Flu Vaccine

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The Flu Vaccine Administration Task Force

In the wake of the 2004-2005 flu vaccine shortage, we are convening a federal task force to develop a strategy plan for addressing the issues presented in this case.

What are the key problems or issues that has caused such shortage?

2. What are the market and non-market forces contributing to the previous shortages?

3. What are the social values the Federal government should protect? State government should protect?

Are there alternatives for flu vaccine production?

5. What kind of potential policy solutions can we develop to deal with the vaccine shortage problem in the future?

6. Does your policy solution guarantees fairness in the availability and distribution of the vaccine?

7. Does your policy solution guarantees that high-risk populations are protected?

Does your policy solution promote competitiveness in flu vaccine market?

9. Is there a way to facilitate or provide incentives for the private firms to invest in R&D of alternative ways of mass-producing flu vaccine?

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General Overview

The 2004-2005 U.S. Influenza Vaccine Shortage

Influenza, or the flu, causes approximately 36,000 deaths and 200,000 hospitalizations annually in the United States and costs the American economy between $ll and $18 billion each year (General Accounting Office 2001b, page 1). The primary method for preventing influenza is the flu vaccine, which is generally available in a variety of settings including clinics, hospitals, schools, workplaces, and other convenient locations. The vaccine is typically distributed in October and November in anticipation of the winter flu season, which usually begins in late November and peaks in February. For the 2004-05 flu season, the Centers for Disease Control and Prevention (CDC) recommended that as many as 185 million Americans receive flu shots. Among those 185 million, almost half (90 million) are considered high-risk (CDC 2004, 2; GAO 2004). The high-risk population includes adults 65 and older, infants six to 23 months old, pregnant women, health care workers, those who care for children under six months old, and people with compromised immune systems or chronic illnesses such as asthma, lung cancer, and cystic fibrosis (CDC 2004: GAO 2004).

In recent years Americans have faced flu vaccine shortages on multiple occasions. For example, at the beginning of the 2000-01 flu season, demand for the vaccine outstripped supply, when problems developing a new viral strain and safety- and quality control issues temporarily delayed vaccine delivery by 6-8 weeks (Cohen 2002. 1999; GAO 2001b). The reduced supply resulted in an uneven distribution of available vaccines and sharp price increases as the cost of flu shots more than doubled from the previous season (GAO 2001b. 2). In 2001-02. three manufacturers produced 87 million doses of which almost one-third were not available when demand for the vaccine peaked. The following year supply exceeded demand when only 87% of the 95 million doses produced were purchased. In 2003-04. demand exceeded supply when 4 million doses were discarded and 87 million doses were inappropriate for that year's flu strain (Brown 2004: GAO. 2001b. 2004)

The Institute of Medicine (IOM) notes that these recent shortages have "highlighted the fragility of vaccine supply" which is further complicated by declining financial incentives

ThJs case was written by Mary K. Feeney, School of Public Policy, at the Georgia Institute of Technology. The case is intended solely as a vehicle for classroom discussion, and is not intended to illustrate either effective or ineffective handling of the situation described. Support was provided by the Kellogg Foundation.

The Electronic Hallway is administered by the University of Washington's Daniel J. Evans School of...
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