Flu Pandemic And Windfall Profits

With fears of an imminent pandemic sweeping the globe, those who make vaccines and antivirals such as Tamiflu are rubbing their hands with glee. It is interesting The run on Tamiflu has gotten so bad that Roche, the producer of Tamiflu, has temporarily stopped shiipng the drug. Interestingly, the CDC has remained silent on stockpiling.

Perhaps that is because there may be those at the CDC who are aware that while Roche is making the drug, they are not the patent holders. The actual intellectual property rights are held by a company named Gilead Sciences, Inc. Gilead outsources the production to Roche. Now interestingly, Donald Rumsfeld (yes, the U.S. Secretary of Defense) was the CEO of Gilead until he was tapped by Bush for the Cabinet position. In fact, Rumsfeld served on Gilead's board of directors from its inception in 1987 until he was tapped as CEO in 1997. Gilead and Roche may be just a bit upset that Taiwan has decided to ignore patents and produce the drug on its own.

I'm sure that Rumsfeld, like Cheney, has his stocks in a "blind" trust to avoid "conflict of interest. Of course it doesn't take an investment guru to figure out that certain contracts and sales jumps "might" raise the value of a stock. However, I'm sure that has no impacts on any policies or contracting decisions.

Another interesting decision was the U.S. awarding a $62.5 million contract to Chiron Corporation for "millions of doses of a vaccine against the strain of bird flu that authorities fear." This is the second contract that has been awarded. The first was a $100 million contract to Aventis. Between the two contracts, "several million" doses should be available. However, there isn't an exact figure because no one knows what an effective dose might be. The U.S. government is attempting to get enough vaccine for 20 million people, and enough Tamiflu for another 20 million. One wonders if Rumsfeld is wringing his hands in grief at the news.

You may think that the names Aventis and Chiron sound familiar. They should after last year's flu season which Bush also did not prepare for. Remember the vaccine shortages? Remember the debacle about the closure of Chiron facilities for bacterial contamination that somehow slipped by the U.S. authorities? Chiron is a U.S. owned company with its production facilities in Britain. Aventis is a France-based company operating plants in Pennsylvania and Washington state (see Who Has the Rest of the Flu Vaccine Contract? and To Your Health).

Excuse me for being a bit skeptical, but how can you make a vaccine for a virus that has not yet mutated to a human communicable form? What if some other company - besides Chiron or Aventis - gets an effective vaccine first? What if they don't want to sell the rights to produce to Chiron or Aventis? What happens to that $162.5 million in contracts?

It is my understanding that it takes some period of time to actually produce a vaccine. Are these companies (assuming there IS a vaccine and that they have the rights to produce it) going to replace their current vaccine production plans with Avian Flu vaccine production? Who will make the other vaccines, or will they simply not be produced? Are those 20 million doses deliverable in one year, or spread out over many? Or is the $162.5 million funding for research and development of a vaccine?

Since there seem to be a number of unknowns, I guess it is reasonable that the U.S. Congress is considering eliminating liability for vaccine injuries. This would not be the first such decision as Eli Lilly was given a bye under the 2002 Homeland Security Act. They were further protected by not having to release their research on the effect of their vaccines on children (in the midst of a law suit). However, if one is making a vaccine for a nonexistent viral mutation there might be just a few "bad reactions" to the vaccine. Or, it might not work at all. Maybe freeing Chiron and Aventis from liability was part of the deal to get them to make the hypothetical drug.

I feel so much safer knowing that every dark cloud has a silver lining for someone, and that some of us will be guinea pigs for experimental vaccines.

If you want to track the status of the bill, You can do so through Thomas. it is S. 1873, Biodefense and Pandemic Vaccine and Drug Development Act of 2005. As of this writing, the last action on the bill was its placement on the Senate Panel on 10/24/05. If the "biodefense" part of this bill makes you a bit nervous, it is justified. I suggest reading the bill.