How to Prevent Another Flu-Shot Crisis

This season's shortage is a wake-up call. Uncle Sam needs to change his ways to ensure the safety of all Americans

By Amy Tsao

It's hard to find a TV news show these days that doesn't include a shot of seniors and the infirm waiting in snaking lines for flu shots. Such scenes make for great TV, especially when frustrated grandmas and grandpas call it like they see it. And are they ever grumpy. To them, the blame for the sudden vaccine shortfall as winter approaches falls squarely on Uncle Sam.

The seniors are right. Because a single manufacturer, struggling Chiron (CHIR ), closed a plant in Britain, the U.S. is suddenly without half of its anticipated supply of flu vaccine for this winter. The instant shortage shouldn't have been as big a surprise as it was. And this episode should stand as a wake-up call to health-care policymakers and the drug industry: They can't let it happen again.

"NO TOLERANCE."

  With no backup system to make up for the shortfall, reports of price-gouging are surfacing, and far worse, a more-than-usual number of flu-related deaths is likely this winter. While the Centers for Disease Control is trying to respond to today's crisis, the system for making flu vaccine has been broken for years. Many manufacturers left the business because the techniques used to make flu vaccines are expensive. Supplies are easily contaminated and rendered worthless.

Other shortages have occurred recent years, but none has been as shocking as this one, by virtue of its size. "We're set up so there's no tolerance in the case of a breakdown," says Irwin Redlener, associate dean at Columbia University Mailman School of Public Health and director of the National Center for Disaster Preparedness. "If anything happens, then we're left holding the bag."

Now, the focus should be on overhauling the system. Here are some remedies proposed by public-health and flu-vaccine experts that could prevent another winter of danger and discontent:

Bolster market forces with government support for vaccines.

Let's face it -- the market is working exactly as expected when it comes to the flu-vaccine business. Because financial risks are high and the rewards relatively low, many companies abandoned the business. Yet, the U.S. government has taken a hands-off approach, allowing market forces to dictate supplies.

Granted, having fewer suppliers makes flu vaccine a better proposition for the companies that have hung in, but not enough suppliers now exist to meet demand. This poses public-health risks. And protecting the public health and safety is one of any government's first priorities. "When there's vital national interest at stake, then it can't be left to the free market alone," says Columbia's Redlener.

Annoyed senior citizens waiting in lines can't compare to the kind of chaos that might ensue if the U.S. were hit with a pandemic of, say, avian flu. While that may not be likely, some extra-virulent strain of influenza is probably going to strike the globe sometime in the future. Michael Osterholm, director of Center for Infectious Disease Research & Policy at the University of Minnesota, notes that the U.S. can't even guarantee enough flu vaccine for high-risk groups, never mind the entire population, should a major flu outbreak hit.

"What we've been doing is making incremental changes," says Osterholm. "We need to have government commitment to being prepared for the possibility of pandemic flu." That means an investment by Uncle Sam in manufacturing vaccine in real time to fight imminent threats of disease.

Set higher prices for flu vaccine.

For decades, flu-vaccine prices were flat. Although they've been inching higher recently, they're still relatively low compared to other drugs, including vaccines for other diseases. The government, as the main buyer of flu vaccine, should set a price that's "adequate to cover the cost of manufacturing and for companies to earn a fair profit," says Alan Sager, professor at Boston University's School of Public Health. This remedy may smack a bit of socialized medicine, but the alternative is far more frightening.

Bring more manufacturers into the mix.

Government price supports for flu-vaccine prices could attract other suppliers. Clearly, relying on just two is risky.

Another possibility: Model the flu-vaccine industry after the defense industry, which comprises a handful of vendors that bid for military projects. "We have to create incentive programs for flu-vaccine makers that are sufficient in resources and commitment," says Osterholm.

To keep more companies in the business, Sager suggests that the government guarantee that it will buy a certain amount of supply, as long as it's safe. Ideally, says Sager, five or six companies would be active in the flu-shot biz. "Competent manufacturers could bid to make 20 million doses a year for five years," he says.

Decrease flu vaccine liability.

Lawsuits have become another deterrent to vaccine makers. "We need to deal with that liability," says Redlener. In recent years, a government-funded vaccine-injury compensation program was established to shield makers of childhood vaccines from litigation. These drugmakers have become the focus of countless suits since certain vaccines were thought to cause health problems in kids. A comparable measure for flu-vaccine makers, says Redlener, would serve as an incentive for other manufacturers to enter the business.

Develop new technologies.

The decades-old method of growing flu virus in chicken eggs needs to be replaced with a more cost-efficient technology. Cell-based manufacturing and other technologies are within grasp and "they could be applied today," says Stanley A. Plotkin, medical and scientific consultant to Aventis Pasteur, the vaccines division of Aventis (AVE ). But regulators must review these methods first, and they're expected to take years to give the go-ahead to incorporate new techniques into manufacturing plants.

The Food & Drug Administration should never be lax in determining whether new methods are safe, but "there should be some sense of urgency," Plotkin says. Regulators should acknowledge that preventing another flu pandemic, similar to ones that killed hundreds of thousands in the 20th century, should be a national priority in the 21st century.

Granted, some of these actions are dramatic and controversial. But it's time for the talk among seniors on flu-shot lines to make it into the national public debate.

Tsao is a reporter for BusinessWeek Online in New York