In our last Supply Chain Matters commentary on the topic of H1N1 vaccine availability in the U.S. on October 28th, we touched upon the then current imbalance in providing adequate supplies of the H1N1 vaccine.  Since we are now approaching the Thanksgiving holiday weekend in the U.S. where lots of families gather together, I thought it would be an appropriate time to provide an update on what the U.S. government is indicating as availability of the vaccine.  From my perspective, the picture of availability looks far better, but certain logistical challenges remain.

The status update as of November 23, 2009, indicates that close to 59 million cumulative doses of vaccine were available at government distribution depots for shipment to individual states.  Of that number, slightly over 49.5 million doses have been shipped out to state distribution sites.  Compare that to the October 28 status of 16.8 million doses shipped, and we can conclude that the availability picture is getting much better in terms of the ability to administer vaccine to the high priority and broader population. A visual look at the CDC’s allocation vs. shipped availability graph indicates to me that the current challenge is more than likely the logistical challenges of getting these larger amounts of vaccine from government distribution depots into individual health centers for administering the vaccine to candidates. 

My suspicion is that the overall availability of H1N1 vaccine will get a lot better during the month of December as manufacturers continue to complete shipments from production sources and supplies make their way to final destinations.  The U.S. government has purchased a total of 250 million doses of flu vaccine. That may be little comfort to those who are traveling this coming week and weekend, but the message is be patient, the supply situation, from my perspective, looks to be improving.  Perhaps we might be able to look forward to having ample availability of the H1N1flu vaccine by mid to late December, hopefully prior to the December and January holiday periods when families once again travel and congregate.

As for the normal seasonal flu vaccine availability, we will all have to wait until manufacturers shift their attention to distribution of that vaccine to government agencies, which looks to be much later in the upcoming influenza season.

 Bob Ferrari

This posting is a follow-up to my previous Supply Chain Matters post providing a supply chain perspective on the current H1N1 vaccine shortage.  Our original posting outlined some causes of the current production shortage problem and some observations relative to where future investments should be applied in vaccine-related supply chains.

While the overall problem related to the shortfall in meeting demand for the H1NI vaccine still continues, efforts are being made by manufacturers to increase production yields and deliveries of the vaccine.  The U.S. government reported that as of October 28, over 16.8 million doses of vaccine have been shipped.  Earlier in the month, the government estimated that about 28 million doses would be available in October, which indicates that shipments are still 11 million doses behind this revised estimate. The original government estimate was to have 40 million doses available.

In a recent New York Times article, A Nation Battling Flu, and Short Vaccine Supplies, the authors point out the fact that U.S. health officials have been consistently and wildly overoptimistic, and have had to ratchet down vaccine availability estimates several times.  As recent as late July, the government was predicting having 160 million doses of vaccine by October. Manufacturers on the other hand indicate that they have kept their government customers well informed regarding production and shipping status.  “All the data is completely transparent to the government” noted Andrin Oswald, the head of the vaccines business at Novartis.  “The contract was always yield-dependent.”

A recent 60 Minutes broadcast airing on the CBS Network profiled the production process at the only existing U.S. production facility, which is the Sanofi Pasteur production plant located in Swiftwater Pennsylvania. This $150 million facility was originally built in 2004-2005 to supply upwards of 100 million doses of influenza vaccine.  The facility was originally planned to come online for the 2008-2009 influenza season, however U.S. FDA approval was not obtained until May of this year, after the previous pandemic outbreak that originated in Mexico.  The plant is quickly ramping-up production to meet the current need, but is based on the older process of growing the virus in eggs. The 60 Minutes program also raised concern as to whether there would be enough trained public-health officials to administer the vaccine, once the shipments of vaccine begin to arrive in larger quantities, as frustrated families seek to have the vaccine administered to high priority individuals and others in the population.  President Obama’s recent proclamation declaring the 2009 H1N1 influenza pandemic a National Emergency enables a waiver of certain statutory Federal requirements for medical treatment facilities, including dealing the surge of patients requiring immunization or treatments associated with the 2009 H1N1 influenza virus.

Let’s once again view the current situation for fixing the current supply-demand imbalance from a supply chain management lens.

First, the U.S. and other government authorities are finally admitting that they were wildly optimistic at estimating vaccine availability, based on the original production yields this summer.  My advice would be that government health officials consult with impartial, experienced supply chain professionals who understand batch production scheduling and order promising methods. These professionals are experienced in determining reasonable order promising estimates based on product yield factors.

Second, there seems to be universal acceptance of the fact that the reliance on fifty year old egg production process is too slow for adequate vaccine response to a pandemic.  Continued research and development into more modern cell-based production techniques is an obvious necessity, and the sooner the better.  As I pointed out in my earlier post, investment in modern supply chain business process practices and more sophisticated IT tools is certainly a further need.

Third, like any other public-health crisis involving severe shortages of preventative vaccine, political influence and arm-twisting on the part of individual governments puts enormous pressures on manufacturers as to which orders get shipped to which countries. U.S. health officials awarded a $100 million contract alone to Sanofi Pasteur to manufacture bulk vaccines from the Stillwater PA facility alone. It seems to me that having only one U.S. resident production facility for vaccine production is a strategy that needs to be re-visited.  Strategic sourcing professionals know the importance placed in not having a single source for a critical commodity.  

New strains of deadly influenza, such as bird flu, may yet appear, and the current crisis would indicate that the U.S,, and multiple countries in our world, are ill-equipped to marshal the production and distribution of high volumes of vaccine when a new, deadly strain develops.

If this crisis in vaccine availability provides any benefit, it will be in the understanding that vaccine related supply chains will be our most critical area for future production, supply chain business process, and technology investments. This crisis should be a wake-up call to all for establishing state-of-the art capabilities across all vaccine-focused supply chains. There are too many lives at stake to do otherwise.

Bob Ferrari

Much has been written and discussed concerning the current unavailability of adequate doses of the H1N1 vaccine to combat the current swine flu pandemic. As outbreaks of H1N1 influenza continue to peak in the U.S. and other countries, delivery of the vaccine has been falling short of expected levels.  In the U.S., government agencies anticipated that 40 million doses would be on-hand by the middle of October, but a mere 13 million doses have arrived, prompting growing fears that the vaccines will arrive too late to stem potential swine flu deaths.

Since this blog is dedicated to commentary related to supply chain business process and information technology, I thought it would be helpful for readers to view the current problem from a supply chain lens. Our loyal readers are welcome to pass along a link to this posting to those that would benefit from education to the magnitude of the effort.

Let’s look at the current problems from the perspective of value-chain scope and complexity. 

Vaccine producers are dealing with a production and distribution problem of enormous scope.  A medical history expert at the University of Michigan indicated in a press interview “that this is potentially the largest mass vaccination program in human history.”  The World Health Organization (WHO) estimates that as much as three billion doses of vaccine could be produced in a single year.  That represents an incredible level of production and distribution scope.

To adequately prepare for both a potential H1N1 pandemic, as well as the normal outbreak of seasonal influenza, many countries have pre-ordered two different vaccines, the H1N1 specific, as well as the recurring seasonal flu vaccine.  Timing is of course most critical, since the vaccine must be delivered in adequate time to buffer a seasonal outbreak.  There are a minimum of three large-scale drug producers working on volume production and global distribution; GlaxSmithKline, Novartis, and Sanofi-Aventis SA. Glaxo alone has invested more than $3 billion on research and incremental manufacturing in anticipation of supporting a flu pandemic.

Vaccine is produced in batch production techniques, with cycle time varying depending on the characteristics of the particular batch.  Supply chain planners in process-related industry who deal every day with planning batch production are very familiar with the complex challenges related to having to account for various aspects of variability in scheduling the output of a batch production process.  While new production methods are currently being investigated, the majority of the current vaccine demand is grown relying on a fifty year old, egg-based production technique.  One of the problems underlying the current delay is that H1NI virus is not growing as quickly as expected in this production process. Apparently, this problem was anticipated as early as this summer, when U.S. government officials were already predicting a shortage of the H1N1 vaccine by mid-October.  A good perspective on the current production difficulties can be found in a U.S. News and World Report article, Production Problems Plague Delivery of Swine Flu Vaccine.

Another form of controversy concerning vaccine production relates to the use of adjuvant as an additive. Adjuvants are a class of substances that apparently increase the overall potency of a particular batch of vaccine.  A recent and timely New York Times article, Benefit and Doubt in Vaccine Additive, contrasts adjuvant methods with lingering uncertainty regarding the safety or side effects of these substances.  According to the article, the WHO and some health experts have been calling for the use of adjuvants to allow more people to be immunized for H1NI with a given amount of vaccine, prompting some governments to order vaccines with adjuvant. Glaxo and Norvatis are selling pandemic flu vaccines containing newer adjuvant made from water emulsions of squalene, or vitamin E.  If vaccines with adjuvants were to be administered in the U.S., the Food and Drug Administration (FDA) would have to evoke a so-called emergency use authorization. U.S. officials are currently of the view that that increased potency is not large enough to offset the possible risks and extra complexity of using the adjuvants. 

Packaging of vaccines is another factor that manufacturers must address. Priorities and protocols have been outlined by governmental authorities as to which populations will receive the vaccine initially. They rightfully include pregnant women, healthcare workers, and children as the first priority, since these populations are the most vulnerable to the effects of the H1N1 virus.

In order to support high-volume distribution needs, preservatives are added to allow manufacturers to package vaccines in multi-dose vials, as opposed to single-use syringes or nasal sprayers.  The U.S. government requested that nasal spray and preservative-free vaccine be the first priority of initial distribution to insure that the populations of pregnant woman and children be serviced by vaccine.  As high-volume distribution continues in the coming weeks, manufacturers will have to shift vaccine production to multi-dose vials to service broader vaccine delivery needs, hence more preservatives will need to be incorporated.  Consumers remain highly sensitized to the potential effects of vaccine preservatives, which may defer some from actually securing the vaccine.

Vaccine producers are under the gun to dramatically increase production and distribution of all influenza-related vaccines.  These producers exist in healthcare-related supply chains that are not currently noted for overcoming complexity in production methods and global packaging and distribution needs.  There are certainly needs for more value-chain wide visibility to supply and demand alignment imbalances, along with more-timely information flows to make critical operational decisions. 

The current crisis is a symptom of a wider problem. If this crisis provides any benefit, it will be in the understanding that vaccine related supply chains will be our most critical area for future supply chain technology investment.  Consider the fact that both consumer goods products and high tech product related supply chains are currently looked upon with track records of world-class capabilities in process and information technology automation.  These supply chains morph in terms of the production and order fulfillment requirements that are manifesting in vaccine supply chains.  The time for attention and investment is overdue.

 Bob Ferrari