Bronwen Kaye

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• Bronwen Kaye
• Senior Director, Government Relations
• Wyeth

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WE AGREE WITH IOM THAT

• Vaccines are under-valued in our society and that
  under-valuation discourages companies from
  participating in the vaccine business.
•  
• 2) Private insurance coverage of immunization is
  the ideal scenario and the more government (or
  any monolithic purchaser) is involved as a
  purchaser in a market, the less desirable that
  market becomes.

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WE AGREE WITH IOM THAT

• 3) More effort should be directed towards
  improving immunization rates among adults and
  adolescents.
• 4) The ACIP does and should play an important
  role in overseeing immunization policy.
• HOWEVER, WE BELIEVE THAT THE IOM FINANCING
  RECOMMENDATION IS FLAWED.

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THE IOM COMMITTEE WAS CHARGED TO IDENTIFY
FINANCIAL BARRIERS TO IMMUNIZATION

• IOM admitted a lack of data to support the
  premise that financial barriers are the major
  reason people are not immunized.
• For example, Medicare provides coverage of
  influenza, Hepatitis B, and pneumococcal
  vaccines, but the elderly remain significantly
  under-immunized.

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• 3) While vaccines have always been available
  free of charge at public health clinics, even
  after VFC which provided free vaccine in
  physician offices, immunization rates for 2 year
  olds have remained relatively constant.
• Query If we focus solely on affordability
  of vaccines do we miss real opportunities to
  improve immunization rates particularly among
  adults through approaches such as better
  education and outreach?

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PRACTICAL CONSIDERATIONS INSURANCE MANDATES

• Insurance is regulated by states. Thus to have
  an effective universal insurance mandate, 50
  different state legislatures (and the District of
  Columbia) would have to pass bills which would
  have to be signed by 50 governors and one mayor. 
• Multi-state employers are governed by the
  federal law ERISA, which would need to be amended
  by Congress and signed by the President in order
  to have full mandated coverage.

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PRACTICAL CONSIDERATIONS SUBSIDIES

• The IOM report contemplates utilizing a complex
  formula to determine the value of a vaccine which
  would then translate into both a subsidy to
  insurers to cover the cost of the mandate and
  into a voucher for the uninsured to use to
  purchase vaccine.
• BUT calculating the value to society of a vaccine
  is fraught with obstacles.

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PRACTICAL CONSIDERATIONS - SUBSIDIES

• For example
• Current vaccines would be impossible to value.
• What is the value of a vaccine that prevents a
  disease that no longer circulates in this
  country? Would we value a polio vaccine at 0? 
• What factors would be included in this
  calculation? A parents lost time at work? The
  investment in special education for a child with
  the sequelae of meningitis? A childs lost wages
  for the future? A societal reduction in
  antibiotic resistance attributable to reduced
  antibiotic usage?

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PRACTICAL CONSIDERATIONS - SUBSIDIES

• What about benefits that are unforeseen prior to
  use in the market such as the reduction of
  pneumococcal disease in the adult population as
  recently observed subsequent to utilization of
  Prevnar?
• Query Will we question the value of
  providing antibiotics, physical therapy, special
  education to a survivor of Hib meningitis or only
  question the value of preventing disease in the
  first place?

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PRACTICAL CONSIDERATIONS SUBSIDIES

• The IOM contemplates funding from the federal
  government to provide vouchers for the uninsured
  and subsidies to insurers to fulfill their
  mandate.
• This means the U.S. Congress will have to
  annually appropriate an adequate amount of money
  for this purpose. 
• How likely is that to happen?

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PRACTICAL CONSIDERATIONS SUBSIDIES

• If the funding is insufficient to cover the
  value of mandated vaccines
• will the mandates disappear and we will then have
  no coverage of immunization ?
• or will the price of vaccines be forced down over
  and over again to fit the available pot of money?

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THE NEW PARADIGM

• Currently, manufacturers determine a price and
  then must negotiate discounts for various
  government markets, which runs to about a 55-60
  share of the market, a significant portion of
  which is price controlled.
• Under the IOM proposal, the government would
  control the price of every dose of vaccine used
  in both the private and the public sector through
  its process of determining value.

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THE NEW PARADIGM

• Worse still, even the value price is never
  likely to be realized given the uncertainty of
  government funding.

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A REAL WORLD CASE STUDY PREVNAR in the PRIVATE
SECTOR

• Once Prevnar was approved by FDA and recommended
  by ACIP, but PRIOR to publication in MMWR
• 98 of managed care plans in the northeast
  covered Prevnar
• 95 of managed care plans in the Midwest covered
  Prevnar
• 76 of managed care plans in the west covered
  Prevnar
• 75 of managed care plans in the south covered
  Prevnar

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A REAL WORLD CASE STUDY PREVNAR in the PUBLIC
SECTOR

• Post official usage publication,
• virtually 100 of managed care plans cover
  Prevnar
• some states still have inadequate 317 funds to
  cover Prevnar 4 years later
• some universal purchase states still do not have
  state funds to cover Prevnar 
• Private sector funding has been timely.
  Government funding has not.

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Manufacturers do not agree with IOM
Recommendation

• IOM envisions the federal government determining
  a price for all vaccines in the U.S.
• 2) Even the pre-determined government price is
  not likely to be realized given the unreliability
  of government funds for purchase.

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Manufacturers do not agree with IOM Recommendation

• Were the IOM recommendation implemented, it would
  be more difficult to be successful as a vaccine
  manufacturer.
• It is in the best interest of public health for
  the maximum number of individuals to be immunized
  AND for manufacturers to have strong incentives
  to continue to provide current vaccines and to
  invest in future vaccines.

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Our Suggestions

• The system is not so broken that it needs to be
  completely overturned. 
• 2) Hard data need to be collected as to why
  people are not immunized. 
• 3) Insurers who do not cover immunizations could
  be encouraged to do so through such quality
  measurements as HEDIS AND

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Our Suggestions

• 4) Insurers must reimburse physicians adequately
  for this service
• 5) Employers who do not purchase insurance with
  immunization coverage could be encouraged to do
  so through such mechanisms as tax credits

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Our Suggestions

• 6) Those children whose economic circumstances
  require them to be immunized with government
  purchased vaccine should be served through
  entitlement programs rather than discretionary
  spending programs

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Our Suggestions

• 7) Public service announcements should be used
  to remind people of the horrors of the diseases
  that vaccines prevent
• 8) Pending collection of hard data, targeted
  solutions for under-immunized adults and
  adolescents should be crafted