JEOPARDIZING STOCKPILES In addition to FDA regulatory policies, vaccine manufacturers are particularly troubled by a financial accounting policy that discourages them from participating in the federal pediatric vaccine stockpiles program. The culprit is a 1999 Securities and Exchange Commission (SEC) accounting bulletin; it says that a company has to actually deliver vaccine to an end user to be able to count the revenue as income. In the past, manufacturers could recognize up front the value of vaccine sales for the stockpile, even though manufacturers do not actually ship vaccines to an actual stockpile but contract with CDC to maintain a certain amount for emergency use.

Until SEC agrees to make an exception to its interpretation of this revenue recognition policy for vaccine stockpiles, most vaccine makers are declining to provide vaccines for the pediatric stockpile. Other solutions are being explored such as contracting with a third entity to actually set up an off-site stockpile, but such approaches are much more expensive than current arrangements.

While working to resolve this accounting issue, CDC is striving to expand the stockpile to include more recommended childhood vaccines and to improve program management. Manufacturers consider the stockpile critical in preventing shortages and in spurring development of new combination products and vaccines for less common conditions.

Unfortunately, over the past three years there has been a wave of claims about vaccines causing autism in children, linked to the excipient thimerosal, which was commonly used to stabilize vaccine formulations. Manufacturers want to clarify that the VICP program extends to all companies involved in any aspect of vaccine production, but the issue may require Congressional action.

New biodefense legislation (S. 3) contains provisions addressing current vaccine liability and shortage issues to encourage the development of counter-terrorism treatments and preventatives. One provision extends the VICP program's protections to all parties involved in vaccine production and distribution, including excipient makers.

To prevent vaccine shortages, the bill allows manufacturers to recognize revenue for vaccines provided to national stockpiles. Another provision directs FDA to establish expert teams able to quickly provide on-site technical assistance to manufacturers facing problems likely to interfere with production. And to prevent future "blind-siding" of FDA about pending regulatory actions by foreign agencies, the bill requires manufacturers to inform FDA of all communications with foreign regulatory bodies that might affect drug distribution in the US.

To spur new innovation, the bill proposes "wild card" patent extensions; grants fast-track FDA review status to counter-terrorism agents; includes tax incentives for counter-terrorism research; and provides an antitrust exemption to allow manufacturers to coordinate the development, manufacture, and sale of counter-terrorism treatments. Additional bioterrorism legislation is in the works, but there will be a tough fight to enact added liability protections for manufacturers.

The Chiron debacle underscores the fragility of the US vaccine supply, observed NVAC chair Charles Helms at the January workshop. He urged participants to not just rehash all the earlier recommendations but to parlay the public's current focus on vaccine supply into concrete recommendations for policy makers. Maybe the recent crisis will lead to action this time.

Jill Wechsler is BioPharm International's Washington editor, 7715 Rocton Avenue, Chevy Chase, MD 20815, 301.656.4634, jwechsler@advanstar.com