Order Code RL32655
CRS Report for Congress
Received through the CRS Web
Influenza Vaccine Shortages and Implications
October 29, 2004
Sarah A. Lister
Specialist in Public Health and Epidemiology
Domestic Social Policy Division
Congressional Research Service ˜ The Library of Congress

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Influenza Vaccine Shortages and Implications
Summary
On October 5, 2004, Chiron, a California-based biotechnology company,
notified U.S. health officials that British regulatory authorities had suspended
production of influenza (“flu”) vaccine in its plant in Liverpool, England, due to
vaccine safety concerns. The plant was slated to provide between 46 million and 48
million doses of flu vaccine for the U.S. market for the imminent 2004-2005 flu
season, almost half the expected nationwide supply.
The announcement of Chiron’s suspension prompted the Centers for Disease
Control and Prevention (CDC) and its Advisory Committee on Immunization
Practices (ACIP) to re-define the groups most at risk, to be given priority for the
available vaccine doses. CDC activated its Emergency Operations Center to
coordinate nationwide tracking of available vaccine doses, high-priority individuals
who might need them, and infections signaling the beginning of the winter flu season.
The Food and Drug Administration (FDA) sent a team to the Liverpool plant to
determine if any of the affected Chiron vaccine lots could be salvaged (they later
determined that they could not) and sought to identify additional sources of vaccine
from other manufacturers, domestically and abroad. States launched plans to locate
and re-distribute or ration doses of vaccine, and responded to widespread reports of
price-gouging. The response of local, state and federal agencies was limited because
most of the U.S. flu vaccine market is in private hands.
Some members of Congress introduced legislation in response to the shortage,
or pointed to legislative proposals introduced earlier in the 108th Congress in
response to flu vaccine supply problems during the 2003-2004 season. Two hearings
on influenza vaccine were held immediately prior to announcement of the shortage,
indicating Congress’s ongoing interest in this issue. An additional hearing was
scheduled and held after the shortage was announced. Congress also passed (in P.L.
108-357, the American Jobs Creation Act of 2004) a provision adding flu vaccine to
the National Vaccine Injury Compensation Program (VICP).
The flu vaccine shortage illustrates two serious challenges that the federal
government faces in responding to public health threats. Law and tradition place
much of the control of the current situation either with the states, or with the private
sector, and the threshold over which the federal government would wrest control
from either appears high. Free market forces operate, and the public health system
responds in a decentralized fashion. As a consequence, federal efforts may seem
disorganized, and the federal government may appear unresponsive.
As communities across the country saw long lines of sick and elderly citizens
waiting in vain for flu vaccine, policymakers asked why the national system to
provide this potentially life-saving product was so unreliable, and what could be done
about it. Some have expressed concern that this situation bodes ill for national
preparedness for an influenza pandemic or a large-scale bioterrorism event. This
report will describe the current system of flu vaccine production and delivery, the
causes of supply problems, and options for improvement. It will be updated as
circumstances warrant.

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Contents
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Scientific and Technical Issues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Annual Strain Selection and Vaccine Production . . . . . . . . . . . . . . . . . . . . . 3
Opportunities to Streamline Vaccine Production . . . . . . . . . . . . . . . . . . . . . 4
Legal and Policy Issues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Federal Responsibility for Vaccines . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Determining Annual Flu Vaccine Production . . . . . . . . . . . . . . . . . . . . . . . . 6
Flu Vaccine Distribution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Re-Prioritizing Groups in Response to the Shortage . . . . . . . . . . . . . . . . . . . 8
Vaccine Rationing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Price Gouging . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Economic Issues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Economic Risk . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Injury Liability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Proposals to Stabilize the Flu Vaccine Market . . . . . . . . . . . . . . . . . . . . . . 14
Government Buy-Back of Surplus . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Government Purchase for Stockpiling . . . . . . . . . . . . . . . . . . . . . . . . . 15
Incentives for Construction of New Facilities . . . . . . . . . . . . . . . . . . . 15
Implications for Pandemic Preparedness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Congressional Actions in the 108th Congress . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Legislation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Hearings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Investigations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Information Resources . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
CRS Products . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Government Accountability Office (GAO) Products . . . . . . . . . . . . . . . . . 21
Health and Human Services (HHS) Resources . . . . . . . . . . . . . . . . . . . . . . 21
Centers for Disease Control and Prevention (CDC) Resources . . . . . . . . . . 21
Food and Drug Administration (FDA) Resources . . . . . . . . . . . . . . . . . . . . 22
Health Resources and Services Administration (HRSA) Resources . . . . . . 22
National Institutes of Health (NIH) Resources . . . . . . . . . . . . . . . . . . . . . . 22
World Health Organization (WHO) Resources . . . . . . . . . . . . . . . . . . . . . . 22
Other Key Resources . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22

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List of Tables
Table 1. Surplus Flu Vaccine, 1999-2003 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Table 2. Federal Recommendations for Flu Vaccine, Before and After
the Vaccine Shortage . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Table 3. CDC Purchases of Flu Vaccine for 2004-2005 . . . . . . . . . . . . . . . . . . . 12

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Influenza Vaccine Shortages and
Implications
Introduction
The Centers for Disease Control and Prevention (CDC) estimates that influenza
(“flu”), a viral respiratory illness, causes 36,000 deaths and 200,000 hospitalizations
in the United States each year. For many years, vaccination has been urged for those
at highest risk of serious illness from flu, such as older persons and those with
chronic illnesses. Peculiarities of flu vaccine production, especially its finite shelf
life (it is good only for the one season for which it is produced), have led to supply
and demand imbalances in recent years. Overall demand for flu vaccine has grown
over the past decade. But CDC reports that there have been vaccine surpluses each
of the past five winters, and unused vaccine has been discarded. (See Table 1.)
Within a season, maldistribution of vaccine may lead to shortages at particular times
and places, despite an overall surplus. Gauging demand from year to year in what is
mostly a private-sector market is a matter of both art and science, an exercise fraught
with difficulty.
On October 5, 2004, Chiron, a California-based biotechnology company,
notified U.S. health officials that British regulatory authorities had suspended
production of influenza (“flu”) vaccine in its plant in Liverpool, England, due to
vaccine safety concerns. The plant was slated to provide between 46 million and 48
million doses of injectable flu vaccine (Fluvirin®) for the U.S. market for the
imminent 2004-2005 flu season, almost half the planned nationwide supply of 100
million doses. Aventis-Pasteur (Aventis), a French-based company with a plant in
Swiftwater, Pennsylvania, was slated to produce 52 million doses of its injectable flu
vaccine (Fluzone®).
Since the Chiron suspension was announced, Aventis has announced that its
production for this season is on target, and can be augmented somewhat to a total of
58 million doses by continuing production through January 2005. An additional
manufacturer, MedImmune, based in Maryland, produces a flu vaccine made of live
virus for intra-nasal administration (FluMist,™ also referred to as live attenuated
influenza vaccine, or LAIV). MedImmune was slated to produce 2 million doses for
the current season after the product was poorly received in the 2003-2004 season.
The company has announced that it can ramp up production somewhat, but because
LAIV is a live virus product it is not licensed for use in the most vulnerable groups
now prioritized by CDC. The Defense Department is trying to obtain doses of LAIV
for its healthy recruits slated for overseas deployment, in order to assure force
protection without consuming the limited civilian supply of injectable vaccine.

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The announcement of Chiron’s suspension prompted CDC and its Advisory
ommittee on Immunization Practices (ACIP) to re-define the groups most at risk
(enumerated in Table 2), to be given priority for the available vaccine doses. CDC
also activated its Emergency Operations Center to coordinate nationwide tracking
of available vaccine doses, high-priority individuals who might need them, and
infections signaling the beginning of the winter flu season. Officials from HHS and
CDC repeat in public statements that vaccine doses from Aventis will continue to roll
off the production lines for several months, and urge those at risk not to stand in long
lines because they believe that there will not be future opportunities to be vaccinated.
In addition, CDC has developed clinician recommendations for the use of
antiviral drugs. These are drugs that can be given before infection occurs as a
preventative, or during illness to minimize serious complications. The Department
of Health and Human Services (HHS) estimates that 40 million doses of antiviral
drugs will be available, including 7 million doses purchased by HHS to treat
low-income individuals, and the remainder within the private sector.
The Food and Drug Administration (FDA) sent a team to the Liverpool plant to
determine if any of the affected Chiron vaccine lots could be salvaged (and later
announced that they could not), and sought to identify additional sources of vaccine
from other manufacturers, domestically and abroad. Both British and U.S. regulatory
agencies are required to assure the safety and efficacy of the Chiron product, for
export and import respectively. If available vaccine were located in other countries,
the products would not be currently licensed in the United States and would require
approval by the FDA as Investigational New Drugs to be used here. The House
Committee on Government Reform began an investigation of the FDA to determine
whether it knew or should have known of the impending production failure, as its
British counterpart did, since FDA is required to assure the safety and efficacy of this
product for importation.
States have responded to the shortage by launching plans to locate and re-
distribute or ration doses of vaccine, and by pursuing widespread reports of price-
gouging. Some localities have held lotteries to apportion limited vaccine to those in
priority groups.
Also following announcement of the Chiron suspension, the Securities and
Exchange Commission (SEC) and the Justice Department launched inquiries into
whether the company knew of the imminent failure of its annual production before
its public announcement. In addition, several class-action stakeholder lawsuits were
filed against Chiron on the premise that the company had not fulfilled its disclosure
obligations.
As communities across the country saw long lines of sick and elderly citizens
waiting in vain for flu vaccine, policymakers asked why the national system to
provide this potentially life-saving product was so unreliable, and what could be done
about it. Some have expressed concern that this situation bodes ill for national
preparedness for an influenza pandemic or a large-scale bioterrorism event. This
report will describe the current system of flu vaccine production and delivery, the
causes of supply problems, and options for improvement.

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Scientific and Technical Issues
Annual Strain Selection and Vaccine Production
In general, vaccines, which are regulated as biologics by the FDA Center for
Biologics Evaluation and Research (CBER), are more tricky to produce than are
drugs. Manufacturers must successfully grow the particular virus or other organism
of interest while avoiding the growth of other organisms that might contaminate the
final product. Several peculiarities of the influenza virus itself and its production
process make flu vaccine production especially complicated. There are numerous
points at which the process could fail, and has failed in recent years.
The influenza virus changes over time. From year to year, the dominant strains
of virus in circulation change, which is why we may get sick every year from flu, in
contrast with having lifelong immunity to more stable viruses such as measles. Each
year in late winter, the FDA, with input from the National Vaccine Advisory
Committee and using surveillance information from the World Health Organization
(WHO) and CDC, reviews virus strains in global circulation and selects three that are
most likely to cause serious illness in the United States during the subsequent winter
season (i.e., one year hence). The chosen strains are incorporated into that next
winter’s trivalent flu vaccine, which typically contains at least one new strain each
year. Strain selection may be based on both the dominance and severity of strains in
circulation, but may be limited by certain obstacles. For example, an especially
virulent strain called Fujian was an obvious choice for the 2003-2004 flu vaccine, but
it could not be successfully grown in eggs in time to include it in last year’s vaccine.
This problem was eventually surmounted, and based on its continuing circulation, the
Fujian strain was included in the 2004-2005 flu vaccine.
To make large amounts of virus for vaccine production, the virus must be grown
in fertilized eggs. Large numbers of fertilized eggs are required each year to support
vaccine production. They must be specially produced, assuring the health of the
laying hens, appropriate sanitation, care in transport, incubation, and other actions as
required by the FDA to assure vaccine safety and efficacy. This endeavor is far more
complicated than the production of unfertilized eggs for food. Reliance on eggs and
is a rate-limiting step in flu vaccine production, requiring many weeks for growing
the virus and extracting it from the eggs, and introducing contamination risks.
Each year the current flu vaccine production system is a race against the clock.
Strains must be selected by February in order that they can be grown, purified,
processed and made into vaccine. Under optimal conditions vaccine is made in
batches from August through November, barely making it to market ahead of the
annual influenza epidemic. Breakdowns in the process, especially one occurring in
the fall as with the Chiron vaccine, can subvert the entire production volume. It is
difficult, if not impossible, to start over within a given season, so as with the Chiron
situation, a large-scale process failure can lead to complete loss of the entire season’s
vaccine production from that supplier.

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Opportunities to Streamline Vaccine Production
The flu vaccine production process can be optimized in a number of ways. A
promising option is replacement of the cumbersome egg-growth step with cell culture
methods, in which the virus is grown in tubes or vats of certain mammalian cells.
With this technique growth is faster, more controlled, takes up less space, and
introduces fewer contamination problems than using eggs. Cell culture techniques
could make the annual flu vaccine production cycle less prone to failures and more
amenable to re-starting production within a season if problems do arise. In other
words, cell culture techniques can provide surge capacity within existing
infrastructure. This technique is not currently FDA-approved for use in flu vaccine
production, but is in early stages of clinical trials, funded by the National Institutes
of Health (NIH). Potential problems must be evaluated, such as the risk of cell
components and genes getting into the vaccine or the virus. Also, for existing flu
vaccine manufacturers to use this method they would have to renovate existing
facilities or construct new ones, and would have to develop consistency in meeting
Good Manufacturing Practices and other standards if they are to reliably produce
vaccine each year.

Flu vaccine production can also be optimized by using reverse genetics to purify
the selected strains. Currently, obtaining strains with the right characteristics for
vaccine production is a trial-and-error process; strains are grown together in batches
and sampled in a search for those with the desired properties. With reverse genetics,
the desired parts of the viral genome are cloned and combined to create strains of
virus with the right combinations of traits to stimulate immunity, and to grow well
in eggs. Reverse genetics is not currently an FDA-approved technique for vaccine
production, but NIH-funded clinical trials are currently underway using the technique
to produce vaccine for the strain of avian influenza (“bird flu”) now circulating in
Asia, in the event that it becomes a serious human pathogen. The safety and efficacy
of flu vaccine produced using this technique remains to be evaluated. In addition,
there are unresolved intellectual property issues, as well as consumer acceptance
concerns (especially in Europe), because the vaccine virus produced is a genetically
modified organism.
Another opportunity to optimize annual flu vaccine production rests with steady
enhancement of global influenza surveillance, which could improve the speed and
accuracy of strain selection.
Ultimately, the influenza virus holds two trump cards for which science does not
offer solutions on the near horizon. First, there is a limited ability to predict how the
virus will modify itself into each year’s dominant circulating strains. Once these
strains emerge, there is a race against time to produce vaccine while the strains are
actually causing illness somewhere on the planet. Second, the regular shifts of the
viral genome (and the more cataclysmic drifts that define a pandemic) are inherent
in its RNA, and the resulting evasion of the human immune response is inherent in
our DNA. This relationship has existed for eons, and no near-term scientific
breakthrough is likely to change it. Those seeking to prevent influenza infection are
stuck with the prospect of annual flu vaccines for the foreseeable future.

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Legal and Policy Issues
Overview
The flu vaccine shortage announced on October 5, 2004, unfolded within a
complex interaction of government and private sector actions, leading many to
question whether the federal government’s authority is adequate to prevent these
types of crises. States and the federal government have different roles and authorities
with respect to this event. In general, public health authority rests with the states as
an exercise of their police powers. As a result, states have taken the lead in
restricting vaccine distribution to high-risk individuals and in prosecuting price-
gouging. The federal government, through the Commerce Clause in the Constitution,
is responsible for assuring the safety and efficacy of vaccines in commerce in the
United States, but this authority does not extend to controlling the distribution or
administration of the product. In a public health emergency, the Public Health
Service Act grants the Secretary of HHS broad authority to take such actions as
necessary to control infectious disease. Traditionally, the federal government has
supported states in exercising their public health authorities rather than subsuming
them. HHS Secretary Tommy G. Thompson has said that he does not intend to
declare the flu vaccine shortage a public health emergency.1
Flu vaccination is a medical procedure, and many people voluntarily choose to
be vaccinated in settings that are primarily non-governmental, such as a physician’s
office, a workplace, or a local grocery store. While federal, state and local
governments do not control these activities directly, they play an important role in
studying the use and impacts of flu vaccination, making recommendations and
providing guidance on the use of flu vaccine, and educating providers and the public
about their findings and recommendations. Examples of relevant public health
research on flu vaccination include studying the effectiveness of vaccine in
preventing illness in different risk groups, and studying the economic impacts of flu
vaccine such as reduced absenteeism in the workplace. Government-supported
education efforts include educational materials for providers outlining the use of
different types of flu vaccines in specific populations, and flyers and public service
announcements encouraging vaccination.
Federal policies and recommendations also drive private-sector flu vaccine
demand. This is discussed further in an upcoming section on “Determining Annual
Flu Vaccine Production.”
Federal Responsibility for Vaccines
The National Vaccine Program Office in HHS serves to coordinate vaccine-
related activities in several agencies, and is the hub for federal pandemic influenza
preparedness activities. The FDA is responsible for assuring the safety and efficacy
of vaccines, according to 21 C.F.R. § 601. The NIH conducts intramural vaccine
1 U.S. Department of Health and Human Services, “Flu Vaccines and Antivirals,” transcript
of news conference, Oct. 19, 2004.

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research and development and funds research in universities. The Health Resources
and Services Administration (HRSA) administers the National Vaccine Injury
Compensation Program (VICP), which provides compensation for injuries judged to
have been caused by certain listed vaccines. The CDC houses the National
Immunization Program, which coordinates research projects, state grant programs
(including funding for purchase of vaccines), and other immunization activities and
supports the Advisory Committee on Immunization Practices (ACIP). CDC also
administers the Vaccines for Children (VFC) program, authorized in Medicaid law
to provide immunizations for children who are uninsured, Medicaid recipients,
Native Americans, and Alaska Natives at their doctors’ offices and federally qualified
health centers.
Vaccine responsibilities lie outside of HHS as well. The Department of Defense
(DOD) maintains research and development programs for vaccines against both
naturally occurring infectious diseases and bioweapons agents. DOD administers
routine and deployment-related vaccines to military personnel and some civilian
employees and contractors. As a primary healthcare provider, DOD also administers
vaccines to its retirees and to current personnel and their families. The Department
of Veterans Affairs administers vaccines to veterans within its healthcare system.
State and local governments carry out relevant activities within their public
health role, such as conducting vaccine clinics, maintaining immunization registries,
and establishing immunization requirements for school attendance. (These
requirements apply to vaccine-preventable childhood diseases such as measles and
whooping cough, but not influenza at this time.) In response to the current flu
vaccine shortage, many states have taken action to prohibit administration of vaccine
to non-priority individuals and to track available vaccine, among other activities.
Determining Annual Flu Vaccine Production
In the winter of 2003-2004 Americans received 83 million doses of flu vaccine;
87 million were produced. According to the CDC, doses of unused flu vaccine have
been discarded in each of the last five years. (See Table 1.) Vaccine manufacturers
bear the loss from surpluses, and they attempt to carefully gauge demand each year
to avoid these losses. Demand has grown in the past ten years, though, as a result of
growing ranks of high-risk groups such as the elderly, increasing use of vaccine by
other high-risk groups, and growing interest from low-risk groups, such as employers
seeking to decrease absenteeism by offering the vaccine to workers at no cost.
Table 1. Surplus Flu Vaccine, 1999-2003
(doses in millions)
1999-2000
2000-2001
2001-2002
2002-2003
2003-2004
Doses produced
77.2
77.9
87.7
95.0
86.9
Doses used
76.8
70.4
77.7
83.0
83.1
Surplus
0.4
7.5
10.0
12.0
3.8a
Source: Communication from CDC, Oct. 20, 2004.
Note: Target production for the 2004-2005 season was approximately 100 million doses.
a. Most of this surplus was live attenuated (intra-nasal) influenza vaccine.

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Flu vaccine demand is also driven by federal policies and recommendations. In
the spring of 2004, for the upcoming flu season, the ACIP added healthy young
children aged 6 to 23 months to the list of groups that should receive the vaccine. To
encourage beneficiaries to be vaccinated, Medicare began covering the full cost of
flu vaccine and administration in 1993. The Healthy People 2010 project, a public-
private national goal-setting agenda for health, set a goal of 90% for influenza
vaccine coverage for certain high-risk groups. Recently there has been greater
emphasis on the prevention of influenza in institutionalized populations. In 2000
CDC published guidance encouraging standing orders programs to increase flu
vaccination coverage in long-term care facilities and other settings. These programs
give nurses “standing orders” to administer annual flu vaccines to residents without
a physician’s explicit authorization. In 2002, the Centers for Medicare and Medicaid
Services (CMS) removed the physician signature requirement for flu vaccine for
Medicare and Medicaid participating hospitals, long-term care facilities, and home
health agencies. The ACIP also recommends that healthcare workers receive flu
vaccine, following studies showing that vaccination of workers reduces mortality in
elderly residents in long-term care facilities.
Based on historical demand and on the new pediatric recommendation from the
ACIP, the two manufacturers licensed for the 2004-2005 season, Aventis and Chiron,
planned to make 100 million doses, about evenly split between them. The failure of
all annual production by Chiron cut the supply in half.
Flu Vaccine Distribution
The path of flu vaccine from assembly line to injection is complex and largely
outside of government control. Manufacturers sell the product to distributors, or may
also sell it directly to pharmacy chains, health maintenance organizations, hospitals,
state health departments, and others. Vaccine may be transferred through multiple
distributors along the way.
The CDC, as a purchaser, would have access to distribution information for the
product it has purchased even if the product does not physically pass through CDC’s
direct control. But almost 90% of the product is circulated outside of government
control, and has not been tracked. The Government Accountability Office (GAO)
has noted the lack of a means to redirect flu vaccine during a shortage, a system that
would depend on centralized tracking.2 In the face of the current shortage, HHS
Secretary Thompson announced that CDC had set up a secure website for state health
officials to use to identify available vaccine in their jurisdictions. Aventis and many
of its downstream distributors were providing information for the site, information
which the Secretary stressed was proprietary and which state health officials must
protect as such. This is the first time such a system has been used to track flu
vaccine. A further complexity: when the shortage was announced the FDA waived
its prohibition against the transfer of vaccine among hospitals and other healthcare
entities, to facilitate their own reallocation efforts. These downstream reallocations,
2 Government Accountability Office, GAO-04-1100T, Infectious Disease Preparedness:
Federal Challenges in Responding to Influenza Outbreaks, testimony, September 28, 2004.

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while clearly helpful under the circumstances, may not be captured in the new CDC
tracking system.
Re-Prioritizing Groups in Response to the Shortage
In the afternoon of October 5, 2004, the day Chiron advised U.S. officials of its
failed production for 2004-2005, CDC and its Advisory Committee on Immunization
Practices (ACIP) issued interim vaccine recommendations, designating “priority
groups” for vaccine coverage following the shortage. The groups previously
recommended to receive vaccine and the narrowed recommendations announced after
the shortage, are listed in Table 2. CDC has subsequently estimated that the pre-
shortage target population of roughly 185 million people (about 2/3 of the
population) would be reduced to about 98 million priority recipients. Based on
historical vaccine usage by these groups (which ranges from 12.4% for pregnant
women to 66.2% for those over age 64), CDC estimated that only about 43 million
doses would be needed to vaccinate those in priority groups.3 CDC acknowledges
that some vaccine was administered to non-priority groups before the shortage was
announced, and that despite best efforts, reallocation of remaining vaccine to priority
groups will be imperfect.
It is worth noting that the expansion of federal recommendations over time, and
the growing recognition of the health benefits of flu vaccination even in healthy
individuals, drives demand and serves as a market incentive to increase supply. In
the face of a severe shortage, public and private actions to encourage flu vaccination
in lower-risk groups have had to be abandoned for the 2004-2005 flu season.
3 Centers for Disease Control and Prevention, Interim Estimates of Populations Targeted for
Influenza Vaccination, fact sheet, Oct. 11, 2004.

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Table 2. Federal Recommendations for Flu Vaccine, Before and After the Vaccine Shortage
Group
Pre-shortage recommendation
Post-shortage recommendation
All children aged 6-23 months, or older than 23
All children aged 6-23 months, or older than 23
Children
months with other risk factor
months with other risk factor
Children and adolescents on aspirin therapy
All such persons
All such persons
Pregnant women
All women who will be pregnant during the flu season
All women who will be pregnant during the flu season
Adults and children aged 2-64 years with certain
chronic conditions, including cardiovascular or
respiratory conditions such as asthma
All such persons
All such persons
Persons institutionalized in chronic care facilities
All residents of such facilities
All residents of such facilities
Persons aged 50-64 years
All such persons
Only those with other risk factors
Persons aged 65 or older
All such persons
All such persons
All healthcare personnel in all inpatient, outpatient and
Healthcare workers involved in direct patient care and
Persons who can transmit influenza to those at
home-care settings, and household contacts of high-
out-of-home caregivers and household contacts of
high risk
risk persons
children younger than six months
Sources: Pre-shortage recommendations: Prevention and Control of Influenza: Recommendations of the Advisory Committee on Immunization Practices (ACIP), MMWR
Recommendations and Reports, May 28, 2004.
Post-shortage recommendations: Interim Influenza Vaccination Recommendations, 2004-05 Influenza Season: Guidance from CDC, in coordination with the ACIP, Oct. 5, 2004.

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Vaccine Rationing
While the federal government has broad authority to take actions necessary to
control infectious diseases in an emergency, traditionally the exercise of public health
authority in this respect has rested with states. As a consequence, when the flu
vaccine shortage was announced and CDC recommended that vaccine be prioritized
to certain groups, several states, counties and the District of Columbia issued orders
requiring healthcare providers to comply, and established fines for the administration
of scarce vaccine to non-priority individuals. Some of the states declared the
situation a public health emergency, while others used narrower authorities to support
their orders. A current listing of state actions is maintained by the Association of
State and Territorial Health Officials (ASTHO) at [http://www.astho.org.]
CDC is facilitating states’ efforts by gathering information about existing
supplies and unmet needs during the current shortage, though it lacks authority to
compel manufacturers, distributors, states or others to provide this information.
While CDC reports good voluntary cooperation with this effort, the GAO has
repeatedly noted the absence of a coordinated national system to assure that those
most in need receive flu vaccine when supplies are limited.4 HHS Secretary Tommy
G. Thompson has said that he does not intend to declare the flu vaccine shortage a
public health emergency, and the federal government will not exercise authority to
control vaccine distribution or administration.5
CDC’s plan to identify vaccine doses in distribution and coordinate a three-part
information exchange — unmet need, available vaccine, and circulating flu virus —
has not been done before and may serve as a useful exercise in preparedness for any
number of public health emergencies. Since it is a new effort, its utility in the face
of the current vaccine shortage has yet to be demonstrated.
Price Gouging
Media reports of price gouging were widespread following the announcement
of the vaccine shortage, with reports that distributors were seeking more than ten
times the original price. At least two states, Florida and Kansas, have responded with
lawsuits. The National Association of Attorneys General notes that at least half of
the states have statutes prohibiting price-gouging, though there are a variety of
definitions and triggering events, not all of which would apply to this situation.
However, the Association also notes that most if not all states could bring action
under broader, more flexible authorities that prohibit “unfair and deceptive acts and
practices.”6
4 Government Accountability Office, GAO-04-1100T, Infectious Disease Preparedness:
Federal Challenges in Responding to Influenza Outbreaks, testimony, September 28, 2004.
5 U.S. Department of Health and Human Services, “Flu Vaccines and Antivirals,” transcript
of news conference, Oct. 19, 2004.
6 Personal communication, Dennis Cuevas, National Association of Attorneys General, Oct.
18, 2004.

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CRS-11
On October 14, 2004, HHS issued a press release urging states to aggressively
prosecute flu vaccine price-gouging.7 State action would require not only the
requisite authority, but also the decision to act and the resources to do so. Some in
Congress, concerned that states may not always be able to respond effectively, have
asked about relevant federal authorities. Neither CDC nor FDA has authority to act
in this matter, though CDC (which activated its Emergency Operations Center when
the shortage was announced) is gathering reports of price-gouging and referring them
to state attorneys general. On October 22, 2004, HHS announced that it had filed
(along with the Department of Justice) a friend of the court brief in support of
Florida’s price-gouging lawsuit against a distributor.8 HHS reported that the brief
lays out the public health threat posed by price gouging, namely that price gouging
leads to allocation of scarce flu vaccine based on who has the most money and not
on who has the most need, that it risks the health of Medicare and Medicaid eligible
patients, who are vulnerable and most in need of the vaccine, and that it may also
lead to violations of the Federal Food, Drug, and Cosmetic Act such as tampering
with, and counterfeiting of, flu vaccine.
On October 15, 2004, the House Committee on Government Reform called on
the Federal Trade Commission (FTC) to launch a nationwide investigation of flu
vaccine price-gouging, and to report on enforcement actions it is taking or plans to
take.9 It is not clear under what specific authority the FTC would act, as there is no
federal price gouging statute. However, as noted above for states, the Commission
could possibly bring an action under its general authority to prohibit unfair or
deceptive acts or practices under the Federal Trade Commission Act.
Economic Issues
Overview
Vaccines for the U.S. market are made by private, for-profit firms, and most of
the supply is privately controlled. For the 2004-2005 season, CDC purchased 11.4
million doses of flu vaccine, or about 11% of total production. (See Table 3 for a
breakdown of CDC purchases.) The public purchase price ranged from $6.80 to
$10.00 per dose, depending on the formulation, which is generally lower than private
sector prices.

7 Department of Health and Human Services, “HHS Secretary Urges States to Aggressively
Prosecute Flu Vaccine Price Gouging” press release, Oct. 14, 2004.
8 Department of Health and Human Services, “HHS Files Brief in Support of Florida Price
Gouging Lawsuit,” press release, Oct. 22, 2004.
9 House Committee on Government Reform, “Davis and Waxman Ask FTC to Launch
Inquiry on Flu Vaccine Price Gouging,” press release, Oct. 15, 2004.

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CRS-12
Table 3. CDC Purchases of Flu Vaccine for 2004-2005
Doses from supplier
(thousands)
Program
Aventis
Chiron
Total
Vaccines for Children (VFC)
4,752
255
5,007
Section 317 (purchases for states)
900
377
1,277
Purchases to stockpile
2,500
2,000
4,500
Purchases using state funds
461
179
640
Total
8,613
2,811
11,424
Source: Communication from CDC on Oct. 10, 2004.
Note: Table reflects purchasing contracts prior to announcement of shortage.
Manufacturers point to a number of disincentives that deter them from the flu
vaccine market, such as poor profitability, risk of a production failure, and injury .10
liability. Policymakers point to a number of problems in assuring adequate supply,
including too few manufacturers, low vaccination rates among groups who are
advised to be vaccinated, unpredictable timing and severity of annual flu seasons, and
reluctance of manufacturers to overshoot demand estimates. The current flu vaccine
shortage resulted from failure of production by a company that held almost 50% of
the market share, because there were only two companies producing injectable flu
vaccine for the U.S. market in 2004. During the 2001-2002 season, when there were
three manufacturers supplying the U.S. market, one sustained significant losses from
unused surplus vaccine, which led to its decision to drop out of the market
Many have noted that expanded public purchases of vaccine would have helped
this situation only if such purchases had increased overall production by shifting
some of the risk of over-production from the manufacturer to the government. Then,
if a product were to fail, the other supplier would have produced relatively more and
a shortage would not have been as severe. Long term, many feel that it is essential
to have more manufacturers involved, so the consequences of a failure of one would
have less impact on supply. But absent a substantial increase in demand,
diversification would likely cut into the market for existing manufacturers,
potentially reducing their incentives for remaining engaged.
A number of these issues have been discussed in the context of Project
BioShield, a program to promote research and development of countermeasures for
bioterrorism. In some ways Project BioShield is an imperfect model for flu vaccine
shortages, because BioShield is designed to create production incentives for products
that lack a commercial market. Nonetheless, there are enough similar issues at play
10 Christine Gorman, “The Flu Snafu: A Vaccine Shortfall Grows Into a Political Headache,”
Time, Nov. 1, 2004.

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CRS-13
that flu vaccine supply may be added to the agenda in ongoing discussions of the
BioShield program. For example, the Project BioShield Act of 2004, P.L. 108-276,
contains a provision which allows the Secretary of HHS to temporarily authorize the
emergency use of non-licensed drugs and vaccines. Some in Congress have called
on the Secretary of HHS to exercise this new authority, by locating available flu
vaccine in other countries and making it available to Americans as quickly as
possible. As Congress considers follow-on legislation to address remaining concerns
(S. 666, the Biological, Chemical, and Radiological Weapons Countermeasures
Research Act), additional issues such as ways to expand vaccine production capacity
may also be relevant for flu vaccine. (For more information, see CRS Report
RS21507, Project BioShield, by Frank Gottron, and CRS Report RL32549, Project
BioShield: Legislative History and Side-by-Side Comparison of H.R. 2122, S. 15, and
S. 1504, by Frank Gottron and Eric Fischer.)
The next section will explore several disincentives to flu vaccine manufacture,
and several proposals for removing these barriers or otherwise stabilizing the annual
flu vaccine market.
Economic Risk
It is often suggested that making flu vaccine is not a good business proposition.
The product is not highly profitable. Furthermore, production of vaccines is
technically difficult, and lot failures resulting from sterility breaks or other causes are
not uncommon. Flu vaccine is especially tricky because of the time constraints
inherent in using eggs, and because vaccine does not have a shelf life beyond the year
it is produced. It is difficult to start from scratch if a problem crops up mid-way in
production. If annual demand is overestimated, unused vaccine is discarded at a loss
to the manufacturer.
Manufacturers have an obligation to investors to make sound business decisions,
and to adhere to standards of transparency in their business conduct. Following
Chiron’s announcement of its failed flu vaccine production for 2004-2005, the
company became the subject of Securities and Exchange Commission (SEC) and
Justice Department inquiries, reportedly to determine whether Chiron knew of the
imminent failure of its product before its public announcement.11 Several class-
action shareholder lawsuits were filed on the premise that the company had not
fulfilled its disclosure obligations.12 The company has since announced that it is
committed to producing flu vaccine for the 2005-2006 season, but that it cannot
assure that its Liverpool plant can meet regulatory standards by February 2005, when
production would have to begin in earnest.13 These seemingly conflicting statements
reflect the challenges the company faces in meeting multiple obligations. Its
shareholders likely expect accurate projections of future performance. The U.S.
11 Paul Elias, “Grand Jury Investigating Chiron’s Flu Vaccine Failure,” Associated Press,
Oct. 13, 2004.
12 Bernadette Tansey, “Chiron Shows a Profit: Battered Flu Vaccine Company Circling the
Wagons,” San Francisco Chronicle, Oct. 21, 2004.
13 Ibid.

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CRS-14
federal government, in order to assist Chiron and other flu vaccine manufacturers in
setting production targets for the 2005-2006 season, will have to know fairly soon if
Chiron will be a supplier.
Injury Liability
An Aventis executive, when asked about the impact of injury liability on flu
vaccine producers, commented that it is a burden, that it is absorbed as a cost of
doing business, and that his company is committed to remaining in the flu vaccine
business.14
Vaccine manufacturers have two potential avenues for protection against injury
liability claims. They can purchase insurance to cover the costs of defending against
or paying out claims, and incorporate costs into the price of vaccine. Also, certain
vaccines are covered under the National Vaccine Injury Compensation Program
(VICP). Congress added flu vaccine to the VICP list in October 2004, in the
American Jobs Creation Act of 2004 (P.L.108-357), which was signed by the
President on October 22, 2004. Under VICP, an excise tax applied to vaccine sales
pays for a public compensation fund. Congress enacted the program in 1986 as a no-
fault alternative to the tort system for resolving claims resulting from adverse
reactions to mandated childhood vaccines. Individuals of any age alleging injury
from any covered vaccine must seek compensation through the program first, though
they may decline a proposed award and then seek a remedy in court. The program
is administered by the Office of Special Programs in the Health Resources and
Services Administration (HRSA). (See [http://www.hrsa.gov/osp/vicp/
INDEX.HTM]. HRSA says that the program has been successful in providing
compensation to those injured by vaccine-associated adverse events, in reducing
liability for vaccine manufacturers and healthcare workers who administer vaccines,
and in achieving vaccine market stabilization.
Proposals to Stabilize the Flu Vaccine Market
Some in Congress and others have proposed a number of incentives to vaccine
manufacturers to encourage entry into the market and to guarantee demand for
vaccine, which would in turn promote diversity of manufacturers and increase annual
supply.
Government Buy-Back of Surplus. Under this proposal the federal
government would purchase vaccine that remained unused at the end of a season.
This would work, in theory, by encouraging manufacturers to produce more than they
believed they could sell, thereby providing a cushion if annual supply were to fall
short for any reason. However, if manufacturing problems or other supply
disruptions did not occur, wastage of unused doses would become a government
expense rather than a private one.
14 U.S. Department of Health and Human Services, “Flu Vaccines and Antivirals,” transcript
of news conference, Oct. 19, 2004.

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CRS-15
Government Purchase for Stockpiling. Under this proposal, the federal
government would purchase doses of vaccine at the beginning of the season, to serve
as a cushion if needed. However, because of its one-season shelf life, flu vaccine is
not an attractive candidate for stockpiling. Products such as smallpox vaccine have
a long shelf life, and stockpile purchases can be considered one-time expenditures
for which a high cost is acceptable. CDC purchased 4.5 million doses of flu vaccine
to stockpile for the 2004-2005 season, at a cost of $40 million. Two and a half
million of these doses were produced by Aventis and can be used to ameliorate the
current shortage, but this is a small amount in the face of a shortfall of 46 million
doses. A federal flu vaccine purchase of sufficient magnitude to cushion a two-
supplier market in the event that one failed would be costly, considering that in each
of the past five years there have been surpluses of flu vaccine, and that this current
year’s shortage may be the exception. But by expanding annual demand, stockpile
purchasing could encourage additional manufacturers to enter the market.
Incentives for Construction of New Facilities. Since the shortage was
announced, several vaccine manufacturers have expressed interest in entering the flu
vaccine market. For new manufacturers to be licensed in the United States, they
must apply years in advance for FDA approval, and pay for plant construction or
renovation, clinical trials and other regulatory obligations before any profit can be
realized. Given the high capital cost for entry into this market, some have proposed
offering tax credits or other incentives to offset these costs and encourage new
manufacturers to join the U.S. flu vaccine market.
Implications for Pandemic Preparedness
Influenza circulates around the globe every year, changing slightly each year so
that healthy adults have partial immunity to new strains. The virus, its genome in
constant flux, typically makes healthy people sick, but not too sick, each year. Now
and then, usually several times in a century, the virus changes enough that there is no
partial immunity. This event, called an influenza pandemic, results in severe illness
and death, even in healthy people. The CDC estimates that in the United States,
while an annual flu season results in 36,000 deaths, on average, a pandemic could
cause more than 200,000. The extent and severity of illness, and the disabling impact
on healthy young people, could cause serious disruptions in services and social order.
Some have expressed concern that the current flu vaccine shortage presages
problems for a national response to an influenza pandemic. The current situation is
in some ways a relevant drill for pandemic preparedness, but in other ways is
different. In the face of the current flu vaccine shortage, many are concerned with
the logistics of finding available vaccine and vaccinating high-risk individuals.
Others are concerned about fairness in the way that companies and federal, state and
local agencies are handling the situation. There is little circulating flu virus at this
time, but as the season progresses there may be additional concerns about the
availability of antiviral drugs, about whether people who are ill should be compelled
to stay home, and similar issues.

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CRS-16
Many of these concerns about limited resources and equity in their allocation
will be writ large during a flu pandemic. Potentially, a vaccine could not be
produced until a pandemic virus strain is actually circulating. For this and other
reasons, severe vaccine shortages are expected during an influenza pandemic. The
WHO and HHS each have published plans for influenza pandemic preparedness.15
Both stress the role of basic infection control practices and have expanded guidance
for handling large numbers of victims, such as expanding capacity for isolation and
enacting plans to keep people at home.
The WHO says that with current technology, worldwide production capacity for
influenza vaccine would cover only 5% of the world’s population. Countries are
advised to consider how they would apportion this scarce resource. WHO notes that
because healthy individuals may become severely ill, or may even die from infection
with a pandemic flu strain, consideration should be given to maintaining essential
services by prioritizing vaccine delivery to critical service providers such as
healthcare, public health and public safety workers. Americans are accustomed to
deferring to those who are most vulnerable in situations where risk of death is low,
as they have been asked to do for the current flu vaccine shortage, but a pandemic
may require a different message.
Some in Congress have expressed concern that a portion of the U.S. flu vaccine
supply is produced in a foreign facility. The concern is that during a flu pandemic
or other emergency, foreign governments may seize vaccines and production
facilities within their borders. The International Federation of Pharmaceutical
Manufacturers Associations reports that in 2003, more than 95% of the world’s flu
vaccine was produced in nine countries: Australia, Canada, France, Germany, Italy,
Japan, Netherlands, the United Kingdom and the United States. The global flu
vaccine market is a confusing patchwork of companies and subsidiaries which may
be based in one country, be producing vaccine in another, and be marketing in
multiple other countries. Aventis and Chiron are the only companies currently
licensed to produce injectable flu vaccine for the U.S. market. While others have
expressed interest since the U.S. flu vaccine shortage was announced, it could take
many years for them to have plants inspected, conduct clinical trials, and meet other
FDA regulatory requirements before they could have a licensed product available in
the U.S. market. This timeline would apply whether the manufacturer or plant were
domestic or foreign.
While both the WHO and HHS plans also stress the use of antiviral drugs, these
are likely to be in very short supply as well. A similar problem may arise with access
to healthcare facilities and providers. A flu pandemic could result in mass casualty
situations, and while these may be isolated in time and place, they may force what is
referred to as degradation of care, the circumstance in which a standard of care is
lowered in the face of overwhelming resource constraints in order to maximize
15 World Health Organization, “Influenza Pandemic Preparedness Plan: The Role of WHO
and Guidelines for National or Regional Planning,” Geneva, Switzerland, April 1999, and
U.S. Department of Health and Human Services, “Pandemic Influenza Preparedness and
Response Plan,” Aug. 26, 2004.

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overall survival. Providers are concerned about the ramifications on social order and
liability, and have sought federal guidance on this matter.
CDC’s plan to coordinate information about flu vaccine availability, pockets of
unmet need, and circulating influenza virus, using geographic information systems
(GIS), gathering information from states and private entities, and relaying it back, is
a useful preparedness exercise for any number of natural or intentional public health
emergencies, including pandemic influenza. In addition, efforts to bolster
bioterrorism preparedness have yielded bonuses for pandemic preparedness, such as
the development of techniques to streamline vaccine development. Generally,
advancements in the development of vaccines for pandemic influenza will benefit
annual flu vaccine development as well.
Despite advances in technology, serious questions remain about the exercise of
federal authority during an influenza pandemic. Many of these questions are also
being raised in the face of the current flu vaccine shortage. Should the federal
government have, or exercise, authority to identify and control doses of scarce flu
vaccine? Should the federal government have, or exercise, authority to control
administration of vaccine by healthcare providers? Is the current model, which
leverages state authorities with federal assistance, adequate for the current shortage,
or for pandemic influenza or other public health emergencies? Given that the federal
government has overarching emergency authorities but has not used them, will
federal officials know how to conduct themselves if such authorities were invoked
in an emergency? The current flu vaccine shortage presents a small study of these
important questions.
Conclusion
It is intuitively appealing to think that federal officials, when faced with a public
health emergency, could take charge of information and assets, and assure that
remedies and burdens were equitably and efficiently distributed. Actually, the
current shortage of flu vaccine illustrates two serious challenges that the federal
government faces in a public health emergency. Law and tradition place much of the
control of the current situation either with the states, or with the private sector, and
the threshold over which the federal government would wrest control from either
appears high. The federal government does not dictate the practice of medicine or
compel companies to do business. As a result, in situations like this one, free market
forces operate, the public health system responds in a decentralized fashion, efforts
may seem disorganized, and the federal government may appear unresponsive.
Since the terror attacks of 2001, some barriers have been overcome without
substantial changes in the legal landscape. An example is state preparedness
planning with uniform guidance, so that states aim for the same targets in planning
for mass drug distribution, or in overhauling their emergency public health
authorities. Decentralization of public health authority to states is less of a problem
if all of them can respond capably and in a consistent fashion. Another example is
the government use of proprietary information, such as drug store sales, to conduct
surveillance for unusual health events. The current flu vaccine shortage is yet
another exercise in the coordination of these partners in response to a national

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challenge, another opportunity to explore creative solutions, and another chance for
lessons learned.
Congressional Actions in the 108th Congress
Legislation
Selected legislative proposals aimed at addressing flu vaccine production or
shortages are listed. A number of bills were introduced before this year’s shortage
was announced, some in response to flu vaccine problems during the 2003-2004
season. Several proposals would subject flu vaccine to an excise tax, in order to add
it to the Vaccine Injury Compensation Program table. A version of this provision
was passed in H.R. 4520 / S. 1637, which was signed by the President on October 22,
2004. Other proposals in authorizing legislation listed below have not been
considered in either chamber as of this writing.
H.R. 3758 (Emanuel)
To amend the Public Health Service Act to provide for an influenza vaccine
awareness campaign, ensure a sufficient influenza vaccine supply, and prepare for an
influenza pandemic or epidemic, to amend the Internal Revenue Code of 1986 to
encourage vaccine production capacity, and for other purposes.
Introduced February 3, 2004.
H.R. 4520 / S. 1637 (Thomas, Grassley)
The American Jobs Creation Act of 2004, includes a provision to add any trivalent
vaccine against influenza as a taxable vaccine for purposes of the excise tax on
certain vaccines.
Became P.L. 108-357 on October 22, 2004.
H.R. 5243 (DeFazio)
To amend the Public Health Service Act to provide for emergency distributions of
influenza vaccine.
Introduced October 7, 2004.
S. 15 (Gregg)
Project BioShield Act of 2004, to amend the Public Health Service Act to provide
protections and countermeasures against chemical, radiological, or nuclear agents by
giving the National Institutes of Health contracting flexibility, infrastructure
improvements, and expediting the scientific peer review process, and streamlining
the Food and Drug Administration approval process of countermeasures. Introduced
March 11, 2003.
Became P.L. 108-276 on July 21, 2004.
S. 666 (Lieberman)
The Biological, Chemical, and Radiological Weapons Countermeasures Research
Act, to provide incentives to increase research by private sector entities to develop

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CRS-19
antivirals, antibiotics, vaccines and other products to prevent and treat illnesses
associated with a biological, chemical, or radiological weapons attack.
Introduced March 19, 2003.
S. 754 (Frist)
To amend the Public Health Service Act to improve immunization rates by increasing
the distribution of vaccines (including flu vaccine) and improving and clarifying the
vaccine injury compensation program.
Introduced April 1, 2003.
S. 1817 (Santorum)
To amend the Internal Revenue Code of 1986 to include influenza vaccines in the
Vaccine Injury Compensation Program.
Introduced November 4, 2003.
S. 1896 (Grassley)
To add to the definition of taxable vaccines any vaccine against hepatitis A and any
trivalent vaccine against influenza.
Introduced November 19, 2003.
S. 2038 (Bayh)
To amend the Public Health Service Act to provide for an influenza vaccine
awareness campaign, ensure a sufficient influenza vaccine supply, and prepare for an
influenza pandemic or epidemic, to amend the Internal Revenue Code of 1986 to
encourage vaccine production capacity, and for other purposes.
Introduced January 28, 2004.
S. 2959 (Dayton)
To amend the Public Health Service Act to ensure an adequate supply and
distribution of influenza vaccine.
Introduced October 8, 2004.
S. 2968 (Reed)
To amend the Public Health Service Act to address the shortage of influenza vaccine,
and for other purposes.
Introduced October 8, 2004.
H.R. 2660 / S. 1356 (Regula / Specter)
Making appropriations for Labor, Health and Human Services, Education and
Related Agencies for FY2004, includes funding for influenza vaccine stockpile
purchase.
Became Public Law No. 108-199 on January 23, 2004.
H.R. 5006 / S. 2810 (Regula / Specter)
Making appropriations for Labor, Health and Human Services, Education and
Related Agencies for FY2005. House bill has passed, Senate bill has been reported.
House and Senate bills specify funding for flu vaccine purchase.

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CRS-20
Hearings
House Committee on Government Reform, hearing on The Nation’s Flu Shot
Shortage, October 8, 2004.
Senate Committees on the Judiciary and Health, Education, Labor and Pensions, joint
hearing on BioShield Legislation, October 6, 2004.
House Appropriations Committee, Subcommittee on Labor, Health and Human
Services and Education, hearing on Influenza Vaccine, October 5, 2004.
Senate Special Aging Committee, hearing on Influenza and the Elderly, September
28, 2004.
House Committee on Government Reform, Subcommittee on Human Rights and
Wellness, hearing on Mercury and Autism, September 8, 2004.
House Appropriations Committee, Subcommittee on Labor, Health and Human
Services and Education, hearing on Global Diseases Programs Appropriations, April
28, 2004.
House Committee on Government Reform, hearing on Health System Preparedness
to Handle Health Threats, focused on the current influenza season, February 12,
2004.
Investigations
The House Committee on Government Reform is conducting an investigation into
FDA’s role in the shutdown of the Chiron plant. The Committee Chairman and
Ranking Member sent a letter to the FDA Acting Commissioner, requesting
information, on October 13, 2004, available at [http://reform.house.gov/
UploadedFiles/101304fdaletterrelease.pdf].
Information Resources
CRS Products
CRS Report RL31793, Vaccine Policy Issues for the 108th Congress, by Susan
Thaul.
CRS Report RS21507, Project BioShield, by Frank Gottron.
CRS Report RL32549, Project BioShield: Legislative History and Side-by-Side
Comparison of H.R. 2122, S. 15, and S. 1504, by Frank Gottron and Eric Fischer.
CRS Report RS21747, Avian Influenza: Multiple Strains Cause Different Effects
Worldwide, by Jim Monke.

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CRS-21
CRS Report RL31333, Federal and State Isolation and Quarantine Authority, by
Angie A. Welborn (discusses state and federal authority for public health
emergencies).
CRS Report RL31719, An Overview of the U.S. Public Health System in the Context
of Bioterrorism, by Holly Harvey and Sarah Lister.
Government Accountability Office (GAO) Products
GAO-04-1100T, Infectious Disease Preparedness: Federal Challenges in
Responding to Influenza Outbreaks, testimony, September 28, 2004.
GAO-04-458T, Public Health Preparedness: Response Capacity Improving, but
Much Remains to Be Accomplished, testimony, February 12, 2004.
GAO-02-987, Childhood Vaccines: Ensuring an Adequate Supply Poses Continuing
Challenges, report, September 13, 2002.
GAO-01-786T, Flu Vaccine: Steps Are Needed to Better Prepare for Possible Future
Shortages, testimony, May 30, 2001.
GAO-01-624, Flu Vaccine: Supply Problems Heighten Need to Ensure Access for
High-Risk People, report, May 15, 2001.
Health and Human Services (HHS) Resources
HHS National Vaccine Program Office Home Page: general information on vaccines,
and the Draft Pandemic Influenza Preparedness and Response Plan.
[http://www.hhs.gov/nvpo/].
Centers for Disease Control and Prevention (CDC) Resources
CDC Influenza Home Page: information for health professionals and the general
public, including guidelines related to the current vaccine shortage,
[http://www.cdc.gov/flu/].
CDC, Prevention and Control of Influenza, Recommendations of the Advisory
Committee on Immunization Practices (ACIP), MMWR Recommendations and
Reports, May 28, 2004, recommendations prior to announcement of the vaccine
shortage for 2004-2005.
CDC National Immunization Program Home Page: information about CDC-funded
vaccine purchases and related information, [http://www.cdc.gov/nip/].
CDC Public Health Law Program Home Page: information on state authorities and
actions taken to assure priority distribution of flu vaccine,
[http://www.phppo.cdc.gov/od/phlp/Influenza.asp].

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Food and Drug Administration (FDA) Resources
FDA Center for Biologics Evaluation and Research, Influenza Virus Vaccine 2004-
2005 Home Page: information about Chiron, Aventis, and MedImmune vaccine
production, [http://www.fda.gov/cber/flu/flu2004.htm].
Health Resources and Services Administration (HRSA) Resources
HRSA National Vaccine Injury Compensation Program (VICP) Home Page,
[http://www.hrsa.gov/osp/vicp/INDEX.HTM].
National Institutes of Health (NIH) Resources
NIH National Institute of Allergy and Infectious Diseases influenza Home Page:
[http://www.niaid.nih.gov/dmid/influenza/].

World Health Organization (WHO) Resources
WHO Influenza Home Page at [http://www.who.int/csr/disease/influenza/en/].
Other Key Resources
National Vaccine Advisory Committee: “Strengthening the Supply of Routinely
Recommended Vaccines in the United States: Recommendations from the National
Vaccine Advisory Committee,” JAMA 290(23), December 17, 2003, pp. 3122-3128.

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