Mr. President, there was a lot of hysteria a short time ago about the flu vaccine and the fact it was not available to a lot of people. There are several problems. One, the flu vaccine production…
Mr. President, there was a lot of hysteria a short time ago about the flu vaccine and the fact it was not available to a lot of people. There are several problems. One, the flu vaccine production currently takes approximately 6 months. I am introducing a bill that will expedite that and will have the sense of the Senate to steer the NIH research dollars toward the development of faster technology. They are using egg cultures to grow this vaccine when it can be done through the cells of silk moths. It will take more research to get there and we will encourage them to do that.
Second, the bill removes price controls for the purchasing of the flu vaccine. This happened during the Clinton administration. We should have learned during the Nixon administration that price controls in reality do not work. The result of this has been that we do not have many companies now that are willing to get in there and take the risk and develop and manufacture these vaccines. As soon as they do, they find out there is no profit at the other end because of price controls.
Lastly, we allow investment tax credits.
I have long been dedicated to quality healthcare for my constituents in Oklahoma and across America. I supported the Medicare bill of 2003 to give a voluntary prescription drug benefit to seniors. I have championed the rural health care providers, who received some of the greatest benefits of the Medicare bill. In 1997, I was one of few Republicans to vote against the Balanced Budget Act because of its lack of support for rural hospitals. Back then, I made a commitment to not allow our rural hospitals to be closed, and I am pleased we finally addressed that important issue in the Medicare legislation. I also cosponsored S. 816, the Health Care Access and Rural Equity Act, to protect and preserve access of Medicare beneficiaries to health care in rural regions.
I am a strong advocate of medical liability reform and am an original cosponsor of S. 11, the Patients First Act, to protect patients' access to quality and affordable health care by reducing the effects of excessive liability costs. There are solutions to alleviate the burden placed on physicians and patients by excessive medical malpractice lawsuits, and I am committed to this vital reform.
I have also worked with officials from the Center for Medicare and Medicaid Services to expand access to life-saving Implantable Cardiac Defibrillators. I supported legislation to increase the supply of pancreative islet cells for research and cosponsored a bill to take the abortion pill RU-486 off the market in the United States.
The federal government invests in improving hospitals and healthcare initiatives, and I have fought hard to ensure that Oklahoma gets its fair share. Specifically, over the past three years, I have helped to secure $5.2 million in funding for the Oklahoma Medical Research Foundation, the Oklahoma State Department of Health planning initiative for a rural telemedicine system, the INTEGRIS Healthcare System, the University of Oklahoma Health Sciences Center, the Oklahoma Center for the Advancement of Science and Technology, St. Anthony's Heart Hospital, the Hillcrest Healthcare System, and the Morton Health Center.
The unexpected influenza, flu, vaccine shortage beginning last month highlights the need to encourage the production of flu vaccine in America. As you know, on October 5th, Chiron, a California-based biotechnology company, notified U.S. health officials that its plant in Liverpool, England had been shut down due to vaccine contamination. Almost 50,000 doses of flu vaccine were thrown away, which created a severe shortage for Americans just as the flu season began.
In light of the current shortage, I have examined why America found itself unable to accommodate the public demand for the flu vaccine. As we have seen, once a vaccine shortage strikes, a rapid response is difficult and often impossible. Thirty years ago, more than a dozen American companies were in the flu vaccine business. Today only two companies make the vaccine for America, and only one in an America- based company. This is no coincidence. High liability costs, tedious production, price caps, and the complicated United States tax code have kept the market bare.
In October, President Bush signed the JOBS bill, which curbed the billion-dollar lawsuits that have crippled the flu vaccine industry. By adding flu vaccine to the list of vaccines protected by the National Vaccine Injury Compensation Program, VICP, a no-fault alternative must be used for resolving vaccine injury claims. I am encouraged with this progress, but more can be done to prevent a shortage in the future.
My bill supports allocating a greater percentage of the National Institutes of Health budget to develop faster and safer vaccine production technology. The ever-changing nature of the flu virus results in a complicated production process. The dominant strain of the flu virus mutates each year, requiring a different vaccine for every flu
season. Because harvesting the flu vaccine currently takes at least six months and requires tens of thousands of fertilized eggs susceptible to contamination, this process must begin nearly a year before the flu season begins.
Research should be focused on developing new technologies to allow us to produce more vaccine--in the same season--when we encounter a shortage. A company in Connecticut is developing a flu vaccine relying on cell lines from silk moths. This type of innovative research promises to shave at least one month off of production time and significantly reduce cost.
My bill includes a sense of the Senate on the importance of allocating a greater percentage of the National Institutes of Health, NIH, research dollars to developing new technology in flu vaccine production. The encouragement of safer and faster flu vaccine production technology is a prudent use of existing Federal research dollars through the National Institutes of Health.
Furthermore, my bill removes the suffocating price controls that have discouraged companies from producing the flu vaccine. The Vaccines For Children program, VFC, enacted under the Clinton administration, imposed a price cap on all vaccines purchased through Federal contracts. From a shortsighted perspective, these regulated prices may expand access to vaccines. However, in the long run this policy devastates the vaccine production industry and decreases the availability of vaccines. This occurred in 1998 when manufacturers of tetanus diphtheria vaccine refused to bid on Government contracts. Consequently, this vaccine is no longer available to children through the VFC program.
Similarly, the CDC purchased nearly 12 percent of the flu vaccine this season, and significant quantities were purchased through the Department of Defense, the Veteran's Administration and Medicare. The price controls imposed from Federal government purchasing create a high-risk, low-reward business market. Price controls destroy any profit incentive. Manufacturers avoid this artificial environment and will continue to as long as the government over steps its bounds.
The harmful effect of government price controls is especially pronounced in the flu vaccine market because the vaccine has a single- season shelf life. The difficulty of predicting the demand for vaccines each year exposes companies great risk. A slight drop in demand can force them out of the market. Financial losses--from 7 million extra doses in 2002 and 4.5 million extra in 2003--compelled Wyeth Pharmaceutical Company to end its flu vaccine manufacturing.
In addition to lifting price controls, the government can loosen its grip on the flu vaccine market by reforming its complicated tax code. Fortunately, the JOBS bill made headway in simplifying the current United States international tax rules. To further offset the heavy penalties within the United States tax code, my bill gives a tax credit to companies, new and old, that construct facilities to manufacture flu vaccine.
Currently, ten American companies produce the 47 FDA-approved vaccines. An investment tax credit will encourage these existing companies to expand their production to cover the flu vaccine and will invite start-up companies to join the industry. This will better equip the United States market to prevent and deal with a shortage in the future.
Scientific experts consider vaccination to be the most effective medical intervention, and we live in an age of unprecedented vaccine development and implementation. We cannot continue to overregulate the flu vaccine industry and hope companies will hang on and produce vaccines regardless of profit. The current national flu vaccine shortage reveals the need to act.
My bill would steer NIH research dollars towards cutting-edge technology, remove suffocating price controls, and free American companies to enter the flu vaccine industry with an investment tax credit. I urge my colleagues to stand with me in supporting this vital legislation.
