practice, manufacturers said they pre- sell almost all of their
planned production volume by May or June of each year. Major distributors
and other large volume purchasers, including state health departments, can
obtain the most favorable prices by ordering directly from manufacturers
during this early order period. The distributors and other resellers can
then offer smaller purchasers such as physicians? offices the convenience
and flexibility of buying flu vaccine along with their other medical
supplies. Most experts we interviewed agreed that when the supply of vaccine
is sufficient, reliance on these varied distribution channels allows for the
successful delivery of a large volume of influenza vaccine in time for the
annual fall vaccination period.

Providers of flu vaccine also represent a diverse group. The annual
influenza vaccine is widely available as a convenience item outside the
usual medical settings of physicians? offices, clinics, and hospitals.
Millions of individuals, including those who are not at high risk, receive
flu shots where they work or in retail outlets such as drugstores and
grocery stores. Some of these providers order their own flu vaccine from a
manufacturer or distributor, others participate in different types of
purchasing groups, and others contract with organizations such as visiting
nurse agencies to come in and administer the vaccine.

The widespread availability of flu shots at both traditional medical
settings and at convenience locations where people shop, work, and play may
contribute to increased immunization rates. HHS survey data show that
between 1989 and 1999, influenza immunization rates more than doubled for
individuals aged 65 and older (see table 3). During that same period,
however, immunization rates increased more than five- fold for the 18- 49
year age group, which includes individuals who are likely to be at lower
risk and to receive flu shots in nonclinical settings.

Table 3: Percentage of Population Receiving Influenza Vaccination Percent
vaccinated Age group 1989 1995 1999

18- 49 years 3. 4 13.1 18.8 50- 64 years 10.6 27.0 35.8 65 years and older
30.4 58.2 66.9

Sources: CDC?s 1989 and 1995 National Health Interview Surveys and 1999
Behavioral Risk Factor Surveillance System data.

Page 13 GAO- 01- 624 Influenza Vaccine Delay

While access to flu shots in a wide range of settings is an established mass
immunization strategy, some physicians and public health officials view it
as less than ideal for targeting high- risk individuals. Because of the
expected delay or possible shortage of vaccine for the 2000- 01 season, CDC
and ACIP recommended in July 2000 that mass immunization campaigns be
delayed until early to mid- November. 14 CDC issued updated guidelines in
October 2000 which stated that vaccination efforts should be focused on
persons aged 65 and older, pregnant women, those with chronic health
conditions that place them at high risk, and health care workers who care
for them. Regarding mass immunization campaigns, these updated guidelines
stated that while efforts should be made to increase participation by high-
risk persons and their household contacts, other persons should not be
turned away. 15

Although some vaccination campaigns open to both high- risk and lowerrisk
individuals were delayed as recommended by CDC, many private physicians and
public health departments raised concerns that they did not have vaccine to
serve their high- risk patients at the time these campaigns were underway.
The following are a few examples of promotional campaigns held across the
nation that created controversy:

 One radio station sponsored a promotional event where a flu shot and a
beer were available at a local restaurant and bar for $10 to whoever wanted
one.

 One grocery store chain offered a discounted flu shot for anyone bringing
in three soup can labels.

 Flu shots were available for purchase at a professional football stadium
to all fans attending the game.

We interviewed several retail outlets and employers and the companies they
contract with to conduct mass immunization clinics. While some reported that
they disseminated information on who was at high risk and stressed the need
for priority vaccination among high- risk groups, they generally did not
screen flu shot recipients for risk. The perspective of

14 See CDC, ?Delayed Supply of Influenza Vaccine and Adjunct ACIP Influenza
Vaccine Recommendations for the 2000- 01 Influenza Season,? Morbidity and
Mortality Weekly Report, Vol. 49, No. 27 (July 14, 2000), pp. 619- 622.

15 See CDC, ?Updated Recommendations from the Advisory Committee on
Immunization Practices in Response to Delays in Supply of Influenza Vaccine
for the 2000- 01 Season,? Morbidity and Mortality Weekly Report, Vol. 49,
No. 39 (Oct. 6, 2000), pp. 888- 892. Availability of Vaccine for

Mass Immunization Campaigns Created Controversy

Page 14 GAO- 01- 624 Influenza Vaccine Delay

these companies was that the burden lies with the individual to determine
his or her own level of risk, not with the provider. Moreover, they said
that the convenience locations provide an important option for high- risk
individuals, because physicians? offices would have difficulty vaccinating
all high- risk individuals during the optimal time period of October through
mid- November. Other organizations held flu clinics open to lower- risk
individuals in the early fall before realizing the extent of the vaccine
supply problems.

Because there generally has been enough vaccine to meet demand in recent
years, there was little practical need for the fragmented distribution
process to develop the capability to determine which purchasers might merit
priority deliveries based on serving high- risk individuals. When the supply
of vaccine was delayed in the fall of 2000, the manufacturers and
distributors we interviewed reported that it was difficult to determine
which of their purchasers should receive priority vaccine deliveries in
response to the ACIP?s July and October 2000 recommendations to vaccinate
high- risk groups first. Although some types of providers are more likely
than others to serve high- risk individuals, it is likely that all types of
providers serve at least some high- risk individuals. CDC and ACIP did not
provide guidance about how to implement priority deliveries, and
manufacturers and some distributors reported that they often did not have
enough information about their customer base to make such decisions. As a
result, they reported using various approaches in distributing their
vaccine. 16

 One manufacturer reported that it initially followed its usual policies of
distributing vaccine on the basis of initial order date- that is, orders
were filled on a first in, first out basis- and honoring contracts with
specific delivery dates. According to the manufacturer, a few contracts in
which purchasers paid a premium price for an early delivery date received
priority in distribution. However, less than halfway through its season?s
distribution, this company notified customers at the end of October that it
changed its policy in order to make partial shipments to all purchasers as a
way of ensuring more equitable treatment for all.

16 In addition to their specific approaches to distributing vaccine, two
manufacturers also sent letters notifying customers of the delays in
distribution and the recommendations by CDC and ACIP for the 2000- 01 flu
season. Manufacturers and

Distributors Reported Difficulty Determining How to Get Vaccine to High-
Risk Individuals

Page 15 GAO- 01- 624 Influenza Vaccine Delay

 One manufacturer reported that it first shipped vaccine to nursing home
customers (where such customers could be identified) and then made partial
shipments to other customers.

 One manufacturer sold all of its vaccine in the United States through one
distributor. That distributor, which also sold vaccine from the other
manufacturers, told us that it attempted to give priority to orders from
physicians and then orders from state and local governments.

Other distributors we contacted also used varied approaches to distribute
vaccine in 2000. For example, officials from one large medical supply
distributor said that after a manufacturer cut its order substantially, the
distributor gave priority to the medical practices that ordered early. The
distributor reported that it cancelled all orders from resellers and
pharmacies, cancelled all orders that came in after June 21, and reduced all
orders from medical practices that came in before June 21 by an equal
percentage. Another medical supply distributor said it did not sell vaccine
to any providers that were not regular customers until it had filled the
early orders of its regular customers. Officials from the Health Industry
Distributors Association, a national trade association representing medical
products distributors, said that distributors are limited in their ability
to target certain types of people because they can only target distribution
by type of provider, such as physicians? offices, nursing homes, or
hospitals. All of the manufacturers and distributors we talked to said that
once they distributed the vaccine it would be up to the purchasers and
health care providers to target the available vaccine to high- risk groups.

The success of these various approaches to reach high- risk groups was
limited by the wide variety of paths the vaccine takes from the
manufacturers to the providers who administer the flu shots. For example,
although one manufacturer shipped available vaccine to the nursing homes it
could identify in its customer base as first priority, this did not ensure
that all nursing homes received vaccine for their high- risk patients on a
priority basis. State health officials reported that nursing homes often
purchase their flu vaccine from local pharmacies or rely on public health
officials to provide the vaccine. In those cases, how quickly nursing homes
received vaccine for their high- risk residents depended on the practices
along the distribution chain- in some cases involving the practices of
manufacturers, distributors, pharmacies, and public health providers.
Attempts to Target HighRisk

Groups Were Complicated by the Variety of Distribution Channels

Page 16 GAO- 01- 624 Influenza Vaccine Delay

Physicians also reported that they did not receive priority, even though
nearly two- thirds of the elderly who had flu shots in 1998- 99 received
them in medical offices. 17 The American Medical Association and other
physicians told us that in some communities vaccine was available at retail
outlets and other sources before physicians? offices. The 58 physician group
practices we surveyed, which received nearly 90,000 doses from
manufacturers, distributors, and other resellers reported receiving their
vaccine at about the same time or slightly later than when manufacturers
shipped more than 70 million doses (see table 4). Thus as a group these
physician practices appeared to experience no priority in vaccine
distribution.

Table 4: Percentage of Influenza Vaccine Shipped by Manufacturers Compared
With Percentage Received by Surveyed Physician Groups, by Month, 2000- 01
Flu Season

Month shipped/ received September 2000

and earlier October 2000 November

2000 December 2000 and later

Vaccine shipped by manufacturers

20 19 29 31 Vaccine received from all sources by surveyed physician groups

20 18 25 38 Note: Percentages may not total 100 percent because of rounding.
Table does not include over 7 million unsold and unshipped doses retained by
manufacturers. Vaccine received by physician groups includes vaccine in
vials and prefilled syringes from all sources.

Source: Vaccine shipped by manufacturers based on data provided by influenza
vaccine manufacturers. Vaccine received by physician groups based on data
from GAO?s survey of 58 physician group practices.

17 Data collected by states through the CDC Behavioral Risk Factor
Surveillance System during 1999 indicated that among persons aged 65 years
or older reporting receipt of influenza vaccine in the past 12 months, about
63 percent reported receiving their last influenza vaccination at
physicians? offices and health maintenance organizations; followed by other
types of clinics (9 percent); senior, recreation, or community centers (7
percent); health departments (6 percent); hospitals (6 percent); stores (5
percent); workplaces (1 percent); and other locations (2 percent).

Page 17 GAO- 01- 624 Influenza Vaccine Delay

While HHS has no direct control over how influenza vaccine is purchased and
distributed by the private sector and local governments during the annual
influenza season, it has several initiatives under way to help mitigate the
adverse effects of any future shortages and delays. 18 Success of these
various efforts, however, relies on collaboration between the public and
private sectors. Completion of HHS? national plan to respond to an influenza
pandemic could help foster this type of collaboration and provide a
foundation to deal with vaccine shortages or delays in nonpandemic years. In
the meantime, increasing immunization rates against pneumococcal pneumonia,
which can follow the flu, may help reduce influenza- related illness and
death.

In response to the production and distribution problems experienced with flu
vaccine for the 2000- 01 flu season, HHS has undertaken several initiatives.
As shown in table 5, these initiatives include (1) conducting clinical
trials on the feasibility of using smaller doses of vaccine for healthy 18-
to 49- year- olds, (2) working with public and private sector entities
involved in vaccine distribution to explore ways of better targeting vaccine
to high- risk groups, (3) recommending state and local health department
actions to prepare for a vaccine delay or shortage, and (4) revising
guidelines to expand the recommended timing of influenza immunizations.

18 Under the Federal Food, Drug and Cosmetic Act, FDA has only limited
authority to regulate the resale of prescription drugs, including influenza
vaccine, that have been purchased by health care entities such as public or
private hospitals. This authority does not apply to wholesale distributors,
who are excluded from the definition of health care entities. HHS Has
Initiatives

Under Way to Prepare for Future Vaccine Delays and Shortages

Several Initiatives Undertaken in Response to the 2000- 01 Flu Season

Page 18 GAO- 01- 624 Influenza Vaccine Delay

Table 5: HHS Initiatives in Response to the 2000- 01 Flu Season Initiative
How this would help Status

The National Institutes of Health, working with FDA and CDC, conducted a
clinical trial to evaluate the immune responses in healthy adults aged 18-
49 years who received a half- dose of vaccine.

Reducing the dosage of vaccine given to healthy adults may be an acceptable
strategy to increase the number of doses available in the event of
shortages.

Preliminary results that were disseminated in October 2000 indicated that a
half- dose of one manufacturer?s vaccine appears to offer an acceptable
level of protection for healthy adults aged 18- 49 years. Final results are
due in the fall of 2001. Discussion among private- and publicsector entities
involved in vaccine distribution regarding options to improve distribution
of influenza vaccine when in short supply.

Private- and public- sector entities involved with vaccine distribution
could agree to consistent strategies and approaches to direct vaccine to
high- risk groups in times of delay or shortage.

On March 27, 2001, CDC and the American Medical Association cosponsored a
meeting with representatives from physician groups, manufacturers,
distributors, and public health officials to discuss the problems
experienced in 2000- 01 and distribution of flu vaccine in the event of a
future shortage. Recommending state and local government actions and
requesting that states develop draft contingency plans to maximize influenza
vaccination in the event of a delay or shortage of vaccine.

State and local health officials could work with private- and public- sector
entities involved in providing vaccine to develop strategies and approaches
to direct vaccine to high- risk groups if a vaccine delay or shortfall
occurred.

CDC has recommended actions for state and local health departments. These
include developing contingency plans to address delays in distribution or
shortages of vaccine if they occur and collaborating with other groups or
coalitions involved in adult immunization efforts. CDC requested that states
provide draft plans before June 2001. Revising guidelines on timing of
influenza vaccination to extend the optimal time for vaccination after
midNovember. Extending the demand past mid- November could

help during temporary shortages. Most flu seasons do not peak until late
December through early March and vaccine can be an effective intervention if
given 2 weeks before exposure.

CDC?s ACIP issued revised guidelines for the 2001- 02 flu season on April
20, 2001. These guidelines extend the optimal time for vaccination through
the end of November.

Success of these initiatives relies to a great extent on the willingness of
manufacturers, distributors, private physicians, other vaccine providers,
and the public to cooperate. For example, if manufacturers requested and FDA
approved the use of half- doses of vaccine for certain healthy adults while
full- doses of vaccine were given to high- risk adults, implementation
strategies may have to address provider concerns about any associated
administrative burden. And if distribution guidelines are agreed upon and
implemented, vaccine sellers may have to sacrifice the additional revenue of
selling to those willing to pay higher prices regardless of relative need.

The importance of collaboration between the public and private sector to
develop and implement initiatives to address flu vaccine shortages at the
state and local level was highlighted by state public health officials we
interviewed. States where public- and private- sector entities collaborated

Page 19 GAO- 01- 624 Influenza Vaccine Delay

early to deal with the delay in vaccine shipments reported some success in
targeting high- risk people for vaccination. For example:

 Before the fall 2000 vaccination period, health officials in Utah had
partnered with Medicare?s local Peer Review Organization (PRO) and a private
managed care organization and others to form an Adult Immunization
Coalition. 19 This coalition had already identified the number and location
of high- risk people living in the state and worked to target vaccine first
to these locations.

 New Mexico health officials participated in a consortium with public and
private providers that purchased about 90 percent of vaccine in the state.
After nursing home residents were vaccinated, this consortium implemented a
three- tiered vaccination strategy. This strategy first targeted the
elderly, people with chronic disease and health care workers. Next it
targeted household members or close contacts of the first group. Finally, it
targeted vaccine to everyone else.

CDC officials acknowledge that outreach and educational efforts are needed
to change the behavior of both providers and the public to recognize the
benefit of flu shots administered after mid- November. For the 2000- 01 flu
season, CDC undertook several outreach and educational efforts, including
issuing guidelines and notices in its Morbidity and Mortality Weekly Report,
posting information on a CDC web site, and conducting a media campaign in
selected cities. However, the relative effectiveness of these various
efforts remains unknown. 20

In addition, CDC has planned various projects to evaluate the impact of the
delay of flu vaccine availability on immunization rates and the vaccination
practices of providers for the 2000- 01 season. For example, CDC is
surveying providers about the risk level of the people they vaccinated,
providers? responses to the delays in obtaining vaccine, and the methods
they used to target vaccinations.

19 PROs promote quality of care improvements for Medicare beneficiaries in
every state. 20 One example of the difficulties of outreach to provider
groups is that fewer than half of the 58 physician group practices we
contacted had heard about the CDC contract that made available 9 million
doses in December.

Page 20 GAO- 01- 624 Influenza Vaccine Delay

HHS has been working since 1993 to develop a national response plan that
would outline actions to be taken to address vaccine delays or shortages
during an influenza pandemic. 21 While such a plan is expected to be used
only in cases of public health emergencies, advance preparation by
manufacturers, distributors, physicians, and public health officials to
respond to a pandemic could provide a foundation to deal with some of the
problems experienced during the 2000- 01 flu season. For example, while some
manufacturers and distributors tried various methods to target vaccine first
to people who were at high risk for complications, they were often unable to
identify these populations. The development of a methodology to identify and
target various population groups under the pandemic plan could be a useful
tool in this regard. In addition, pandemic planning activities could build
collaborative relationships among affected parties that could be useful in
dealing with vaccine shortages in nonpandemic years. As we reported in
October 2000, HHS has not completed a national pandemic response plan that
would, among other things, address how to deal with shortages of vaccine. 22
While HHS has set a completion date of June 2001 for the body of the plan,
it has not set specific dates for completing the detailed appendixes needed
to implement the plan should vaccine be delayed or in short supply.

Another ongoing HHS effort that could mitigate the impact of an influenza
vaccine shortage is to increase adult immunization rates against
pneumococcal disease, which causes a type of pneumonia that frequently
follows influenza. 23 The population most at risk for pneumococcal pneumonia
includes the elderly and those with chronic illnesses- the same groups at
high- risk for complications or death following infection with influenza.
Because pneumococcal vaccine provides immunity for at least 5 to 10 years,
it can provide some protection against one of the serious complications
associated with influenza if the annual influenza vaccine is unavailable.

21 Occasionally, worldwide influenza epidemics- called pandemics- cause
exceptionally high levels of illness and mortality in the population. The
worst flu pandemic occurred in 1918 and killed half a million U. S.
citizens. More recent pandemics occurring in 1957 and 1968 were responsible
for 70, 000 and 34, 000 U. S. deaths, respectively.

22 See Influenza Pandemic: Plan Needed for Federal and State Response (GAO-
01- 4, Oct. 2000). 23 CDC officials generally attribute about one- third of
the 20, 000 flu- related deaths each year to influenza- related pneumonia,
and most of these deaths are attributed to a type of bacterial pneumonia
that may be prevented with the pneumococcal vaccine. Pandemic Response Plan

Is Still Incomplete Increased Pneumococcal Immunizations Could Mitigate the
Impact of an Influenza Vaccine Shortage

Page 21 GAO- 01- 624 Influenza Vaccine Delay

Although pneumococcal vaccine provides added protection against a major
influenza- related illness, widespread use among the high- risk population
remains relatively low. HHS has set its goal for 2010 to achieve 90 percent
immunization against pneumococcal disease among the elderly and 60 percent
among other high- risk adults. 24 Available data show that only 54 percent
of the elderly and 13 percent of younger high- risk adults have been
vaccinated against pneumococcal disease. 25 For the population 65 years and
older, HCFA, which administers the Medicare program, has activities directed
toward increasing both pneumococcal and influenza vaccination rates. For
example, HCFA has contracted with its 53 PROs to work within communities to
raise immunization rates. The extent that state immunization rates for
pneumococcal vaccine and influenza vaccine improve over time is a factor
that HCFA will consider in evaluating PRO performance.

CDC also supports efforts to increase adult immunizations, such as influenza
and pneumococcal immunizations, for people aged 65 and older and others with
medical conditions placing them at high risk for influenza and pneumococcal
pneumonia. In 2001, CDC awarded $159 million for Preventive Health Services
Immunization grants to support state infrastructures for childhood and adult
immunization. However, because CDC considers activities to support childhood
immunization a priority for these grants, only 5 of the 64 grantees targeted
more than 10 percent of grant funds to support adult immunization efforts.

While HCFA and CDC have taken some steps to coordinate many of their adult
immunization activities, including efforts to increase pneumococcal
immunization, their performance goals may differ. For example, in their
fiscal year 2001 performance plans, HCFA set a target of vaccinating 55
percent of those 65 years and older against pneumococcal disease, while CDC
set a more ambitious target of 63 percent.

24 For the year 2000, HHS had set a target of 60 percent immunization
against pneumococcal disease among noninstitutionalized people aged 65 and
older. 25 The estimated rate for those aged 65 and older is based on
preliminary data from CDC?s 1999 Behavioral Risk Factor Surveillance System.
The estimated rate for the high- risk population aged 18- 64 years is based
on 1998 baseline data from CDC?s National Health Interview Survey, as
reported in Department of Health and Human Services, ?Immunization

and Infectious Diseases,? Healthy People 2010, Second Edition, November
2000.

Page 22 GAO- 01- 624 Influenza Vaccine Delay

The circumstances that led to the delay and early shortage of flu vaccine
during the 2000- 01 flu season could repeat themselves in the future.
Ensuring an adequate and timely supply of vaccine, already a difficult task
given the current manufacturing process, has become even more difficult as
the number of manufacturers has decreased. Now, a production delay or
shortfall experienced by even one of the three remaining manufacturers can
significantly impact overall vaccine availability. The effects of production
delays in 2000- 01 were exacerbated by the expectation of providers and the
public that flu shots should be received by Thanksgiving or not at all, even
though a flu shot after this time would provide a reasonable level of
protection in most years. In the event of a future delay or shortage,
determining the most effective means of changing this traditional behavior
will be beneficial.

The purchase, distribution, and administration of flu vaccine are mainly
private- sector responsibilities. Consequently, HHS? actions to help
mitigate any adverse effects of vaccine delays or shortages need to rely to
a great extent on collaboration with private- sector participants. By
completing its own planning efforts for dealing with these issues during a
pandemic, as we previously recommended, HHS would provide a foundation for
building collaboration among suppliers and purchasers of flu vaccine that
could help improve the vaccine distribution process. The March 2001 meeting
with public health officials, vaccine manufacturers, distributors,
physicians, and others is a potentially useful first step towards developing
voluntary guidelines for distribution in the event of a future delay or
shortage, but more work is needed before consensus is achieved. Success is
contingent on consensus and continued commitment by all parties.

In addition, to maximize results federal and state agencies need to fully
coordinate their pneumococcal vaccination efforts to set and achieve common
goals. While pneumococcal vaccination is not a substitute for the annual flu
shot, it can provide protection against a major complication of influenza if
the flu vaccine is not available. In the event that future shortages of
influenza vaccine cannot be avoided, coordination among HCFA, CDC, and state
programs designed to increase pneumococcal immunizations now may contribute
to lowering future hospitalization and death rates due to influenza- related
pneumonia.

We recommend that the Secretary of HHS take the following actions:

 To prepare for potential delays or shortages in flu vaccine, instruct the
Director of CDC to assess the relative success of its past outreach and
Conclusions

Recommendations for Executive Action

Page 23 GAO- 01- 624 Influenza Vaccine Delay

education efforts and identify those means that are most effective in
changing behavior to meet public health priorities. When appropriate, these
means should be used as the primary method to educate flu vaccine providers
and the general public well before the start of the traditional fall
vaccination period.

 To improve response to future vaccine delays or shortages, instruct the
Director of CDC to continue to take a leadership role in organizing and
supporting efforts to bring together all stakeholders to formulate voluntary
guidelines for vaccine distribution. Specifically, in formulating guidelines
for getting vaccine to high- risk individuals first in times of need, work
with stakeholders to pursue the feasibility of steps that showed promise in
the 2000- 01 flu season.

 To maximize use of federal resources, instruct the Director of CDC to work
to complement HCFA?s ongoing activities to improve pneumococcal immunization
rates among the Medicare population and focus CDC?s funded efforts on
increasing pneumococcal immunization in the high- risk non- Medicare
population.

We provided a draft of this report to HHS for review. In its written
comments (see app. II), HHS identified actions that it had initiated or
planned to undertake related to two of our recommendations. For example, HHS
stated that CDC had efforts underway to assess the relative success of the
outreach and educational efforts for the 2000- 01 flu season, and that it
was working with stakeholders to try to develop contingency plans for
vaccine distribution in the event of future supply problems. Regarding our
third recommendation, HHS stated that pneumococcal immunization could be
part of a broader plan for the government to reduce the overall impact of
influenza in case of vaccine supply problems.

HHS also commented that our draft report overstated HHS? authority to
exercise greater control over vaccine purchase and distribution in the event
of a public health emergency such as an influenza pandemic. We have revised
the report language to better reflect our point, which was not about the
extent of HHS? authority to respond to a pandemic, but rather about using
pandemic planning activities to better prepare for vaccine shortages in non-
pandemic years as well. HHS also provided technical comments, which we
incorporated where appropriate.

We are sending copies of this report to the Honorable Tommy G. Thompson,
Secretary of HHS; the Honorable Jeffrey P. Koplan, Director of CDC; the
Honorable Bernard A. Schwetz, Acting Principal Deputy Commissioner of FDA;
Michael McMullan, Acting Deputy Administrator of Agency Comments

Page 24 GAO- 01- 624 Influenza Vaccine Delay

HCFA; Martin G. Myers, Director of NVPO; and others who are interested. We
will also make copies available to others on request.

If you or your staffs have any questions, please contact me at (202)
5127119. An additional GAO contact and the names of other staff who made
major contributions to this report are listed in appendix III.

Janet Heinrich Director, Health Care- Public Health Issues

Page 25 GAO- 01- 624 Influenza Vaccine Delay

List of Requesters The Honorable Tim Johnson The Honorable Ron Wyden United
States Senate

The Honorable Sherrod Brown The Honorable Lois Capps The Honorable Gary A.
Condit The Honorable Joseph Crowley The Honorable Peter A. DeFazio The
Honorable Lloyd Doggett The Honorable Jo Ann Emerson The Honorable Bob
Filner The Honorable Martin Frost The Honorable Charles A. Gonzalez The
Honorable Dennis J. Kucinich The Honorable Sander M. Levin The Honorable
Frank A. LoBiondo The Honorable Nita M. Lowey The Honorable James H. Maloney
The Honorable James P. McGovern The Honorable Patsy T. Mink The Honorable
Earl Pomeroy The Honorable Lucille Roybal- Allard The Honorable Thomas C.
Sawyer The Honorable Janice D. Schakowsky The Honorable Christopher H. Smith
The Honorable Fortney Pete Stark The Honorable Mike Thompson The Honorable
Tom Udall The Honorable Henry A. Waxman The Honorable Anthony D. Weiner
House of Representatives

Appendix I: CDC Advisory Committee Recommendations on Target Groups for
Influenza Vaccination, 2000- 01

Page 26 GAO- 01- 624 Influenza Vaccine Delay

For the 2000- 01 flu season, the CDC Advisory Committee on Immunization
Practices (ACIP) issued guidance in April 2000 that strongly recommended
influenza vaccination for those persons who- because of age or underlying
medical condition- are at increased risk for complications of influenza. For
the first time, the committee lowered the age for universal vaccination from
65 years to 50 years of age, adding an estimated 28 to 31 million persons to
the target population. The reason for this expansion was to increase
vaccination rates among persons aged 50- 64 with high- risk conditions,
since age- based strategies have been more successful than strategies based
on medical condition. The committee also recommended that health- care
workers and other individuals in close contact with persons in high- risk
groups should be vaccinated to decrease the risk of transmitting influenza
to persons at high risk.

Because of expected delays or possible shortages of influenza vaccine for
the 2000- 01 flu season, the committee issued adjunct recommendations on
July 14, 2000. In addition to recommending that mass immunization campaigns
be delayed, these adjunct recommendations said that (1) vaccination of high-
risk individuals should proceed with available vaccine, (2) provider-
specific contingency plans should be developed for possible vaccine
shortages, and (3) vaccine administered after mid- November can still
provide substantial benefits.

Updated recommendations were issued on October 6, 2000, stating that a
shortage had been averted but distribution would be delayed. These updated
recommendations placed highest priority on those persons aged 65 and older,
pregnant women and those persons with chronic health conditions that placed
them at high risk, and health care workers who care for them. Table 6 shows
the target groups for influenza immunization from these updated
recommendations. The update also recommended that mass vaccination campaigns
should be scheduled later in the season and that these campaigns should try
to enhance coverage among those at greatest risk for complications of
influenza and their household contacts. However, the recommendations stated
that other persons should not be turned away. The updated recommendations
also emphasized that special efforts should be made in December and later to
vaccinate persons aged 50- 64 and that vaccination efforts for all groups
should continue into December and later when vaccine was available. Appendix
I: CDC Advisory Committee

Recommendations on Target Groups for Influenza Vaccination, 2000- 01

Appendix I: CDC Advisory Committee Recommendations on Target Groups for
Influenza Vaccination, 2000- 01

Page 27 GAO- 01- 624 Influenza Vaccine Delay

Table 6: Updated ACIP Recommendations on Target Groups for Influenza
Immunization, 2000- 01

Target group Estimated population

All persons aged 65 and older 35 million Persons under age 65 with chronic
underlying medical conditions 33- 39 million Residents of nursing homes and
other chronic- care facilities 2 million Pregnant women (in 2nd or 3rd
trimester during the flu season) 2 million Health care workers 7- 8 million
Close contacts of those at high risk 40- 60 million

Note: Categories are not mutually exclusive. Source: CDC, ?Updated
Recommendations from the Advisory Committee on Immunization Practices in
Response to Delays in Supply of Influenza Vaccine for the 2000- 01 Season,?
Morbidity and Mortality Weekly Report, Vol. 49, No. 39 (Oct. 6, 2000), pp.
888- 892; CDC, ?Prevention and Control of Influenza: Recommendations of the
Advisory Committee on Immunization Practices (ACIP),?

Morbidity and Mortality Weekly Report, Vol. 49, No. RR- 3 (April 14, 2000),
pp. 1- 38; and National Immunization Program, CDC, unpublished data, 2000.

Appendix II: Comments From the Department of Health and Human Services

Page 28 GAO- 01- 624 Influenza Vaccine Delay

Appendix II: Comments From the Department of Health and Human Services

Appendix II: Comments From the Department of Health and Human Services

Page 29 GAO- 01- 624 Influenza Vaccine Delay

Appendix II: Comments From the Department of Health and Human Services

Page 30 GAO- 01- 624 Influenza Vaccine Delay

Appendix II: Comments From the Department of Health and Human Services

Page 31 GAO- 01- 624 Influenza Vaccine Delay

Appendix III: GAO Contact and Staff Acknowledgments

Page 32 GAO- 01- 624 Influenza Vaccine Delay

Frank C. Pasquier, (206) 287- 4861 Other major contributors to this report
were Lacinda Ayers, George Bogart, Ellen M. Smith, Stan Stenersen, and Kim
Yamane. Appendix III: GAO Contact and Staff

Acknowledgments GAO Contact Staff Acknowledgments

(290011)

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 Web site: http:// www. gao. gov/ fraudnet/ fraudnet. htm

 E- mail: fraudnet@ gao. gov

 1- 800- 424- 5454 (automated answering system) Ordering Information

To Report Fraud, Waste, and Abuse in Federal Programs
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