Assuring immunization of our children

January 2005

---Philip A. Brunell, MD

During the past few years, we have witnessed several interruptions of our vaccine supply. This has been a cause of concern in the pediatric community as well as in government organizations responsible for making immunization policy. Economic factors continue to plague manufacturers, practitioners and patients. Because of the problem of supplying influenza vaccine, much attention recently has been focused on the maintenance of an uninterrupted supply of vaccines. On closer examination, it is apparent that other long-standing impediments to immunization still have not been addressed adequately.

In an ideal world, we probably should offer incentives to families to have their children immunized, as others in the community are protected against infectious disease when a child is vaccinated. It never seemed quite fair to me to ask parents to bear the financial burden and inconvenience of having their sons immunized against rubella. The disease itself causes little morbidity except when pregnant women in a household or in the community are infected and bear children with congenital rubella syndrome (CRS). When this happens, the community incurs significant expense for medical costs, schooling and rehabilitation of affected children. No one would argue with the need to immunize baby girls. Indeed, had rubella vaccine not been combined with measles and mumps, universal immunization against rubella would have raised lots of howls. The importance of herd immunity for preventing CRS was clearly illustrated by the failure of England’s initial approach, immunizing prepubescent girls. Later they switched to our system of universal immunization, boys and girls, to prevent community spread of rubella and thus CRS. The benefits of this and almost every other vaccine accrue not only to the vaccinee but also to the community. Thus, there is justification for asking the community to at least share the cost. In one scheme outlined in the Institute of Medicine (IOM) report, the benefit to the community of a specific vaccine is factored into the cost that should be paid for the vaccine. This provides incentive for manufacturers to produce vaccines.

Motivating manufacturers

Why do manufacturers need incentives to produce vaccines? I am reminded of a conversation I had with a representative of one of these companies, when I chaired the Red Book Committee in the ’80s. He pointed out that our current system required that vaccines compete in the corporate world with other products that generally are more profitable. The specific example he gave me was the fact that vaccine business was only one component of a large corporation’s operation and that it makes just as much from underarm deodorant sales. He pointed out that, within the organization, vaccines had to compete with other products that are just as, if not more, profitable, require less developmental costs and are less likely to cause the company to be sued.

This is a difficult argument to rebut. I doubt many of us rushed to sell our investments in these companies when they stopped producing the vaccines, which they found to be less profitable in favor of “blockbusters.” The number of companies producing vaccines has progressively diminished despite the fact that the number of vaccines has markedly increased. In 1955, 37 companies made five routinely administered vaccines. In 1980, 18 made eight, as Steve Cochi, MD, MPH, mentioned in the November issue. Today, there are five manufacturers for 12 vaccines, and for eight there is only one supplier.

The profit-driven system is even more egregious when one considers the disincentive from a corporate standpoint to produce vaccines for developing countries where the morbidity from diseases such as malaria, tuberculosis and meningococcus is high. These diseases take far greater tolls than the diseases for which vaccines are produced in countries that can afford to buy vaccines. It was pointed out to me that when the United Kingdom decided to start an immunization program against meningococcus group C, four companies were vying to provide vaccine. At the same time, none were eager to produce a meningococcus group A vaccine for use in epidemics in less developed areas, where the morbidity from this organism was significantly greater than that from meningococcus group C in the United Kingdom.

Intracorporate competition for development funds pits vaccines, which may be given as a single dose or a vaccine series consisting of a maximum of five doses, against drugs, which may be prescribed daily for the lifetime of the patient. The cost of flu vaccine may be a sixth of that of a month’s supply of some of the newer drugs for lowering cholesterol or treating diabetes or hypertension. What is more, companies can more profitably use resources to produce “blockbuster” vaccines rather than less expensive ones.

Manufacturers clearly are abandoning production of low-cost vaccines, e.g. influenza and diphtheria-pertussis-tetanus, for higher-cost vaccines, e.g. varicella, hepatitis, pneumococcus and, coming down the line, meningococcal conjugate vaccines and vaccines against zoster and human papilloma virus. The risk to manufacturers producing vaccines is exemplified by the withdrawal of rotavirus and Lyme vaccines and the poor profitability of the intranasal influenza vaccine. MedImmune would need to sell 6 to 8 million doses of FluMist this year just to break even. This is far in excess of what will be marketed.

High co-pays, low reimbursement

The problem of getting kids immunized is more than just assuring that the vaccine supply is secure. There are other needs: eliminating financial impediments to immunization for parents and assuring that physicians are adequately compensated for immunizing their patients. The 2003 IOM report indicated that 11 million children have private insurance that does not include immunization and that those who have coverage often have significant co-pays for vaccines. For a poor family with multiple children, expensive vaccines become a financial burden that is difficult to bear. The Vaccines for Children program now covers about 10 million children but does not cover many who are underinsured, and the coverage varies by state. A new program outlined by the IOM report would require health insurance companies to cover vaccines and to have them reimbursed by the government. Those who do not have health insurance will receive vouchers.

Physicians are not compensated adequately for immunizing patients, and the demands have been constantly increasing, e.g. reporting to immunization registries. The office tasks involved in billing, vaccine storage and explanation to parents appear to be largely ignored in setting reimbursement levels. A review in The New England Journal of Medicine states what you already know that reimbursement barely covers physicians’ costs. Referral by physicians of patients to immunization clinics decreases the likelihood that children will be immunized and places an extra burden on the families. Also, records of immunization often do not get into the child’s office chart. Almost every group reviewing this subject indicates that the Medicare reimbursement levels, upon which almost all others are based, are totally inadequate. Although the IOM report does not emphasize this problem, the National Vaccine Advisory Committee states clearly, “Preventative services need to be appropriately compensated. Proposed reductions in reimbursement and compensation for administering vaccines are disincentives for clinicians. The rates should include a realistic administration fee that reflects clinician work as well as professional liability and practice expenses.” Here, the AAP clearly must step up to the plate.

There are a number of government and nongovernment groups working on these problems. More money will undoubtedly help, but that alone will not solve all the problems. The immediate pressure on the immunization system hopefully will increase effort to provide some long-term solutions. The problems are complex and will require intense effort to solve them. It is probably appropriate to state at this point that “for every complex problem, there is usually a simple solution, and it usually is wrong.”

For more information:

• Santoli JM, Peter G, Arvin AM, et al. Strengthening the supply of routinely recommended vaccines in the United States: recommendations from the National Vaccine Advisory Committee. JAMA. 2003;290(23):3122-3128.
• Sloan FA, Berman S, Rosenbaum S, et al. The fragility of the U.S. vaccine supply. N Engl J Med. 2004;351(23):2443-2447.
• Institute of Medicine. “Financing Vaccines in the 21st Century.” Washington, D.C.: National Academies Press; 2003.