U.S. Begins Investigation of Vaccine Supplier

The Justice Department has started an investigation of the Chiron Corporation, whose British factory where flu vaccine was being manufactured was shut down last week, depriving the United States of nearly half the flu shots it was expecting for this winter.

Chiron, a California biotechnology company, said yesterday that it had received a grand jury subpoena from the United States attorney's office in Manhattan requesting documents related to its flu vaccine and to the suspension of manufacturing at its Liverpool factory by British regulators.

The company, which said it would cooperate with the investigation, provided no further information and the United States attorney's office declined to comment.

Outside lawyers and analysts said, however, that they thought the investigation might be into whether Chiron had deceived shareholders, and thus violated securities law, by saying a week before the shutdown that it was optimistic it could ship 46 million to 48 million doses of vaccine to the United States for this winter. When its license was subsequently suspended and the company could not ship any doses, the share price of its stock plummeted.

Still, it is possible the investigation is about something else, or could even be a sort of fishing expedition to see if there has been a crime.

"We will have a substantial crisis of a shortfall of vaccine,'' said Zachary Carter, a lawyer at Dorsey & Whitney in New York and a former United States attorney. "There's a human impulse to believe that someone must have done something wrong and that the something wrong may be criminal in nature.''

In another development, the federal Centers for Disease Control and Prevention in Atlanta and Aventis Pasteur, a unit of the French company Sanofi-Aventis that is the other major supplier of flu vaccine to the United States, said they had agreed on a plan to distribute the remaining supply of flu shots.

"The overall goal of this is to target the vaccine that we do have to the people who will get the most benefit from that vaccine, and to do it in a way that's fair and equitable to the greatest number of people across our country,'' Julie Gerberding, the director of the disease centers, said in a news conference. Still, she said, the plan was "probably not going to make everybody happy.''

Flu vaccines are normally distributed by the manufacturers and private distributors based on orders from hospitals, doctors and companies as well as from state and local governments.

Aventis is supplying 55.4 million doses this year, but all but 22.4 million have already been distributed, Dr. Gerberding said. The centers and Aventis have agreed on where to send 14 million of those doses, she said. Distribution of the remaining doses would be decided later based on need, she said.

Highest priority for the 14 million doses will be places that serve the elderly and young children, like pediatric offices, nursing homes and veterans hospitals.

The military will also get what it needs, Dr. Gerberding said. And states that placed most of their order with Chiron and thus have little or no vaccine would be allocated at least 50 percent of what they had sought from Chiron, she said.

Still, it does not seem that enough of the vaccine can be redistributed to make up for the shortfall of the 46 million to 48 million Chiron doses or to end the disparities between those who have vaccine and those who do not. Aventis officials said many of the undelivered doses had already been committed to customers that serve high-risk populations and would not be redistributed.

Yesterday, there were signs that the situation remained in turmoil. Four people were treated by paramedics after passing out in a long line at a flu-shot clinic in Williamsville, N.Y., near Buffalo, The Associated Press reported. And the attorney general of Kansas filed a suit accusing a drug distributor of price-gouging by trying to sell vaccine at more than 10 times the usual cost.

The federal investigation, meanwhile, is just the latest blow to Chiron, of Emeryville, Calif. Chiron said in late August that it had detected bacterial contamination in a small number of lots and that it would delay deliveries of its vaccine until early this month.

Since then, though, it has largely issued positive statements. In testimony to a Senate committee on Sept. 28, Howard Pien, Chiron's chief executive, said that the company believed it had resolved the situation, found the contamination limited and was on track to begin shipments earlier this month. A day later, at an investor conference in New York, Chiron executives also said the company expected to ship the vaccine.

Chiron said it was completely surprised when British regulators told it on Oct. 5, a week after the Senate testimony, that the plant's manufacturing license would be suspended for three months because of quality control problems and that the company could not ship any vaccine. That day, Chiron's stock plummeted 16 percent, to $37.98 a share; it closed yesterday at $33.74 a share.

Still in many cases where corporate executives have said misleading things it is the Securities and Exchange Commission that begins a civil inquiry. "It is unusual that the U.S. attorney's office has pounced on this as aggressively as they have,'' said Robert Mintz, a former assistant United States attorney in New Jersey who now heads securities litigation and white collar defense for McCarter & English in Newark.

Geoffrey C. Porges, an analyst for Sanford C. Bernstein & Company, said the subpoena "may be an attempt to ensure there is full disclosure'' about the interchange between Chiron and British regulators.

Making it in this country is a great idea, but who's going to make it. They'll get sued the first time someone who took the vaccine actually dies from the flu (or worse yet, from the shot). Also, they'll go bankrupt; the government won't conver the cost of the shots in their reimbursement practices. So, just like a lot of other things.... we've been driven out of this country by our own stupidity and now depend on other countries.

"Make the darned vaccine in the USA, instead of France and Great Britain, OK?
Johnnie Edwards would love your idea."

How so? To tell you the truth, I'm a little worried about taking a French vaccine. British I can see, but that's not a choice this year.

I say we should produce these vaccines in the USA. How? By making the manufacturer immune to lawsuits, as long as the vaccine gets FDA approval, then allow the manufacturer to charge market value for the vaccine.

Nothing liberal about that, my friend. Keep American vaccines in America. Who knows who is working in that French plant. Perhaps the "contamination" of the vaccine was sabotage....ever think of that?

How many Moslem workers are there in the French vaccine production line?

Let's keep it here.

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