IOM highlights financing needs: More vaccines, higher cost

Recent vaccine shortages and increased prices are sparking concern in the public health community.

By Susan J. Landers, amednews staff. Aug. 25, 2003.

Washington -- A new report by the Institute of Medicine provides several recommendations designed to place vaccine funding on more stable ground -- thereby easing the financial burden that can fall on physicians and helping to ensure the continued availability of vaccines.

The report, "Financing Vaccines in the 21st Century: Assuring Access and Availability," calls on the federal government to require all insurers, public and private, to cover immunizations. It also asks that the federal government subsidize health plans and physicians for the purchase and administration fees associated with this mandate and provide vaccine vouchers to individuals without insurance so their physicians and others can be reimbursed for the expense of providing the vaccine.

Calling the shots
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"Immunizations against common, dangerous diseases convey valuable health and social benefits, but the higher prices of newly developed vaccines and the outmoded system by which they are financed create significant financial burdens on health plans, consumers, health providers and vaccine makers," said IOM committee chair Frank Sloan, PhD, professor of health policy, management and economics at Duke University in Durham, N.C. The recommendations were released during an Aug. 4 news briefing.

Vaccines are the most cost-effective weapons to fight many infectious diseases, yet the availability of vaccines has been undermined in recent years by widespread shortages, and sharp price increases for newer vaccines have strained the budgets of purchasers.

Although high levels of immunization have been achieved in the United States for young children, vaccine levels are low for adolescents and adults. And even among young children, there are gaps in coverage, with some states and urban areas, particularly those in the Northwest and Southwest, reporting low rates of coverage, according to a new Centers for Disease Control and Prevention survey.

"The proposals that came from the committee addressed a lot of the concerns that we in the immunization and public health communities share -- that we are not doing a very good job of getting vaccines into the arms of people for whom they are recommended," said David A. Neumann, PhD, executive director of the National Partnership for Immunization.

It cost $700 to vaccinate a 2-year-old in 2003.

The IOM report, which was commissioned by the CDC, addresses the need to increase immunization levels for children, adolescents and adults, a consideration applauded by William Schaffner, MD, professor and chair of the Dept. of Preventive Medicine at Vanderbilt University in Nashville, Tenn. "There is an inherent tendency when you think about immunizations to think about infant and childhood vaccines," he said. "But there are many more adults than there are children."

It is particularly timely to consider vaccinations for preadolescents, adolescents and young adults because many of the vaccines now in development will be most appropriate for these age groups, said Dr. Schaffner. Included among them are vaccines for the human papillomavirus, herpes simplex, Epstein-Barr virus and, although one isn't on the immediate horizon, an AIDS vaccine.

Consideration is also being given to using the vaccines currently available, such as the meningococcal vaccine, more broadly, said Dr. Schaffner. Recommendations now stress the need to administer the vaccine to young people heading off to college, especially those who will live in dormitories. But the CDC's Advisory Committee on Immunization Practices is discussing whether to extend its recommendation to high school students, he said.

Calculating costs

New vaccines for infants are likely to add to the cost, which to fully immunize a 2-year-old has risen to about $700. The vaccines recommended for adolescents and adults will only add to this tally.

Financial issues have contributed a "significant undercurrent" to vaccine discussions in the past few years, said Dr. Neumann. The federal government has traditionally negotiated with vaccine manufacturers. But the prices for many vaccines were set years ago and fail to acknowledge increases in production costs, he said.

There were 4 vaccine manufacturers in 2003, down from 25 in 1988.

"Vaccine production is not a very high-profit item for manufacturers, yet we know that disease prevention is the most cost-effective way to manage our public health system," said Cody Meissner, MD, head of the Pediatric Infectious Diseases Service at Tufts New England Medical Center in Boston.

"It is also true that in the past we have had the sense that vaccines, because they are public health as well as personal protection, ought to be inexpensive," said Dr. Schaffner. "But the cost of providing vaccines is increasing, even for such traditional vaccines as the influenza vaccine."

The report's recommendations could help address financial considerations faced by physicians as they begin to immunize patients with newly recommended vaccines before reimbursement levels have been established. "The pediatrician can be left with a dilemma when he or she decides on giving the vaccine because, while it is appropriate to administer the vaccine, reimbursement may not be in place," noted Dr. Meissner.

The increasing cost of the newer vaccines adds to the financial risk to physicians who are responsible for purchasing their own vaccines in a number of states, noted Thomas Saari, MD, professor of pediatrics at the University of Wisconsin Medical School in Madison.

The declining number of manufacturers -- from 25 companies 10 or 15 years ago to four today -- combined with the accompanying drop in competition could mean prices will remain high, predicted several experts. The small number of manufacturers also raises concerns of future vaccine shortages in the event that a manufacturer drops vaccine production in favor of more profitable pharmaceuticals or runs into production difficulties.

The report acknowledges that ensuring a stable supply of these more expensive vaccines may require enticements to manufacturers. "We think they spotted the issues," said Chris Grant, vice president of public policy and government affairs for vaccine manufacturer Aventis Pasteur.

The report was the first from the IOM to acknowledge the connection between insurance coverage for immunization and the ability to have companies that invest in vaccine development and manufacturing, said Grant. "It certainly helps make investment decisions easier when there is known insurance coverage for vaccines."

However, identifying the issues is only a first step. There's still a long and uncertain road ahead until implementation. "Clearly other conversations are needed with insurers, employers and government agencies about the specific recommendations they make about a mandated approach," said Grant.

ADDITIONAL INFORMATION:

Calling the shots

The Institute of Medicine report, "Financing Vaccines in the 21st Century: Assuring Access and Availability," made the following vaccine-financing recommendations:

Federal mandate that all health plans include vaccine benefits.
Government subsidy for insurers and health care providers to cover purchase and administrative fees associated with the insurance mandate.
Vaccine voucher plan for the uninsured.
Changes in the procedures and membership of Advisory Committee on Immunization Practices.
Stakeholder deliberations on issues associated with a shift from a vaccine-purchase to a vaccine-mandate system.
Post-implementation evaluation study.
Research program aimed at achieving national immunization goals.