Chiron Reduces Production Estimate for Flu Vaccine, Second Shortage Possible

California-based flu vaccine manufacturer Chiron on Wednesday said it plans to produce 18 million to 26 million doses of its Fluvirin vaccine for the 2005-2006 season, down from an April forecast of 25 million to 30 million doses, the AP/Seattle Post-Intelligencer reports (Elias, AP/Seattle Post-Intelligencer, 6/16).

A U.S. flu vaccine shortage developed in the most recent flu season after the British Medicines and Healthcare Products Regulatory Agency in October 2004 suspended the manufacturing license for Chiron's facility in Liverpool, England, because of contamination issues. Prior to the regulatory action, Chiron was expected to produce about half of the United States' 100 million-dose flu vaccine supply for the 2004-2005 season. MHRA in late February lifted the suspension, allowing the company to manufacture flu vaccine for the U.S. market next season if FDA gives approval.

British regulators approved changes made at the plant in March (California Healthline, 5/5). Of the 61 million total doses available last year, about 57 million were used. CDC had set a goal to vaccinate 100 million U.S. residents (Gellene/Girion, Los Angeles Times, 6/16).

No more than 83 million people have ever been vaccinated in the United States in a single year (Schmidt, USA Today, 6/16).

The company's efforts to "ramp up" to full capacity and produce the third of three flu strains used in the vaccine are a large factor in the company's decreased production estimate, according to Chiron President Jack Goldstein. Chiron this year for the first time is manufacturing the third strain, which was the predominant virus in last winter's flu season. According to the San Francisco Chronicle, "it is not unusual for a vaccine maker to have difficulty producing a new strain"; however, Goldstein "indicated that the current problem is one of training the more than 100 new factory employees," whom the company hired to improve quality control (Russell, San Francisco Chronicle, 6/16).

After its license was suspended last year, Chiron moved 100 workers from other facilities to Liverpool and made 2,000 improvements to its manufacturing process. Integrating those changes has been more difficult than expected, according to Goldstein (Los Angeles Times, 6/16).

Chiron spokesperson Alison Marquiss said that the "normal manufacturing issues" the company is experiencing are compounded by its efforts to simultaneously correct problems that occurred last year. "What we're talking about here is timing," she added (Kerr, Long Island Newsday, 6/16).

Chiron officials expect FDA to inspect the Liverpool plant next month (Hamilton, Wall Street Journal, 6/16). FDA must approve the facility before the vaccine can be distributed in the United States (USA Today, 6/16). According to the Wall Street Journal, CDC officials are "already planning for a possible vaccine shortage this year" and are considering the possibility that Chiron will not supply any doses (Wall Street Journal, 6/16).

If Chiron is unable to produce vaccine for the U.S. market, the nation's supply could be reduced to between 52 million and 77 million doses (San Francisco Chronicle, 6/16). Chiron expects to begin shipping its first batches of vaccine to the United States in September -- about one month later than usual (Los Angeles Times, 6/16). Company officials said the lower estimate of 18 million to 26 million doses is related to the delay in production (Wall Street Journal, 6/16).

According to the Chronicle, Chiron's lower estimate "is certain to be discussed" on June 30, when the CDC Advisory Commission on Immunization Practices meets in Atlanta. Officials also are expected to consider a proposal to establish a national priority system for allocating vaccines to those at high-risk (San Francisco Chronicle, 6/16).

Prices of flu vaccine also will increase, regardless of Chiron's contribution. Aventis has increased the price of its flu vaccine by 17%, and Chiron also has increased the cost of Fluvirin, though it will not disclose the new amount (USA Today, 6/16).

Chiron CEO Howard Pien said that "it remains possible that we will reach our previously announced range," but the manufacturing issues are a large factor (Long Island Newsday, 6/16).

Deutsche Bank analyst Jennifer Chao said, "This is egg on their face." She added that the company's announcement "once again" damages the company's credibility (USA Today, 6/16).

Sanford Bernstein biotechnology analyst Geoffrey Porges said, "I don't think that anyone is going to be too encouraged that they have once again failed to meet their early promises" (Silber, Contra Costa Times, 6/16).