Federal coffers could be tapped to pay for construction or rehabilitation of privately owned vaccine production facilities under a supplemental appropriations bill passed by the House May 14.

The money would come from a $1.85 billion emergency fund created by H.R. 2346 to support preparations and response to a possible pandemic of H1N1 influenza, the virus previously known as swine flu.

The government could finance "construction or renovation of privately owned facilities for the production of pandemic influenza vaccine and other biologics" if necessary to secure sufficient supplies of the medical products.

While the pandemic preparations will result in significant immediate funding for vaccine manufacturers (see ¹ Also see "Novartis Wins Top Share Of HHS’ Initial Pandemic Flu Vaccine Contracts" - Pink Sheet, 25 May, 2009.), the legislation also underscores that the effort has the potential to transform the underlying vaccine business by helping to build facilities that could produce many future products.

The legislation does not specify how much money could go for capital costs, nor does it define "other biologics." Funding for the latter provides flexibility in case biologics become part of the response equation, a House Appropriations Committee aide explained.

The panel wanted the administration to be able to respond appropriately "to meet the highest priority needs," the staffer said.

The $96.7 billion supplemental appropriations bill, which funds the wars in Iraq and Afghanistan, was approved in the House by a 386-60 vote.

The Senate version of H.R. 2346 has a total cost of $91.3 billion, with $1.5 billion for a pandemic emergency fund. The bill was approved May 21 by a vote of 83-6 before Congress went home for the week-long Memorial Day district work period.

House and Senate conferees will have to resolve differences when they return to Washington June 1.

If the provision allowing financing of vaccine production facilities remains in the final measure sent to the president's desk, it would continue a Bush administration effort to strengthen vaccine production in this country.

In January, Novartis received $486 million from the government to defray the costs of building and getting approval for a North Carolina facility to produce cell-culture flu vaccine; Sanofi and MedImmune have also benefited from federal largesse for retrofitting vaccine plants (² Also see "Novartis Gets Bricks And Mortar Money: Last Vaccine Support From Bush Administration" - Pink Sheet, 20 January, 2009.).

Differences In House And Senate Funding

Differences to be resolved between the House and Senate appropriations for flu preparedness include more than just the total funding levels.

H.R. 2346 would create the $1.85 billion emergency fund within the Department of Health and Human Services. The Senate bill sets up the $1.5 billion Pandemic Preparedness and Response account within the White House and makes the money available for responding to the global outbreak of the H1N1 virus, and other diseases as well. The administration requested $1.5 billion in emergency funds to respond to a potential pandemic.

The money in the House fund would be available until expended, while that in the Senate fund is available only until Sept. 30, 2010.

The House bill directs that at least $350 million of the money be used to upgrade state and local capacity and at least $200 million be transferred to the Centers for Disease Control and Prevention to conduct global and domestic disease surveillance, provide laboratory capacity and research, risk communications, diagnostics, rapid response and quarantine.

Products that can be purchased with the money include vaccines, antiviral medications, medical supplies, diagnostics and surveillance tools.

The Senate appropriators would spread the money more widely. HHS would receive $900 million for its pandemic flu preparations, including vaccine development, purchase of antiviral products and medical equipment, and antiviral research.

The committee report urges HHS to invest in research and development of new antivirals and universal vaccines. The money would be available for state and local preparedness, but no amount is specified.

Instead, the panel recommends a transfer of $190 million to the Department of Homeland Security and encourages the department to use the funds to help fund state and local coordination and planning activities and to pay for personal protective equipment and antivirals for first responders and DHS employees.

Other recommended transfers include:

$50 million for FDA activities that include vaccine and antiviral development, manufacturer assistance, approval reviews and safety activities. The agency has already issued emergency use authorizations for Tamiflu and Relenza for use in an outbreak (³ Also see "FDA Authorizes Broad Use Of Tamiflu And Relenza To Deal With Swine Flu Outbreak" - Pink Sheet, 28 April, 2009.).

$100 million for Department of Agriculture pandemic preparedness and response, including surveillance of animal health.

$110 million for Department of Veterans Affairs for preparedness and response activities, such as vaccines and antiviral purchases, but also information technology capabilities for real-time data reporting.

$150 million to the Agency for International Development's Global Health and Child Survival account.

The House bill would provide $300 million for the AID global health account, with $200 million allotted for pandemic preparedness and response, and $100 million for a U.S. contribution to the Global Fund to Fight AIDS, Tuberculosis and Malaria. The AID money is available only until Sept. 30, 2010.

The Senate bill would provide $50 billion to the global fund.

- Cathy Dombrowski (c.dombrowski@elsevier.com)

Flu Vaccine Funds From Gov’t Could Help Firms Upgrade Production Facilities

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