Regulatory Beat: Manufacturers Struggle with Vaccine Production and Supply

Published on: 
BioPharm International, BioPharm International-03-01-2005, Volume 18, Issue 3

Bioterrorism legislation is in the works, but there will be a tough fight to enact added liability protections for manufacturers.

It seems hard to fix the nation's vaccine supply problems. The flu vaccine shortage of last fall turned into a surprising surplus by January, as confusion and delays discouraged millions of Americans from lining up for a shot. Centers for Disease Control and Prevention (CDC) director Julie Gerberding cited "unprecedented supply-and-demand mismatches" at the local level as she encouraged broader distribution of more than five million unused vaccine doses before the flu season ends. The future doesn't look very bright, though, as doctors and manufacturers remain uncertain about who will produce flu vaccine for next year, what the supply will be, and who will want treatment.

Jill Wechsler

Financial accounting rules are blocking manufacturers from providing vaccines for national stockpiles, while liability concerns are discouraging investment in new products and manufacturing operations. Industry complains that increasingly stringent good manufacturing practices (GMP) standards delay production and raise costs. Policy makers are weighing legislative proposals to address some of these issues, but disagreement over legal and manufacturing issues may block speedy agreement on needed changes.


In January of this year, CDC's National Vaccine Advisory Commission (NVAC) held a two-day workshop to examine perennial problems jeopardizing the US vaccine supply. NVAC addressed many of these concerns three years ago and published a report in the

Journal of the American Medical Association

(JAMA, Dec. 17, 2003; 290: 3122-3128) outlining strategies to improve vaccine development and distribution. The report called for policymakers to:

  • expand vaccine stockpiles

  • streamline the regulatory process

  • increase support for the Food and Drug Administration

  • strengthen liability protections

  • improve communication and public information about vaccine benefits.

Unfortunately, not much has been done. CDC mounted a vigorous campaign to promote vaccine benefits, and manufacturers report some success with a voluntary program to give FDA advance notice of plans to cease vaccine production. However, periodic vaccine shortages continue, aggravated by steady industry consolidation: only four manufacturers produce routine childhood vaccines in the US, with just one supplier per product.


Although regulators and manufacturers agree on the need for vaccine production facilities to meet rigorous quality standards, industry executives complain that overly inflexible GMP requirements block innovation and expansion. At the workshop, Norman Baylor of FDA's Office of Vaccines Research and Review in the Center for Biologics Evaluation and Research (CBER), cited the agency's two-year GMP modernization initiative for streamlining manufacturing regulatory processes, including the agency's Team Biologics inspection program. He noted that CBER is encouraging fast-track and accelerated approval approaches to speed innovative vaccines to market, but he also acknowledged that tight budgets are preventing the agency from doing much more than meet required review goals and deal with the most pressing problems.

Manufacturers at the meeting agreed that CBER requires more resources to support a critical scientific base capable of dealing with the technological advances that will shape future vaccine development. At the same time, they complained that regulatory requirements aggravate supply problems and add to the cost and time needed to develop new products. Alan Shaw of Merck noted that the agency is requiring larger and larger safety studies, which still are unlikely to reveal really rare adverse events. Vax-Gen CEO Lance Gordon described how very costly it was to build a GMP-compliant plant to produce an anticipated 75 million doses of its new recombinant anthrax vaccine. Escalating GMP requirements, Gordon observed, erect barriers to entry for smaller biotech firms and make it hard to obtain clinical supplies for early studies.

Despite harmonization efforts, Peter Paradiso, vice president at Wyeth Vaccines, explained that US and EU manufacturing standards still focus on different areas, prompting manufacturers to meet the most stringent requirements to avoid future problems. He urged more balance between safety concerns and public health, with product specifications and requirements geared to enhancing product quality.


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.


A main goal of the first NVAC workshop was to examine ways to improve the National Vaccine Injury Compensation Program (VICP), which was established in 1986 to protect vaccine manufacturers against lawsuits from individuals claiming to be harmed by a vaccine. The system covers all vaccines recommended by CDC for children and has paid out over $1.5 billion in awards to families and individuals through its no-fault process.

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,