Securities and Exchange Commission Accounting Rule Leads to Shortage of Childhood Vaccines
A Securities and Exchange Commission accounting regulation has caused three of the four manufacturers of children's vaccines for the national stockpile to exit the Vaccines for Children Program, leaving the "cushion against shortages or emergencies ... seriously understocked," USA Today reports. The SEC regulation prohibits vaccine makers from claiming sales to the stockpile program as revenue until the vaccines are delivered to CDC, which is the customer in this case, according to USA Today.
The regulation discourages pharmaceutical companies from participating because new vaccines often are not sent to CDC to maintain stockpile levels until the older supplies pass expiration dates and are destroyed. The stockpile is therefore designed to always have a fresh supply, but manufacturers cannot report revenue for doses that have been sold but not delivered because of the SEC regulation. As a result, company profits are skewed downward.
SEC spokesperson John Heine said the "bill and hold guidance" is designed to protect investors, according to USA Today. Merck is the only company still participating in children's vaccine program. MMR is the only one of the nine VCP vaccines to be fully stocked, while there are no reserve supplies for pneumococcal vaccine and DTaP vaccine.
Sen. Tom Harkin (D-Iowa), ranking member of the Senate Appropriations Subcommittee on Labor, Health and Human Services, and Education, has requested that HHS compile a report outlining proposed solutions by Jan. 1.
Stephen Cochi, acting director of CDC's Immunization Program, said, "There are a number of ways to solve the vaccine shortages on the pediatric side, and the strategic reserve is one of the obvious ways we can cushion ourselves. If we can't solve this problem, we're in trouble."
Ian Spatz, Merck's vice president for public policy, said the company will not abandon the program but would like to see the regulation changed. "Imagine, for all the products Merck sold, if we couldn't record them as revenue. Our shareholders would not be pleased" (Manning, USA Today, 11/9).