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Full text of "Comprehensive Child Immunization Act of 1993 : joint hearing before the Committee on Labor and Human Resources, United States Senate, and the Subcommittee on Health and the Environment of the Committee on Energy and Commerce, House of Representatives, One Hundred Third Congress, first session, on to provide for the immunization of all children in the United States against vaccine-preventable diseases, and for other purposes, April 21, 1993"

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S.  HRG.  103-169 

COMPREHENSIVE  CHILD 
IMMUNIZATION  ACT  OF  1993 

Y  4.L  11/4:S.HRG.  103-169 

1  HEARING 

Conprehensive  Child  I/tnunizatioB  Ac...  before  the 

UUlViMITTEE  ON 

LABOR  AND  HUMAN  RESOURCES 

UNITED  STATES  SENATE 

AND  THE 

SUBCOMMITTEE  ON  HEALTH  AND  THE 
ENVIRONMENT 

OF  THE 

COMMITTEE  ON  ENERGY  AND 

COMMERCE 
HOUSE  OF  REPRESENTATIVES 

ONE  HUNDRED  THIRD  CONGRESS 

FIRST  SESSION 
ON 

TO  PROVIDE  FOR  THE  IMMUNIZATION  OF  ALL  CHILDREN  IN  THE  UNIT- 
ED STATES  AGAINST  VACCINE-PREVENTABLE  DISEASES,  AND  FOR 
OTHER  PURPOSES  

APRIL  21,  1993 


Serial  No.  103-23 
Committee  on  Energy  and  Commerce 


Printed  for  the  use  of  the  Committee  on  Labor  and  Human  Resources  and  the 
House  Committee  on  Energy  and  Commerce 


7  <?  /  i 


U.S.  GOVERNMENT  PRINTING  OFFICE 
68-S98CC  WASHINGTON  :  1993 

For  sale  by  the  U.S.  Government  Printing  Office 
Superintendent  of  Documents.  Congressional  Sales  Office,  Washington,  DC  20402 
ISBN    0-16-041395-8 


^  S.  Hrg.  103-169 

COMPREHENSIVE  CHILD 
IMMUNIZATION  ACT  OF  1993 

L  1 1/4:  S.  HRG.  103-169 

1  HEARING 

ehensive  Child  Innunizatioi  Ac...  before  the 

(JUMMITTEE  ON 

LABOR  AND  HUMAN  RESOURCES 

UNITED  STATES  SENATE 

AND  THE 

SUBCOMMITTEE  ON  HEALTH  AND  THE 
ENVIRONMENT 

OF  THE 

COMMITTEE  ON  ENERGY  AND 

COMMERCE 
HOUSE  OF  REPRESENTATIVES 

ONE  HUNDRED  THIRD  CONGRESS 

FffiST  SESSION 
ON 

TO  PROVIDE  FOR  THE  IMMUNIZATION  OF  ALL  CHILDREN  IN  THE  UNIT- 
ED STATES  AGAINST  VACCINE-PREVENTABLE  DISEASES,  AND  FOR 
OTHER  PURPOSES  

APRIL  21,  1993 


Serial  No.  103-23 
Committee  on  Energy  and  Commerce 


Printed  for  the  use  of  the  Committee  on  Labor  and  Human  Resources  and  the 
House  Committee  on  Energy  and  Commerce 


21 

U.S.  GOVERNMENT  PRINTING  OFFICE 
68-S98ec  WASHINGTON  :  1993 

For  sale  by  the  U.S.  Government  Printing  Office 
Superintendent  of  Documents.  Congressional  Sales  Office,  Washington,  DC  20402 
ISBN   0-16-041395-8 


COMMITTEE  ON  LABOR  AND  HUMAN  RESOURCES 

EDWARD  M.  KENNEDY,  Massachusetts,  Chairman 
CLAIBORNE  PELL,  Rhode  Island  NANCY  LANDON  KASSEBAUM,  Kansas 

HOWARD  M.  METZENBAUM,  Ohio  JAMES  M.  JEFFORDS,  Vermont 

CHRISTOPHER  J.  DODD,  Connecticut  DAN  COATS,  Indiana 

PAUL  SIMON,  Illinois  JUDD  GREGG,  New  Hampshire 

TOM  HARKIN,  Iowa  STROM  THURMOND,  South  Carolina 

BARBARA  A.  MIKULSKI,  Maryland  ORRIN  G.  HATCH,  Utah 

JEFF  BINGAMAN,  New  Mexico  DAVE  DURENBERGER,  Minnesota 

PAUL  D.  WELLSTONE,  Minnesota 
HARRIS  WOFFORD,  Pennsylvania 

NICK  LnTLJEFlELD,  Staff  Director  and  Chief  Counsel 
SUSAN  K.  HATTAN,  Minority  Staff  Director 

(II) 


HENRY  A.  WAXMAN,  California 

PHILIP  R  SHARP,  Indiana 

EDWARD  J.  MARKEY,  Maaaachuaetta 

AL  SWIFT,  Washington 

CARDISS  COLLINS,  Illinois 

MIKE  SYNAR,  Oklahoma 

WJ.  "BILLY"  TAUZIN,  Louisiana 

RON  WYDEN,  Oregon 

RALPH  M.  HALL,  Texaa 

BILL  RICHARDSON,  New  Mexico 
JIM  SLATTERY,  Kansas 

JOHN  BRYANT,  Texas 

RICK  BOUCHER,  Virginia 
JIM  COOPER,  Tennessee 
J.  ROY  ROWLAND,  Georgia 
THOMAS  J.  MANTON,  New  York 
EDOLPHUS  TOWNS,  New  York 
GERRY  E.  STUDDS,  Maasachuaetta 
RICHARD  H.  LEHMAN,  California 
FRANK  PALLONE,  Jr.,  New  Jersey 
CRAIG  A.  WASHINGTON,  Texaa 
LYNN  SCHENK,  California 
SHERROD  BROWN,  Ohio 
MIKE  KREIDLER,  Washington 
MARJORIE  MARGOLIES-MEZVINSKY, 

Pennsylvania 
BLANCHE  M.  LAMBERT,  Arkanaaa 


COMMITTEE  ON  ENERGY  AND  COMMERCE 
JOHN  D.  DINGELL,  Michigan,  Chairman 


CARLOS  J.  MOORHEAD,  California 

THOMAS  J.  BLILEY,  Jr.,  Virginia 

JACK  FIELDS,  Texaa 

MICHAEL  G.  OXLEY,  Ohio 

MICHAEL  BILIRAKIS,  Florida 

DAN  SCHAEFER,  Colorado 

JOE  BARTON,  Texaa 

ALEX  MCMILLAN,  North  Carolina 

J.  DENNIS  HASTERT,  Illinois 

FRED  UPTON,  Michigan 

CLIFF  STEARNS,  Florida 

BILL  PAXON,  New  York 

PAUL  E.  GILLMOR,  Ohio 

SCOTT  KLUG,  Wisconsin 

GARY  A.  FRANKS,  Connecticut 

JAMES  C.  GREENWOOD,  Pennsylvania 

MICHAEL  D.  CRAPO,  Idaho 


ALAN  J.  Roth,  Staff  Director  and  Chief  Counsel 

DENNIS  B.  FrrzGIBBONS,  Deputy  Staff  Director 

MARGARCT  A.  Durbin,  Minority  Chief  Counsel  and  Staff  Director 


Subcommittee  on  Health  and  the  Environment 

HENRY  A.  WAXMAN,  California,  Chairman 


MIKE  SYNAR,  Oklahoma 
RON  WYDEN,  Oregon 
RALPH  M.  HALL,  Texaa 
BILL  RICHARDSON,  New  Mexico 
JOHN  BRYANT,  Texas 
J.  ROY  ROWLAND,  Georgia 
EDOLPHUS  TOWNS,  New  York 
GERRY  E.  STUDDS,  Maasachuaetta 
JIM  SLATTERY,  Kansas 
JIM  COOPER,  Tennessee 
FRANK  PALLONE,  Jr.,  New  Jersey 
CRAIG  A.  WASHINGTON,  Texaa 
SHERROD  BROWN,  Ohio 
MIKE  KREIDLER,  Washington 
JOHN  D.  DINGELL,  Michigan 
(Ex  Officio) 

KAREN  NELSON,  Staff  Director 
Timothy  M.  Westmoreland,  Counsel 

RUTH  J.  Katz,  Counsel 
MARY  M.  McGRANE,  Minority  Counsel 


THOMAS  J.  BLILEY,  Jr.,  Virginia 
MICHAEL  BILIRAKIS,  Florida 
ALEX  MCMILLAN,  North  Carolina 
J.  DENNIS  HASTERT,  Illinoia 
FRED  UPTON,  Michigan 
BILL  PAXON,  New  York 
SCOTT  KLUG,  Wisconsin 
GARY  A.  FRANKS,  Connecticut 
JAMES  C.  GREENWOOD,  Pennsylvania 
CARLOS  J.  MOORHEAD,  California 
(Ex  Officio) 


an> 


CONTENTS 


STATEMENTS 
April  21,  1993 


Waxman,  Hon.  Henry  A.  a  VS.  Representative  from  the  State  of  California  ...  1 

Kennedy,  Hon.  Edward  M.,  a  U.S.  Senator  from  the  State  of  Massachusetts, 

prepared  statement  2 

Kasseoaum,  Hon.  Nancy  Landon,  a  U.S.  Senator  from  the  State  of  Kansas, 

prepared  statement  4 

Riegle,  Hon.  Donald  W.,  Jr.,  a  VS.  Senator  from  the  State  of  Michigan, 

prepared  statement  6 

Greenwood,  Hon.  James  C,  a  U.S.  Representative  from  the  State  of  Penn- 
sylvania    9 

Slaughter,  Hon.  Louise  Mcintosh,  a  U.S.-  Representative  from  the  State  of 

New  York  10 

Metzenbaum,  Hon.  Howard  M.,  a  U.S.  Senator  from  the  State  of  Ohio  12 

Kreidler,  Hon.  Mike,  a  U.S.  Representative  from  the  State  of  Washington  12 

Gregg,  Hon.  Judd,  a  U.S.  Senator  from  the  State  of  New  Hampshire 13 

Bliley,  Hon.  Thomas  J.,  Jr.,  a  VS.  Representative  from  the  State  of  Virginia  ..        16 
Dodd,  Hon.  Christopher  J.,  a  U.S.  Senator  from  the  State  of  Connecticut, 

Srepared  statement  16 
;ulski,  Hon.   Barbara  A.,   a  U.S.  Senator  from  the  State  of  Maryland, 

prepared  statement  21 

Durenberger,  Hon.  Dave,  a  U.S.  Senator  from  the  State  of  Minnesota  23 

Thurmond,  Hon.  Strom,  a  U.S.  Senator  from  the  State  of  South  Carolina  28 

Wellstone,  Hon.  Paul  D^  a  U.S.  Senator  from  the  State  of  Minnesota 29 

Wyden,  Hon.  Ron,  a  U.S.  Representative  from  the  State  of  Oregon  30 

Upton,  Hon.  Fred,  a  UJ3.  Representative  from  the  State  of  Michigan   30 

Rowland,  Hon.,  Roy  J.,  a  U.S.  Representative  from  the  State  of  Georgia, 

prepared  statement  31 

Klug,  Hon.  Scott,  a  U.S.  Representative  from  the  State  of  Wisconsin  32 

Towns,  Hon.  Edolphus,  a  VS.  Representative  from  the  State  of  New  York, 

prepared  statement  33 

Franks,  Hon.  Gary  A.,  a  U.S.  Representative  from  the  State  of  Connecticut  ....        35 

Jeffords,  Hon.  James  M.,  a  VS.  Senator  from  the  State  of  Vermont  35 

Danforth,  Hon.  John  C,  a  U.S.  Senator  from  the  State  of  Missouri  37 

Shalala,  Donna  E.,  Secretary,  U.S.  Department  of  Health  and  Human  Serv- 
ices, Washington,  DC,  prepared  statement  (with  attachments) 39 

Sienko,  Dr.  Dean,  director,  Ingham  County  Health  Department,  Lansing, 
MI,  representing  the  National  Association  of  County  Health  Officials;  Dr. 
David  Smith,  director,  Texas  Department  of  Health,  Austin,  TX,  represent- 
ing the  Association  of  State  and  Territorial  Health  Officers;  Dr.  Ed  Thomp- 
son. Jr.,  acting  State  health  officer  and  Mississippi  State  epidemiologist, 
Jackson,  MS,  and  president,  Council  of  State  and  Territorial  Epidemiolo- 
gists; Michael  E.  Moen,  director,  Division  of  Disease  Prevention  and  Con- 
trol, Minnesota  Department  of  Health,  Minneapolis,  MN;  Gladys  LeBron, 
director,  Centre  de  Educacion  Durante  El  Embarazo,  Cede,  Holyoke,  MA, 
accompanied  by  Danielle  Gordon;  and  Marian  Wright  Edelman,  president, 
Children's  Defense  Fund,  Washington,  DC  71 

(V) 


VI 

Page 

Prepared  statements: 

Dr.  Smith  76 

Dr.  Thompson  (with  attachments)  80 

Mr.  Moen  (with  attachments) 86 

Ms.  LeBron  98 

Ms.  Edelman 102 

Douglas,  Dr.  R.  Gordon,  president,  Merck  Vaccine  Division,  Merck  and  Co., 
Inc.,  Whitehouse,  NJ;  David  Williams,  president,  Cannaught  Laboratories, 
Inc.,  Swiftwater,  PA;  Ronald  Saldarini,  president  and  chief  executive  officer, 
Lederle-Praxis  Biologicals,  Wayne,  NJ;  and  Jean-Pierre  Gamier,  president, 
North  American  Pharmaceuticals,  SmithKline  Beecham,  Philadelphia,  PA  ..  113 
Prepared  statements: 

Dr.  Douglas  (with  attachments)  114 

Mr.  Williams  127 

Dr.  Saldarini  134 

Mr.  Gamier  (with  an  attachment)  140 

Marcuse,  Dr.  Ed,  president,  Washington  chapter,  American  Academy  of  Pedi- 
atrics, and  director,  Ambulatory  Care  Services,  Children's  Hospital  and 
Medical  Center,  University  of  Washington,  Seattle,  WA;  and  Dr.  Richard 
J.  Duma,  executive  director,  National  Foundation  for  Infectious  Diseases, 

Bethesda,  MD  165 

Prepared  statements: 

Dr.  Marcuse  (with  attachments)  166 

Dr.  Duma  176 

ADDITIONAL  MATERIAL 

Articles,  publications,  letters,  etc.: 

Statement  of  the  National  Association  of  Community  Health  Centers  189 

Letter  to  President  and  Mrs.  Clinton,  from  Mrs.  Marge  Grant,  (DPT  SHOT) 

Determined  Parents  To  Stop  Hurting  Our  Tots  192 

"Vaccines  may  do  more  harm  than  good",  Dayton  Daily  News,  May  19,  1992  ..      197 
"7    polio   victims'  families  win   damages   from  U.S.  ,   The   Baltimore   Sun, 

Wednesday,  January  27,  1993  198 


COMPREHENSIVE  CHILD  IMMUNIZATION  ACT 

OF  1993 


WEDNESDAY,  APRIL  21,  1993 

U.S.  Senate, 
Committee  on  Labor  and  Human  Resources, 

and 
U.S.  House  of  Representatives, 
Subcommittee  on  Health  and  the  Environment, 
of  the  Committee  on  Energy  and  Commerce, 

Washington,  DC. 
The  joint  committees  met,  pursuant  to  notice,  at  10:08  a.m.,  in 
room  SDG-50,  Dirksen  Senate  Office  Building,  Senator  Edward  M. 
Kennedy  (chairman  of  the  committee)  and  Hon.  Henry  A.  Waxman 
(chairman  of  the  subcommittee)  presiding. 

Present:  Senators  Kennedy,  Pell,  Metzenbaum,  Dodd,  Mikulski, 
Wellstone,  Wofford,  Kassebaum,  Jeffords,  Gregg,  and  Durenberger; 
Representatives  Waxman,  Synar,  Wyden,  Bryant,  Rowland,  Towns, 
Slattery,  Brown,  Kreidler,  Bliley,  Upton,  Klug,  Franks,  and  Green- 
wood. 

Also  Present:  Senator  Riegle  and  Representative  Louise  Slaugh- 
ter. 

Opening  Statement  of  Representative  Waxman 

Mr.  Waxman.  The  meeting  will  come  to  order.  I  have  a  few  orga- 
nizational comments  before  we  begin. 

We  all  know  that  this  is  the  first  joint  hearing  between  the  Labor 
Committee  and  the  Health  Subcommittee  in  a  long  time,  and  I  am 
sure  there  are  going  to  be  some  confusing  moments  of  procedure. 

First,  in  the  interest  of  time,  I  would  ask  all  members  to  keep 
their  opening  statements  brief.  I  would  also  ask  that  all  members 
limit  their  first  round  of  questions  to  five  minutes  and  seek  a  sec- 
ond round  only  if  there  are  pressing  issues  that  have  not  been  ex- 
plored. 

We  will  try  to  alternate  questions  between  majority  and  minority 
and  between  House  and  Senate,  and  I  apologize  in  advance  if  this 
gets  to  be  awkward,  and  it  certainly  will  be  awkward. 

Second,  I  would  ask  witnesses  to  keep  their  oral  remarks  to  five 
minutes.  Your  written  statements  will  be  included  in  the  record  in 
full. 

I'd  like  to  start  off  with  an  opening  statement. 

Today's  hearing  is  on  childhood  immunization  and  the  Presi- 
dent's proposals  for  improving  immunization  rates.  This  is  the 
right  place  to  start.  In  this  area,  as  in  all  parts  of  the  health  re- 

(1) 


form  debate,  an  ounce  of  prevention  is  worth  more  than  a  pound 
of  cure. 

For  years,  the  Federal  Government  has  short-changed  this  pro- 
gram. Clinics  are  inaccessible  and  have  hours  that  are  difficult  for 
working  parents.  There  are  fewer  school  nurses  and  public  health 
workers.  Public  information  efforts  have  been  trimmed  simply  to 
leave  funds  for  buying  vaccine.  The  result  has  been  immunization 
rates  as  low  as  37  percent  in  preschoolers. 

At  the  same  time,  the  American  family  has  had  to  pay  more  and 
more  to  vaccinate  their  children  against  disease.  While  much  of  the 
price  increase  in  recent  years  has  been  from  new  vaccines  and  for 
the  compensation  program,  the  end  result  for  the  family  is  the 
same.  They  have  to  dig  deeper  to  pay  for  basic  protection. 

With  this  proposal,  President  Clinton  has  also  set  the  tone  for 
health  reform,  emphasizing  preventing  illness  before  it  occurs  and 
emphasizing  access  for  all  Americans.  This  is  good  for  each  child, 
ana  it  is  good  for  the  Nation.  It  has  been  too  long  that  the  Federal 
Government  has  been  penny-wise  and  dollar-foolish  in  dealing  with 
health  care.  We  cannot  allow  children  to  die  from  diseases  that 
should  never  occur,  and  we  cannot  afford  to  treat  children  for  crip- 

Eling  conditions  that  we  can  prevent.  This  proposal  starts  to  re- 
uild  American  health  care  from  prevention  up,  and  I  look  forward 
to  working  together  to  begin. 
Senator  Kennedy. 

Opening  Statement  of  Senator  Kennedy 

The  Chairman.  Thank  you  very  much,  Congressman  Waxman. 

I  just  want  to  express  on  behalf  of  our  colleagues  here  in  the 
Senate  how  much  we  appreciate  the  opportunity  to  work  with  an 
administration  as  concerned  about  the  issues  of  immunization  as 
this  administration  is,  and  to  work  closely  with  the  House  of  Rep- 
resentatives. 

Today,  we  will  hear  from  the  Secretary  and  many  other  wit- 
nesses. This  legislation  requires  the  cooperation  of  a  variety  of  dif- 
ferent committees.  What  we  are  trying  to  do  in  public  policy  is  to 
bring  everyone  involved  together  to  really  benefit  the  children  in 
this  country. 

So  I  would  express  all  of  our  appreciation  to  our  colleagues,  and 
as  Henry  Waxman  has  pointed  out,  we  are  going  to  try  to  accom- 
modate each  of  their  interests,  but  do  it  in  a  way  that  will  permit 
even  our  last  witnesses  the  opportunity  for  a  full  and  fair  hearing. 

I  think  all  of  us  want  to  ensure  that  every  child  in  this  country 
receives  their  immunizations.  I  applaud  President  Clinton  for  out- 
lining this  as  one  of  his  top  priorities  in  achieving  a  national  health 
insurance  program.  Rather  than  waiting  for  the  actions  here  in  the 
Senate  and  the  Congress  that  many  of  us  hope  will  come  later  this 
year,  he  has  put  the  issue  of  childhood  immunization  first,  out 
front.  Let's  get  all  Americans  and  all  parties  behind  this  program 
to  ensure  that  vital  vaccines,  which  can  make  such  a  difference  in 
terms  of  a  healthy  child,  are  purchased  at  the  lowest  possible  price 
while  recognizing  that  drug  companies  need  incentives  to  be  able 
to  go  forward  in  terms  of  additional  research  for  new  types  of  vac- 
cines. Getting  vaccine  at  the  lowest  possible  price  and  removing  fi- 
nancial barriers  is  only  part  of  the  puzzle.  What  we  need  is  a  pub- 


lie  health  system  that  reaches  out  to  children  and  ensures  that 
they  are  going  to  actually  be  immunized,  and  then  second,  that  the 
appropriate  kinds  of  follow-up  is  available  for  parents  to  make  sure 
that  their  children  are  going  to  have  follow-up  shots  in  a  timely 
manner.  We  have  follow-up  information,  as  all  of  us  know,  in  a  va- 
riety of  different  other  areas  of  public  policy;  why  not  for  children? 

I  believe  we  have  in  this  particular  proposal  a  comprehensive  im- 
munization program  that  can  really  meet  the  needs  of  millions  of 
families.  I  think  most  parents  understand  the  importance  of  immu- 
nizations. Some  have  difficulty  with  language  barriers,  many  have 
difficulty  with  transportation,  and  many  others  do  not  understand 
that  if  a  child  is  sick  or  maybe  has  a  sniffle  that  this  need  not 
delay  receiving  immunizations.  We  need  to  address  all  these  con- 
siderations through  a  sound,  comprehensive  public  policy  approach. 
This  legislation  does  it,  and  I  am  very  hopeful  that  well  have  early 
consideration  of  it  this  year.  We  will  certainly  do  so  in  the  Senate 
Labor  Committee  and  hopefully  in  the  other  committees  as  well. 

[The  prepared  statement  of  Senator  Kennedy  follows:] 

Prepared  Statement  of  Senator  Kennedy 

Today  we  open  hearings  on  President  Clinton's  bold  and  far- 
reaching  initiative  on  health  care  for  children — universal  childhood 
immunization. 

I  am  pleased  that  the  Senate  Labor  Committee's  first  joint  hear- 
ing with  the  House  Subcommittee  has  childhood  immunization  as 
the  topic.  Senator  Riegle  and  Senator  Bumpers  join  us  from  the  Fi- 
nance Committee  and  the  Appropriations  Committee  in  the  Senate, 
and  they  deserve  great  credit  for  their  leadership  on  this  issue. 

For  many  years,  we  have  paid  lip  service  to  the  goal  of  immuni- 
zation but  failed  to  achieve  it.  To  a  large  extent  that  failure  is  the 
failure  of  governments  at  every  level  to  fulfill  their  public  health 
responsibility. 

Now,  faced  with  the  festering  problem  of  unacceptably  low  pre- 
school immunization  rates,  the  time  has  come  to  develop  a  new  ap- 
proach to  protect  children  from  preventable  diseases. 

With  the  leadership  of  the  Clinton  Administration,  a  comprehen- 
sive approach  is  within  reach,  and  can  become  a  reality  for  all  chil- 
dren in  every  community  in  America. 

We  know  the  many  barriers  to  immunization.  We  know  that 
overcoming  them  presents  a  complex  challenge.  There  is  no  simple 
answer  or  magic  bullet.  What  is  needed  is  a  sustained  national 
commitment  to  removing  these  barriers  as  effectively  and  as  rap- 
idly as  we  can. 

Health  insurance  coverage  of  vaccinations  is  one  important  step. 
Yet  insurance  alone  is  not  sufficient.  Even  among  major  HMOs 
where  vaccination  is  fully  covered,  immunization  rates  have  fallen 
below  60  percent.  In  some  States,  the  key  to  greater  margins  has 
been  a  vaccine  distribution  program  for  all  providers.  Those  States 
have  a  higher  rate  of  immunization,  but  they  too  fall  short  of  the 
national  goal  of  a  90  percent  rate  for  all  2-year  olds. 

We  have  seen  other  successes  in  communities  with  public  health 
education  and  free  vaccination  programs.  But  these  successes  are 
hard  to  maintain  without  adequate  resources. 


The  role  of  public  health  workers  has  steadily  eroded,  as  more 
and  more  children  come  to  understaffed  clinics.  Working  parents 
and  parents  without  transportation  find  it  difficult  to  obtain  these 
services,  even  though  their  children  are  at  growing  risk  for  unnec- 
essary illness. 

We  know  from  the  experiences  of  recent  years  that  a  half-hearted 
approach  will  not  work.  President  Clinton's  proposal  gives  us  a  real 
chance  to  break  through  barriers  that  exist,  and  I  look  forward  to 
todays  hearings  and  early  action  by  Congress  on  this  worthwhile 
and  long  overdue  initiative. 

The  Chairman.  I  recognize  Senator  Kassebaum. 

Opening  Statement  of  Senator  Kassebaum 

Senator  Kassebaum.  Chairmen,  it  is  a  pleasure  to  have  this  joint 
committee  hearing,  because  I  think  it  indicates  the  importance  of 
the  problem  that  we  face  with  the  low  rate  of  early  childhood  im- 
munization. I,  too,  commend  President  Clinton  for  the  national  at- 
tention that  he  has  focused  on  this  compelling  problem  and  for 
sending  us  a  strategy  with  which  to  deal  with  it. 

However,  I  am  concerned  that  the  centerpiece  of  the  President's 
plan,  an  over  $1  billion  yearly  program  for  the  Federal  purchase 
and  free  distribution  of  all  vaccines,  misdiagnosis  the  causes  of  the 
problems  and  prescribes  a  remedy  that  is  likely  to  be  ineffective 
and  perhaps  wasteful.  And  I  think  that  the  importance  of  these 
hearings  is  to  try  to  analyze  that  and  to  try  to  put  together  some 
constructive  alternatives.  I  think  that  the  President's  plan,  based 
on  the  premise  of  the  rising  cost  of  vaccines  as  the  major  reason 
for  low  immunization  rates,  is  misdirected.  While  cost  is  a  factor, 
there  are  other  factors,  and  Senator  Kennedy  addressed  some  of 
those  as  he  spoke. 

Mr.  Chairman,  there  are  many  comments  to  be  made  and  impor- 
tant witnesses  to  hear  from,  so  I  would  like  to  ask  unanimous  con- 
sent that  my  full  statement  be  made  a  part  of  the  record. 

The  Chairman.  Without  objection,  so  ordered. 

[The  prepared  statement  of  Senator  Kassebaum  follows:] 

Prepared  Statement  of  Senator  Kassebaum 

Messrs.  Chairmen,  today's  hearing  on  strategies  to  improve  our 
Nation's  low  rates  of  early  childhood  immunization  may  be  one  of 
the  most  important  we  hold  in  this  Congress. 

The  measles  epidemic  that  swept  across  our  Nation  in  1989  and 
1990  and  outbreaks  of  other  preventable  diseases  reveal  that  our 
Nation's  children  are  again  at  risk  for  devastating  childhood  dis- 
eases which  we  thought  we  were  conquering.  Fewer  than  60  per- 
cent of  2-year  olds  in  most  States — and  in  some  inner-city  areas  as 
few  as  10  percent  of  2-year  olds — are  fully  immunized  against 
childhood  diseases. 

President  Clinton  is  to  be  commended  for  the  national  attention 
he  has  focused  on  this  compelling  problem  and  for  sending  us  a 
strategy  for  solving  it. 

Messrs.  Chairmen,  I  am  deeply  concerned  about  our  Nation's  low 
immunization  rates.  I  share  the  President's  and  your  own  strong 
commitment  to  ensuring  that  every  child  is  fully  immunized  on 


schedule.  As  you  may  know,  I  have  been  working  with  several  of 
my  colleagues  on  a  strategy  for  achieving  this  goal,  and  we  hope 
to  introduce  our  plan  in  the  near  future.  In  developing  this  strat- 
egy, my  staff  and  I  have  studied  reports  on  the  causes  of  the  prob- 
lem and  recommendations  for  addressing  it  and  have  conferred 
with  public  health  officials  in  my  own  State  of  Kansas  and  in  other 
States. 

Frankly,  I  am  concerned  that  the  centerpiece  of  the  President's 
plan — an  over  $1  billion  a  year  program  for  the  Federal  purchase 
and  free  distribution  of  vaccines — misdiagnoses  the  causes  of  the 

Rroblem  and  prescribes  a  remedy  likely  to  De  ineffective  and  waste- 
ll  of  scarce  taxpayer  dollars. 

The  President's  plan  is  based  on  the  premise  that  the  rising  cost 
of  vaccines  is  the  major  cause  of  our  low  immunization  rates.  But 
that  is  not  the  case.  I  agree  that  the  cost  of  vaccines  may  be  one 
facet  of  the  problem  for  some  parents.  But  the  National  Vaccine 
Advisory  Committee,  former  Surgeon  General  Koop,  and  most  pub- 
lic health  officials  across  the  Nation  find  that  the  major  causes  of 
low  immunization  rates  are  the  lack  of  parental  education  about 
the  continued  importance  of  immunizing  their  children,  the  failure 
of  health  professionals  to  use  every  opportunity  to  vaccinate  chil- 
dren, our  overburdened  public  health  clinics  where  immunization 
services  are  not  readily  accessible,  and  the  lack  of  private  physician 
participation  in  Medicaid  due  to  unreasonably  low  Medicaid  reim- 
bursement rates. 

If  we  are  to  achieve  the  goal  of  appropriately  immunizing  every 
child,  these  are  the  problems  on  which  we  should  be  focusing. 

With  the  proposed  $1  billion  the  President  would  allocate  to  the 
Federal  purchase  and  distribution  of  free  vaccines,  we  could  triple 
the  number  of  community  health  clinics  operating  in  the  United 
States.  We  could  substantially  increase  the  number  of  children  eli- 
gible for  immunizations  under  Medicaid  and  improve  payment 
rates  to  encourage  private  physicians  to  participate  in  that  pro- 
gram. With  this  same  $1  billion,  we  could  launch  intensive  out- 
reach programs  and  put  immunization  clinics  at  our  WIC  sites. 

My  own  State  of  Kansas,  for  example,  is  launching  "Operation 
Immunize"  this  weekend,  a  massive  immunization  education  and 
outreach  program.  The  Department  of  Health,  working  closely  with 
health  care  providers,  businesses,  the  National  Guard,  and  thou- 
sands of  volunteers,  will  offer  immunization  services  at  over  200 
sites  across  the  State.  Services  will  be  provided  in  malls,  in  trailer 
parks,  and  from  mobile  vans  in  rural  communities.  Voluntary  ad- 
vertising campaigns  by  Kansas  businesses  are  blitzing  Kansans 
with  information  on  the  importance  of  immunizations  and  where  to 
go  for  services. 

Messrs.  Chairmen,  in  addition  the  serious  reservations  I  have 
about  the  public  health  effectiveness  of  the  President's  universal 
vaccine  purchase  and  free  distribution  plan,  I  am  also  concerned 
about  the  impact  of  this  program  on  incentives  and  resources  for 
the  development  of  new  and  improved  vaccines. 

I  recognize  that  the  administration  plan  proposes  to  take  re- 
search and  development  costs  into  account  in  determining  the  Fed- 
eral purchase  price  for  vaccines.  However,  our  experience  with 
other  Federal  entitlement  programs  calls  into  question  the  reliabil- 


6 

ity  of  that  commitment.  The  Medicaid  program  provides  a  pointed 
example.  The  Medicaid  statute  requires  States  to  establish  reason- 
able reimbursement  rates  to  ensure  provider  participation.  The 
Secretary  of  HHS  can  enforce  this  requirement  by  failing  to  ap- 
prove proposed  State  Medicaid  plans  until  they  are  modified  to  in- 
clude reasonable  rates.  But  this  requirement  is  not  enforced,  and 
unreasonably  low  Medicaid  reimbursement  rates  are  one  of  the  root 
causes  of  low  childhood  immunization  rates. 

The  second  major  component  of  the  President's  plan — in  addition 
to  universal  purchase — is  a  national  vaccine  tracking  and  surveil- 
lance system.  This  is  intriguing  in  its  potential  to  help  the  States 
identify  and  reach  out  to  un vaccinated  children  and  to  improve  the 
data  base  we  use  to  measure  our  progress  toward  the  goal  of  uni- 
versal immunization.  I  will  be  interested  today  in  learning  more 
about  how  such  a  system  would  be  structured  and  would  work. 

I  do  want  to  note  that  several  public  health  officials  have  raised 
questions  about  the  plan's  cost-effectiveness  in  States  that  already 
have  relatively  high  rates  of  immunization.  They  have  also  raisea 
concerns  about  how  the  privacy  of  sensitive  medical  records  can  be 
maintained.  I  hope  that  we  can  also  focus  on  these  issues  today. 

Again,  Mr.  Chairmen,  I  share  the  President's  and  your  own  com- 
mitment to  ensuring  that  every  child  is  appropriately  immunized. 
I  want  to  work  closely  with  you  and  with  the  President  to  ensure 
that  the  strategy  we  adopt  to  achieve  that  goal  is  grounded  in 
sound  public  health  policy  and  the  wise  and  efficient  use  of  our 
scarce  Federal  resources. 

The  Chairman.  Senator  Riegle,  on  the  Finance  Committee,  has 
been  a  real  leader  in  this  area  in  the  Senate  along  with  Senator 
Bumpers,  but  Don  has  been  instrumental  in  the  fashioning  of  the 
legislation. 

Senator  Riegle. 

STATEMENT  OF  THE  HONORABLE  DONALD  W.  RIEGLE,  JR.,  A 
U.S.  SENATOR  FROM  THE  STATE  OF  MICHIGAN 

Senator  Riegle.  Thank  you,  Senator  Kennedy  and  Chairman 
Waxman  as  well. 

Let  me  just  say  at  the  outset  how  much  I  appreciate  the  leader- 
ship of  Secretary  of  Health  and  Human  Services,  Donna  Shalala, 
for  stepping  forward  on  this  issue  and  also  the  President  and  the 
First  Lady. 

Children  in  our  country  have  really  not  had  strong  advocates  in 
their  behalf  at  the  highest  levels  of  our  government  for  some  time, 
and  that  has  changed.  We  are  talking  about  children  in  the  country 
who  are  going  today  without  vaccinations.  Our  country  ranks 
among  the  lowest  of  countries  around  the  world  in  the  failure  to 
get  our  children  vaccinated  by  the  age  of  2,  and  many,  of  course, 
end  up  being  vaccinated  by  the  time  they  go  to  school,  but  there 
is  a  gap  in  time  where  they  are  susceptible  to  diseases,  and  they 
are  hit  by  diseases,  and  that  is  really  not  acceptable  in  our  country, 
and  it  is  very  expensive  as  well. 

So  the  legislation  that  we  have  here  really  falls  between  two 
committees — the  Senate  Labor  Committee  under  Senator  Kennedy, 
and  part  of  it  under  the  Finance  Committee  and  the  Subcommittee 
on  Health  for  Families  and  the  Uninsured,  which  I  chair.  We  will 


be  having  hearings  in  the  Senate  Finance  Committee  in  May  on 
this  issue. 

But  with  respect  to  the  universal  purchase  and  distribution,  we 
now  have  11  States  that  have  some  kind  of  a  universal  purchase 
program.  This  is  not  a  new  idea.  This  is  an  idea  that  several  States 
have  decided  makes  sense,  including  even  in  my  home  State  of 
Michigan,  where  we  produce  and  distribute  the  DTP  vaccine  free 
to  all  providers,  and  as  a  result,  there  has  been  a  sharp  increase 
in  the  number  of  doctors  who  in  fact  provide  these  shots  to  children 
who  come  in  and  need  them. 

One  of  the  problems  we  face — and  I  talked  with  one  family  in 
this  situation  in  Grand  Rapids.  MI,  where  they  have  four  younger 
children,  they  do  not  have  health  insurance  that  provides  vaccina- 
tions, and  they  go  to  a  private  physician — the  cost  of  the  vaccines 
has  become  very  expensive,  and  they  can't  afford  them  any  longer 
through  that  channel,  so  they  must  go  to  a  public  health  clinic.  It 
is  impossible  to  make  a  scheduled  appointment  there.  It  takes  a 
great  deal  of  time,  and  for  working  families  that  is  often  not  a 
practical  route.  And  many  of  our  children  are  not  getting  vac- 
cinated, and  they  are  out  there,  susceptible  to  these  diseases,  not 
only  to  catching  them  themselves,  but  passing  them  on  to  others. 

So  I  want  to  insert  for  the  record  a  list  of  70  national  organiza- 
tions, Chairman  Kennedy,  that  have  come  forward  to  endorse  this 
plan  and  to  say  that  in  the  end,  what  we  are  trying  to  do  here  is 
to  get  the  cost  down  to  the  lowest  possible  level  and  to  do  so  con- 
sistent with  providing  a  fair  return,  a  fair  profit  for  research  and 
development  and  for  earning  a  return  on  the  investment  to  the  vac- 
cine manufacturers.  That  is  built  in  here. 

But  having  said  that,  the  job  now  is  to  see  to  it  that  we  are  pro- 
viding the  basic  medical  protection  to  our  children  that  they  must 
have;  that  is  really  the  purpose  of  having  a  civilized  Nation  and  a 
Federal  Government,  in  conjunction  with  the  State  and  local  units 
of  government,  to  see  that  this  is  done. 

The  children  have  been  waiting  for  this  for  a  long  time,  and  they 
shouldn't  have  to  wait  any  longer,  so  I  am  very  anxious  to  see  this 
enacted. 

Thank  you,  Mr.  Chairman. 

[The  prepared  statement  and  information  of  Senator  Riegle  fol- 
lows:] 

Prepared  Statement  of  Senator  Riegle 

This  hearing  is  in  the  true  spirit  of  cooperation  and  I  am  very  pleased  to  co-chair 
it  with  Senator  Kennedy  and  Congressman  Waxman.  S.  732  and  S.  733,  bills  Sen- 
ator Kennedy  and  I  introduced,  together  represent  President  Clinton's  immunization 
initiative.  S.  733,  which  has  been  referred  to  the  Finance  Committee,  establishes  a 
central  bulk  purchasing  program  for  all  vaccines,  restores  the  excise  tax  for  the  in- 
jury compensation  trust  fund  which  expired  in  October  1992  and  makes  improve- 
ments to  the  Medicaid  program.  The  Finance  Subcommittee  on  Health  for  Families 
and  the  Uninsured  that  I  chair  will  hold  a  hearing  in  early  May  to  further  explore 
these  areas. 

The  bills  that  we  introduced,  together  with  the  $300  million  in  the  economic  stim- 
ulus package,  are  a  comprehensive  plan  to  make  sure  every  child  is  immunized  by 
age  2. 

The  United  States  ranks  103rd  among  130  nations  of  all  levels  of  development 
in  immunizing  its  1-year-olds.  We  only  immunize  48  percent  of  our  1-year  -olds. 
Countries  such  as  Cuba  (93  percent),  Bulgaria  (99  percent),  and  Honduras  (76  per- 
cent) all  have  better  immunization  rates  of  their  young  children  than  the  United 


8 

States  has.  In  1992,  over  one-third  of  Michigan's  children  (or  160,000  children)  did 
not  receive  their  full  set  of  vaccinations  by  their  second  birthday. 

I  have  been  working  on  this  issue  for  many  years.  Senator  Kennedy  and  I  had 
been  working  on  a  bill  since  December  last  year  based  on  a  bill  I  first  introduced 
in  November  1991. 

Many  children  who  go  to  private  physicians  are  being  referred  to  public  clinics 
for  immunizations  because  of  the  high  cost  of  vaccines,  creating  missed  opportuni- 
ties. Public  clinics  generally  receive  vaccines  for  free  and  charge  a  nominal  amount, 
if  any  at  all,  for  administering  vaccines.  The  Academy  of  Pediatrics  found  that  over 
50  percent  of  pediatricians  refer  patients  for  immunizations.  Many  of  our  public 
clinics  are  extremely  overburdened  and  we  will  hear  about  one  of  these  clinics 
today,  from  Dr.  Dean  Sienko  of  the  Tngham  County  Health  Department  in  Michigan. 

Let  me  give  an  example  that  illustrates  why  this  is  a  problem: 

A  middle-income  couple  in  Grand  Rapids,  MI,  have  4  young  children  under  7 
years  old.  The  family  has  private  insurance  through  the  husband's  employer  but  it 
does  not  cover  immunizations.  The  mother  used  to  take  her  4  children  to  their  pri- 
vate doctor  for  immunizations,  but  it  took  the  family  3  to  4  months  to  pay  off  the 
costs  of  these  visits  and  it  became  too  much  of  a  financial  burden. 

About  a  year  ago,  the  mother  began  taking  her  children  to  the  local  health  depart- 
ment for  their  immunizations  since  the  health  department  did  not  charge  for  most 
vaccinations.  The  health  department,  however,  does  not  make  appointments  and 
works  on  a  first  come,  first  serve  basis.  The  youngest  child  in  the  family  is  9  months 
old  and  requires  several  vaccinations  a  year.  This  means  several  times  a  year  the 
family  must  wait  up  to  2Va  hours  in  the  health  department  for  the  immunizations. 
This  major  inconvenience  acts  as  a  significant  barrier  to  immunizing  children. 

A  universal  purchase  program  decreases  missed  opportunities  to  reach  more  chil- 
dren by  making  vaccines  available  and  free  to  providers  for  any  child  who  needs 
care  for  any  reason.  It  will  encourage  private  doctors  to  immunize  children  in  their 
offices,  rather  than  refer  them  to  already  burdened  public  clinics. 

A  universal  purchase  program  eliminates  a  major  cost  barrier — cost  now  varies 
from  $114  for  a  full  set  of  vaccinations  in  the  public  sector  to  over  $230  in  the  pri- 
vate sector.  Eleven  States  have  some  type  of  universal  purchase  programs  and  these 
programs  have  made  vaccines  more  affordable  and  increased  the  rate  of  private  doc- 
tors who  deliver  vaccinations.  Michigan  produces  and  distributes  the  DTP  vaccine 
free  to  all  providers — there  has  been  an  increase  in  private  doctors  providing  DTP 
due  to  this. 

I  understand  the  concern  that  setting  too  low  a  price  could  discourage  vaccine  re- 
search and  development.  That's  why  we  specify  that  the  negotiated  price  would  in- 
clude costs  for  research  and  development  as  well  as  a  fair  rate. 

Children  can't  look  out  for  themselves,  we  have  to  look  out  for  them.  By  getting 
vaccinations  to  kids  by  the  time  they  are  two,  we  meet  an  important  public  need. 
And  we  save  $10  in  future  health  care  costs  for  every  $1  we  spend  now  on  immuni- 
zations. This  program  will  improve  the  health  of  our  people  while  bringing  health 
care  costs  under  control. 

National  immunization  week  begins  on  April  24  and  runs  through  April  30  and 
I  urge  everyone  to  join  me  in  bringing  attention  to  the  need  for  vaccinations.  I  will 
continue  to  travel  throughout  Michigan  seeking  the  views  of  advocates,  parents,  and 
providers.  I  commend  the  Clinton  administration  for  their  efforts  on  this  issue.  I  ask 
unanimous  consent  that  a  statement  of  70  groups  who  support  the  plan  be  included 
in  today's  record. 

Statement  of  Support  for  the  Comprehensive  Child  Immunization  Act  of 

1993 

We,  the  undersigned  organizations,  applaud  President  Clinton's  initiative  to  pro- 
tect all  of  America  s  children  against  preventable  diseases.  It  is  unacceptable  that 
almost  half  of  our  Nation's  preschoolers  are  not  fully  immunized.  The  Nation's 
shameful  immunization  record  is  a  testament  to  the  need  for  comprehensive  health 
care  reform  to  guarantee  comprehensive  health  care  coverage  for  all  Americans. 
This  legislation  is  an  important  step  toward  that  goal. 

The  President's  initiative  will  guarantee  that  no  child  will  go  unimmunized  be- 
cause his  or  her  family  cannot  afford  the  shot.  It  is  unacceptable  that  40  percent 
of  American  preschoolers  are  not  fully  immunized  when  each  dollar  invested  in  im- 
munizations saves  our  society  more  than  $10  in  health  care  costs  by  preventing  dis- 
ease and  disability.  This  legislation  will  also  create  a  national  immunization  reg- 
istry to  follow  the  vaccination  status  of  individual  children.  The  registry  will  provide 
reminder  notices  to  families  for  their  children's  shots  and  identify  communities  with 
low  coverage  rates  for  outreach  and  public  education.  The  Act  will  also  improve 


Medicaid  coverage  of  immunizations  for  low-income  children,  and  reauthorize  the 
National  Vaccine  Injury  Compensation  Program. 

The  organizations  are: 

Action  for  Families  and  Children  of  Delaware;  Advocates  for  Children  and  Youth; 
American  Academy  of  Family  Physicians;  American  Association  of  University  Affili- 
ated Programs  for  Persons  with  Developmental  Disabilities;  American  College  of 
Nurse-Midwives;  American  Dental  Association;  American  Federation  of  State,  Coun- 
ty, and  Municipal  Employees;  American  Federation  of  Teachers;  American  Hospital 
Association;  American  Indian  Health  Care  Association;  American  Public  Health  As- 
sociation; American  School  Health  Association;  American  Speech-Language-Hearing 
Association;  The  ARC  (formerly  the  Association  of  Retarded  Citizens);  Association 
for  Supervision  and  Curriculum  Development  (ASCD);  Association  for  the  Care  of 
Children's  Health;  Association  of  Junior  Leagues  International;  Association  of  Ma- 
ternal and  Child  Health  Programs;  Association  of  Schools  of  Public  Health  (ASPH); 
Association  of  State  and  Territorial  Health  Officers;  Bridgeport  Child  Advocacy  Coa- 
lition; Catholic  Chanties,  USA;  Child  Welfare  League  of  America;  Children  Now; 
Children's  Advocacy  Institute  (California);  The  Children's  Alliance,  Seattle,  WA;  The 
Children's  Council  of  San  Francisco;  Children's  Defense  Fund;  The  Children's  Foun- 
dation; Children's  Health  Fund;  Children's  Policy  Institute  of  West  Virginia;  Citi- 
zens for  Missouri's  Children;  Colorado  Children's  Campaign;  Community  Services, 
Inc.  (Head  Start);  Consumers  Union;  Florida  Children's  Forum;  Friends  Committee 
on  National  Legislation;  Georgia  Alliance  for  Children;  Hadassah,  the  Women's  Zi- 
onist Organization  of  America;  Hawaii  Advocates  for  Children  and  Youth;  Human 
Development  Center  of  Mississippi;  Interfaith  Impact  for  Justice  and  Peace;  Jesuit 
Social  Ministries,  National  Office;  Lutheran  Office  of  Governmental  Affairs  (ELCA); 
March  of  Dimes  Birth  Defects  Foundation;  Maryland  Committee  for  Children;  Mas- 
sachusetts Committee  for  Children  and  Youth;  Michigan  Head  Start  Child  Develop- 
ment Association;  Michigan  League  for  Human  Services;  Mid-Michigan  District 
Health  Department;  Mississippi  Human  Services  Agenda;  Missouri  Valley  Human 
Resource  Head  Start;  National  Association  for  the  Education  of  Young  Children;  Na- 
tional Association  of  Children's  Hospitals  and  Related  Institutions;  National  Asso- 
ciation of  Community  Action  Agencies;  National  Association  of  Community  Health 
Centers;  National  Association  01  Developmental  Disabilities  Councils;  National  Asso- 
ciation of  Partners  in  Education,  Inc.  (NAPE);  National  Association  of  WIC  Direc- 
tors; National  Black  Child  Development  Institute,  Inc.;  National  Black  Nurses  Asso- 
ciation; National  Community  Education  Association  (NCEA);  National  Easter  Seal 
Society;  National  Indian  Education  Association;  National  PTA;  National  Parent  Net- 
work on  Disabilities;  New  Hampshire  Alliance  for  Children  and  Youth;  North  Caro- 
lina Child  Advocacy  Institute;  Office  of  Domestic  Social  Development,  U.S.  Catholic 
Conference;  Pennsylvania  Head  Start  Staff  Association;  Pennsylvania  Partnerships 
for  Children;  Philadelphia  Citizens  for  Children  and  Youth;  Planned  Parenthood 
Federation  of  America;  Results,  Inc.;  San  Francisco  Child  Abuse  Council;  Service 
Employees  International  Union;  Statewide  Youth  Advocacy,  Inc.;  Sudden  Infant 
Death  Syndrome  Alliance  (SIDS  Alliance);  Unitarian  Universalis},  Association  of 
Congregations;  United  Auto  Workers  of  America;  United  Cerebral  Palsy  Associa- 
tions; United  Educators  of  San  Francisco;  The  Children's  Council  of  San  Francisco; 
the  Vaccine  Project;  Vermont  Children's  Forum;  Virginia  Perinatal  Association;  Wis- 
consin Council  on  Children  and  Families,  Inc.;  Women's  Legal  Defense  Fund;  and 
Zero  to  Three/National  Center  for  Clinical  Infant  Programs. 

Mr.  Waxman.  Thank  you,  Senator  Riegle. 

I  want  to  recognize  Mr.  Greenwood  to  make  an  opening  state- 
ment. 

Opening  Statement  of  Representative  Greenwood 

Mr.  Greenwood.  Thank  you,  Chairman  Waxman  and  Chairman 
Kennedy. 

I  am  pleased  to  be  here  today  to  hear  the  testimony  of  our  distin- 
guished witnesses  on  the  issue  of  childhood  immunization.  I  am  the 
father  of  four  children,  so  I  am  well  aware  that  immunizations  are 
among  the  most  vital  and  cost-effective  medical  interventions  avail- 
able. 

I  am  also  a  former  Pennsylvania  legislator,  so  I  know  that  we 
really  do  have  to  do  a  better  job  of  immunizing  our  children. 


10 

It  is  interesting  to  note  that  over  95  percent  of  children  are  im- 
munized before  entering  school,  so  it  appears  that  requiring  immu- 
nizations is  effective  and  that  if  parents  are  required  to  do  this, 
they  will. 

Unfortunately,  we  know  that  fewer  than  50  percent  of  children 
are  completely  immunized  by  their  second  birthday,  and  that  this 
rate  is  unacceptable. 

This  hearing  gives  us  the  opportunity  to  discuss  some  important 
policy  questions.  What  is  the  most  effective  way  to  make  sure  that 
the  children  are  vaccinated  and  to  ensure  their  health?  Is  it  cost- 
effective  to  give  free  immunizations  to  individuals  who  can  afford 
to  purchase  vaccines  for  their  children,  or  does  doing  that  add  un- 
necessarily to  the  cost  of  the  program?  Does  this  target  our  limited 
resources  wisely?  What  responsibilities  do  parents  have  in  ensuring 
that  their  children  receive  proper  vaccinations,  and  what  is  the  role 
of  our  health  care  providers? 

Eleven  States  currently  provide  free  vaccines  to  all  children. 
What  has  their  experience  shown?  Have  the  intended  beneficiaries 
been  reached  in  this  manner?  Can  some  type  of  public-private  part- 
nership be  developed  to  reach  this  goal?  Is  the  rate  of  childhood  im- 
munization in  fact  directly  related  to  the  cost  of  the  vaccine?  How 
will  universal  purchase  by  the  Federal  Government  impact  vaccine 
development  and  innovation? 

I  appreciate  the  opportunity  to  participate  in  this  important 
hearing  and  look  forward  to  participating  in  a  constructive  dialogue 
with  all  of  our  witnesses. 

Thank  you,  Mr.  Chairman. 

Mr.  Waxman.  Senator  Kennedy  and  members  of  our  committees, 
I  want  to  recognize  a  House  member  next  who  is  not  even  a  mem- 
ber of  either  or  any  of  the  committees  of  jurisdiction  on  this  ques- 
tion, but  she  has  been  invited  to  sit  with  us  this  morning  because 
this  legislation  is  very  much  modelled  on  the  legislation  that  she 
introduced  to  deal  with  this  immunization  program. 

I  am  delighted  to  have  her  with  us  and  to  work  with  her  on  this 
important  program — the  gentlelady  from  the  State  of  New  York, 
Ms.  Slaughter. 

Opening  Statement  of  Representative  Slaughter 

Ms.  Slaughter.  I  thank  you  very  much,  Chairman  Waxman  and 
Chairman  Kennedy  and  appreciate  very  much  your  letting  me  be 
here  this  morning. 

As  you  just  mentioned,  for  2  years,  I  have  worked  on  this  legisla- 
tion, and  I  want  to  say  it  was  a  very  proud  moment  for  me  when, 
earlier  this  month,  I  could  stand  next  to  Secretary  Shalala,  Senator 
Kennedy,  Chairman  Waxman  and  other  leaders  and  talk  about  the 
President's  initiative  to  vaccinate  America's  children. 

At  hearings  like  this  one,  we  can  easily  become  mired  in 
hypothetical  and  hyperbole,  muddying  the  facts  and  losing  sight 
of  our  objective.  So  I  would  like  to  begin  with  simple  facts. 

The  first  one  is  that  fewer  than  half  of  America's  preschoolers 
are  immunized  against  routine  childhood  diseases — that  is  less 
than  one-half— a  vaccination  rate  that  is  only  marginally  better 
than  that  achieved  in  Bolivia  and  Haiti. 


11 

The  cost  to  a  single  parent  now  to  get  the  necessary  vaccines  for 
a  child  can  range  from  $250  a  year  to  $500  a  year.  A  single  parent, 
often  struggling  to  put  food  on  the  table  and  a  roof  over  their 
heads,  finds  it  difficult  to  pay  up  to  $1,500  a  year  to  vaccinate  one's 
children  before  they  must  be  vaccinated  at  school  age;  so  we  have 
the  spectacle  of  some  mothers  or  fathers  having  to  decide  which  of 
their  children  are  probably  the  strongest  and  can  make  it  through 
the  next  year  without  vaccines. 

The  fact  is  that  70  percent  of  the  Nation's  community  health  cen- 
ters where  vaccines  are  offered  free-of-charge  have  reported  vaccine 
shortages  in  their  clinics.  It  is  a  fact  that  in  1981,  when  the  gov- 
ernment opted  out  of  vaccinating  our  children,  we  had  the  highest 
rate  in  the  world  of  compliance,  and  when  we  decided  to  opt  out 
of  it,  we  also  gave  up  the  education  process  that  is  so  necessary  to 
make  sure  that  children  are  protected. 

Between  1981  and  1991,  the  price  of  a  single  dose  of  DTP  rose 
from  33  cents  to  $10,  an  almost  3,000  percent  increase.  Between 
1981  and  1991,  profits  in  the  pharmaceutical  industry  have  in- 
creased by  400  percent,  while  in  comparison,  the  manufacturing 
sector  had  a  33  percent  decrease. 

But  the  tragic  bottom  line  is  this.  Measles,  pertussis  and  rubella 
cases  are  on  the  rise,  leaving  young,  unvaccinated  children  sick, 
disabled  or  dead,  and  devastating  thousands  of  American  families. 

That  is  what  we  have  to  remember  during  this  morning's  hear- 
ing— we  are  here  today  for  the  children.  Their  health  and  their  wel- 
fare is  our  only  objective.  Politics  and  profit  margins  aside,  the 
young  children  of  America  must  be  our  only  concern. 

The  bill  that  was  introduced  on  April  1st  by  the  Clinton  Adminis- 
tration will  make  sure  that  every,  single  child  in  the  country  under 
age  2  will  be  protected  from  preventable  disease.  Expecting  govern- 
ment to  assume  the  responsibility  for  public  health  is  not  a  new 
idea.  When  I  was  growing  up  in  the  coal  fields  of  Harlan  County, 
KY,  the  last  thing  we  did  on  the  last  day  of  school  was  to  line  up 
before  the  school  nurse  to  get  our  typhoid  shots  so  we  could  survive 
the  summer.  When  I  left  the  University  of  Kentucky  with  a  bach- 
elor's and  masters  in  microbiology  and  public  health,  we  were  in 
the  golden  age  of  public  health,  when  the  government  was  heavily 
involved  in  not  only  vaccine  but  education  programs. 

But  somewhere  along  that  line,  the  focus  was  lost.  We  lost  sight 
of  the  economic  common  sense  that  paying  for  a  vaccine  is  cheaper 
than  paying  for  a  hospital  stay,  and  we  lost  sight  of  the  simple  hu- 
manity of  trying  to  prevent  suffering  and  sickness  and  death 
among  our  smallest  citizens. 

Especially  as  we  have  made  dramatic  breakthroughs  in  medical 
research  and  the  development  of  medical  technology,  it  is  unethical 
that  we  have  been  unable  to  make  sure  that  the  American  public 
has  access  to  the  fruits  of  our  research,  often  funded  by  the  public's 
own  tax  dollars.  It  is  not  too  late  to  reclaim  the  luster  of  the  golden 
age  of  decades  past. 

Today,  we  want  to  make  sure  that  at  least  in  the  case  of  vac- 
cines, our  children  are  guaranteed  protection. 

I  appreciate  the  active  role  that  Secretary  Shalala  has  played  in 
developing  and  advancing  this  legislation,  and  I  am  very  grateful 
for  the  participation  of  all  the  witnesses  nere  this  morning,  espe- 


12 

cially  public  health  experts  from  States  where  universal  programs 
of  purchase  have  been  tested  and  been  successful. 

I  look  forward  to  the  testimony  and  working  to  make  sure  that 
never  again  will  we  see  the  spectacle  of  the  rise  of  measles,  the 
onset  again  of  polio  and  other  diseases  that  we  thought  had  been 
eradicated  but  knew  that  we  could  control. 

Thank  you  very  much. 

The  Chairman.  Thank  you. 

Senator  Pell. 

Senator  Pell.  I  want  to  get  on  with  hearing  the  witnesses,  so  I 
will  desist  with  no  comments,  but  just  congratulate  you  on  holding 
this  hearing. 

The  Chairman.  Did  everyone  hear  that?  Claiborne  Pell  wants  to 
get  on  with  hearing  all  of  the  witnesses. 

Senator  Metzenbaum. 

Opening  Statement  of  Senator  Metzenbaum 

Senator  Metzenbaum.  Mr.  Chairman,  I  am  very  pleased  to  par- 
ticipate in  this  meeting  this  morning  of  these  two  joint  committees. 
I  think  it  is  an  historic  occasion. 

But  I  had  to  make  a  decision  whether  I  would  come  to  this  hear- 
ing this  morning  or  go  to  an  important  hearing  of  the  Judiciary 
Committee  on  the  subject  of  terrorism.  I  concluded  in  my  own  mind 
that  there  is  a  kind  of  terrorism  that  is  much  more  serious  than 
that  which  we  normally  talk  about,  when  fewer  than  60  percent  of 
the  2-year-olds  in  this  country  are  vaccinated,  when  the  urban  and 
rural  poor  are  being  left  by  the  wayside,  forgotten,  and  not  being 
vaccinated,  when  Hispanic  and  black  children  are  being  short- 
changed of  the  opportunity  to  be  vaccinated. 

And  then,  I  am  aware  of  the  fact  of  the  unbelievable  increase  in 
costs,  which  rose  more  than  1,000  percent,  for  vaccinations  over  the 
past  15  years.  The  drug  companies  claim  that  they  have  to  con- 
tinue recouping  their  capital  costs.  That's  just  an  unbelievable  and 
an  incredible  statement  to  make. 

I  think  that  the  administration's  leadership  in  this  effort  is  one 
of  the  most  major  undertakings  the  administration  is  involved  in, 
and  I  hope  to  be  able  to  work  with  Donna  Shalala  and  President 
and  Mrs.  Clinton  in  moving  this  program  forward  rapidly,  and  I 
certainly  will  be  working  with  the  chairman  of  this  committee  and 
the  chairman  of  the  health  subcommittee.  I  think  terrorism  does 
exist  in  America  for  the  children  of  America,  and  I  am  pleased  to 
be  here  and  work  with  you. 

Mr.  Waxman.  Thank  you,  Senator  Metzenbaum. 

Mr.  Kreidler. 

Opening  Statement  of  Representatf/e  Kreidler 

Mr.  Kreidler.  Thank  you,  Mr.  Chairman  and  Senator  Kennedy, 
for  allowing  us  to  come  here  and  participate  in  this  hearing  today 
on  such  a  notable  and  commendable  program  that  is  being  pro- 
posed here,  dealing  with  immunization. 

Nothing  really  demonstrates  more  clearly  the  failure  of  public 
health  policy  than  the  return  of  childhood  diseases  that  many  of  us 
thought  many  years  ago  had  been  left  behind,  as  measles,  mumps, 


13 

whooping  cough  and  rubella  epidemics  have  started  to  raise  their 
heads  over  the  last  decade. 

Over  half  the  population  of  America's  infants  fail  to  receive  the 
full  series  of  immunizations  that  they  should  be  receiving,  measles 
and  rubella  have  seen  a  500  percent  increase,  and  whooping  cough 
has  more  than  doubled. 

Many  of  us  thought  that,  by  virtue  of  current  and  existing  immu- 
nization programs,  the  phenomenon  of  herd  immunity  would  take 
hold,  and  these  epidemics  would  never  raise  their  heads  again  in 
this  country. 

There  is  enough  blame  to  go  around  in  the  whole  system  for 
what  has  happened,  in  our  policies,  whether  it  be  the  prices  of  vac- 
cine, the  inadequate  funding  of  public  health  clinics,  doctors  and 
nurses  who  don't  carry  through  with  vaccination  programs,  or  par- 
ents, who  perhaps  don't  care  enough  to  take  care  of  their  kids' 
needs. 

We  must  improve  awareness  of  the  need  for  immunization,  and 
we  must  make  it  easier  for  children  to  be  vaccinated.  This  speaks 
strongly  to  the  need  for  comprehensive  reform  of  our  health  care 
system  in  this  country  so  that  we  do  have  the  kind  of  adequate  fol- 
low-up and  recordkeeping  that  is  so  necessary. 

Last  week,  I  had  the  opportunity  to  visit  a  community  care  clinic, 
where  one  of  the  nurses  told  me  that  as  she  was  immunizing  a 
woman's  children,  the  woman  said,  "Don't  give  me  any  shot  record; 
I'm  only  going  to  lose  it  anyway."  Perhaps  one  of  the  major  short- 
falls that  we  have  right  now  is  that  we  don't  have  the  ability  to 
do  the  kind  of  follow-up  that  is  so  necessary  and  that  will  be  a  fun- 
damental part,  I  presume,  of  what  we  do  in  health  care  reform. 

I  also  want  to  mention  that  the  universal  purchase  program  in 
the  State  of  Washington  is  an  example  of  what  should  be  happen- 
ing in  the  entire  country.  When  I  served  in  the  State  legislature, 
we  enacted  laws  requiring  that  children  entering  the  school  system 
had  to  have  their  full  shots.  But  that  has  not  worked  for  infants, 
because  we  are  still  only  operating  at  about  50  percent  in  the  State 
of  Washington. 

I  am  pleased  that  the  committee  is  going  to  be  able  to  hear  from 
Dr.  Marcuse,  who  played  an  active  role  in  our  universal  purchase 
program  in  the  State  of  Washington.  He  is  from  Seattle's  Children's 
Hospital. 

This  is  not  a  perfect  bill,  and  I  am  certainly  willing  and  eager 
to  hear  what  people  have  to  say  about  how  we  could  make  it  even 
better  and  more  workable,  so  that  we  can  achieve  the  goal  of  uni- 
versal access. 

Thank  you,  Mr.  Chairman. 

The  Chairman.  Senator  Gregg. 

Opening  Statement  of  Senator  Gregg 

Senator  Gregg.  Thank  you,  Senator  and  Chairman  Waxman.  I 
appreciate  your  having  this  hearing. 

I  come  at  this,  I  guess,  with  a  little  bit  of  a  different  perspective. 
I  was  president  of  a  polio  clinic  for  many  years,  and  as  Governor 
of  the  State  of  New  Hampshire,  we  helped  introduce  universal  dis- 
tribution of  drugs  for  immunization  without  any  cost.  As  a  State, 


14 

we  have  the  highest  percentage  of  2-year-olds  who  are  vaccinated 
in  the  country. 

I  helped  initiate  the  universal  distribution  of  drugs  for  immuni- 
zation without  doing  it  through  the  public  policy  of  having  the  gov- 
ernment take  over  the  program.  In  fact,  we  presently  have  the  non- 
Federal  sector  pay  for  60  percent  of  the  drugs  that  are  distributed 
under  this  program,  free,  to  all  the  kids  in  the  State  of  New  Hamp- 
shire. 

Thus,  I  have  great  concern  about  a  program  which  would  basi- 
cally lead  to  the  nationalization  of  the  immunization  drug  pro- 
grams in  this  country,  because  my  concern  is  that  the  problem  is 
not  going  to  be  resolved  by  the  nationalization  of  the  industry,  and 
I  think  it  will  aggravate  the  problem  considerably  by  taking  this 
course  of  action. 

It  will  aggravate  it  because  it  will  significantly  reduce  the  incen- 
tive for  research,  which  is  absolutely  critical  to  the  production  of 
more  and  even  better  drugs  for  immunization.  But  it  will  also  ag- 
gravate it  because  people  will  think  the  problem  has  been  resolved 
when  it  hasn't  been  resolved  by  creating,  with  the  magic  wand  ap- 
proach of  government,  a  program  which  buys  up  all  the  drugs  and 
says  now  they  are  free,  and  they  are  available.  Because  the  issue 
isn't  the  availability  of  drugs — as  much  as  you'd  like  to  think  it  is, 
that  is  not  the  issue. 

When  drugs  are  available,  immunization  occurs.  That's  at  the 
age  when  kids  get  into  school,  when  we  have  95  percent  of  the  kids 
being  immunized.  They  are  immunized  because  the  drugs  are 
there,  they  are  available,  and  they  are  delivered — in  order  to  go  to 
school,  you've  got  to  be  immunized,  so  it  occurs.  So  it  is  not  an 
issue  of  lack  of  availability  of  the  drugs  or  the  price  of  the  drugs 
that  is  driving  the  problem. 

The  problem  is  driven  by  the  fact  that  2-  and  3-year-olds  are  not 
immunized  because  parents  don't  take  responsibility  to  have  their 
kids  immunized.  And  if  you  aren't  willing  to  accept  that  premise, 
then  you  must  reject  the  numbers  that  show  that  when  kids  hit  the 
school  systems  when  they  are  required  to  be  immunized,  95  percent 
of  them  are  immunized. 

So  the  issue  is  how  do  we  get  2-year-olds  immunized,  in  order 
to  address  the  question?  It  is  not  buying  up  all  the  drugs  and  then 
claiming  that  you've  resolved  the  problem  in  some  populist  explo- 
sion of  rhetoric. 

I  think  if  you  want  to  address  the  issue  of  2-year-olds  and  immu- 
nizing 2-year-olds,  you've  got  to  address  parent  responsibility,  and 
you've  got  to  address  how  you  integrate  those  parents  who  are  re- 
sponsible for  their  children  into  a  system  that  requires  them  to  be 
immunized.  And  there  are  a  number  of  instances  where  parents 
come  into  activities  which  the  government  has  the  legitimate  right 
to  require  of  them  to  take  certain  actions  in  order  to  participate  in 
those  activities. 

I  would  take,  for  example,  parents  participating  in  the  WIC  pro- 
gram, parents  participating  in  AFDC,  parents  participating  in 
Medicaid,  parents  who  receive  tax  refunds  or  receive  earned  income 
tax  credits.  In  all  these  instances,  a  parent  is  engaging  in  benefit 
from  the  Federal  Government,  and  in  all  these  instances,  if  a  par- 
ent has  a  2-year-old,  possibly  a  precondition  of  obtaining  that  bene- 


15 

fit  should  be  some  sort  of  recognition  that  the  parent  has  immu- 
nized their  2-year-old  or  participated  in  obtaining  immunization  for 
their  2-year-old  and  their  3-year-old.  And  certainly,  the  cost  that 
would  be  incurred  to  do  that  could  be  borne  by  parents  of  moderate 
incomes.  In  fact,  I  think  it  is  a  legitimate  request  to  ask  the  par- 
ents of  moderate  income  to  pay  $400  to  $500  over  a  2-year  period 
for  immunization — probably  significantly  less  than  they  pay  in  car 
payments  or  maybe  even  for  their  cable  television  costs.  The  mod- 
erate-income individuals  should  invest  in  their  children's  health 
care,  and  the  government  has  no  obligation  to  pick  up  that  cost.  If 
the  parents  are  going  to  pay  for  their  cable  TV,  they  can  pay  for 
their  children's  immunizations. 

And  for  the  low-income  parent,  yes,  the  government  can  pick  up 
that  cost,  and  pick  it  up  without  any  great  burden  being  put  on  the 
government  and  without  any  great  need  to  wipe  out  the  incentive 
of  the  drug  industries  to  produce  new  and  more  vibrant  types  of 
drugs  for  immunization  through  a  nationalized  program. 

So  I  think  the  goals  are  obviously  the  same.  How  do  you  get  ev- 
erybody immunized?  That  was  my  goal  as  Governor,  and  that's  the 
goal  of  this  committee.  But  I  do  nave  to  say  that,  having  been 
through  the  program  both  on  a  hands-on  basis  as  head  of  a  polio 
clinic  and  as  a  Governor  who  has  helped  institute  universal  immu- 
nization and  had  some  results  from  it,  I  don't  see  that  nationaliza- 
tion of  the  industry  is  the  way  that  is  going  to  get  us  there.  I  see, 
rather,  developing  a  program  that  draws  the  parents  into  an  active 
responsibility  pattern  as  the  way  you  are  going  to  get  there.  To  the 
extent  that  government  interfaces  with  parents,  we  should  be  able 
to  accomplish  that. 

Thank  you,  Mr.  Chairman. 

Mr.  Waxman.  I  want  to  recognize  at  this  time  the  ranking  Re- 
publican member  of  our  subcommittee,  Tom  Bliley  from  Virginia. 

Opening  Statement  of  Representative  Bliley 

Mr.  Bliley.  Thank  you,  Mr.  Chairman. 

I  am  pleased  to  participate  in  this  hearing  on  a  subject  very  im- 
portant to  all  of  us — the  nealth  and  well-being  of  our  children  and 
grandchildren.  Immunization  probably  represents  the  most  cost-ef- 
fective means  our  society  has  for  preventing  suffering  and  death. 

I  remember  the  polio  epidemic  quite  well.  We  are  very  fortunate 
to  have  eradicated  that  disease  as  well  as  many  others.  Centers  for 
Disease  Control  estimates  that  in  the  past  three  decades,  more 
than  77  million  cases  of  measles  and  25,000  cases  of  mental  retar- 
dation have  been  avoided,  and  over  7,000  lives  saved,  thanks  to  the 
development  of  just  the  MMR  vaccine. 

Reviewing  the  barriers  to  immunization  that  have  been  identified 
in  our  vaccine  delivery  system  reinforces  the  view  that  I  have  held 
for  some  time — our  public  assistance  system  is  highly  fragmented 
and  imposes  unnecessary  bureaucratic  roadblocks  to  providing  the 
services  it  was  created  to  provide.  Our  current  system  simply 
misses  too  many  opportunities  to  immunize  the  children  most  at 
risk. 

Children  and  their  parents  frequently  come  in  contact  with  a  va- 
riety of  programs,  such  as  the  maternal  and  child  health  block 
grant  program,  Medicaid,  AFDC,  and  the  WIC  program,  where  in- 


16 

dividuals  receive  benefits.  We  could  easily  also  check  children's  im- 
munization status  and  administer  vaccines  if  necessary. 

I  have  long  advocated  legislation  that  would  permit  one-stop 
shopping,  whereby  families  could  meet  all  their  related  needs  in 
the  same  program  and  at  the  same  time,  instead  of  being  shuffled 
from  one  bureaucracy  to  the  next. 

While  I  commend  the  administration's  emphasis  on  childhood  im- 
munization, I  do  have  concerns  about  the  logic  of  some  elements  of 
their  proposal.  For  example,  does  it  really  make  sense  to  establish 
a  new  entitlement  program  for  well-off  Americans,  the  majority  of 
whose  children  are  vaccinated  by  their  pediatricians  without  any 
difficulty?  While  the  goal  of  a  national  tracking  system  for  every 
child  in  America  is  certainly  Utopian,  does  it  really  make  sense? 
Do  we  really  need  to  spend  scarce  Federal  tax  revenues  for  such 
a  system  when  millions  of  pediatricians  and  families  already  keep 
these  records?  Shouldn't  we  begin  to  target  such  a  system  to  popu- 
lations of  greatest  need  first? 

I  look  forward  to  working  with  my  colleagues  and  the  adminis- 
tration to  resolve  these  concerns  and  to  ensure  that  all  children  are 
immunized  in  the  most  cost-effective  fashion. 

Thank  you,  Mr.  Chairman. 

The  Chairman.  Mr.  Chairman,  under  previous  agreement,  the 
Senators  will  have  to  vote  soon.  Since  we've  got  four  or  five  Mem- 
bers here,  if  you  are  agreeable,  we  could  let  each  of  them  take  per- 
haps a  minute  or  a  minute  and  a  half,  then  hear  from  Senator 
Danforth,  and  Members  could  go  and  vote  at  that  time. 

So  I  would  suggest  this,  and  call  on  our  colleagues  who  wish  to 
speak — I'd  recognize  Senator  Dodd  first,  then  Senator  Mikulski, 
Senator  Durenberger,  Senator  Wellstone  and  Senator  Wofford — if 
that  is  agreeable,  hopefully,  and  then  have  Senator  Danforth  pro- 
ceed. 

Mr.  Waxman.  Well,  we're  going  to  have  give  the  opportunity  for 
the  House  Members  to  make  their  statements.  If  we  re  going  for  a 
minute  and  a  half,  let's  hear  from  four  Senators  and  then—well, 
you've  only  got  a  short  time  before  10:45  when  you'll  have  to 
leave — then  the  House  Members  will  have  our  chance  to  take  over 
with  opening  statements. 

The  Chairman.  Senator  Dodd. 

Opening  Statement  of  Senator  Dodd 

Senator  Dodd.  I'll  save  some  time  for  you.  First  of  all,  let  me 
commend  both  of  our  chairs  here  for  conducting  this  hearing.  Obvi- 
ously, it  is  a  critically  important  issue  to  all  of  us,  and  there  is  ob- 
viously a  tremendous  need  that  I  think  everyone  understands. 

Mr.  Chairman,  I  have  a  short  opening  statement  and  an  article 
from  the  Bridgeport  Post  that  I'd  like  to  have  included  in  the 
record. 

Connecticut  is  one  of  the  few  New  England  States  that  have  a 
full  program.  We  spend  $4  million  a  year,  and  Governor  Weicker 
is  now  going  to  include  hepatitis  B  as  one  of  the  diseases  to  be  cov- 
ered by  the  universal  program.  We  have  about  50  to  60  percent 
coverage;  New  Haven,  CT,  about  50  percent.  Obviously,  making  im- 
munizations available  is  a  major  part  of  the  issue,  but  also  the  in- 
frastructure issues — how  you  get  people  to  show  up.  So  even  with 


17 

a  full  program,  we  have  a  critical  problem,  and  this  Bridgeport 
Post  article  cites  the  example  of  a  woman  who  spends  the  good  part 
of  half  a  day  in  New  Haven,  just  with  various  bus  transfers  and 
waiting  and  so  forth,  to  get  there,  with  great  determination.  So 
that  is  the  other  side  of  the  equation. 

But  you  also  can't  talk  just  about  infrastructure  problems.  You've 
got  to  have  the  resources  as  well  to  deliver  the  vaccinations  as  nec- 
essary. 

I  commend  you  for  the  hearings  and  look  forward  to  working 
with  you. 

[The  prepared  statement  and  article  of  Senator  Dodd  follow:] 

Prepared  Statement  of  Senator  Dodd 

Mr.  Chairman,  I  am  pleased  to  be  here  today.  I  am  excited  that 
President  Clinton  has  placed  the  health  of  our  children  high  on  his 
list  of  priorities.  He  is  committed  to  ensuring  proper  immunizations 
for  all  children.  Three  hundred  million  dollars  was  included  in  the 
economic  stimulus  package  for  immunizations  and  he  has  now  sent 
the  "Comprehensive  Child  Immunization  Act  of  1993"  to  Congress. 

We  all  recognize  that  immunization  rates  in  this  country  are 
much  too  low.  We  have  fallen  behind  the  rest  of  the  developed 
world  in  immunizing  preschool  children — fewer  than  63  percent  of 
American  2-year-olds  have  received  the  complete  immunizations  se- 
ries. 

A  recent  article  in  the  Connecticut  Post  points  out  that  measles 
kill  one  out  of  every  1,000  people  who  get  it,  and  leave  one  out  of 
every  1,000  brain  damaged.  A  few  dollars  worth  of  vaccines  could 
prevent  this  terrible  tragedy. 

We  must  take  action,  and  I  believe  Members  on  both  sides  of  the 
aisle  are  anxious  to  address  this  issue.  Immunization  rates  are  low 
for  a  variety  of  reasons,  and  unfortunately,  a  simple  solution  does 
not  exist. 

We  do  know  that  any  solution  must  include  improvements  in  the 
delivery  system.  For  many  working  parents,  limited  clinic  and  phy- 
sician office  hours  and  transportation  problems  are  real  obstacles. 
We  must  remove  these  obstacles. 

We  also  must  conduct  greater  outreach,  and  do  a  better  job  of 
educating  parents  about  tne  importance  of  vaccinating  their  chil- 
dren. And,  in  instances  where  the  price  of  vaccines  is  an  obstacle, 
we  must  address  that. 

I  want  to  thank  all  of  the  witnesses  for  coming  here  today.  I  look 
forward  to  their  testimony. 


18 

Plenty  to  Plague  Efforts  to  Immunize  All  State's  Cities  Lagging  in 

Vaccination  of  2-year-olds 


By  JOHN  G- CARLTON 

Staffwriter  v.  '    '"  "■■''   -••'— ■  "••  -;" 

,    Maribcl  Carrasn  uilto  left  her  New  Haven  home  at 
about  9:30  Friday  maroitig  wrtn  a  q-monin-oifl  neph-" 

cwintoV.i^  ■:!^:-^-  ^V"C     *,T-:V  rr?VJ  ££ 
Trurt^injgirt^  and  two  bus  tranfers  later^sbe  ar-' 
iivbd  aTa  dinic  in  the  city's  lough  Hill  neighbor-' 
l>obd.  Ninety  minutes  after  mat,  she  wis  ushered  into 
a  small  examining  rccm.iri  the  Hill  Health  Center1 
wbars  Pedro  F^icnics,  her  nephew,  was  jabbed  in  the 
thigh  witha  short  needle  and  given  a  shot  to  prevent 
a  trio  of  diseases  she's  never  heard  of. 

"I  know  rfs  important  Car-" 
rasquillo  said  as  Pedro  screamed 
in  me'background  "It's  impor-  •• 
taht  that  he- get  the  shot  so  that  * 
-he  doesn't  get  sick.1 **  ■'/•  ri'-t»«:  t-v:r 
■-  '*■  -  It  is  a  message  not  every  Con- 
necticut, parent  has  absorbed,  but  _ 
"one  attracting  increased  attention; 
\  in  recent  weeks  on  a  state  and  national  JeveL  .        :  j  , 
•ff    V  .With  the  two  jabs  of  Iheneedlcand  a1  swallow  off 
' '.-  oral  vaccine,  Pedro:!was  on  his  way  to-joining  the  "•'- 

_  65  percent  of  Connecticut  children  who  have  received 
recommended  immunizations  by  the  time  they  are 
2  years  old.  .  .'."...  -r>  /••'     -« 

'  '.The  good  news,  public  health  officials  reoort,  is  a . 
[  -r^rpartrheht'of  Heato  Sennces  jro 

cincs  at  n'onrinal  cost,  making  Connecticut  a  natkniH) 
leader  in  the  percentage  of  children  fully  irnmnnized  •■ 
;  by  age  two..  .    r:^  :  .r.^*>:'.\^^-.^.;-\;^xTwj£r^ 
.  •  '    And  virtually  every  child.  ih^Corinecticut-  has* ;re-»*:. 
/«" crived  the  shots,  as  required  by  state  law,  by  the  time :,Z 
V.^heybegm school ■*'.•;'     *J   •".»  '  -V; 
r*.  ^The  bad  hews  is  35  percent  of  the  state's  2-year-  • 
olds  have  not  received  the  immuiiizations,  which  pro- 
tect against  a  cost  oi  diseases  that  can  JdJI  or  cause 
— train  Uuibage.  And  in  large .  ciues,  me  rate  is  even 
-   higher.-    :v.:  .-•■:.  >*"/'.       :..,.^'^^L;^ 

.>-■  v:  -These  diseases  can  occur  so  relatively'  tarry  iriHrfe 
•  -thatrwe  have  to  offer  children  proti^on,";  explained- 
•<  Dennis  Dix,  director  of  the  state  health  department's 
rr:  immuaizaticar  prc*^^^?::^:^ 
5-  ^--Two- weeks- ago,  President  Clinton  cbided  drug 
^.companies  for  the  high  price  Jof  •  vaccines — •  their 


19 


cost  has  soared  from  $23  for  a  foil 
course  in  1982  to  $244  for  the  same 
dosages  last  year.  He  announced  a 
major  initiative  aimed  at  getting 
every  American  child  fully  immun- 
ized by  age  two. 

And  in  Connecticut,  one  of  a 
handful  of  states  to  make  the  drugs 
avaiiapic  to  every  emid.  Ciov. 
Lowell  P.  Weackcr  Jr.  has  proposed 
additional  funding  to  ***tf  hnnatitic 
B  to  the  list  of  vaccines  provided. 

JBut  even  with  roughly  $4  mil- 
lion  spent  bv  state  omciats  each 
year  tor  tne  immunization  prc&ram 
—  eveu  Willi -61AJ.UUU  floS&s  TSIvag- 
cine  'distributed  annually  —  manrv 
connecucut  cmidren  co  not  get 

"TnejV". public  health  officials 
isaid,  is  not  the  only  obstacle. 

In  New  Havet^'  wl 
quillo  spent  the  better  part  of  her 
morning  Friday  getting  little  Pedro 
his  Shots,  only  ,S1  ngmwit  nf  Ihr. 

children  havebeenjmmumzed  by 
agelwu.    .  . 

Tf^Sornf^merican  cities  have  an 
even  lower  rate  -—in  fionston  for 
example^' only  It)  percerir  oj 
dren  have  receivea  snots.  Nafaonal- 
ty,  the  rate  is  about  50  percent 
..:  Carrasquillo  said  she  under- 
stands the  importance  of  the  vacci- 
nation, even  if  she's  never  heard  of 
pertussis  (whooping  cough)  or 
diphtheria.  She  would  gladly  take 
Pedro  back  for  his  next  round  of 
shots  if  her  sister  asked.  After  all, 
Carrasquillo  has  done  the  same  for 
her  own  1  0-month-old  child. 

Still,  her  bus  odyssey  may  help 
to  explain  why  so  few  of  the  city's 
children  have  been  vaccinated. 

*There  are  problems  about 
transportation,  problems  about  get- 
ting the  free  time,"  explained  Dr. 
Stephen  Updegrove,  medical  direc- 


tor of  the  Hill  Health  Center.  "If 
you're  talking  -  about  a  working 
mother, .  she's  got  tp„ give ;  up  the, 
time  from  work  td  bring  her  chiK 
orcnin.  ■  ~- ~~ -».- r^j ;-;  -v"*- ?. .-"•. • 
.  But,  increasingly,  youngsters  in 
affluent  areas  of  me  state  are  miss- 
ing out  on  vaccines  as  well 

Dr.  Robert  D.  Cfaessin,  a 
Bridgeport  Hospital  pediatrician 
whose  practice  includes  many  fami- 
lies from  the  suburbs,  said  oyer  the 
last  year  or  so,  "the  recession  has 
rcaHyhrtr^ii^  ;  •  :.  -\  ^ag&u 

"We've  seen  more  and  more 
parents  putting  off  their  kids' 
checkups,"  which  arc  often  when 
the  -vaccinations  are  administered, 
he  said.  "Some  of  it  is  financial,  If 
their  insurance  has  been  cut  off, 
they  may  not  realize  they  can  get 
the  vaccinations  for  free  from  their 
iocal  health  department" 

Outmoded  thinking  also  plays  a 
role,  public  health  experts  said. 

Many  parents,  and  even  some 
doctors,  may  believe  they  cannot 
vaccinate  children  who  have  a 
slight  fever  or  are  complaining  of 
feeling  ilL  But  recent  studies  have 
shown  that's  not  necessarily  the 
case. 

Ironically;  the,  verysuccessTo^ 
vaccinations  in  eradicating  disease 
has:  also  worked. /against. -^doctors.; 

:.;..r.  But*  other  iinmunizarions  pro- 
tect  children  from  diseases  just  as 
harmful  —  and  far  more  common! "~ 
"Measles;  which  many  of  us 
had  as  chtfdren,  kills  one  of  every 
thousand  people  who  get  it  and 
leaves  another  one  of  every  thour 
sand  brain  damaged,"  Chessjri  said: 
~3«&A1I  cTtliis;^PKr6bserve^^all; 
of  it  could  be  :preventcd  for  a  few 
dollars  worth  of  vaccines,* 


20 


Soua^ConnachcUt  Dtpvtmsnt  c*  Hvolh 


21 
The  Chairman.  Senator  Mikulski. 

Opening  Statement  of  Senator  Mikulski 

Senator  Mikulski.  Thank  you,  Mr.  Chairman. 

I  am  delighted  to  be  once  again  at  a  hearing  with  my  colleagues 
from  the  House  Committee  on  Energy  and  Commerce,  Subcommit- 
tee on  Health,  a  committee  and  subcommittee  that  I  served  on  that 
has  been  the  incubator  of  Senators. 

I  remember  in  the  first  days  of  the  Reagan  administration  when 
Henry  Waxman  and  I  were  in  hand-to-hand  combat  with  then  our 
former  colleague,  Mr.  Stockman,  trying  to  get  $6  million — Henry, 
do  you  remember  that — for  the  immunization  of  children.  And  now, 
here  we  are,  11  years  later,  still  in  hand-to-hand  combat,  trying  to 
get  immunization  and  the  stimulus  package,  and  yet  the  needs  con- 
tinue at  an  even  more  increasing  and  more  alarming  rate. 

I  would  hope  that  we  would  pass  the  stimulus  package,  and  I 
would  hope  that  we  would  support  this  immunization  effort.  When 
one  looks  at  the  obstacles  to  children  being  immunized,  we  know 
that  one  thing  that  has  been  lacking  has  been  national  leadership. 
We  now  have  that  in  our  President  and  in  our  Secretary. 

We  know  that  another  obstacle. is  cost,  and  we  now  know  that 
aggressive  intervention  has  dealt  with  that.  But  also,  we  need  to 
be  able  to  put  our  children  through  a  system  that  not  only  immu- 
nizes them,  but  gets  them  into  a  primary  care  network. 

Therefore,  I  hope  that  whatever  we  do  in  immunization,  we  don't 
see  it  only  as  another  government  program  to  be  delivered,  but  as 
a  national  effort  to  focus  on  the  needs  of  children,  to  immunize 
them  and  get  them  into  primary  care,  and  that  we  mobilize  the 
public  and  private  resources  of  the  United  States  of  America  to  ac- 
complish this  goal,  so  that  when  President  Clinton  and  Mrs.  Clin- 
ton walk  Chelsea  to  school  next  year,  every  child  will  be  immu- 
nized, with  special  focus  particularly  on  children  under  the  age  of 
2. 

I  would  hope  we  would  use  the  resources  of  the  National  Guard 
and  of  other  nonprofit  organizations  as  well  as  traditional  mecha- 
nisms for  delivering  this  service,  because  what  we  need  is  not  more 
government — yes,  we  need  more  personal  responsibility,  but  we 
need  to  mobilize  our  people  so  that  they  can  see  that,  working  to- 
gether, we  can  do  this.  And  I  would  hope  that  immunization  does 
not  become  a  further  problem  in  the  gridlock  and  deadlock  that  is 
focusing  on  the  U.S.  Senate. 

Six  million  dollars  in  1982;  now  it  is  up  to  $120  million  in  1993. 
It  is  time  to  end  the  decade  of  neglect. 

[The  prepared  statement  of  Senator  Mikulski  follows:] 

Prepared  Statement  of  Senator  Mlkulski 

Nothing  should  shock  us  more  than  the  fact  that  nearly  one-half 
of  all  children  have  not  been  fully  immunized  by  the  time  they 
have  their  second  birthday. 

The  Comprehensive  Child  Immunization  Act,  of  which  I  am  a  co- 
sponsor,  seeks  to  close  the  health  care  gap  for  children.  It  closes 
the  gap  between  what  we  promise  and  what  we  deliver.  Between 


22 

what  we  know  how  to  do  and  what  isn't  being  done.  Between 
gridlock  and  a  government  that  works. 

We  know  that  immunization  works.  We  don't  need  any  more 
studies.  We  don't  need  any  more  reports.  We  don't  need  any  more 
convincing. 

Vaccines  save  lives.  They  are  effective  in  preventing  nine  major 
childhood  diseases. 

What  we  need  is  resources  and  a  program  that  works.  Because 
for  all  that  we  know  and  for  all  that  we  nave  studied  the  problem, 
the  reality  is  that  too  many  children  are  not  being  vaccinated  on 
time  or  at  all.  They  are  unprotected.  Vulnerable  to  diseases  that 
were  once  virtually  eliminated.  And  dying  needlessly. 

Measles  is  a  case  in  point.  In  1963,  when  the  measles  vaccine 
was  licensed  there  were  an  average  of  500,000  to  1  million  cases 
every  year.  By  the  early  1980s  we  had  all  but  eliminated  measles. 
But  in  the  last  3  years,  we  have  seen  over  54,000  cases  of  measles 
and  over  160  deaths.  Almost  one-half  of  these  occurred  in 
unvaccinated  preschool  children. 

There  is  no  excuse  for  this.  Not  in  a  country  like  ours  with  the 
resources,  the  medical  expertise  and  the  ingenuity  to  get  this  job 
done.  Some  today  may  argue  that  the  Government  cant  afford  to 
spend  more  money.  And  some  would  say  that  we  shouldn't  control 
the  cost  of  vaccines.  Well,  I  say  we  can't  afford  not  to. 

We  have  to  turn  our  thinking  around.  Immunization  not  only 
save  lives,  it  saves  dollars.  For  every  dollar  invested  in  immuniza- 
tions, $10  is  saved  in  later  medical  costs.  For  every  dollar  invested 
in  a  measles  shot,  we  can  expect  to  save  $14. 

We  need  to  stop  spending  needless  dollars  at  the  back  end  of  the 
health  care  system.  We  need  to  spend  them  right  up  front — to  pre- 
vent illness  and  disease. 

We  are  fortunate  to  have  a  President  and  Secretary  of  Health 
and  Human  Services  who  believe  in  prevention.  And  who  know  a 
good  deal  when  they  see  one. 

The  President's  bill,  is  investment  in  a  healthy  future  that  fills 
the  heart  and  the  pocketbook. 

If  we  can  show  the  American  people  that  every  child  has  been 
fully  immunized  than  we  can  show  them  that  Government  can 
work.  That  it  can  make  lives  better.  That  it  can  change  good  inten- 
tions into  reality. 

For  too  long  Americans  have  seen  a  lot  of  talk  about  caring  for 
children.  No  Action.  This  immunization  program  is  real.  It  is  con- 
crete. And  it  will  make  a  difference. 

A  poet  once  said,  "it  is  a  wise  man  who  plants  seeds  for  trees 
under  whose  shade  he  will  never  rest."  The  time  for  planting  the 
seeds  for  our  future — our  children — is  now. 

The  Chairman.  Senator  Durenberger. 

Senator  Durenberger.  Mr.  Chairman,  I  ask  unanimous  consent 
that  my  statement  be  entered  into  the  record,  along  with  questions 
for  Mike  Moen,  Ed  Thompson,  Secretary  Shalala,  and  Marian 
Edelman.  And  I  would  strongly  associate  myself  with  the  remarks 
of  my  colleague  from  Kansas,  Senator  Kassebaum,  and  my  col- 
league from  New  Hampshire,  Senator  Gregg,  and  what  I  hope  will 
be  the  comments  of  my  colleague  from  Missouri,  Senator  Jack  Dan- 
forth. 


23 

[The  prepared  statement  and  questions  of  Senator  Durenberger 
follow:] 

Prepared  Statement  of  Senator  Durenberger 

Along  with  all  the  Senators  here  today,  I  am  fully  committed  to 
a  healthier  America  and  to  prevention  and  well-baby  care.  It  is  in- 
disputable that  early  childhood  immunization  is  essential  to  a  suc- 
cessful strategy  for  improving  the  health  of  our  children. 

I  applaud  the  commitment  of  others  here  today,  from  the  new  ad- 
ministration, from  the  Democrats  in  the  House  and  in  the  Senate, 
and  from  all  our  witnesses  who  have  come  to  testify.  I  do  not  deny 
that  low  immunization  rates  are  a  real  problem  in  this  country. 

Indeed,  we  are  long  on  commitment  today.  Commitment  often 
leads  to  answers,  and  this  bill  is  full  of  answers.  But  I  would  like 
to  introduce  a  caution  at  this  point.  There  is  a  health  policy  expert 
at  the  University  of  Minnesota  named  Bryan  Dowd.  who  says  the 
problem  with  health  policy  today  is — and  I  quote —  we  have  1,000 
answers  and  no  questions. 

And  I  am  afraid  that,  despite  the  commitment  of  its  authors,  this 
bill  has  not  asked  the  right  questions. 

The  centerpiece  of  this  bill  is  so-called  "universal  purchase" 
where  the  Federal  Government  will  buy  all  vaccines  needed  each 
year  and  distribute  it  to  States.  But,  the  question  is:  Is  the  cost  of 
vaccines  the  real  barrier  to  immunizations?  Is  there  evidence  that 
this  "answer"  will  solve  the  problem? 

Will  the  investment  of  a  billion  dollars  in  the  purchase  of  vac- 
cines really  work?  I  have  my  doubts. 

There  are  so  many  other  factors  that  affect  the  immunization 
levels.  Many  of  those  barriers  are  cultural,  some  are  lack  of  edu- 
cation, and  some  due  to  infrastructure  problems  (limited  clinic 
hours,  long  waits,  no  transportation,  etc.).  The  fact  is  that  every 
community  is  different,  and  that  strategies  to  overcome  these  bar- 
riers depend  on  understanding  the  people  in  those  communities. 
We  neea  to  allow  State  flexibility  to  address  these  issues,  commu- 
nity by  community.  Federal  dollars  simply  won't  solve  these  prob- 
lems. 

Last  session,  I  supported  efforts  by  the  Appropriations  Commit- 
tee to  expand  funding  for  immunization  grants  to  States.  We  raised 
appropriations  for  immunizations  under  this  program  to  $341.78 
million,  an  increase  of  $45.08  million  over  fiscal  year  1992. 

These  grants  allow  States  to  determine  what  barriers  really  exist 
to  access  in  their  communities.  In  other  words,  States  have  the 
flexibility  to  ask  the  right  questions,  and  then  come  up  with  appro- 

Sriate  solutions.  Under  this  program,  the  CDC  awards  grants  to 
tates  and  local  governments  to  develop  and  implement  immuniza- 
tion action  plans  (IAFs). 

I  am  pleased  that  Dr.  Michael  Moen,  who  is  the  director  of  Dis- 
ease Prevention  and  Control  in  the  Minnesota  Department  of 
Health,  is  one  of  our  witnesses  here  today.  He  is  among  the  truly 
committed  individuals  who  have  worked  tirelessly  to  improve  im- 
munization rates  in  Minnesota. 

Minnesota  has  received  a  grant  of  $900,000  to  develop  an  action 
plan  and  implement  an  improved  vaccine  delivery  system.  What 
Mike  will  show  us  is  that,  even  in  Minnesota  which  is  a  relatively 


24 

homogenous  State,  there  are  tremendous  variations  among  commu- 
nities in  immunization  rates,  and  the  causes  are  as  variable  as  the 
solutions. 

Wise  policy  dictates,  and  experience  supports,  a  program  that  al- 
lows States  to  use  all  the  necessary  tools  to  raise  immunization 
rates  without  throwing  resources  into  communities  that  do  not 
need  these  funds.  We  must  concentrate  our  efforts  where  they  can 
do  die  most  good.  We  simply  do  not  have  money  to  waste. 

I  am  concerned  that  the  bill's  free  vaccines  for  all  will  spend 
scarce  dollars  where  they  are  not  always  needed  and  deplete  re- 
sources to  solve  the  hard  problems. 

There  is  really  only  one  basic  question,  and  it  is  this:  What  is 
the  real  goal  here?  The  answer  is:  healthy  children.  What  I  am  con- 
cerned about  is  that  we  will  fixate  on  immunizations  rather  than 
on  the  whole  child.  Will  we  spend  vast  resources  to  raise  immuni- 
zation rates  from  55  to  75  percent,  for  example,  but  overlook  the 
child's  well-being?  A  child's  health  needs  and  a  child's  human 
needs  are  much  greater.  And,  we  are  going  to  need  an  intelligent 
commitment  to  public  health  and  healthy  communities  if  we  want 
to  reach  our  goal. 

I  look  forward  to  hearing  the  testimony  that  will  be  presented 
today.  I  also  look  forward  to  asking  the  questions  that  will  produce 
the  best  answers.  We  don't  need  and  can't  afford  wrong  answers. 
Our  children  are  too  important  for  that. 

Responses  of  the  Department  of  Health  and  Human  Services  to  Questions 

Asked  by  Senator  Durenberger 

Question  1.  One  statistic  has  been  bothering  me,  and  I  want  to  ask  you  about  it. 
Five  year  olds  have  very  high  immunization  rates,  don't  they?  About  95  percent. 
BUT,  for  some  reason,  2-year-olds  have  only  53  percent  compliance. 

Can  you  explain  why  5-year-olds  have  such  a  high  rate?  Because  it  is  required 
for  school  is  my  guess.  Somehow  parents  are  finding  their  way  to  vaccinations  when 
there  is  a  powerful  stimulus.  It  seems  to  me  it  is  less  a  problem  of  economics  and 
more  one  of  infrastructure,  given  these  facts. 

Answer,  mmunization  rates  for  children  entering  school  have  reached  unprece- 
dented levels  of  96  percent  or  greater,  largely  as  a  result  of  a  national  campaign 
started  in  the  late  1970s  that  encouraged  States  to  enact  and  enforce  mandatory 
vaccination  laws. 

Immunization  rates  of  2-year-olds  are  much  worse,  ranging  from  37  to  56  percent 
depending  on  the  method  of  data  analysis.  Data  from  the  1991  Health  Interview 
Survey  indicate  that  only  41  to  60  percent  of  whites  were  fully  vaccinated  (4  DTP, 
3  OPV,  1  MMR)  at  2  years  of  age,  and  only  20  to  33  percent  of  blacks  were  fully 
vaccinated. 

A  mere  42  to  61  percent  of  the  respondents  to  that  survey  above  the  poverty  level 
wore  fully  vaccinated  and  an  appallingly  low  25  to  38  percent  of  those  below  the 
poverty  level  were  fully  vaccinated. 

The  barriers  contributing  to  the  low  immunization  rates  among  2-year-olds  are 
complex  and  require  a  comprehensive  solution.  The  barriers  include  the  lack  of  edu- 
cation of  parents  and  providers  about  the  importance  of  immunization,  the  lack  of 
outreach  programs  and  the  lack  of  access  to  vaccines  and  immunization  services.  In 
addition  structural  barriers  exist  that  require  parents  who  are  seeking  immuniza- 
tion services  to  have  advance  appointments,  physician  referrals,  or  to  be  enrolled 
in  comprehensive  well-baby  climes  when  such  services  take  weeks  to  months  to  ob- 
tain. Public  health  clinics  are  underfunded,  lack  sufficient  staff,  are  unable  to  be 
open  at  hours  convenient  to  parents.  Finally,  we  know  that  the  cost  of  vaccines  and 
vaccine  administration  fees  are  having  a  substantial  negative  impact,  especially 
among  those  without  insurance  benefits  that  cover  immunization  services. 

Data  also  indicate  that  traditional  private-sector  patients  are  being  shifted  to  the 
already  overburdened  public  clinics  where  free  vaccine  is  available. 

A  1992  survey  of  City  Maternal  and  Child  Health  Programs  (CityMatCH)  reported 
88  percent  of  responding  health  departments  had  experienced  a  private-to-public 


25 

sector  shift  of  children.  From  1989  to  1991,  there  was  a  median  increase  of  24  per- 
cent in  children  served  and  31  percent  in  doses  administered. 

A  survey  from  Dallas  County,  TX,  reported  that  between  1979  and  1988,  private 
practitioners  increased  referrals  281  percent.  The  percentage  of  children  referred 
during  the  same  time  period  increased  oy  693  percent. 

The  American  Academy  of  Pediatrics  (AAP)  surveyed  1,600  private  pediatricians 
in  1992  regarding  their  immunization  practices.  Approximately  45  percent  of  those 
who  responded  reported  referring  patients  to  the  public  sector  for  immunizations; 
2.5  percent  reported  referring  all  patients  to  the  public  sector  for  immunizations. 

This  survey  also  noted  that  40  percent  of  the  pediatricians  that  refer  patients  to 
the  public  sector  indicated  they  nad  increased  referrals  during  the  previous  10 
years,  whereas  only  7.3  percent  reported  they  made  fewer  referrals.  Most  referrals 
were  made  to  health  department  clinics  and  cost  was  listed  most  frequently  as  the 
reason  for  referring  children  to  other  sources  for  routine  immunization. 

In  a  Northern  California  study  of  barriers  to  immunization  among  children  at- 
tending public  immunization  clinics,  63  percent  of  parents  whose  children  had  a 
source  of  well  child  care  indicated  they  would  have  preferred  to  have  their  child  vac- 
cinated at  the  source  of  care;  53  percent  indicated  cost  was  the  main  barrier. 

Question  2.  I'm  very  concerned  about  the  impact  of  this  universal  purchase  pro- 
gram on  innovation.  In  fact,  it  seems  to  me  that  innovation  in  the  vaccine  industry 
may  hold  the  key  to  our  problem. 

In  yesterday's  Washington  Post,  it  said  that  the  FDA  approved  a  new  vaccine  that 
mixes  the  standard  DPT  shot  with  an  influenza  vaccine.  Instead  of  needing  eight 
shots,  only  four  would  be  necessary.  Wouldn't  it  be  ironic  if  we  damage  this  fast- 
moving  research  through  nationalization  of  vaccines  through  universal  purchase? 

Answer.  We  agree  that  vaccine  research  and  development  is  critical  to  improving 
our  prevention  of  infectious  diseases  and  simplifying  our  immunization  schedule. 

As  you  may  know,  the  universal  access  compromise  proposal,  requires  that  the 
Secretary  of  the  Department  of  Health  and  Human  Services  enter  into  negotiations 
with  vaccine  manufacturers  for  a  Federal  purchase  price  for  each  vaccine  rec- 
ommended for  routine  use  in  children.  A  key  element  of  the  proposal  is  the  require- 
ment that  the  cost  of  research  and  development  for  vaccines  t>e  considered  in  deter- 
mining a  reasonable  profit. 

Neither  universal  purchase,  nor  the  universal  access  proposal,  should  be  viewed 
as  the  "nationalization"  of  the  vaccine  industry.  On  the  contrary,  the  initiative 
merely  seeks  to  obtain  the  best  price  for  a  public  good  that  is  manufactured  and 
marketed,  in  part,  by  the  private  sector. 

Question  3.  The  price  tag  for  this  bill  is  very  high.  Most  of  it  is  spent  on  the  uni- 
versal purchase  portion  of  this  effort.  Don't  you  think  we  should  give  the  infrastruc- 
ture reforms  a  chance,  working  in  the  communities,  before  we  spend  ALL  this 
money  and  threaten  the  innovation  of  the  industry? 

Answer.  The  projected  costs  of  the  compromise  proposal  to  ensure  that  all  children 
are  appropriately  immunized  by  age  2  are  high.  However,  immunization  is  one  of 
the  most  cost-effective  prevention  measures  we  have.  For  example,  past  analyses  of 
the  measles,  mumps  and  rubella  vaccine  have  estimated  that  society  saves  more 
than  $14  for  every  $1  spent  of  the  vaccine  program. 

The  Congressional  Budget  Office  estimates  that  the  vaccine  purchase  provision  of 
the  universal  access  proposal  would  cost  about  $300  million  per  year.  In  addition, 
funds  for  the  State-based  immunization  registries  would  include  costs  of  $50  million 
in  1994  for  planning  and  initial  purchase  of  equipment,  further  development  costs 
of  $152  million  in  fiscal  year  1995  and  $125  million  for  fiscal  year  1996,  and  $35 
million  maintenance  costs  in  fiscal  years  1997  through  1999.  Finally,  the  bill  would 
reauthorize  the  Centers  for  Disease  Control  and  Prevention  Immunization  Program 
at  a  total  of  about  $640  million,  about  $200  million  of  which  would  be  available  for 
strengthening  the  vaccine  delivery  infrastructure  by  funding  of  the  State  Immuniza- 
tion Action  Plans. 

Responses  of  Michael  E.  Moen  to  Questions  Asked  by  Senator  Durenberger 

Question  1.  Minnesota  has  received  a  grant  under  the  current  CDC  Immunization 
Action  Plan  that  allowed  it  to  do  a  local  population-based  assessment  of  community 
needs.  What  would  happen  to  that  community -based  assessment  and  program  devel- 
opment capacity  under  legislation  that  ties  those  funds  to  a  federally  mandated  reg- 
istry program? 

Answer.  Population-based  assessment  of  immunization  levels  in  Minnesota  has 
enabled  us  to  identify  geographic  areas  and  populations  which  are  underimmunized, 
and  to  develop  interventions  targeted  to  these  specific  areas.  Mandating  a  federally 
operated  registry  program  would  have  the  effect  of  diverting  resources  from  areas 


26 

of  greatest  need  as  evidenced  by  the  lowest  immunization  levels  to  areas  that  have 
adequate  or  satisfactory  immunization  levels.  This  would  occur  because  a  registry 
program,  as  currently  being  discussed,  would  incorporate  children  throughout  the 
State  including  those  children  from  areas  where  immunization  levels  are  satisfac- 
tory. Developing  this  registry  with  the  short  timelines  currently  proposed  would  di- 
vert our  efforts  from  "pockets"  of  unimmunized  children  to  developing  a  statewide 
registry  to  keep  track  of  all  children,  many  of  whom  are  already  adequately  immu- 
nized. 

Question  2.  In  your  testimony,  you  State  that  in  order  to  attack  the  problem  of 
low  immunization  rates,  we  must  focus  our  limited  resources  to  where  the  problem 
is,  and  not  to  where  the  problem  is  not.  From  your  experience  as  the  Director  of 
the  Division  of  Disease  Prevention  and  Control  at  the  Minnesota  Department  of 
Health,  wouldn't  universal  purchase  of  vaccines  and  requiring  the  establishment  of 
registries  direct  limited  resources  to  places  that  dont  have  low  immunization  rates? 

Answer.  Universal  purchase  of  vaccine  and  the  establishment  of  registries  would 
have  the  effect  of  directing  limited  resources  to  all  areas  of  the  State,  including 
those  areas  that  do  not  currently  have  low  immunization  rates. 

Question  3.  Are  there  more  cost  effective  ways  to  conduct  effective  surveillance 
than  registries? 

Answer.  Effective  surveillance  can  be  conducted  in  more  cost-effective  ways  than 
operation  of  population-based  registries.  Population-based  registries  and  provider- 
based  registries  have  an  important  service  role  in  assisting  parents  and  providers 
to  identify  children  who  are  falling  behind  in  their  immunizations  and  notifying 
those  parents  in  order  that  they  may  acquire  the  needed  immunizations.  Determin- 
ing immunization  levels  on  a  population  basis,  i.e.,  surveillance  of  immunization 
rates,  can  be  conducted  in  other  more  inexpensive,  cost-effective  ways.  For  example, 
retrospective  surveys  have  been  utilized  in  Minnesota  to  ascertain  immunization 
rates  Tor  all  children  born  in  the  state  in  1987.  This  methodology  utilizes  records 
kept  on  all  kindergarten  children  which  contain  the  child's  date  of  birth  and  the 
dates  the  child  was  immunized.  Utilizing  these  records,  public  health  officials  can 
"reconstruct"  the  immunization  history  of  a  child  who  is  currently  5  years  old  and 
in  kindergarten.  A  sample  of  these  records  have  been  validated  with  the  child's  med- 
ical record.  This  survey  methodology  provides  information  to  the  zip  code  level  about 
immunization  rates  on  a  population  basis  in  Minnesota.  This  allows  public  health 
officials  to  identify  "pockets"  of  unimmunized  children  and  target  resources  to  those 
"pockets."  While  retrospective  surveys  provide  information  which  is  several  years 
old,  other  survey  methodologies  using  birth  certificates  and  follow-up  can  provide 
more  recent  information.  Together,  these  survey  methods  provide  important,  rel- 
evant data  about  immunization  rates  on  a  population  basis  for  a  fraction  of  the  cost 
and  time  that  would  be  required  to  operate  a  statewide  registry  for  this  purpose. 

Responses  of  F  J5.  Thompson  to  Questions  Asked  by  Senator  Durenberger 

Question  1.  What  are  your  concerns  about  the  requirements  for  States  under  the 
Federal  Tracking  Model  and  system  specifications  of  registry  design? 

Answer.  The  most  important  concern  is  that  any  requirements  placed  upon  the 
system  will  be  for  data  elements  to  be  included  and  for  output  that  the  system  can 
provide,  rather  than  for  specific  software  compatibility  or  particular  data  processing 
requirements.  It  is  appropriate  to  mandate  what  basic  information  will  be  contained 
in  the  registries  in  each  state  and  also  what  basic  information  can  be  provided  to 
other  states  from  these  registries.  It  would  be  extraordinarily  expensive  and  burden- 
some to  states  to  require  that  it  be  done  through  a  particular  program  or  using  a 
particular  set  of  software.  Many  States,  Mississippi  included,  are  well  on  the  way 
to  having  developed  a  State  immunization  registry  already  and  may  have  something 
in  place  and  working  well  that  can  deliver  the  necessary  output  to  any  national 
tracking  system  but  may  not  do  it  through  the  same  software  that  the  national  sys- 
tem uses.  Provided  we  can  print  out  and  deliver  hard  copy  of  the  necessary  mate- 
rial, the  real  need  for  tracking  systems  will  have  been  met. 

Another  concern  is  that  the  data  elements  to  be  included  under  "the  Federal 
tracking  model"  be  only  those  required  to  track  a  child's  immunization  status.  Addi- 
tional information,  such  as  history  of  adverse  reactions,  any  vaccine  contraindica- 
tions present  for  this  child,  and  any  religious  or  legal  exemptions  that  may  pertain 
for  an  individual  child  are  not  appropriate  for  inclusion  in  a  national  system.  The 
child's  medical  record  should  contain  this  information. 

Question  2.  You  have  stated  in  your  testimony  that  the  universal  purchase  of  vac- 
cine will  not  contribute  significantly  to  raising  childhood  levels.  What  would  be  the 
best  strategy  for  overall  well-baby  care  in  your  State? 


27 

Answer.  I  cannot  answer  the  question  as  to  the  best  strategy  for  overall  well-baby 
care  because  that  is  not  at  issue.  The  issue  is  raising  childhood  immunization  levels, 
and  that  is  what  I  addressed.  In  terms  of  raising  childhood  immunization  levels,  the 
best  strategy  would  be  to  take  the  resources  that  would  be  used  to  purchase  vaccine 
for  distribution  to  private  providers  and  use  those  funds  to  hire  additional  staff  to 
give  immunizations,  to  do  outreach  work  and  to  operate  and  maintain  tracking  sys- 
tems. The  funds  could  also  be  used  to  purchase  the  necessary  hardware  and  soft- 
ware to  develop  tracking  systems,  and  to  provide  for  outreach  and  education  efforts 
to  promote  immunization  awareness  among  parents.  Above  all,  the  additional  staff 
necessary  to  immunize  the  children,  the  people  required  to  give  the  vaccines  are  the 
heart  of  any  effective  strategy  to  raise  and  maintain  immunization  levels  in  our  pre- 
schoolers. 

Responses  of  Marian  Wrightt  Edelman  to  Questions  Asked  by  Senator 

durenberger 

It  is  true  that  the  immunization  rate  for  5-year-olds  is  greater  than  95  percent 
and  that  this  rate  is  the  result  of  school  entry  requirements.  However,  immunizing 
a  child  to  enter  school  is  both  easier  and  cheaper  than  fully  immunizing  a  child  from 
birth.  It  takes  18  doses  of  vaccines  given  at  seven  doctor  visits  to  fully  immunize 
a  child  through  the  preschool  years.  The  cost  is  more  than  $230  plus  administration 
fees  and  office  visit  charges.  D*  a  child  has  never  been  immunized,  most  school  sys- 
tems require  Just  three  doses  of  vaccines  which  can  be  administered  at  one  visit 
at  a  cost  of  less  than  $50.  A  child  who  receives  three  shots  is  not  protected  from 
diseases.  Therefore,  economics  is  a  significant  factor  in  the  problem  of  low  preschool 
immunization  rates. 

We  wholeheartedly  support  the  development  of  vaccines  which  are  safer,  neces- 
sitate fewer  shots  and  prevent  additional  diseases.  Such  advances  would  increase 
our  ability  to  protect  our  children  from  illness  and  death.  This  legislation  specifi- 
cally requires  that  the  negotiated  price  for  vaccines  include  production  costs,  re- 
search and  development  expenses  and  sufficient  profits  to  encourage  further  vaccine 
research  and  development.  The  legislation  assumes  that  the  negotiated  price  will  be 
the  average  of  the  current  public  and  private  market  prices.  Therefore,  the  manufac- 
turers should  see  no  loss  of  revenue  and  there  should  be  no  financial  disincentive 
for  research  and  development.  In  fact,  a  universal  system  might  contribute  to  the 
development  of  new  vaccines  because  the  manufacturers  will  see  increased  demand 
(and  increased  profits)  as  financial  barriers  for  families  and  providers  are  elimi- 
nated. However,  the  vaccine  manufacturers  will  not  be  able  to  unilaterally  increase 
S rices  at  rates  far  higher  than  inflation.  In  1977  polio  vaccine  (OPV)  cost  $1.00  per 
ose.  If  the  price  had  increased  at  the  general  rate  of  inflation  for  medical  care,  it 
would  cost  $3.64  per  dose  todav.  Instead,  the  price  increased  at  a  rate  of  59  percent 

Ser  year  to  reach  $10.43.  The  $6.79  excess  (above  inflation  with  the  excise  tax)  costs 
.merican  families  an  extra  $80  million  per  year  for  this  one  vaccine. 

Infrastructure  reforms  are  a  vital  part  of  the  solution  to  the  immunization  crisis, 
but  an  immunization  strategy  that  only  addresses  the  public  sector  will  exacerbate 
the  current  problems.  A  central  problem  is  the  referral  of  many  children  to  public 
clinics  by  their  private  doctors  because  of  the  high  cost  of  vaccines.  As  a  result,  chil- 
dren miss  opportunities  to  be  vaccinated  and  increase  the  demand  at  already  over- 
burdened clinics.  Focusing  on  the  public  sector  alone  could  result  in  a  cycle  where 
the  cost  of  vaccines  for  the  private  sector  is  increased,  even  more  children  are  forced 
into  public  clinics  and  more  barriers  to  immunizations  and  well-baby  care  are  cre- 
ated. 

The  Government  tried  in  the  mid  and  late  1980's  to  invest  more  in  immunizations 
without  negotiating  a  universal  price  but  manufacturers'  large  vaccine  price  in- 
creases offset  federal  funding  increases  and  families  still  found  themselves  priced 
out  of  the  market.  If  families  can't  afford  vaccine,  they  can't  afford  vaccine,  no  mat- 
ter how  much  outreach  there  is.  The  participation  of  private  physicians  must  be  en- 
listed as  part  of  a  comprehensive  solution  wnich  keeps  immunization  services  deliv- 
ered in  private  offices,  where  most  children  get  their  regular  health  care. 

We  oppose  any  alternative  to  the  President's  immunization  act  which  calls  for  an 
expansion  of  Medicaid  eligibility  to  cover  immunizations.  This  would  be  bad  for  chil- 
dren, parents,  States  and  the  Federal  Government.  The  Medicaid  application  would 
be  one  more  barrier  for  families  tryingto  get  their  children  immunized  in  a  system 
which  already  has  too  many  barriers.  The  majority  of  children  who  might  gain  eligi- 
bility would  be  patients  of  physicians  who  do  not  accept  Medicaid.  In  these  cases 
the  doctor  would  still  send  the  family  to  a  public  health  clinic  for  immunization. 
Parents  would  have  to  take  additional  time  off  work  either  to  go  to  the  public  clinic 
or  to  visit  a  Medicaid  office  and  then  return  to  their  doctor  for  the  shots.  The  num- 


28 

ber  of  missed  opportunities  for  immunization  would  escalate.  The  frequent  eligibility 
redeterminations  required  by  Medicaid  would  necessitate  the  filing  of  a  Medicaid 
application  each  time  a  child  needed  a  vaccination.  This  would  be  yet  another  obsta- 
cle to  getting  children  immunized  on  time  and  a  bureaucratic  and  financial  burden 
for  States.  Such  a  system  would  burden  middle  class  families  and  State  Medicaid 
programs,  raise  Federal  and  State  costs,  and  benefit  only  the  pharmaceutical  com- 
panies. 

An  effective  plan  for  immunizing  all  children  on  schedule  has  four  components: 
education  and  outreach;  improved  public  health  infrastructure;  a  registry  and  track- 
ing system;  and  universal  assurance  of  affordable  vaccines.  Each  01  the  components 
is  crucial.  Education  and  outreach  will  not  succeed  if  parents  are  frustrated  by  sys- 
temic barriers  to  providing  for  their  children's  needs.  Public  health  service  delivery 
changes  will  not  help  those  children  who  have  a  private  physician.  Our  failure  to 
appropriately  immunize  all  of  our  children  has  multiple  causes  and  the  response 
must  include  multiple  remedies.  This  bill  encompasses  the  essential  components  of 
a  lasting  solution  and  has  our  full  support. 

The  Chairman.  Ill  place  in  the  record  the  statement  of  Senator 
Thurmond,  who  very  much  wanted  to  be  here. 

[The  prepared  statement  of  Senator  Thurmond  follows:] 

Prepared  Statement  of  Senator  Thurmond 

Mr.  Chairman,  it  is  a  pleasure  to  be  here  this  morning  to  receive 
testimony  on  the  "Comprehensive  Child  Immunization  Act  of 
1993".  I  want  to  join  the  Chairman  and  mv  colleagues  in  extending 
a  warm  welcome  to  our  witnesses.  I  would  also  like  to  welcome  my 
colleagues  on  the  House  Subcommittee  on  Health  and  the  Environ- 
ment. 

Mr.  Chairman,  the  focus  of  the  "Comprehensive  Child  Immuniza- 
tion Act  of  1993"  is  universal  federal  purchase  and  distribution  of 
vaccines.  The  premise  underlying  this  plan  is  that  low  immuniza- 
tion rates  result  from  the  high  cost  and  unavailability  of  vaccines. 
President  Clinton  has  proposed  to  authorize  $1  billion  a  year  to 
purchase  all  vaccines. 

While  I  agree  that  immunizations  are  among  the  most  cost-effec- 
tive means  of  preventing  disease,  I  am  concerned  that  this  plan 
fails  to  recognize  that  there  are  a  number  of  factors  contributing 
to  the  low  incidence  of  vaccination.  Some  of  these  factors  include: 
inadequate  public  education,  inadequate  outreach  to  poor  and  mi- 
nority populations,  and  lack  of  accessible  systems  for  delivery. 

This  plan  would  also  establish  a  national  system  to  track  the  im- 
munization status  of  children.  It  would  condition  the  receipt  of  free 
vaccines  upon  the  states  implementing  a  registry  and  tracking  sys- 
tem which  would  link  up  with  a  national  registry  system.  In  other 
words,  no  registry  and  tracking  system — no  free  vaccine. 

Mr.  Chairman,  I  have  a  number  of  concerns  surrounding  this 
plan.  One,  as  I  mentioned  already,  whether  universal  purchase  is 
the  best  solution  to  the  problem.  Two,  whether  registry  systems 
work.  Three,  whether  there  is  potential  for  waste  from  spoilage  and 
overpurchase.  Four,  what  the  impact  will  be  on  the  manufacturers 
of  the  vaccine. 

Mr.  Chairman,  I  wish  to  join  you  in  thanking  the  witnesses  for 
being  here  and  I  look  forward  to  reviewing  their  testimony. 

The  Chairman.  Senator  Well  stone. 

Senator  Wellstone.  Thank  you  very  much,  Mr.  Chairman. 

I  just  have  a  one-hour  statement  that  I  was  hoping  to  be  able 
to  make  right  now. 


29 

The  Chairman.  What  about  tonight  at  midnight?  [Laughter.] 
Senator  Wellstone.  I  would  just  ask  the  chair  to  include  my 
statement  in  the  record. 
The  Chairman.  Fine. 
[The  prepared  statement  of  Senator  Wellstone  follows:] 

Prepared  Statement  of  Senator  Wellstone 

I  am  very  happy  to  speak  in  support  of  the  revised  version  of  S. 
732,  the  Comprehensive  Child  Immunization  Act  of  1993.  This  bill 
has  taken  the  concepts  laid  out  in  the  original  version  and  im- 
proved upon  them  to  produce  a  piece  of  legislation  that  will  really 
nelp  get  preventive  vaccinations  to  our  children.  I  feel  fortunate 
that  I  have  had  an  opportunity  to  work  and  plan  for  this  program 
which  promises  to  help  strive  toward  the  immunization  goals  set 
for  the  year  2000. 

Four  key  points  have  been  added  to  this  bill  which  will  improve 
its  effectiveness  as  a  national  immunization  program,  while  allow- 
ing significant  flexibility  for  State  implementation.  First,  the  bill 
provides  grants  to  States  to  improve  the  public  health  infrastruc- 
ture. This  includes  public  education,  development  of  alternative 
methods  of  delivering  vaccines,  and  increasing  clinic  hours. 

Second,  the  bill  provides  for  the"  refusal  of  vaccines  based  upon 
philosophical  or  religious  objections.  The  Federal  regulations  may 
in  no  way  override  those  designed  by  a  State. 

Third,  the  bill  provides  for  the  continued  success  of  the  Vaccine 
Injury  Compensation  Program.  This  program,  aside  from  lack  of 
funds,  has  been  successful  in  resolving  claims  resulting  from  ad- 
verse reactions  to  included  vaccines.  I  am  happy  to  see  this  pro- 
gram continued  and  improved  in  the  current  bill. 

Fourth,  the  revised  bill  fosters  the  States'  role  in  the  surveillance 
and  registries  of  children.  The  States  will  be  receive  grants  to 
produce  accurate  surveillance  data  regarding  immunization  data, 
assist  in  identification  of  localities  with  inadequate  immunization 
rates,  monitor  safety  and  effectiveness  of  vaccines,  and  improve  the 
management  of  immunization  programs  at  the  State  and  local 
level. 

The  national  registry,  on  the  other  hand,  will  provide  technical 
assistance  to  the  States  as  well  as  collect  aggregate  epidemiologic 
data  from  them.  This  relationship  between  State  and  National  reg- 
istry, should  on  the  whole,  provide  for  an  efficient  and  useful  sys- 
tem. 

Minnesota  has  developed  a  system  for  surveillance  of  immuniza- 
tions, and  for  targeting  communities  that  have  low  immunization 
rates  for  outreach  activities.  This  model,  discussed  in  the  hearings 
on  April  20th  by  Dr.  Michael  Moen,  provides  an  excellent  model 
worth  examining.  Allowing  States  the  flexibility  to  design  immuni- 
zation surveillance  programs  that  best  suit  their  population  while 
requiring  aggregate  data  on  a  national  level  is  a  key  element  in  the 
solution  to  the  problem  of  improving  our  low  immunization  rate  for 
children  under  2  years  old. 

Once  again,  I  express  my  support  for  this  necessary  and  timely 
piece  of  legislation. 

The  Chairman.  I  thank  the  House  Members  for  their  courtesy. 

Mr.  Waxman.  Mr.  Wyden. 


30 

Opening  Statement  of  Representative  Wyden 

Mr.  Wyden.  Thank  you,  Mr.  Chairman.  I  want  to  commend  you 
and  Chairman  Kennedy,  and  just  make  three  very  quick  points. 

First,  this  is  really  the  President's  and  Secretary  Shalala's  first 
major  initiative  in  the  health  and  human  services  area.  I  think  it 
is  illustrative  that  it  is  a  commitment  to  kids  and  indicative  of  how 
strongly  they  feel  about  it,  and  I  want  to  commend  both  of  them 
for  it. 

It  seems  to  me  that  the  big  challenge  that  we  face  is  coming  up 
with  fresh,  creative  ways  to  reach  the  millions  of  kids  who  are 
going  without  immunizations.  I  want  to  associate  myself  with  the 
comments  of  Senator  Mikulski,  because  I  am  convinced  that  what 
works  in  my  home  town  of  Portland  may  not  necessarily  work  in 
the  Bronx  or  in  southern  Illinois;  we  are  going  to  have  to  have  a 
grassroots  mobilization,  in  effect,  as  our  colleague  said,  and  I  think 
she  is  right  on  target. 

The  last  point  that  I  would  make  is  that — and  maybe  some  of  the 
other  members  experienced  this  yesterday — but  as  we  see  so  often, 
when  important  issues  heat  up,  there  are  groups  that  go  out  and 
try  to  distort  the  debate,  try  to  frighten  people  and  scare  people 
into  thinking  that  legislation  is  something  that  it  isn't. 

For  example,  our  telephones  rang  off  the  hook  yesterday  with 
people  calling,  saying  that  they  were  concerned  that  the  bill  man- 
dates immunization  for  all  children  without  exception.  I  think  the 
concern  here  was  on  the  part  of  some  groups  that  somehow  this 
legislation  would  strike  the  religious  and  medical  exemptions  that 
are  by  and  large  protected  in  State  law. 

The  fact  of  the  matter  is  this  bill  doesn't  mandate  immunization 
for  all  children  without  exception.  This  legislation  is  about  pay- 
ment; it  essentially  protects  the  religious  and  medical  exemptions 
that  are  for  the  most  part  provided  by  the  States.  And  I  think  what 
we  heard  this  morning  is  that  members  on  both  sides  of  the  aisle 
want  to  fashion  strong  legislation,  and  to  do  that,  we've  got  to 
make  sure  that  people  get  the  facts  about  this  legislation.  And  I 
look  forward  to  working  with  my  colleagues  to  make  sure  that  gets 
done,  and  yield  back. 

Mr.  Waxman.  Thank  you,  Mr.  Wyden. 

Mr.  Upton. 

Opening  Statement  of  Representative  Upton 

Mr.  Upton.  Thank  you,  Mr.  Chairman. 

First  of  all,  the  issue  is  really  about  the  future  of  America  and 
certainly,  the  health  of  our  kids.  My  State  of  Michigan  is  a  good 
example  of  a  State  that  has  made  an  aggressive  commitment  to  the 
immunization  of  our  kids. 

As  one  of  only  two  States  in  the  Nation  that  has  a  State-owned 
lab  that  produces  vaccines,  Michigan  produces  these  vaccines  for 
the  benefit  of  its  citizens  and  distributes  them  throughout  the 
State  free-of-charge.  However,  even  though  immunization  is  avail- 
able for  free,  we  still  have  unacceptably  low  rates  of  immunization 
for  children  between  birth  and  2  years  old.  This  indicates  to  me 
that  we  must  allocate  funds  not  only  for  providing  the  vaccines,  but 
for  infrastructure  support  in  local  immunization  programs,  includ- 


31 

ing  monitoring  and  tracking,  expanded  clinic  hours,  more  staff  to 
eliminate  long  lines,  and  educational  programs  to  educate  parents 
on  the  availability  and  importance  of  childhood  immunization. 

Some  States — not  Michigan — have  taken  steps  requiring  that 
those  receiving  State  assistance  must  verify  their  kids'  immuniza- 
tion before  receiving  such  assistance.  I  commend  those  States,  and 
I  believe  we  should  look  to  these  States  to  see  if,  while  searching 
for  a  national  solution,  we  might  learn  from  them. 

I  yield  back  the  balance  of  my  time. 

Mr.  Waxman.  Mr.  Bryant. 

Mr.  Bryant.  Mr.  Chairman,  not  wishing  to  be  subjected  to  inter- 
minable opening  statements  by  members  of  the  House  and  the  Sen- 
ate that  precede  every  committee  hearing,  I  am  not  going  to  subject 
my  colleagues  to  one,  either.  I  look  forward  to  hearing  from  the 
witnesses. 

Mr.  Waxman.  Thank  you,  Mr.  Bryant. 

Dr.  Rowland. 

Opening  Statement  of  Representative  Rowland 

Mr.  Rowland.  Thank  you,  Mr.  Chairman. 

I  do  have  a  statement  that  I  wish  to  submit  to  the  record;  I  do 
want  to  make  a  couple  of  points,  though. 

I  am  a  cosponsor  of  this  legislation.  I  do  have  mixed  feelings 
about  it,  but  I  think  the  positives  outweigh  the  negatives.  I  am 
very  concerned  about  the  number  of  reported  cases  that  are  in- 
creasing in  childhood  diseases.  I  think  one  of  the  very  important 
things  that  we  need  to  do  in  this  legislation  is  to  educate  the  public 
in  general  about  the  necessity  of  these  childhood  immunizations. 

I  do  not  believe  that  the  public  in  general  realizes  how  important 
it  is  that  that  be  done. 

With  that,  I  yield  back  the  balance  of  my  time. 

Mr.  Waxman.  Thank  you,  Dr.  Rowland. 

[The  prepared  statement  of  Mr.  Rowland  follows:] 

Prepared  Statement  of  Representative  Rowland 

Mr.  Chairman,  congratulations  are  in  order  for  everyone  respon- 
sible for  this  hearing.  I  understand  it's  been  more  than  a  decade 
since  House  and  Senate  committees  have  held  a  joint  hearing  on 
a  health  issue  of  this  magnitude.  This  sets  a  good  example  of  co- 
operation for  other  to  follow. 

As  a  physician  who  practiced  family  medicine  in  middle  Georgia 
for  28  years,  I've  been  concerned  for  a  long  time  about  the  low 
number  of  preschool  children  receiving  immunizations  against  in- 
fectious diseases  like  measles,  whooping  cough,  diphtheria,  and 
even  polio. 

These  diseases  are  costly.  Every  $1  spent  on  immunizations 
saves  an  estimated  $10  in  health  care  costs.  They  can  be  fatal.  Al- 
though it  may  be  rare,  a  disease  like  measles  takes  a  few  lives 
every  year.  The  real  tragedy  is  that  these  diseases  are  often  pre- 
ventable. Out  of  13,000  preschoolers  who  contracted  measles  in 
1990,  as  many  as  10,000  would  have  escaped  the  disease  with  im- 
munizations. 


32 

Unfortunately,  three  out  of  every  10  2-year-olds  fail  to  get  proper 
immunizations.  Cuba  and  Syria  and  Mongolia  have  better  immuni- 
zation records  than  this.  The  United  States  ranking  in  preschool 
immunizations  is  70th  in  the  world.  Even  though  the  polio  vaccine 
was  developed  in  our  country,  the  United  States  ranks  behind  16 
other  countries  in  the  percentage  of  young  children  immunized 
against  polio. 

This  is  a  comprehensive,  cost-effective  program.  With  parents 
and  health  care  providers  and  Government  at  all  levels  working  to- 
gether, we  can  provide  greater  protection  for  children  and  make  a 
real  contribution  toward  getting  health  care  costs  down. 

Thank  you. 

Mr.  Waxman.  Mr.  Klug. 

Opening  Statement  of  Representative  Klug 

Mr.  Klug.  Thank  you,  Mr.  Chairman.  I  too  want  to  make  a  cou- 
ple of  quick  points. 

Like  many  Americans,  I  am  troubled  by  the  problems  with  im- 
munization rates  in  the  United  States,  and  like  a  number  of  mem- 
bers of  Congress,  I  also  think  we  need  to  spend  more  money  on 
children's  programs. 

But  I  also  think  we  have  to  spend  that  money  more  intelligently, 
and  in  my  opinion,  nationalizing  this  country's  vaccine  business  is 
not  part  of  the  intelligent  solution.  There  are  pockets  in  this  coun- 
try, primarily  in  large  cities,  but  not  exclusively,  where  it  is  clear 
that  vaccination  rates  lag.  In  Wisconsin,  the  State  immunization 
rate  for  2-year-olds  is  53  percent;  outside  the  city  of  Milwaukee,  the 
rate  is  61  percent;  in  the  city  itself,  the  rate  is  below  40  percent. 

We  have  pockets  of  hunger  in  this  country,  but  we  don't  national- 
ize the  bread  industry,  and  we  have  a  shortage  of  apartments  in 
some  cities,  but  we  don't  nationalize  the  housing  industry.  If  na- 
tionalization were  the  key  to  success,  it  would  be  the  Russian  Par- 
liament working  on  a  foreign  aid  package  to  the  United  States. 

There  are  three  things  I  think  we  need  to  do.  We  obviously  have 
to  spend  more  money  on  community  education  and  outreach  pro- 
grams. The  Federal  Government  should  also  perhaps  make  avail- 
able to  States  on  a  matching  grant  basis  funds  to  help  track  kids. 
One  round  of  shots  is  clearly  not  enough,  and  recently  in  Ohio,  doc- 
tors are  now  able  to  use  a  statewide  computer  system  to  keep  track 
of  their  young  patients  and,  rather  than  forcing  rural  doctors  to 
buy  their  own  computers,  doctors  can  access  their  young  patients 
through  their  touch  tone  telephones. 

It  also  seems  clear  to  me  that  we  need  to  encourage  parental  re- 
sponsibility, and  I  would  recommend  that  Secretary  Shalala  care- 
fully evaluate  a  series  of  programs  now  implemented  by  a  number 
of  States  to  force  parental  responsibility.  For  example,  as  of  yester- 
day in  South  Carolina,  a  new  State  law  says  no  shots,  no  daycare. 
All  private  and  public  daycare  providers  must  demand  verification 
of  immunizations  before  a  child  can  be  enrolled,  and  a  number  of 
States,  including  my  home  State  of  Wisconsin,  obviously,  have  the 
same  kind  of  laws  on  the  books  now  for  kindergarten. 

In  Georgia,  in  a  program  instituted  in  January,  parents  who  re- 
ceive AFDC  payments  must  provide  proof  of  vaccinations  or  else 
AFDC  payments  are  reduced.  And  Maryland  has  both  a  carrot  and 


33 

a  stick  approach,  which  reduces  AFDC  payments  by  $25  if  a  child 
is  not  immunized,  but  if  parents  get  annual  checkups  including  im- 
munization, recipients  get  an  annual  bonus  of  $20  for  each  child 
and  each  adult. 

We  have  the  ability  to  leverage  AFDC,  WIC,  or  food  stamp  pay- 
ments, and  food  stamps  may  be  the  best  vehicle,  because  it  is  the 
largest  universe  of  any  Federal  program. 

It  is  clear  that  those  of  us  in  the  Federal  Government  have  a  re- 
sponsibility to  make  sure  kids  are  vaccinated  and  to  make  vaccina- 
tions available  to  parents  who  cannot  afford  it,  but  we  also  have 
a  responsibility  to  say  to  those  parents:  You  have  a  responsibility 
to  make  sure  your  own  kids  are  vaccinated,  or  else  suffer  penalties 
if  you  do  not. 

Thank  you,  Mr.  Chairman. 

Mr.  Waxman.  Mr.  Synar. 

Mr.  Synar.  Pass. 

Mr.  Waxman.  Mr.  Towns. 

Opening  Statement  of  Representative  Towns 

Mr.  Towns.  Thank  you,  Mr.  Chairman.  Mr.  Chairman,  I'd  like  to 
ask  permission  to  include  my  entire  statement  in  the  record. 

Mr.  Waxman.  Without  objection,  so  ordered. 

Mr.  Towns.  And  I  will  just  make  a  couple  comments.  Inasmuch 
as  I  support  the  legislation,  I  have  some  real  problems  with  it. 
First  of  all,  the  fact  that  only  10  percent  is  being  used  for  outreach. 
I  think  that  we  should  make  that  flexible.  I  come  from  a  State 
where  many  doctors  will  not  take  Medicaid,  and  if  a  doctor  does  not 
take  Medicaid,  then  you  need  to  make  certain  that  you  have  a 
strong  outreach  program  to  get  them  into  a  facility  to  be  able  to 
get  the  immunization.  So  I  think  that  outreach  in  those  areas  is 
very,  very  important. 

The  other  thing  that  I  must  submit  that  I  am  very  concerned 
about  is  the  fact  that  private  physicians  will  be  able  to  charge  at 
the  same  time  with  the  free  medication.  I  am  concerned  about  the 
profit  made  in  that  regard  as  well. 

So  I  think  that  the  spirit  of  the  legislation  is  great,  but  I  do  see 
a  lot  of  pitfalls  as  we  move  forward.  So  inasmuch  as  I  want  to  sup- 
port it,  I  do  have  these  concerns. 

Mr.  Waxman.  Thank  you,  Mr.  Towns. 

[The  prepared  statement  of  Mr.  Towns  follows:] 

Prepared  Statement  of  Representative  Towns 

Mr.  Chairman,  I  want  to  thank  you  for  this  opportunity  to  make 
an  opening  statement. 

I  applaud  the  spirit  and  feeling  of  the  proposal  before  us  "today. 
To  assure  that"  every  child  in  America  is  protected  against  often 
deadly  and  completely  preventable  childhood  disease  is  noble  and 
necessary. 

However,  I  am  not  sure  that  the  approach  of  universal  purchase 
of  vaccine  will  actually  accomplish  the  goal  of  universal  immuniza- 
tion of  children.  There  is  a  great  need  in  this  country  for  wide- 
spread immunization.  The  General  Accounting  Office  (GAO)  re- 
ports that  childhood  immunization  is  one  of  the  most  effective 


34 

means  of  health  promotion  and  disease  prevention.  Yet,  fewer  than 
63  percent  of  2-year-olds  in  the  United  States  have  received  all  of 
the  immunizations  recommended.  In  some  inner  city  areas,  the 
vaccination  rate  is  as  low  as  10  percent.  When  we  have  numbers 
as  stark  as  this,  we  must  ask  why? 

Providing  free  vaccine  implies  that  the  problem  is  supply.  But 
that  is  not  completely  the  case.  In  public  health  clinics,  vaccines 
are  offered  free  of  charge  to  every  child  who  walks  through  the 
door.  We  have  not  heard  report  oi  clinics  running  out  of  vaccine. 
So  if  the  problem  is  not  supply,  it  may  be  demand. 

In  a  recent  Washington  Post  story,  it  was  reported  that  an  im- 
munization project  run  by  former  President  Jimmy  Carter  not  only 
had  to  canvass  from  door-to-door  but  also  had  to  offer  an  incen- 
tive— families  who  come  in  for  free  shots  will  get  a  free  ticket  to 
see  Michael  Jackson.  If  you  have  to  hand  out  free  tickets  to  give 
away  free  shots,  then  the  problem  is  not  the  availability  of  shots. 
The  problem  is  demand  for  shots  and  the  lack  of  understanding 
that  the  shots  are  necessary. 

This  kind  of  demand  can  only  be  increased  by  comprehensive 
outreach  and  education  programs.  If  you  have  a  young  mother  who 
does  not  understand  that  from  birth  to  age  6,  a  child  requires  a  se- 
ries of  18  shots  and  that  those  shots  must  be  properly  spaced  to 
be  effective — you  will  have  a  young  parent  who  does  not  see  the  ne- 
cessity and  will  not  be  willing  to  traverse  a  sometimes  hostile,  con- 
fusing and  extremely  bureaucratic  public  health  care  system.  This 
is  a  system  that  often  requires  parents  to  make  appointments,  wait 
for  hours  despite  an  appointment,  and  may  refuse  to  vaccinate  a 
child  visiting  the  doctor  for  different  reasons.  And  let  us  bear  in 
mind  that  children  and  their  parents  are  required  to  go  through 
this  bureaucratic  ritual  18  times  in  5  or  6  years.  It  is  my  under- 
standing that  Federal  and  State  Governments  could  streamline  the 
existing  system  to  improve  the  delivery  of  services. 

For  the  poor  and  working  class,  improving  public  health  clinics 
would  go  a  long  way  toward  increasing  demand  for  any  and  every 
kind  of  service  offered  there.  But  the  proposal  we  have  before  us 
today  does  not  do  that. 

Out  of  all  the  money  we  are  looking  at  to  supply  vaccine  ($1.5 
billion) — we  are  only  asking  for  10  percent  of  that  for  education 
and  outreach.  In  a  GAO  report  on  childhood  immunizations,  the 
Centers  for  Disease  Control  recommended  that  the  three  most  im- 
portant factors  to  improve  immunization  levels  would  be  (1)  educat- 
ing parents  on  the  importance  of  immunizations  for  children;  (2) 
tracking  of  each  child's  immunization  status;  and  (3)  follow-up  with 
children  needing  immunization.  So  I  am  not  alone  in  my  belief  that 
supply  of  vaccine  is  the  only  part  of  this  problem.  Yet  the  bill  de- 
votes only  10  percent  of  the  resources  to  getting  the  word  out  to 
parents  that  vaccines  are  necessary  and  that  free  vaccines  are 
available. 

But  turning  to  another  aspect  of  free  supply,  I  am  also  deeply 
concerned  about  whether  this  bill  will  provide  a  major  financial 
windfall  for  private  physicians.  You  see,  nowhere  does  the  bill  re- 
quire that  doctors  who  receive  free  vaccine  either  administer  it 
without  charge  or  accept  patients  who  may  not  be  able  to  pay.  Lets 
be  honest  about  this.  In  the  district  I  represent  and  throughout 


35 

New  York,  many  physicians  will  not  take  medicaid  or  medicaid  eli- 
gible patients.  This  means  that  the  poor  must  resort  to  the  public 
health  clinic  system.  But  with  this  system,  the  wealthy  will  be  able 
to  take  their  children  to  their  private  pediatrician  and  receive  free 
government- supplied  vaccine.  The  physician  will  be  able  to  receive 
his  standard  fee  even  though  the  government  has  supplemented 
some  of  his  overhead  costs.  I  have  a  serious  problem  with  this.  If 
we  are  going  to  provide  this  kind  of  benefit,  then  we  must  require 
that  the  doctor  provide  services  to  everyone.  I  deeply  concerned 
about  the  linkage  of  free  vaccine  and  services  for  private  physi- 
cians. . 

In  conclusion,  Mr.  Chairman,  while  I  support  the  spirit  and  driv- 
ing idea  behind  this  bill,  I  am  troubled  by  several  of  its  aspects. 
I  do  not  think  that  the  increase  in  supply  alone  will  create  more 
demand.  I  do  not  think  that  the  provision  of  free  vaccine  will  help 
to  streamline  an  overburdened  system  of  public  health  clinics — 
often  the  only  access  to  health  care  available  to  the  poor  and  work- 
ing class.  Thank  you. 

Mr.  Waxman.  Mr.  Franks. 

Opening  Statement  of  Representative  Franks 

Mr.  Franks.  Thank  you,  Mr.  Chairman. 

Mr.  Chairman,  the  issue  we  address  today  is  vital  to  the  health 
of  our  country.  We  are  fortunate  that  modern  technology  and  re- 
search has  allowed  us  to  develop  the  vaccines  that  will  prevent 
deadly  diseases  in  our  children,  diseases  that  at  one  time  we  were 
powerless  against. 

The  issue  at  hand  is  how  to  best  deliver  these  vaccines  to  the 
children  and  how  to  properly  educate  parents  about  the  importance 
and  availability  of  the  vaccines. 

It  is  somewhat  unbelievable  that  our  immunization  rates  are  so 
low  among  preschool  children.  My  daughter  Jessica  will  turn  2  in 
June,  and  I  am  happy  and  relieved  to  be  able  to  protect  her  against 
measles,  mumps,  polio  and  other  diseases,  and  I  wish  the  same  for 
allparents. 

Tne  question  we  must  examine  today  is  what  are  the  barriers  to 
immunization,  and  how  do  we  break  tnem  down;  and  then  second, 
how  do  we  pay  for  it. 

Thank  you  very  much,  and  I  yield  back  the  balance  of  my  time. 

Mr.  Waxman.  Thank  you,  Mr.  Franks. 

Senator  Danforth  is  our  first  witness,  and  I  understand  hell  be 
walking  in  the  door  any  minute.  [Pause.]  Meanwhile,  we  are 
pleased  that  Senator  Jeffords  is  with  us,  and  we're  looking  forward 
to  his  opening  statement. 

Opening  Statement  of  Senator  Jeffords 

Senator  Jeffords.  Thank  you,  Mr.  Chairman.  It  is  a  pleasure  to 
see  all  of  you  here. 

I  have  a  brief  statement.  Unfortunately,  like  everyone  else,  I 
have  to  be  elsewhere  for  most  of  the  time  tnis  morning,  but  I  cer- 
tainly wanted  to  come  and  lend  my  support  to  your  endeavors. 

I  believe  the  hearing  this  morning  is  more  than  timely;  it  is  very, 
very  long  overdue.  We  all  know  this  country  has  a  problem  when 


36 

it  comes  to  children's  immunizations.  The  problem  is  costing  us  bil- 
lions of  dollars  in  health  care  costs  because  every  dollar  spent  on 
immunization  saves  at  least  $10  in  treatment  costs. 

But  tragically,  it  is  costing  us  untold  numbers  of  deaths  and  ill- 
nesses. How  can  we  begin  to  measure  that  pain? 

Fewer  than  60  percent  of  the  2-year-olds  in  most  of  our  States 
are  fully  immunized.  Clearly,  the  question  is  not  whether  some- 
thing should  be  done,  but  what;  at  what  monetary  and  other  costs, 
and  how  do  we  pay  for  it? 

The  Comprehensive  Child  Immunization  Act  of  1993  is  one  ap- 
proach. Is  it  the  best?  That  is  what  we  need  to  discuss  at  these 
hearings. 

My  State  of  Vermont,  like  other  New  England  States,  already 
has  the  universal  distribution  system  called  for  in  President  Clin- 
ton's proposal  essentially  in  place,  and  it  is  working,  at  least  in 
Vermont,  which  has  been  recognized  nationally  for  its  high  immu- 
nization levels  of  preschoolers.  However,  even  the  Vermont  Depart- 
ment of  Health  acknowledges  that  significant  numbers  of  pre- 
schoolers still  are  not  vaccinated  appropriately,  particularly  with 
respect  to  follow-up  vaccinations,  and  the  department  stresses  the 
need  to  motivate  parents  to  utilize  the  increased  vaccination  oppor- 
tunities. 

So  I  will  be  looking  for  some  basic  clarification  of  concerns 
brought  to  my  attention,  specifically,  how  much  of  a  contributing 
factor  to  the  disappointing  vaccination  rate  in  this  country  is  cost? 
What  are  the  other  major  factors?  How  will  the  Vermont  program, 
for  example,  be  wrapped  into  the  national  program  without  damag- 
ing a  program  which  already  is  doing  pretty  well?  How  will  the  na- 
tional program  affect  U.S.  industries'  leadership  in  world  vaccine 
development?  Will  artificial  price  and  market  constraints  endanger 
R  and  D  efforts?  How  will  the  $1  billion  that  the  program  is  esti- 
mated to  cost  be  raised?  Thus  far,  we  have  been  told  only  that  the 
revenue  will  be  identified  in  the  overall  health  care  reform  legisla- 
tion, and  that  doesn't  do  it.  We  need  to  have  specifics  on  how  this 
is  going  to  occur.  I  know,  because  I  have  wrestled  with  this  issue 
in  preparing  my  own  comprehensive  health  care  reform  proposal, 
called  Medicore. 

We  have  to  know  exactly  where  the  dollars  are  coming  from,  both 
for  overall  immunization  and  reform.  I  for  one  want  to  work  to 
identify  these  issues  and  find  the  answers  to  those  hard  questions. 

This  hearing  should  be  very  helpful,  and  I  commend  everyone 
who  is  involved  and  here  today,  as  I  think,  hopefully,  after  this 
hearing  and  with  some  further  investigation,  we  will  be  able  to  an- 
swer these  questions  and  move  forward. 

Thank  you,  Mr.  Chairman. 

Mr.  Waxman.  Thank  you.  Senator  Jeffords. 

We  are  pleased  at  this  time  to  recognize  Senator  Danforth,  who 
is  a  member  of  the  Senate  Finance  Committee  and  has  a  strong  in- 
terest in  the  area  of  childhood  immunizations. 

Welcome,  Senator. 


37 

STATEMENT  OF  THE  HONORABLE  JOHN  C.  DANFORTH,  A  U.S. 
SENATOR  FROM  THE  STATE  OF  MISSOURI 

Senator  DANFORTH.  Mr.  Chairman,  thank  you  very  much.  This  is 
a  terrific  hearing.  I  have  never  seen  so  many  people  in  Congress 
at  one  hearing  before.  I  feel  like  Oliver  North.  [Laughter.] 

Mr.  Chairman,  I  along  with  Senator  Kassebaum,  Senator  Duren- 
berger  and  others  have  Deen  working  on  proposed  legislation  deal- 
ing with  immunization,  and  we  had  hoped  to  have  something  to 
present  to  the  committee  before  this  hearing.  We  do  not  have  it  as 
yet.  We  look  forward  to  introducing  a  bill  perhaps  later  this  week 
or  maybe  next  week — in  any  event,  in  the  very  near  future — for 
dealing  with  exactly  the  issue  that  is  before  this  committee,  al- 
though in  a  somewhat  different  form. 

Let  me  say  first  of  all  that  the  problem  that  has  been  identified 
is  an  obvious  problem.  I  first  recognized  it,  I  guess,  about  3  years 
ago,  when  I  was  visiting  the  director  of  St.  Louis  Children's  Hos- 
pital, an  absolutely  first-rate  hospital,  and  I  asked  the  director  dur- 
ing that  visit  what  is  the  main  reason  for  admissions  right  now  at 
Children's  Hospital,  and  the  director's  answer  was  measles.  To  me, 
that  was  an  astounding  answer — measles.  There  shouldn't  be  any 
admissions  for  measles.  And  yet  at  that  particular  point  of  time,  it 
was  the  leading  reason  for  admissions  in  St.  Louis  Children's  Hos- 
pital. 

Then  we  started  getting  into  the  facts,  and  some  of  them  have 
been  mentioned  already  this  morning,  but  one  thing  that  struck  me 
was  that  with  respect  to  polio  immunization  for  children  under  the 
age  of  one,  the  United  States  ranks  behind  Albania  and  behind 
Pakistan.  So  clearly,  something  is  terribly  wrong,  and  something 
has  to  be  fixed. 

And  as  I  say,  Senator  Kassebaum  and  Senator  Durenberger  and 
I  have  been  looking  into  ways  to  fix  this  serious  problem.  We  be- 
lieve that  there  is  the  basis  for  agreement,  that  there  is  the  basis 
for  bipartisan  cooperation.  Some  are  doubting  whether  that's  pos- 
sible. Of  course,  it  is.  And  it  is  possible  with  respect  to  this  all-im- 
portant issue. 

So  we  think  that  there  is  a  basis  for  agreement  and  for  reaching 
across  the  aisle  and  working  together  in  legislation,  and  that  some 
of  the  things  that  have  been  focused  upon  by  the  administration's 
bill  really  have  to  be  done,  and  we  have  approaches  which  are  pret- 
ty close,  maybe  a  little  bit  different  in  some  of  the  details,  to  some 
of  these  key  issues  that  have  been  identified  by  the  administration. 

In  looking  into  the  whole  question  of  lack  of  immunization  and 
the  reasons  for  it,  we  have  come  to  the  very  strong  conclusion  that 
the  reason  for  the  problem  is  not  cost,  by  and  large,  the  reason  is 
not  cost.  The  reason,  instead,  is  access,  knowledge,  various  issues 
relating  to  the  actual  delivery,  the  availability  of  vaccinations  to 
children. 

When  you  talk  to  people  about  these  reasons — and  I  had  two 
meetings  during  this  past  recess  in  Missouri,  one  in  Kansas  City 
and  one  in  St.  Louis,  with  experts  in  the  area — the  reasons  are 
complex.  There  are  a  number  of  them.  They  deal  with  such  matters 
as  the  complexity  of  the  informed  consent  form;  transportation 
problems;  parents'  lack  of  knowledge  about  the  importance  and  the 
various  facts  relating  to  immunization;  doctors'  lack  of  knowledge 


38 

about  the  circumstances  under  which  vaccines  can  and  cannot  be 
administered;  the  hours  public  health  clinics  are  open,  whether 
they  are  open  for  after-work  hours  for  parents  who  work  to  take 
their  children  by,  whether  they  are  open  on  weekends,  and  whether 
they  are  really  accessible. 

And  then,  one  thing  that  we  ran  into  in  a  number  of  States  in 
the  present  system  is  the  way  that  physicians  are  reimbursed  if 
parents  bring  kids  to  private  physicians.  This  varies.  There  are 
several  different  ways  of  doing  it  according  to  the  States,  but  in  a 
number  of  States  the  physicians  are  reimbursed  in  cash  at  a  rate 
lower  than  the  actual  cost  of  buying  the  vaccine.  So  late  last  year, 
some  of  us  introduced  legislation  which  provided  that  physicians 
should  be  reimbursed  in  kind,  that  they  should  receive  a  dose  for 
dose  and  that  the  dose  would  be  bought  under  a  mass  purchasing 
arrangement,  negotiated  by  the  Federal  Government,  but  the  pur- 
chase is  made  by  the  States. 

So  what  I  am  saying  is  that  there  are  a  number  of  problems  re- 
lating to  the  actual  delivery,  the  knowledge,  the  information,  the 
outreach,  the  tracking,  that  are  complex  and  that  are  related  to  the 
overall  problem. 

The  legislation  that  Senator  Kassebaum  and  Senator  Duren- 
berger  and  I  are  working  on  is  legislation  that  deals,  as  the  admin- 
istration's bill  does,  with  outreach;  it  deals  with  tracking,  it  deals 
with  delivery,  it  deals  with  information.  But  the  principal  dif- 
ference is  that  we  do  not  have  the  universal  purchase  provision 
that  is  in  the  administration's  bill.  We  don't  have  it  because  accord- 
ing to  the  Center  for  Disease  Control,  universal  purchase,  where  it 
has  occurred  in  some  11  States,  has  not  in  fact  led  to  substantial 
changes  in  the  actual  rate  of  immunization — some  five  percentage 
points.  Apparently,  those  five  points  are  accounted  for  perhaps  by 
other  reasons  other  than  universal  purchase.  But  we  feel  that  this 
is  not  the  time  in  our  country  to  provide  another  entitlement  pro- 
gram that  is  not  means-tested,  another  entitlement  program  for 
high-income  people. 

We  feel  that  it  is  necessary  for  the  general  health  of  the  country 
to  try  to  get  some  grip  on  the  rapid  growth  of  entitlement  pro- 
grams. We  are  also  concerned  that  to  have  a  universal  purchase 
program  to  totally  disrupt  the  market  system  is  one  which  attacks 
a  very  basic  economic  premise  in  this  country  which  has  worked 
very  well  with  respect  to  developing  and  bringing  into  the  market- 
place new  products. 

So  for  those  reasons,  we  do  not  agree  with  the  universal  pur- 
chase proposal.  We  are  working  on  a  proposal  which  would  increase 
the  number  of  people  for  whom  no-cost  vaccine  would  be  available. 
Of  course,  it  is  generally  available  in  public  health  clinics;  it  would 
continue  to  be  for  whomever  shows  up.  But  we  would  increase  and 
expand  access  for  Medicaid  at  least  for  the  purpose  of  vaccination 
and  maybe  beyond  that  to  185  percent  of  poverty,  which  I  am  told 
would  raise  from  about  30  percent  to  about  50  percent  the  number 
of  kids  who  would  be  covered  by  the  free  vaccine  program.  To  us, 
that  would  be  a  much  more  targeted  approach,  and  it  would  avoid 
the  pitfalls  in  the  universal  purchase  program. 

But  I  want  to  close  simply  by  emphasizing  the  positive.  While 
there  is  a  point  of  disagreement,  and  while  that  point  of  disagree- 


39 

ment  has  become,  I  guess,  the  most  famous  part  of  this  whole  en- 
terprise, the  one  that  has  attracted  a  lot  of  attention,  we  think  that 
this  is  an  important  issue;  we  think  that  this  is  an  issue  on  which 
there  really  should  not  be  partisan  or  even  philosophical  dif- 
ferences. We  believe  that  a  bill  could  be  passed  which  really  does 
deal  with  the  problem,  that  it  could  be  passed  very  quickly,  that 
it  could  be  passed  with  very  strong  support  from  Republicans  and 
Democrats,  conservatives  and  liberals,  and  everybody  else,  and  we 
would  urge  that  on  the  people  who  are  attending  this  hearing. 

Thank  you. 

Mr.  Waxman.  Senator,  I  want  to  commend  you  on  that  state- 
ment. I  think  it  is  a  very  constructive  approach  to  a  problem  that 
is  not  partisan,  and  I  look  forward  to  working  with  you  and  all  of 
our  colleagues  on  both  sides  of  the  aisle  to  try  to  meet  the  needs 
of  the  American  people  for  immunization  and  do  it  in  a  most  effec- 
tive way. 

Thank  you  very  much.  I  don't  know  if  any  members  want  to  ask 
any  questions;  if  not,  thank  you  for  being  here,  and  we'll  work  to- 
gether. 

Senator  Danforth.  Thank  you,  Mr.  Chairman. 

Senator  Kassebaum.  I  would  only  comment,  Mr.  Chairman,  that 
I  appreciate  Senator  Danforth's  patience  and  the  patience  of  those 
who  have  been  waiting  to  testify. 

Mr.  Waxman.  Another  person  who  has  been  very  patient  and  is 
now  going  to  make  a  presentation  to  us  needs  little  introduction  to 
those  of  us  here.  Secretary  Shalala,.  we  are  honored  that  you  have 
joined  us  today  to  address  the  issue  of  childhood  immunizations. 

Many  of  us  have  been  working  on  this  problem  for  years  now, 
but  within  a  few  months  of  taking  office,  you  have  coordinated  the 
administration's  legislative  proposal  for  comprehensive  childhood 
immunizations.  We  are  working  hard  to  keep  up  with  you.  We  wel- 
come you  to  this  joint  hearing  and  look  forward  to  your  continued 
leadership  on  this  issue. 

STATEMENT  OF  HON.  DONNA  E.  SHALALA,  SECRETARY,  U.S. 
DEPARTMENT  OF  HEALTH  AND  HUMAN  SERVICES,  WASH- 
LNGTON,  DC. 

Secretary  Shalala.  Thank  you,  Congressman  Waxman. 

I  am  honored  to  appear  at  this  special  joint  hearing  before  two 
of  the  key  Senate  and  House  committees  that  have  taken  the  lead 
on  ensuring  the  health  of  the  American  people. 

Joint  congressional  hearings  have  been  traditionally  reserved  for 
issues  of  the  highest  importance,  and  I  can  think  of  no  issue  that 
is  more  deserving  of  our  time  and  interest  than  the  immunization 
of  our  children  against  preventable  infectious  diseases  such  as 
mumps,  measles,  polio  and  whooping  cough. 

We  should  all  be  appalled  that  our  Nation's  childhood  immuniza- 
tion system  has  become  so  ineffective  that  it  is  necessary  for  Con- 
gress to  hold  this  hearing,  and  that  our  youngest  Americans  face 
barriers  to  immunization  precisely  when  they  are  most  vulner- 
able—before the  age  of  2. 

But  I  am  also  pleased  that  we  are  here  to  discuss  the  solution, 
not  just  the  problem.  We  are  here  to  begin  the  process  of  removing 
barriers  to  immunization  and  ensuring  that  all  children  in  the 


40 

United  States  of  America  are  protected  at  the  appropriate  age 
against  crippling  childhood  diseases. 

The  problem  is  enormous.  Although  95  percent  of  school-age  chil- 
dren are  properly  immunized,  our  preschool  vaccination  rates  are 
dismal.  According  to  the  Centers  for  Disease  Control  and  Preven- 
tion, some  40  to  60  percent  of  American  toddlers  have  not  received 
the  proper  vaccination  series  by  their  second  birthday.  In  some 
inner-city  areas,  the  rate  is  as  low  as  10  percent. 

A  brief  look  at  this  chart  shows  that  to  be  fully  immunized,  a 
child  must  be  protected  against  nine  diseases.  Administering  the 
entire  sequence  of  shots  is  no  easy  matter.  Full  immunization  re- 
quires that  a  child  be  inoculated  18  times  with  five  vaccines,  and 
all  but  three  of  the  18  doses  should  be  received  by  the  age  of  2. 
This  regime  would  require  five  additional  visits  to  the  doctor's  of- 
fice after  birth — at  2  months,  at  4  months,  at  6  months,  12  months, 
and  15  months. 

America's  immunization  delivery  system  is  deteriorating  rapidly. 
Reductions  in  resources,  increases  in  disease  incidence,  and  pa- 
tient-shifting from  private  providers  to  public  sector  clinics  have 
outstretched  our  abilities  to  identify  children  who  need  vaccina- 
tions and  to  provide  them. 

There  are  not  enough  clinics,  and  where  they  do  exist,  they  are 
often  understaffed,  overworked,  and  closed  during  critical  hours. 
Unfortunately,  too  often,  children  who  need  shots  are  required  to 
make  advance  appointments  or  to  have  a  physician  referral. 

Sometimes  children  are  denied  shots  because  they  have  a  runny 
nose  or  haven't  had  a  physical  exam.  Each  of  these  obstacles  makes 
it  more  difficult  for  parents  to  have  their  children  immunized. 

American  families  are  getting  squeezed  by  the  skyrocketing 
prices  of  vaccines.  As  this  accompanying  graph  illustrates,  the  vac- 
cine cost  to  fully  immunize  a  child  has  increased  significantly  from 
1982  to  1992.  In  1982,  the  cost  of  vaccine  to  fully  immunize  a  child 
in  the  public  and  private  sectors  was  approximately  $7  and  $23,  re- 
spectively. By  1992,  those  costs  had  risen  to  $122  in  the  public  sec- 
tor and  $244  in  the  private  sector.  In  part,  these  cost  increases  can 
be  attributed  to  recommendations  for  new  vaccines,  to  additional 
doses  of  existing  vaccines,  and  to  an  excise  tax  used  to  fund  the 
vaccine  compensation  program. 

But  these  factors  do  not  account  for  the  net  increase  in  the  cost 
of  existing  vaccines.  For  example,  another  graph  I'd  like  to  share 
with  you  shows  that  in  1982,  the  measles,  mumps  and  rubella,  or 
MMR  vaccine,  cost  $10.44  per  dose  in  the  private  sector,  but  in 
1992,  the  same  dose  cost  $25.29.  Even  if  you  subtract  the  $4.44  per 
dose  excise  tax  instituted  in  1988,  the  price  of  the  MMR  vaccine 
still  doubled.  The  diphtheria,  tetanus,  and  pertussis  vaccine,  or 
DTP,  increased  even  more  sharply — from  37  cents  in  1982  to  a 
whopping  $10.04  in  1992.  With  the  $4.56  excise  tax  excluded,  that's 
a  net  price  increase  of  $5.11,  or  almost  a  14-fold  hike  per  dose. 

But  what  is  the  societal  cost?  According  to  our  most  recent  esti- 
mates from  the  CDC,  the  failure  to  immunize  our  children  on  time 
led  to  the  measles  resurgence  between  1989  and  1991.  This  epi- 
demic resulted  in  over  55,000  cases  of  measles,  130  deaths,  11,000 
hospitalizations,  and  44,000  hospital  days,  with  an  estimated  $150 
million  in  direct  medical  costs — and  that  doesn't  include  the  mas- 


41 

sive  indirect  costs  stemming  from  the  lost  time  on  the  job,  lost  pro- 
ductivity, and  lost  wages — costs  that  could  have  been  avoided  by 
merely  providing  families  with  a  vaccine  that  cost  about  $24  a  dose 
in  1988. 

I'd  like  you  to  look  at  another  chart  I've  brought  here  today.  It 
graphically  illustrates  that  the  United  States  has  one  of  the  lowest 
immunization  rates  for  preschool  children  when  compared  to  Euro- 
pean countries.  And  note  that  for  the  United  States,  the  percent- 
ages are  for  children  aged  one  to  4,  while  the  European  figures  are 
for  children  under  3  for  DTP  and  polio,  and  under  2  for  measles. 
Parenthetically,  I  would  also  note  that  the  data  from  the  World 
Health  Organization  places  our  immunization  rate  for  one  dose  of 
measles  by  24  months  of  age  behind  countries  such  as  Argentina, 
Costa  Rica,  Grenada,  and  even  Cuba. 

As  you  know,  the  President  has  requested  an  additional  $300 
million  in  the  jobs  bill  to  strengthen  this  country's  immunization 
infrastructure,  which  we  estimate  will  create  between  4,000  and 
5,000  new  jobs.  These  funds  would  help  communities  to  imme- 
diately strengthen  delivery  systems,  to  broaden  their  outreach  ef- 
forts, to  increase  access  to  immunization  services,  to  enhance  par- 
ent and  provider  education  programs,  and  to  provide  a  host  of 
other  essential  activities. 

These  endeavors  alone  are  not  enough.  The  legislation  currently 
under  consideration,  as  proposed  by  the  President  on  April  1st,  con- 
tains the  solutions,  the  means,  for  removing  the  other  systemic 
barriers  to  immunization. 

The  high  price  of  vaccines  is  a  significant  financial  barrier  to  ob- 
taining vaccinations  for  preschool  children.  The  absence  of  a  track- 
ing system  has  impeded  local  and  State  efforts  to  ensure  that  all 
children  are  vaccinated.  A  viable  vaccine  injury  compensation  pro- 
gram must  be  maintained  and  strengthened  to  increase  public  con- 
fidence in  the  safety  of  vaccination.  Finally,  information  for  parents 
on  the  benefits  and  risks  of  vaccines  must  be  presented  in  clear, 
concise,  and  understandable  terms. 

This  bill  authorizes  the  purchase  of  all  vaccines  by  the  Federal 
Government  to  be  given  at  no  cost  to  providers.  Our  plan  will 
eliminate  financial  barriers  that  impede  the  timely  vaccination  of 
children  and  facilitate  the  development  of  a  national  immunization 
trackin&r  svstem. 

The  bill  directs  the  Secretary  to  negotiate  a  reasonable  price  with 
manufacturers  based  on  data  supplied  by  the  manufacturers  re- 
garding costs  in  the  following  areas:  research  and  development, 
production,  distribution,  marketing,  profit  levels  sufficient  to  en- 
courage further  investment  in  research  and  development,  and  the 
ability  to  maintain  adequate  outbreak  control.  Such  data  would  be 
treated  as  trade  secrets,  or  confidential  information  in  accordance 
with  the  Freedom  of  Information  Act,  and  the  bill  would  provide 
criminal  sanctions  for  violations  of  this  provision. 

We  want  to  ensure  a  secure  and  adequate  supply  of  vaccines  and 
to  stimulate  competition  among  manufacturers.  To  this  end,  when 
possible,  contracts  would  be  put  out  for  competitive  bidding  to  mul- 
tiple manufacturers  of  various  vaccines.  Vaccines  would  be  pro- 
vided to  States  for  free  distribution  to  health  care  providers  who 
serve  children.  Such  providers  would  not  be  allowed  to  charge  pa- 


42 

tients  for  the  cost  of  vaccines,  but  could  require  a  fee  for  vaccine 
administration.  However,  no  one  could  be  denied  immunization  be- 
cause of  the  inability  to  pay. 

In  addition,  the  bill  would  increase  immunization  levels  of  chil- 
dren receiving  Medicaid  by  assuring  appropriate  reimbursement  to 
providers  for  vaccine  administration.  Medicaid  programs  would 
take  into  account  the  reasonable  cost  of  furnishing  immunizations 
and  to  calculate  payment  rates  for  vaccine  administration  sepa- 
rately from  payment  rates  for  office  visits  or  other  services. 

A  few  key  points  need  to  be  made  about  the  purchase  and  uni- 
versal provision  of  vaccines.  Critics  have  argued,  "Why  should  we 
pay  for  vaccines  for  those  who  can  already  afford  them?"  We  can 
answer  that  question. 

First,  because  of  patient  shifting  from  private  providers  to  public 
clinics,  we  are  already  providing  free  vaccines  to  thousands  or  fami- 
lies who  can  afford  them.  The  American  Academy  of  Pediatrics  has 
reported  that  50  percent  of  practicing  pediatricians  refer  some  or 
all  children  with  health  insurance  to  clinics  for  immunizations. 
Universal  provision  of  vaccines  could  stop  this  flow  of  private  pa- 
tient shifting  to  public  clinics  and  free  up  needed  resources  for  the 
truly  needy. 

Second,  providing  vaccines  based  on  family  income  would  require 
means  testing,  another  barrier  which  could  be  enforced  only  by  the 
physicians.  It  would  be  counterproductive,  in  our  judgment,  to  im- 
pose on  America's  physicians  and  health  care  providers  a  whole 
new  set  of  reporting  and  paperwork  requirements  that  a  means- 
tested  system  would  require.  The  purpose  of  this  initiative  is  to 
eliminate  barriers  to  immunization,  not  create  more  of  them. 

Proper  immunization  should  be  a  basic  right  for  every  child  in 
America,  rich  or  poor,  just  like  in  most  other  industrialized  coun- 
tries. We  don't  "means  test"  the  right  to  public  education,  we  don't 
"means  test"  the  right  to  clean  air  or  clean  water.  Nor  should  we 
make  access  to  the  most  basic  form  of  disease  prevention  a  matter 
of  family  income. 

Also,  the  point  must  be  made  that  by  assuring  a  stable  and 
strong  purchasing  program  for  vaccines,  with  fair  prices  paid,  this 
system  may  stimulate  rather  than  inhibit  competition.  In  other 
words,  some  manufacturers  actually  could  return  to  the  vaccine 
market  because  of  the  stability  and  reliability  inherent  in  the 
President's  plan. 

Finally,  universal  purchase  is  also  a  key  to  the  development  of 
the  national  immunization  tracking  system  which  is  necessary  to 
assist  in  attaining  full  immunization  of  children  by  their  second 
birthday. 

We  cannot  ensure  that  all  children  are  immunized  unless  we 
know  which  vaccinations  we  need.  That's  why  the  bill  provides  for 
a  collaborative  Federal  and  State  tracking  system.  Our  system 
would  notify  parents  when  immunizations  are  due  and  remind 
them  if  they  do  not  keep  appointments.  Children  in  need  would  be 
identified  for  special  outreach  efforts.  Immunization  levels  would 
be  monitored  at  the  local  level  to  track  progress  toward  meeting 
State  and  national  immunization  goals. 

Federal  grants  would  be  provided  to  States  to  establish  and  oper- 
ate State  immunization  registries  containing  specific  information 


43 

on  each  child  starting  from  birth.  Such  information  would  include 
at  a  minimum  immunization  history,  types  and  lot  numbers  of  vac- 
cines received,  health  care  provider  identification,  demographic 
data,  and  notations  of  adverse  events  associated  with  immuniza- 
tions. The  national  system  will  include  information  on  all  preschool 
children,  beginning  at  birth,  and  will  identify  the  State  tracking 
system  in  which  the  child's  immunization  record  is  located.  The  na- 
tional system  will  link  all  State  tracking  systems  and  transfer  ac- 
tual immunization  records  when  the  child  relocates  to  a  new  State. 

Providers  would  be  required  to  report  to  the  State  tracking  reg- 
istry information  regarding  each  vaccine  administered.  The  efficacy 
and  safety  and  of  vaccines  would  be  monitored  by  linking  vaccine 
administration  records  with  adverse  events  and  disease  patterns. 

The  bill  would  also  require  that  security  measures  be  established 
to  assure  the  confidentiality  of  information  collected.  The  registries, 
we  believe,  could  be  fully  operational  by  October  1st  of  1996. 

A  functioning  national  vaccine  injury  compensation  program  is 
critical  to  the  national  immunization  effort.  The  very  few  children 
who  suffer  vaccine-related  injuries  must  be  compensated  for  those 
injuries,  and  so  should  their  families. 

In  1988,  the  National  Childhood  Vaccine  Injury  Compensation 
Act  was  funded  through  an  excise  tax  on  each  dose  of  vaccine,  and 
this  no-fault  system  greatly  reduced  the  number  of  lawsuits  filed 
against  manufacturers.  However,  the  authority  to  pay  awards  ex- 
pired on  October  1,  1992,  and  the  tax  was  suspended  on  January 
1,  1993  by  the  Secretary  of  the  Treasury.  These  provisions  would 
have  been  extended  routinely  but  for  their  inclusion  in  the  urban 
aid  legislation  which  was  vetoed  last  year. 

This  new  bill  would  reauthorize  payment  from  the  trust  fund  for 
compensable  injuries  attributable  to  vaccines  administered  on  or 
after  October  1,  1992.  The  bill  also  provides  for  the  permanent  ex- 
tension and  reinstatement  of  the  vaccine  excise  tax,  so  that  funding 
will  continue  to  be  reserved  for  the  compensation  program. 

Additionally,  the  bill  provides  a  mechanism  for  automatically 
covering  new  recommended  vaccines  under  the  compensation  pro- 
gram; allows  the  chief  special  master  to  suspend  proceedings  on  pe- 
titions for  retrospective  claims  for  up  to  30  months  rather  than  the 
18  months  in  the  current  law;  and  simplifies  the  vaccine  informa- 
tion materials  currently  in  use  and  the  process  of  revising  those 

Great  nations,  Mr.  Chairman,  invest  in  their  people— and  no  in- 
vestment is  more  fundamental  and  more  cost-effective  than  immu- 
nizations. We  can  and  must  develop  a  comprehensive  program  to 
reduce  barriers  to  immunizations  and  to  protect  all  of  our  chil- 
dren—which are,  after  all,  the  future  of  our  country  and  our  great- 
est  natural  resource 

The  President's  legislation  will  ensure  that  all  children  in  the 
United  States  are  protected  against  preventable  infectious  diseases 
by  their  second  birthday.  This  legislation  inaugurates  a  new  part- 
nership among  parents  and  guardians,  among  health  care  prob- 
ers, public  and  private,  among  vaccine  manufacturers,  and  the  Fed- 
eral, State  and  local  governments  to  ensure  that  all  American  chil- 
dren have  the  opportunity  to  live  full  and  healthy  lives. 


44 

The  Congress  now  has  before  it  for  its  consideration  three  bills 
that  reflect  President  Clinton's  legislative  proposal— S.  732,  S.  733, 
and  H.R.  1640.  To  those  of  you  who  have  sponsored  and  cospon- 
sored  the  legislation,  we  applaud  your  leadership.  To  your  col- 
leagues who  nave  it  under  consideration,  we  urge  your  support. 

Thank  you,  and  I  would  be  happy  to  answer  any  questions  you 
might  have. 

[The  prepared  statement  of  Secretary  Shalala  follows:] 

Prepared  Statement  of  Donna  E.  Shalala 

I  am  honored  to  appear  at  this  special  joint  hearing  before  two  of  the  key  Senate 
and  House  committees  that  have  taken  the  lead  in  ensuring  the  health  of  the  Amer- 
ican people. 

Joint  congressional  hearings  have  been  traditionally  reserved  for  issues  of  the 
highest  importance;  and  I  can  think  of  no  issue  that  is  more  deserving  of  your  time 
and  interest  than  the  immunization  of  our  children  against  preventable  infectious 
diseases  such  as  mumps,  measles,  polio,  and  whooping  cough. 

We  should  all  be  appalled  that  our  Nation's  childhood  immunization  system  has 
become  so  ineffective  that  it  is  necessary  for  Congress  to  hold  this  hearing,  and  that 
our  youngest  American's  face  barriers  to  immunization  precisely  when  they  are 
most  vulnerable — before  the  age  of  2. 

But,  I  am  also  pleased  that  we  are  here  to  discuss  the  solution,  not  just  the  prob- 
lem. We  are  here  to  begin  the  process  of  removing  barriers  to  immunization  and  en- 
suring that  all  children  in  the  United  States  of  America  are  protected  at  the  appro- 
priate age  against  crippling  childhood  diseases. 

The  problem  is  enormous.  Although  95  percent  of  school-age  children  are  properly 
immunized,  our  preschool  vaccination  rates  are  dismal.  According  to  the  Centers  for 
Disease  Control  and  Prevention  (CDC),  some  40  to  60  percent  of  American  toddlers 
have  not  received  the  proper  vaccination  series  by  their  second  birthday.  In  some 
inner-city  areas,  the  rate  is  as  low  as  10  percent. 

A  brief  look  at  this  chart  shows  that  to  be  fully  immunized  a  child  must  be  pro- 
tected against  nine  diseases.  Administering  the  entire  sequence  of  shots  is  no  easy 
matter.  Pull  immunization  requires  that  a  child  be  inoculated  18  times  with  five 
vaccines,  and  all  but  3  of  the  18  doses  should  be  received  by  age  2.  (This  regimen 
would  require  5  additional  visits  to  the  doctor's  office  after  birth — at  2  months,  4 
months,  6  months,  12  months  and  15  months). 

America's  immunization  delivery  system  is  deteriorating  rapidly.  Reductions  in  re- 
sources, increases  in  disease  incidence,  and  patient — shifting  from  private  providers 
to  public-sector  clinics  have  out-stretched  our  abilities  to  identify  children  who  need 
vaccinations  and  provide  them.  There  are  not  enough  clinics,  and  where  they  do 
exist,  they  are  often  understaffed,  overworked,  and  closed  during  critical  hours.  Un- 
fortunately, too  often  children  who  need  shots  are  required  to  make  advance  ap- 
pointments or  to  have  a  physician  referral.  Sometimes  children  are  denied  shots  be- 
cause they  have  a  runny  nose  or  haven't  had  a  physical  exam.  Each  of  these  obsta- 
cles makes  it  more  difficult  for  parents  to  have  their  children  immunized. 

American  families  are  getting  squeezed  by  the  sky  rocketing  prices  of  vaccines. 
As  this  accompanying  graph  illustrates,  the  vaccine  cost  to  fulTy  immunize  a  child 
has  increased  significantly  from  1982  to  1992.  In  1982,  the  cost  of  vaccine  to  fully 
immunize  a  child  in  the  public  and  private  sectors  was  approximately  $7  and  $23, 
respectively.  By  1992,  those  costs  had  risen  to  $122  in  the  public  sector  and  $244 
in  the  private  sector.  In  part,  these  cost  increases  can  be  attributed  to  recommenda- 
tions for  new  vaccines,  to  additional  doses  of  existing  vaccines,  and  to  an  excise  tax 
used  to  fund  the  vaccine  compensation  program. 

But  these  factors  do  not  account  for  the  net  increase  in  the  cost  of  existing  vac- 
cines. For  example,  another  graph  I'd  like  to  share  with  you  shows  that  in  1982, 
the  measles,  mumps  and  rubella,  or  MMR  vaccine,  cost  $10.44  per  dose  in  the  pri- 
vate sector — but  in  1992  the  same  dose  cost  $25.29.  Even  ifyou  subtract  the  $4.44 
per  dose  excise  tax  instituted  in  1988,  the  price  of  the  MMR  vaccine  still  doubled. 
The  diphtheria,  tetanus,  and  pertussis  vaccine  or  DTP,  increased  even  more  sharp- 
ly—from 37  cents  in  1982  to  a  whopping  $10.04  in  1992.  With  the  $4.56  excise  tax 
excluded,  that's  a  net  price  increase  of  $5.11,  or  almost  a  14-fold  hike  per  dose. 

But  what  is  the  societal  cost?  According  to  the  most  recent  estimates  from  the 
CDC,  the  failure  to  immunize  our  children  on  time  led  to  the  measles  resurgence 
between  1989  and  1991.  This  epidemic  resulted  in  over  55,000  cases  of  measles,  130 
deaths,  11,000  hospitalizations,  and  44,000  hospital  days — with  an  estimated  $150 


45 

million  in  direct  medical  costs.  And  that  doesnt  include  the  massive  indirect  costs 
stemming  from  lost  time  on  the  job,  lost  productivity,  and  lost  wages — costs  that 
could  have  been  avoided  by  merely  providing  families  with  a  vaccine  that  cost  about 
$24  a  dose  in  1988. 

Td  like  you  to  look  at  another  chart  I  have  brought  here  today.  It  graphically  il- 
lustrates that  the  United  States  has  one  of  the  lowest  immunization  rates  for  pre- 
school children  when  compared  with  European  countries.  And  note  that  for  the 
United  States  the  percentages  are  for  children  aged  1  to  4,  while  the  European  fig- 
ures are  for  children  under  3  for  DTP  and  Polio,  and  under  2  for  measles.  Par- 
enthetically, I  would  also  note  that  data  from  the  World  Health  Organization  places 
our  immunization  rates  for  one  dose  of  measles  by  twenty-four  months  of  age  behind 
countries  such  as  Argentina,  Costa  Rica,  Grenada,  and  even  Cuba. 

As  you  know,  the  President  has  requested  an  additional  $300  million  in  the  jobs 
bill  to  strengthen  this  country's  immunization  infrastructure,  which  we  estimate 
will  create  between  4,000  and  5,000  new  jobs.  These  funds  would  help  communities 
to  immediately  strengthen  delivery  systems,  broaden  outreach  efforts,  increase  ac- 
cess to  immunization  services,  enhance  parent  and  provider  education  programs, 
and  provide  a  host  of  other  essential  activities. 

These  endeavors  alone  are  not  enough.  The  legislation  currently  under  consider- 
ation, as  proposed  by  the  President  on  April  1,  contains  the  solutions — the  means — 
for  removing  the  other  systemic  barriers  to  immunization. 

The  high  price  of  vaccines  is  a  significant  financial  barrier  to  obtaining  vaccina- 
tions. The  absence  of  a  tracking  system  has  impeded  local  and  State  efforts  to  en- 
sure that  all  children  are  vaccinated.  A  viable  Vaccine  Injury  Compensation  Pro- 
gram must  be  maintained  and  strengthened  to  increase  public  confidence  in  the 
safety  of  vaccination.  Finally,  information  for  parents  on  the  benefits  and  risks  of 
vaccines  must  be  presented  in  clear,  concise,  and  understandable  terms. 

LEGISLATIVE  PROPOSAL 

This  bill  authorizes  the  purchase  of  all  vaccines  by  the  Federal  Government  to  be 
given  at  no  cost  to  providers.  Our  plan  will  eliminate  financial  barriers  that  impede 
the  timely  vaccination  of  children  and  facilitate  development  of  a  national  immuni- 
zation tracking  system. 

The  bill  directs  the  Secretary  to  negotiate  a  reasonable  price  with  manufacturers 
based  on  data  supplied  by  the  manufacturers  regarding  costs  in  the  following  areas: 
research  and  development,  production,  distribution,  marketing,  profit  levels  suffi- 
cient to  encourage  future  investment  in  research  and  development,  and  the  abibty 
to  maintain  adequate  outbreak  control.  Such  data  would  be  treated  as  trade  secrets, 
or  confidential  information  in  accordance  with  the  Freedom  of  Information  Act,  and 
the  bill  would  provide  criminal  sanctions  for  violations  of  this  provision. 

We  want  to  ensure  a  secure  and  adequate  supply  of  vaccines  and  to  stimulate 
competition  among  manufacturers.  To  this  end,  when  possible,  contracts  would  be 
put  out  for  competitive  bidding  to  multiple  manufacturers  of  various  vaccines. 

Vaccines  would  be  provided  to  states  for  free  distribution  to  health  care  providers 
who  serve  children.  Such  providers  would  not  be  allowed  to  charge  patients  for  the 
cost  of  vaccines,  but  could  require  a  fee  for  vaccine  administration.  However,  no  one 
could  be  denied  immunization  because  of  the  inability  to  pay. 

In  addition,  the  bill  would  increase  immunization  levels  of  children  receiving  Med- 
icaid by  assuring  appropriate  reimbursement  to  providers  for  vaccine  administra- 
tion. Medicaid  programs  would  take  into  account  the  reasonable  cost  of  furnishing 
immunizations  ana  calculate  payment  rates  for  vaccine  administration  separately 
from  payment  rates  for  office  visits  or  other  services. 

A  few  key  points  need  to  be  made  about  the  purchase  and  universal  provision  of 
vaccines.  Critics  have  argued,  "Why  should  we  pay  for  vaccines  for  those  who  can 
already  afford  them?"  We  can  answer  that  question. 

First,  because  of  Datient  shifting  from  private  providers  to  public  clinics,  we  are 
already  providing  free  vaccines  to  families  that  can  afford  them.  The  American 
Academy  of  Pediatrics  reports  that  50  percent  of  practicing  pediatricians  refer  some 
or  all  children  with  health  insurance  to  clinics  for  immunizations.  Universal  provi- 
sion of  vaccines  could  stop  this  flow  of  private  patient  shifting  to  public  clinics  and 
free-up  needed  resources  for  the  truly  needy. 

Second,  providing  vaccines  based  on  family  income  would  require  means-testing, 
another  barrier  which  could  be  enforced  only  by  the  physicians.  It  would  be  counter- 
productive to  impose  on  physicians  and  health  care  providers  a  whole  new  set  of 
reporting  and  paperwork  requirements  that  a  means-tested  system  would  require. 
The  purpose  of  this  initiative  is  to  eliminate  barriers  to  immunization,  not  create 
more  of  them. 


46 

Proper  immunization  should  be  a  basic  right  for  every  child  in  America — rich  or 
poor— just  like  in  most  other  industrialized  countries.  We  don't  "means  test"  the 
right  to  public  education,  to  clean  air  or  clean  water.  Nor  should  we  make  access 
to  the  most  basic  form  of  disease  prevention  a  matter  of  family  income. 

Also,  the  point  must  be  made  that  by  assuring  a  stable  and  strong  purchasing 
program  for  vaccines,  with  fair  prices  paid,  this  system  may  stimulate,  rather  than 
inhibit,  competition.  In  other  words,  some  manufacturers  actually  could  return  to 
the  vaccine  market  because  of  the  stability  and  reliability  inherent  in  the  Presi- 
dent's plan. 

Finally,  universal  purchase  is  also  key  to  the  development  of  the  national  immu- 
nization tracking  system  necessary  to  assist  in  attaining  full  immunization  of  chil- 
dren by  their  second  birthday. 

We  cannot  ensure  that  all  children  are  immunized  unless  we  know  which  vaccina- 
tions they  need.  That's  why  the  bill  provides  for  a  collaborative  Federal  and  state 
tracking  system.  Our  system  would  notify  parents  when  immunizations  are  due  and 
remind  them  if  they  do  not  keep  appointments.  Children  in  need  would  be  identified 
for  special  outreach  efforts.  Immunization  levels  would  be  monitored  at  the  local 
level  to  track  progress  toward  meeting  state  and  national  immunization  goals. 

Federal  grants  would  be  provided  to  states  to  establish  and  operate  state  immuni- 
zation registries  containing  specific  information  on  each  child  starting  from  birth. 
Such  information  would  include  at  a  minimum:  1)  immunization  history,  2)  types 
and  lot  numbers  of  vaccines  received,  3)  health  care  provider  identification,  4)  demo- 
graphic data,  and  5)  notations  of  adverse  events  associated  with  immunizations.  The 
National  System  will  include  information  on  all  preschool  children,  beginning  at 
birth,  and  will  identify  the  state  tracking  system  in  which  the  child's  immunization 
record  is  located.  The  National  System  will  link  all  State  tracking  systems  and 
transfer  actual  immunization  records  when  the  child  relocates  to  a  new  State. 

Providers  would  be  required  to  report  to  the  state  tracking  registry  information 
regarding  each  vaccine  administered.  The  efficacy  and  safety  of  vaccines  would  be 
monitored  by  linking  vaccine  administration  records  with  adverse  events  and  dis- 
ease patterns.  The  bill  also  would  require  that  security  measures  be  established  to 
assure  the  confidentiality  of  the  information  collected.  The  registries  would  be  fully 
operational  by  October  1,  1996. 

A  functioning  National  Vaccine  Injury  Compensation  Program  is  critical  to  the  na- 
tional immunization  effort.  The  very  few  children  who  suffer  vaccine-related  injuries 
must  be  compensated  for  those  injuries,  and  so  should  their  families. 

In  1988,  the  National  Childhood  Vaccine  Injury  Compensation  Act  was  funded 
through  an  excise  tax  on  each  dose  of  vaccine,  and  this  no-fault  system  greatly  re- 
duced the  number  of  lawsuits  filed  against  manufacturers.  However,  the  authority 
to  pay  awards  expired  on  October  1,  1992,  and  the  tax  was  suspended  on  January 
1,  1993  by  the  Secretary  of  the  Treasury.  These  provisions  would  have  been  ex- 
tended routinely  but  for  their  inclusion  in  the  urban  aid  legislation  vetoed  last  year. 

This  bill  would  reauthorize  payment  from  the  Trust  Fund  for  compensable  inju- 
ries attributable  to  vaccines  administered  on  or  after  October  1,  1992.  The  bill  also 
provides  for  the  permanent  extension  and  reinstatement  of  the  vaccine  excise  tax, 
so  that  funding  will  continue  to  be  reserved  for  the  Compensation  Program. 

Additionally,  the  bill  provides  a  mechanism  for  automatically  covering  new  rec- 
ommended vaccines  under  the  Compensation  Program;  allows  the  Chief  Special 
Master  to  suspend  proceedings  on  petitions  for  retrospective  claims  for  up  to  30 
months,  rather  than  the  18  months  in  current  law;  and  simplifies  the  vaccine  infor- 
mation materials  currently  in  use  and  the  process  of  revising  chose  materials. 

Great  nations  invest  in  their  people — and  no  investment  is  more  fundamental  and 
more  cost  effective  than  immunizations.  We  can  and  must  develop  a  comprehensive 
program  to  immunizations  and  to  protect  our  children — who  are,  after  all  the  future 
of  our  country  and  our  greatest  natural  resource. 

The  President's  legislation  will  ensure  that  all  children  in  the  United  States  are 
protected  against  preventable  infectious  diseases  by  their  second  birthday.  This  leg- 
islation inaugurates  a  new  partnership  among  parents  and  guardians;  health  care 
providers;  vaccine  manufacturers;  and  Federal,  State,  and  local  governments  to  en- 
sure that  all  children  have  the  opportunity  to  live  fully  healthy  lives. 

The  Congress  now  has  before  it,  for  its  consideration,  three  bills  that  reflect  Presi- 
dent Clinton's  legislative  proposal,  S.  732,  S.  733,  and  H.R.  1640.  To  those  of  you 
who  sponsored  and  cosponsored  this  legislation,  I  applaud  your  leadership.  To  your 
colleagues  who  have  it  under  consideration,  I  urge  your  support. 

Thank  you  and  I  would  be  happy  to  answer  any  questions. 


47 


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51 

The  Chairman.  Thank  you  very  much,  Madam  Secretary,  for  an 
excellent  statement. 

We  will  now  follow  a  5-minute  rule  that  will  apply  to  the  mem- 
bers, and  also,  hopefully,  to  the  response.  We  want  this  hearing  to 
be  accurate  and  complete,  but  well  try  and  do  that  in  fairness  to 
all  of  the  witnesses  here  today,  and  well  rotate  back  and  forth. 

Senator  Riegle  has  other  business  which  will  necessitate  his  de- 
parture, so  nf  yield  my  time  to  Senator  Riegle  and  recognize  him 
for  5  minutes.  I  think  all  of  us  regret  this  timing  machine  more 
than  anything  else,  but  I  would  ask  staff  to  comply  with  the  re- 
quest. 

Senator  Riegle.  Thank  you  very  much,  Senator  Kennedy. 

Madam  Secretary,  let  me  begin  by  saying  I  appreciate  your  lead- 
ership on  this  issue.  People  can  always  drum  up  reasons  why  we 
shouldn't  find  a  way  to  solve  a  serious  national  problem  and  to  sort 
of  throw  obstacles  in  the  way.  You  strike  me  as  a  person  who  is 
determined  to  try  to  take  the  obstacles  down  and  to  get  this  accom- 
plished. 

I  am  struck  by  the  fact  that  other  nations  are  finding  ways  to 
do  this.  You  know,  it  isn't  rocket  science  to  figure  out  how  to  get 
these  immunizations  to  these  children.  And  when  Third  World 
countries  are  able  to  do  it  more  effectively  than  we  are,  I  think  we 
have  to  face  this  issue  and  decide  to  solve  it. 

The  data  that  I  have  been  able  to  see — and  I'd  like  your  con- 
firmation on  this— from  the  Centers  for  Disease  Control  shows  that 
three-fourths  of  the  2-year-olds  who  aren't  fully  immunized  are  in 
fact  above  the  poverty  line.  Is  that  right? 

Secretary  Shalala.  Yes,  Senator. 

Senator  Riegle.  So  most  of  the  kids  out  there  aren't  kids  in  pov- 
erty— many  are,  but  the  greater  number,  75  percent,  of  those  who 
aren't  immunized  are  actually  children  from  families  above  the 
poverty  line.  I  think  this  shows  the  difficulties  of  getting  these  im- 
munizations to  kids  essentially  across  the  board  in  our  society. 

Now,  the  data  that  I  have  indicate  that  the  backgrounds  of  the 
children  who  are  not  immunized  by  the  time  they  should  be,  just 
to  give  the  public  an  idea  and  to  put  it  into  the  record,  some  40 
percent  are  white  children,  some  65  percent  are  minority  children, 
some  60  percent  are  children  who  live  in  cities,  and  some  39  per- 
cent are  living  in  rural  and  suburban  areas.  So  this  is  a  problem 
that  stretches  across  the  50  States,  and  it  is  found  in  all  kinds  of 
communities. 

Looking  at  this  from  the  point  of  view  of  how  you  would  really 
change  the  system,  I  thought  your  testimony,  by  the  way,  was  ex- 
ceptionally well-done;  I  think  you  put  all  of  the  supposed  objections 
up  there,  and  you  answered  tnem  one-by-one,  in  terms  of  how  this 
would  reduce  cost  and  how  this  would  enable  us  to  get  this  kind 
of  universal  coverage.  . 

A  central  bulk  purchasing  program  would  see  to  it  that  all  pro- 
viders have  vaccines  in  their  offices,  ready  to  go,  and  can  admin- 
ister these  shots.  In  a  private  doctor's  office,  for  example,  they 
might  charge  some  small  administrative  fee  to  do  this,  but  the  big 
cost,  the  cost  of  the  medicine,  the  vaccine  itself,  would,  of  course, 
be  taken  care  of.  So  that  would  create  an  incentive  for  the  doctor 
who  is  providing  that  primary  care  to  go  ahead  and  do  it  right 


52 

there — not  send  that  family  out  the  door  and  say,  aGo  find  a  public 
clinic  somewhere,"  which  they  may  or  may  not  do. 

Is  that  essentially  what  we  re  driving  at  here? 

Secretary  Shalala.  Yes. 

Senator  Riegle.  Now,  with  respect  to  the  $300  million  in  the 
stimulus  program,  that  is  really  designed  to  help  these  overbur- 
dened public  clinics,  is  it  not,  where  people  now  go  and  stand  in 
line,  wait  half  the  day,  and  sometimes  they  can't  even  get  in  on  a 
given  day  because  of  the  enormous  burden  out  there — isn't  it  really 
designed  to  try  to  relieve  that  and  to  see  to  it  these  kids  get  the 
help  they  need? 

Secretary  Shalala.  Yes,  it  is,  Senator. 

Senator  Riegle.  When  I  think  of  urgent  needs  in  this  country, 
you  know,  we've  got  50,000  nuclear  warheads  in  our  arsenal  that 
we  found  the  money  to  buy  and  to  pay  for.  We've  spent  hundreds 
of  billions  of  dollars,  and  frankly,  not  all  that  many  questions  were 
asked  about  doing  it.  Now  weve  got  all  these  weapons  that  we 
can't  use,  and  it's  going  to  cost  us  a  fortune  to  get  rid  of  them. 

Here,  we  are  talking  about  something  as  fundamental  as  protect- 
ing our  children,  which  after  all,  we  talk  about  that  being  our  most 
important  natural  resources,  and  clearly  it  is — if  our  people  aren't, 
then  the  government  isn't  worth  much,  because  our  people  truly 
are  what  our  government  should  be  aimed  at  helping  and,  in  a 
sense,  protecting.  In  fact,  all  these  nuclear  warheads  we  have  pre- 
sumably are  designed  to  protect  our  people,  and  here  we  are  with 
something  as  fundamental  as  a  vaccination  that  can  protect  chil- 
dren against  diseases  that  can  kill  them  or  handicap  tnem  for  life, 
and  in  effect  what  we've  said  up  until  now  is  that,  well,  we  can't 
figure  out  a  way  to  do  it;  it's  just  too  tough,  and  we  can't  afford 
it— yet  we  can  afford  every  other  kind  of  thing  out  there. 

I  think  finally,  with  respect  to  the  tracking  system,  you  know,  we 
live  in  a  computer  age,  and  it  seems  to  me  it  shouldn't  be  that  hard 
to  establish  a  record,  a  permanent  record.  I  like  the  idea  of  working 
with  Social  Security  numbers,  because  that's  a  number  that  we 
take  with  us  through  our  lifetimes,  to  see  to  it  that  we  have  a  way 
of  having  a  record  on  each  child.  Isn't  the  science  and  the 
practicalities  now  of  just  modern  data  processing  sufficient  that  we 
can  have  these  kinds  of  logs  and  maintain  them  so  we  have  a  way 
of  having  a  record  on  the  children  of  this  country? 

Secretary  Shalala.  Yes,  and  most  American  doctors  will  have 
their  computer  systems  up  and  operating  because  of  Medicare  re- 
quirements long  before  this  new  tracking  system  is  put  in  place. 

Senator  Riegle.  So  they  can  just  add  this  right  onto  that,  so  they 
will  already  have  this  capability. 

Secretary  Shalala.  Yes. 

Senator  Riegle.  Now,  finally — well,  my  time  is  up.  Thank  you. 

Mr.  Waxman.  Thank  you,  Senator  Riegle. 

Secretary  Shalala,  I  want  to  commend  you  on  your  statement.  I 
thought  it  was  an  excellent  statement  as  well.  It  is  heartening  to 
see  the  strong  bipartisan  support  behind  the  initiative  of  this  ad- 
ministration, and  I  don't  think  we  are  going  to  see  any  disagree- 
ment over  the  idea  that  we  need  to  immunize  children  in  this  coun- 
try, although  I  do  want  to  point  out  that  it  has  taken  this  biparti- 
san agreement  behind  the  leadership  that  you  and  the  administra- 


53 

tion  have  given  to  the  whole  question  of  making  this  a  high  prior- 
ity. 

We  are  going  to  hear  later  from  the  pharmaceutical  companies, 
and  they  are  going  to  argue,  I  believe,  probably  each  and  every  one 
of  them,  that  we  shouldn't  have  the  government  purchase  all  the 
vaccines  and  then  distribute  them  out  to  the  clinics  or  even  to  the 
private  doctors  to  be  used  for  immunizations.  I  know  you  made  ref- 
erence to  this  in  your  statement,  but  this  is  a  focal  point  for  some 
attention.  Why  should  we  have  universal  purchase?  Why  not  just 
let  the  government  purchase  for  low-income  people  and  then  those 
who  can  afford  to  buy  it  on  their  own  will  buy  it  on  their  own,  even 
if  they  pay  a  higher  price? 

Secretary  Shalala.  There  are  a  number  of  reasons  for  that.  We 
obviously  don't  want  to  rebuild  the  public  system  so  it  covers  all 
the  children  who  are  now  served  by  their  private  physicians.  We 
believe — and  you  will  see  it  in  our  health  care  reform  system — that 
we  ought  to  build  on  a  substantial  public-private  medical  system 
that  we  have  in  this  country. 

What  universal  purchase  will  allow  us  to  do  is  to  use  the  current 
delivery  system.  The  private  doctors  and  the  pediatricians  who  tes- 
tify will  report  this,  now  now,  for  cost  reasons,  they  are  referring 
their  children  to  the  public  clinics,  which  are  unable  to  take  on  the 
responsibility  for  delivering  without  long  lines  and  without  appoint- 
ments to  all  those  children.  We  are  losing  children  in  the  referral 
process.  So  that  under  the  current  system,  middle-income  parents 
can  indeed  go  to  a  public  clinic  and  get  free  shots. 

And  what  we  are  trying  to  do  is  to  make  sure  we  don't  break  the 
connection  between  parents  and  their  children  and  their  own  doc- 
tors. So  we  think  that  a  universal  purchase  system,  if  we  distribute 
the  vaccines  free,  will  in  fact  build  on  the  existing  system  and  keep 
the  close  connection  and  the  continuity  of  the  relationship  between 
private  doctors  and  their  own  patients. 

Mr.  Waxman.  It  is  an  interesting  argument  that  you  are  making, 
because  a  lot  of  people  are  suggesting  that  what  universal  purchase 
of  vaccines  would  mean  is  that  the  government  is  going  to  run  the 
whole  program;  but  in  effect  what  you  are  saying  is  that  if  we  can 
get  universal  purchase  of  vaccines,  you  would  like  to  then  see  more 
people  go  to  their  private  doctors  rather  than  the  public  clinics. 

Secretary  Shalala.  Absolutely.  In  fact,  I  am  arguing  against  a 
large  public  bureaucracy.  I  am  arguing  that  while  we  need  to  re- 
build the  public  health  delivery  system  because  it  is  very  weak  and 
heavily  used  by  very  poor  individuals,  that  we  should  not  in  the 
process  destroy  the  role  of  private  pediatricians  and  private  family 
physicians  and  their  patients.  They  very  much  ought  to  be  deliver- 
ing the  vaccines  and  having  that  ongoing  relationship  with  the 
family. 

Mr.  Waxman.  How  do  you  answer  the  other  argument  that  I 
know  will  be  made,  that  is,  if  we  have  one  purchaser  of  vaccines, 
we  are  going  to  in  some  way  inhibit  the  research  and  development 
for  new  innovation  in  vaccines  that  are  going  to  be  more  effective 
for  the  future? 

Secretary  Shalala.  I  think  we've  indicated,  and  some  of  the 
things  that  are  written  in  the  bill  certainly  protect  in  the  negotia- 
tions research  and  development.  I  would  also  say  that  the  govern- 


54 

ment  has  some  experience  in  this.  Large  American  companies 
whose  primary  customer  is  the  government  have  had  a  lot  of  expe- 
rience in  the  negotiations,  protecting  the  R  and  D.  Senator  Riegle 
mentioned  the  nuclear  warheads,  and  there  have  not  been  a  lot  of 
complaints,  it  seems  to  me,  from  the  part  of  the  industry  in  this 
country  that  does  purchasing  and  provides  things  for  the  Defense 
Department,  that  the  government  is  insensitive  to  their  R  and  D 
needs. 

I  would  argue  that  we  are  sophisticated  enough  as  a  government 
and  that  my  Department  in  particular  is  deeply  committed  to  re- 
search and  development  in  the  vaccine  industry,  and  there  is  just 
no  way  that  we're  going  to  permit  a  negotiation  that  doesn't  protect 
that  interest.  And  we  also  intend  where  we  can  to  have  multiple 

Purchases  of  the  same  vaccine  so  that  it  won't  be  just  one  company, 
ut  as  many  companies  as  we  can  get  involved. 

We  believe,  too,  that  the  stability  of  the  government  purchaser 
will  help  offer  some  stability  to  American  vaccine  companies. 

Mr.  Waxman.  Are  you  giving  the  same  kind  of  argument  that  one 
might  give  if  you  said  the  military  has  been  the  main  purchaser 
of  weapons,  and  that  certainly  hasn't  inhibited  development  of  new 
weapons,  and  that  if  the  government  is  the  purchaser  of  vaccines, 
it  will  not  inhibit,  and  in  fact  it  could  well  promote,  the  research 
and  development  for  new  vaccines? 

Secretary  Shalala.  It  may  well  be.  And  beyond  the  Defense  De- 
partment, there  are  numerous  examples  throughout  the  govern- 
ment of  the  relationship  between  the  government  and  American  in- 
dustry and  government  purchasing  and  government  involvement 
helping  the  R  and  D  relationship.  So  that  I  just  think  we  can  do 
it,  and  for  the  kids  of  this  country  it  is  important  that  we  do. 

Mr.  Waxman.  Thank  you. 

The  Chairman.  Senator  Kassebaum. 

Senator  Kassebaum.  Madam  Secretary,  I  think  there  is  no  one 
who  can  make  a  more  thoughtful  and  I  know  dedicated  effort  to 
this  initiative  than  yourself. 

I'd  like  to  move  away  from  the  Defense  Department  for  a  mo- 
ment, because  I  don't  think  that's  a  very  good  analogy.  There  were 
some  of  us  who  thought  the  Defense  Department  didn't  do  a  very 
good  job  with  their  research  and  development  and  paying  for  their 
research  and  development. 

So  I'd  like  to  move  on  from  that  for  a  moment  to  just  explore 
with  you  the  premise  of  the  administration's  immunization  plan.  I 
think  all  of  us  here  recognize  it  is  important  to  eliminate  the  bar- 
riers to  immunization,  as  you  said.  But  where  I  have  a  problem  is 
in  believing  that  universal  purchase  will  indeed  do  that  and  cost 
is  the  major  barrier. 

I  really  do  feel  myself  that  there  are  other  factors  that  come  into 
play,  and  one  of  them  is  the  parents'  lack  of  knowledge.  I  think 
that  for  many,  the  growth  in  the  number  of  recommended  vaccines 
may  not  be  understood.  Nor  is  the  early  age  at  which  immunization 
becomes  important  clearly  understood.  And  as  I  am  sure  you  are 
well  aware,  there  have  been  those  in  the  Public  Health  Service  who 
have  indicated  that  the  children  most  at  risk  of  not  being  immu- 
nized are  those  who  are  Medicaid-eligible  and  for  whose  families, 
therefore,  the  cost  of  vaccines  is  not  the  problem. 


55 

You  mentioned  private  physicians,  and  I  think  that's  important. 
One  of  the  problems,  I  would  suggest — and  I  would  like  your  com- 
ment on — is  that  these  private  physicians  are  reluctant  to  accept 
Medicaid  patients  because  of  poor  provider  reimbursement  rates, 
the  failure  of  some  States  to  pay  for  required  follow-up  visits,  and 
the  paperwork  hassles  entailed  in  filing  claims. 

And  I  would  suggest  that  these  are  things  that  we  need  to  ad- 
dress, and  with  the  moneys  that  would  be  spent  for  universal  pur- 
chase, we  could  address  some  of  these  other  barriers  first. 

Would  you  care  to  comment  on  that? 

Secretary  Shalala.  Yes.  Thank  you,  Senator.  Senator,  I  agree 
with  you,  and  in  fact  in  the  stimulus  package,  we  put  in  the  re- 
sources to  rebuild  the  infrastructure.  We  pledge  that  we'll  straight- 
en out  the  Medicaid  reimbursement  issues  that  will  eliminate  the 
paperwork  that  would  provide  a  barrier. 

I  think  the  point  of  this  bill  is  that  what  we've  learned  from  our 
experience  in  the  other  States  is  that  we  have  to  do  everything; 
that  universal  purchase  cannot  be  the  centerpiece.  In  fact,  you 
have  to  have  the  infrastructure  in  place  so  that  the  private  doctor 
can  provide  the  service  to  the  children.  And  to  do  that,  you  need 
to  expand  the  hours  of  public  clinics  to  make  sure  you  have  provid- 
ers in  place,  to  have  an  educational  campaign  that  is  extraordinary 
so  that  every  parent  not  only  hears  about  it,  but  feels  that  it  is 
their  responsibility. 

So  I  would  simply  say  all  of  the  above — but  we  can't  take  one 
large  link  out.  If  we  have  learned  anything  about  international 
campaigns  or  about  national  campaigns  to  do  something  as  fun- 
damental as  this,  it  is  that  you  have  to  put  a  public  and  private 
infrastructure  in  place  so  that  no  one  falls  between  the  cracks.  So 
it's  all  of  the  pieces  that  have  to  be  put  in  place,  and  what  I  am 
arguing  for  today  is  all  of  the  pieces,  and  I  concede  your  points 
about  the  infrastructure  pieces  that  have  to  be  in  place. 

Senator  Kassebaum.  It's  just  that  I  think,  Madam  Secretary, 
universal  purchase  does  become  the  centerpiece.  And  I  guess  I 
would  say  for  the  billion  dollars  that  is  just  a  start,  annually,  we 
could  triple  the  number  of  community  health  centers;  we  could 
really  do  some  of  the  other  things  to  correct  what  seem  to  me  are 
greater  barriers  with  the  money  we  would  spend  on  universal  pur- 
chase. 

My  time,  I  have  been  notified,  is  about  to  expire,  but  I  would  just 
like  to  say  that  I  support  those  who  have  said  this  is  not  a  partisan 
issue.  I  tnink  there  are  ways  that  we  could,  I  hope,  work  on  this 
as  it  moves  along,  in  a  bipartisan  fashion,  because  I  think  there  are 
many  things  on  which  we  would  agree. 

But  I  have  serious  reservations  about  universal  purchase.  As  we 
work  together  on  this,  I  hope  we  can  each  provide  some  assurances 
to  each  other  about  whether  this  is  indeed  the  answer.  I  know  I 
still  need  to  be  convinced. 

Secretary  Shalala.  Well,  Senator,  if  I  could  only  repeat  just 
quickly,  if  you'll  just  keep  in  mind  that  what  we  don't  want  to  do 
is  to  build  a  huge  public  bureaucracy.  What  we  do  want  to  do  is 
involve  private  physicians,  private  pediatricians,  and  to  keep  that 
continuity  between  young  people,  between  children  and  their  pri- 
vate doctors;  that  now,  private  doctors  are  referring  patients  to 


56 

public  clinics  because  of  the  cost,  in  large  part  because  of  the  cost. 
We  need  to  deal  with  that  issue  as  part  of  this  bill,  or  60  percent 
of  those  who  are  above  the  poverty  line  will  continue  not  to  have 
vaccinations  for  their  children. 

Senator  Kassebaum.  Thank  you. 

Mr.  Waxman.  Thank  you,  Senator  Kassebaum. 

Mr.  Greenwood. 

Mr.  Greenwood.  Good  morning,  Madam  Secretary. 

Secretary  Shalala.  Good  morning. 

Mr.  Greenwood.  Immediately  prior  to  my  entry  into  politics,  I 
was  a  child  welfare  case  worker,  and  so  was  my  wife.  We  spent  a 
lot  of  time  in  the  homes  of  families  where  there  were  less  than 
ideal  parenting  skills,  where  we  needed  to  educate  the  parents,  we 
needed  to  coax  parents  and  in  some  cases  require  parents  to  do  the 
things  that  were  necessary  for  their  children. 

There  has  been  a  logic  proposed  here  by  Senator  Gregg  from  New 
Hampshire  and  Representative  Klug  from  Wisconsin  that  I  would 
like  to  pursue  with  you.  We  look  at  the  fact  that  2-year-olds  have 
a  50  percent  immunization  record  in  this  country.  But  by  the  time 
children  are  going  to  public  schools,  where  the  States  require  them 
to  be  immunized,  that  percentage  leaps  to  95  or  97  percent.  And 
it  seems  logical,  certainly  on  the  face  of  it,  to  conclude  that  what 
is  happening  is  that  although  there  may  be  barriers  to  immuniza- 
tion, these  barriers  disappear  when  parents  are  told  that  in  order 
to  receive  the  service  of  public  education,  you  must  have  your  chil- 
dren immunized.  Suddenly,  the  children  become  immunized. 

So  the  argument  has  been  proposed  that  since  the  Federal  Gov- 
ernment and  the  State  governments,  through  their  taxpayers,  pro- 
vide AFDC  for  children  and  the  WIC  nutrition  program,  and  pro- 
grams like  Head  Start  and  day  care,  we  could  simply  make  it  a  re- 
quirement of  those  programs  that  children  be  immunized.  In  fact, 
the  caseworker  would  say  when  the  mother  applies  for  the  medical 
assistance  card  for  her  cnild,  "Yes,  your  child  is  eligible,  and  here 
is  the  card.  We  require  that  your  child  be  immunized  and  that  you 
follow  up.  We  will  work  with  you  to  do  that."  And  the  same  thing 
could  occur  at  day  care  settings  and  so  forth. 

There  is  a  logic  that  says  that  would  work.  It  wouldn't  take  a  bil- 
lion dollars,  it  wouldn't  take  most  of  what  is  in  this  bill,  and  it 
would  work  effectively.  The  logic  of  this  argument  also  observes  the 
fact  that  there  are  lots  of  places  in  this  country  where  children 
have  immediate  access  in  terms  of  geography  to  clinics  where  there 
are  free  immunizations.  The  parents  are  not  availing  themselves  of 
that  service,  and  it  is  probably  because  they  have  not  been  required 
to  do  so. 

I  would  like  to  hear  your  response  to  that  argument. 

Secretary  Shalala.  Congressman,  I  think  it  is  very  important  to 
remember  that  this  is  not  a  poverty  program  and  that  the  problem 
of  vaccinations  in  this  country  for  preschool  children  is  a  problem 
for  every  American  family,  and  that  the  high  rates  of  children  who 
are  over  the  poverty  line,  who  don't  participate  in  the  WIC  pro- 
gram or  in  the  AFDC  program,  60  percent  of  the  children  whose 
families  are  over  the  poverty  line  don't  have  their  vaccinations  be- 
fore they  are  2  years  old. 


57 

Mr.  Greenwood.  Sixty  percent  of  all  children  over  the  poverty 
line,  or  60  percent  of  children  just  above  the  poverty  line? 

Secretary  Shalala.  No.  These  are  children  over  the  poverty  line. 
I  don't  have  the  numbers  for  those  who  are  just  above 

Mr.  Greenwood.  All  the  way  up  to  the  top,  and  that  would 

Secretary  Shalala.  We  have  very  high  percentages  of  children 
from  middle-income  families,  not  just  from  poverty  families^bvi- 
ously,  there  are  huge  percentages  of  children  who  grow  up  in  pov- 
erty in  this  country,  larger  percentages  of  them  as  a  group  who 
don't  get  their  vaccinations.  This  is  an  American  problem.  This  is 
a  problem  more  fundamental  than  just  looking  at  poor  children. 
And  therefore,  the  design  has  to  be  something  that  doesn't  just  look 
at  the  public  delivery  system,  but  that  looks  at  the  private  delivery 
system  at  the  same  time. 

While  I  believe  that  we  ought  to — and  we  have  experimented, 
using  the  WIC  program,  for  example,  using  Head  Start  programs, 
to  try  to  get  more  children  in,  and  some  of  these  economic  incen- 
tives and  other  kinds  of  incentives  have  worked — I  think  we  ought 
to  do  all  of  the  above.  I  am  not  opposed,  nor  is  the  Clinton  adminis- 
tration, to  trying  every  kind  of  positive  incentive  of  education  pro- 
gram. But 

Mr.  Greenwood.  Excuse  me  for  interrupting  you,  but  the  time 
is  short.  Do  you  include  that  requirement  as  a  criterion  for  entry 
into  certain  programs 

Secretary  Shalala.  Yes,  absolutely,  absolutely. 

Mr.  Greenwood.  — that  there  be  a  requirement  that  the  children 
be  immunized — that's  all  right  with  this  administration? 

Secretary  Shalala.  But  everything  we  have  learned  is  that  while 
that  will  help  for  a  percentage  of  the  children  who  grow  up  in  pov- 
erty who  are  eligible  for  Federal  programs,  we  need  to  do  other 
things  for  the  rest  of  American  children. 

One  wealthy  kid  who  gets  measles  in  this  country  is  a  danger  to 
every  American  child  and  to  every  American  in  terms  of  the  long- 
term  costs  and  the  health  of  the  children  that  they  come  into  con- 
tact with.  And  therefore,  we  have  to  see  this  program  as  a  national 
program  for  every  American  child  and  have  to  see  the  public  inter- 
est in  it,  and  therefore  the  design  has  to  be  focused  beyond  just  our 
poverty  programs. 

Mr.  Greenwood.  Do  you  happen  to  know,  Madam  Secretary, 
what  the  rate  of  immunizations  is  for  our  AFDC  children? 

Secretary  Shalala.  I  actually  probably  have  that  number,  and  I 
can  provide  it  to  you. 

Mr.  Greenwood.  Thank  you,  Mr.  Chairman. 

The  Chairman.  Thank  you,  Madam  Secretary. 

I  think  that  today,  as  well  as  the  day  that  you  made  the  an- 
nouncement of  the  President's  program,  is  really  one  of  the  impor- 
tant days  for  children  in  America.  And  I  think  any  of  us  who  had 
the  good  opportunity  to  see  the  President  and  Mrs.  Clinton  in  the 
clinic  in  northern  Virginia  and  meet  the  parents  and  children 
there,  saw  a  successful  program  and  know  what  this  can  really 
mean  for  children  in  our  own  country.  Again,  I  join  with  others  in 
commending  you  for  excellent  testimony,  and  also  for  your  last  re- 
sponse to  some  of  the  questions. 


58 

I  think  this  is  an  area  where  certainly — and  we  gather  from 
what  the  President,  Mrs.  Clinton,  and  otners,  including  yourself, 
have  stated — we  know  what  works.  And  we  have  the  experience  in 
terms  of  many  European  countries.  I  am  sure  you  are  familiar  with 
the  case  in  the  United  Kingdom  where  they  had  national  health  in- 
surance for  all  citizens,  and  they  didn't  have  a  good  immunization 
program.  And  what  did  they  do?  They  provided  a  bonus  to  doctors 
to  make  sure  that  in  the  various  areas  and  regions,  children  would 
receive  their  immunizations.  Practitioners  would  receive  the  bonus 
if  a  certain  percentage  of  their  children  received  immunizations. 
Bang,  right  up  through  the  ceiling,  immunization  rates  increased. 

We  aren't  even  proposing  that  in  terms  of  this  issue,  but  we  do 
know  what  has  worked  in  other  places.  We  know  that  the  cost  is 
definitely  a  factor  to  both  families  and  providers.  We  find  that  even 
in  the  Federal  Government,  we  don't  provide  adequate  reimburse- 
ment under  Medicaid  to  doctors  to  provide  immunizations,  and  that 
where  this  isn't  provided,  the  numbers  are  down.  So  as  a  matter 
of  national  policy,  we  have  had  disincentives  for  all  of  our  friends, 
rather  than  an  incentive,  to  try  to  immunize. 

And  even  in  the  handful  of  States  that  have  adequate  Medicaid 
compensation,  barriers  to  families  remain. 

And  as  I  understand  it,  what  you  are  saying  supports  a  com- 
prehensive approach — to  try  to  get  the  lowest  possible  cost  for  the 
taxpayers  and  the  parents,  and  place  a  very  heavy  emphasis  on  the 
delivery  systems — where  we  find  that  many  of  the  European  coun- 
tries have  had  great  success  in  involving  the  parents  and  providers. 

Perhaps  in  the  brief  time  that  I  have,  you  could  identify  even 
further  for  us — I  think  you  have  in  terms  of  your  testimony — what 
would  be  included  in  the  President's  program,  and  also  what  addi- 
tional indicators  there  are  in  terms  of  ensuring  adequate  coverage. 
We  are  going  to  hear  from  someone  from  my  own  State,  from  Hol- 
yoke,  MA,  that  neighbors  who  speak  the  local  language  participate 
in  outreach  programs,  going  door  to  door  bringing  the  message  of 
immunization  to  parents  and  children.  Also,  just  very  briefly  in  the 
time  that  I  have,  what  can  we  learn  from  other  countries/  Often, 
we  can  learn  from  others — we  know  that  all  knowledge  is  not  in 
Washington,  and  all  knowledge  is  not  necessarily  in  our  country, 
and  we  find  that  we  can  probably  learn  a  bit  from  some  others  who 
have  had  extraordinary  success.  So  I  am  just  wondering  if  you 
could  take  a  minute  or  two  and  just  outline  these  things  for  us. 

Secretary  Shalala.  Senator,  as  you  know,  much  of  the  Third 
World  has  actually  had  more  success  than  we  have.  In  fact,  in  this 
hemisphere,  there  are  only  two  countries  that  rank  below  us  in  the 
percentage  of  their  2-year-olds  that  are  immunized — Bolivia  and 
Haiti — to  give  you  some  sense  of  the  experience  in  other  countries. 

So  convinced  are  we  that  we  can  learn  from  other  countries  that 
we  have  recruited  one  of  the  great  public  health  officials  in  this 
country,  D.A.  Henderson,  who  eliminated  smallpox  in  the  world 
some  time  ago,  who  was  head  of  public  health  at  Johns  Hopkins. 
Dr.  Henderson  is  here,  and  he  will  be  the  deputy  assistant  sec- 
retary for  science  policy,  and  he  will  lead  the  administration's  effort 
to  get  every  child  under  2  immunized. 

What  he  and  his  colleagues  around  the  world  have  learned  is 
that  it  really  is  all  of  the  above  in  terms  of  outreach.  It  is  edu- 


59 

cational  programs,  it  is  going  to  every  institution,  it  is  getting 
every  part  from  the  churches  to  the  grocery  stores,  it  is  getting  ev- 
eryone to  pass  the  message  to  parents.  It  is  getting  national  leader- 
ship to  make  it  very  clear  that  this  is  a  national  effort. 

I  will  be  talking  to  our  friends  from  Walt  Disney,  who  are  going 
to  join  me  tomorrow  morning  to  talk  about  what  role  the  Walt  Dis- 
ney characters  can  play  in  talking  directly  to  children.  From  tele- 
vision to  the  script  writers  to  America's  athletes,  we  intend  to  mo- 
bilize everyone  who  has  conversations  with  parents  and  children  to 
get  them  in  and  to  use  every  American  institution. 

Our  Social  Security  offices  around  the  country — there  are  a  large 
number — have  volunteered  to  do  what  they  can,  and  they  are  doing 
their  own  outreach  for  their  own  programs.  The  Department  in- 
tends to  mobilize  itself.  But  the  truth  is  a  national  campaign  that 
is  sustained  because  it  has  an  infrastructure  in  place,  we  can  do 
it  once,  but  we  need  to  repeat  it  so  that  everyone  knows  that  the 
children  need  to  come  in  before  they  are  2  to  get  their  vaccinations. 

The  Chairman.  My  time  is  up.  I  thank  you,  Madam  Secretary. 

Mr.  Waxman.  Mr.  Bryant. 

Mr.  Bryant.  Thank  you,  Mr.  Chairman. 

Secretary  Shalala,  I  support  the  egalitarian  spirit  behind  this, 
and  I  am  willing  to  spend  money  to  achieve  it.  It  seems  to  me  that 
perhaps  there  is  still  a  disconnect — if  60  percent  of  the  nonpoor 
kids  are  not  being  immunized,  then  it  would  appear  that  money  is 
not  the  principal  problem;  and  yet  it  would  seem  that  purchasing 
all  of  the  vaccines  and  providing  them  free  would  be  an  attempt 
to  address  the  problem  of  affordability  which,  as  I  said,  does  not 
appear  to  be  the  principal  problem  here. 

Secretary  Shalala.  Let  me  respond  to  that.  America's  pediatri- 
cians have  told  us  that  they  are  referring  large  numbers  of  children 
who  are  not  poor,  because  the  cost  of  the  vaccine  combination,  to 
public  health  clinics,  and  some  of  them  never  get  there — transpor- 
tation problems  and  other  kinds  of  explanations. 

One  explanation  doesn't  work  for  every  child  depending  on  their 
income.  The  important  point  here  is  that  you  cannot  assume  that 
cost  is  not  a  problem  for  lower-middle-income  families  who  have 
very,  very  young  children. 

The  pediatricians  have  indicated  to  us  that  it  is  a  problem.  The 
fact  that  large  numbers  of  nonpoor  children  are  not  immunized  in- 
dicates both  cost  to  us  as  well  as  communications.  So  that  we 
aren't  pointing  to  one  explanation — cost — we  are  pointing  to  mul- 
tiple explanations,  and  we  are  pointing  to  the  need  for  a  delivery 
system  in  both  the  private  sector  as  well  as  the  public  sector  to  get 
every  child  immunized. 

Mr.  Bryant.  But  the  problem,  I  think,  that  persists  and  that  I 
have  pointed  to  is  that  if  when  they  get  to  school  age,  95  percent 
of  them  then  get  immunized,  then  it  appears  the  problem  is  not 
that  some  private  doctor  is  sending  the  kid  to  a  public  health  clinic 
and  he  does  not  show  up;  the  problem  is  something  else.  And  I  am 
still  puzzled  as  to  why  buying  the  vaccine  and  providing  it  free 
solves  the  problem.  . 

Secretary  Shalala.  Because  it  is  a  combination  of  things,  par- 
ticularly for  very  young  children  and  for  babies.  It  is  a  combination 
of  communication  that  it  is  necessary  to  do  it  before  the  children 


60 

are  2;  it  is  a  combination  of  having  access  to  vaccines,  which  is  a 
cost  problem  for  many  young  families  at  that  point.  Our  point  is 
that  we  need  to  eliminate  every  barrier  for  parents  who  have  very 
young  children,  to  get  those  children  in  to  get  their  vaccinations. 

Mr.  Bryant.  Senator  Kennedy  observed  that  in  the  United  King- 
dom, where  medical  care  is  free  and  apparently  every  barrier  was 
down,  they  still  did  not  have  people  getting  vaccinations,  and  I  did 
not  know  that,  but  apparently  they  had  to  offer  a  bonus  to  the  doc- 
tors to  get  them  to  notify  everybody. 

Secretary  Shalala,  No  one  can  point  to  one  explanation  that  ac- 
counts for  this,  and  therefore  we  must  do  everything  that  has  been 
experimented  with  or  has  been  tried,  but  to  put  it  all  together  so 
that  we  get  all  the  children  in.  The  important  thing  is  not  one  ap- 
proach versus  another,  but  to  see  it  as  a  more  systemic  need  and 
to  put  a  total  effort  together,  to  make  it  a  community  effort  and 
a  community  investment. 

Mr.  Bryant.  Have  you  calculated  the  net  cost  once  you  subtract 
the  costs  that  we  will  not  have  because  we  will  not  have  so  many 
unimmunized  people?  What  will  the  net  cost  of  the  program  be? 

Secretary  Shalala.  The  universal  purchase  will  come  down  to 
$600  million  once  we  discount  the  Medicaid  and  other  kinds  of  sav- 
ings. 

Mr.  Bryant.  Thank  you. 

The  Chairman.  Senator  Wellstone. 

Senator  Wellstone.  Thank  you,  Mr.  Chairman.  I'll  be  brief. 

First  of  all.  Madam  Secretary,  I'd  like  to  thank  you  for  your  lead- 
ership. I  feel  like  I  have  shouted  it  from  the  mountaintop,  that  I 
think  that  when  historians  look  back  at  this  decade,  the  ultimate 
indictment  is  going  to  be  the  ways  in  which  we  abandoned  children 
and  devalued  the  work  of  adults  who  work  with  children.  I  think 
you  are  lighting  a  candle,  and  this  is  an  extremely  important  ini- 
tiative, and  you  certainly  have  my  full  support. 

I  have  some  questions,  and  I  believe  when  I  stepped  out  to  meet 
with  some  students  from  Minnesota,  that  the  chairman  asked  one 
of  them.  Let  me  first  ask  you  the  why  of  a  national  registry.  Dr. 
Michael  Moen  from  the  Minnesota  Department  of  Health  is  going 
to  talk  about  this  later  on,  but  why  a  national  registry  as  opposed 
to  something  that  is  more  focused  on  those  neighborhoods  and 
those  communities  where  we  know  we  have  a  real  problem? 

Secretary  Shalala.  These  are  basically  State  registries,  but  chil- 
dren move  across  State  boundaries,  so  what  we  are  hoping  to  do 
is  to  develop  a  State  registry  in  every  State  that  fits  together  so 
that  we  can  provide  the  information  across  States  as  children  move 
along.  It  is  the  basic  information  for  the  child,  and  the  tracking 
system  will  be  developed  by  State  experts. 

We've  got  to  be  able  to  find  the  child  who  hasn't  been  fully  im- 
munized, and  children  do  move,  so  it  is  really  an  attempt  to  fit  a 
bunch  of  State  registries  together. 

Senator  Wellstone.  I  must  confess  to  you  that  I'm  just  learning 
about  this  in  specific,  so  forgive  me  if  this  question  has  been  asked. 
But  I  guess  what  I'm  confused  about  is  that  at  the  State  level,  it 
would  strike  me  that  if  there  is  a  limited  amount  of  money,  and 
we  are  living  in  an  age  where  we  know  we  don't  have  an  unlimited 
amount  of  resources,  we  are  calling  for  States  to  essentially  estab- 


61 

lish  an  across-the-board  registry — why  not  enable  States  to  have 
the  capacity  to  have  more  of  a  focus  as  to  where  they're  going  to 
do  their  surveillance?  I  think  what  I  am  hearing  from  some  States 
is  that  they  are  a  little  nervous  about  tracking  each  and  every 
child.  Do  you  see  where  I  am  heading  with  this  question? 

Secretary  Shalala.  Yes,  I  see  where  you  are  heading.  I  guess  I 
have  to  keep  repeating  that  this  isn't  a  poverty  program;  that  we 
have  large  numbers  of  American  children  who  are  working  class, 
who  are  middle  class,  who  are  not  getting  immunized;  that  this  is 
a  national  program.  Our  investment  in  immunization,  our  invest- 
ment in  the  health  of  our  country  has  to  be  for  every  American, 
and  we've  got  to  start  with  very  young  children. 

To  get  the  information,  the  number  of  shots  you  need  to  get,  the 
number  of  times  you  need  to  go  back  and  forth,  are  so  numerous 
that  the  registration  system  and  the  tracking  system  is  to  do  the 
follow-up  and  work  with  parents,  to  get  them  back  in  at  the  right 
times.  And  I  think  I  sort  of  read  through  when  you  have  to  come 
in — at  2  months,  at  4  months,  at  6  months.  It  is  a  complex  system, 
and  we  need  to  work  with  parents  to  get  them  the  notification,  and 
we  need  it  for  every  child. 

It  does  us  no  good  if  part  of  the  American  children  are  immu- 
nized and  a  disease  breaks  out.  We've  got  to  get  every  child  immu- 
nized. 

Senator  Wellstone.  I  was  just  handed  a  note  that  I  have  2  min- 
utes remaining. 

I  have  a  number  of  other  questions,  Mr.  Chairman,  which  I'd  like 
to  submit  in  writing  and  will  do  so. 

Secretary  Shalala.  I'd  be  happy  to  respond. 

Senator  Wellstone.  Let  me  just  follow  up,  so  that  I  am  clear 
about  the  why  of  the  question.  I  think  that  those  people  who  have 
critiqued  social  policy  in  our  country  and  have  argued  that  all  too 
often,  means-tested  programs  and  poor  people's  programs  become 
poor  programs,  are  correct,  and  I  think  I  understand  where  you're 
heading  in  terms  of  the  application  of  this.  But  I  still,  I  guess,  have 
this  question  about  how  it  is  we  develop  this  registry.  This  is,  of 
course,  for  the  purposes  of  beginning  to  have  some  kind  of  way  of 
accumulating  our  data  and  knowing  where  to  go,  but  with  a  limited 
amount  of  resources,  I  still  have  that  question,  and  I  want  to  talk 
with  you  more  about  it. 

Secretary  Shalala.  And  I  would  be  happy  to 

Senator  Wellstone.  I'm  not  trying  to  get  more  and  more  means- 
tested  programs. 

Secretary  Shalala.  Yes,  and  to  ask  private  doctors,  private  pedi- 
atricians to  ask  the  income  of  their  patients  would  simply  add  an- 
other obstacle.  What  we're  trying  to  do  is  to  remove  obstacles.  But 
more  than  anything  else,  we  are  trying  to  get  every  child  in  Amer- 
ica immunized  whether  they  are  rich  or  poor.  This  is  a  public 
health  program  for  every  American  child,  not  a  poverty  program. 

Senator  Wellstone.  Thank  you,  Madam  Secretary. 

Thank  you,  Mr.  Chairman. 

Mr.  Waxman.  Thank  you,  Senator  Wellstone. 

Mr.  Towns. 

Mr.  Towns.  Thank  you  very  much,  Mr.  Chairman. 


62 

Let  me  also  indicate  that  I  thought  your  testimony  was  outstand- 
ing. 

Secretary  Shalala.  Thank  you. 

Mr.  Towns.  However,  I  have  some  concerns,  coming  from  New 
York,  an  area  where  many  of  our  doctors  will  not  take  Medicaid. 
You  mentioned  the  fact  that  with  the  Medicare  policy,  certain  com- 
puters have  to  go  in  in  terms  of  recordkeeping. 

Also,  many  of  our  doctors  will  not  take  Medicare.  And  I  am  just 
wondering  if  this  will  not  force  them  to  opt  out.  I  don't  see  this  as 
being  something  that  will  really  benefit  those  areas  because  of  the 
problems  we  have  now  in  terms  of  doctors  not  taking  Medicaid. 
And  among  the  reasons  they  give,  for  instance,  are  the  amount 
that  it  pays,  or  the  fact  of  all  the  paperwork  involved.  It  seems  to 
me  that  we  are  putting  additional  paperwork  on  them,  and  I  think 
that  the  few  that  we  have  who  will  take  Medicaid  will  now  say, 
"No,  I  am  not  going  to  take  it." 

So  my  question  to  you  would  be  why  don't  we  spend  more  in 
terms  of  outreach?  In  the  countries  that  are  doing  well,  in  Europe, 
that  have  90  percent,  you'll  find  that  they  spend  a  tremendous 
amount  of  money  in  outreach.  So  it  seems  to  me  that  our  problem 
more  than  anything  else  is  outreach,  and  I  think  that's  where  the 
emphasis  should  be. 

Secretary  Shalala.  Congressman,  I'm  not  quite  sure — you  men- 
tioned a  10  percent  number.  It  is  significantly  higher  than  that,  I 
think,  closer  to  25  percent,  in  terms  of  our  outreach  recommenda- 
tions, with  a  lot  beyond  that — that's  the  government  expenditure — 
a  lot  of  volunteers  from  the  Ad  Council  and  other  places.  So  we  are 
going  to  have  a  huge  outreach  effort. 

Second,  90  percent  of  American  physicians  now  participate  in 
Medicare,  and  as  you  probably  know,  in  the  Medicaid  program,  we 
are  in  the  middle  of  a  debate  within  the  Clinton  administration 
about  reforming  that  program. 

Third,  we  are  going  to  make  it  very  easy  for  every  American  phy- 
sician to  provide  vaccines  by  essentially  giving  them  the  vaccine. 
We  are  asking  them  to  keep  a  record  on  the  child,  which  they  ordi- 
narily would  do,  so  that  there  could  be  a  follow-up  on  the  vaccine. 
We  are  going  to  eliminate  paperwork,  we  are  going  to  eliminate  bu- 
reaucracy. We  are  going  to  make  it  easy  for  them  to  do  what  they 
very  much  would  like  to  do,  and  that  is  to  make  sure  that  our 
youngest  and  most  vulnerable  citizens  are  properly  immunized  so 
they  get  started  right  and  so  that  they  do  have  a  healthy  begin- 
ning. 

Mr.  Towns.  I'm  hoping  that  you  are  right  and  that  it  works,  and 
I  think  that  we  have  to  begin  to  try  some  things.  But  when  I  look 
at  the  pediatricians  that  you  talked  about  in  terms  of  referring  pa- 
tients out  rather  than  immunizing  them,  I  think  the  reason  for 
that  more  than  anything  else  is  that  the  conventional  health  insur- 
ance companies,  about  50  percent  of  them  will  actually  pay.  So  I 
think  that's  a  real  problem  there. 

Secretary  Shalala.  And  that  is  why  giving  the  physician  the 
vaccines,  particularly  physicians  who  deaf  with  working  class  peo- 
ple like  those  in  your  community,  and  low-income  people,  will  make 
the  difference. 


63 

I  was  in  New  York  on  Monday,  and  as  you  probably  know,  the 
HIP  program  has  announced  that  they  are  going  to  work  with  us 
and  immunize  thousands  of  New  York  children.  Again,  they  believe 
very  strongly  that  free  vaccines  will  make  the  difference  in  terms 
of  our  ability  to  get  every  child  in  New  York  and  every  place  else 
immunized. 

Mr.  Towns.  Well,  I  am  happy  to  hear  that  you're  really  spending 
a  little  more  than  I  thought  in  terms  of  outreach,  because  I  really 
feel  that  outreach  is  the  Key  to  be  able  to  get  people  to  come  in. 
I  know  in  Georgia,  there  is  a  program  that  President  Carter  is  in- 
volved in  where  they  are  giving  out  tickets  to  go  see  Michael  Jack- 
son in  order  to  get  people  to  go  in  and  get  immunized. 

So  I  think  that  we  have  to  be  creative  in  order  to  make  certain 
that  it  works.  So  I  am  happy  to  see  the  flexibility,  because  in  the 
area  that  I  come  from,  that  flexibility  would  be  needed  in  order  to 
make  a  difference. 

Secretary  Shalala.  We  want  to  leave  no  child  behind,  and  to  do 
that  we  have  to  try  everything  that  we  know  to  make  sure  we  get 
the  children  in  and  get  them  into  a  regular  relationship  with  the 
physician,  so  they  can  do  more  than  just  immunization,  too. 

Mr.  Towns.  Let  me  just  make  one  point,  and  I  want  to  make  cer- 
tain I  understand.  I  know  we  are  in  the  process  of  revamping,  and 
I  think  that's  great,  but  is  there  anything  that  we  can  do  to  encour- 
age the  physicians  who  will  not  take  Medicaid  to  participate  in  this 
program? 

Secretary  Shalala.  Well,  I  think  that  as  part  of  health  reform, 
to  the  extent  that  we  eliminate  barriers,  that  we  eliminate  bu- 
reaucracy, that  we  make  it  easier  to  participate,  that  we  get  a  na- 
tional program  in  which  everyone  is  insured  with  the  same  basic 
benefit  package,  that  that  will  all  help,  because  the  doctor  won't  be 
tied  to  a  fee-for-service,  a  narrow  reimbursement  program,  and  a 
big  bureaucracy  to  deal  with,  and  to  that  extent  I  think  it  will 
make  a  difference. 

Mr.  Towns.  Thank  you  very  much,  Mr.  Chairman. 

The  Chairman.  Thank  you. 

Senator  Gregg. 

Senator  Gregg.  Thank  you,  Mr.  Chairman. 

If  I  understood  your  response  to  Congressman  Greenwood,  it  was 
that  you  would  have  no  problems  conceptually  with  amendments 
that  would  address  the  issue  of  encouraging  immunization  when 
people  who  have  children  obtain  access  to  Federal  programs.  Now, 
I  am  not  limiting  it  just  to 

Secretary  Shalala.  Senator,  I  indicated  that  I  favored  positive 
incentives  and  connecting  other  kinds  of  programs  with  positive  in- 
centives. For  example,  in  the  WIC  program,  we  have  done  some 
demonstrations  where  we  offered  2  months  of  WIC  rather  than  1 
month  of  WIC  if  parents  would  bring  their  children  in,  and  that 
was  a  positive  incentive. 

Senator  Gregg.  You  are  not  saying,  then,  that  you  would  agree 
that  people,  in  order  to  get  WIC  to  begin  with,  should  have  some 
sort  of  certification  that  they  have  gotten  their  2-year-old  immu- 
nized, or  that  once  they  come  on  the  system,  in  order  to  stay  on 
the  system,  thev  have  to  have  the  2-year-old  immunized.  You  don't 
agree  with  that? 


64 

Secretary  Shalala.  Senator,  I  don't  want  to  jump  into  adminis- 
tration policy  without  reviewing  that.  What  I  was  saying  is  that  we 
certainly  will  consider  positive  incentives  and  connections  with 
other  government  programs  as  part  of  an  overall  effort  to  raise  our 
immunization  rates.  And  I  think  we  will  enthusiastically  review 
any  proposal  that  might  be  made  as  part  of  an  overall  strategy. 
But  I  would  not  want  to  be  pinned  down  on  the  specifics 

Senator  Gregg.  I  understand  that,  and  I  think  that's  reasonable, 
but  the  concept  makes  sense. 

Secretary  Shalala.  Yes. 

Senator  Gregg.  And  I  wouldn't  just  limit  it  to  the  poor  or  the 
near-poor.  I  don't  see  why  people  coming  in  for  tax  refunds,  if 
they've  checked  off  a  dependency  item,  you  might  want  to  require 
that  in  order  to  get  a  dependency  exemption  you  might  have  to  cer- 
tify if  you  have  a  2-year-old  that  they  have  been  immunized.  But 
the  concept  of  getting  broader  participation  is,  I  believe,  the  core 
issue.  And  because  you  have  cited  D.A.  Henderson's  report,  I  would 
simply  note  that  D.A.  Henderson  in  his  report  didn't  talk  about 
universal  purchase.  He  talked  about  a  whole  series  of  other  things, 
all  of  which  went  to  the  issue  of  access,  and  that  that's  been  the 
experience. 

If  you  look  at  the  numbers  on  their  face,  the  numbers  scream  out 
that  it  is  getting  people  in  to  get  immunized  that's  the  problem.  I 
mean,  the  fact  that  States  have  universal  purchase  and  distribu- 
tion of  free  immunization,  such  as  New  Hampshire  and  11  other 
States,  and  that  there  is  only  a  5  percent  variance  from  those 
States  who  don't  have  that  program,  pretty  much  says  on  its  face 
that  it  isn't  the  universal  purchase  that  is  the  issue;  it  is  the  fact 
that  people  aren't  taking  responsibility  for  getting  their  children 
immunized. 

In  this  whole  process,  there  are  going  to  be  States  like  New 
Hampshire,  which  have  the  private  sector  now  picking  up  the  cost 
of  the  drugs.  We  have  universal  access  and  universal  state  pur- 
chase, and  the  non-Federal  sector  picks  up  60  percent  of  that. 
Under  your  program,  is  all  that  money  just  to  go  back  as  a  windfall 
to  those  insurance  companies — the  tens  of  millions  of  dollars  that 
they  are  now  obligated  to  pay? 

Secretary  Shalala.  Well,  we'd  have  to  work  with  the  States  on 
that.  We'd  have  to  work  with  the  States  on  this  universal  program. 
There  would  be  some  opportunity  for  States  to  use  the  resources 
they  have  been  spending  in  other  sorts  of  ways.  Given  the  budgets 
of  most  States,  I  am  certain  that  they  would  find  ways  to  redirect 
some  of  these  resources  to  other  programs  for  children. 

Senator  Gregg.  Well,  these  are  private  contributions.  These 
aren't  State  taxes.  This  is  just  a  private  contribution  program. 

Thank  you. 

Mr.  Waxman.  Ms.  Slaughter. 

Ms.  Slaughter.  Thank  you,  Mr.  Chairman. 

Madam  Secretary,  your  testimony  was  wonderful,  but  I  think  we 
are  getting  away  from  something  here  that  I  would  like  to  restate. 
We  are  talking  about  communicable  infectious  disease.  A  bacterium 
or  a  virus  doesn't  give  a  hoot  whether  you  are  rich  or  poor.  Obvi- 
ously, the  reason  that  we  required  all  these  inoculations  by  school 


65 

age  was  that  we  didn't  want  to  decimate  the  entire  school  system 
with  a  disease.  And  all  States  have  very  high  compliance  rates. 

We're  talking  about  the  children  wno  are  not  protected  under 
that  school  age  from  these  same  infectious  diseases. 

I  recall  when  we  had  the  great  effort  to  do  whatever  we  could 
to  eradicate  measles  because  we  knew  that  measles  often  left  chil- 
dren blind,  deaf  or  with  other  handicaps,  and  we  felt  that  Ameri- 
ca's future  and  its  children  were  too  important  to  allow  that  to  go 
on. 

I  think  the  biggest  tragedy  that  we  are  sliding  over  this  morning 
is  that  all  the  vaccinations  and  all  the  inoculations  that  other  coun- 
tries are  giving,  far  more  effectively  and  freely  than  we  are,  were 
for  the  most  part  pioneered  in  the  United  States  of  America. 

One  of  the  things  that  is  wrong  that  we  haven't  really  talked 
about  is  that  there  is  no  education  process.  It  is  almost  as  though 

ferm  theory  of  disease  does  not  bother  us  anymore  because  we 
ave  antibiotics  now,  and  we'll  fix  it  all  later.  And  that  simply  is 
not  happening,  and  that  is  not  the  truth. 

We  are  losing  sight  here  of  what  we  are  talking  about,  and  that 
is  an  investment.  If  we  really  want  to  discuss  this  argument  thor- 
oughly, we  have  to  ask  what  is  the  cost  of  not  doing  it. 

We  live  in  a  country  right  now,  not  just  with  children  but  with 
elderly,  where  we  are  perfectly  willing  to  pay  $10,000  or  more  per 
hospital  stay  for  an  elderly  person  with  the  flu,  but  we  are  not  will- 
ing to  pay  $10  to  inoculate  them  against  it.  The  same  thing  obvi- 
ously is  happening  with  the  children.  We  just  let  them  have  the 
luck  of  the  draw.  Are  they  going  to  be  the  ones  who  have  been  born 
with  an  extraordinary  immune  system  so  they  can  fight  some  of 
this  off,  or  are  they,  like  most  human  beings  with  frailties,  going 
to  be  picking  up  these  diseases,  for  which  we  will  pay? 

Make  no  mistake  about  that.  The  option  is  not  whether  we  are 
going  to  buy  vaccine  for  these  children.  We  are  either  going  to  pay 
in  making  sure  that  they  are  well,  or  we  are  going  to  pay  to  try 
to  cure  them  or  the  handicaps  that  are  left  later  on. 

Don't  ever  lose  sight  of  that.  That  is  why  we  are  trying  to  do  this. 
And  I  think  one  of  the  most  important  points  that  you  made  that 
should  also  not  get  lost  is  that  it  is  the  working  poor  who  suffer 
most.  It  is  a  good  idea,  I  suspect,  that  people  who  are  on  public  as- 
sistance programs  can  also  get  inoculations,  but  there  shouldn  t  be 
a  penalty.  Again,  this  is  something  that  we  should  want  them  to 
be  able  to  have.  It  is  important,  and  one  thing  about  what  we  are 
trying  to  do  here  is  to  get  this  at  a  reasonable  cost. 

A  New  York  State  health  official  told  me  last  week  that  they  had 
worked  out  some  kind  of  contract  with  Fort  Drumm  to  be  able  to 
get  some  vaccine  from  them  at  almost  half  cost,  whereupon  the  pro- 
viders immediately  doubled  the  cost.  So  I  think  one  of  the  things 
that  interests  me  more  in  what  you're  saying  is  making  sure  that 
there  is  a  point  of  universal  need  and  that  there  will  be  a  strong 
purchasing  svstem,  so  we  may  institute  some  competition,  which  I 
think  would  be  a  good  thing.  . 

But  don't  lose  sight  of  the  fact  that  what  we  are  trying  to  do  here 
is  save  ourselves  money  in  the  future.  If  you  can't  look  at  it  just 
from  the  humane  aspect,  please  look  at  it  from  the  cost  savings- 
it  is  cheaper  to  keep  people  well  than  to  treat  their  disease. 


66 

Thank  you. 

Mr.  Waxman.  Thank  you,  Ms.  Slaughter. 

Mr.  Slattery. 

Mr.  Slattery.  Thank  you,  Mr.  Chairman. 

Madam  Secretary,  it's  great  to  see  you,  and  like  all  the  other 
members  of  this  committee  today,  certainly  on  this  side  of  the  aisle, 
I  appreciate  your  leadership,  and  I  am  pleased  to  be  an  original  co- 
sponsor  of  the  legislation  in  the  House. 

I  do  have  some  concerns  about  some  provisions  of  this,  and  I 
wanted  to  zero  in  on  those  if  I  could.  In  response  to  Congressman 
Bryant's  question  about  where  the  $1  billion  is  to  be  spent,  did  I 
understand  you  correctly  that  you  envision  that  approximately 
$600  million  of  that  will  be  allocated  to  the  actual  purchase  of  the 
vaccines? 

Secretary  Shalala.  Yes. 

Mr.  Slattery.  So  about  $400  million  of  it,  then,  will  be  spent  for 
tracking  or  outreach  or  educational  efforts,  or  developing  a  better 
delivery  system;  is  that  correct? 

Secretary  Shalala.  Not  quite,  because  in  our  stimulus  package, 
we  put  in  $300  million  that  helps  us  rebuild  the  public  infrastruc- 
ture plus  does  outreach,  so  there  is  a  lot  more  of  an  outreach  com- 
ponent than  is  apparent. 

Mr.  Slattery.  So  the  outreach  component,  then,  is  the  300  plus 
million  dollars  in  the  stimulus  package  that  is  still  in  question, 
coupled  with 

Secretary  Shalala.  Plus  the  400. 

Mr.  Slattery.  —the  400.  OK. 

The  other  concern  that  I  have  is  that  when  I  look  at  this,  it 
seems  to  me  that  in  this  matter,  as  in  other  matters  dealing  with 
the  health  care  delivery  system,  that  doctors  are  the  key  players. 
And  when  I  look  at  what  we  are  attempting  to  do,  we  are  really 
fundamentally  suggesting  that  the  doctors  need  to  change  their  be- 
havior, need  to  change  the  way  they  view  immunizations  and  be 
more  actively  involved  in  trying  to  provide  these  immunizations. 
And  to  achieve  that,  if  we  are  going  to  really  modify  human  behav- 
ior, we  are  going  to  have  to  incentivize  that.  And  when  I  look  at 
what  we're  talking  about,  it  is  difficult  for  me  to  find  an  incentive 
in  this  approach  that  is  really  going  to  motivate  doctors  to  actively 
seek  out  opportunities  to  vaccinate  children. 

I  mean,  I  see  a  recordkeeping  hassle  here;  I  see  problems  with 
maintaining  the  vaccines,  their  shelf  life,  and  keeping  them  refrig- 
erated; I  see  potential  medical  malpractice  problems.  I  have  even 
talked  to  pediatricians  who  are  very  concerned  about  vaccinating 
children  without  providing  them  with  a  complete  medical  exam. 

I  look  at  what  has  happened  to  date,  and  it  looks  to  me  like  doc- 
tors don't  really  want  to  be  troubled  with  all  of  this.  And  what  we 
are  in  effect  saying  to  them  is  we  are  going  to  give  you  vaccines, 
and  hopefully,  when  we  give  you  vaccines,  you  are  going  to  provide 
more  vaccinations  to  children.  Yet  when  I  look  at  what  has  hap- 
pened in  other  States  where  we  have  had  this  universal  purchase 
of  drugs,  we  have*  seen  somewhat  of  an  increase— ^61  percent  in 
Michigan,  and  I  am  advised  that  in  Massachusetts  it  is  roughly  the 
same — 10  percent  above  the  national  average. 


67 

I  am  just  curious — do  you  believe  that  we  have  really  adequately 
incentivized  doctors  to  change  their  behavior?  As  Senator  Kennedy 
earlier  observed,  in  the  United  Kingdom,  it  was  really  only  when 
they  agreed  to  do  this  that  it  got  done.  I  am  just  concerned  about 
that  point. 

Secretary  Shalala.  Your  question  is  very  thoughtful.  We  see  the 
national  immunization  program  for  children  as  the  opening  wedge 
to  a  national  commitment  to  prevention.  It  is  not  simply  for  us  get- 
ting all  the  kids  under  2  immunized.  It  is  not  an  isolated  program. 
It  is  a  new  vision  of  how  this  country's  health  system  ought  to  be 
organized. 

Mr.  Slattery.  I  understand  that,  but  again,  when  we  think  spe- 
cifically, we  are  going  to  have  to  change  the  behavior  of  that  doctor, 
and  right  now,  that  doctor  is  saying,  "Go  down  the  street  to  the 
public  health  clinic,  because  it  is  cheaper."  But  really — and  I  don't 
say  this  to  cast  any  aspersions  on  doctors — but  if  there  were  money 
to  be  made  in  this,  and  if  there  were  a  reason  to  provide  those  vac- 
cinations in  those  offices,  they  would  probably  be  doing  more  of  it. 

Secretary  Shalala.  If  the  doctor — and  from  our  conversations 
with  physicians,  by  giving  the  doctor  the  vaccine,  we  make  that 
connection  for  the  continuity  of  care  between  the  doctor  and  the 
family,  and  we  make  it  early  enough 

Mr.  Slattery.  But  there  is  nothing  in  here  that  would  really 
prevent  those  doctors  who  want  to  provide  vaccinations  from  say- 
ing, "Thank  you  very  much.  I  am  going  to  continue  to  charge  my 
patients  what  I  have  historically  charged  them." 

Secretary  Shalala.  Well,  yes,  there  is,  in  the  sense  that  we  will 
provide  the  vaccines  free.  They  can  charge  a  small  fee  for  the  ad- 
ministration of  the  vaccine. 

Mr.  Slattery.  One  more  question.  Please  comment  if  you  could 
on  the  concern  that  some  drug  companies  have  expressed  with  this 
whole  idea  that  if  the  government  is  the  single  purchaser  of  their 
product,  it  is  going  to  have  a  real  chilling  effect  on  attracting  in- 
vestment that  is  desperately  needed  in  some  cases  to  develop  the 
kinds  of  new  products  that  we  need.  I  would  like  to  hear  your  re- 
sponse to  that  concern  that  is  being  expressed  by  the  drug  compa- 
nies. 

Secretary  Shalala.  First,  the  issue  is  of  fair  price,  and  I  think 
that  if  investors  see  that  one  of  the  major  purchasers — pointing  out 
that  these  companies  also  sell  their  products  in  many  cases  to  ei- 
ther other  countries,  or  they  have  other  products  to  sell,  so  we  are 
not  talking  about  companies  that  don't  have  other  products;  they 
make  more  than  just  a  series  of  vaccines,  many  of  them,  that  we 
are  talking  about  being  a  major  purchaser  of 

Mr.  Slattery.  If  the  government  were  buying  90  percent  or  95 
percent  of  the  products  that  you  are  producing 

Secretary  Shalala.  Of  one  of  the  products  that  you  are  produc- 
ing, as  opposed  to 

Mr.  Slattery.  Or  maybe  all  of  the  products,  if  you  are  strictly 
in  the  business  of  producing  vaccines. 

Secretary  Shalala.  — as  opposed  to  other  products.  The  issue  is 
are  they  getting  a  fair  price,  is  it  a  stable  purchaser.  For  many 
American  companies,  it  is  a  single  buyer  for  a  product.  If  you  look 
at  the  rate  of  products  that  are  made  in  this  country  and  where 


68 

the  government — either  a  State  government  or  a  local  govern- 
ment— is  a  major  purchaser  that  continues  to  get  investments,  the 
issue  is  are  they  getting  a  fair  price  that  allows  them  to  continue 
their  R  and  D,  to  continue  to  be  on  the  cutting  edge.  We  have  indi- 
cated that  we  have  every  interest  in  doing  that,  not  only  R  and  D, 
but  obviously  a  fair  profit,  and  that  there  would  be  in  fact  a  nego- 
tiation that  would  protect  the  integrity  and  the  economic  health  of 
the  industry. 

Mr.  Waxman.  The  gentleman's  time  has  expired. 

Mr.  Slattery.  Thank  you,  Mr.  Chairman. 

The  Chairman.  Senator  Woflford. 

Senator  Wofford.  Thank  you,  Mr.  Chairman. 

Madam  Secretary,  I  fully  agree  with  the  goal,  and  I  want  to  see 
us  take  the  steps  to  reach  the  goal  of  universal  immunization.  I  sa- 
lute you  for  your  leadership  in  moving  us  in  that  direction.^ 

Is  the  universal  purchase  provision  of  vaccines  an  interim  meas- 
ure, in  your  mind,  before  we  have  a  universal  health  insurance  sys- 
tem in  this  country?  My  thought  on  this  is  that  if  we  have  a  stand- 
ard American  package  of  health  care  benefits  which  people  pay  for 
according  to  their  means,  in  a  system  to  be  designed  and  adopted, 
I  hope,  tnis  year,  and  if  preventive  medicine  and  particularly  im- 
munization is  a  key  part  of  it,  then  the  financing  of  the  purchase 
and  the  payment  for  that  immunization  would  be  part  of  that 
standard  package  for  all.  And  that  led  me  to  think  that  this  part 
of  this  bill— not  the  delivery  system  or  the  tracking  system  part, 
but  this  part  of  it — is  a  very  interim  measure  before  we  get  that 
kind  of  health  care,  universal  insurance,  that  would  emphasize  pre- 
ventive medicine. 

Secretary  Shalala.  Senator,  I  really  can't  answer  that  question 
because  we  obviously  have  not  made  the  final  decisions  on  the 
basic  benefit  package,  though  clearly  we  have  signalled  that  it  is 
going  to  have  a  huge  prevention  and  certainly  immunization  com- 
ponent in  it,  or  how  access  will  be  provided  for  every  American, 
whether  it  will  be  done  immediately  or  phased  in. 

I  think  that  the  administration  was  very  anxious  to  lead  with 
this  a  prevention  program  that  provides  the  baseline  for  every 
American  child,  and  we  will  report  on  the  relationship  between  this 
and  the  package  in  May  very  quickly,  about  how  it  fits  together  in 
terms  of  our  longer-term  plans. 

Senator  Wofford.  It  seems  to  me  from  what  I  have  heard,  as- 
suring that  all  children  would  be  part  of  a  universal  health  insur- 
ance might  well  be  a  first  priority,  and  that  therefore  the  proposals 
here  would  need  to  be  folded  into  those  proposals  once  they  are 

made. 

Secretary  Shalala.  Certainly,  every  piece  of  legislation  that  has 
been  proposed  on  health  care  by  the  administration  will  have  to  be 
fit  into  that  new  national  plan.  I  can't  give  you  any  indication  of 
decisions  that  just  have  not  been  made  yet. 

Senator  Wofford.  Certainly.  Is  there  any  community  in  Amer- 
ica—I can't  think  of  any  State-ythat  has  taken  action  together,  ef- 
fectively, to  approach  universal  immunization? 

Secretary  Shalala.  Well,  there  are  a  number  of  States  in  the 
Northeast,  in  New  England  in  particular,  that  have  made  extraor- 
dinary efforts,  and  certainly  there  are  cities,  like  Atlanta— and 


69 

Houston  has  just  made  a  big  effort  to  try  to  get  their  very  low  im- 
munization rates  up.  No  one  is  perfect.  We  have  learned  from  ev- 
eryone and  tried  to  incorporate  their  ideas  into  this  proposal. 

Senator  Wofford.  Have  those  cities  that  have  made  the  biggest 
progress  relied  on  universal  purchase  within  their  domain? 

Secretary  Shalala.  Some  of  the  New  England  States  that  have 
been  successful  have  provided  the  vaccines  free  as  part  of  their 
overall  effort.  I  think  that  given  international  and  national  commu- 
nications, a  national  campaign  will  help  every  community,  because 
the  word  will  get  out  in  the  national  media  for  every  community, 
and  it  will  be  a  national  community  effort,  not  simply  an  individual 
State  or  individual  city  effort. 

Senator  Wofford.  One  last  question.  If  the  universal  health  sys- 
tem that  I  hope  we  move  to  includes  vaccination  as  one  of  the 
rights,  would  not  the  $600  million  in  this  bill  for  the  purchasing 
then  be  better  spent  in  strengthening  the  delivery  and  tracking 
system? 

Secretary  Shalala.  We  have  not  vet  identified  the  funding 
source  for  the  immunization  program,  because  that  will  be  folded 
into  the  health  care  reform,  so  that  how  all  these  pieces  fit  together 
will  be  reported  out  when  the  health  reform  bill  is  folded  out. 

Senator  Wofford.  Thank  you.  I  await  with  anticipation. 

Secretary  Shalala.  Thank  you. 

Mr.  Waxman.  Mr.  Brown. 

Mr.  Brown.  Thank  you,  Mr.  Chairman. 

As  a  cosponsor  of  your  proposal,  Madam  Secretary,  I  applaud 
both  you  and  Chairman  Waxman  on  your  initiative  on  this  issue. 

There  are  some  major  parts  of  my  district  where  the  immuniza- 
tion rate  is  markedly  less  than  50  percent,  as  there  are  obviouslv 
in  places  all  over  the  country.  Recently,  I  convened  a  meeting  with 
people  who  do  outreach  with  child  health  care  providers,  with  peo- 
ple in  the  community  who  are  interested  in  those  kinds  of  issues, 
to  talk  about  reducing  not  just  the  cost  barriers,  but  to  address  the 
whole  outreach  issue.  Two  questions,  Madam  Secretary.  One,  how 
would  the  Department  work  on  the  local  level  with  State  and  coun- 
ty health  agencies  and  not-for-profits  and  so  on,  to  establish  cre- 
ative strategies  to  improve  outreach,  and  what  kinds  of  suggestions 
do  you  have  for  us  as  Members  of  Congress  or  for  local  commu- 
nities to  work  together  to  complement  the  kinds  of  things  that  you 
are  going  to  do  in  addition  to  the  national  strategies  and  national 
media  and  all  that?  What  are  you  doing  on  the  local  level  with 
county  health  agencies  and  community  health  agencies  and  so  on, 
and  what  do  they  do  to  complement  your  efforts? 

Secretary  Shalala.  The  counties  and  the  States  and  the  local 
communities  have  already  done  a  buildup  and  designed  action 
plans,  and  part  of  the  stimulus  package  funding  is  to  fund  those 
action  plans  in  which  there  has  already  been  participation. 

I  think  we  believe  that  it  will  take  bottom-up  participation  and 
leadership  from  State  and  local  leaders  and  community  leaders  to 
put  all  of  this  together.  We  will  be  providing  technical  assistance 
through  the  CDC  and  through  our  own  immunization— I  don't  want 
to  call  it  a  war  room;  there  are  too  many  war  rooms  in  this  town — 
through  our  own  immunization  strategists,  but  we  will  very  much 
rely  on  passing  information  to  local  communities  about  what  works 


70 

and  what  doesn't  work,  and  about  fitting — I  think  more  than  any- 
thing else,  the  strategy  needs  to  fit  lots  of  different  kinds  of  ap- 
proaches. This  is  an  effort  in  which  you  have  to  make  sure  that  no 
one  falls  between  the  cracks,  that  no  child  falls  between  the  cracks, 
that  no  family  falls  between  the  cracks,  so  that  it  really  has  to  be 
a  multiple  strategy,  with  community  organizations  working  within 
their  local  communities,  with  State  and  county  health  officials.  It 
has  got  to  be  an  integrated  strategy,  but  it  has  got  to  be  something 
that  s  not  one-shot. 

My  greatest  concern  is  that  well  get  everybody  immunized  in  1 
year  through  this  enormous  effort,  led  by  Mickey  Mouse  and  Don- 
ald Duck  and  everybody  else  who  gets  energized  as  part  of  this,  but 
that  we  won't  have  put  in  place  a  system,  an  infrastructure,  that 
will  repeat  it  year  after  year.  And  that's  why  we've  put  so  much 
emphasis  on  the  front  end,  on  building  that  infrastructure,  that  de- 
livery system,  so  that  the  visibility  efforts  will  fit  into  that  and  so 
that  we  begin  to  change  everybody's  minds  about  when  children 
should  be  their  shots. 

Mr.  Brown.  Thank  you. 

Thank  you,  Mr.  Chairman. 

The  Chairman.  If  there  are  no  further  questions,  we  want  to 
thank  you  very  much,  Madam  Secretary.  It  has  been  a  very  full 
morning,  I  know,  for  you,  but  I  think  the  responses  that  you  have 
given  have  made  a  very  powerful  and  constructive  record.  We  are 
enormously  grateful  for  your  presence  here,  and  well  do  everything 
we  can  in  our  committee  to  expedite  the  consideration  of  the  Act. 

We  thank  you  very,  very  much. 

Secretary  Shalala.  Thank  you.  To  all  of  you,  thank  you. 

The  Chairman.  Our  next  panel  includes  Dr.  David  Smith,  direc- 
tor of  the  Texas  Department  of  Health,  who  is  representing  the  As- 
sociation of  State  and  Territorial  Health  Officers.  Dr.  Smith  is  a 
pediatrician  who  tackled  the  problem  of  low  immunization  as  sen- 
ior vice  president  of  Parkland  Memorial  Hospital  in  Dallas.  He  now 
is  a  State  health  officer,  and  has  pushed  legislation  through  the 
legislature  to  improve  immunization  services  in  the  State.  We  wel- 
come him. 

Dr.  Dean  Sienko  is  the  medical  director  of  the  Ingham  County 
Health  Department  in  Lansing,  MI,  and  he  represents  the  National 
Association  of  County  Health  Officials  here  today.  I  know  Senator 
Riegle  wanted  to  add  a  very  special  welcome  to  you,  Dr.  Sienko. 

Dr.  Ed  Thompson  is  the  acting  State  health  officer  in  the  State 
of  Mississippi  and  is  also  president  of  the  Council  of  State  and  Ter- 
ritorial Epidemiologists.  Dr.  Thompson  is  well-respected  for  his 
work  in  childhood  immunization.  We  are  glad  he  could  join  us 
today. 

Mr.  Michael  Moen  is  director  of  the  division  of  disease  prevention 
and  control  at  the  Minnesota  Department  of  Health.  He  has  served 
in  many  capacities  with  the  department  of  health  over  the  years, 
and  he  has  a  particular  interest  in  childhood  immunization.  We 
welcome  his  testimony. 

Finally,  I'd  give  a  warm  welcome  to  Ms.  Gladys  LeBron,  who  is 
director  of  CEDE,  a  community-based  organization  serving  Puerto 
Rican  families  in  Holyoke,  MA.  Accompanying  her  is  Ms.  Danielle 
Gordon,  immunization  project  director.  Ms.  LeBron  oversees  the 


71 

community  outreach  project,  training  community  workers  to  go  out 
into  their  neighborhoods  with  health  information,  assisting  families 
to  obtain  health  care  and  needed  services.  We  are  delighted  that 
you  could  both  join  us  today.  I  am  familiar  with  this  program,  and 
if  you  want  to  talk  about  a  hands-on  program  that  involves  the 
members  of  the  community  in  an  imaginative  and  creative  and 
hardworking  way,  this  is  really  it.  The  community  workers  in  that 
neighborhood  know  their  neighbors,  understand  them,  believe  in 
them,  and  talk  their  language.  I  think  this  organization  has  really 
shown  an  enormous  dedication  to  the  many,  many  families  in  that 
community. 

Senator  Riegle. 

Senator  Riegle.  Senator  Kennedy,  thank  you. 

I  just  wanted  to  recognize  Dr.  Dean  Sienko  who  is  here,  and  to 
thank  him  for  his  leadership  and  the  very  important  role  he  plays 
in  Michigan.  I  think  his  testimony  today  will  be  very  important. 

The  Chairman.  Thank  you. 

Dr.  Sienko,  we'll  start  with  you. 

It  is  the  intention  of  the  chair,  with  the  understanding  and  sup- 
port of  the  members,  that  we  will  hear  from  all  of  the  panelists 
first.  Marian  Wright  Edelman  had  been  scheduled  to  testify,  and 
we  made  an  extraordinary  effort  to  get  the  satellite  time.  Since  sev- 
eral members  of  this  panel  have  planes  to  catch,  the  intention  of 
the  chair  is  to  hear  from  each  of  the  panelists  and  then  to  hear 
from  Marian  Wright  Edelman  via  television.  And  then,  since  her 
testimony  is  related  both  to  what  Dr.  Shalala  and  the  others  have 
discussed  and  what  this  panel  will  talk  about,  well  go  to  questions 
for  members  of  the  panel  before  moving  on  to  the  next  panel. 

So  that's  the  way  we  will  proceed,  and  I'll  ask  Dr.  Sienko  if  he'd 
be  good  enough  to  start  off. 

STATEMENTS  OF  DR.  DEAN  SIENKO,  DIRECTOR,  INGHAM 
COUNTY  HEALTH  DEPARTMENT,  LANSING,  ML  REPRESENT- 
ING NATIONAL  ASSOCIATION  OF  COUNTY  HEALTH  OFFI- 
CIALS; DR.  DAVID  SMITH,  DIRECTOR,  TEXAS  DEPARTMENT 
OF  HEALTH,  AUSTIN,  TX,  REPRESENTING  ASSOCIATION  OF 
STATE  AND  TERRITORIAL  HEALTH  OFFICERS;  DR.  ED 
THOMPSON,  JR.,  ACTING  STATE  HEALTH  OFFICER  AND  MIS- 
SISSIPPI STATE  EPIDEMIOLOGIST,  JACKSON,  MS,  AND 
PRESIDENT,  COUNCIL  OF  STATE  AND  TERRITORIAL  EPI- 
DEMIOLOGISTS; MICHAEL  E.  MOEN,  DIRECTOR,  DP/ISION  OF 
DISEASE  PREVENTION  AND  CONTROL,  MINNESOTA  DEPART- 
MENT OF  HEALTH,  MINNEAPOLIS,  MN;  GLADYS  LeBRON,  DI- 
RECTOR, CENTRO  DE  EDUCACION  DURANTE  EL  EMBARAZO, 
CEDE,  HOLYOKE,  MA,  ACCOMPANIED  BY  DANIELLE  GORDON; 
AND  MARIAN  WRIGHT  EDELMAN,  PRESIDENT,  CfflLDRENTS 
DEFENSE  FUND,  WASHINGTON,  DC. 

Dr.  Sienko.  Thank  you,  Mr.  Chairman. 

My  name  is  Dr.  Dean  Sienko.  I  am  representing  the  Ingham 
County  Health  Department  in  Lansing,  MI,  the  Michigan  Advisory 
Committee  on  Immunizations,  and  the  National  Association  of 
County  Health  Officials. 


72 

My  testimony  will  describe  how  local  health  departments  contrib- 
ute to  our  Nation's  immunization  effort  and  outline  opportunities 
to  improve  immunization  compliance  within  our  population. 

Over  2,900  local  health  departments  vaccinate  28  million  chil- 
dren annually.  About  one-half  of  all  American  children  are  vac- 
cinated in  our  clinics.  In  Michigan,  most  counties  provide  immuni- 
zations free-of-charge,  without  copay  or  sliding  fee  scales.  At  my 
health  department,  we  have  witnessed  growing  demands  for  our 
services.  The  number  of  immunizations  that  we  provided  from  1990 
to  1992  increased  46  percent  Our  resources  will  be  stretched  even 
further  as  newer  vaccines  come  to  market. 

Our  immunization  clients  are  employed  people,  people  with  Med- 
icaid, and  individuals  without  health  insurance.  An  expanding 
number  of  people  with  health  insurance  come  to  us  for  immuniza- 
tions as  their  private  practitioners  are  discontinuing  such  services 
or  charging  beyond  the  average  citizen's  means  to  pay. 

We  have  found  that  37  percent  of  our  immunization  clients  have 
private  health  insurance,  another  38  percent  have  Medicaid. 

The  demands  on  our  immunization  clinics  translate  into  longer 
waiting  lines,  overcrowded  waiting  rooms,  and  unnecessary  frustra- 
tion among  our  consumers.  Undoubtedly,  such  circumstances  con- 
tribute to  the  substandard  immunization  coverage  for  many  of  our 
Nation's  children. 

We  estimate  that  roughly  60  percent  of  our  country's  pre- 
schoolers are  age-appropriately  immunized.  CDC  studies  reveal 
rates  much  lower  than  this  in  large  urban  areas.  If  we  are  to  reach 
the  U.S.  Public  Health  Service  Year  2000  goal  to  have  90  percent 
of  2-year-olds  age-appropriately  immunized,  then  improvements  in 
our  immunization  infrastructure  will  be  necessary.  Fortunately, 
many  of  these  infrastructure  problems  are  considered  in  the  Presi- 
dent s  immunization  bill. 

If  I  were  to  receive  increased  resources  to  improve  my  county's 
immunization  rates,  I  would  employ  the  following  strategies.  First, 
I  would  expand  immunization  clinic  hours  to  include  evenings  and 
weekends.  One  reason  would  be  to  help  people  who  do  not  have 
sick  leave  benefits.  Their  visits  to  the  immunization  clinic  require 
uncompensated  time  off  from  work.  If  we  could  offer  services  dur- 
ing hours  that  are  more  conducive  to  our  patients'  schedules,  our 
immunization  coverage  rates  would  improve. 

Second,  I  would  expand  services  in  satellite  locations.  We  fre- 
quently hold  clinics  in  outlying  areas  of  the  county  or  within  our 
poorest  neighborhoods.  However,  the  demand  for  such  services 
quickly  exceeds  our  capacity  to  meet  it.  Increased  resources  would 
allow  us  to  enhance  capacity  and  meet  the  demand  in  these  loca- 
tions. 

Third,  I  would  enhance  both  internal  and  external  outreach  ef- 
forts. Internally,  we  could  couple  immunization  services  to  other 
health  department  functions.  For  example,  with  a  computerized 
tracking  mechanism,  we  could  assess  immunization  status  and 
refer  or  offer  direct  services  through  our  WIC  clinic  or  other  mater- 
nal and  child  health  programs.  Externally,  we  could  enhance  sur- 
veillance, education,  promotion  and  referral  efforts  in  the  commu- 
nity at  large  and  within  those  communities  where  immunization 
rates  are  lowest.  Along  these  lines,  we  could  work  more  closely 


73 

with  day  care  facilities  to  ensure  compliance  with  immunization 
recommendations. 

I  believe  that  your  proposed  legislation  will  give  us  the  means  to 
execute  many  of  these  strategies.  In  my  written  report,  I  offer  com- 
ments specific  to  the  proposed  legislation  on  1)  the  explicit  inclu- 
sion of  local  health  departments  as  part  of  the  free  vaccine  dis- 
tribution network  and  universal  purchasing  system;  2)  the  poten- 
tial for  increased  burden  on  our  system  should  private  providers  be 
dissatisfied  with  the  administrative  fee  reimbursement  or  immuni- 
zation registry  reporting  requirements;  3)  defining  the  responsibil- 
ity for  registering  children  within  6  weeks  of  birth  and  the  follow- 
up  of  children  who  are  behind  schedule,  and  4)  our  gratitude  for 
the  intention  to  simplify  the  vaccine  information  pamphlets  and  to 
extend  the  National  Childhood  Vaccine  Injury  Compensation  Pro- 
gram; and  finally,  our  concerns  about  the  requirement  to  have  a 
Social  Security  number  as  a  condition  of  a  child  receiving  vaccine. 
In  many  jurisdictions,  undocumented  people  are  often  among  those 
least  vaccinated.  Prohibiting  their  participation  could  be  counter- 
productive to  local  disease  control  efforts. 

In  summary,  local  health  departments  are  at  the  front  line  of  the 
immunization  effort  in  this  country.  We  already  immunize  large 
numbers  of  the  population,  and  we  have  established  relations  with 
segments  of  the  population  that  are  most  in  need  of  improved  im- 
munization coverage.  And  we  have  ideas  and  solutions  to  respond 
to  the  year  2000  challenge. 

I  submit  that  any  national  strategy  that  takes  advantage  of  our 
vast  network  of  cost-effective  clinics  and  resourceful  staff  will  be 
able  to  meet  this  challenge. 

Thank  you  for  the  opportunity  to  present  these  thoughts  before 
the  committee. 

Senator  Riegle.  Thank  you,  Dr.  Sienko.  I  know  you  have  a  plane 
to  catch,  and  we  appreciate  very  much  your  being  here  and  your 
leadership  in  Michigan. 

Dr.  Sienko.  Thank  you. 

Senator  Riegle.  Let  me  now  go  to  Dr.  David  Smith,  who  is  here 
from  Austin,  TX. 

Dr.  Smith.  Thank  you,  Senator  Riegle.  It's  my  pleasure  to  be 
here  and  to  support  a  bill  that  I  suppose,  after  Secretary  Shalala's 
presentation,  could  be  called  the  "No  More  Excuses"  bill. 

I  think  what  we  are  doing  here  is  trying  to  eliminate  all  the  ex- 
cuses that  we've  had  from  all  different  sectors  and  to  make  sure 
we  realize  the  place  it's  going  to  happen  is  certainly  within  the 
family  and  the  community  first,  and  then  only  with  the  help  of 
places  such  as  Austin  and  Washington,  to  hopefully  make  some 
sense  out  of  this  and  not  get  in  the  way. 

I  also  want  to  point  out  that  the  State  of  Texas,  which  has  the 
dubious  distinction  of  having  some  of  the  worst  statistics  in  the  Na- 
tion—in fact,  overall,  I  think  about  30  percent  of  our  children 
under  the  age  of  2  are  adequately  immunized — having  been  both 
a  National  Health  Service  Corps  physician  practicing  in  Browns- 
ville, being  a  pediatrician,  and  also  in  Dallas  during  the  outbreak, 
I  have  unfortunately  both  managed  the  problem  and  tried  to  do 
something  about  it  over  time,  and  we  aren't  doing  enough. 


74 

We  have  new  call  words  in  Austin  now.  We  used  to  say  fre- 
quently that  we  had  to  "Remember  the  Alamo."  I  would  challenge 
us  now  as  a  State,  and  certainly  as  a  Nation,  that  if  we  can't  fix 
measles,  then  there  is  little  we  can  do  in  health  care  reform  and 
the  problems  we  are  facing,  and  we  need  to  understand  that. 

I  also  join  with  our  Governor,  Ann  Richards,  who  has  sent  her 
support  for  this  legislation  to  Secretary  Shalala,  and  I  am  here  to 
add  my  endorsement.  In  addition,  I  am  here  representing  the  Asso- 
ciation of  State  and  Territorial  Health  Officers,  and  share  with  my 
colleagues  in  the  public  health  infrastructure  at  the  local  and  na- 
tional levels  the  need  to  pay  attention  to  all  public  health  as  we 
look  at  this  issue. 

I  am  here,  though,  to  quickly  tell  a  tale  more  of  what  happened 
in  Dallas  in  1989-90  which  reflects  the  challenge  if  we  can't  fix 
measles.  In  1989-90  in  Dallas  County,  we  had  almost  2,500  cases 
of  measles  in  that  community.  It  hit  both  sides  of  the  Trinity  River. 
For  those  who  don't  know,  that  means  it  hit  north  Dallas  as  well 
as  south  Dallas,  rich  Dallas  as  well  as  poor  Dallas,  and  it  didn't 
bother  as  far  as  barriers  to  time  or  age  or  distance.  Quite  frankly, 
we  also  had  a  number  of  adults  infected. 

Interestingly,  that  problem  and  that  tragedy  taught  us  several 
things,  the  first  of  which  is  that  a  number  of  the  individuals  who 
did  become  infected  did  later  go  to  the  hospital.  Almost  240  individ- 
uals were  hospitalized.  A  study  that  we  did  at  the  University  of 
Texas  Southwest  Medical  College  showed  that  the  inpatient  cost 
alone,  just  inpatient  cost,  for  that  outbreak  was  $3.5  million.  We 
could  have  immunized  easily  four  times  the  number  of  children  for 
about  $200,000.  The  cost  benefit  here  is  staggering.  We  need  to  get 
on  with  it  because  we  are  paying  every,  single  day. 

Twelve  people  died.  A  number  of  those  were  adults,  interestingly. 
We  sent  two  children,  one  of  whom  actually  went  to  Michigan,  for 
a  heart-lung  bypass,  ECMO,  extracorporeal  membrane  oxygen- 
ation, at  a  cost  of  over  $200,000  for  just  one  child.  We  could  have 
easily  prevented  that. 

We  also  know  several  things  from  this  particular  outbreak,  and 
it  has  now  held  true  for  similar  work  that  we've  done  analyzing  the 
problems  in  Houston  and  most  recently  in  Starke  County,  which  is 
the  second  poorest  county  in  the  United  States,  in  far  south  Texas. 
It  has  touched  all  aspects  of  Texas  culture  as  we  have  looked  at 
this  problem. 

We  have  learned  these  things.  No.  1,  a  700  percent  increased  de- 
mand has  been  placed  on  our  public  sector  in  Dallas  County  by 
people  who  traditionally  would  go  to  the  private  sector.  One  of  the 
commonly  cited  reasons  in  fact  is  cost.  It  is  not  the  only  one.  I 
think  we  all  too  often  want  to  pick  a  fraction  or  a  part  of  this  bill 
apart  and  eliminate  it  from  the  process,  but  it  was  an  issue,  and 
it  was  a  significant  issue.  And  our  already  overburdened  public  sys- 
tem at  the  local  and  State  levels  could  not  meet  the  excessive  de- 
mand that  was  placed  upon  it 

I  would  also  point  out  that  we  determined  other  barriers  do  exist, 
and  what  I  was  pleased  to  hear  from  Secretary  Shalala  was  the  ac- 
knowledgment that  it  will  take  flexibility  to  meet  individual  com- 
munity needs.  And  I  think  Representative  Wyden  said  this  well. 
Each  community  is  different,  and  we're  going  to  have  to  under- 


75 

stand  those,  and  States  will  need  flexibility  with  these  resources  to 
attack  the  needs  and  the  problems  that  we  are  facing.  I  would  just 
like  to  quickly  touch  on  those  because  I  think  they  are  relevant. 

The  first  is  that  in  our  State,  we  don't  have  a  lot  of  infrastruc- 
ture. We  do  have  to  build  it  up.  We  are  very  pleased  with  the  pro- 
posal for  the  $300  million  to  do  something  about  it.  In  many  coun- 
tries in  our  State — in  fact,  over  170— the  only  thing  we've  got  out 
there  is  a  Dairy  Queen,  and  if  we  don't  decide  to  use  those  as  a 
place  to  shoot,  we  are  going  to  have  a  problem;  maybe  we  should. 

In  our  State,  like  many  States — and  I  think  we  need  to  be 
harsh — tracking  is  an  issue.  In  our  State,  we  track  lottery  tickets 
better  than  we  do  children's  immunization  status.  We  have  a  lovely 
little  code.  We  put  the  technology  in  place  in  every  Circle  K,  7- 
Eleven,  and  convenience  store  in  the  State,  and  we  did  it  in  6 
months.  We  can  do  it  with  immunizations. 

I  would  also  finally  like  to  say,  though,  that  we  do  need  to  look 
at  issues  of  convenience,  making  sure  we  have  a  system  that  is  in 
place  and  oriented  to  comprehensive  care  and  prevention.  Cost  is 
an  issue,  I  would  reinforce,  and  that  every  community  is  different. 
And  finally — and  Secretary  Shalala  mentioned  this — I  would  not 
use  the  word  "education"  anymore.  We  need  to  use  "outreach."  But 
also,  I  think  we  need  to  look  at  marketing.  We  need  to  be  ready 
for  prime  time,  because  when  we  put  our  messages  on  today  about 
public  health,  they  are  usually  at  2:00  on  Saturday  morning,  or  I'm 
on  a  radio  talk  show  at  5:30  on  Sunday.  We  need  to  be  on  prime 
time,  and  we  know  when  we've  done  it — when  we're  right  next  to 
Nike  and  McDonald's  during  the  Super  Bowl  on  Super  Bowl  Sun- 
day. 

Thank  you. 

Senator  Riegle.  Thank  you,  Dr.  Smith,  for  very  impressive  testi- 
mony. 

[The  prepared  statement  of  Dr.  Smith  follows:] 

Prepared  Statement  of  David  R.  Smith 

Chairman  Waxman,  Chairman  Kennedy,  Senator  Riegle,  distinguished  committee 
and  subcommittee  members,  my  name  is  David  Smith.  I  am  the  Texas  Commis- 
sioner of  Health  and  head  of  the  Texas  Department  of  Health.  I  also  am  represent- 
ing the  Association  of  State  and  Territorial  Health  Officers. 

I  appreciate  the  opportunity  to  talk  with  you  about  a  topic  that  is  a  number  one 
health  priority  in  Texas:  immunizations. 

Texas  Governor  Ann  Richards  has  already  communicated  her  support  for  this 
"Comprehensive  Child  Immunization  Act  of  1993"  to  Secretary  Shalala.  I  am  here 
to  ada  my  endorsement.  . 

I  strongly  support  the  major  points  addressed  in  this  legislation,  namely:  univer- 
sal purchase  or  vaccines,  improved  access  to  immunizations,  the  establishment  of  a 
nationwide  tracking  system  and  the  revitalization  of  the  National  Vaccine  Injury 
Compensation  Program. 

My  State  leads  the  Nation  in  the  number  of  cases  of  vaccine-preventable  diseases. 
In  fact,  in  some  areas  of  our  State  the  immunization  rate  is  lower  than  in  some 
Third  World  Countries.  While  the  estimated  national  rate  for  immunization  of  2- 
year-olds  is  60  percent,  in  Texas  it's  30  percent.  We're  not  bragging  about  this. 
We're  not  proud.  But,  we  are  determined  to  do  something  about  it. 

We're  hopeful  that  a  new  piece  of  State  legislation  which  recently  came  out  of  a 
House/Senate  conference  committee  will  be  approved.  While  this  legislation  does  not 
give  us  all  of  the  ammunition  we  wanted,  it  is  an  excellent  start.  We  call  it  the  no 
more  excuses"  bill.  «i_  *  u 

It  mandates  that  every  child  in  Texas  be  immunized.  It  also  mandates  that  hos- 
pitals and  Physicians  check  immunization  records  of  their  young  patients,  and  ad- 
minister any  needed  vaccines.  It  allows  us  to  provide  reimbursement  to  private  phy- 


76 

sicians  for  administering  vaccines.  It  states  that  immunizations  will  not  be  denied 
because  of  an  inability  to  pay.  And,  it  allows  us  to  operate  our  public  health  clinics 
during  hours  that  are  more  convenient  to  working  parents,  including  poor  working 
parents. 

With  the  new  Texas  legislation  and  this  new  Federal  initiative — putting  solid  re- 
sources behind  our  efforts — we  are  increasingly  confident  that  we  will  be  able  to 
achieve  our  goal  of  immunizing  90  percent  of  the  2-year-olds  in  Texas  by  the  year 
2000. 

Perhaps,  it  would  be  helpful,  in  offering  my  support  for  this  legislation,  that  I 
offer  some  beliefs  and  observations  from  my  perspective. 

1)  It  is  my  belief  that  every  child  in  this  country  should  be  immunized:  we  should 
look  at  this  legislation  as  a  bill  of  rights  for  children's  health  care. 

2)  It  is  also  my  belief  that  this  right  should  be  inalienable  and  available,  regard- 
less of  the  ability  to  pay. 

3)  We  have  got  to  simplify  the  way  we,  as  government  agencies,  communicate  the 
need  for  immunization  and  the  recommended  immunization  schedule  to  parents  and 
others  responsible  for  young  children.  We  can't  continue  to  Rubik's  Cube  the  infor- 
mation and  expect  them  to  figure  it  out,  or  to  even  want  to  figure  it  out. 

I  submit  that  the  way  we  communicate  this  information  shouldn't  be — but  is — a 
barrier  to  compliance.  I'm  talking  about  the  need  for  brevity,  for  plain  concise  lan- 
guage, in  a  form  readily  understandable  by  the  parents  of  the  children  we  need  to 
serve. 

The  proposed  tracking  system  in  this  legislation  is  extremely  valuable  for  several 
reasons,  but  one  of  the  main  ones,  I  believe,  is  that  it  will  allow  us  to  better  commu- 
nicate the  immunization  need  to  parents.  We  can  help  them  remember,  especially 
as  immunization  schedules  become  more  complex  and  new  vaccines  are  added. 

4)  Another  barrier  to  immunizations,  which  may  not  seem  obvious  at  first,  is  the 
complexity  of  the  consent  forms  required  by  the  Federal  Government  before  an  im- 
munization can  be  given  in  a  public  clinic.  I  normally  do  not  get  excited  about  such 
details,  but  it  is  gratifying  to  see  that  this  legislation  includes  the  opportunity  to 
simplify  these  forms. 

Certainly,  it  is  important  for  parents  to  understand  the  care  given  to  their  chil- 
dren. But,  currently,  a  parent  who  takes  an  18-month  old  in  to  a  public  clinic  for 
the  appropriate  immunizations  is  confronted  with  16  pages  of  consent 
forms  ...  16  pages  of  very  small  print.  It  is  critical  that  we  streamline  this  infor- 
mation, so  that  it  is  not  formidable  but  still  informative  for  parents.  It  is  also  vital 
that  other  relatives  or  guardians  be  allowed  to  bring  children  in  for  immunization 
when  the  parents  cannot. 

5)  In  establishing  this  system  of  purchase,  distribution,  and  tracking,  it  is  vital 
that  Federal  agencies  work  together  with  the  States  and  require  only  the  reporting 
data  necessary  to  ensure  program  accountability  and  document  results.  We  do  not 
need  to  increase  the  cost  of  this  vital  program  with  excessive  reporting  require- 
ments. To  achieve  the  best  return  for  our  investment,  please  don't  ask  us  to  docu- 
ment the  process.  Ask  us  to  immunize  the  children  and  document  the  results. 

6)  And  in  connection,  while  I  confess  that  each  of  us  always  thinks  the  best  level 
for  control  is  the  level  at  which  we  find  ourselves  at  the  time,  please  allow  funds 
for  the  improvement  of  the  public  health  infrastructure  to  be  directed  by  each  State 
for  each  State. 

A  major  strength  of  this  legislation  is  that  it  recognizes  the  vital  role  states  have 
in  developing  strategies  to  address  public  health  needs. 

In  other  words,  don't  hold  me  responsible  for  Texas  unless  you  allow  me  the  flexi- 
bility and  control  to  actually  be  responsible.  Then,  hold  me  fully  responsible.  Allow 
us  to  capitalize  on  doing  what  we  do  best  at  the  level  that's  best  equipped  to  handle 
it.  Allow  us  the  flexibility  to  shift  and  emphasize  according  to  need.  This  is  not  a 
question  of  turf;  it's  a  question  of  efficiency  and  effectiveness. 

7)  The  obligation  we  have  to  our  children  does  not  lie  in  the  public  sector  alone; 
nor  does  it  lie  in  the  private  sector  alone.  We  have  to  have  a  delivery  infrastructure 
that  encourages  both  the  public  health  clinics  and  the  private  physicians.  We  need 
to  remove  any  barriers  which  discourage  private  physicians'  full  participation  in  our 
efforts  to  immunize. 

We  don't  need  a  system  where  private  physicians  refer  children  to  public  health 
clinics  for  immunization.  That's  like  me  walking  in  to  a  Ford  dealership  to  buy  a 
car  and  being  told  to  go  to  another  Ford  dealer  across  town.  What  are  my  chances 
of  doing  that?  What  are  my  chances  of  actually  staying  interested  in  Fords?  What 
are  the  chances  of  me  making  the  effort? 

We're  talking  about  an  immunization  program,  not  a  progressive  dinner.  We  can- 
not continue  sending  people  on  a  scavenger  hunt  for  health. 


77 

When  weVe  got  'em,  let's  don't  let  'em  get  away.  I  believe  this — in  essence — is  the 
wish  of  this  administration  and  the  intent  of  this  bill. 

Let  us  remember  that  this  war  will  be  waged  in  the  communities  of  this  Nation, 
not  in  Washington,  DC.  and  not  in  Austin,  TX.  We  have  to  have  the  flexibility  to 
employ  nontraditional  delivery  methods.  Raving  the  vaccine  without  a  system  of  de- 
livery, without  the  people  to  give  it,  isnt  going  to  do  anyone  any  good.  In  a  commu- 
nity where  the  closest  thing  we  have  to  a  health  care  facility  is  a  Dairy  Queen, 
we  ve  got  to  look  for  other  ways  to  deliver.  We've  got  to  talk  about  school-based  or 
church-based  health  care.  We've  got  to  talk  about  mobile  systems.  We've  got  to  take 
the  care  to  the  people  where  the  people  are  and  quit  trying  to  make  them  come  to 
us. 

We  can't  throw  this  national  party  where  the  people  ain't,  and  we  cant  throw  the 
party  without  someone  to  cut  the  cake.  We've  got  to  have  the  professional  health 
staff  to  get  the  job  done.  We've  got  to  have  more  nurses,  and  we've  got  to  be  able 
to  keep  them. 

Many  States,  including  Texas,  will  need  the  flexibility  to  use  funds  to  meet  these 
staffing  needs  and  to  look  for  and  establish  non-traditional  delivery  systems  at  the 
community  level  ...  to  make  immunizations  available  and  convenient. 

8)  We  have  to  market  the  product.  We  have  to  advertise.  To  promote.  And,  we 
have  to  do  it  professionally.  In  this  age  of  instant  mass  communication  technology 
and  methodology,  we  cannot  continue  to  rely  on  seminars,  overheads  and  one-on- 
one  communication  to  get  the  word  out.  Public  health  communication  in  this  country 
has  been  the  medical  equivalent  of  the  "Not  Ready  for  Prime  Time  Players".  Well, 
this  immunization  initiative  is  definitely  a  prime  time  program,  and  our  commu- 
nications to  make  it  successful  have  to  be  prime  time,  too. 

We've  got  to  sell  the  product. 

But,  before  any  aspect  of  this  immunization  effort  can  be  maximally  effective,  I 
believe  there  are  several  conditions  we  need  to  recognize. 

First,  we  as  decision  makers  and  we  as  a  nation  of  parents,  have  got  to  view  im- 
munization as  a  priority  need.  We  cannot  continue  to  look  at  measles,  mumps  and 
whooping  cough  as  normal  childhood  diseases  which  every  kid  goes  through.  We 
cannot  continue  to  think  they'rejust  part  of  growing  up — some  sort  of  plights  of  pas- 
sage— that  aren't  that  serious.  These  illnesses  are  serious,  even  deadly,  and  we  have 
no  excuse  for  not  eliminating  them  in  this  country.  We've  got  to  get  away  from  the 
idea  that  a  disease  has  to  be  deadly  to  be  disastrous. 

Second,  we  cannot  continue  to  wait  for  devastation  before  we  see  doing  something 
about  it  as  a  priority.  It's  a  sad  commentary  on  our  vision  when  we  experience  some 
calamity  of  national  attention,  followed  by  everybody  and  their  uncles  clamoring  for 
action,  for  reform.  It  doesn't  take  a  genius  to  witness  a  pile-up  at  an  unmarked 
intersection  to  conclude  the  need  for  a  signal  light. 

We  have  a  chance  here  to  exercise  real  vision  ...  to  do  something  to  prevent 
calamity. 

Third,  we  have  got  to  continuously  remind  ourselves  that  prevention  is  the  cheap- 
est form  of  health  care  we  have.  And,  immunization  is  prevention  at  its 
best  .  .  .  our  most  cost-effective  health  service. 

To  illustrate,  allow  me  to  mention  three  outbreaks  of  measles  in  Texas  in  the  past 
few  years: 

In  Dallas,  in  1989-90,  it  cost  $3.5  million  to  hospitalize  238  patients.  It  would 
have  cost  $3,700  for  238  doses  of  the  MMR  vaccine. 

In  South  Texas,  in  1991-92,  it  cost  $2.4  million  to  hospitalize  595  patients.  It 
would  have  cost  $9,100  for  the  vaccine. 

In  Houston,  in  1988-89,  it  cost  $8.5  million  to  hospitalize  550  patients.  It  would 
have  cost  $8,400  for  the  vaccine. 

In  the  Dallas  outbreak,  more  than  half  of  the  $3.5  million  hospitalization  cost  was 
borne  by  the  government  or  government-sponsored  agencies. 

In  short,  in  these  three  examples  alone,  $14.4  million  was  spent  to  treat  because 
$21,200  was  not  spent  to  prevent. 

One  of  the  major  points  we  supported  that  we  did  not  get  in  the  Texas  legislation 
I  mentioned  earlier  was  a  provision  that  health  insurance  companies  would  be  re- 
quired to  reimburse  for  immunizations  on  a  non-deductible  basis.  I'm  not  an  actu- 
ary. I'm  a  pediatrician.  Maybe  that's  why  I'm  missing  the  point.  I  simply  cannot  see 
the  wisdom  of  an  insurance  company  refusing  to  reimburse  a  few  dollars  for  an  im- 
munization, but  be  willing  to  cover  hospital  stays  for  measles  complications  that  can 
range  from  $850  to  $20,000  a  day. 

Another  disturbing  finding  in  the  Dallas  example  ...  of  the  238  patients  hos- 
pitalized, some  169  were  children.  Of  these,  about  half  had  been  to  a  health  care 
provider  prior  to  exposure;  providers  who  missed  opportunities  to  immunize.  We  had 
^m;  we  let  'em  get  away. 


78 

Equally  disturbing  is  that  about  40  percent  were  enrolled  in  at  least  one  of  our 
Federal  assistance  programs-food  stamps;  Women,  Infants  and  Children;  Aid  to 
Families  with  Dependent  Children;  or  Medicaid.  We  could  have  immunized  them 
there.  Again,  we  had  'em;  we  let  'em  get  away. 

We  cannot  continue  to  miss  opportunities  to  prevent  illness,  doctor  bills,  hospital 
bills,  suffering,  death,  loss  of  income,  and  lost  productivity. 

We  have  got  to  have  cooperation  among  our  various  government  programs,  espe- 
cially among  entitlement  programs,  such  as  food  stamps,  WIC,  Medicaid  and  AFDC. 

In  Texas,  we  estimate  that  half  of  the  2-year-olds  who  need  to  be  immunized  par- 
ticipate in  the  WIC  program.  So  why  not  incorporate  our  immunization  program 
with  WIC?  In  fact,  we  have  started  doing  just  that  in  El  Paso,  and  we  are  excited 
by  the  reception  from  the  WIC  program  and  by  the  prospects  for  increased  immuni- 
zation rates  this  cooperative  effort  affords  us. 

Let's  get  them  while  we've  got  them  and  not  send  them  across  town  and  bet  so 
heavily  on  them  getting  there.  Neither  a  2-year-old  nor  the  parents  should  have  to 
understand  and  appreciate  a  governmental  organizational  chart  to  get  what  he  or 
she  should  have. 

Let's  stop  saying  we  can't,  and  start  figuring  out  ways  to  do  it.  The  "Comprehen- 
sive Child  Immunization  Act  of  1993"  is  a  solid  and  impressive  step  in  this  direc- 
tion. The  State  of  Texas  and  ASTRO  stand  ready  to  work  with  you  to  enact  this 
legislation  in  1993. 

Thank  you  for  this  privilege,  and  in  closing,  I  would  emphasize  that  Texas  stands 
ready  and  willing  to  be  a  charter  participant  in  any  aspect  of  this  initiative  you  see 
fit,  especially  in  the  efforts  to  establish  a  national  tracking  system. 

Senator  Riegle.  Next,  Mr.  Ed  Thompson,  Jr.,  who  is  here  from 
Jackson,  MS. 

Dr.  Thompson.  Thank  you,  Senator. 

I  am  Dr.  Ed  Thompson,  chair  of  preventive  health  services  for 
the  Mississippi  State  Department  of  Health,  and  currently  that 
State's  interim  State  health  officer. 

At  the  national  level,  I  am  president  of  the  Council  of  State  and 
Territorial  Epidemiologists  and  a  member  of  the  Centers  for  Dis- 
ease Control's  Advisory  Committee  on  Immunization  Practices.  I  do 
not,  however,  present  any  official  ACIP  position  on  this  issue. 

As  a  practicing  public  health  professional  responsible  for  the  di- 
rection of  a  State  immunization  program,  I  want  to  express  appre- 
ciation for  the  interest  and  support  being  given  to  children's  immu- 
nization by  the  President  and  by  the  Congress.  I  would  like  to  voice 
strong  support  for  much  of  the  content  of  the  Comprehensive  Child 
Immunization  Act  of  1993. 

Two  provisions  in  particular  will  be  of  significant  help.  The  sim- 
plification of  vaccine  information  materials  will  generate  a  nation- 
wide sigh  of  relief  throughout  our  public  health  system,  and  the 
ability  to  use  Social  Security  numbers  to  track  children's  immuni- 
zation status  is  something  we  in  the  States  have  recommended  for 
some  time,  and  it  will  be  of  major  help  to  us  in  tracking  children. 

Another  provision  of  the  bill,  the  collaborative  Federal  and  State 
efforts  to  track  children's  immunizations,  can  be  highly  valuable, 
perhaps  even  decisive,  in  our  efforts  to  reach  the  goal  of  protecting 
90  percent  of  our  children  by  age  2.  In  Mississippi,  we  have  identi- 
fied the  implementation  of  a  statewide  immunization  tracking  sys- 
tem as  one  of  the  most  important  things  we  need  to  do  to  reach 
our  year  2000  goal. 

There  is  a  cautionary  note  that  needs  to  be  raised,  however.  The 
emphasis  needs  to  be  on  supporting  tracking  systems  in  the  States. 
The  national  registry  proposed  in  the  bill  will  contribute  much  less 
to  raising  immunization  levels.  It  needs  to  be  kept  simple  and 


79 

streamlined,  and  common  sense  and  the  realistic  evaluation  of  its 
relative  yield  need  to  be  stressed. 

In  addition,  there  are  serious  concerns  in  the  States  about  some 
of  the  requirements  with  regard  to  adherence  to  Federal  tracking 
models  and  systems  specifications  regarding  registry  design.  I  can 
address  these  further  in  response  to  questions  the  members  may 
have  at  the  conclusion  of  my  remarks. 

One  provision  of  the  bill,  the  universal  purchase  of  vaccines,  is 
not,  in  my  opinion  as  a  public  health  practitioner,  a  good  use  of  re- 
sources and  will  not  contribute  significantly  to  raising  childhood 
immunization  levels.  To  support  that  opinion,  I  must  give  some 
background  on  immunizations  in  Mississippi. 

Mississippi  has  the  lowest  per  capita  income  of  any  State.  We 
have  one  of  the  highest  proportions  of  minority  populations  in  the 
Nation;  36  percent  of  our  population  is  African  American.  In  many 
ways,  Mississippi  is  the  rural  counterpart  of  the  inner  city,  with 
substantial  demand  for  public  health  services  and  relatively  limited 
resources  to  meet  that  demand. 

Mississippi  has  one  of  the  highest  immunization  levels  in  the  Na- 
tion. In  1992,  72.2  percent  of  our  children  had  completed  a  basic 
series  of  four  DTP,  three  OPV,  and  one  MMR  by  age  2,  and  that 
is  based  on  a  statewide  population-based  probability  sample.  One 
of  our  public  health  districts  has  already  reached  the  year  2000 
goal  of  90  percent  coverage,  and  these  levels  are  the  same  for  Afri- 
can American  and  white  Mississippians. 

Mississippi  intends  to  be  the  first  State  to  reach  the  Nation's 
year  2000  goal,  and  we  believe  we  can  do  it  by  1994.  We  have  ac- 
complished the  immunization  levels  we  have  and  can  reach  our  90 
percent  coverage  goal  without  providing  vaccine  to  private  provid- 
ers. 

In  analyzing  the  reason  why  28  percent  of  our  2-year-olds  are  not 
fully  immunized,  we  have  not  found  availability  of  vaccine  or  its 
cost  to  be  a  significant  barrier.  MMR  is  the  most  expensive  vaccine 
we  give,  yet  in  1992,  86  percent  of  Mississippi  children  had  re- 
ceived MMR  by  24  months  of  age.  Availability  of  vaccine  is  not  the 
problem.  Like  all  States,  we  purchase  our  public  health  vaccine 
through  Federal  contracts,  at  prices  significantly  below  the  retail 
prices  paid  by  private  providers.  We  are  able  to  provide  vaccine  to 
any  child  in  Mississippi  through  the  health  department  at  minimal 
cost  for  those  who  can  afford  it  and  at  no  cost  to  those  who  cannot. 

We  have  enough  vaccine,  or  nearly  so,  as  long  as  new  vaccines 
and  cost  increases  are  provided  for.  Giving  vaccine  is  the  problem. 
We  need  more  nurses  and  other  staff  to  give  the  vaccine,  track  chil- 
dren and  do  outreach.  We  need  computers  and  software  to  do 
tracking  and  trigger  outreach.  We  need,  in  short,  to  further 
strengthen  the  public  health  infrastructure  for  vaccine  delivery,  not 
just  buy  more  vaccine. 

Part  of  the  reason  that  vaccine  availability  and  cost  are  not  a 
real  barrier  is  that  States  provide  much  of  the  funding  for  vaccine. 
In  Mississippi,  nearly  80  percent  of  children  receive  all  or  most  of 
their  immunization  in  health  department  clinics.  Roughly  half  the 
cost  of  the  vaccine  we  use  each  year  is  paid  for  with  State  dollars, 
even  though  we  are  a  resource-poor  State.  State  legislators  can  un- 
derstand and  appreciate  the  need  for  vaccine.  It  is  easier  to  get 


80 

State  support  for  vaccine  than  for  infrastructure,  which  is  more  dif- 
ficult to  sell  at  the  State  level. 

The  cost  of  making  free  Federal  vaccine  available  to  all  providers 
is  high.  As  a  practicing  public  health  official  at  the  State  level 
where  immunizations  are  actually  given,  where  the  rubber  meets 
the  road,  I  respectfully  recommend  that  these  funds  be  directed  to 
infrastructure  instead,  especially  for  outreach  and  tracking. 

Thank  you  for  the  opportunity  to  speak  on  this  issue,  and  111  be 
happy  to  answer  any  questions  the  members  may  have. 

Mr.  Waxman.  Thank  you  very  much,  Dr.  Thompson. 

[The  prepared  statement  of  Dr.  Thompson  follows:] 

Prepared  Statement  of  FJ2.  Thompson,  Jr. 

Messrs.  Chairmen,  ranking  members,  and  members  of  the  committee  and  sub- 
committee. I  am  Dr.  Ed  Thompson,  Chief  of  Preventive  Health  Services  for  the  Mis- 
sissippi State  Department  of  Health,  and  currently  Mississippi's  Interim  State 
Health  Officer.  At  the  national  level,  I  am  president  of  the  Council  of  State  and  Ter- 
ritorial Epidemiologists.  I  am  also  a  member  of  the  Centers  for  Disease  Control's 
Advisory  Committee  on  Immunization  Practice;  I  do  not,  however,  present  the 
ACIPs  position  on  this  issue,  but  appear  today  as  an  individual  member  of  that 
body. 

As  a  practicing  public  health  professional  responsible  for  the  direction  of  a  State 
immunization  program,  I  want  to  express  my  appreciation  for  the  interest  and  sup- 
port being  given  to  children's  immunization  by  the  President  and  the  Congress.  The 
increased  resources  already  provided  for  childhood  immunizations,  and  those  pro- 
posed in  the  legislation  being  considered  by  this  committee  are  a  clear  indication 
of  both  the  President's  and  the  Congress's  intent  to  protect  our  children  against  dis- 
eases no  child  should  have.  Our  goal  for  the  Nation  for  the  year  2000  is  for  90  per- 
cent American  children  to  have  completed  a  basis  series  of  immunizations  by  their 
second  birthday.  The  measure  being  considered  today  can  help  us  reach  this  goal. 

I  would  like  to  voice  strong  support  for  much  of  the  content  of  the  Comprehensive 
Child  Immunization  Act  of  1993,  as  contained  in  House  Bill  1640  and  Senate  Bills 
732  and  733.  I  would  like  to  raise  a  cautionary  note  about  one  provision  of  the  act, 
and  I  would  also  like  to  respectively  suggest  that  the  resources  provided  in  another 
major  component  of  the  proposal  could  be  better  targeted.  Two  provisions  in  particu- 
lar are  much  needed  and  will  be  of  significant  help.  The  simplification  of  vaccine 
information  materials  provided  in  subsection  (e)  of  section  5  of  the  bill  will  generate 
a  nationwide  sigh  of  relief  throughout  our  public  health  system.  The  unduly  complex 
materials  currently  mandated  are  a  barrier  to  timely  immunization,  a  needless  ex- 
pense, and  divert  time  and  effort  away  from  actually  immunizing  children.  The  abil- 
ity to  use  Social  Security  numbers  to  track  children's  immunization  status,  provided 
in  subsection  (b)  of  new  section  2143,  is  one  of  the  most  valuable  provisions  of  the 
bill.  This  is  something  we  in  the  States  have  recommended  for  some  time,  and  it 
will  be  a  major  help  to  us  in  tracking  children.  It  may  well  be  the  single  best  thing 
in  the  bill,  and  it's  much  appreciated. 

Another  provision  of  the  Dill,  the  collaborative  Federal  and  State  efforts  to  track 
children's  immunizations  described  in  new  section  2143,  can  be  highly  valuable,  per- 
haps even  decisive,  in  our  efforts  to  reach  the  goal  of  protecting  90  percent  or  more 
of  our  children  by  aged.  A  good  tracking  system  allows  reminder  notices  to  be  sent 
when  immunizations  are  due,  and  other  notices  to  be  sent  if  a  dose  is  missed  or 
overdue.  It  identifies  inadequately  immunized  children  for  special  attention  and  out- 
reach efforts,  measures  immunization  levels  in  a  clinic,  an  area,  or  a  State,  and  al- 
lows for  evaluation  of  immunization  program  efforts.  In  Mississippi,  we  have  Identi- 
fied the  development  and  implementation  of  a  statewide  immunization  tracking  sys- 
tem as  one  of  the  most  important  things  we  need  to  do  to  reach  the  year  2000  goal. 

There  is  a  cautionary  note  that  needs  to  be  raised,  however.  The  potential  value 
in  raising  immunization  levels  lies  in  State  and  large  substate  regional  tracking  sys- 
tems, and  this  is  where  the  emphasis  needs  to  be:  on  supporting  tracking  systems 
in  the  States.  The  national  registry  or  tracking  system  proposed  in  the  bill,  while 
of  some  help,  will  contribute  much  less  to  actually  raising  immunization  levels,  and 
needs  to  be  kept  simple  and  streamlined.  Most  importantly,  common  sense  and  a 
realistic  evaluation  of  its  relative  yield  need  to  be  stressed.  In  addition,  while  some 
degree  of  standardization  and  interchangeability  of  data  is  important,  there  are  seri- 
ous concerns  in  the  states  about  some  of  the  requirements  with  regard  to  adherence 


81 

to  Federal  tracking  models  and  systems  specifications  regarding  registry  design.  I 
can  address  these  further  response  to  questions  the  members  may  nave  after  the 
conclusion  of  my  remarks. 

One  provision  of  the  bill,  the  universal  Federal  purchase  of  vaccines  addressed  in 
new  section  2141,  is  not,  in  my  opinion  as  a  pubnc  health  practitioner,  a  good  use 
of  resources,  and  will  not  contribute  significantly  to  raising  childhood  immunization 
levels.  To  support  that  opinion,  must  give  some  background  on  immunizations  in  my 
own  State  of  Mississippi. 

Mississippi  is  a  largely  rural  State,  and  has  the  lowest  per  capita  income  of  any 
State  in  the  Nation.  We  have  one  of  the  highest  proportions  of  minority  population 
in  the  Nation:  36  percent  of  our  population  is  African-American.  In  many  ways,  Mis- 
sissippi is  the  rural  counterpart  of  the  inner  city.  We  are  a  State  with  substantial 
demand  for  public  health  services,  and  relatively  limited  resources  to  meet  that  de- 
mand. In  light  of  these  factors,  Mississippi  has  had  to  develop  a  strong  immuniza- 
tion program. 

Mississippi  has  one  of  the  highest  immunization  rates  in  the  Nation.  In  1992,  72.2 
percent  of  our  children  had  completed  a  basic  series  of  four  DTP,  three  OPV,  and 
one  MMR.  This  figure  is  based  on  a  Statewide,  population  based  survey  of  a  prob- 
ability sample  consisting  of  6  percent  of  the  1990  birth  cohort,  drawn  from  birth  cer- 
tificate records,  and  surveyed  prospectively.  Figure  1,  in  Appendix  A,  depicts  these 
results  by  State  and  by  public  health  district.  One  of  our  districts  has  already 
reached  the  year  2000  goal  of  90  percent  completion.  These  levels  are  the  same  for 
African-American  and  white  Mississippians.  With  the  help  of  the  new  resources  pro- 
vided in  other  measures  now  before  the  Congress,  and  some  of  those  proposed  in 
this  bill,  Mississippi  intends  to  be  the  first  State  to  reach  the  Nation's  year  2000 
goal.  We  believe  we  can  do  it  by  1994. 

We  have  accomplished  the  immunization  coverage  we  have,  and  we  will  reach  our 
90  percent  coverage  goal,  without  providing  vaccine  to  private  providers.  In  analyz- 
ing the  reasons  why  28  percent  of  our  2-year-olds  are  not  fully  immunized,  we  have 
not  found  availability  of  vaccine,  or  its  cost,  to  be  a  significant  barrier.  MMR  is  the 
most  expensive  of  the  vaccines  we  give,  yet  in  1992,  86  percent  of  Mississippi  chil- 
dren had  received  MMR  by  24  months  of  age.  Availability  of  vaccine  is  not  the  prob- 
lem. Like  all  States,  we  purchase  our  public  health  vaccines  through  Federal  con- 
tracts at  prices  significantly  below  the  retail  prices  paid  by  private  providers.  We 
are  able  to  provide  immunizations  to  any  child  in  Mississippi  who  wants  to  receive 
them  through  the  health  department  at  minimal  cost  ($5  per  dose)  for  those  that 
can  afford  it,  and  at  no  cost  to  those  who  cannot  we  have  enough  vaccine,  or  nearly 
so,  and  as  long  as  new  vaccines  and  cost  increases  are  provided  for,  we  need  re- 
sources in  other,  areas  to  raise  our  immunization  levels.  Giving  the  vaccine  is  the 
problem.  We  need  more  nurses  and  other  staff  to  give  the  vaccines,  track  children, 
and  do  outreach.  We  need  computers  and  software  to  do  tracking  and  trigger  out- 
reach. We  need,  In  short,  to  strengthen  the  public  health  infrastructure  for  vaccine 
delivery,  not  just  buy  more  vaccine. 

Part  of  the  reason  that  vaccine  availability  and  cost  are  not  a  real  barrier  is  that 
States  are  willing  to  provide  much  of  the  funding  for  needed  vaccines.  In  Mississippi 
nearly  80  percent  of  children  receive  all  or  most  of  their  immunizations  in  Health 
Department  clinics,  as  shown  in  Figure  2  in  Appendix  B.  Figure  3  in  Appendix  C 
shows  Mississippi's  Health  Department  vaccine  funding  over  the  last  7  years. 
Roughly  half  the  cost  of  the  vaccine  we  use  each  year  is  paid  with  State  dollars, 
even  though  we  are  a  resource-poor  State.  We  anticipate  the  willingness  of  our  State 
legislature  to  bear  the  State's  share  of  vaccine  costs  will  continue.  State  legislators 
readily  understand  and  appreciate  the  need  for  vaccine,  and  it  is  easier  to  get  State 
support  for  vaccine  than  for  infrastructure,  which  is  more  difficult  to  "selr  at  the 
State  level. 

The  cost  of  making  tree  Federal  vaccine  available  to  all  health  care  providers  is 
high — over  a  billion  dollars  annually.  As  a  practicing  public  health  official  at  the 
State  level,  where  immunizations  are  actually  given,  "where  the  rubber  meets  the 
road,"  I  respectfully  suggest  that  these  funds  be  directed  to  infrastructure,  especially 
for  outreach  and  tracking,  rather  than  universal  vaccine  purchase.  From  our  experi- 
ence at  the  State  and  local  level,  that  is  what's  needed  to  really  raise  immunization 
levels  for  our  children. 

Thank  you  for  the  opportunity  to  speak  on  this  issue.  I  will  be  happy  to  answer 
any  questions  the  committee  and  subcommittee  members  have. 


82 


Mississippi  lininuiuzation  Status 

1992  Survey  Of  Two  Year  Olds 
Completion  Status  By  District 


APPEN01X  A 


n 


DI 


iv      v      vi     vn    vm 

Public  Health  District 


DC 


STATE 
TOTAL 


The  Healthy  People  Year  2000 
immunization  goal  is  to  increase  childhood 
immunization  levels  to  at  least  90  peicenl 
of  two-year-elds  (a  20  percent  increase) 


Mississippi  Slate  Department  of  Health 
Pobtlc  Health  Districts 

Northwest  Public  Health  District  1 
Northeast  Public  Health  District  II 
Delta  Hills  Tubllc  Health  District  111 
Tbmblgbee  Public  Health  District  IV 
West  Central  Public  Health  District  V 
East  Central  Public  Health  District  V! 
Southwest  Public  Health  District  VII 
Southeast  Tubllc  Health  District  VTD 
Cpastal  Plains  Public  Health  District  IX 


F'oiire    1 


83 


APPENDIX  B 


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85 

Mr.  Waxman.  Mr.  Moen. 

Mr.  Moen.  Thank  you,  Mr.  Chairman  and  members  of  the  com- 
mittee and  staff.  Td  like  to  applaud  your  efforts  in  putting  forth 
this  legislation  we  are  discussing  today.  I  offer  the  following  com- 
ments in  the  spirit  of  helping  make  this  legislation  focus  on  the 
real  immunization  problems  confronting  us. 

I  would  like  to  discuss  with  you  two  issues.  First,  we  must  be 
more  specific  on  how  we  measure  immunization  rates  in  this  coun- 
try. The  current  one-number  methodology  treats  children  who  have 
had  no  immunizations  the  same  as  children  who  have  three  doses 
of  DTP,  two  doses  of  polio,  and  one  dose  of  measles,  mumps, 
rubella.  While  both  groups  of  children  are  technically  behind  in 
their  immunizations,  there  is  a  substantial  difference  in  terms  of 
disease  risk,  reasons  for  being  behind,  and  the  interventions  nec- 
essary to  address  the  problem. 

The  current  one-number  methodology  at  best  oversimplifies  the 
issue  and  at  worse  seriously  misdirects  our  efforts  to  improve  im- 
munization rates  in  this  country. 

The  second  issue  pertains  to  immunization  registries.  We  believe 
immunization  registries  can  be  useful  and  have  several  purposes  in 
tracking  children  s  health  over  time.  However,  we  believe  there  has 
been  inadequate  consideration  of  the  costs  or  the  benefits  of  a  na- 
tional statewide  immunization  registry. 

Regarding  the  first  issue,  we  continue  to  describe  the  immuniza- 
tion levels  of  our  preschool  children  by  use  of  a  single  number — 
the  percentage  of  children  who  have  completed  a  primary  series  of 
four  doses  of  DTP,  three  of  polio,  and  one  of  MMR  by  24  months 
of  age.  Unfortunately,  the  single-number  approach  does  not  accu- 
rately portray  that  immunization  levels  are  a  moving  and  changing 
target  throughout  the  life  of  a  child. 

In  Minnesota,  we  have  ascertained  the  immunization  rates  of  all 
69,000  kindergartners  in  the  State  who  were  born  in  1986-87.  For 
purposes  of  comparison,  we  define  success  by  whether  the  child  had 
received  the  recommended  dose  within  2  months  of  the  time  it 
should  have  been  administered. 

The  attachments  to  my  testimony  display  charts  and  graphs  of 
some  of  this  information  and  the  rates  of  immunization  in  Min- 
nesota using  this  methodology.  Eighty-six  percent  of  the  children  in 
Minnesota  do  receive  their  first  dose  of  DTP  and  polio  by  4  months 
of  age.  As  additional  doses  are  added,  however,  the  numbers  ade- 
quately immunized  quickly  but  begin  to  rebound  as  children  re- 
ceive additional  recommended  vaccine  doses. 

By  24  months  of  age,  90  percent  have  received  three  doses  of 
DTP,  93  percent  have  had  two  doses  of  polio  and  82  percent  have 
had  MMR.  While  these  are  the  most  important  of  the  primary  im- 
munizations a  child  should  receive,  because  only  64  percent  of  the 
children  have  received  the  fourth  dose  of  DTP,  we  often  refer  sim- 
ply to  this  latter  number  as  the  percent  of  children  who  have  been 
vaccinated  at  this  age.  As  you  can  see,  the  single  number  hardly 
represents  our  experience,  does  not  portray  true  disease  risk  in 
these  children,  and  does  not  allow  us  to  understand  what  or  where 
the  problem  is. 

Looking  at  vaccines  over  the  life  of  the  child  can  also  identify 
problems  at  the  local  level.  We  have  information  on  the  immuniza- 


86 

tion  rates  over  time  in  the  city  of  St  Paul,  and  in  the  city  of  St. 
Paul  fewer  than  80  percent  of  the  children  receive  their  first  doses 
in  a  'timely  manner.  However,  we  can  go  down  further  We  can  go 
down  to  the  ZIP  Code  level  in  St  Paul  In  ZIP  Code  55105,  oyer 
90  percent  of  the  children  receive  their  initial  dose  within  2  months 
of  the  recommended  age.  If  we  look  at  another  ZIP  Code  in  the  city 
of  St.  Paul,  we  see  quite  a  different  picture;  less  than  70  percent 
are  actually  receiving  immunizations. 

We  have  similar  information  for  every  county  in  the  btate  ot 
Minnesota.  This  effort  has  allowed  us  to  focus  the  activity  in  com- 
munities at  the  problems,  activate  and  arm  those  communities  to 
first  understand  what  their  problem  is  and  then  to  act. 

Local  immunization  registries  in  conjunction  with  other  interven- 
tions can  be  cost-effective  and  can  play  an  important  role  in  im- 
proving immunization  rates  in  a  community.  However,  a  national 
population-based  immunization  registry  is  premature  at  this  time 
and  will  divert  resources  from  areas  with  the  greatest  problems. 

We  need  to  keep  our  eye  on  the  ball,  and  the  ball  in  terms  of  dis- 
ease risk  is  low  immunization  rates,  especially  for  those  early  doses 
of  DTP,  polio  and  MMR  in  specific  populations  with  the  worst  prob- 

We  support  the  thrust  of  this  legislation  and  believe  it  can  result 
in  significant  improvements  of  immunization  rates  in  this  country 
if  the  interventions  and  resources  are  directed  to  where  the  prob- 
lems are. 

Thank  you. 

Mr.  Waxman.  Thank  you  very  much,  Mr.  Moen. 

[The  prepared  statement  of  Mr.  Moen  follows:] 

Prepared  Statement  of  Michael  E.  Moen 

Mr.  Chairman,  members  of  the  committee  and  staff,  I'd  like  to  applaud  your  ef- 
forts in  putting  forth  this  legislation  we  are  discussing  today.  I  offer  the  following 
comments  in  the  spirit  of  helping  make  this  legislation  cost-effective  end  focus  on 
the  real  immunization  problems  confronting  us.  I  would  like  to  discuss  with  you  two 
issues.  First,  we  must  be  more  specific  on  how  we  measure  immunization  rates  in 
this  country,  we  must  be  able  to  distinguish  children  who  have  had  no  immuniza- 
tions from  children  who  have  had  3  doses  of  diphtheria,  tetanus,  pertussis  (DIP), 
2  doses  of  polio,  and  1  dose  of  measles,  mumps,  rubella  (MMR).  While  both  groups 
of  children  are  technically  behind  in  their  immunizations,  there  is  a  substantial  dif- 
ference in  terms  of  disease  risks,  reasons  for  being  behind,  and  interventions  to  ad- 
dress the  problem.  The  second  issue  pertains  to  immunization  registries.  There  has 
been  a  great  deal  of  discussion  regarding  the  use  of  immunization  registries  for  de- 
termining immunization  levels  in  this  country.  Immunization  registries  have  several 
purposes,  including  tracking  the  health  of  children  over  time.  We  believe  there 
needs  to  be  additional  discussions,  however,  about  the  cost  of  a  national  or  state- 
wide immunization  registry. 

Regarding  the  first  issue,  we  continue  to  describe  the  immunization  levels  of  our 
preschool  children  by  use  of  a  single  number:  the  percentage  of  children  who  have 
completed  a  primary  series  of  4  doses  of  DIP;  3  doses  of  polio;  and  1  MMR  by  24 
months  of  age.  These  numbers  are  frequently  used  to  describe  immunization  rates 
in  individual  states  or  cities.  Unfortunately  this  single  number  approach  does  not 
accurately  portray  the  complex  process  of  immunizing  children,  immunization  levels 
are  a  moving  ana  changing  target  throughout  the  life  of  a  child  and  especially  dur- 
ing the  time  from  birth  through  age  3.  Our  success  at  immunizing  preschool  chil- 
dren must  be  measured  by  their  age-appropriate  receipt  of  vaccine  not  rust  on  their 
completion  rates  for  the  primary  series  by  24  months  of  age.  Ensuring  that  children 
start  on  time  and  receive  their  third  dose  of  DD?  by  6  months  of  age  is  critical  to 
prevent  the  serious  complications  of  pertussis  infections  during  the  first  year  of  life. 
The  importance  of  timely  administration  of  these  early  doses  of  vaccine  can  be  lost 
by  focusing  only  on  the  immunization  status  of  children  at  24  months. 


87 

In  Minnesota  we  have  conducted  a  retrospective  survey  of  all  69,000  kindergarten 
children  to  determine  their  immunization  rates  from  birth  to  school  entry.  These  are 
chUdren  who  were  born  in  1986  and  1987.  We  have  conducted  validation  studies 
and  determined  that  their  school  records  accurately  document  the  dates  upon  which 
they  received  their  immunizations.  By  comparing  these  dates  with  the  birth  of  the 
child  we  can  present  a  composite  history  of  the  immunization  of  each  child.  Our  goal 
is  to  create  a  system  that  ensures  that  infants  of  all  geographic  areas,  racial  and 
ethnic  groups,  and  socio-economic  strata  receive  age-appropriate  immunizations, 
such  that  90  percent  are  up-to-date  when  measured  within  2  months  of  the  dates 
on  which  thev  were  to  be  vaccinated.  Thus,  we  have  evaluated  the  preschool  immu- 
nization levels  of  our  kindergartners  at  the  live  goal  points  described  in  Attachment 
1.  Attachment  2  displays  the  immunization  rates  for  the  State  of  Minnesota  using 
this  methodology.  As  you  can  see,  immunization  rates  vary  tremendously  by  the  age 
°f  the  child  and  the  type  of  vaccine.  In  Minnesota,  86  percent  of  children  receive 
their  first  dose  of  DIP  and  polio  by  4  months  of  age.  As  additional  doses  of  vaccines 
are  added,  the  numbers  ofchildren  adequately  immunized  drop  sharply  but  begin 
to  rebound  quickly  as  those  children  receive  the  additional  recommended  vaccine 
doses. 

i-^rri2  montn8  °f  a8e»  79  percent  of  children  in  this  cohort  have  received  3  doses 
of  DTP  and  89  percent  have  received  2  doses  of  polio.  By  24  months,  90  percent 
have  received  3  doses  of  DTP  93  percent  had  2  doses  of  polio,  and  82  percent  MMR. 
While  these  are  the  most  important  of  the  primary  immunizations  a  child  should 
receive,  because  only  64  percent  of  children  have  received  the  fourth  dose  of  DTP, 
we  often  refer  to  this  latter  number  as  the  percent  of  children  who  have  been  vac- 
cinated at  thiB  age.  As  you  can  see,  this  single  number  hardly  represents  our  experi- 
ence in  Minnesota.  Because  of  laws  that  require  children  to  be  immunized  prior  to 
school  entry,  over  98  percent  of  children  in  Minnesota  receive  all  required  vaccines 
by  school  entry. 

Lack  of  immunizations  at  different  ages  of  a  child's  life  suggest  very  different 
problems.  A  2-month-old  child  who  has  not  received  first  dose  or  second  dose  DTP 
or  polio,  very  likely  has  not  received  any  well-baby  care  subsequent  to  delivery.  Pro- 
vision of  these  early  doses  of  vaccine  are  clearly  one  of  the  most  important  functions 
of  any  well-baby  visit.  Lack  of  completion  of  the  series,  in  particular  fourth-dose 
DTP  suggests  quite  a  different  problem.  This  is  particularly  evident  when  compar- 
"JOSg  percent  of  children  who  receive  MMR  who  do  not  receive  the  fourth  dose 
of  DTP.  Inasmuch  as  these  two  vaccines  can  be  given  simultaneously  at  the  same 
clinic  visit,  the  question  arises  as  to  why  children  who  are  receiving  MMR  are  not 
receiving  their  fourth  dose  of  DTP. 

By  conducting  surveys  of  all  kindergartners  in  Minnesota,  we  can  determine  im- 
munization rates  by  specific  geographic  areas.  Attachment  3  displays  the  immuniza- 
tion levels  for  children  in  the  city  of  St.  Paul.  Fewer  than  80  percent  of  children 
receive  their  first  doses  of  vaccine  in  a  timely  manner  and,  except  for  second  dose 
polio,  which  reaches  83  percent,  these  children  do  not  rise  above  80  percent  for  any 
vaccine.  Breaking  the  city  into  zip  codes  provides  additional  information  which  is 
key  to  targeting  efforts  to  improve  immunization  rates  in  this  city.  Attachment  4 
displays  immunization  rates  for  zip  code  55105  in  St.  Paul.  Over  90  percent  of  chil- 
dren In  this  area  receive  their  initial  dose  within  2  months  of  the  recommended  age. 
However,  even  in  this  relatively  affluent  community  there  is  room  for  further  im- 
provement in  the  timeliness  of  fourth  dose  DTP. 

Attachment  5  displays  immunization  rates  for  zip  code  55103  in  St.  Paul.  Clearly 
this  area  is  where  we  need  to  focus  our  efforts. 

Attachment  6  displays  rates  for  Olmsted  County,  home  of  the  Mayo  Clinic.  At- 
tachments 7  and  8  display  immunization  rates  in  two  different  schools  in  Olmsted 
county.  In  this  county  with  generally  good  immunization  levels,  Hawthorne  Elemen- 
tary represents  a  pocket  where  efforts  to  improve  immunization  rates  need  to  be  di- 
rected. 

In  order  to  successfully  attack  the  problem  of  low  immunization  rates,  we  must 
focus  our  limited  resources  to  where  the  problem  is  and  not  to  where  the  problem 
is  not.  The  methodology  described  above  allows  us  to  pinpoint  immunization  prob- 
lems and  direct  resources  to  those  areas.  We  collected  this  data,  analyzed  it,  and 
prepared  a  composite  for  each  county  in  Minnesota  in  8  months  at  a  cost  of  approxi- 
mately $220,000.  Using  Immunization  Action  Plan  (IAP)  funding,  local  community 
health  departments  in  Minnesota  have  convened  community  task  forces  to  develop 
strategies  to  address  the  low  immunization  rates  in  their  areas.  This  process  will 
focus  resources  and  interventions  to  problem  areas  and  avoid  the  dilution  of  empha- 
sis and  resources  that  occur  with  a  "shotgun  approach. 

Local  immunization  registries  in  conjunction  with  other  interventions  can  play  an 
important  role  in  improving  the  immunization  rates  of  a  community.  By  assisting 


88 


providers  and  parents  in  keeping  track  of  when  the  next  vaccine  dose  is  due,  a  reg- 
istry can  serve  an  important  purpose.  Registries  that  are  locally-supported  hy  the 
community  can  be  cost-effective,  particularly  in  areas  with  low  immunization  rates. 
The  Minnesota  Department  of  Health  supports  immunization  tracking  and  reg- 
istries, particularly  at  the  provider  or  community  level,  we  have  experience  in  the 
development  of  registries  in  the  area  of  cancer  and  in  public  immunization  clinics, 
and  have  received  a  grant  from  the  Robert  Wood  Johnson  Foundation  to  develop  ad- 
ditional immunization  registries  in  Minnesota.  In  addition,  key  staff  in  the  depart- 
ment, such  as  Dr.  Osterholm,  have  served  on  grant  review  committees  for  immuni- 
zation registries  for  the  Robert  Wood  Johnson  Foundation.  We  draw  upon  this  expe- 
rience with,  and  commitment  to,  registries  when  we  say  that  a  national  immuniza- 
tion registry  is  premature  at  this  time  and  will  divert  resources  from  areas  with  the 
greatest  problems.  „ 

Local  provider-based  immunization  registries  that  provide    on  line,      real  tune 
information  are  important  and  cost  beneficial  in  areas  where  there  are  documented 
immunization  problems.  However,  the  expanse  of  a  national  population-based  "on 
line,"  "real  time"  immunization  registry  is  hardly  justified  at  this  time. 

We  support  the  thrust  of  the  legislation  and  believe  it  can  result  in  significant 
improvement  of  immunization  rates  in  this  country  if  the  interventions  and  re- 
sources contained  in  the  bill  are  directed  to  where  the  problems  are.  I  believe  we 
can  improve  immunization  rates  in  this  country  if  we  build  on  the  work  that  has 
begun  through  the  IAP  initiative;  which  involves  communities  in  identifying  where 
problems  exist  and  which  directs  resources  toward  problem  areas.  Additional  infor- 
mation on  immunization  rates  can  be  gathered  quickly  and  inexpensively  using  ex- 
isting survey  methodology  and  existing  data  sources.  This  information  can  assist 
States  and  communities  to  direct  their  efforts  to  problem  areas.  Adding  registries 
and  additional  vaccines  to  public  health's  armamentarium  to  attack  low  immuniza- 
tion rates  is  a  good  strategy.  Making  those  two  strategies  the  sole  strategy,  or  ap- 
plying them  in  areas  where  they're  not  needed,  diverts  important  and  limited  public 
health  resources  from  the  areas  where  additional  work  is  needed. 


89 

ATTACHMENT      1 


Goal  of  the  Minnesota 
Immunization  Action  Plan 


By  the  year  2000  create  a  system  that  ensures  that  infants  of  all 
geographic  areas,  racial  and  ethnic  groups  and  socio-economic  strata 
receive  age-appropriate  immunization  against  diphtheria,  tetanus, 
pertussis,  poliomyelitis,  measles,  mumps,  rubella,  Haemophilus  influenzae 
type  B,  and  hepatitis  B  such  that  90%  are  up  to  date  when  measured 
within  two  months  of  the  date(s)  on  which  they  were  to  be  vaccinated. 


Immunization  Goals  by  Age 

Goal  1  (4  months) 
DTP1 
Polio  1 

Goal  2  (6  months) 
DTP  t 
Polio  2 

Goal  3  (8  months) 
DTP  3 
Polio  2 

Goal  4  (17  months) 
MMR 
DTP  3 
Polio  2 

Goal  5  (20  months) 
MMR 
DTP  4 
Polio  3 


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97 

Mr.  Waxman.  Ms.  LeBron. 

Ms.  LeBron.  Thank  you,  Chairmen,  and  members  of  the  commit- 
tee. I  thank  you  all  for  allowing  me  to  come  here  today  to  speak 
on  the  immunization  project  that  we  have  in  the  city  of  Holyoke, 
MA.  It  is  an  honor. 

I'd  like  to  introduce  on  my  right  Ms.  Danielle  Gordon,  the  coordi- 
nator of  the  Holyoke  immunization  project. 

I  will  be  talking  in  regard  to  the  strategies  that  have  taken  place 
with  our  program,  which  is  funded  through  the  Department  of  Pub- 
lic Health.  CEDE  is  a  community-based  project  under  the  Nuevo 
Esperanza  Housing  Development  Agency,  and  our  strategies  are 
grassroots  level  strategies. 

As  I  go  through  my  testimony,  I  will  be  touching  on  what  kinds 
of  strategies  were  used  in  this  community.  We  are  serving  and 
working  with  a  predominantly  Puerto  Rican  community  in  this 
city.  Our  approach  has  been  door-to-door  outreach. 

In  our  first  year,  when  we  began  our  first  phase  for  the  project 
that  is  a  demonstration  of  the  Department  of  Public  Health,  what 
we  did  was  to  go  out  and  do  an  assessment.  This  was  through  a 
randomly-chosen  sample,  and  we  did  door-to-door  knocking  in  order 
to  identify  families  whose  children  were  not  fully  immunized. 

Let  me  just  say  that  we  found  that  70  percent  of  these  children 
were  not  immunized,  and  this  was  just  a  random  sample,  so  we  can 
figure  out  the  rest. 

I  want  to  continue  by  saying  that  each  community  needs  to  apply 
its  own  personal  outreach  that  fits  into  its  own  community.  Besides 
door-to-door  outreach,  we  have  been  able  to  do  media  advertising 
through  our  local  ratio  stations  and  community  and  local  news- 
papers to  outreach  to  families  so  that  they  know  what  is  available. 

The  first  year,  what  we  did  was  to  just  assess  these  families,  look 
at  the  records  of  what  they  had  available,  and  then  compare  with 
the  providers.  And  like  I  said,  it  was  found  that  70  percent  of  these 
children  were  not  fully  immunized. 

We  are  in  the  second  phase  of  our  project  now,  and  we  are  doing 
the  second  components,  which  is  what  people  suggest.  There  was 
a  series  of  questions  that  were  asked  to  the  families.  And  I  heard 
here  today  certain  things  that  are  very  true.  There  were  barriers, 
and  these  barriers  are  the  ones  that  we  are  working  with  in  this 
second  phase. 

One  of  the  barriers  that  I'd  like  to  mention  was  health  insurance. 
Massachusetts  has  done  a  great  job  in  providing  immunization 
free-of-charge,  but  we  need  to  understand  that  the  administration 
of  these  immunizations  still  has  a  cost.  So  that  is  a  barrier  right 
there  alone. 

The  accessibility  of  hours  and  days  is  a  barrier,  and  language, 
transportation  and  child  care  are  some  of  the  barriers  that  were 
encountered  as  well.  This  project  is  based  on  empowerment  and 
also  on  the  involvement  of  members  of  the  community.  The  sugges- 
tions were  that  we  should  have  rotating  clinics  throughout  the  iour 
wards  of  the  community  to  provide  these  clinics.  Right  now,  we  will 
begin  our  first  one  on  Saturday,  April  24th,  from  12  to  4.  We  have 
subcontracted  with  Providence  Hospital  Prenatal  Clinic  from  Hol- 
yoke, MA,  and  they  will  be  the  providers. 


98 

In  closing,  I  just  want  to  say  that  we  are  not  health  profes- 
sionals, but  we  are  health  educators  who  are  taking  this  to  heart 
in  reaching  our  grassroots  residents  to  understand  and  educate  at 
the  same  time.  This  process  took  place  as  they  were  doing  the  as- 
sessment; they  were  also  educating  people  at  the  same  time,  and 
working  on  the  barriers. 

We  are  doing  follow-ups  with  the  families,  getting  them  into  clin- 
ics, and  assuring  them  that  they  can  have  the  accessibility  that 
they  need. 

Triank  you. 

Mr.  Waxman.  Thank  you  very  much.  That  is  a  report  of  a  good 
success  story. 

[The  prepared  statement  of  Ms.  LeBron  follows:] 

Prepared  Statement  of  Gladys  LeBron 

Thank  you  Mr.  Chairman  and  members  of  the  committee  for  the  opportunity  to 
be  here  and  to  talk  with  you  about  the  importance  of  childhood  immunizations.  I 
am  the  Director  of  CE.D £.,  or  the  Center  tor  Education  During  Pregnancy,  which 
is  a  community  organization  concerned  with  health  education  ana  support  for 
Latinos,  and  in  particular  for  pregnant  and  postpartum  Latina  women.  With  me 
today  is  Danielle  Gordon,  who  is  the  coordinator  of  a  CE.D.E.  immunization  project. 

CE.D.E.  is  based  on  a  holistic  approach  and  believes  in  using  outreach  strategies 
to  help  people  facing  barriers  to  health  care  services.  CE.D.E.  is  an  organization 
of  community  workers,  not  trained  health  professionals — it  works  because  it  is  an 
integral  part  of  the  community  it  serves,  and  is  strongly  committed  to  community 
empowerment  through  better  health  education. 

CE.D.E.'s  outreach  strategies  include  going  door-to-door,  canvassing  areas  by 
posting  flyers,  and  having  a  strong  physical,  visible  presence  in  the  neighborhood. 
As  we  provided  case  management  services  to  young  women  and  families  in  Holyoke, 
we  became  aware  that  many  children  were  behind  in  their  vaccinations  and  that 
some  lacked  primary  care  providers. 

In  1991,  the  Massachusetts  Department  of  Health  approached  CE.D.E.  to  begin 
a  demonstration  project  to  assess  the  immunization  status  of  children  in  our  com- 
munity, and  to  identify  barriers  to  immunization.  This  followed  an  outbreak  of  mea- 
sles in  1990  that  affected  other  areas  of  New  England,  when  it  was  found  that  many 
children  were  not  fully  immunized. 

CE.D.E.  took  on  the  assessment  project  with  4  part-time  outreach  workers  who 
worked  in  the  4  predominately  Puerto  Rican  wards  of  Holyoke.  The  outreach  work- 
ers went  door-to-door  in  these  neighborhoods,  were  interviewed  on  radio,  and  were 
featured  in  local  newspapers.  They  asked  parents  a  series  of  questions  and  exam- 
ined children's  vaccination  records  kept  by  the  family.  The  outreach  workers  also 
compared  each  family's  vaccine  records  with  those  kept  by  the  family's  medical  pro- 
vider. Each  time  the  outreach  workers  found  children  who  were  behind  in  their  im- 
munizations, we  worked  to  get  those  children  to  a  health  clinic  for  their  vaccina- 
tions— making  appointments,  often  providing  the  transportation  to  the  clinics  and 
back. 

The  results  of  our  survey  were  very  disturbing;  we  found  out  that  70  percent  of 
2-year-olds  were  not  fully  immunized.  The  main  barriers  to  immunization  were  lan- 
guage difficulties,  inconvenient  hours  for  administration  of  vaccinations,  lack  of 
health  insurance  and  concern  for  the  cost  of  immunization,  misunderstandings 
about  the  potential  risks  of  vaccination,  and  a  lack  of  support  and  transportation 
to  enable  families  to  get  to  a  provider  for  immunizations. 

In  Massachusetts,  we  are  more  fortunate  than  many  to  have  vaccine  available  to 
providers  without  cost,  and  families  in  clinics  pay  for  administration  on  a  sliding 
fee  scale.  Even  though  no  one  can  be  turned  away  from  vaccinations  if  they  can  t 
pay  the  administration  fee,  it  is  not  easy  for  families  to  discuss  these  issues  and 
advocate  for  themselves.  We  work  with  parents  to  help  them  understand  this. 

Just  to  give  you  some  idea  about  the  kind  of  problems  we  face,  we  recently  as- 
sisted a  mother  who  has  a  child  suffering  from  meningitis,  which  could  have  been 
prevented  by  timely  immunization.  Although  this  mother  clearly  understood  the  im- 
portance of  vaccines,  she  had  two  other  children  who  were  behind  in  their  immuni- 
zations. No  parent  would  knowingly  put  their  child  at  risk,  but  the  barriers  to  im- 
munization are  so  daunting  that  even  parents  who  are  trying  hard  to  assure  their 
children's  protection  are  not  always  successful. 


99 

In  another  case,  a  mother  was  suffering  from  AIDS  and  faced  a  constant  struggle 
between  trying  to  obtain  the  medical  services  she  needed,  while  trying  to  make  sure 
that  her  child  also  received  the  necessary  immunizations.  Before  we  were  able  to 
help  them,  both  the  mother  and  the  child  were  lacking  needed  services.  These  sto- 
ries are  not  uncommon — our  immunization  project  deals  with  these  kinds  of  prob- 
lems every  day. 

As  a  result  of  our  interviews,  C JE.D.E.  is  now  embarking  on  a  new  project,  based 
on  the  suggestions  of  parents.  Beginning  this  weekend,  we  will  provide  free  immuni- 
zation climes  one  weeknight  and  one  weekday,  rotating  through  the  4  wards  of  Hol- 
yoke  we  serve  in  community  centers  and  accessible  locations.  We  have  subcon- 
tracted with  Providence  Hospital  to  administer  the  vaccines.  To  announce  these  clin- 
ics, C.E.D.E.  has  made  a  major  effort  in  public  outreach,  including  putting  posters 
up  throughout  the  neighborhoods,  distributing  informational  packets  to  local  agen- 
cies, placing  public  service  announcements  on  radio,  TV  and  in  newspapers,  doing 
bullhorn  announcements  in  the  street;  and  a  massive  distribution  through  the  pub- 
lic school  system  of  7,800  flyers  sent  home  to  parents.  This  has  been  a  major  col- 
laborative effort  for  our  organization,  involving  all  of  our  staff  and  outreach  work- 
ers. 

In  conclusion,  I  would  like  to  stress  to  you  the  importance  of  this  community- 
based  health  care  outreach,  education  and  support  to  improving  immunization  rates 
in  communities.  It  is  most  important  that  each  community  apply  their  own  strate- 
gies to  see  what  works  in  each  neighborhood.  Only  by  reaching  out  and  understand- 
ing what  parents  and  families  face,  can  we  be  helpful  in  overcoming  the  barriers 
to  immunization  and  help  our  children  grow  strong  and  healthy.  Tnank  you,  am 
happy  to  answer  any  questions  you  may  have. 

Mr.  Waxman.  I  am  going  to  add  to  this  panel  another  witness 
who  unfortunately  is  not  able  to  be  here  witn  us,  and  that  is  Mar- 
ian Wright  Edelman,  who  is  president  of  the  Children's  Defense 
Fund  and  a  leading  advocate  on  behalf  of  our  Nation's  children. 
She  has  been  an  inspiration  for  this  legislation,  and  I  think  this 
hearing  would  not  be  complete  if  we  didn't  have  an  opportunity  to 
hear  from  her. 

We  have  fortunately  been  able  to  tape  a  statement  from  her,  and 
I'd  like  to  have  the  monitor  run  right  now  so  we  can  hear  from  Ms. 
Edelman. 

Ms.  Edelman.  I  am  deeply  grateful  for  the  opportunity  to  testify 
today  from  Indianapolis,  where  8,500  Head  Start  directors,  teach- 
ers and  parents  are  meeting,  in  strong  support  of  the  Comprehen- 
sive Child  Immunization  Act  of  1993. 

Recently,  with  the  help  of  American  soldiers  in  Somalia, 
UNICEF  announced  that  it  would  vaccinate  more  than  80  percent 
of  that  devastated  country's  children  against  measles  in  just  a  few 
short  months.  In  contrast,  here  at  home  we  have  iust  emerged  from 
a  measles  epidemic  that  struck  nearly  60,000  Americans,  mostly 
preschool  children,  and  cost  millions  in  unnecessary  hospitalization 
costs. 

Failing  to  invest  in  universal  childhood  immunizations  really 
does  increase  both  our  Nation's  social  and  fiscal  deficits,  and  it  in- 
creases unnecessary  child  suffering. 

The  Children's  Defense  Fund  supports  immediate  action  to  in- 
clude this  universal  childhood  immunization  legislation  in  the 
President's  budget  reconciliation  package.  We  think  that  immuniz- 
ing children  should  not  and  cannot  wait  for  a  national  health  plan, 
which  we  also  support  very  strongly  and  hope  will  move  quickly. 

We  hope  you  will  act  and  will  include  all  of  the  components  of 
this  comprehensive  immunization  initiative,  because  they  all  are 
crucial.  We  know  that  education  and  outreach  will  not  succeed  if 
parents  are  frustrated  by  systems  barriers  or  costs.  We  know  that 
public  health  service  delivery  changes  will  not  work  alone  as  long 


100 

as  children  still  have  private  physicians — and  we  hope  they  will. 
We  know  that  a  national  tracking  system  will  only  work  if  all  pro- 
viders, both  public  and  private,  participate  as  a  condition  of  univer- 
sal vaccine  distribution. 

Since  our  Nation's  failure  to  vaccinate  all  our  children  has  mul- 
tiple causes,  the  response  must  include  multiple  remedies,  and  the 
President's  proposal  does  so. 

Millions  of  times  a  year,  children  miss  opportunities  to  be  vac- 
cinated. Too  often,  doctors  delay  their  shots  because  they  have  a 
runny  nose  or  a  sore  throat.  Many  pediatricians  send  children 
away  from  their  offices  without  immunizations  because  families 
cannot  afford  to  pay  the  steep  price  of  the  vaccine,  even  if  they  can 
afford  the  doctor's  administration  fee. 

For  many  parents,  it  is  a  choice  between  immunizing  the  child 
right  away  at  a  cost  of  $60,  or  going  to  a  public  immunization  clinic 
for  free.  According  to  one  State  study,  more  than  70  percent  of  pe- 
diatricians and  family  physicians  now  refer  patients  to  public  clin- 
ics for  immunizations  because  of  financial  considerations. 

The  system  unwisely  forces  families  to  run  around  from  provider 
to  provider  to  find  low-cost  immunization  services.  Many  parents 
must  take  extra  time  off  work  and  find  transportation  to  inconven- 
ient locations  for  free  vaccine,  rather  than  putting  the  vaccine 
where  the  children  can  get  their  health  care — in  their  family  doc- 
tors' offices.  This  system  makes  it  more  difficult  for  parents  to  do 
and  get  their  children's  health  needs  met. 

This  was  not  a  serious  problem  before  vaccine  prices  rose  for  im- 
munizing a  child  from  less  than  $11  in  1977  to  more  than  $230 
today.  While  there  are  many  reasons  for  the  price  increase,  includ- 
ing price  inflation,  new  vaccines  and  excise  taxes,  the  fact  is  that 
many  families  have  simply  been  priced  out  of  the  market.  Even 
middle  class  parents  are  increasingly  driven  by  rising  vaccine  costs 
to  see  the  immunization  as  a  step  that  can  be  deferred. 

With  less  than  half  of  private  insurance  plans  covering  the  cost 
of  immunization  services  and  the  rising  number  of  uninsured  chil- 
dren, more  families  are  being  forced  to  rely  on  public  clinics  for 
their  children's  health  care. 

Under  a  universal  vaccine  distribution  system,  which  the  Chil- 
dren's Defense  Fund  strongly  supports,  a  system  that  has  been  in 
place  for  some  vaccines  in  the  New  England  States  for  20  years 
and  is  used  in  every  other  Nation  in  the  world,  we  think  that  this 
problem  will  be  significantly  alleviated.  Vaccine  would  be  added  to 
education,  fluoridated  water,  fire  protection,  and  other  activities 
recognized  as  best  delivered  for  everyone's  benefit  on  a  universal 
basis. 

We  believe  that  a  comprehensive  approach  is  essential.  Many  op- 
ponents of  this  legislation  have  argued  that  universal  vaccine  pur- 
chase and  distribution  alone  will  not  solve  the  problem.  We  agree. 
That  is  exactly  why  the  administration  has  put  forth  a  comprehen- 
sive strategy  with  universal  purchase  as  a  cornerstone. 

Universal  distribution  will  fix  the  problem  of  children  missing 
opportunities  to  be  vaccinated  in  their  doctors'  offices.  It  will  be  the 
foundation  for  a  universal  tracking  system,  and  it  will  make  it 
much  easier  to  reach  parents  and  reduce  the  overwhelming  bur- 
dens on  the  public  health  system.  But  it  cannot  solve  all  these 


101 

problems  alone.  That  is  why  the  administration's  proposal  is  also 
asking  for  resources  to  reach  parents  and  expand  public  health 
services. 

Some  believe  that  simply  adding  new  dollars  to  the  infrastruc- 
ture components  of  the  solution  will  solve  the  problem.  While  this 
is  a  key  step  and  a  key  element  of  the  administration's  strategy, 
it  is  not  sufficient  alone  to  address  the  problem.  For  the  past  sev- 
eral years,  this  has  been  the  principal  Federal  response  to  the  im- 
munization problem. 

First,  vaccine  price  increases  have  tracked  appropriations  in- 
creases so  that  Federal  funding  increases  have  been  offset  by  high- 
er vaccine  costs. 

Second,  focusing  on  the  public  sector  alone  will  not  stem  the  flow 
of  children  from  private  health  providers  to  public  clinics  for  immu- 
nizations. In  fact,  a  strategy  that  focuses  solely  on  the  public  sector 
could  exacerbate  the  current  trends  by  increasing  the  cost  of  vac- 
cines for  the  private  sector  and  forcing  more  children  and  their 
families  into  public  clinics.  We  simply  will  not  be  able  to  solve  the 
immunization  crisis  without  fully  enlisting  the  participation  of  pri- 
vate pediatricians  and  family  physicians. 

So,  while  we  do  support  increasing  and  strengthening  the  public 
infrastructure,  it  alone  is  not  enough. 

Another  proposed  alternative  to  a  universal  system  is  to  create 
a  new  means-tested  or  Medicaid-like  program  to  distribute  vaccine 
to  private  physicians.  Some  advocate  a  means  test  in  order  to  avoid 
subsidizing  the  well-to-do,  despite  the  fact  that  means-testing 
would  have  a  very  high  administrative  cost  for  modest  benefit. 

For  example,  the  haemophilus  influenza  B  vaccination  for  a  12- 
month-old  infant  costs  about  $10,  far  less  than  the  cost  to  process 
the  paperwork  needed  to  check  a  family's  resources.  In  order  to 
have  a  means  test  in  the  private  sector,  either  doctors  would  have 
to  apply  the  income  test,  or  families  would  have  to  go  to  a  separate 
agency.  Few  doctors  would  be  willing  to  conduct  income  tests,  and 
millions  of  families  would  be  lost  from  the  system  by  the  need  to 
go  through  a  separate  process  for  a  crucial  but  modest  benefit.  An- 
other barrier  would  be  erected  when  our  goal  is  to  eliminate  such 
obstacles. 

About  70  percent  of  families  with  children  under  6  have  total  in- 
comes below  $45,000,  about  300  percent  of  the  poverty  level  for  a 
family  of  four.  To  ensure  equity,  revenues  needed  to  pay  for  child- 
hood immunizations  should  be  raised  through  the  tax  system,  plac- 
ing the  least  burden  on  those  with  lower  incomes,  not  by  adding 
more  administrative  costs  in  the  doctors'  offices. 

Finally,  the  vaccine  manufacturers  claim  that  this  legislation  will 
stifle  vaccine  research  and  development.  We  disagree.  The  legisla- 
tion specifically  requires  the  Secretary  to  negotiate  a  price  for  vac- 
cines that  includes  production  costs,  research  and  development  ex- 
penses, and  sufficient  profits  to  encourage  future  vaccine  research 
and  development  in  addition  to  the  funds  they  currently  receive 
from  NIH.  The  legislation  assumes  that  the  negotiated  price  of  vac- 
cines will  be  the  average  of  current  public  and  private  market 
prices — $122  in  the  public  sector  versus  $245  for  a  full  series  of 
vaccines  per  child  at  the  private  market  price.  As  a  result,  the 
manufacturers  should  see  no  loss  of  revenue.  They  will,  however, 


102 

lose  the  ability  to  unilaterally  increase  prices  at  rates  far  higher 
than  inflation. 

The  President  has  shown  leadership  on  this  critical  issue  of 
childhood  immunizations  and  recognizes  that  it  is  unacceptable  for 
our  children  to  lag  behind  many  other  industrialized  nations  and 
indeed,  developing  nations,  in  seeing  that  its  children  are  healthy. 

Congress  must  follow  this  leadership  and  take  the  needed  action 
to  immunize  every  American  child.  If  we  do  not  seize  this  oppor- 
tunity, we  will  see  another  cycle  of  falling  immunization  rates  and 
resurgent  childhood  diseases,  unnecessary  child  illness  and  death, 
and  unnecessary  expenditures  on  treatment  and  hospitalization. 

This  Comprehensive  Child  Immunization  Act  of  1993  is  good  for 
children,  it  is  good  for  families,  it  is  good  for  our  Nation,  and  it  is 
long  overdue.  It  lightens  the  load  for  public  health  and  strengthens 
the  role  of  pediatricians  and  family  physicians  in  children's  health 
care.  And  it  provides  assurances  for  the  vaccine  manufacturers  for 
fair  and  reasonable  prices  and  reasonable  profits  for  their  products. 

I  urge  Congress  to  take  immediate  action  on  this  most  basic, 
cost-effective  mvestment  in  children's  health  and  not  let  propri- 
etary interests  prevent  us  from  doing  the  right  thing  for  our  chil- 
dren. 

I  thank  you  for  the  opportunity  to  testify.  I  regret  I  am  not  there 
in  person.  CDF  staff  is  there  to  answer  any  questions  you  may 
have,  and  I  will  be  glad  to  answer  them  myself  in  writing  if  you 
submit  them  to  me. 

Thank  you. 

[The  prepared  statement  of  Ms.  Edelman  follows:] 

Prepared  Statement  of  Marian  Wright  Edelman 

Messrs.  Chairmen  and  members  of  the  Senate  Labor  and  Human  Resources  Com- 
mittee and  the  House  Health  and  Environment  Subcommittee,  I  am  honored  to  be 
testifying  before  you  today  from  Indianapolis  where  8,500  Head  Start  directors, 
teachers,  and  parents  are  meeting  on  expanding  and  improving  the  Nation's  best 
early  childhood  development  program.  The  greatest  challenge  before  our  Nation  is 
to  provide  a  head  start,  a  healthy  start,  and  a  fair  start  to  every  child  so  they  arrive 
at  school  ready  to  achieve  and  learn  the  skills  necessary  to  compete  in  a  global  econ- 
omy. 

Yet  when  we  look  at  immunizations  and  other  measures  of  our  children's  well- 
being,  we  have  fallen  far  behind  not  only  our  industrialized  competitors,  but  many 
developing  nation's  as  well.  Over  the  past  10  years,  as  immunization  rates  rose  in 
the  developing  nations  of  Latin  America,  Africa,  and  Asia,  American  children  be- 
came less  and  less  likely  to  be  protected  against  vaccine  preventable  diseases.  While 
China,  one  of  the  poorest  nations  in  the  world,  immunizes  more  than  90  percent  of 
its  children,  nearly  half  of  American  2-year-olds  are  not  fully  immunized.  With  the 
help  of  American  soldiers  in  Somalia,  UNICEF  announced  that  it  would  vaccinate 
more  than  80  percent  of  that  devastated  country's  children  against  measles  in  just 
a  few  short  months.  In  contrast,  here  at  home,  we  have  just  emerged  from  a  measles 
epidemic  that  struck  nearly  60,000  Americans,  mostly  preschool  children,  and  cost 
millions  in  unnecessary  hospitalization  costs. 

Our  failure  to  protect  children  against  preventable  diseases  is  a  disgrace  not  only 
because  of  the  needless  suffering  it  creates,  but  because  of  its  shortsightedness. 
Every  dollar  we  invest  in  immunizing  a  child  saves  at  least  $10  in  later  health  care 
costs  by  preventing  disease.  Failing  to  invest  in  childhood  immunizations  worsens 
both  our  Nation's  social  and  fiscal  deficits.  In  order  to  lay  the  groundwork  for  a  solid 
economic  future,  we  must  make  investments  in  proven,  cost-effective  programs  like 
immunizations.  It  is  these  cost-effective,  preventive  health  measures  that  must  be 
the  foundation  of  reformingour  health  care  system. 

The  Children's  Defense  Fund  is  delighted  that  the  President  and  the  Secretary 
of  the  Department  of  Health  and  Human  Services  have  made  immunizations  a  high 
priority.  We  urge  you  to  take  quick  action  and  to  pass  this  legislation  in  the  budget 


103 

reconciliation  package.  Immunizing  children  cannot  and  should  not  wait  for  a  na- 
tional health  plan.  While  CDF  supports  moving  national  health  reform  quickly,  par- 
ticularly comprehensive  coverage  for  all  children,  any  phase-in  will  delay  the  imple- 
mentation of  a  program  we  know  works.  We  literally  cannot  afford  to  wait.  The 
President's  initiative  is  comprehensive.  It  will  help  parents  through  increasing  edu- 
cation and  outreach  services.  It  will  hire  more  nurses  and  open  more  clinics  to  re- 
build the  public  health  system  which  has  suffered  from  a  decade  of  neglect.  It  will 
create  a  national  vaccination  registry  or  tracking  system  to  monitor  our  children's 
immunization  status.  And  it  will  eliminate  cost  barriers  for  parents  as  well  as  the 
hassles  of  having  to  go  to  more  than  one  doctor  by  creating  a  universal  vaccine  pur- 
chase and  distribution  system. 

Each  of  the  components  of  the  immunization  initiative  are  crucial.  We  know  that 
education  and  outreach  will  not  succeed  if  parents  are  frustrated  by  systematic  bar- 
riers to  providing  for  their  children's  needs.  Public  health  service  delivery  changes 
will  not  help  those  children  who  have  a  private  physician.  And  a  national  tracking 
system  will  only  work  if  all  providers,  both  public  and  private,  participate  as  a  con- 
dition of  universal  vaccine  distribution.  Since  our  Nation's  failure  to  vaccinate  all 
our  children  has  multiple  causes,  the  response  must  include  multiple  remedies.  This 
bill  encompasses  the  essential  components  to  a  lasting  solution  and  has  our  full  sup- 
port. 

THE  PROBLEM 

While  nearly  all  American  children  are  immunized  at  the  time  they  enter  school, 
millions  of  preschoolers  don't  get  their  shots  on  time,  leaving  them  vulnerable  to 
preventable  diseases.  There  are  many  reasons  children  don  t  get  immunized  on 
schedule.  They  include  the  rising  cost  of  vaccine  to  families,  missed  opportunities 
to  vaccinate,  inadequate  resources  in  public  clinics,  and  some  children's  lack  of  ac- 
cess to  regular  health  care.  The  Nation  needs  a  comprehensive  immunization  policy 
that  will  protect  every  child  against  preventable  diseases. 

Millions  of  times  a  year,  children  miss  opportunities  to  be  vaccinated.  Too  often 
doctors  delay  their  shots  because  they  have  a  runny  nose  or  sore  throat.  Many  pedi- 
atricians send  children  away  from  their  offices  without  immunizations  because  fami- 
lies cannot  afford  to  pay  the  steep  price  of  the  vaccine,  even  if  they  can  afford  the 
doctor's  administration  fee.  For  many  parents,  its  a  choice  between  immunizing  the 
child  right  away  at  a  cost  of  $60  or  going  to  a  public  immunization  clinic  for  free. 
According  to  one  state  study,  more  than  70  percent  of  pediatricians  and  family  phy- 
sicians now  refer  patients  to  public  clinics  for  immunizations  because  of  financial 
considerations. 

This  system  unwisely  forces  families  to  run  around  from  provider  to  provider  to 
find  low  cost  immunization  services.  Parents  must  take  extra  time  off  work  and  find 
transportation  to  inconvenient  locations.  For  free  vaccine  rather  than  putting  the 
vaccine  where  the  children  get  their  health  care — in  their  family  doctors  offices.  We 
simply  cannot  expect  high  vaccination  rates  if  we  leave  such  barriers  to  immuniza- 
tions in  place. 

Further,  these  referrals  contribute  to  the  immunization  crisis  both  directly  and  in- 
directly: direct  when  a  child  referred  out  of  the  private  doctor's  office  never  makes 
it  to  the  public  clinic,  and  goes  unimmunized;  and  indirectly,  when  the  family  gets 
to  the  public  clinic  and  is  deterred  by  long  waiting  lines  or  inconvenient  hours.  In 
a  recent  California  study,  60  percent  of  children  in  public  immunization  clinics  had 
been  referred  there  by  their  private  family  doctor.  In  either  case,  immunizations  are 
being  separated  from  children's  overall  health  care  and  "medical  home,"  which  con- 
tributes to  lower  quality  health  care  and  inadequate  tracking  of  children's  vaccina- 
tion status. 

A  decade  ago,  this  was  not  a  serious  problem  because  vaccines  were  much  cheap- 
er. Since  1977,  the  price  of  vaccines  to  fully  immunize  a  child  has  climbed  from  less 
than  $11  to  over  $245.  While  there  are  many  reasons  for  the  price  increase,  includ- 
ing price  inflation,  new  vaccines,  and  excise  taxes,  the  problem  is  that  many  fami- 
lies nave  been  priced  out  of  the  market.  For  many  families — especially  lower-middle 
income  families — the  cost  of  vaccines  makes  immunizing  their  children  in  a  doctor's 
office  prohibitively  expensive.  Even  middle  income  parents  are  increasingly  driven 
by  rising  vaccine  costs  to  see  the  immunization  as  a  step  that  can  be  deferred. 

In  addition  to  vaccine  costs  and  the  attendant  disruption  of  care,  low  immuniza- 
tion rates  are  also  attributable  to  an  overburdened  and  underfunded  public  health 
system,  the  lack  of  a  comprehensive  tracking  system,  and  inadequate  parental  and 
provider  education.  With  less  than  half  of  private  insurance  plans  covering  the  cost 
of  immunization  services  and  the  rising  number  of  uninsured  children,  more  fami- 
lies rely  on  public  clinics  for  their  children's  health  care.  Yet  public  clinics  are  hav- 


104 

ing  a  hard  time  trying  to  Berve  more  people,  with  fewer  resources.  Increasing  funds 
for  these  clinics  is  critical  to  provide  immunization  services  to  more  children. 

Finally,  experience  from  States  that  currently  have  universal  programs  under- 
scores the  importance  of  a  full  scale  tracking  system  which  can  monitor  vaccine 
usage  and  child  immunization  status,  and  send  reminder  notices  to  parents  when 
their  child  is  due  for  their  next  shot.  Many  parents  need  help  remembering  the 
schedule  for  all  18  shots.  We  also  need  to  provide  the  outreach  and  flexibility  in 
service  delivery  to  reach  the  many  families  who  because  of  geographic,  language, 
transportation  or  other  barriers  are  unable  to  bring  their  children  in  for  shots. 

THE  ADMINISTRATION'S  IMMUNIZATION  INITIATIVE:  A  COMPREHENSIVE  STRATEGY 

The  Administration  is  making  its  first  investments  in  public  health  service  deliv- 
ery and  education  and  outreach  to  families.  The  President's  proposed  $300  million 
supplemental  appropriation  for  immunizations  and  additional  investments  in  the 
fiscal  year  1994  budget  will  allow  clinics  to  stay  open  on  evenings  and  weekends 
to  serve  working  families,  to  open  new  clinics  in  convenient  locations,  and  bring  im- 
munization services  to  programs  like  WIC  that  serve  families  with  young  children. 
The  new  investments  will  nearly  double  the  federal  commitment  to  immunization 
services.  .  , 

The  second  component  of  the  President's  initiative  is  the  Comprehensive  Child 
Immunization  Act  of  1993  (Hi*.  1640  and  S.  732/733).  The  key  elements  of  the  legis- 
lation are:  _„.,,.,  .     A.      i_.n 

Universal  Vaccine  Purchase  and  Distribution:  The  President's  immunization  bill 
will  make  vaccines  available  to  all  children  and  assure  that  no  child  goes 
unimmunized  because  his  or  her  family  could  not  afford  the  vaccine.  This  system 
is  already  in  place  in  the  New  England  States  and  Washington  State.  The  vaccine 
would  be  distributed  by  the  manufacturers  directly  to  doctors  and  clinics.  While  doc- 
tors may  still  charge  a  small  fee  to  administer  the  vaccine,  no  child  could  be  refused 
a  vaccination  because  the  child's  family  could  not  pay  the  administration  fee. 

Cost  Containment  of  Vaccine  Prices:  As  part  of  a  universal  vaccine  distribution 
system,  the  Federal  Government  would  negotiate  prices  for  vaccines  with  the  manu- 
facturers. A  negotiated  system  would  control  vaccine  price  inflation  while  still  pro- 
viding sufficient  revenues  for  fair  profits  and  aggressive  research  and  development 
of  new  vaccines  by  the  manufacturers. 

Research  and  Development  of  New  Vaccines:  The  legislation  encourages  research 
and  development  of  new  vaccines.  The  bill  specifically  requires  that  vaccine  prices 
reflect  production  costs,  research  and  development  expenses,  and  sufficient  profits 
to  encourage  future  research  and  development. 

Immunization  Tracking  and  Surveillance:  The  bill  would  establish  a  system  that 
tracks  the  immunization  status  of  preschool  children.  This  system  would  make  pos- 
sible the  sending  of  reminder  notices  to  parents,  the  targeting  of  outreach  and  edu- 
cation efforts,  and  the  identification  of  high-risk  communities.  The  tracking  system 
will  be  state-based  to  provide  the  States  with  maximum  flexibility. 

Reauthorization  of  the  National  Vaccine  Injury  Compensation  Program:  The  pro- 

£am  provides  compensation  for  the  small  number  of  children  who  have  adverse  ef- 
:ts  after  receiving  vaccines. 

Simplification  of  Vaccine  Information  Pamphlets:  Doctors  and  clinics  are  now  re- 
quired to  give  long,  cumbersome  vaccine  information  materials  to  families  before 
Sroviding  immunizations.  The  legislation  will  allow  the  Department  of  Health  and 
tumanServices  to  develop  simpler  and  easier  to  understand  materials  to  parents. 
Under  a  universal  vaccine  distribution  system,  the  government  purchases  vac- 
cines from  private  manufacturers  and  distributes  them  to  immunization  providers 
free  of  charge.  This  system  has  been  in  place  for  some  vaccines  in  the  New  England 
States  for  20  years  and  is  used  in  nearly  every  other  nation  in  the  world.  Vaccine 
would  be  added  to  education,  fluoridatea  water,  fire  protection,  and  other  activities 
recognized  as  best  delivered  for  everyone's  benefit  on  a  universal  basis. 

A  universal  system  would  be  simpler  than  the  current  two-tier  system  to  admin- 
ister. The  Federal  Government  would  contract  with  vaccine  manufacturers  to  pur- 
chase and  distribute  vaccines  to  individual  health  providers.  Physicians  would  sim- 
fily  place  vaccine  orders  to  the  manufacturers  and  immunize  their  patients  with  the 
ree  vaccine.  No  payment  would  be  made  between  providers  and  the  vaccine  compa- 
nies. And  no  charge  would  be  placed  on  families  for  the  vaccine.  As  a  universal  pro- 
gram, no  income  test  would  be  applied;  all  children  would  be  eligible  to  receive  the 
Free  vaccine. 

There  would  be  a  vastly  reduced  financial  barrier  to  immunizing  a  child  in  a  doc- 
tor's office  under  a  universal  vaccine  distribution  system.  So,  rather  than  referring 
children  to  public  clinics,  private  physicians  could  immunize  the  children  in  their 


105 

offices  and  not  have  to  worry  about  vaccine  costs.  Not  only  would  this  system  reduce 
missed  opportunities,  but  it  would  also  reduce  demand  on  public  immunization  clin- 
ics and  free  public  health  resources  to  better  serve  low-income  families  and  those 
with  no  regular  source  of  care.  As  a  condition  of  receiving  free  vaccine^physicians 
would  be  required  to  participate  in  an  immunization  tracking  system.  This  system 
would  follow  the  immunization  status  of  children  from  birth.  When  a  child  is  due 
for  a  vaccination,  the  system  would  send  a  reminder  notice  to  the  family.  A  re- 
minder and  recall  system  is  needed  particularly  to  help  a  family  with  no  regular 
source  of  care  to  know  when  their  child  needs  immunizations.  But,  it  helps  all  par- 
ents who  have  a  difficult  time  keeping  track  of  the  18  doses  needed  to  fully  immu- 
nize a  child  from  birth  to  school-entry.  The  system  would  also  provide  detailed  infor- 
mation on  communities  with  low  coverage  rates  in  order  to  better  target  parent  out- 
reach and  education  activities  and  would  also  identify  physicians  whose  patients  are 
not  appropriately  immunized  to  target  provider  education  as  well. 

WHY  A  COMPREHENSIVE  APPROACH  IS  ESSENTIAL 

Opponents  of  this  legislation  argue  that  universal  vaccine  purchase  and  distribu- 
tion alone  will  not  solve  the  problem.  That  is  exactly  why  the  Administration  has 
put  forth  a  comprehensive  strategy  with  universal  purchase  as  a  cornerstone.  Uni- 
versal distribution  will  fix  the  problem  of  children  missing  opportunities  to  be  vac- 
cinated in  their  doctor's  offices,  it  will  be  the  foundation  for  the  tracking  system, 
and  it  will  make  it  much  easier  to  reach  parents  and  reduce  the  overwhelming  bur- 
dens on  the  public  health  system.  But  it  cannot  solve  all  the  problems  alone.  That 
is  why  the  Administration  is  also  asking  for  resources  to  reach  parents  and  expand 
public  health  services. 

Some  believe  that  simply  adding  new  dollars  to  the  infrastructure  components  of 
the  solution  will  solve  the  problem.  While  this  is  a  key  step,  and  a  key  element  of 
the  Administration's  strategy,  it  is  not  sufficient  to  address  the  problem.  Over  the 
past  several  years,  this  has  been  the  principal  Federal  response  to  the  immunization 
problem.  It  has  not  worked,  because  while  new  resources  are  desperately  needed  by 
the  public  health  system,  this  approach  alone  does  not  fix  the  weaknesses  of  the 
current  system.  First,  vaccine  price  increases  have  tracked  appropriations  increases 
so  that  federal  funding  increases  have  been  offset  by  higher  vaccine  costs.  Second, 
focusing  on  the  public  sector  alone  will  not  stem  the  flow  of  children  from  private 
health  providers  to  public  clinics  for  immunizations.  In  fact,  a  strategy  that  focuses 
solely  on  the  public  sector  could  exacerbate  the  current  trends  by  increasing  the  cost 
of  vaccines  for  the  private  sector  and  forcing  more  children  and  their  families  into 

Jmblic  clinics.  We  simply  will  not  be  able  to  solve  the  immunization  crisis  without 
tally  enlisting  the  participation  of  private  pediatricians  and  family  physicians. 

Another  proposed  alternative  to  a  universal  system  is  to  create  a  new  means-test- 
ed or  Medicaid-like  program  to  distribute  vaccine  to  private  physicians.  Some  advo- 
cate a  means-test  in  order  to  avoid  subsidizing  the  "well -to-do",  despite  the  fact  that 
means-testing  would  have  a  very  high  administrative  cost  for  modest  benefit.  For 
example,  the  Haemophilus  influenza  B  vaccination  for  a  12-month  old  infant  costs 
about  $10,  far  less  than  the  cost  to  process  the  paperwork  needed  to  check  a  families 
resources.  In  order  to  have  a  means  test  in  the  private  sector,  moreover,  either  doc- 
tors would  have  to  apply  the  income  test  or  families  would  have  to  go  to  a  separate 
agency.  Few  doctors  would  be  willing  to  conduct  income  tests,  and  millions  of  fami- 
lies would  be  lost  from  the  system  by  the  need  to  go  through  a  separate  process  for 
a  crucial  but  modest  benefit.  Another  barrier  would  be  erected  when  our  goal  is  to 
eliminate  such  obstacles. 

However,  it  is  important  to  understand  that  about  70  percent  of  families  with 
children  younger  than  6  have  total  incomes  below  $45,000 — about  300  percent  of  the 

JK)verty  level  Tor  a  family  of  four.  Concern  about  unnecessarily  subsidizing  wealthy 
amilies  is  misplaced.  To  ensure  equity,  revenues  needed  to  pay  for  childhood  immu- 
nization should  be  raised  through  the  tax  system  placing  the  least  burden  on  those 
with  lower  incomes,  not  by  adding  more  administrative  costs  at  the  doctor's  offices. 
Finally,  the  vaccine  manufacturers  claim  that  this  legislation  will  stifle  vaccine 
research  and  development.  We  disagree.  The  legislation  specifically  requires  the  Sec- 
retary to  negotiate  a  price  for  vaccines  that  includes  production  costs,  research  and 
development  expenses  and  sufficient  profits  to  encourage  future  vaccine  research 
and  development  in  addition  to  the  funds  they  currently  receive  from  NIH.  The  leg- 
islation assumes  that  the  negotiated  price  of  vaccines  will  be  the  average  of  current 
public  and  private  market  prices — $122  versus  $245  for  a  full  series  of  vaccines  per 
child  at  the  private  market  price.  As  a  result,  the  manufacturers  should  see  no  loss 
of  revenue.  They  will,  however,  lose  the  ability  to  unilaterally  increase  prices  at 
rates  far  higher  than  inflation. 


106 

The  President  has  shown  his  leadership  and  vision  on  this  critical  issue.  Congress 
must  accept  the  challenge  issued  by  the  President  and  think  boldly  about  the  solu- 
tions needed  to  immunize  every  American  child.  If  we  do  not  seize  this  opportunity, 
we  will  see  another  cycle  of  falling  immunization  rates  and  resurgent  childhood  dis- 
eases unnecessary  child  illness  and  death,  and  unnecessary  expenditures  on  treat- 
ment and  hospitalization.  The  Comprehensive  Child  Immunization  Act  of  1993  (H.R. 
1640  and  S.  732/733)  is  good  for  children  and  their  families  and  good  for  our  Nation. 
It  is  long  overdue.  It  lightens  the  load  for  public  health  and  strengthens  the  role 
of  pediatricians  and  family  physicians  in  children's  health  care.  And,  it  provides  as- 
surances for  the  vaccine  manufacturers  for  fair  and  reasonable  prices  and  reason- 
able profits  for  their  products. 

I  urge  Congress  to  take  a  quick  action  on  this  most  basic  cost  effective  investment 
in  children'shealth  and  not  let  proprietary  interests  prevent  us  from  doing  the  right 
thing  for  children.  Thank  you. 

Mr.  Waxman.  As  Marian  Wright  Edelman  indicated,  she  is  not 
here  to  answer  questions,  but  all  members  will  have  an  opportunity 
to  submit  questions  to  her  in  writing  and  get  a  response  for  the 
record,  and  I  am  sure  Dr.  Sienko  would  be  willing  to  do  the  same. 

But  you  all  are  here  from  this  last  panel,  and  I  want  to  pursue 
some  questions  with  you.  First,  let  me  be  sure  that  I  have  every- 
one's position  clear.  All  of  you  support  Federal  programs  to  assist 
States,  local  governments  and  poverty  clinics  in  providing  immuni- 
zations, and  all  of  you  support  expanded  Federal  resources  to  pro- 
vide immunizations,  and  all  of  you  support  assistance  for  expanded 
outreach,  longer  clinic  hours,  and  more  accessible  services.  Is  that 
a  correct  statement? 

Dr.  Smith.  Yes. 

Dr.  Thompson.  Yes. 

Mr.  Moen.  Yes. 

Ms.  LeBron.  Yes. 

Mr.  Waxman.  Dr.  Smith,  you  support  universal  purchase  of  vac- 
cine. You  have  heard  testimony  from  other  witnesses  that  this  is 
not  necessary  or  even  a  good  idea.  How  would  you  respond?  Why 
are  the  State  health  officers  and  the  county  health  officers  support- 
ing this  proposal? 

Dr.  Smith.  Speaking  for  myself  as  a  State  health  officer  and  a 
pediatrician,  looking  at  the  data,  I  think  it  gets  back  to  the  point 
of  Secretary  Shalala's  response  to  this,  that  there  are  many  dif- 
ferent aspects  to  this,  and  one  of  them  is  cost.  And  I  think  to  stand 
by  and  say  that  it  isn't  one  of  the  factors  is  ignoring  some  data  that 
is  out  there,  whether  it  is  coming  directly  from  the  provider  groups, 
my  colleagues,  pediatricians,  family  practitioners,  nurse  practition- 
ers, P.A.S  and  others,  and  then  the  trends  that  we  have  seen  from 
other  parts  of  my  own  State,  where  in  fact  we  talk  to  families  or 
we  see  the  trend  where  in  fact  a  larger  burden  is  being  placed  on 
the  public  sector,  and  that  direction  is  being  created  in  large  part 
by  cost.  The  information  there  leads  to  believe  it  is  part  of  the 
problem.  It  is  not  the  only  one,  and  I  think  we  have  stated  that 
clearly,  too,  but  I  think  when  you  are  trying  to  create  a  "no  more 
excuses"  bill  and  eliminate  any  possibilities  and  try  to  go  forward 
with  a  good  program  which  we  needed  yesterday,  you  do  that,  you 
move  on,  and  we  evaluate  it  as  we  go  forward.  And  I  think  since 
our  background  is  in  epidemiology  and  evaluation,  we  want  to  be 
held  accountable  if  we  have  those  tools  and  flexibility,  and  we 
should  continue  to  evaluate  the  effectiveness  of  this  legislation  as 
we  need  forward— but  we  do  need  to  do  something  today. 


107 

Mr.  Waxman.  Thank  you. 

Dr.  Thompson  and  Mr.  Moen,  in  some  States,  we  have  seen  doc- 
tors referring  private  patients  to  public  clinics  because  of  the  cost 
of  the  immunizations,  and  slowly,  by  default,  this  sort  of  private  to 
public  shift  is  creating  a  universal  purchase  system,  but  one  with- 
out the  efficiencies  of  planning  and  price  negotiations,  and  one  in 
which  children  get  lost  in  the  cracks  between  services. 

How  would  you  respond  to  this  shift  without  universal  purchase, 
and  what  can  we  do  to  encourage  full  immunization  in  such  cir- 
cumstances? 

Dr.  Thompson.  We  have  already  responded  to  the  shift  in  Mis- 
sissippi, because  80  percent  of  Mississippi  children  receive  most  of 
their  immunizations  in  public  health  department  clinics,  and  an- 
other 5  percent  receive  their  immunizations  in  community  health 
centers,  leaving  only  15  percent  that  receive  the  bulk  of  their  im- 
munization in  the  private  sector.  And  yet  the  vast  majority  of  these 
children  have  a  regular  pediatrician  wno  cares  for  them. 

They  are  able  to  come  to  public  health  clinics,  efficiently  receive 
their  immunizations,  and  go  right  back  to  their  private  doctor.  Far 
from  fragmenting  health  care,  in  many  ways,  this  has  been  effi- 
cient, because  it  Drings  many  parents  who  would  never  otherwise 
see  the  public  health  system  in  operation  into  our  clinics  for  a  brief 
and  efficient  visit  and  then  back  to  their  private  physician. 

It  is  something  that  we  have  been  able  to  absorb;  it  has  not  been 
an  undue  burden  on  us.  And  I  would  say  that  if  I  could  get  Mis- 
sissippi's share  of  even  the  $600  billion  suggested  for  the  purchase 
of  vaccine,  I  could  guarantee  that  we  could  have  a  private  physi- 
cian's patient  in  and  out  of  the  health  department  in  about  rive 
minutes;  we  could  almost  have  them  drive  through,  and  they  might 
not  even  have  to  slow  down  very  much. 

Mr.  Waxman.  You  have  an  85  percent  universal  system  now  in 
Mississippi;  what  you  are  doing,  though,  is  having  the  clinics  pay 
for  the  immunizations  for  the  patients  of  private  doctors.  Wouldn  t 
it  be  more  convenient  for  those  private  doctors  to  be  able  to  have 
the  lower  price  vaccine  and  not  have  to  make  the  patients  have  to 
travel  to  the  clinics? 

Dr.  Thompson.  It  might  be  more  convenient  for  the  doctor,  and 
it  might  be  somewhat  more  convenient  for  the  parent.  But  our  ex- 
perience has  been  that  while  some  private  pediatricians  very  care- 
fully adhere  to  all  the  recommendations  of  such  groups  as  trie  Na- 
tional Vaccine  Advisory  Committee  about  simultaneous  administra- 
tion of  as  many  vaccines  as  possible  at  a  single  visit,  so  that  chil- 
dren to  complete  their  vaccines  on  schedule,  many  other  private 
physicians  do  not  do  so,  and  for  reasons  that  pertain  more  to  the 
private  practice  of  medicine  than  to  the  child's  direct  health  care 
needs,  will  often  space  out  immunizations  and  expect  the  parents 
to  return  for  five  or  six  or  even  seven  visits  rather  than  completing 
the  basic  series  in  four  visits,  as  it  can  be  done.  The  result  is  that 
children  are  not  fully  protected  at  age-appropriate  times  for  their 
immunizations. 

Mr.  Waxman.  That  is  a  pretty  indicting  statement  of  doctors, 
that  they  have  their  patients  come  back  for  extra  visits,  presum- 
ably because  they  are  getting  fees  for  extra  visits,  rather  than  do 
all  the  immunizations  in  the  few  visits  that  it  would  take  to  do  it. 


108 

It  sounds  to  me  like  it's  an  argument  for  public  medicine  instead 
of  private  medicine. 

Dr.  Thompson.  I  don't  mean  to  imply  that  the  motivations  of 
physicians  who  space  immunizations  out  more  widely  than  is  rec- 
ommended are  financial.  In  many  cases,  it  is  their  sincere  and  hon- 
est belief  that  it  is  better  for  the  child  to  come  back  for  additional 
visits  and  be  seen  more  frequently  for  well-child  visits.  That's  de- 
batable. 

With  immunization,  sometimes  one  of  the  biggest  problems  we 
have  is  that  the  worst  enemy  of  good  is  often  better;  sometimes,  if 
we  could  just  get  them  in  for  immunizations,  we  could  stand  not 
to  have  them  come  in  for  quite  so  many  well-baby  visits. 

Mr.  Waxman.  Mr.  Moen,  did  you  want  to  respond?  I  did  direct 
the  question  to  you  as  well. 

Mr.  Moen.  In  Minnesota,  we  have  a  very  different  situation  than 
in  Mississippi.  Eighty  percent  of  the  vaccines  in  Minnesota  are 
given  by  the  private  sector;  10  percent  are  given  by  a  combination 
of  public-private,  and  10  percent  are  given  in  the  public  sector.  In 
addition,  30  percent  of  the  children  in  Minnesota  zero  to  6  are  cov- 
ered by  prepaid  health  plans,  HMOs,  which  under  State  law  cannot 
charge  fees  for  immunization  or  well-baby  care  visits,  and  the  per- 
centage is  higher  in  the  metropolitan  area,  obviously,  that  out  of 
State. 

We  have  seen  some  movement  in  some  rural  areas  in  particular 
of  individuals  going  to  the  public  clinics,  but  in  fact  our  vaccine 
usage  has  not  increased,  and  that  rate  of  shift  between  public-pri- 
vate has  remained  somewhat  constant. 

We  could  use  some  additional  vaccines  in  particular  areas  where 
some  of  the  prepaid  health  plans  are  not,  for  example,  as  prevalent, 
and  people  are  paying  for  immunizations  out-of-pocket.  However, 
our  main  concern  with  some  of  the  issues  involving  the  legislation 
is  not  necessarily  the  universal  purchase  or  the  universal  furnish 
of  vaccine.  I  think  that  is  something  that,  as  I  said,  even  though 
for  a  number  of  children,  cost  is  not  an  issue,  it  would  certainly  be 
nice  to  have  the  free  vaccine.  The  issue  we're  concerned  about  is 
that  to  the  extent  you  remove  bureaucracy  and  red  tape  and  bar- 
riers through  the  universal  plan,  I  think  you  create  it  through  the 
national  registry  program,  and  I  think  more  thought  needs  to  be 
brought  to  that  so  we  don't  add  more  red  tape,  more  paperwork, 
and  more  bureaucracy  to  make  that  work,  while  at  the  same  time 
we  are  trying  to  decrease  it  with  the  universal  plan.  Some  of  our 
concerns  are  more  on  that  side  of  the  issue. 

Mr.  Waxman.  Thank  you. 

Mr.  Greenwood. 

Mr.  Greenwood.  Thank  you,  Mr.  Chairman. 

First,  Dr.  Smith,  in  your  testimony,  you  indicated  your  support 
for  Texas  State  legislation  that  has  just  come  out  of  conference 
committee.  As  I  understand  it,  the  legislation  mandates  that  every 
child  in  Texas  be  immunized,  and  in  fact,  it  mandates  that  hos- 
pitals and  physicians  check  immunization  records  of  their  young 
patients  and  administer  any  needed  vaccine. 

Does  this  legislation  require  that  children  be  immunized  as  a 
condition  of  their  participation  in  any  programs  in  Texas? 


109 

Dr.  Smith.  No,  it  does  not.  It  was  debated,  just  as  it  has  been 
here.  In  fact,  we  went  the  route  of  looking  at  some  incentives  also 
that  we  could  put  in  place.  We  are  looking  at  using  WIC  and  other 
programs  to  expand  the  vouchers  even  to  two  or  3  months,  and  we 
are  actually  beginning  to  do  immunizations  on  all  WIC  sites.  We 
are  very  different  from  Mississippi,  too.  We  have  about  340,000 
children  born  each  year,  so  it  is  a  large  issue.  The  private  sector 
is  a  significant  player.  We  are  even  going  to  try  to  ^et  some  pro- 
grams like  WIC  to  parallel  that  with  our  initiatives  in  immuniza- 
tion and  tie  them  into  the  private  sector. 

It  was  pushed  away.  We  actually  had  talked  quite  a  bit  about  it. 
The  reason  and  the  concern  was  that  if  you  put  it  as  a  stipulation 
or  a  penalty,  number  one,  a  lot  of  our  kids  who  aren't  being  immu- 
nized are  not  part  of  those  programs,  which  has  already  been  stat- 
ed, so  that  it  wouldn't  be  effective  for  those  families  who  are  above 
income  levels — and  unfortunately,  in  Texas,  it  is  quickly  to  be 
above  an  income  level 

Mr.  Greenwood.  Let  me  interrupt  you  if  I  may.  I  apologize  for 
that,  but  with  limited  time,  we  have  to  do  this  sometimes.  Do  you 
know  of  any  data  that  would  describe  the  rates  of  immunization  for 
children  above  and  below  the  poverty  line,  for  instance,  for  those 
children  who  are  eligible  for  AFDC  or  involved  in  WIC  programs? 
Do  you  have  any  statistics  of  that  nature? 

Dr.  Smith.  We  have  some  of  that,  and  I  believe  that  there  is 
some  also  available  in  limited  quantity  through  CDC.  But  we  do 
have  some  in  the  State  that  we  could  share. 

The  other  factor,  though,  that  I'd  like  to  point  out  is  that  we 
have  the  problem  of  infrastructure.  If  you  made  that  a  condition, 
the  challenge  back  to  us  by  all  groups,  including  pediatricians  and 
others,  is  do  we  have  the  ability  to  come  up  and  be  able  to  shoot 
those  children  if  we  make  it  a  stipulation.  The  concern  was  that 
we  did  not  have  enough  infrastructure  out  there  to  live  up  to  the 
demand  we  just  placed  on  families,  so  let's  go  ahead  and  do  that 
first. 

Mr.  Greenwood.  I  think  I  heard  you  say  that  you  are  working 
on  providing  immunizations  at  WIC  centers. 

Dr.  Smith.  That  is  correct. 

Mr.  Greenwood.  Do  you  have  a  problem  with  at  least  requiring 
that  immunizations  be  completed  where  you  can  provide  them — in 
other  words,  if  you  can  get  physicians  to  come  to  the  WIC  centers, 
the  Head  Start  centers,  the  day  care  centers,  is  it  okay  then  to  say, 
"OK,  now,  if  you  want  to  participate,  get  your  shot"? 

Dr.  Smith.  That  is  part  of  the  flexibility  that  I  think  you  need 
to  give  States  and  local  authorities  to  in  fact  try  some  of  those 
things,  because  in  fact  we  are  going  to  at  least  require  that  they 
bring  in  their  records  so  we  can  review  them,  and  we  will  offer  on- 
site,  and  that's  a  flexibility  that  I  think  we  need  to  look  at  and 
evaluate  at  the  State  and  local  levels,  and  we  would  press  for  that 
kind  of  flexibility. 

Mr.  Greenwood.  Thank  you. 

I'd  like  to  address  some  questions  to  Mr.  Moen.  I  am  looking  at 
the  graphs  that  you  have  provided  us.  You  made  some  points  in 
your  testimony  about  the  differences  between  ZIP  codes.  It  looks  to 
me  like  maybe  St.  Paul  55105  has  pretty  good  rates  of  immuniza- 


110 

tion,  and  55103  has  pretty  low  rates.  First  of  all,  am  I  reading 
these  charts  correctly? 

Mr.  Moen.  That's  correct. 

Mr.  Greenwood,  second,  can  you  tell  us  something  about  the  de- 
mographics of  those  two  ZIP  codes? 

Mr.  Moen.  Yes.  55103  is  the  inner  city  section  of  St.  Paul,  per- 
haps not  dissimilar  from  many  inner  city  locations  throughout  our 
country;  55105  is  a  more  affluent  section  of  the  city  of  St.  Paul 
where  incomes,  I'm  sure,  are  much  higher.  And  thats  exactly  the 
point,  that  we  need  to  bring  that  specificity,  because  as  the  city  of 
St.  Paul  mobilizes  their  resources,  their  physicians  and  their  public 
clinics  to  start  attacking  this  problem,  they  need  to  know  where  to 
focus,  and  in  Minnesota,  we  are  trying  to  focus  where  the  problem 
is. 

Mr.  Greenwood.  That's  what  I'm  trying  to  do.  The  thing  that  s 
troubling  me  is  that  these  statistics  seem  to  bear  what  I  think  is 
intuitive  to  most  people.  That  is,  that  the  lowest  rates  of  immuni- 
zation and  the  biggest  problems  are  in  the  areas  of  greatest  pov- 
erty, of  the  least  advantage  and  so  forth.  Those  are  the  places 
where  we  are  going  to  find  much  greater  percentages  of  kids  par- 
ticipating in  AFDC,  Head  Start,  WIC  and  similar  programs.  Yet 
you  heard  the  Secretary  disagreeing  with  that  thinking,  and  saying 
that  60  percent — I  can  t  believe  that  this  is  accurate— tut  she  said 
60  percent  of  the  kids  in  this  country  who  aren't  immunized  are 
above  the  poverty  line.  Since  the  national  average  is  50  percent, 
that  would  argue  that  below  the  poverty  line  you  have  very  small 
percentages  of  unimmunized  kids.  That  can't  be  true,  can  it? 

Mr.  Moen.  And  in  fact  that  illustrates  my  point  why  the  one- 
number  methodology  for  measuring  immunization  rates  is  in  fact 
misleading.  Even  in  our  ZIP  code  55105,  if  you  look  at  the  comple- 
tion of  the  series  as  defined  by  the  one-number  methodology,  which 
includes  fourth  dose  DTP,  it  is  extremely  low.  However,  if  we  look 
at  the  overall  rate  of  immunizations  for  all  the  doses,  there  is  a 
very  different  picture  that  emerges. 

So  I  think  it  may  be  in  fact  true  that,  as  I  said  in  my  opening 
comments,  we  are  treating  a  child  who  has  had  no  vaccines  the 
same  as  a  child  who  has  had  three  doses  of  DTP,  two  of  polio,  and 
one  of  MMR.  The  disease  risk  is  very  different,  and  yet  we  are  talk- 
ing about  them  in  the  same  context. 

Mr.  Greenwood.  One  follow-up  or  final  question.  What  are  your 
feelings,  sir,  with  regard  to  the  notion  of  requiring  parents  to  im- 
munize their  children  in  a  timely  fashion  in  order  to  continue  their 
eligibility  for  day  care,  Head  Start,  WIC,  or  EPSDT  where  we  can 
provide  immunization. 

Mr.  Moen.  In  Minnesota,  we  have  actually  changed  our  State 
law  so  it  is  a  requirement  for  attendants  at  day  care  centers  that 
you  do  show  proof  of  immunization  similar  to  our  school  entry  im- 
munization. 

Mr.  Greenwood.  This  is  sometimes  characterized  as  punitive. 
Do  you  find  that  there  are  children  who  are  missing  out  on  day 
care  as  a  result  of  that  stipulation,  or  do  they  in  fact  just  get  the 
shots  and  then  go  to  the  day  care? 

Mr.  Moen.  I  think  the  requirement  attached  to  day  care  has  not 
had  an  adverse  effect  in  terms  of  persons  staying  away.  I  think 


Ill 

some  of  the  requirements  that  have  been  discussed  pertaining  to 
some  entitlement  programs  may  have  a  different  effect.  In  St.  Paul, 
we  have  actually  added  an  immunization  registry  into  the  WIC 
clinic,  and  I  think  that's  a  combination  of  immunization  clinic  at 
the  WIC  clinic,  and  immunization  registry  in  the  WIC  clinic,  and 
the  immunization  rates  and  the  immunizations  being  given  in  the 
WIC  clinic  now  exceed  the  immunizations  being  given  in  the  immu- 
nization clinic. 

I  think  these  are  the  types  of  local  interventions  that  can  be  put 
together  at  the  local  level  if  we  arm  these  communities  with  spe- 
cific data  and  empower  them  to  move  forward  and  stay  away  from 
kind  of  national,  one-shot  kinds  of  approaches. 

Mr.  Waxman.  Would  the  gentleman  yield? 

Mr.  Greenwood.  Yes. 

Mr.  Waxman.  I'd  like  to  direct  a  question  to  Dr.  Smith,  because 
you  are  representing  the  State  and  Territorial  Health  Officers.  Do 
most  States  have  requirements  that  before  you  can  enter  school, 
before  you  can  enter  day  care,  before  you  can  get  your  WIC  allot- 
ment or  whatever,  that  there  be  an  immunization?  Is  this  a  usual 
practice  in  the  States? 

Dr.  Smith.  I  am  not  totally  familiar  with  all  the  States,  but  of 
course,  when  it  relates  to  school  entry,  that's  pretty  uniform.  Day 
care,  a  number  of  States  including  my  own  have  a  requirement  for 
licensed  day  care  that  in  fact  you  also  have  to  show  proof  of  immu- 
nization. 

When  it  comes  to  WIC,  I  think  a  number  of  us  are  looking  at  this 
as  yet  another  opportunity — not  a  way  to  be  punitive,  but  as  an  op- 
portunity— for  us  to  knock  a  barrier  down,  since  they  are  already 
going  there.  Our  problem  in  the  past  has  been,  and  it  has  also  been 
a  problem  of  policy  in  the  Agriculture  Department,  is  that  we  are 
allowed  to  do  everything  but  shoot  using  money  through  WIC.  And 
that's  a  crazy  policy,  by  the  way.  We  need  to  change  that.  We  can 
screen,  we  can  counsel,  and  we  can  refer.  Well,  we  shouldn't  be  re- 
ferring; we  should  be  shooting.  And  most  of  us  are  looking  at 
opportunities 

Mr.  Waxman.  Immunizing  at  the  center  itself. 

Dr.  Smith.  That's  correct.  And  we  are  taking  advantage  of  those. 
I  think  it  gets  back  to  the  point  of  this  legislation.  I  don't  see  it 
prohibiting  any  of  that.  I  want  to  make  sure  we  have  the  flexibility, 
but  that  we  do  go  forward  with  that  kind  of  flexibility. 

I  think  you  asked  if  there  was  a  requirement  to  do  that  through 
WIC,  and  I  don't  think  there  is  any  requirement  there.  I  think, 
though,  good  public  health  officials  are  taking  advantage  as  are 
community-based  people  and  private  practitioners  to  use  these 
places  to  immunize  kids. 

Mr.  Waxman.  Well,  it  certainly  makes  a  lot  of  sense  to  me  to 
have  immunizations  available  at  those  locations  and  ask  for  certifi- 
cation that  the  children  have  been  immunized,  as  a  way  to  have 
a  double  check  at  a  location  and  a  nexus  in  time  to  make  sure  that 
the  immunizations  are  taking  place. 

I  would  be  interested  if  you  would  ask  other  State  officials 
whether  their  experience  is  the  same  as  yours  and  whether  they 
think  there  ought  to  be  a  Federal  law  mandating  it,  or  whether 


112 

most  States  already  do  it,  and  therefore  it  would  not  be  necessary. 
I  am  impressed  by  that. 

Dr.  Smith.  We'd  be  glad  to  get  back  to  you  on  that.  I  was  handed 
a  note  that  all  States  do  in  fact,  with  licensed  day  care,  besides 
schools,  have  requirements.  We'd  be  happy  to  get  back  with  you  on 
some  recommendations  in  that  regard  from  ASTHO. 

Mr.  Waxman.  Thank  you. 

Mr.  Greenwood. 

Mr.  Greenwood.  The  term  "punitive" — you  just  used  again — 
comes  up  in  this  instance,  and  I  would  ask  this  question.  Why  don't 
we  refer  to  the  requirement  that  kids  be  immunized  in  order  to  go 
to  school  as  punitive?  I  don't  see  any  clamor  to  repeal  that  punitive 
criterion.  In  fact,  it  seems  obvious  on  the  face  of  it  that  these  bar- 
riers vanish  into  thin  air  at  the  door  of  the  public  school  system; 
they  vanish,  and  the  kids  get  their  immunization. 

I  cannot  understand  for  the  life  of  me  why  it  is  that,  if  we  say 
that  we  care  so  much  about  getting  kids  immunized,  we  don't  sim- 
ply push  that  door  back  where  it  belongs,  not  at  age  5  or  6,  but 
at  age  2.  We  push  the  door  back,  watch  the  barriers  vanish,  the 
kids  get  immunized  and  the  problem  is  solved  without  spending  $1 
billion. 

Dr.  Smith.  In  response  again — I  think  I  already  alluded  to  this — 
I  think  States  would  like  to  try  and  look  at  that  flexibility  for  pro- 
grams. I  think  the  thing  we  are  cautious  about  ourselves  is  that 
if  we  put  that  law  on  the  books,  whether  it  is  at  the  State  or  the 
Federal  level,  do  we  have  the  capacity,  whether  the  vaccine  or  the 
people  to  provide  the  immunization,  to  make  sure  they  get  it? 

Right  now 

Mr.  Greenwood.  It  is  there  at  the  gate  to  the  school. 

Dr.  Smith.  Yes,  but  you've  got  children  now  backed  up  before 
school  age  that  we  aren  t  getting  to.  The  question  is  at  what  point 
is  the  system  at  capacity,  and  at  what  point  do  you  have  to  add 
capacity.  In  many  of  our  States — and  I  know  it  is  true  in  mine — 
we  are  at  capacity  or  beyond,  so  somehow,  I've  got  to  get  the  pri- 
vate sector  back  in,  which  is  what  I  am  going  to  have  to  do  in  my 
State — and  they  have  endorsed  our  bill,  as  you  are  probably  aware. 
And  in  addition,  I  have  got  to  get  public  capacity  where  I  don't 
have  that. 

It  is  a  capacity  issue  in  addition,  and  part  of  that  is  also  the  vac- 
cine availability.  And  I  think  if  that  were  there,  most  of  us  would 
be  willing  to  try  the  others,  because  that  would  go  hand-in-hand, 
plus  some  incentives,  which  is  giving  the  extra  month  of  vouchers 
for  WIC,  or — and  we've  got  to  remember  this,  too,  that  human  be- 
havior does  respond  to  nonincentives.  We  don't  sell  Nike  and 
McDonald's  on  television  through  punitive  action.  And  I  really  do 
want  to  push  for  marketing.  We  need  to  go  prime  time.  We  change 
behaviors  on  television,  and  we  know  that's  a  fact,  so  why  aren't 
we  in  fact  pushing  this  harder  and  making  it  important  on  our  air- 
waves? 

Mr.  Waxman.  You  all  raise  very  good  questions,  and  I  think  it 
would  be  worthwhile  to  continue  to  pursue  them  with  you,  and 
we'd  be  pleased  to  receive  for  the  record  any  further  comments  that 
the  other  State  representatives  have. 

Thank  you  very  much.  We  appreciate  each  of  your  testimony. 


113 

Mr.  Waxman.  The  members  of  our  next  panel  are  representatives 
of  various  manufacturers  of  childhood  vaccines. 

Dr.  R.  Gordon  Douglas  is  president  of  the  Merck  Vaccine  Division 
of  Merck  and  Company,  Inc.  Mr.  David  Williams  is  president  of 
Connaught  Laboratories,  testifying  on  behalf  of  Lederle-Praxis 
Biologicals,  with  Dr.  Ronald  Saldanni,  the  organization's  president 
and  chief  executive  officer.  And  finally,  we  will  hear  from  Mr.  Jean- 
Pierre  Gamier,  president  of  SmithKline  Beecham  Pharmaceuticals. 

We  appreciate  your  being  here  today.  Your  prepared  statements 
will  appear  in  the  record  in  full.  We'd  like  to  ask  each  of  you  to 
limit  your  oral  presentation  to  no  more  than  five  minutes. 

Dr.  Douglas,  well  start  with  you. 

STATEMENTS  OF  DR.  R.  GORDON  DOUGLAS,  PRESIDENT, 
MERCK  VACCINE  DIVISION,  MERCK  AND  CO.,  INC., 
WHITEHOUSE,  NJ;  DAVID  WILLIAMS,  PRESIDENT, 
CONNAUGHT  LABORATORIES,  INC.,  SWIFTWATER,  PA;  RON- 
ALD  SALDARLNI,  PRESIDENT  AND  CHIEF  EXECUTIVE  OFFI- 
CER, LEDERLE-PRAXIS  BIOLOGICALS,  WAYNE,  NJ;  AND 
JEAN-PIERRE  GARNIER,  PRESIDENT,  NORTH  AMERICAN 
PHARMACEUTICALS,  SMITHKLINE  BEECHAM,  PHILADEL- 
PHIA, PA 

Dr.  Douglas.  Mr.  Chairman  and  members  of  the  committee,  my 
name  is  Gordon  Douglas,  and  I  am  president  of  the  Vaccine  Divi- 
sion of  Merck  and  Company.  Merck  commends  the  diligence  of 
these  comments  in  pursuing  solutions  to  one  of  our  greatest  health 
care  challenges — full  immunization  of  all  of  our  children  by  age  2. 

Merck  has  been  committed  to  the  eradication  of  infectious  dis- 
eases through  the  research  and  development  of  vaccines  for  100 
years.  But  the  ability  to  prevent  disease  is  a  hollow  triumph  if  we 
fail  to  get  vaccines  into  the  arms  of  our  children. 

President  Clinton  deserves  credit  for  bringing  the  issue  if  child- 
hood immunization  to  the  forefront,  but  the  administration's  pro- 
posal to  expand  the  government's  free  vaccine  program  for  the  poor 
to  include  wealthier  Americans  is  a  flawed  prescription.  It  is  based 
on  a  misdiagnosis  of  the  Nation's  true  immunization  challenges, 
and  it  will  not  get  us  to  our  goal  of  full  immunization. 

Available  research  clearly  demonstrates  that  the  roadblocks  to 
immunization  are  delivery  failures,  not  vaccine  cost  or  supply.  I 
cannot  emphasize  this  point  strongly  enough,  because  without  a 
clear,  factual  definition  of  barriers,  we  cannot  work  together  to  con- 
struct a  comprehensive,  effective  solution. 

The  administration  misleads  the  public  by  stating  that  the  vac- 
cine price  increases  drove  the  cost  to  immunize  a  child  in  the  pub- 
lic sector  from  $6  in  1982  to  $90  in  1992.  The  CDC  data  shown  on 
this  chart  clearly  show  that  80  percent  of  the  increase  is  a  result 
of  adding  the  Federal  excise  tax  to  fund  the  National  Vaccine  In- 
jury Compensation  Program,  and  the  introduction  of  new  vaccines 
that  produce  against  two  serious  infections — Hib  meningitis  and 
hepatitis  B. 

Almost  100  percent  of  our  children  get  all  their  recommended 
shots  by  age  5.  This  is  not  a  function  of  Federal  spending,  but  rath- 
er of  State  laws  which  mandate  immunization  for  school  entry. 
CDC  data  show  that  the  average  immunization  level  in  the  11 


114 

States  that  currently  distribute  taxpayer-funded  vaccines — 63  per- 
cent— is  little  better  than  the  national  average  of  58  percent. 

In  1982,  eight  other  States  considered  adopting  universal  pur- 
chase, and  after  examining  the  results  in  the  record,  all  eight  re- 
jected the  concept.  Our  challenge  is  to  increase  unacceptably  low 
immunization  rates  among  children  at  age  2. 

Mr.  Chairman,  the  fact  is  a  high  percentage  of  children  in  this 
younger  age  group  are  being  immunized  appropriately.  These  are 
the  children  who  have  access  to  appropriate  health  care.  The  sys- 
tem for  them  is  working.  The  children  who  really  need  help  are  the 
poor  and  near-poor  without  health  insurance.  Many  in  this  most 
vulnerable  population  already  are  covered  through  Federal  vaccine 
programs. 

We  know  that  government  programs  purchase  more  than  enough 
measles,  mumps  and  rubella  vaccine  to  immunize  all  of  America's 
needy  infants;  vet  only  about  half  get  shots  on  time. 

The  National  Vaccine  Advisory  Committee  concluded  in  its  1991 
report  that  all  13  barriers  to  immunization  were  related  to  the  de- 
livery system,  not  to  vaccine  supply.  These  problems  are  articu- 
lated by  thousands  of  voices  from  frontline  service  providers.  We 
agree  with  them  that  the  best  way  to  raise  preschool  immunization 
rates  is  to  make  immunization  services  more  accessible  and  to 
overcome  parental  ignorance  and  apathy  through  education. 

In  1955  as  a  medical  resident,  I  worked  on  a  ward  with  20  pa- 
tients, victims  of  the  last  polio  epidemic,  clinging  to  life  in  tank  res- 
pirators, the  old  "iron  lungs."  Most  patients  today  have  never  seen 
polio.  Our  triumph  in  eradicating  disease  creates  a  complacency 
about  risk. 

A  recent  General  Accounting  Office  report  found  that  allowing 
States  to  create  Medicaid  vaccine  replacement  programs  and  in- 
creasing Federal  funds  for  education  and  tracking  could  actually 
reduce  Federal  spending,  while  improving  immunization  rates. 

Merck's  Medicaid  program  for  vaccines  facilitates  the  specific  rec- 
ommendations of  the  GAO  for  a  State  replacement  option.  In  brief, 
the  program  encourages  more  immunizations  of  Medicaid-eligible 
children  in  the  private  physicians'  offices;  it  saves  Medicaid  pro- 
gram money,  thus  freeing  dollars  for  investment  and  outreach,  de- 
livery, and  increasing  physician  reimbursement  fees. 

Unfortunately,  without  changes  in  the  Medicaid  law,  States  re- 
quire a  waiver  to  participate  in  a  replacement  program  of  this  sort. 
We  believe  this  program,  expanded  to  provide  immunizations  to 
those  at  up  to  200  percent  of  poverty,  will  go  a  long  way  toward 
assuring  that  our  kids  get  their  shots  and  will  save  taxpayers  bil- 
lions of  dollars  that  otherwise  would  be  spent  on  the  administra- 
tion's vaccine  purchase  program. 

Thank  you. 

Mr.  Waxman.  Thank  you  very  much,  Dr.  Douglas. 

[The  prepared  statement  of  Dr.  Douglas  follows:] 

Prepared  Statement  of  R.  Gordon  Douglas,  Jr. 

My  name  is  Dr.  R.  Gordon  Douglas,  Jr.  I  am  president  of  the  Vaccine  Division 
of  Merck  and  Go.,  Inc.  Merck  appreciates  the  diligence  of  these  Committees  in  pur- 
suing solutions  to  one  of  this  Nation's  greatest  health  care  challenges:  full,  age-ap- 
propriate immunization  of  our  children. 


115 

The  purpose  of  today's  hearing  is  to  discuss  viable  solutions  to  the  immunization 
crisis  facing  this  Nation.  I  believe  we  should  couch  any  deliberation  in  an  accurate 
description  of  the  problem.  While  we  unequivocally  support  the  goal  of  universal  im- 
munization, we  reject  the  approach  contained  in  the  Comprehensive  Child  Health 
Immunization  Act  of  1993  put  forth  by  the  White  House.  Universal  purchase  is  not 
synonymous  with  universal  immunization.  In  fact,  the  concept  of  universal  pur- 
chase, where  the  government  buys  vaccine  for  distribution  to  the  entire  population 
of  children — needy  or  well-to-do,  insured  or  uninsured — does  not  address  the  estab- 
lished barriers  to  immunization  in  America. 

I  cannot  emphasize  this  point  strongly  enough,  because  without  a  clear,  factual 
definition  of  barriers,  we  cannot  work  together  to  construct  a  comprehensive,  effec- 
tive solution. 

Merck  has  recommendations  to  share  with  the  committees  today,  recommenda- 
tions which  packaged  together  can  assure  success  in  meeting  the  Administration's 
goals  while  saving  the  taxpayers  billions  of  dollars.  We  believe  that  State  vaccine 
replacement  programs  for  families  up  to  200  percent  of  the  poverty  level,  combined 
with  first-dollar  insurance  coverage  for  vaccinations,  meet  the  litmus  test  of  fiscal 
responsibility  and  will  hurdle  the  real  barriers  to  immunization. 

VACCINES  REDUCE  HEALTH  CARE  COSTS  AND  SAVE  LIVES 

Vaccines  clearly  are  the  most  cost-effective  way  to  prevent  disease  and  reduce 
health  care  costs.  Vaccines  have  eradicated  smallpox  internationally  and  virtually 
eliminated  polio  in  the  Western  Hemisphere.  Measles,  mumps  and  rubella  have 
been  reduced  by  more  than  95  percent  in  this  country.  The  Centers  for  Disease  Con- 
trol and  Prevention  (CDC)  estimates  that  for  every  $1  invested  in  vaccines,  $10  can 
be  saved  in  potential  health  care  costs. 

Childhood  vaccines  yield  a  particularly  high  return  to  society.  These  products  help 
prevent  unnecessary  disease  and  the  related  suffering,  physical  and  mental  disabil- 
ities, emotional  trauma,  hospitalization  and  death  at  a  fraction  of  what  it  costs  to 
treat  diseases.  Childhood  diseases  also  represent  a  financial  drain  on  adult  Ameri- 
cans and  the  national  economy  through  lost  days  of  parental  employment,  the  cost 
of  doctor  visits  and  the  emotional  wear  and  tear  that  comes  with  caring  for  a  sick 
child. 

A  recent  cost-benefit  analysis  of  immunization  against  Haemophilus  influenzae 
type  b,  which  causes  serious  infections  in  children,  calculated  the  cost  of  the  disease 
to  society  at  $2.6  billion  and  savings  at  $88.22  per  child  vaccinated.  Infant  bacterial 
meningitis  has  been  reduced  by  80  to  90  percent  in  just  2  years  since  the  introduc- 
tion of  the  HD3  vaccine.  (Pediatric  Infectious  Disease  Journal,  April  1990)  For 
Merck's  vaccine  against  measles,  mumps  and  rubella,  MMR-H,  the  cost-savings 
ratio  is  $1  to  $14.  The  CDC  estimates  that  more  than  77.5  million  cases  of  measles 
and  25,200  cases  of  mental  retardation  have  been  averted,  and  7,750  children's  lives 
saved,  through  immunization  with  O-II  over  the  past  27  years. 

MERCK'S  COMMITMENT  TO  VACCINE  RESEARCH  AND  DEVELOPMENT 

Vaccines  have  been  an  important  part  of  Merck's  business  for  nearly  100  years. 
Beginning  in  1894  with  the  first  U.S.  antitoxin  against  diphtheria,  our  dedication 
to  vaccine  research  and  development  has  yielded  a  product  portfolio  and  research 
pipeline  that  are  the  strongest  in  the  industry.  Among  the  many  contributions  we 
have  made  to  human  health  through  immunization  are  vaccines  for  smallpox,  ra- 
bies, meningitis,  pneumonia,  measles,  mumps,  rubella,  hepatitis  B  and  tetanus. 

Other  Merck  vaccine  innovations  include  a  combined  measles,  mumps  and  rubella 
(MMR-H)  vaccine  and  RecombivaxHB,  the  world's  first  genetically  engineered  prod- 
uct to  prevent  hepatitis  B.  We  have  been  working  for  28  years  on  a  vaccine  to  pre- 
vent chickenpox  ('VARIVAX')  and  are  in  the  later  stages  of  development  of  a  new 
vaccine  combining  'VARIVAX'  with  MMR-H.  A  killed  hepatitis  A  vaccine  is  expected 
to  be  licensed  in  the  near  future. 

Industry  currently  has  under  development  vaccines  for  numerous  other  diseases, 
including  hepatitis  C,  which  causes  liver  disease;  otitis  media,  a  middle  ear  infection 
caused  by  a  variety  of  organisms;  herpes  simplex  virus  types  1  and  2  which  cause 
fever  blisters  and  genital  sores,  respectively;  Lyme  disease;  respiratory  syncytial 
virus,  an  acute  respiratory  infection  that  can  be  fatal  in  infants;  rotavirus,  a  major 
cause  of  diarrhea  and  dehydration;  meningococcal  meningitis;  streptococcus  pneu- 
monia; and  ADDS. 

Basic  research  ongoing  at  this  time  may  lead  to  new  vaccines  for  leprosy  and  gon- 
orrhea and  diseases  caused  by  Epstein-Barr  virus,  chlamydia  and  cytomegalovirus. 
In  addition,  new  technology  like  naked  DNA  may  revolutionize  our  approach  to  all 


116 

vires  and  facilitate  the  development  of  vaccines  against  such  diseases  as  cancer  and 
arthritis. 

One  of  our  most  exciting  research  initiatives  now  underway  is  a  vaccine  that 
would  combine  DTP  vaccine  (for  the  prevention  of  diphtheria,  tetanus  and  pertus- 
sis), a  high  potency  inactivated  polio  virus  vaccine,  Haemophilus  influenzae  type  b 
vaccine  and  hepatitis  B  vaccine  into  a  hexavalent  product.  We  will  follow  this  with 
the  addition  of  the  acellular  pertussis  component  to  replace  the  whole  cell  pertussis 
in  current  DTP  vaccines. 

No  one  company  has  all  the  critical  antigens  necessary  for  this  combined  vac- 
cine— or  super  shot — which  has  long  been  a  goal  of  industry  and  the  public  health 
community.  A  super  shot  would  remove  two  significant  barriers  to  full  immuniza- 
tion— the  discomfort  of  multiple  injections  for  children  and  the  anxiety  for  their  par- 
ents and  repeat  visits  for  additional  shots.  Too  often,  children  are  not  brought  back 
for  subsequent  vaccinations  because  of  the  trauma  of  the  injection.  To  expedite  a 
more  rapid  development  of  this  product,  the  Merck  Vaccine  Division  recently  created 
a  partnership  with  Connaught  Laboratories. 

Yet  another  intriguing  research  project  underway  involves  encapsulating  vaccines 
in  microsomes,  or  microscopic  beads,  that  the  body  breaks  down  over  time.  By  alter- 
ing the  chemical  composition  of  these  beads,  we  hope  to  time  the  release  of  antigens 
in  the  body,  making  it  possible — again,  with  one  shot — to  provide  protection  against 
diseases  that  now  require  multiple  injections  at  varying  intervals. 

VACCINE  COST  DOES  NOT  EXPLAIN  FAILURE  TO  IMMUNIZE  OUR  CHILDREN 

Mr.  Chairmen,  there  should  be  no  question  about  Merck's  commitment  to  eradi- 
cate preventable  infectious  disease  through  the  development  of  new  vaccines  and 
improvements  in  vaccine  delivery.  But  having  the  capability  to  prevent  disease 
through  successful  research  is  worth  little  if  we  do  not  immunize  against  disease 
through  effective  vaccine  delivery. 

In  advancing  a  universal  purchase  plan,  the  Administration  would  have  us  believe 
that  our  immunization  problems  are  predominately  economic.  The  Secretary's  call 
for  government-negotiated  "reasonably  priced"  vaccines  as  the  solution  to  our  de- 
plorable failure  to  immunize  our  children  on  an  age-appropriate  schedule  clouds  the 
real  issues.  It  implies  that  the  industry  has  set  prices  that  are  not  reasonable  and 
that  we  raise  these  prices  regularly — neither  of  which  is  true.  Pricing  is  a  short  cut 
way  to  explain  why  all  American  children  are  not  immunized  by  the  recommended 
age  of  2  years.  But  it  is  a  short  cut  that  leads  to  a  dead  end. 

In  comparing  today's  cost  for  complete  immunization  to  that  of  12  years  agol  the 
Administration  misleads  the  public  by  implying  that  the  entire  increase  is  due  to 

Srice  inflation  by  vaccine  developers.  Centers  for  Disease  Control  data  (Figure  1) 
emonstrate  that  80  percent  of  tine  cost  increase  is  the  result  of  added  protections 
of  an  excise  tax  and  two  new  vaccines.  Specifically: 

(1)  In  1988  the  Federal  Government  added  an  excise  tax  to  each  dose  sold  to  fund 
the  National  Vaccine  Injury  Compensation  program  for  a  total  added  cost  of  $23.50 
for  three  vaccines;  and  (2)  As  a  result  of  research  and  development,  children  now 
are  being  immunized  with  new  vaccines  that  protect  against  two  serious  infections: 
Hib  meningitis  and  hepatitis  B.  The  cost  of  these  additional  vaccines  is  $43  for 
seven  doses. 

We  at  Merck  are  pleased  to  have  had  a  leading  role  in  the  discovery  and  develop- 
ment of  these  two  new  vaccines.  Furthermore,  we  believe  that  Merck  has  done  its 
part  by  containing  vaccine  costs.  Since  its  introduction  in  1972  to  the  present,  price 
increases  for  Merck's  MMR-II  have  remained  at  or  below  the  CPI  (Figure  2).  In  fact, 
for  the  past  2  years  there  have  been  no  price  increases  at  all,  despite  increasing 
costs  to  us  and  inflation.  At  the  Federal  Government  price  of  $10.89  per  dose,  MMR- 
II  is  a  bargain,  preventing  three  potentially  serious  and  debilitating  diseases  in  in- 
fants. 

Perhaps  the  greatest  testament  to  the  fact  that  price  is  not  a  significant  barrier 
to  immunization  is  the  experience  of  the  11  States  that  currently  provide  taxpayer 
funded  vaccine.  CDC  data  show  that  the  average  immunization  level  of  these 
states— €3  percent— is  little  better  than  the  national  average  of  58  percent  (Figure 
3).  The  State  of  Connecticut,  which  has  a  high  per  capita  income  and  a  universal 
vaccine  purchase  program,  has  an  immunization  rate  of  only  59  percent,  barely 
matching  economically  disadvantaged  Alabama's  57  percent,  rural  K^msas's  58  per- 
cent and  falling  far  short  of  Tennessee's  69  percent.  Furthermore,  Connecticut  and 
Vermont,  the  universal  purchase  State  with  the  highest  immunization  rate,  cur- 
rently are  experiencing  measles  outbreaks. 

It  is  worth  noting  that  while  these  States  often  are  cited  as  models,  most  do  not 
have  congested  urban  areas  with  large  minority  populations.  It  is  these  areas  that 


117 

have  consistently  suffered  the  most  during  epidemics  and  which  have  the  lowest  im- 
munization rates.  Thus  even  the  universal  purchase  States'  modest  average  im- 
provement in  rates  does  not  necessarily  reflect  the  potential  for  other  States. 

In  1992,  eight  other  States  considered  adopting  universal  purchase  systems.  But 
after  examining  the  realities  and  the  record,  all  eight  rejected  the  concept. 

INEFFICIENT  DELIVERY  IS  THE  TRUE  BARRIER  TO  IMMUNIZATION 

When  Ventura,  CA,  recently  set  out  to  improve  its  immunization  rate  it  did  every- 
thing right.  Vaccine  was  free.  Public  health  nurses  were  available  in  strategically 
placed  clinics  during  hours  geared  to  accommodate  working  parents.  Materials  pro- 
moting the  program  were  printed  in  two  languages  and  widely  distributed  through- 
out the  community.  Vans  drove  the  streets  with  loudspeakers  blaring  immunization 
messages.  Net  result:  not  a  single  child  showed  up  for  vaccination.  Universal  pur- 
chase deals  solely  with  the  issue  of  vaccine  cost,  when  in  reality  the  problems  obvi- 
ously are  much  more  complicated. 

To  begin  with,  not  all  children  are  equally  at  risk  for  failure  to  be  immunized. 
Ninety-seven  to  98  percent  are  fully  immunized  by  age  5  when  they  begin  school. 
This  success  is  not  a  function  of  federal  spending,  but  of  State  laws.  We  know  that 
a  high  percentage  of  children  in  the  private  sector  are  being  immunized  appro- 
priately. For  example,  the  return  rate  for  MMR-II  distributed  to  private  physicians' 
offices — which  is  one  measure  of  actual  use — is  about  3  percent.  Dr.  Alan  Hinmcn 
at  the  Center  for  Preventive  Services  of  the  CDC  recently  wrote  that  universal  pur- 
chase would  "essentially  subsidize  vaccination  for  the  middle  class  and  well-to-do, 
who  seem  to  be  getting  immunized  on  lschedule."  (Am.  J.  Dis.  Child  145(5);559- 
5€2(May  1991)) 

I  would  like  to  elaborate  briefly  here  on  the  Administration's  statement  that  uni- 
versal purchase  is  necessary  in  part  because  increased  costs  of  vaccine  have  dam- 
aged our  private  delivery  system.  The  most-often  quoted  source  for  this  statement 
is  a  survey  of  family  practice  physicians  and  pediatricians  in  Dallas  County,  Texas, 
as  reported  in  the  February  2,  1991  issue  of  PEDIATRICS. 

Careful  evaluation  of  this  survey  reveals  significant  shortcomings  in  methodology 
that  promote  misleading  findings  and  a  flawed  conclusion.  Specifically: 

The  survey's  cover  letter  explained  that  the  survey  was  undertaken  because  of  in- 
creased usage  of  health  department  clinics,  which  may  have  predisposed  physicians 
in  their  responses. 

Physician  recall  for  a  period  spanning  nearly  10  years  was  the  only  "documenta- 
tion'' used  to  quantify  changes. 

The  authors  suggest  that  the  changes  noted  in  the  article  occurred  while  the 
state's  child  population  was  stable  for  immunization  purposes.  In  fact,  the  U.S.  Bu- 
reau of  Census  reports  at  least  a  30  percent  increase  in  those  populations  most  like- 
ly to  use  public  clinics,  Hispanic  and  Black. 

Perhaps  the  greatest  contradiction  to  the  authors'  conclusions,  however,  is  in  the 
actual  distribution  of  vaccine  sales.  If  the  PEDIATRICS  article's  conclusions  were 
valid,  dramatic  shifts  should  have  been  readily  apparent  with  respect  to  vaccine  dis- 
tribution. Yet  during  the  survey  years,  the  proportion  of  privately  administered 
doses  of  MMR-II  actually  increased  in  Texas  from  43  percent  in  1985  to  51  percent 
in  1987.  Further,  in  states  comparable  to  Texas  in  terms  of  population,  vaccine  de- 
livery systems  and  experience  during  the  measles  epidemic  (Pennsylvania,  Califor- 
nia and  New  York),  the  proportion  of  doses  delivered  in  the  private  sector  likewise 
increased. 

THOSE  MOST  AT  RISK  ARE  AMERICA'S  POOREST 

Tragically,  the  most  vulnerable  population  is  the  very  population  already  covered 
through  federal  vaccine  programs:  America's  poorest  children.  We  know  that  in  any 
given  year,  government  programs  purchase  more  than  enough  MMR-II  to  immunize 
all  of  America's  needy  infants.  Merck  provides  each  dose  at  a  discount  of  50  percent 
under  the  price  to  the  private  sector.  Yet  nationally,  only  about  half  of  these  chil- 
dren actually  get  their  shots  and  in  some  areas,  the  delivery  rate  is  as  low  as  10 
percent. 

The  government  wastes  tens  of  millions  of  scarce  tax  dollars  annually  and  fails 
to  reach  our  poorest,  most  vulnerable  kids  because  it  has  failed  to  assure  effective 
delivery.  The  real  problem  with  current  government  programs  is  that  they  lack — 
on  a  local  level — the  infrastructure,  organization  skills  and  sufficient  personnel 
needed  to  effectively  get  already-purchased  vaccines  to  America's  needy  children. 

Having  worked  with  immunization  programs  and  health  care  agencies  throughout 
the  United  States,  we  have  heard  about  the  many  problems  on  the  front  lines.  Near 
Trenton,  NJ,  for  example,  there  is  a  refrigerated  warehouse  stocked  with  a  complete 


118 

inventory  of  required  childhood  vaccines  waiting  to  be  administered  to  the  poor  for 
free.  Yet  poor  children  throughout  the  State — particularly  in  the  cities — remain  un- 
protected, unable  to  get  past  the  real  barriers  of  ignorance,  indifference  and  access. 
As  Dr.  Franklin  S.  Ward,  a  physician  in  New  York  City  wrote  in  a  March  11,  1993 
letter  to  the  New  York  Post,  "I  can  tell  you  that  the  president  is  wrong  as  to  why 
people  dont  get  vaccinated  ....  We're  dealing  with  people's  personalities  and 
people's  ambitions  and  motivations.  The  cost  of  the  vaccine  has  nothing  to  do  with 
it — anybody  can  get  it  for  nothing  if  they  want  to." 

A  government  study  following  the  measles  outbreaks  in  1989  and  1990  under- 
scores this  point.  The  38  percent  of  kids  in  the  Medicaid  population,  particularly 
Hispanic  and  Black  preschool  children  in  urban  areas,  were  disproportionately  af- 
fected by  the  epidemic.  The  principal  cause  for  the  measles  epidemic,  according  to 
the  report,  was  failure  to  deliver  existing  vaccine  to  children  at  the  recommended 
age.  Given  the  expansions  in  Medicaid  eligibility,  the  study  concluded  adequate 
steps  had  not  been  taken  to  assure  vaccine  delivery  under  the  program. 

The  U.S.  Department  of  Health  and  Human  Services  National  Vaccine  Advisory 
Committee  (NVAC),  which  conducted  this  careful  analysis,  listed  13  specific  barriers 
as  the  major  causes  of  this  national  tragedy.  Vaccine  cost  was  not  one  of  them.  The 
NVAC  report  cited  inadequate  delivery  infrastructure,  specifically,  insufficient  staff 
and  too  few  hours  in  public  clinics,  and  insufficient  education  and  outreach  as  the 
main  impediments  to  vaccination. 

One  situation  in  particular  creates  a  "domino  effect"  for  the  Medicaid  population: 
the  exodus  of  office-based  physicians  from  the  program.  Low  Medicaid  reimburse- 
ment fees  lead  physicians  to  refer  patients  to  public  health  clinics.  The  resulting  de- 
mand overburdens  these  clinics  and  discourages  families  from  seeking  services.  And 
the  result  is  that  kids  don't  get  immunized. 

The  issue  of  inadequate  education  is  significant,  ironically  in  large  degree,  be- 
cause of  our  successes  in  developing  new  vaccines.  In  1955,  as  a  medical  resident 
at  Bellvue  Hospital  in  New  York  City,  I  worked  on  a  ward  with  20  patients,  victims 
of  the  last  polio  epidemic,  who  were  clinging  to  life  in  tank  respirators,  the  old  "iron 
lungs."  Most  young  parents  in  America  today  have  never  seen  polio  and  by  now  the 
iron  lungs  have  rusted  away  in  junk  yards,  due  entirely  to  an  effective  vaccine.  Our 
triumph  in  eradicating  one  disease  creates  a  complacency  about  the  risk  of  others. 
This  complacency,  unfortunately,  has  been  reinforced  by  the  government's  lack  of 
emphasis  on  public  education  around  the  importance  of  childhood  immunization. 

UNIVERSAL  PURCHASE  PLACES  INNOVATIVE  RESEARCH  AT  RISK 

In  addition  to  its  demonstrated  inability  to  achieve  full  immunization,  a  national 
universal  purchase  program  ultimately  would  erode  the  foundations  of  a  successful 
research  environment.  Here  it  is  important  to  note  the  technical  complexities  con- 
fronting the  vaccine  industry. 

Vaccines  are  discovered  and  developed  through  a  partnership  between  the  govern- 
ment which  excels  at  basic  research,  and  industry,  which  excels  at  developmental 
research  and  manufacturing.  While  the  government  facilitates  some  clinical  studies, 
it  does  not  generally  conduct  process  research  and  development  (PR&D),  quality 
control  or  regulatory  development. 

These  later  functions  are  delicate,  time-consuming,  resource-intensive  processes 
involving  live  viruses  and  bacteria.  It  takes,  on  average,  10  to  12  years  from  discov- 
ery until  a  vaccine  is  approved  for  market.  The  average  manufacturing  cycle  for  a 
vaccine  is  6  months  to  I  year.  Ten  years  ago  there  were  11  companies  making  vac- 
cines in  America;  today,  only  four  remain.  Merck  is  one  of  only  two  United  States- 
based  firms  still  in  the  vaccine  business.  Inadequate  profitability  and  increased  li- 
ability were  the  key  factors  cited  by  companies  as  they  went  out  of  the  vaccine  busi- 
ness. 

Even  once  a  vaccine  is  approved,  a  company  faces  a  changing  and  uncertain  mar- 
ketplace. Years  ago,  for  example,  the  public  health  community  asked  vaccine  devel- 
opers to  put  their  resources  into  the  discovery  and  development  of  a  vaccine  against 
pneumococcal  pneumonia.  Merck  responded  with  Tneumovax23',  which  today  re- 
mains an  underutilized  vaccine.  We  probably  never  will  recover  the  investment  we 
made  in  getting  this  vaccine  to  the  public. 

In  addition  to  the  heavy  time  invested  by  our  top  scientists  and  engineers,  over 
the  past  30  years  Merck  has  invested  more  than  $1.1  billion  on  vaccine  research, 
more  than  half  of  which  was  spent  investigating  products  that  never  made  it  to 
market.  Most  recently,  we  have  invested  an  initial  $150  million  in  phase  one  of  a 
new,  state-of-the-art,  biotechnology  manufacturing  facility  at  our  West  Point,  Penn- 
sylvania site. 


119 

Companies  that  invest  heavily  in  research  and  development  need  the  freedom  to 
set  their  own  research  agendas.  A  federally-controlled  process  of  price  bidding  and 
market  division,  combined  with  the  vagaries  of  the  federal  budget  process  cannot 
assure  the  reliable,  stable,  long-term  infusions  of  capital  that  companies  like  Merck 
need  to  commit  to  fund  vaccine  discovery,  development  and  manufacturing. 

The  Administration's  rhetoric  alone  around  universal  purchase  and  vaccine  com- 
panies has  contributed  to  a  dampening  of  the  potential  for  vaccine  and  pharma- 
ceutical research.  U.S.  pharmaceutical  and  biotechnology  industries  so  far  have  lost 
at  least  $120  billion  in  market  value  during  the  last  several  months. 

That  the  current  market  strangles  the  influx  of  new  investment  capital  to  bio- 
technology companies  has  a  direct,  negative  impact  on  a  competitive  environment 
for  vaccine  research  and  development.  After  more  than  a  decade  of  companies 
exiting  the  business,  we  have  begun  to  see  a  resurgence  of  interest  in  this  area.  New 
companies  and  strategic  alliances  promote  more  vigorous  competition  and  the  rapid 
development  of  new  products. 

Dr.  Samuel  Katz  of  the  Duke  University  Department  of  Pediatrics,  an  internation- 
ally recognized  expert  on  childhood  immunization,  addressed  this  issue  of  competi- 
tion in  a  recent  issue  of  PEDIATRICS.  Dr.  Katz  noted  that  universal  purchase 
would  hamper  this  currently  favorable  situation  because  if  companies  are  unable  to 
see  the  possibility  of  reclaiming  research  investments  and  securing  some  profit,  they 
will  "very  quickly  again  move  out  of  the  vaccine  business." 

VACCINE  "PROMOTION"  EQUALS  CONSUMER,  PHYSICIAN  EDUCATION 

Mr.  Chairmen,  I  would  like  to  set  the  record  straight  on  both  the  nature  and  ex- 
tent of  the  Merck  Vaccine  Division's  "promotional"  activities.  Merck's  responsibility 
as  a  vaccine  developer  and  manufacturer  extends  far  beyond  providing  vaccine  in 
a  vial.  We  warehouse  millions  of  doses  of  vaccines  for  the  government's  emergency 
stockpile.  We  handle  product  returns  of  vaccine  whose  dating  has  expired.  We  report 
on  adverse  reactions.  We  have  developed  and  implemented  vaccine  tracking  sys- 
tems. And  every  year,  we  spend  millions  of  dollars  to  educate  consumers  about  the 
importance  of  immunization.  Our  goal  is  to  market  and  promote  vaccines  in  a  way 
that  appropriately  informs  the  physicians  and  other  health-care  workers,  as  well  as 
parents,  on  use,  risks  and  benefits  of  our  vaccines. 

I  have  included  with  this  testimony  several  typical  education  pieces,  including  the 
Vaccine  Information  Pamphlet  (VIP)  which  we  print  and  distribute  to  pediatricians 
at  a  cost  of  $1  million  per  year. 

MEETING  THE  REAL  CHALLENGES  OF  UNIVERSAL  IMMUNIZATION 

As  a  Nation,  we  must  focus  on  solutions  that  meet  the  real  challenges  of  universal 
immunization.  The  Administration's  proposal,  while  its  goal  is  admirable,  directs 
scarce  tax  dollars  and  social  resources  at  the  wrong  sources  of  our  problem.  Ameri- 
ca's low  vaccination  rate  is  principally  a  problem  of  distribution,  not  price.  This  is 
what  the  government's  own 

research  tells  us.  This  is  the  message  from  public  health  experts  throughout  the 
United  States.  This  is  what  the  experience  of  States  with  universal  purchase  plans 
teaches  us  as  well. 

President  Clinton  deserves  credit  for  bringing  this  issue  to  the  forefront  of  health 
care  reform.  But  unfortunately,  the  universal  purchase  debate  has  served  to  distract 
us  from  the  larger  issues  that  actually  impact  vaccine  delivery — issues  such  as  the 
failures  in  the  infrastructure,  the  lack  of  sufficient  public  education  about  health 
care,  the  complacency  of  parents  toward  immunizing  their  children  and  the  need  for 
first  dollar  insurance  coverage  for  immunizations. 

We  at  Merck  believe  that  to  improve  the  health  of  our  children,  government  and 
the  private  sector  must  work  together  and  draw  upon  the  strengths  of  one  another. 
In  terms  of  improving  immunization  rates,  this  means  focusing  our  collective  ener- 
gies on  three  goals: 

1.  Reaching  children  early; 

2.  Pursuing  scientific  innovations  to  reduce  barriers  to  immunization;  and 

3.  Developing  a  national  tracking  system. 

GOAL  NUMBER  l:  EARLY  IMMUNIZATION 

We  have  a  long  way  to  go  to  achieve  this  first  goal.  While  our  record  of  immuniz- 
ing school-age  children  is  excellent — the  concern  is  for  those  children  who  remain 
at  risk  before  they  reach  the  schoolhouse.  What  lessons  can  we  apply  from  the  suc- 
cess of  school  immunization  requirements  to  increase  immunization  rates  by  age 
two?  Surely  there  are  ways  to  gam  compliance  on  such  a  critical  public  health  objec- 
tive that  are  not  punitive.  If  we  can  immunize  children  before  they  reach  2  years 


120 

of  age,  when  they  are  the  most  vulnerable,  the  health  benefits  down  the  road  will 
be  incalculable. 

Data  show  that  those  children  who  rely  on  Medicaid  and  public  health  clinics  for 
vaccinations  are  the  most  likely  to  remain  unimmunized.  We  need  to  support  vac- 
cine delivery  in  public  clinics  and  private  physicians'  offices  and  encourage  doctors 
to  vaccinate,  rather  than  refer,  patients.  To  the  extent  that  the  President's  economic 
stimulus  package  funds  the  expansion  of  public  clinics,  community  outreach  and 
multi-cultural  education  programs,  we  strongly  endorse  his  recommendations. 

The  problem  of  referrals  is  a  serious  one.  Research  shows  that  vaccinations  re- 
ferred often  are  vaccinations  deferred — parents  frequently  do  not  follow  through 
from  the  private  office  to  the  public  clinic. 

We  have  responded  to  this  problem  with  the  Merck  Medicaid  Program  for  Vac- 
cines, which  encourages  more  immunizations  of  Medicaid-eligible  children  in  private 
physicians'  offices.  Under  this  program,  Merck  will  send  each  participating  physi- 
cian a  "seed"  shipment  of  vaccines  at  no  cost.  The  States  will  pay  Merck  directly 
for  vaccines  actually  used  for  Medicaid  children  and  we  will  replace  supplies  directly 
to  the  physician.  Thus  physicians  have  no  out-of-pocket  costs  to  carry  and  will  al- 
ways have  vaccines  available. 

There  are  benefits  from  this  program  to  both  Federal  and  State  governments. 
First,  it  obviates  the  need  to  set  up  a  national  or  State  warehousing  and  distribu- 
tion system  for  vaccines.  It  saves  Medicaid  programs  substantial  monies  since  all 
vaccines  distributed  through  the  program  will  be  at  the  CDC  rate — which  is  the  low- 
est price  for  our  products. 

California  estimates  that  participation  in  this  program  would  save  $4.6  million 
annually  for  distribution  of  MMRII  alone.  Virginia,  which  implemented  the  program 
in  March,  anticipates  annual  savings  to  Medicaid  of  $800,000  per  year,  again  just 
for  MMRH.  New  Jersey  projects  savings  of  $600,000  if  they  were  able  to  participate. 

All  of  the  States  we  have  spoken  with  have  pledged  to  reinvest  these  savings  to 
improve  their  vaccine  infrastructure  and  to  increase  physician  fees  paid  for  immuni- 
zation of  Medicaid  children.  Finally,  this  program  facilitates  development  of  a  na- 
tionwide tracking  system. 

Senator  Daniel  P.  Moynihan,  as  Chairman  of  the  Senate  Committee  on  Finance, 
asked  the  General  Accounting  Office  (GAO)  to  examine  possible  ways  to  reduce 
Medicaid  vaccine  costs  for  immunizing  children  and  for  ways  to  improve  immuniza- 
tion rates  among  preschool  children.  GAO's  recommendation,  just  released  last 
month,  was  a  vaccine  replacement  program  that  mirrors  the  Merck  proposal.  Spe- 
cifically, GAO  found  that: 

Most  State  Medicaid  programs  could  save  money  if  low-cost  vaccines  acquired 
through  CDC  contracts  were  made  available  to  all  health  care  providers  administer- 
ingvaccinations  to  poor  children. 

The  report  goes  on  to  say  that: 

Savings  on  vaccine  costs  will  do  little  to  improve  preschool  immunization  levels 
unless  funds  are  provided  for  educating  parents  and  tracking  and  following  up  on 
the  immunization  status  of  children.  .  .  . 

We  are  very  optimistic  about  the  Merck  Medicaid  Program  for  Vaccines's  potential 
for  removing  additional  roadblocks  to  immunization  at  actual  savings  for  the  States. 
Unfortunately,  without  formal  changes  in  the  Medicaid  law,  states  require  a  waiver 
to  participate  in  a  replacement  program  of  this  sort.  Despite  the  established  value 
of  this  program  and  the  promise  of  the  Administration  to  expedite  waivers  required 
for  the  states  to  participate,  five  States  (California,  New  Jersey,  New  York,  Florida, 
and  Arkansas)  actually  have  waiver  requests  sitting  at  the  Department  of  Health 
and  Human  Services.  Language  to  allow  all  States  this  option  was  included  in  the 
tax  bill  vetoed  by  President  Bush  last  fall.  Senator  Danforth  has  introduced  a  free- 
standing bill,  S.  151,  this  session. 

Ignorance  is  a  tremendous  barrier  to  early  immunizations.  Aggressive  community 
education  initiatives  that  promote  full  and  early  immunization  will  help  to  eliminate 
this  obstacle.  As  a  company,  we  are  investing  $5  million  in  grants  over  3  years  in 
the  Merck  Immunization  Initiative  to  support  creative  local  projects  that  educate 
people  about  the  importance  of  immunization  and  make  immunization  services  more 
accessible.  I  have  included  a  complete  summary  of  the  Merck  Immunization  Initia- 
tive projects  as  an  appendix  to  these  remarks. 

But  we  must  do  more  than  educate.  To  improve  immunization  rates  among  the 
poor,  where  the  need  is  greatest,  we  should  provide  Medicaid  immunization  cov- 
erage for  families  living  at  a  level  of  up  to  200  percent  of  poverty.  An  enhanced  Fed- 
eral match  to  ease  the  burden  on  the  States  for  this  coverage  is  a  much  fiscally 
sounder  and  goal  oriented  commitment  of  tax  dollars  than  subsidizing  coverage  for 
the  wealthier.  In  addition,  we  need  insurance  reforms  that  provide  first-dollar  cov- 


121 

erage  for  all  childhood  immunizations.  Such  reforms  alone  could  reach  a  substantial 
percentage  of  America's  children  under  age  2. 

GOAL  NUMBER  2:  SCIENTIFIC  INNOVATION 

Vaccines  against  more  diseases  and  more  efficient  methods  of  inoculation  are  criti- 
cal components  of  improved  immunization.  I  have  dealt  in  some  detail  with  the  re- 
search and  development  initiatives  currently  underway  in  the  Merck  Vaccine  Divi- 
sion and  the  exponential  risks  and  intense  resource  demands  inherent  in  vaccine 
initiatives.  We  must  maintain  a  market  environment  that  encourages  risk-taking. 

GOAL  NUMBER  3:  TRACKING 

Merck  is  committed  to  facilitating  implementation  of  a  national  tracking  system. 
We  offer  the  full  range  of  our  experience  and  resources  in  this  area  to  the  Adminis- 
tration and  the  public  health  community. 

SUMMARY 

Messrs.  Chairmen,  I  want  to  thank  you  again  for  the  opportunity  to  testify  today. 
Much  of  the  Administration's  dialogue  on  immunizations  to  date  has  been  heavy  on 
emotional  rhetoric  and  short  on  hard  fact  and  has  done  little  to  advance  the  cause 
of  universal  immunization  in  America.  And  immunizing  our  children,  after  all,  is 
the  goal  we  all  seek  to  attain. 

Because  universal  immunization  is  our  goal,  we  cannot  support  the  Administra- 
tion's recommendations.  As  I  have  illustrated,  the  very  "Findings"  on  which  the  leg- 
islation stands  are  flawed.  The  solution — a  multi-billion  dollar  entitlement  program 
to  treat  a  problem  caused  predominately  by  failures  in  delivery — suggests  a  strong 
need  to  go  back  to  the  drawingboard. 

We  look  forward  to  a  continued  dialogue  on  this  issue  and  a  deliberate  consider- 
ation of  alternatives  such  as  we  have  proposed  today. 


122 


123 


68-998  0-93-5 


124 


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125 


126 

Mr.  Waxman.  Dr.  Williams. 

Mr.  Williams.  Thank  you  very  much. 

First  off,  let  me  say  I  am  not  a  doctor;  I  appreciate  the  extra 
title,  but  it  is  Mister  Williams.  And  good  afternoon. 

My  name  is  David  Williams,  and  I  am  president  and  chief  oper- 
ating officer  of  Connaught  Laboratories.  I  appreciate  the  oppor- 
tunity to  be  here  today  to  talk  about  this  very  important  Act. 

Connaught  Laboratories,  Incorporated  is  based  in  Swiftwater, 
PA,  and  is  solely  dedicated  to  biological  products,  which  means  that 
most  of  our  products  are  vaccines.  It  is  the  very  company  that  Mr. 
Slattery  was  referring  to.  We  do  exist. 

We  do  support  the  administration's  objective  of  fully  immunizing 
all  children  by  age  2.  We  think  that  Senator  Gregg  summed  it  up 
best  when  he  said  that  this  country  does  an  excellent  job  of  immu- 
nizing our  children  by  the  time  they  enter  school.  If  we  can  prop- 
erly immunize  most  of  our  children  by  age  5,  we  certainly  can  im- 
munize them  by  age  2. 

We  haven't  achieved  near  universal  levels  at  school  entry  age  be- 
cause all  vaccines  are  free.  We  have  done  it  because  we  do  it  well; 
there  is  a  motivation,  and  we  set  out  to  get  it  done,  and  we  accom- 
plished it.  We  need  to  use  those  same  resources  that  we  used  at 
school  entry  to  get  children  immunized  at  age  2. 

The  Comprehensive  Child  Immunization  Act  of  1993  has  three 
major  parts:  supply  and  price,  a  follow-up  section,  and  motivation 
and  infrastructure.  We  believe,  however,  that  the  legislative  prior- 
ities are  a  bit  upside-down  in  this  regard. 

No.  1,  most  of  the  funds  will  be  consumed  through  the  acquisi- 
tion of  vaccines  by  universal  purchase;  second,  a  substantial 
amount  will  follow  for  tracking  and,  as  a  result,  insufficient  funds 
will  be  left  for  motivation — which  we  heard  earlier  is  going  to  be 
the  key — and  infrastructure  changes  which  will  follow  right  behind 
it,  and  have  been  concluded  by  all  health  experts  to  be  absolutely 
necessary  for  full  immunization. 

We  recommend  that  universal  purchase,  which  will  do  little  to 
improve  immunization  rates,  not  be  included  in  the  final  legisla- 
tion. Universal  purchase  does  not  equal  universal  immunization. 
Part  or  all  of  the  money  saved  could  be  invested  in  the  areas  of 
education,  outreach,  and  infrastructure  improvements. 

The  administration,  however — and  it  didn't  come  up  this  morn- 
ing—but they  may  State  that  the  vaccine  is  needed  for  tracking — 
we  have  heard  this  before — that  is,  that  doctors  must  be  free  vac- 
cine in  return  for  supplying  tracking  information  to  the  CDC.  To 
that,  we  have  a  few  questions. 

What  will  happen  if  the  doctor  doesn't  supply  the  vaccine?  Will 
the  vaccine  be  withheld,  and  is  that  creating  another  barrier  to  im- 
munization? 

And  then,  most  importantly,  there  is  a  sunset  clause  in  the  legis- 
lation. If  it  is  so  important  today,  why  is  it  not  going  to  be  impor- 
tant when  universal  purchase  no  longer  exists? 

We  feel  that  the  lack  of  free  vaccine  will  not  dissuade  providers 
from  participating  in  a  well-developed,  well-run  tracking  program 
that  not  only  goes  for  the  good  of  society,  but  also  brings  patients 
back  for  additional  services. 


127 

Any  number  of  studies,  including  the  report  by  the  National  Vac- 
cine Advisory  Committee,  have  outlined  the  major  barriers  to  im- 
munization. Cost  and  supply  are  not  amongst  them.  In  addition, 
universal  purchase  programs  simply  don't  raise  immunization  rates 
enough.  Immunization  levels,  we  neard  earlier,  in  the  11  States 
that  have  it,  are  disappointing. 

The  quotes  that  came  out  in  the  newspaper,  in  the  Washington 
Post  here  in  town,  heard  from  many  health  care  providers,  and  the 
quotes  ranged  from  Dr.  Polumbo,  who  is  in  a  private  clinic  here  in 
Washington,  DC,  who  said,  "Vaccines  are  available;  the  problem  is 
the  kids  are  not  available."  And  a  public  health  official  in  New  Jer- 
sey, Dr.  Larry  Lockhart,  was  quoted  in  the  Bergen  County  Record 
to  say:  "Vaccine  cost  is  not  an  issue;  putting  doctors  and  pediatri- 
cians in  the  community  and  having  a  good  program  is  what  is 
needed." 

In  addition,  the  CDC  data  shows  that  more  than  enough  vaccine 
is  already  currently  purchased  by  the  private  and  public  sectors  to 
fully  immunize  every  child  in  this  country  on  time.  The  vaccine  is 
already  there.  So  why  not  concentrate  the  scarce  resources  that  are 
available  today  on  those  programs  that  have  proven  to  make  a  dif- 
ference? 

Study  after  study  documents  what  will  work — more  education  for 
parents  and  health  care  providers;  outreach — we  can't  emphasize 
that  enough;  infrastructure  improvements,  such  as  improved  clinic 
hours;  and  less  obstructive  policies,  like  the  requirement  for  ap- 
pointments. Those  are  the  things  that  drive  patients  away. 

In  Connaught's  opinion,  reforming  Medicaid  is  the  key  to  the  suc- 
cess. Improper  Medicaid  is  what  is  driving  patients  from  private  of- 
fices to  the  public  clinics.  We  feel  that  if  we  can  fix  that  problem, 
we're  going  to  go  a  long  way  toward  fixing  immunization  rates. 

Connaught  has  a  program  similar  to  Merck  in  terms  of  providing 
vaccine  at  low  cost  to  Medicaid  programs,  and  I  would  like  to  draw 
your  attention  to  that  in  our  written  testimony. 

However,  a  fundamental  drawback  of  the  universal  purchase  con- 
cept is  its  failure  to  account  for  the  economic  realities  that  influ- 
ence manufacturers  to  remain  in  the  vaccine  market  and  pursue 
vaccine  development  and  research.  The  prospects  of  insufficient  re- 
turns on  investment  will  discourage  companies  from  engaging  in 
vaccine  research  and  development.  I  have  already  talked  to  several 
biotech  companies  who  are  reevaluating  their  programs.  We  think 
universal  purchase  shouldn't  be  part  of  this  program.  We  hope  that 
the  members  of  this  committee  look  beyond  universal  purchase  to- 
ward legislation  that  will  in  fact  break  down  the  real  barriers  to 
immunization  and  achieve  the  goal  that  we  all  share,  and  that  is 
immunizing  all  of  our  children  by  age  2. 

Thank  you  very  much. 

Mr.  Waxman.  Thank  you,  Mr.  Williams. 

[The  prepared  statement  of  Mr.  Williams  follows:] 

Prepared  Statement  of  David  J.  Williams 

Good  morning.  My  name  is  David  Williams  and  I  am  president  and  chief  operat- 
ing officer  of  Connaught  Laboratories,  Inc.  I  appreciate  the  opportunity  to  provide 
Connaught's  views  on  Hit.  1640,  the  Comprehensive  Child  Immunization  Act  of 
1993.  Connaught  Laboratories,  Inc.  based  in  Swiftwater,  PA,  is  dedicated  solely  to 
the  development  and  manufacture  of  vaccines  and  other  biological  products. 


128 

We  support  the  Administration's  objective  of  fully  immunizing  all  children  by  age 
2.  This  country  does  an  excellent  job  of  immunizing  our  children  for  school  entry 
when  almost  all  of  them  are  immunized.  We  do  it  at  5  years  of  age,  not  because 
we  do  it  free,  but  because  we  do  it  well.  Having  proven  that  it  can  be  done  by  age 
five,  we  just  need  to  use  these  same  resources  and  immunize  our  children  by  age 
2. 

The  Comprehensive  Child  Immunization  Act  of  1993  has  three  major  parts  to  it. 

(1)  Supply  and  price — the  universal  purchase  of  all  childhood  vaccines  that  will 
require  at  least  $1  billion  a  year  of  taxpayers  money 

(2)  Follow-up — which  is  being  addressed  by  a  tracking  and  registry  system,  and 

(3)  Motivation  and  infrastructure — which  is  being  addressed  by  the  continuation 
of  outreach,  education  and  infrastructure  programs  already  underway  as  part  of 
other  HHS  initiatives. 

We  think  this  legislation  is  upside  down  in  that: 
most  of  the  funds  will  be  required  for  universal  purchase  which  will  do  little 
to  improve  immunization  rates 

a  substantial  amount  follows  for  tracking  and  registry — which  won't  be  fully 
operational  until  the  next  century 

insufficient  funds  are  left  for  the  motivation  and  infrastructure  parts  of  the  leg- 
islation that  most  people  feel  could  bring  about  the  biggest  improvement  in  im- 
munization rates. 

Our  recommendation  is  that  universal  purchase,  which  will  do  little  to  improve 
immunization  rates,  not  be  included  in  final  legislation  and  that  part  of  the  money 
then  saved  be  invested  in  the  area  of  education,  outreach  and  infrastructure  im- 
provements. 

A.  WHERE  WILL  TAXPAYERS'  DOLLARS  GO? 

Purchasing  the  entire  vaccine  supply  for  rich  and  poor  alike  is  estimated  to  cost 
at  least  $1  billion  a  year.  Currently,  the  public  sector  Duys  vaccines  at  a  substantial 
discount  averaging  50  percent  less  than  the  private  sector  price.  Should  the  govern- 
ment become  the  only  purchaser  of  vaccines,  the  CDC  price  per  dose  would  have 
to  rise  for  all  children,  in  order  to  subsidize  those  who  can  readily  afford  them.  This 
money  could  be  better  spent  on  programs  that  address  the  real  problems. 

B.  UNIVERSAL  PURCHASE:  NOT  A  CURE  FOR  THE  PROBLEM 

The  United  States  does  an  excellent  job  of  immunizing  children  who  are  about  to 
enter  school.  According  to  the  Centers  for  Disease  Control  and  Prevention  (CDC), 
over  96  percent  of  UJs.  children  are  properly  immunized  by  the  time  they  reach 
school-age.  If  vaccine  cost  is  a  major  barrier  at  two,  why  is  it  no  longer  a  barrier 
at  age  5? 

A  closer  look  at  immunization  levels  for  children  younger  than  age  2  proves  that 
a  variety  of  factors  other  than  cost  are  keeping  children  from  vaccines.  Unfortu- 
nately, less  than  half  of  our  children  are  completely  immunized  by  their  second 
birthday.  These  unimmunized  children  are  often  the  ones  most  vulnerable  to  vac- 
cine-preventable childhood  diseases  and  their  complications.  Because  companies  like 
Connaught  have  substantially  discounted  their  vaccines  to  the  public  sector  for 
many  years,  vaccines  are  readily  available  to  children  without  charge. 

In  fact,  approximately  60  percent  of  vaccines  are  purchased  by  the  public  sector 
at  deeply  discounted  prices  already  provided  by  the  manufacturers.  Yet  according 
to  CDC,  the  children  who  have  greatest  access  to  free  and  low-cost  vaccines  have 
the  lowest  age-appropriate  immunization  rates.  The  point  is  that  children  are  not 
being  brought  by  their  parents  to  be  immunized. 

When  serious  outbreaks  of  measles  and  other  diseases  occurred  during  the  late 
1980's  and  early  1990's,  minority  children  were  disproportionately  affected,  with 
Hispanic  and  African-American  preschool  children,  particularly  in  urban  areas,  fac- 
ing seven  to  nine  times  the  risk  of  contracting  measles  when  compared  with  Cauca- 
sian children.  Significantly,  low-income,  minority,  inner-city  children  most  often  de- 
pend on  acute-care  clinics  and  other  public-sector  agencies,  where  vaccines  are  al- 
ready available  without  charge,  for  their  primary  health  care  and  immunizations. 

CDC  data  also  show  that  more  than  enough  vaccine  is  currently  purchased  by  the 

fiublic  and  private  sectors  to  age-appropriately  immunize  every  child  in  this  country, 
n  fact,  with  the  exception  of  Hepatitis  b  which  was  recently  added  to  the  schedule, 
110  percent  of  the  vaccine  needed  for  full  immunization  is  bought  each  year. 

We  need  to  learn  from  the  experience  in  the  11  States  with  universal  purchase 
programs.  Many  of  these  State  programs  have  been  in  place  for  over  25  years,  and 
the  results  have  been  mixed,  but  disappointing.  The  1991  immunization  rate  for 


129 

children  2  years  and  under  was  49  percent  in  Idaho,  50  percent  in  Connecticut,  51 
percent  in  Washington,  and  56  percent  in  South  Dakota. 

Although  immunization  levels  in  some  universal  purchase  States  are  slightly  bet- 
ter than  the  national  average,  it  is  probably  due  to  other  factors.  For  instance,  New 
England  States  have  few  inner  city  areas  and  the  preponderance  of  children  are  vac- 
cinated by  private  physicians. 

Any  number  of  studies,  including  a  report  by  HHS'  National  Vaccine  Advisory 
Committee  which  has  been  studying  immunizations  for  several  years  have  outlined 
the  critical  barriers  to  pediatric  immunization.  Cost  is  not  one  of  them.  In  addition, 
leading  health  officials  are  convinced  that  universal  purchase  does  not  address  the 
root  of  the  problem.  According  to  former  U.S.  Surgeon  General  C.  Everett  Koop, 
M.D."  .  .  .  the  real  problem  is  inadequate  education  and  access  to,  not  availability 
o£  vaccines."  Dr.  Francis  Polumbo,  a  pediatrician  who  works  in  a  large  Northwest 
Washington  practice  where  most  patients  have  health  insurance  and  well-educated 

{>arents,  recently  told  the  Washington  Post  that  "Vaccines  are  available.  The  prob- 
em  is  that  the  kids  are  not  available."  A  March  28,  1993  Bergen  County  (NJ.) 
Record  article  entitled  "Unused  Vaccines"  quotes  Larry  Lockhart,  Associate  Com- 
missioner of  the  New  Jersey  Department  of  Human  Services,  as  saying,  "The  vac- 
cine coat  is  not  an  issue.  It's  putting  doctors  and  pediatricians  in  the  commvnity 
and  having  a  good  system". 

C.  THE  REAL  BARRIERS  TO  PEDIATRIC  IMMUNIZATION 

A  1990  article  in  the  Journal  of  Health  Care  for  Poor  and  Underserved  by  Dr. 
Walter  Orenstein  et  al.,  described  a  survey  of  54  immunization  program  managers 
on  pediatric  immunization  barriers. 

The  most  frequently  mentioned  barriers  were  appointment-only  systems  (93  per- 
cent), insufficient  staff  (70  percent)  insufficient  clinic  hours  (56  percent)  and  require- 
ments for  prior  physical  examinations  (56  percent).  Similar  conclusions  are  reached 
in  a  paper  entitled  "The  Measles  Epidemic:  The  Problems,  Barriers  and  Rec- 
ommendations," which  was  adopted  by  the  National  Vaccine  Advisory  Committee  in 
1991. 

The  findings  in  the  H.R.  1640  legislation  state  that  there  has  been  a  shift  in  im- 
munizations from  private  physicians'  offices  to  public  clinics.  We  know  of  only  two 
sources  of  data  on  this  issue:  manufacturers'  records  and  an  American  Academy  of 
Pediatrics  (AAP)  study  completed  in  September,  1992.  The  companies'  actual  ship- 
ping records  do  not  suggest  that  such  a  shift  from  the  private  to  the  public  sector 
has  occurred.  Since  numerous  studies  document  that  the  best  immunization  services 
are  provided  in  private  physicians'  offices — where  children  are  more  likely  to  have 
a  "medical  home  — Connaught  strongly  supports  efforts  to  eliminate  barriers  in  pri- 
vate physicians'  offices.  However,  we  do  not  believe  that  the  conclusions  of  the  AAP 
report  can  be  supported  by  the  study  methodology.  The  AAP  study  consisted  of  a 
self-administered  mail  survey  of  1246  fellows  of  the  Academy.  The  study  is  problem- 
atic for  a  variety  of  reasons,  including  an  over-representation  of  residents,  interns, 
and  physicians  involved  in  administrative  and  teaching  positions. 

Survey  respondents  were  also  more  likely  to  be  employed  in  hospitals  than  the 
general  pediatric  physician  population.  Furthermore,  the  survey  is  based  on  the 
physicians'  "perceived"  recall  of  referrals  over  a  10-year  period,  and  the  questions 
related  to  the  cost  of  vaccines  did  not  adequately  differentiate  between  the  cost  from 
the  manufacturer  and  the  cost  to  the  patient,  which  includes  physicians'  fees.  Be- 
cause of  the  problems  with  the  sample,  the  long  time-frame  for  recalled  perceptions 
and  vague  way  key  questions  are  phrased,  we  do  not  believe  that  this  study  can 
be  applied  to  pediatric  trends  in  general.  In  fact,  Connaught  supports  the  need  for 
further  studies  of  this  nature  with  representative  samples  and  multi-year  tracking 
so  trends  can  be  accurately  detected. 

E.  EXAMINING  IMMUNIZATION  COSTS 

Despite  the  fact  that  cost  is  clearly  not  a  major  barrier,  vaccine  prices  have  been 
the  focus  of  much  undue  attention  over  the  past  few  months.  There  is  no  question 
about  the  cost-effectiveness  of  vaccines.  As  the  President  has  noted,  we  save  $10  for 
every  $1  spent  on  vaccines.  However,  the  reasons  for  increases  in  the  cost  of  immu- 
nizations have  been  misrepresented.  Eighty  percent  of  the  cost  increase  to  fully  im- 
munize children  over  the  past  decade  is  due  to: 

— Two  new  vaccines  added  to  the  immunization  schedule  to  protect  against 
hepatitis  B  and  Haemophilus  influenzae  type  b(Hib),  a  leading  cause  of  meningi- 
tis. The  Hib  vaccine  alone  is  estimated  to  save  $400  million  per  year  in  health 
care  costs. 


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— A  Federal  excise  tax  added  to  the  price  of  pediatric  vaccines  to  fund  the  Na- 
tional Vaccine  Injury  Compensation  Program,  a  Federal  program  designed  to 
provide  an  orderly  and  swift  mechanism  to  compensate  those  few  who  suffer  un- 
avoidable adverse  reactions  to  the  childhood  vaccines  that  protect  our  children. 
The  excise  tax  accounts  for  $23.50  of  the  cost  increase  over  the  past  decade. 

Vaccine  production  has  become  increasingly  complex.  It  often  takes  10  to  12  years 
to  bring  a  new  product  to  the  market.  Skyrocketing  costs  to  develop  and  manufac- 
ture vaccines  account  for  the  remaining  price  difference  between  1982  and  1992. 
Manufacturing  costs  have  risen  because  of: 

—A  proliferation  of  government  regulations  by  FDA,  CBER,  OSHA  (Federal 
and  State)  and  environmental  agencies,  such  as  DEP  and  EPA.  For  example, 
the  cost  to  manufacture  our  DTP  vaccine  rose  nearly  500  percent  since  1982. 
The  overwhelming  majority  of  this  increase  is  due  to  government  regulations 
and  requirements.  Substantial  capital  investments  were  required  to  comply 
with  new  government  requirements  and  regulations,  covering  such  areas  as  val- 
idation, aseptic  techniques,  and  good  lab  and  clinical  practices. 

—Sharply  rising  costs  of  insurance  which  remains  necessary  for  liability  not 
covered  by  the  National  Vaccine  Injury  Compensation  Program.  Due  to  an  ex- 
tremely litigious  climate  for  vaccine  manufacturers  in  the  early  1980's, 
Connaught  was  unable  to  obtain  adequate  private  insurance.  To  stay  in  busi- 
ness, we  were  forced  to  become  primarily  self-insured  and  our  insurance  pre- 
miums for  what  little  insurance  we  can  purchase  today  have  risen  750  percent 
since  1982.  During  the  same  period,  deductibles  rose  by  2,000  percent. 

Despite  the  tremendous  increases  in  our  costs,  Connaught's  prices  in  the  public 
and  private  sectors  have  also  stabilized  and  for  some  products,  dropped  signifi- 
cantly. Connaught's  DTP  public  sector  prices  dropped  from  a  high  of  $7.69  per  dose 
in  1987 — prior  to  enactment  of  the  National  Vaccine  Injury  Compensation  Pro- 

Sam— to  $1.42  per  dose  in  1992  (exclusive  of  the  $4.56  per  dose  Federal  excise  tax), 
ivate  sector  prices  have  followed  the  same  pattern.  Connaught  also  passes  along 
economies  of  scale  to  private  physicians  who  purchase  in  large  quantities. 

We  have  analyzed  international  prices  and  when  you  compare  apples  to  apples, 
the  cost  of  fully  immunizing  a  child  in  the  United  States  and  European  Community 
is  relatively  the  same.  There  will  always  be  some  individual  product  price  anomalies 
in  international  comparisons.  The  focus  on  pricing  has  also  obscured  its  relativity 
in  terms  of  overall  health  care  costs.  Pharmaceutical  products  account  for  5  percent; 
vaccines  are  five  one-hundredths  of  one  percent  of  total  health  care  cost. 

F.  THE  NATIONAL  CHILDHOOD  VACCINE  INJURY  ACT:  A  CALL  TO  ACTION 

The  National  Childhood  Vaccine  Injury  Act  has  helped  play  a  maior  role  in  sta- 
bilizing both  the  supply  and  price  of  vaccines.  Products  liability  has  been  the  single 
most  potent  determinant  of  the  cost  of — and  attitudes  about— vaccines  in  the  last 
10  years.  It  not  only  significantly  increased  the  overall  cost  of  immunization,  it  also 
created  a  climate  of  fear  among  parents  and  led  to  an  informed  consent  process  that 
is  complicated  and  frightening. 

Ultimately,  working  closely  with  physicians,  manufacturers  and  parents,  the  Fed- 
eral Government  enacted  this  program  that  went  into  effect  in  1988  and  was  funded 
by  the  Federal  excise  tax  placed  on  each  dose  of  vaccine.  Unfortunately,  the  excise 
tax  expired  on  December  31,  1992  along  with  authorization  to  use  previously  col- 
lected taxes  to  pay  for  claims  based  on  vaccinations  after  October.  Immediate  legis- 
lative attention  is  needed  to  reinstate  both  the  Act  and  the  excise  tax  and  amend 
the  program  to  coyer  new  vaccines. 

G.  SOLVING  THE  PROBLEM  WITH  SCARCE  TAXPAYER  DOLLARS 

In  addition  to  reinstating  the  National  Vaccine  Injury  Compensation  Program,  we 
need  to  concentrate  scarce  taxpayers  dollars  on  programs  that  have  proven  that 
they  can  get  vaccines  to  children,  and  children  to  vaccines.  Solving  the  immuniza- 
tion problem  will  require  that  government,  industry,  parents  ana  health  profes- 
sionals work  together  in  a  multi-faceted  campaign.  Study  after  study  has  docu- 
mented some  of  the  most  important  areas  to  address  including: 

1.  EDUCATION  FOR  PARENTS  AND  HEALTH  CARE  PROVIDERS 

Immunization,  in  ending  the  mass  epidemics  that  once  routinely  killed  or  harmed 
our  babies,  may  be  a  victim  of  its  own  success.  Parents  no  longer  see  these  prevent- 
able diseases  as  something  to  fear.  We  need  educational  programs  that  reinstitute — 
and  even  go  beyond — the  degree  of  appreciation  of  immunization  that  parents  had 


131 

in  the  past.  Educational  programs  for  health  providers  on  current  vaccinations  and 
appropriate  contraindications  are  also  important. 

2.  INNOVATIVE  DELIVERY  MECHANISMS 

We  need  to  create  a  public  health  environment  that  welcomes  parents  and  chil- 
dren, rather  than  keeps  them  away.  To  that  end,  we  may  have  to  go  directly  to 
them,  rather  than  wait  for  them  to  come  to  us.  There  are  a  number  of  pilot  pro- 
grams having  success  in  that  area. 

The  Children's  Health  Fund  has  created  a  clinic  on  wheels  in  New  York  and  other 
cities;  the  National  Immunization  Campaign  has  a  multi-faceted  organizing  and  out- 
reach effort  on  national  and  grassroots  levels.  In  addition,  there  are  several  govern- 
ment demonstration  projects  in  New  York,  New  Jersey  and  Dlinois  in  which  immu- 
nizations are  combined  with  other  services,  such  as  food  stamp  purchase  and  wel- 
fare, to  meet  multiple  needs  simultaneously. 

3.  INFRASTRUCTURE  IMPROVEMENTS 

We  wholeheartedly  support  the  Clinton  administration's  intention  to  infuse  more 
funds  into  the  public  health  infrastructure.  Such  funds  will  directly  address  the 
most  common  barriers,  such  as  improved  staffing,  expanded  hours,  and  better  trans- 
portation. 

4.  IMMUNIZATION  TRACKING  SYSTEMS 

A  national  immunization  registry  to  insure  that  each  child's  immunization  record 
is  automatically  updated,  wherever  and  whenever  a  vaccine  is  administered,  is  long 
overdue.  We  firmly  support  the  Administration's  efforts  to  establish  such  a  system 
and  only  wish  it  could  be  implemented  sooner.  A  national  immunization  registry 
needs  to  be  comprehensive  and  include  the  private  sector,  so  that  the  immunization 
status  of  all  children  is  accessible  and  updated  as  vaccines  are  administered.  How- 
ever, universal  purchase  is  not  a  prerequisite  for  effective  tracking  systems.  Any 
tracking  system  must  be  designed  with  a  minimal  "hassle  factor"  so  that  doctors 
aren't  driven  away  from  delivering  immunization  altogether.  The  Administration 
states  that  free  vaccine  is  needed  lor  tracking,  i.e.,  doctors  will  get  free  vaccine  in 
return  for  supplying  tracking  information  to  the  CDC. 

We  have  a  few  questions:  (1)  What  will  happen  after  the  sunset  clause  kicks  in 
and  universal  purchase  stops?  and  (2)  What  if  doctors  don't  supply  the  tracking  in- 
formation— will  free  vaccine  be  withheld?  Is  that  another  barrier?  We  think  it  will 
create  another  barrier  to  immunization  and  the  free  vaccine  will  play  little  to  no 
role  in  tracking.  Free  vaccine  will  not  be  enough  of  an  incentive  to  make  providers 

ftarticipate  in  an  overly  burdensome  information  gathering  system.  Nor  will  lack  of 
ree  vaccine  dissuade  providers  from  participating  in  a  well  developed,  well  run 
tracking  program  that  not  only  does  good  for  society  but  brings  back  the  patients 
for  follow-up  services  and  treatment.  It  is  clear  from  this  provision  that  the  Admin- 
istration believes  that  the  distribution  of  free  vaccine  to  providers  will  be  adequate 
inducement  to  ensure  that  providers  perform  their  "tracking^  duties  under  the  bill. 
It  is  just  as  likely  to  drive  providers  out  of  providing  immunization  services.  It  is 
more  likely  that  the  States  will  have  to  develop  some  penalty  system  or  make  the 
performance  of  these  duties  a  condition  of  licensure  for  providers,  in  order  for  States 
to  get  and  maintain  their  Federal  grant  money  and  for  the  tracking  system  to  work. 

6.  ELIMINATE  MEDICAID  OBSTACLES 

There  are  a  variety  of  delivery  systems  for  Medicaid-eligible  children  throughout 
the  country.  Some  States  have  been  successful  in  achieving  high  rates  of  immuniza- 
tion for  Medicaid-eligible  children,  while  others  have  not.  The  States  which  have  the 
best  records  are  those  which  have  little  paperwork  hassle  and  reimburse  at  high 
enough  levels  to  cover  vaccine  costs  and  a  reasonable  administration  fee.  In 
Connaught's  opinion,  if  this  were  fixed,  much  of  the  concern  about  the  price  of  vac- 
cines will  be  eliminated.  Thus  far,  however,  there  has  not  been  a  comprehensive 
analysis  of  success  factors  to  help  forge  a  blueprint  for  success.  We  applaud  the  Ad- 
ministration's intention  to  seek  long-term  funding  to  rebuild  the  infrastructure  but 
believe  that  it  will  be  necessary  to  include  a  careful  analysis  as  the  keystone  for 
success.  However,  several  key  issues  are  universally  mentioned  as  necessary  for 
Medicaid  reform.  Eligibility  requirements  should  be  standardized  to  establish  accu- 
rate numbers  of  children  who  are  receiving  vaccines  through  Medicaid  programs. 
Currently,  disincentives  to  physician  participation  are  created  by  inadequate  reim- 
bursement rates  and  excessive  paperwork. 


132 

Another  disincentive  to  private  physicians  is  the  difficulty  of  obtaining  Medicaid- 

Sriced  vaccine  for  Medicaid  patients.  Connaught  believes  that  Medicaid-eligible  chil- 
ren  should  receive  Medicaid-priced  vaccine  and  has  a  long-standing  commitment 
to  work  on  a  State-by-State  basis  to  accomplish  that  goal.  To  that  end,  we  are  offer- 
ing several  States  a  Medicaid  Replacement  Program  that  seeks  to  provide  public 
sector  vaccine  to  private  physicians  for  their  Medicaid-eligible  patients  in  as  effi- 
cient a  way  as  possible.  In  addition,  we  believe  that  states  should  be  able  to  buy 
vaccine  for  all  Medicaid-eligible  children  at  reduced  prices. 

Connaught  also  believes  that  all  necessary  childhood  vaccines  should  be  made  ac- 
cessible to  the  public  sector  at  a  discounted  price  and  that  appropriations  should 
cover,  for  use  by  the  medically  needy,  all  vaccines — including  Haemophilus 
Influenzae  type  b  and  Hepatitis  B— -that  are  indicated  for  use  and  recommended  by 
the  Public  Health  Service  8  Immunization  Practices  Advisory  Committee  (ACIP)  and 
by  the  Red  Book  Committee  of  the  American  Academy  of  Pediatrics.  Currently,  that 
is  not  the  case. 

6.  PRIVATE  INSURANCE  COVERAGE  FOR  IMMUNIZATIONS 

In  the  private  sector,  much  needs  to  be  done  to  encourage  timely  immunization. 
While  many  managed  health  care  programs  now  cover  immunizations,  less  than  half 
of  conventional,  employment-based  carriers  do  so.  As  a  result,  many  underinsured 

gatients  must  find  their  way  to  the  public  health  sector  for  immunizations.  The 
ommonwealth  of  Pennsylvania  has  addressed  this  issue  by  passing  a  law  that  re- 
?|uires  all  commercial  group  and  individual  policies  that  provide  medical  coverage 
or  dependent  children  to  provide  first-dollar  coverage  for  immunizations,  including 
professional  fees  for  administering  the  vaccines.  Benefits  for  immunization  services 
are  exempt  from  deductible  or  dollar-limit  provisions.  We  think  this  is  a  model  ap- 
proach that  can  have  a  significant  impact  on  reducing  the  cost  of  immunization  to 
the  Federal  and  State  Governments. 

I.  SUMMARY 

We  applaud  the  Clinton  administration's  intention  to  ultimately  include  childhood 
immunizations  as  part  of  a  basic  benefits  package  under  Health  Care  Reform.  How- 
ever, using  scarce  taxpayers'  dollars  as  a  stopgap  measure  with  no  proven  utility 
in  raising  immunization  levels  will  have  serious  long-term  repercussions  that  could 
jeopardize  our  entire  industry. 

Among  Thomas  Jefferson's  private  papers  is  a  letter  he  wrote  to  Dr.  Edward  Jen- 
ner,  the  father  of  vaccination  who  is  best  known  for  inoculating  himself  with  the 
first  smallpox  vaccine.  Jefferson  describes  Jenner's  discovery  of  the  first  vaccine  by 
saying  that  Medicine  has  never  before  produced  any  single  improvement  of  such 
utility1*. 

It  is  in  this  spirit  of  worthwhile  innovation  that  Connaught  must  be  allowed  to 
continue  to  be  responsible  to  the  children  in  the  United  States  and  around  the 
world.  The  only  way  we  can  do  this  is  to  continue  developing  new  and  improved  vac- 
cines. 

A  fundamental  drawback  of  the  universal  purchase  concept  is  that  it  does  not  ac- 
count for  the  economic  realities  that  influence  manufacturers  to  remain  in  the  vac- 
cine market,  adjust  prices  in  accordance  with  the  demands  of  competition,  and  pur- 
sue vaccine  development  and  research.  If  most  or  all  pediatric  vaccines  were  pur- 
chased under  Federal  or  State  contracts  at  bulk -purchase  discounts,  a  company  that 
did  not  win  a  contract  award  for  a  year  or  2  would  be  unlikely  to  continue  to  invest 
in  vaccine  development  or  to  a  commitment  of  manufacturing  resources. 

Risks  are  extremely  high  and  returns  are  too  small  to  justify  such  investment. 
Thus,  the  result  would  likely  be  the  elimination  of  manufacturers  from  the  competi- 
tive market,  which  in  turn  would  eliminate  incentives  for  competitive  price  reduc- 
tion and  increase  the  risk  of  vaccine  shortages.  In  addition,  the  prospect  of  insuffi- 
cient returns  on  investment  will  discourage  companies  from  engaging  in  vaccine  re- 
search and  development  and  may  diminish  efforts  to  improve  existing  or  develop 
new  vaccines.  Vaccine  prices  reflect  the  ever  increasing  manufacturing  costs  but  also 
the  need  to  achieve  reasonable  returns  on  previous  vaccine  research  and  develop- 
ments. We  are  on  the  verge  of  an  explosion  of  new  vaccine  technology,  with  new 
combination  vaccines  that  protect  against  more  diseases  with  fewer  injections,  and 
with  many  new  products  in  the  pipeline  such  as  those  against  otitis  media  and  Res- 
piratory Synctial  Virus  infection,  the  leading  cause  of  childhood  hospitalization  in 
this  country. 

Unfortunately,  the  universal  purchase  program  proposed  in  the  Child 

Immunization  Act,  may  put  an  end  to  this  kind  of  research  and  hurt  considerably 
companies  like  Connaught— which  focuses  almost  entirely  on  vaccines — in  the  proc- 


133 

ess.  Even  more  unfortunate  is  the  fact  that  universal  purchase  will  not  fix  the  prob- 
lem. This  Kind  of  expenditure  of  taxpayers'  dollars  is  both  unwise  and  unjustifiable. 
We  hope  that  the  members  of  these  committees  will  look  beyond  universal  pur- 
chase toward  legislation  that  will,  in  fact,  break  down  the  barriers  to  pediatric  im- 
munization and  achieve  the  goal,  which  we  all  share,  of  full  immunization  of  every 
child  by  two.  Thank  you. 

Mr.  Waxman.  Dr.  Saldarini. 

Dr.  Saldarini.  Thank  you,  and  good  afternoon. 

I  am  Ron  Saldarini,  president  of  Lederle-Praxis  Biologicals.  I 
have  submitted  written  testimony,  and  I  don't  intend  to  read  it;  I 
would  just  like  to  make  a  few  additional  comments  for  the  record. 

As  I  came  into  this  meeting  room  today,  it  occurred  to  me  that 
I  have  been  associated  with  the  vaccine  business  for  the  last  8 
years,  and  I  believe  I  have  been  participating  in  some  type  of  com- 
mittee hearing  like  this  probably  five  or  six  times  over  the  past  8 
years.  These  are  very  meaningnil  subjects  and  very  important  to 
the  health  and  welfare  of  our  Nation's  children. 

One  of  the  things  that  was  always  consistent  as  I  look  back  on 
those  committee  hearings  was  the  tone  that  one  always  heard  from 
people  representing  public  interest  groups,  people  representing  the 
government,  and  even  people  representing  the  industry,  and  that 
tone  was  one  of  great  expectation. 

I  think  uniformly  throughout  those  hearings,  everyone  expected 
that  because  we  were  now  in  a  new  era,  which  we  refer  to  as  "bio- 
technology," that  the  promise  for  vaccine  development  was  really 
very,  very  big,  and  people  felt  good  about  it.  And  everybody  looked 
to  the  industry  to  help  provide  those  new  vaccine  developments. 

And  I  guess  as  we  have  been  deliberating  these  very  important 
immunization  initiatives  over  the  past  several  years,  one  thing  is 
very  clear — the  industry,  and  Lederle-Praxis,  to  be  sure,  in  particu- 
lar, has  not  been  idle;  in  fact,  we  have  been  very  busy.  And  we 
have  reached  or  achieved  some  of  these  expectations  because  just 
my  own  company  has  introduced  three  new  vaccines  in  the  last  4 
years. 

We  introduced  a  brand  new  one,  called  haemophilus  influenzae 
type  B,  in  1990.  We  know  that  it  has  already  significantly  impacted 
the  total  economic  costs  associated  with  disease  to  the  tune  of 
about  $2.5  billion  a  year,  which  is  Centers  for  Disease  Control  sta- 
tistics. 

We  know  that  we  have  reached  a  noticeable  improvement  in  per- 
tussis immunization,  which  has  been  a  source  of  concern  for  many 
of  these  committees  over  the  past  10  years,  and  we  have  introduced 
a  new  vaccine  for  that,  called  acellular  pertussis  vaccine.  What  is 
becoming  very  clear  is  that  as  biotechnology  moves  us  forward, 
there  will  be  many  new  product  introductions,  and  we  will  run  out 
of  arms  and  legs  on  a  child,  and  therefore,  we  must  find  better 
ways  to  deliver  the  product,  and  that  has  been  referred  to  often  as 
"combination  products."  And  we  have  just  introduced  our  first  com- 
bination product,  which  combines  real  childhood  vaccines— diphthe- 
ria, tetanus  and  pertussis — with  haemophilus  influenzae,  so  that 
we  have  effectively  reduced  the  number  of  immunizations  required 
from  eight  tc  four,  and  that  has  iust  happened  in  this  last  month. 

So  I  am  trying  to  emphasize  the  fact  that  I  feel  that  this  com- 
pany and  this  industry  have  had  a  very  successful  relationship,  we 
nope,  and  we  feel  we  nave  been  faithful  to  the  public  sector  by  of- 


134 

fering  very,  very  low  cost  products  to  the  public  sector  so  they  can 
be  directed  to  those  parties  who  truly  are  needy.  And  we  have  of- 
fered at  least  half  of  our  volume  in  that  cause  of  everything  that 
we  produce. 

We  feel  we  have  had  an  effective  partnership  with  the  private 
sector  as  well,  because  we  spend  a  lot  of  time  and  effort  not  only 
trying  to  provide  pediatricians  with  an  understanding  of  what  is 
coming  in  vaccine  development,  but  also  with  the  educational  mate- 
rials that  are  required  to  help  them  relate  to  their  patient  base, 
which  is  very,  very  important. 

And  yet  throughout  all  of  this,  we  are  faced  with  a  constant  con- 
cern over  the  pricing  of  these  products,  and  this  is  particularly  true 
for  existing  products.  And  I  wouldn't  want  to  mislead  anybody  and 
say  that  the  prices  of  these  products  has  not  gone  up;  in  fact,  they 
have  gone  up.  And  I  would  also  add  that  in  large  measure,  the 
moneys  that  were  in  those  prices  that  people  constantly  refer  to 
have  been  redirected  into  this  business. 

In  my  company,  just  as  with  my  colleagues,  this  redirection  has 
indeed  resulted  in  three  new  vaccines  in  the  last  4  years,  and  has 
resulted  in  a  measurable  improvement  in  research  and  develop- 
ment pipelines  which  will  take  advantage  of  the  biotechnology  era, 
and  over  the  next  several  years,  we  are  going  to  see  many,  many 
more  products  come  this  way  as  a  result  of  this  reinvestment. 

I  feel  that  if  we  move  in  the  direction  that  this  bill — at  least,  the 
part  of  this  bill  that  deals  with  universal  purchase — takes  us,  it 
will  have  an  impact  on  our  overall  research  and  development  effort. 
We  feel  the  marketplace  is  a  better  place  than  having  the  govern- 
ment making  decisions  with  respect  to  vaccine  products,  vaccine  re- 
search, the  way  we  do  clinical  studies,  the  kinds  of  investments  we 
make,  and  we  think  it  will  also  have  a  potentially  negative  impact 
on  the  overall  capital  market  in  terms  of  attracting  investment. 

So  I  would  argue  that  historically  and  currently,  we  are  the 
world's  leader  in  vaccine  innovation.  Please  consider  this  bill  care- 
fully because  it  may  not  keep  us  that  way. 

I  would  add  one  more  point 

Mr.  Waxman.  Dr.  Saldarini,  the  rest  of  your  statement  will  be  in 
the  record 

Dr.  Saldarini.  If  I  may,  Congressman,  one  more  point,  because 
it  is  ironic  to  me  that  the  Clinton  administration  has,  in  our  opin- 
ion, wisely  rejected  a  single-payer  approach  for  its  health  care  re- 
form initiatives,  and  it  has  opted  to  go  with  the  competitive  mar- 
ketplace—that is,  in  everything  but  vaccines.  There,  where  we  have 
demonstrated  our  capability  to  deliver  new  products,  there,  the  sin- 
gle-payer approach  seems  to  be  important,  and  I  would  like  us  to 
give  that  consideration. 

Thank  you,  sir. 

Mr.  Waxman.  Thank  you,  Dr.  Saldarini. 

[The  prepared  statement  of  Dr.  Saldarini  follows:] 

Prepared  Statement  of  Ronald  Saldarini 

I  am  Ron  Saldarini,  president  of  Lederle-Praxis  Biologicals,  a  Division  of  the 
American  Cyanamid  Company.  Lederle-Praxis  is  one  of  two  remaining  U-S.-based 
vaccine  manufacturing  companies.  Our  business  is  promotion  of  health  through  pre- 
vention, for  the  moment  mostly  in  the  form  of  childhood  vaccines  but  with  the  hope 
of  developing  an  array  of  effective  adult  vaccines  in  the  future. 


135 

Lederle-Praxis  is  proud  of  its  accomplishments  in  childhood  immunization.  At 
present,  it  is  the  sole  supplier  of  oral  polio  vaccine,  and  one  of  two  companies  pro- 
viding diphtheria,  tetanus  and  pertussis  vaccines,  combined  into  one  DIP  shot.  We 
were  the  first  company  to  introduce  an  acellular  pertussis  product  to  the  American 
market  as  a  result  of  demands  from  pediatricians,  parents  and  the  public  health 
community  for  a  less  reactive  vaccine  to  prevent  whooping  cough.  In  addition,  we 
received  in  1990  the  first  approval  for  a  vaccine  for  infants  to  prevent  meningitis 
caused  by  the  Haemophilus  influenzae  type  B  organism — the  first  new  infant  vaccine 
since  oral  polio  vaccine,  30  years  earlier. 

The  Haemophilus,  or  Hib,  vaccine  provides  dramatic  evidence  of  the  value  of  child- 
hood immunization  and  the  necessity  for  continued  research  and  development  ef- 
forts. Meningitis  resulting  from  infection  with  the  Haemophilus  bacterium  was  the 
cause  of  about  800  infant  deaths  annually  and  about  the  same  number  of  cases  of 
mental  retardation  or  other  permanent  neurological  damage.  The  government's  own 
statistics  from  the  Centers  for  Disease  Control  (CDC)  were  that  the  disease  resulted 
in  economic  loss  to  the  United  States  of  $2.5  billion  every  year.  It  was  only  through 
new  biotechnology  techniques  that  we  and  other  companies  could  find  a  way  to  stim- 
ulate the  immature  immune  systems  of  infants  to  create  protective  antibodies 
against  this  disease.  Once  the  vaccine  was  approved,  the  disease  was  virtually 
eradicated  over  the  course  of  about  a  year  and  a  naif. 

Just  a  few  weeks  ago  we  received  the  good  news  from  the  Food  and  Drug  Admin- 
istration that  we  had  received  approval  for  a  combined  DTP  and  Hib  vaccine,  again 
the  first  such  product  to  be  approved.  This  combination  of  four  antigens  will  effec- 
tively halve  the  number  of  injections  required  to  immunize  children  against  those 
diseases.  Against  this  backdrop  of  success  in  our  research  program  and  in  introduc- 
tion of  new  products,  we  appreciate  the  invitation  to  address  this  joint  hearing,  but 
we  approach  this  hearing  with  mixed  emotions.  As  someone  who  has  spent  a  num- 
ber of  years  in  the  vaccine  business,  I  am  gratified  to  see  the  attention  which  child- 
hood immunization  is  receiving  in  this  Administration.  Finally,  policymakers  in 
Washington  and  elsewhere,  along  with  the  media  and  the  public  generally,  seem  to 
appreciate  the  value  of  prevention  and,  more  specifically,  of  immunization  as  a  cost- 
effective  strategy  for  health  care.  However,  while  the  spotlight  on  immunization  is 
welcome,  we  fear  that  politics,  public  relations  and  symbolism  may  be  pushing  aside 
sound  policy  considerations  in  addressing  what  everyone  agrees  is  a  distressing 

Sroblem — the  chronic  low  rates  of  age-appropriate  immunization  among  our  chil- 
ren,  particularly  in  the  inner  cities  and  other  challenging  locations. 
The  legislation  sponsored  by  Congressman  Waxman  and  others  in  the  House  and 
by  Senator  Kennedy  and  Senator  Riegle  in  the  Senate  is  at  the  root  of  our  concern. 
Lederle-Praxis  supports  in  concept  virtually  all  the  provisions  of  this  legislation.  We 
endorse  improved  tracking,  outreach  and  delivery  oi  vaccines  as  a  means  of  enhanc- 
ing immunization  rates  across  the  board  and  especially  in  those  hard-to-reach  inner 
city  or  remote  rural  sites.  In  fact,  the  only  significant  portion  of  the  legislation 
which  we  cannot  support  is  the  provision  for  the  government  to  purchase  all  child- 
hood vaccines. 
As  we  have  said  many  times  before,  universal  purchase  is  not  the  answer  to  the 

Stroblem  of  low  immunization  rates.  If  it  were,  the  11  States  currently  following  that 
brmula  would  demonstrate  markedly  better  immunization  rates,  as  well  as  lower 
disease  rates.  The  reverse  is  true.  Immunization  rates  are  not  substantially  better 
in  universal  purchase  States,  and  in  some  notable  instances,  disease  rates  are  high- 
er in  those  States  purchasing  all  vaccine  for  distribution  free-of-charge  not  only 
through  public  health  clinics  but  also  through  private  pediatricians'  offices. 

Aside  from  this  overwhelming  public  policy  reason  for  not  pursuing  universal  pur- 
chase, we  believe  that  the  current  environment  of  vigorous  research  and  develop- 
ment cannot  continue  if  we  have  only  one  customer  and  that  is  the  Federal  Govern- 
ment. Our  specific  concerns  about  the  universal  purchase  proposal  are  as  follows: 
As  drafted,  the  legislation  does  not  address  the  real  problems  underlying  low  im- 
munization rates.  As  noted  in  a  recently  released  GAO  report  requested  by  the 
Chair  of  the  Senate  Finance  Committee,  improvement  in  immunization  programs 
depends  on  (1)  education  of  parents,  (2)  tracking  of  each  child's  immunization  status 
and  (3)  follow-up  with  children  requiring  further  immunization. l  Even  though  the 
legislation  deals  with  funding  for  each  of  these  matters,  there  is  no  guarantee  that 
the  States  receiving  grant  funds  will  approach  these  tasks  in  a  systematic  coordi- 
nated fashion.  Universal  purchase  is  little  more  than  a  diversion  from  these  fun- 


1GAO'HRD-93-41,  Report  to  the  Chairman,  Committee  on  Finance,  U.S.  Senate,  "Childhood 
Immunization:  Opportunities  to  Improve  Immunization  Rates  at  Lower  Cost,"  (March  1993). 


136 

damental  undertakings,  and  there  is  no  evidence  to  lead  one  to  believe  that  it  will 
measurably  enhance  the  immunization  effort. 

The  universal  purchase  proposal  is  antithetical  to  the  Administration's  health 
care  reform  initiative.  We  have  been  told  that  universal  purchase  is  a  transitional 
device,  complete  with  a  sunset  provision,  but  we  believe  it  in  fact  represents  a  de- 
structive departure  from  the  philosophy  underlying  the  Administration's  health  care 
reform  initiative.  The  Clinton  administration  has  expressly  rejected  a  single-payer 
system  and  has  instead  chosen  a  market-driven  managed  competition  system.  Hav- 
ing rejected  a  single-purchaser  model  for  the  overall  health  care  system,  however, 
the  Administration  has  chosen  to  make  the  Federal  Government  the  sole  purchaser 
of  vaccines.  To  render  the  government  our  sole  customer  is  effectively  to  make  in- 
dustry a  prisoner  of  bureaucratic  decisionmaking.  Why  take  this  extraordinary  step 
with  a  segment  of  the  pharmaceutical  industry  which  has  historically  provided  the 
public  sector  with  one-half  of  all  product  needs  at  sharply  discounted  prices  in  order 
to  ensure  that  the  needy  would  be  served?  It  contradicts  every  impulse  that  we  have 
come  to  expect  from  the  Administration's  health  care  deliberations.  Regulate  us  if 
you  must,  but  do  so  in  the  context  of  larger  health  care  reform  where  those  fun- 
damental marketplace  principles  may  be  allowed  to  operate. 

Universal  purchase  of  childhood  vaccines  at  this  juncture  may  create  an  unin- 
tended subsidy  for  the  insurance  industry  and  may  provide  disincentives  to  insur- 
ance coverage  for  well-baby  care.  Statistics  indicate  that  about  one-third  of  insur- 
ance policies  currently  provide  for  well-baby  care,  including  immunizations.  If  vac- 
cines are  now  to  be  provided  free  of  charge,  the  insurers  will  be  absolved  of  a  cost 
which  they  have  contractually  agreed  to  bear.  More  importantly,  the  pressure  for 
mandated  first-dollar  coverage  of  well-baby  care,  including  immunizations,  may  be 
decreased  by  enactment  of  this  legislation.  As  proponents  of  the  legislation  would 
agree,  there  are  substantial  reasons  to  mandate  insurance  coverage  of  well-baby 
care  that  includes  immunizations. 

The  legislation  creates  a  new  entitlement  for  middle-and  upper-income  parents  at 
a  time  when  other  entitlements  are  at  risk.  Under  current  budget  rules,  $90  billion 
in  entitlements  are  slated  for  reduction  over  the  next  five  years,  roughly  the  same 
period  in  which  this  legislation  would  spend  almost  $5  billion  to  provide  free  vac- 
cinations to  all  children,  regardless  of  wealth.  The  more  than  $1  billion  a  year  that 
is  proposed  for  universal  purchase  could  go  far  toward  any  of  the  following 

priority  items  to  serve  the  needs  of  the  poor:  full  funding  of  Head  Start;  full  fund- 
ing of  WIC:  or  bringing  Medicaid  coverage  up  to  185  percent  of  poverty.  If  this  un- 
precedented shift  of  public  resources  from  the  needy  to  the  'well-to-do  had  been  pro- 
posed by  a  Republican  Administration,  there  would  be  well-justified  howls  of  protest 
from  Congress,  as  well  as  from  a  variety  of  public  interest  advocates. 

Universal  purchase  is  not  necessary  to  facilitate  a  tracking  program  which  in- 
cludes private  pediatricians.  Among  the  rationales  offered  for  universal  purchase  is 
the  perception  that  private  physicians  must  be  enticed  to  participate  in  a  Federal 
tracking  system  by  the  lure  of  free  vaccines.  Personally,  I  am  not  prepared  to  accept 
this  cynical,  defeatist  attitude.  Physicians  are  obliged  as  part  of  their  duty  to  pa- 
tients and  to  the  public  health  to  participate  in  various  reporting  programs,  and 
there  is  no  reason  to  believe  that  pediatricians  would  resist  involvement  in  this  very 
important  initiative.  Most  private  pediatricians'  offices  now  have  computer  capacity, 
and  Lederle-Praxis  has  offered  to  design  and  provide  free  of  charge  to  pediatricians 
a  software  package  that  should  be  compatible  with  the  program  being  developed  by 
CDC  for  tracking  purposes. 

Research  and  development  efforts  will  be  seriously  affected  by  universal  purchase. 
Virtually  every  vaccine  company  in  this  market  could  offer  impressive  reports  of 
their  research  and  development  programs,  in  terms  of  both  past  successes  and  fu- 
ture prospects.  We  at  Lederle-Praxis  are  confident  of  our  capacity  to  bring  to  market 
a  very  complicated,  multi-antigen  product  to  prevent  acute,  recurring  ear  infection, 
one  of  the  most  common  and  costly  reasons  for  visits  to  pediatricians  during  the 
early  years  of  childhood.  We  are  not,  however,  confident  that  funding  for  such 
projects  will  be  available  if  the  government  is  our  single  customer.  There  is  no  need 
to  recount  the  numerous  examples,  experienced  by  every  company,  of  instances  in 
which  inefficiencies  or  bureaucratic  thinking  by  the  government  has  impeded  our 
ability  to  provide  safe  and  effective  products  to  the  public.  If  the  government,  rather 
than  the  marketplace,  becomes  the  arbiter  of  manufacturing  protocols,  research  pri- 
orities, and  investment  decisions,  both  quality  and  progress  will  suffer. 

At  the  outset,  I  mentioned  the  fact  that  our  Hib  vaccine,  introduced  in  1990,  was 
the  first  new  infant  immunization  for  30  years.  During  that  30-year-period,  Lederle- 
Praxis  and  other  manufacturers  competently  and  reliably  produced  the  traditional 
regimen  of  childhood  vaccines — OPV,  DTP  and  MMR.  Only  with  the  advent  of  bio- 
technology have  we  been  able  to  expand  the  universe  of  diseases  preventable 


137 

through  childhood  vaccines.  I  fear  that  adoption  of  a  universal  purchase  program, 
under  which  the  government  is  our  single  customer,  will  return  us  to  the  relative 
dark  ages  of  vaccine  development.  I  cannot  envision  a  system  in  which  the  govern- 
ment participates  with  today's  vaccine  developers,  and  essentially  overrides  the 
marketplace,  in  making  investment,  research  and  product  decisions  except  by  ref- 
erence to  that  earlier  period  when  research  and  development  took  a  backseat  to 
mere  manufacturing. 

We  at  Lederle-Praxis  believe  that  many  more  diseases  of  childhood — and  for  that 
matter  of  adults— can  be  conquered  through  immunization.  The  promise  of  the  fu- 
ture will  not  be  realized  if  we  sacrifice  continued  progress  for  short-term  political 
and  symbolic  gains.  In  the  strongest  possible  terms,  I  urge  Members  of  Congress 
to  consider  carefully  the  relative  benefits  and  risks  of  this  ill-conceived  strategy. 

My  company  could  understand  a  push  for  universal  purchase  if  history  were  dif- 
ferent. We  could  understand  it: 

— if  the  government  had  any  reason  to  say  that  we  had  ever  been  a  bad  part- 
ner in  the  effort  to  immunize  our  nation's  children; 

— if  we  had  sought  to  gouge  the  public  sector  with  high  prices; 

— if  we,  like  foreign-based  manufacturers,  had  abandoned  the  US.  market 
when  we  were  no  longer  able  to  obtain  liability  insurance  in  the  mid-1980's; 

— if  we  had  ever  failed  to  respond  to  the  government's  request  to  shift  produc- 
tion or  provide  vaccine  when  shortages  threatened; 

— if  there  were  any  reason  to  believe  that  our  research  and  development  pro- 
grams were  broken  and  in  need  of  a  government  fix;  or 

— if  any  State  had  ever  markedly  improved  its  immunization  rates  by  adopt- 
ing universal  purchase. 

Instead,  we  see  a  situation  in  which  we  have  been  a  faithful  partner  to  the  Fed- 
eral Government  and  a  good  friend  to  individual  States.  (Even  States  like  Hawaii 
and  South  Carolina,  cited  by  the  Administration  as  examples  of  States  we  denied 
discounted  vaccines,  would  agree  that  we  willingly  and  openly  shared  our  views 
with  them,  and  we  believe  we  earned  their  respect  and  in  all  likelihood  could  reach 
accommodation  with  them.) 

We  have  regularly  supplied  the  government  with  half  the  country's  vaccine  needs 
at  sharply  reduced  prices,  have  held  relatively  steady  our  private  sector  prices  in 
recent  years,  and  have  pledged  to  freeze  current  prices.  We  have  remained  in  a  very 
difficult  market  when  others  have  left,  and  we  would  like  to  think  we  will  still  be 
here  when  they  have  left  again.  Our  research  and  development  are  second  to  none. 
We  have  not  panicked,  or  carped  or  bolted  the  market  when  the  government  let 
lapse  the  excise  tax  which  funds  the  compensation  system  that  is  critical  for  large 
corporate  enterprises  lacking  liability  coverage. 

In  short,  we  have  given  just  about  everything  the  government  has  asked.  But  we 
draw  the  line  when  the  government  says  it  wants  to  own  us,  which  is  the  effect  of 
universal  purchase.  The  immunization  system  in  this  country  may  be  broken,  but 
not  with  respect  to  quality  of  vaccines,  assuredness  of  supply  at  reasonable  prices, 
or  prospects  for  innovation  and  improvement.  Let  us  fix  the  delivery  system  and  not 
risk  destroying  those  parts  of  the  immunization  program  that  have  worked  well  and 
will  continue  to  do  so  if  the  government  permits. 

Mr.  Waxman.  Mr.  Gamier. 

Mr.  Garndsr.  Thank  you,  Mr.  Chairman,  and  members  of  the 
committee  and  subcommittee.  My  name  is  Jean-Pierre,  and  I  am 
president  of  SmithKline  Beecham  Pharmaceuticals  for  North  Amer- 
ica. 

SmithKline  Beecham  is  a  transnational  health  care  company 
whose  principal  activities  are  the  discovery,  development,  manufac- 
ture and  marketing  of  pharmaceuticals,  vaccines,  and  other  health 
care  goods  and  services. 

As  far  as  vaccines  are  concerned,  we  are  a  major  supplier  of  polio 
and  measles  vaccines  outside  the  United  States,  and  we  market 
Engerix-B,  the  first  biotechnology-derived  hepatitis  B  vaccine  in 
the  U.S.  and  around  the  world.  Every  second  of  every  day,  15  peo- 
ple around  the  world  are  inoculated  with  one  of  our  vaccines. 

We  consider  our  R  and  D  efforts  second  to  none.  We  are  working 
on  Lyme  disease,  AIDS,  and  we  recently  introduced  the  world's 


138 

first  hepatitis  A  vaccine  in  Europe.  As  you  know,  hepatitis  A  is  a 
major  killer  in  the  world.  And  we  presently  plan  to  offer  a  full 
range  of  pediatric  vaccines  in  this  country.  So  we  are  a  fairly  new 
comer  in  the  U.S.  in  terms  of  pediatric  vaccines,  and  therefore  I 
think  we  bring  a  different  perspective. 

We  believe  we  bring  in  fact  a  useful  worldwide  perspective  on  the 
types  of  measures  that  will  help  achieve  the  goals  we  all  share. 

I  am  pleased  to  appear  before  you  today  as  you  consider  an  issue 
of  great  importance — the  immunization  of  our  children  by  the  age 
of  2.  I  will  identify  the  approaches  we  favor,  and  comment  on  those 
which  we  believe  need  modification. 

Few  tasks  are  more  important  than  the  one  before  us,  because 
nothing  speaks  more  for  any  Nation  than  how  well  it  protects  its 
children.  America's  record  is  not  what  it  can  and  must  be.  There 
is  no  question  that  we  can  get  the  job  done;  we  have  a  world  class 
vaccine  industry,  dedicated  health  professionals,  sophisticated  dis- 
tribution networks,  and  the  economic  capacity  to  do  it. 

SmithKline  Beecham  applauds  the  objectives  of  the  universal  im- 
munization proposal,  and  we  favor  many  aspects  of  the  administra- 
tion's proposal,  particularly  the  following:  establishment  of  an  im- 
munization tracking  system;  enhancing  education  and  outreach 
programs;  securing  the  National  Vaccine  Injury  Compensation  Pro- 
gram by  making  it  permanent,  and  finally,  continuing  vaccine  in- 
frastructure enhancements. 

While  we  support  these  important  points,  there  are  other  areas 
where  we  believe  modifications  are  in  order.  Universal  government 
purchase  creates  several  concerns. 

First,  universal  purchase  would  eliminate  the  private  market 
which,  incidentally,  under  managed  care,  for  instance — and  soon, 
managed  competition— works  quite  well  in  ensuring  immunization 
of  young  children.  One  need  only  look  at  the  Kaiser  Permanente 
program  in  California,  where  childhood  immunization  at  the  age  of 
2  is  at  95  percent. 

Second,  elimination  of  the  private  market  will  greatly  increase 
government  outlays  for  vaccines,  first  by  reimbursing  vaccines  for 
many  Americans  who  could  afford  them,  and  second  because  prices 
to  the  public  sector — currently,  the  CDC  prices — which  are  now 
subsidized  by  the  higher  prices  derived  from  the  private  sector,  will 
indeed  increase. 

Sole-source  procurement  will  create  a  major  barrier  to  entry  for 
new  players  in  the  vaccine  market  such  as  SmithKline  Beecham. 
If  universal  purchase  is  coupled  to  a  winner-take-all  bidding  ap- 
proach, the  nature  of  vaccine  manufacturing  is  such  that  the  firms 
that  lose  the  bid  will  exist  the  market.  Vaccine  production  cannot 
be  shut  down  for  months  or  years  and  restarted  on  the  next  bid. 

Creation  of  a  system  giving  all  the  business  to  a  sole-source  sup- 
plier could  lead  to  a  shortage  of  essential  vaccines  if  that  supplier 
encounters  production  or  quality  control  problems.  Precisely  this 
has  happened  in  the  recent  past. 

The  current  proposal  also  fails  to  address  the  inadequate  com- 
pensation of  physicians  who  are  expected  to  immunize  Medicaid 
beneficiaries.  This  has  resulted  in  some  patients  being  shifted  from 
private  physicians'  offices  to  public  clinics.  As  a  consequence,  many 
children  are  not  being  immunized. 


139 

The  March  1993  GAO  report  notes  that,  "even  when  States  have 
established  vaccine  replacement  programs,  not  all  physicians  have 
participated  because  of  what  they  perceive  as  very  inadequate  re- 
imbursement for  vaccine  administration.'' 

And  finally,  the  proposal  should  be  changed  to  include  an  impor- 
tant role  that  should  be  performed  by  the  private  insurance  mar- 
ket. Insurance  companies  should  be  required  to  contribute  to  the 
solution  by  covering  the  immunization  of  children  they  already  in- 
sure. Plus  it  is  good  business  for  them;  they  avoid  costs  in  the  fu- 
ture. 

While  we  do  not  endorse  every  facet  of  the  administration's  pro- 
posal, we  do  not  favor  the  status  quo.  Rather  than  turning  the  in- 
dustry on  its  head,  we  essentially  would  like  to  talk  about  a  better 
approach.  Let  me  summarize  SmithKline  Beecham's  recommenda- 
tions on  how  each  of  these  issues  may  be  addressed. 

First  of  all,  we  advocate  that  CDC  prices — currently  the  lowest 
prices  in  the  marketplace — be  made  available  to  all  State  Medicaid 
programs. 

We  recommend  that  the  CDC  winner-take-all  system  be  replaced 
by  an  apportioned  bidding  system,  allocating  a  share  of  the  bid  to 
all  bidders  that  meet  the  lowest  price. 

We  support  expanded  purchase  to  provide  Medicaid  immuniza- 
tion coverage  for  all  children  whose  family  incomes  are  185  percent 
of  poverty.  We  also  support  coverage  of  the  physician  fees  to  ensure 
needed  follow-up  visits  to  complete  immunizations. 

We  recommend  that  private  insurance  be  required  to  cover  all 
American  Academy  of  Pediatrics  recommended  childhood  immuni- 
zations and  that  preventive  care  services  be  made  part  of  the  basic 
health  care  benefit. 

Our  proposal  achieves  the  results  that  the  administration  seeks, 
but  at  a  much  lower  cost.  If  the  Federal  Government  were  to  pur- 
chase vaccines  for  all  children,  and  if  a  95  percent  immunization 
rate  were  reached,  we  estimate  that  the  cost  would  be  around  $700 
million  to  $1  billion  annually.  Under  our  proposal,  the  vaccine  cost 
would  be  $240  million,  a  saving  of  more  than  half  a  billion  dollars 
every  year.  The  savings  could  be  applied  to  the  public  education  ef- 
fort, the  infrastructure  and  tracking  programs,  and  to  Medicaid  re- 
form and  expansion. 

Contrary  to  the  universal  purchase,  our  proposal  preserves  mul- 
tiple vaccine  developers  and  manufacturers,  therefore  avoiding  po- 
tential serious  disruptions  of  supply.  Our  proposal  also  focuses  on 
the  root  causes  of  low  vaccination  rates,  at  a  substantially  lower 
price  tag  for  the  taxpayers. 

Our  proposal  represents  a  workable  plan  for  achieving  full  immu- 
nization of  our  children,  while  avoiding  the  pitfalls  of  universal 
purchase  and  the  severe  inadequacies  of  the  current  system. 

This  completes  my  testimony.  Thank  you  for  your  attention. 

The  Chairman.  Tnank  you  very  much. 

[The  prepared  statement  of  Mr.  Gamier  follows:] 


140 

Prepared  Statement  of  J.P.  Garnier 

Chairmen  and  Members  of  the  Committee  and  Subcommittee,  I  am  Jean-Pierre 
Garnier,  President  c  f  SmithKline  Beecham  Pharmaceuticals-North  America. 

SmithKline  Beecham  is  a  health  care  company  with  annual  sales  of  more  than  $9 
billion.  Our  principal  activities  are  the  discovery,  development,  manufacture  and 
marketing  of  human  and  animal  pharmaceuticals,  over-the-counter  medicines  and 
health-related  conrumer  products  and  clinical  laboratory  services. 

We  are  a  major  supplier  of  polio  and  measles  vaccines  outside  the  United  States, 
and  we  market  £<igcrix-B.  our  hepatitis  B  vaccine  in  the  U.S.  and  around  the 
world.  Every  second  of  every  day,  fifteen  people  around  the  world  are  inoculated 
with  one  of  our  vaccines.  Recently  we  introduced  the  world's  first  hepatitis  A 
vaccine  in  Europe  and  we  presently  plan  to  offer  a  full  range  of  vaccines  in  this 
country. 

We  believe  we  bring  a  useful  worldwide  perspective  on  the  types  of  measures  that 
will  help  achieve  the  goals  we  all  share. 

I  am  pleased  to  appear  before  you  today  as  you  consider  an  issue  of  great 
importance  --  the  immunization  of  our  children  by  the  age  of  two.  I  will  identify 
the  approaches  we  favor,  and  comment  on  those  which  we  believe  need 
modification. 

Few  tasks  are  more  important  than  the  one  before  you,  because  nothing  speaks 
more  for  any  natior  than  how  well  it  protects  its  children.  America's  record  is  not 
what  it  can  and  ir  list  be.  We  have  much  to  do  if  we  are  to  look  back  with  pride 
at  the  end  of  this  decade  to  a  nation  whose  children  are  protected  as  well  as  any 
in  the  world  against  communicable  illnesses. 

There  is  no  question  that  we  can  get  the  job  done.  We  have  a  world  class  vaccine 
industry,  dedicated  health  professionals,  sophisticated  distribution  networks  and 
the  economic  car.Jtcity  to  do  it. 

SmithKline  Beecham  applauds  the  objectives  of  the  universal  immunization 
proposal,  and  we  favor  many  aspects  of  the  Administration's  proposal,  particularly 
the  following: 

Establishment  of  an  immunization  tracking  system  through  state  registries  to 
ensure  that  children  receive  their  scheduled  immunizations  at  the  earliest 
appropriate  age. 

Enhancing  education  and  outreach  to  improve  parents'  awareness  of  the 
importance  of  immunization. 


141 

Securing    the    Mational   Vaccine   Injury   Compensation    Program    by    making    it 
permanent. 

Continuing  vaccine  infrastructure  enhancements. 

While  we  support  these  important  points,  there  are  other  areas  where  we  believe 
modilications  are  in  order.  Universal  government  purchase  creates  several 
concerns: 

First,  universal  purchase  would  eliminate  the  private  market,  which  under 
managed  competition  works  quite  well  in  ensuring  immunization  of  children. 
One  need  only  look  at  the  Kaiser  Permanente  program  in  California,  where 
childhood  immunization  is  at  95%. 

Second,  elimination  of  the  private  market  will  increase  government  outlays 
for  vaccines,  because  prices  to  the  public  sector,  which  are  now  subsidized 
by  the  higher  prices  derived  from  the  private  sector,  will  increase. 


Sole  source  procurement  will  create  a  major  barrier  to  entry  for  new  players 
in  the  vaccine  market,  such  as  SmithKline  Beecham.  If  universal  purchase  is 
coupled  lo  a  winner  take  all  bidding  approach,  the  nature  of  vaccine 
manufacturl  lg  is  such  that  the  firms  that  lose  the  bid  will  leave  the  market. 
Vaccine  production  cannot  be  shut  down  for  months  or  years  and  restarted 
on  the  next  hid. 

Creation  of  a  system  giving  all  the  business  to  a  sole  source  supplier  could 
lead  to  a  i.hortage  of  essential  vaccines  if  that  supplier  encounters 
production  o  quality  control  problems.  Precisely  this  has  happened  in  the 
recent  past. 


The  pioposal  also  needs  to  correct  inadequate  compensation  of  physicians  who 
are  expected  to  immunize  Medicaid  beneficiaries.  This  has  resulted  in  some 
patients  being  sh  Med  from  private  physicians'  offices  to  public  clinics  As  a 
consequence,  many  children  are  not  being  immunized.  The  March  1993  GAO 
report  notes  that,  "even  when  states  have  established  vaccine  replacement 
programs,  not  all  ohysicians  have  participated,  because  of  what  they  perceive  as 
inadequate  reimbmsement  for  vaccine  administration." 

And  finally,  the  poposal  should  be  changed  to  include  an  important  role  that 
should  be  per  forme;  by  the  private  insurance  market.  Insurance  companies  should 
be  required  to  cor.tiibute  to  the  solution  by  covering  the  immunization  of  children 
they  already  insure. 


142 

While  we  do  not  endorse  every  facet  of  the  Administration's  proposal,  we  do  not 

favor  the  status  quo.     Rather  than  turning  the  industry  on  its  head,  creating  a 

public     utility    concept,    with    a    promise    to    turn    us    back    on    our  feet    with 
implementation  ot  managed  competition,  we  have  a  better  approach. 

Let  me  summarize  SmithKlinc  Beecham's  recommendations  on  how  each  of  these 
issues  may  be  add.ossed: 

1.  We  advocate  that  CDC  prices  be  made  available  to  all  state  Medicaid, 
programs. 

2.  We  reccmmend  that  the  CDC  winner  take-all  system  be  replaced  by  arl 
apportioned  'jidding  system,  allocating  a  share  of  the  bid  to  all  bidders  that 
meet  the  lowest  price. 

3.  We    support    expanded    (not    universal)    purchase    to    provide    Medicaid"/ 
immunization  coverage  to  all  children   whose   family   incomes  are    185   per 
cent   of   poverty.      We   also   support   coverage   of   the   physician's   fees   to 
ensure  needjd  follow  up  visits  to  complete  immunizations.  ■ 

•1/ 


iricacL' 


4.  We  recommend  that  private  insurance  be  required  to  cover  all  Amer 
Academy  o*  Pediatrics  recommended  childhood  immunizations  and  that 
preventive  care  services,  including  Immunizations,  be  made  part  of  the  basic 
health  care  jtnefit. 

These  are  our  principal  recommendations.  A  more  comprehensive  explanation  of 
our  approach,  and  a  rationale  for  them,    is  attached  to  my  testimony. 

Our  proposal  allows  the  government  to  help  those  most  in  need.  It  maintains  a 
role  for  private  insurance,  ensuring  that  all  privately  insured  children  will  be 
covered. 

Our  proposal  achieves  the  results  the  Administration  seeks,  but  at  lower  cost.  If 
the  Federal  gover:  ment  were  to  purchase  vaccines  for  all  children  and  if  a  95% 
immunization  rate  were  reached,  we  estimate  that  the  cost  would  be  $695  million 
annually.  Under  our  proposal,  the  vaccine  cost  would  be  $240  million,  a  saving  of 
$455  million.  Th>  savings  could  be  applied  to  the  public  education  effort,  the 
infrastructure  and  racking  programs,  and  to  Medicaid  expansion. 


SmithKlinc  Beecham  appreciates  this  opportunity  to  offer  our  perspectives  on 
improving  immunization  rates  in  this  country.  While  we  support  the  objectives  of 
universal  immunization,  we  believe  that  during  this  time  of  limited  resources,  a 
more  targeted,  public  private  partnership  is  required.  Any  plan  must  ensure  the 
participation  of  mi  Itiple  manufacturers  while  at  the  same  time  providing  the  lowest 
cost  vaccines  to  tie  public  market.      The  Senate  bill  provides  that  the  Secretary 


143 

shall  grant  multip'.i  contracts,  but  there  must  be  greater  certainty  in  order  to 
ensure  enough  volume  to  justify  investment  in  manufacturing  and  research. 
Without  these  s^.urances,  SmithKline  Beecham  will  have  difficulty  entering  a 
winner-take-all  system  where  there  is  universal  purchase. 

Our  proposal  represents  a  workable  plan  for  achieving  full  immunization  of  our 
children,  while  avoiding  the  pitfalls  of  universal  purchase  and  the  severe 
inadequacies  of  the  current  system. 

We  are  ready  to  work  with  you  to  refine  a  new  immunization  policy,  and  we  look 
forward  to  the  day,  hopefully  in  the  very  near  future,  when  no  child  in  this 
country  goes  withrut  proper  immunization. 


SMITHKLINE  BEECHAM  PHARMACEUTICALS 

EEDERAL  IMMUNIZATION  PROPOSAL 

Executive  Summary 


Require  all  states  to  provido  Medicaid  coverage  for  Immunizations  to  all 
children  whose  family  Income  Is  185  porcont  of  the  poverty  level  and 
require  states  to  covor  tho  physician's  follow-up  office  visits  nooded  to 
complete  Immunizations. 


2.  Provido  the  CDC  prico  to  oil  stote  Medicaid  programs. 

3.  Replace  the  CDC  wlnnor-tnke-ell  system  with  an  "apportioned"  bidding 
system  which  would  allocate  o  share  of  tho  bid  to  all  bidders  that  meet  tho 
lowest  bid  price. 


4.         Give  states  the  option  of  dovoloping  o  cost-effective  way  to  distribute 
vacclno  products  to  Medicaid  programs  at  tho  CDC  price. 


Require  all  private  Insurors  to  provide  coverage  of  all  American  Academy  of 
Pediatrics  (AAP)-recommended  childhood  immunizations  in  their  plans  as 
well  as  provontivo  care  services  end  include  immunizations  as  part  of  basic 
health  care  benefits  In  any  plan  that  is  adopted  to  provide  universal  health 
care  coverage. 


Simplify  the  regulatory  approval  process  for  vaccines,  particularly  the  new 
combination  products,  with  clearer  guidelines  and  expedited  approval. 


144 

7.         Roquiro  o  multi-pronged  approach  to  Improve  accoss,  outreach,  education 
and  delivery  of  Immuni70tions,  including  a  national  Immunization  tracking 
and  surveillance  registry. 


In  order  to  ensure  the  pricing  stability  ol  the  market  place,  iho  Voccino 
Injury  Compensation  Fund  should  bo  restored  and  expanded. 


PRINCIPLES  FOR  A  FEDERAL  IMMUNIZATION  PROGRAM 

The  following  principles  should  guide  the  development  of  a  federal  plan  to  increase 
childhood  Immunization  rates: 

Prlnclplo  1:    Elimination  of  Financial  Barriers  to  Immunization 

Clearly,  tho  families  ol  somo  children  face  financial  bairlcrs  to  Immunization 
end  these  should  be  addressed  through  a  combination  of  privato  and  public 
approaches.  Government  heelth  programs  that  serve  needy  children  should 
be  able  to  purchase  Vaccines  from  manufacturers  at  the  lowest  prices. 

Principle  2:    Preservation  of  Healthy  Private  Markot 

A  private  market  for  vaccines  must  be  preserved  to  support  research  end 
development  of  future  vaccine  products.   This  includes  retaining  and 
expanding  tho  role  of  private  Insurance  for  immunizations  as  well  es 
suoamllnlng  the  regulatory  processes  that  approve  new  vaccine  products. 

Prlnclplo  3:    Guaranteed  Participation  In  Public  Market 

All  vaccine  manufacturers  should  be  allowed  to  participate  In  a  competitive 
federally  administered  program  to  purchase  vaccines  on  behalf  of  all 
government  programs.  A  winner-take-all  system  extondod  to  an  expanded 
public  market  would  drivo  most  companies  out  of  the  vacclno  business  and 
make  it  virtually  impossible  for  now  entrants  to  compete,  eliminating 
competition  (thus  driving  up  prices  In  the  long  run)  and  severely  hampering 
Innovation. 

Principle  4:    Improved  Access  and  Outreach 

Experts  agree  that  Improvod  access  and  outreach  are  critical  to  Increasing 
this  notion's  childhood  immunization  ratos,  end  univorsel  purchase  of 
vaccines  alone  will  be  insufficient  to  Incroaso  vaccination  r8tes. 

Principlo  5:  Hcstoration  of  Liability  Proioction 

Immediate  restoration  ol  tho  Vaccine  Injury  Compensation  fund  and  tort 
reform  in  the  longer  run  are  key  to  remaining  the  cost  of  vnccincs. 


145 

RECOMMENDATIONS 

Issue  1:    Elimination  of  Financial  Barriers 

One  reason  for  low  immunization  ratos  Is  lack  of  Medicaid  coverage  for  chlldron 
whose  paronts  don't  meet  poverty  guidelines  end  don't  have  health  insurance. 

Rocommondation: 

Require  oil  states  to  provide  Medicaid  coverago  for  Immunizations  to  all  children 
whoso  family  Income  Is  185  percent  of  the  poverty  level  and  require  states  to 
cover  the  physician's  follow-up  office  visit  needed  to  complete  Immunizations. 

Rationale: 

Cuncntly,  Medicaid  coverage  for  childhood  vaccines  Is  relatively  good,  primarily 
because  the  EPSDT  program  roqulros  states  to  provide  ell  medically  nocessory 
Immunizations  to  the  categorically  needy.   The  problom  Is  that  eligibility  guidollnos 
can  vary  by  state.    For  example,  all  states  now  cover  children  up  to  age  6  from 
families  with  Incomes  8t  133  percent  of  poverty  level     But  some  states  sot  the 
eligibility  level  to  185  percent  of  povorty.    Mandating  Modlcald  eligibility  for  oil 
children  up  to  185  porcent  of  poverty  level  would  guarantoo  that  almost  3  million 
mora  children  would  be  eligible  for  Medicaid  coverage  8nd  Immunizations, 
according  to  Bureau  of  the  Census  poverty  statistics. 

In  addition,  most  experts  egree  that  Inadequate  physician  reimbursement  levols 
provide  a  strong  disincentive  to  physicians  to  immunize  Medicaid  patients.    Many 
states  provide  no  payment  for  follow-up  visits  required  to  complete  the 
Immunization  schedule.    Requiring  coverage  of  these  visits  should  provide  enough 
additional  reimbursement  so  that  physicians  don't  turn  away  eligible  children  who 
need  immunizations. 

SB's  combined  private-public  approach  addresses  virtually  all  of  tho  affordability 
problem  by: 

•  expanding  Medicaid  coverage  to  185  percent  of  poverty  to  cover  almost  52 
percent  of  children;  and 

•  requiring  all  private  insurers  to  cover  Immunizations. 

We  estimate  significant  savings  from  this  targeted  approach.    If  the  government 
were  to  purchase  vaccino  for  oil  children,  we  estimate  the  cost  to  be  obout  6695 
million  per  year.    If  instead  Medicaid  eligibility  were  expanded  to  185  percent  of 
poverty,  we  estimate  the  cost  to  tho  government  lor  vaccine  products  to  be  only 
about  $240  million,  or  o  savings  of  S-155  million. 


146 
Issue  2:    Avoilability  of  Low-Cost  Vaccines  to  the  Needy 

Many  stato  Modicaid  programs  do  not  take  advantage  of  lower  CDC  prices  for 
vaccine  products. 

Recommendation: 

Allow  state  Medicaid  programs  the  right  to  purchase  vaccines  at  the  CDC  bid 
price 

Rationale: 

To  make  sure  all  states  have  access  to  the  most  favorable  prices  for  vaccines,  an 
expanded  CDC-admlnfstered  bidding  program  makes  sense.   The  Medicaid  program 
could  garnor  signilicant  savings  from  CDC  pricing  for  childhood  vaccines.    By 
combining  the  broadened  eligibility  with  the  most  tavorable  vaccine  pricing,  wo 
estimate  that  state  Medicaid  programs  currontly  using  a  fec-for-sorvice  system  to 
provide  Immunizations  potentially  could  save  about  50  percent  on  vaccine 
acquisition  costs  at  existing  CDC  prices. 

Issue  3:    Guaranteed  Participation  In  Public  Market 

It  Is  critical  that  a  federal  Immunization  program  ensuro  that  multiple  manufacturers 
participate  in  the  public  market  so  that  supplies  ere  adequate  and  Incentives  ere 
strong  for  the  development  of  new  vaccines  by  existing  players  end  new  entrants. 

Recommendation: 

Replace  the  CDC  winner-tako-all  system  with  an  "apportioned"  bidding  system 
which  would  ollocote  e  shore  of  the  bid  to  all  bidders  at  the  lowest  bid  price 
according  to  a  formula.    For  oxample: 

No.  or  Bippcns  Lowest  Bio  Share  Other  Bids'  Shares 

2  60%  40% 

3  40%  30%-30% 

4  32.5%  22.5%-22.5%-22.5% 

Rationale: 

This  expansion  of  the  public  market  underscores  the  need  to  preserve  a  private 
market  as  well  as  guarantee  the  public  market  requires  participation  of  multiple 
competitors.    This  is  so  for  several  reasons. 

First,  8  sole-supplier  situation  has  serious  potential  commercial  and  technical 
problems.   The  commercial  problem  Is  Illustrated  by  the  shortage  of  DTP  vaccine 
cxporienced  in  the  mld-80s.    The  technical  probloms,  according  to  the  1985 
Institute  of  Medicine  report  entitled  Vaccine  Supply  and  Innovation,  includes 
potency  variation,  stability  probloms,  quantitative  imbalanco  of  microbial 
components  In  polyvalent  or  combination  vaccines,  variations  In  the  response  to 
Inactlvatlon  processes,  excessive  undesirable  biological  activity  end  Inadvertent 
contamination. 


147 

Bocause  vaccine  manufacturing  requiros  major  Investment  In  a  sophisticated 
production  plant  and  the  establishment  of  teams  with  muKidisciplinary  cxportlse  (n 
the  large-scale  production  of  biological  products,  It  Is  essential  to  preserve  8 
market  with  multiple  manufacturers.     This  combination  of  rosources  would  be 
nxtremely  difficult  to  assemble  to  offer  an  alternate  supply  if  a  sole  supplier 
experienced  the  problems  outlined  8bove. 


Moreover,  without  a  private  market  and  a  guarontcod  shoro  of  o  largo  public 
market,  manufacturers  may  either  leave  the  vaccine  development  business  or 
decide  not  to  enter  it  at  all.    For  a  new  entrant  In  tho  childhood  vaccine  market  the 
potential  disincentives  are  many--comoloxity  of  development,  production  and 
quality  control;  lengthy   vaccine  production  processes  which  may  adversely  affect 
Inventory  end  cash  flow;  cost  of  research  and  dovelopment;  perception  that 
vaccines  historically  have  received  less  effective  patent  protection  than  drugs  and 
apprehension  over  the  liability  situation. 

Without  healthy,  competitive  public  and  private  markets,  the  incentives  to  enter 
the  market  will  not  be  sufficient,  especially  for  any  company  that  possesses 
significant  technological  know-how,  and  is  about  to  commit  considerable  resources 
In  developing  new  pediatric  vaccinos. 


Issue  4:    Mechanism  for  Providing  Voccines  to  Medicaid  Programs 

How  would  the  "apportioned"  bid  system  actually  work  to  provide  CDC  vaccine 
prices  to  expanded  state  Medicaid  programs? 

Recommendation: 

A  number  of  distribution  approaches  could  be  used  by  states.   Alternatively,  the 
CDC  could  contract  with  private  wholesalers  to  distribute  vaccine  products  on 
behalf  of  the  Etotes.    States  should  be  given  the  option  to  select  the  approach  that 
makes  tho  most  sense  for  them. 

Here  ere  three  possible  approaches: 

1.  Stete  replacement:   Where  states  currently  buy  vaccines  directly  from  CDC, 
warehouse,  and  distribute  them  to  Medicaid  physicians,  they  would 
continue  to  do  so,  according  to  an  apportionment  scheme  which  may  be 
administered  by  CDC. 

2.  State-contracted  distribution:    States  would  allow  private  wholesalers  to  bid 
for  the  right  to  distribute  vaccines  It  purchases  to.  Medicaid  physicians 
within  the  state,  according  to  an  apportionment  method  (see  attachment). 

3.  CDC-contracted  distribution:   CDC  would  contract  with  private  wholesalers 
who  would  compete -possibly  on  8  regional  basls-for  contracts  to  distribute 
vecclne  products  to  stete  Medicaid  programs.    Physicians  would  purchase 
Inventory  under  extended  credit  terms  rather  than  receive  free  replacement 
products. 

Caution  should  be  exercised  when  considering  the  Individual  manufacturer  "free 
replacement"  or  "consignment"  approach  proposed  by  some  manufacturers.    This 
program  Is  targeted  at  high  volume  Medicaid  physicl8ns--not  necessarily  all 
physicians  who  could  immunize  Medicaid  patients-and  is  intended  to  create  a  de 


148 

facto  monopoly  of  the  distribution  channel  within  that  state  at  the  expense  of 
retail  pharmacies  and  physician  supply  houses.    This  dc  facto  monopoly  can  then 
be  naturally  extended  to  include  the  voccines  for  private  patients  as  well  as  non- 
pedlatrlc  vaccines.    The  long  term  consequence  of  such  a  program  Is  Increased 
cost  of  vaccines  8S  a  result  of  the  distribution  monopoly  within  the  state.    Last  but 
not  loast,  tho  manufacturer  replacement  approach  could  not  accommodate  the 
federal  apportionment  program  outlined  above  without  a  supplemental  effort  by 
tho  fndnrol  or  state  government. 


Issue  5:    Preservollon  of  Healthy  Private  Market 


Many  private  insurance  plans  do  not  cover  immunizations.    This  forces  physicians 
to  pass  on  thoso  costs  to  parents  or  to  rofor  thorn  to  olready  overloaded  public 
clinics.  A  1990  HIAA  survey  showed  that  only  62  percent  of  commercial  Insurers 
provided  full  Immunization  coverage. 

Recommendation: 

Roqulre  all  private  Insurors  to  provide  covorago  of  all  AAP  recommended  childhood 
Immunizations  in  their  plans  and  make  preventive  care  services.  Including  Immuni- 
zations, part  of  basic  health  care  benefits  In  any  plan  that  Is  adopted  to  provide 
unlvorsal  health  care  coverage.   Such  coverago  should  bo  first  dollar  coverage  end 
Include  all  three  components  of  the  immunization:    vaccine  cost,  administration 
cost  and  the  office  visit. 

Rationale: 

Requiring  all  private  insurers  to  provide  immunization  coverage,  like  the 
Commonwealth  of  Pennsylvania,  would  eliminate  any  financial  barriers  to  Immuni- 
zation for  the  privately  Insured  end  put  a  needed  emphasis  on  preventive  care  as 
rocommendod  by  the  Hoalth  Insurance  Association  of  America's  1992  Good  Health 
Prevention  Initiative.    Bolstering  coverage  in  the  private  sector  should  relieve  public 
clinics  and  alleviate  the  need  for  a  universal  vaccine  purchase  program.    Long-term 
savings  on  the  health  care  system  through  such  broadening  coverage  In  the 
private  sector  Is  good  public  policy,  as  evory  $1  spent  on  vaccination  will  save 
$10  on  future  medical  care. 

The  elimination  of  a  private  market  Is  not  inthe  public's  Interest,  either  from  a 
financial  or  a  health-status  standpoint.   The  elimination  of  the  private  market  will 
raise  prices  In  the  public  sector  because  private  market  vaccine  prices  are 
subsidizing  the  public  vaccine  market.    If  public  market  prices  do  not  go  up,  then 
the  number  of  manufacturers  will  go  down  as  those  on  the  cusp  of  entry  decide 
not  enter  the  vaccine  business. 

Last,  providing  Iroo  vaccines  to  tho  Insured  or  to  those  who  can  afford  it  simply 
takes  away  scarce,  critical  federal  resources  from  Medicaid  oxpansion  and 
education,  access  8nd  outreach  efforts  that  experts  agree  are  critical  to  higher 
Immunization  rales. 


149 

SB's  combinod  private-public  approach  addresses  virtually  all  of  the  affordablllty 
problem  by: 

•  expanding  Medicoid  coverage  to  185  percent  of  poverty  to  cover  almost  52 
percent  of  children;  ond 

•  requiring  oil  privato  Insurors  to  covor  Immunizations. 

We  estimate  significant  savings  from  this  torgoted  opproech.    If  the  government 
were  to  purchase  vaccine  for  all  children,  we  estimate  the  cost  to  bo  about  $695 
million  per  year.    If  Instead  Medicaid  eligibility  were  expanded  to  185  percent  of 
poverty,  we  estimate  the  cost  to  the  government  for  veccine  products  to  be  about 
$240  million,  or  a  savings  of  $455  million. 


Issuo  6:    Reducing  tho  Hurdlo  for  Ropld  Availability  of  Now  Tochnology 

Therogulotory  approval  process  Is  cumbersome  end  Inefficient  and  slows  the 
development  of  new  vaccines. 

Recommendation: 

Speed  up  tho  rogulatory  approval  process  for  vaccines,  particularly  the  new 
combination  products,  with  clearer  guidelines  and  expedited  8pprov8l.    Articulate 
clearly  tho  regulatory  burden  of  proof  for  approving  combination  vaccines,  with 
the  advice  of  en  odvlsory  committee.    The  FDA  should  be  encouraged  to  propose 
measures  that  will  simplify  tho  approval  of  vaccines. 

Rationale: 

Streamlining  the  regulatory  approval  process  will  help  manufacturers  get  new 
products  to  market  more  quickly  to  the  benefit  of  all.    One  of  the  more  significant 
examples  of  such  product  technology  advancements  will  bo  a  combination 
podiatric  veccine  that  will  contain  several  antigons.    This  combination  will  Increase 
Immunization  rotes  by  virtue  of  the  reduction  of  number  of  Injections.    Further- 
more, as  tho  vaccination  schedule  of  different  antigens  are  unified,  there  is 
potential  reduction  in  the  number  of  physicians  visits,  thus  saving  significant  public 
and  private  funds. 


Issuo  7:    Improved  Access  and  Outreach 

Most  public  health  officials  agree  that  the  cost  of  voccino  ploys  a  minor  role  In  the 
failure  of  large  segments  of  tho  population  to  receive  vaccinations.   Important 
factors  othor  than  the  ones  mentioned  above  that  have  been  recognized  by  tho 
Public  Health  Service  and  the  National  Vaccine  Advisory  Committee  include  the 
following: 

•  lack  of  education  about  the  benefits  of  childhood  Immunization 

•  missed  opportunities  for  vaccine  delivery  due  to  the  failure  to  sufficiently  link 
Immunization  services  with  other  private  and  public  sector  (e.g..  private 
physicians,  the  WIC  program,  unemployment  benefits)  interactions  with 
persons  who  are  not  Immunized 


150 

•  Inadequate  tracking  of  vaccine  delivery  and  the  failure  to  fully  fund  methods  of 
providing  Immunization  services  to  underserved  populations  (e.g.,  public  health 
clinics,  outreach  programs) 

•  cultural  misconceptions  regarding  vaccines,  end  hypersensitivity  to  perceived 
vaccine  risks 

Recommendation: 

Require  a  multlprongod  approach  to  include: 

•  easier  end  Increased  eccess  to  public  health  clinics  and  outreach  programs 

•  education  programs  to  eliminate  the  misconceptions  about  immunization  and 
ensure  that  Information  about  the  need  for  and  methods  of  obtaining  vaccines 
Is  widely  disseminated 

•  coordination  of  Federal,  state  8nd  local  immunization  programs  to  ensure  that 
no  opportunity  to  Immunize  a  child  is  missed 

•  estoblish  a  national  Immunization  tracking  and  surveillance  registry  at  COC  to 
collect  and  analyze  data  on  childhood  Immunizations 


Issue  8:    Restoration  of  the  Vaccine  Injury  Compensation  Fund 

The  offordability  and  tho  long-term  price  stability  of  vaccines  are  adversely 
effected  by  the  expiration  of  tho  Vaccine  Injury  Compensation  Fund. 

Recommendation: 

Without  the  protection  of  the  Vaccine  Injury  Compensation  Fund,  the  long-term 
price  stability  of  vaccines  cannot  be  guaranteed  bocause  manufacturers  will  need 
to  provide  for  tho  uncertointy  of  enormous  legal  awards.    Likewise,  physicians  will 
need  to  additional  malpractice  protection.   The  fund  should  be  restored 
Immediately  and  tho  newer  vaccines  (HiB  for  bacterial  meningitis,  and  HBV  for 
hepatitis  B)  6hould  be  Included. 


STEPS  TO  IMPLEMENT  THE  APPORTIONED  DISTRIBUTION  SYSTEM 


1.  Tho  CDC  or  other  federal  entity  would  solicit  from  and  award  bids  to 
manufacturers  to  provide  voccines  products  in  volumes  sufficient  to 
Immunlzo  all  Medicaid  and  other  public  sector  patients.    In  the  case  of 
multiple  bidders,  multiple  contracts  would  be  awarded  on  en 
"apportionment"  basis,  o.g.  40%  to  the  lowest  bidder,  30%  to  second 
lowest  and  30%  to  high  bidder. 

2.  States  that  already  have  their  own  distribution  system  would  be  allowed  to 
continuo  It  so  long  as  their  systems  could  meet  the  terms  of  the  COC 
apportioned  bid. 

3.  States  without  their  own  distribution  systems  would  be  required  to  develop 
their  own  system  or  contract  with  a  private  distributor  to  provide  a  system 
to  distribute  vaccines  to  physicians  for  Medicaid  patients  and  to  public 
clinics.    Such  as  system  would  ensure  that: 


151 

•  products  would  bo  distributed  to  public  clinics  and  Modicald  physicians  In 
eccordanco  with  tho  apportionment  In  the  federal  contract; 

•  physicians  rocoivo  adequate  supplies  of  vaccine  to  Immunize  all  their 
Medicaid  patients; 

•  free  vacclno  products  are  supplied  to  physicians  solely  for  their  Medicaid 
patients;  and 

•  data  regarding  public  clinic  and  Medicaid  utilization  Is  transmitted  to  the 
distributor  so  that  products  can  be  replaced  as  needed. 

4.  Manufacturers  would  provide  o  one-month  Initial  Inventory  of  goods  based 
on  the  CDC  contract  for  distribution  to  public  clinics  and  physicians  for 
Modicald  patients. 

5.  Physicians  would  Immunl20  Modicald  pationts  and  fllo  Modicald  claims  for 
administration  and  ollice  fees;  claims  would  capture  appropriate  information 
to  allow  replacement 

6.  The  Medicaid  agency  or  Its  claims  processor  would  report  monthly  to  the 
distributor  on  the  vaccines  used  per  physician  with  a  requisition  to  purchase 
more  vaccine;  public  clinics  would  make  o  similar  monthly  report. 


7.  Onsod  on  tho  Information  provided  by  the  state,  the  distributor  would  order 
replacement  products  from  the  appropriate  manufacturers  (ensuring  tho 
apportionment  described  above)  and  manufacturers  would  ship  tho  vaccine 
to  the  distributor. 

8.  The  distributor  would  roplace  the  vaccine  used  by  clinics  and  physicians  for 
Modicald  patients  at  least  monthly,  although  the  distributor  would  hove  to 
be  eble  to  provide  additional  vaccino  to  clinics  and  physicians  who  run  out 
of  vocclno  between  monthly  shipments;  alternatively,  if  the  state  agencies 
captured  product  specific  data,  they  could  report  utilization  data  to  both  tho 
manufocturer  and  tho  distributor  to  enhance  distribution  efficiency. 

9.  Manufacturers  would  ship  vaccine  In  the  "apportioned"  amount  to  the 
distributor. 

10.  The  appropriate  state  agencies  would  pay  tho  distributor  tho  contract  price 
for  vaccino  products  purchased  from  manufacturers. 

11.  To  enable  states  to  track  Immunization,  physicians  would  be  required  to 
report  to  the  state  immunization  agency  patient-specific    immunization  data 
for  private  patients:  Medicaid  and  public  clinics  would  be  required  to  report 
the  same  data  for  their  patients. 


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153 

The  Chairman.  Thank  you  all  very  much.  I  apologize  for  missing 
the  earlier  presentations,  and  I  will  review  the  statements  at  the 
conclusion  of  the  hearing. 

Mr  Gamier,  you  have  given  us  the  cost  and  the  savings.  Could 
you  elaborate  on  that  for  us  in  submitting  further  information  and 
analysis  m  terms  of  the  comparison? 

Mr.  Garnier.  Yes,  we  have  in  fact. 

The  Chairman.  That  would  be  very  useful  and  helpful 

Mr.  Garnier.  Yes,  we  will  do  that. 

The  Chairman.  As  I  understand,  Dr.  Garnier,  your  company  has 
considerable  experience  internationally,  does  it  not,  and  therefore 
has  operated  in  markets  where  the  government  is  the  sole  pur- 
chaser? Is  that  true? 

Mr.  Garnier.  Yes. 

The  Chairman.  And  are  there  such  markets  in  which  you  com- 
pete, and  if  so,  is  it  safe  to  assume  that  the  company  is  still  able 
to  make  a  profit  in  those  areas? 

Mr.  Garnier.  The  company's  profits,  of  course,  are  dependent  on 
a  number  of  successes  in  various  markets.  We  operate  in  all  dif- 
ferent markets,  some  where  we  negotiate  vaccine  prices  with  the 
government,  and  some  where  we  do  not. 

The  vaccine  business  is  not  a  business  that  can  be  earmarked  in 
every  «>untry  in  terms  of  profitability,  because  it  has  a  huge  fixed 
cost.  The  cost  of  manufacturing  and  research  and  development  is 
a  fixed  cost,  and  it  really  doesn't  vary  with  the  volume  so  much  of 
vaccines  you  sell-  so  I  don't  want  to  necessarily  analyze  country  by 
country  But  I  think  that  in  all  cases,  the  solution  is  possible  in 
terms  of  allowing  the  company  to  make  a  profit. 

Simply  stated,  however  if  you  look  at  the  market  dynamics,  in 
some  markets,  market  dynamics  have  actually  driven  the  cost 
lower,  so  it  is  of  benefit  to  the  consumers,  compared  to  some  gov- 
ernment-controlled price  countries. 

The  Chairman.  But  nonetheless,  it  is  safe  to  assume  at  least 
where  you  are  operating  in  different  countries  around  the  world 
where  the  government  is  the  sole  purchaser,  or  some  combination 
ot  different  negotiations,  that  you  are  able  to  compete  with  other 
companies,  and  you  are  able  to  make  a  profit. 

ranPDc^?'    Clearly,    with    the    exception    of   our    sales    to 
UNlCh,*,  which  are  sales  of  a  product  which  is  charity,  more  or 

The  Chairman.  And  if  this  legislation  is  enacted,  and  a  fair  price 
tor  your  products  is  offered,  do  you  believe  your  company's  efforts 
in  research  and  development  be  compromised? 

Mr  Garnier.  Senator,  it  really  depends  on  how  those  prices 
would  be  negotiated— and  not  just  on  the  price  level,  but  also  on 
how  the  bidding  system  would  function.  We  stress  the  importance 
2  *  wi1  g  m«a»Ple  manufacturers  to  participate  in  a  given  mar- 
ket. We  have  had  no  assurances  that  this  would  actually  occur 

Now,  if  there  is  a  negotiation  that  allows  predictability 

The  Chairman.  I  think  that  is  a  constructive  suggestion  to  en- 
courage multiple  manufacturers,  but  I  think  we  may  need  to  do 
more  than  this.  But  go  ahead,  please. 

Mr.  Garnier.  So  if  you  combine  apportionment  with  reasonable 
pricing,   clearly,  there  is   a  probability  of  ensuring  a  sufficient 


154 

stream  of  profits  to  the  company.  However,  I  want  to  stress  a  re- 
mark that  one  of  my  colleagues  made  about  biotechnology  compa- 
nies. I  happen  to  sit  on  the  U.S.  board  of  biotech  companies,  and 
I  can  tell  you  that  for  them,  it  is  a  very  difficult  task  to  come  in, 
not  having  a  basis  of  revenue  to  draw  from,  and  enter  a  new  mar- 
ket under  this  set  of  conditions.  That  is  why  there  are  different  sit- 
uations for  different  players. 

But  looking  from  the  outside  in,  I  would  confirm  what  you  said, 
Senator — if  the  implementation  of  the  pricing  negotiation  and  the 
guarantee  of  multiple  participants  in  each  market  are  granted,  that 
will  go  a  long  way  to  facilitate  this. 

The  Chairman.  In  your  written  testimony,  you  caution  us 
against  the  individual  manufacturer  contract — as  I  understand  it, 
the  free  replacement  or  consignment  approach  that  has  been  pro- 
posed. Could  you  State  your  concerns  about  that? 

Mr.  Garnier.  We  feel  that  the  distribution  of  vaccine  is  an  easy 
issue  to  resolve  in  terms  of  making  free  vaccine  available  to  pedia- 
tricians. We  don't  need  universal  purchase  to  make  that  happen. 
There  are  several  formulas  which  are  possible.  We  just  want  to 
warn  against  the  fact  that  if  States  would  enter  into  negotiations 
with  one  sole  manufacturer  under  this  distribution  system,  it 
would  create  a  monopolistic  situation,  and  we  are  opposed  to  that. 
There  is  already  an  existing  network  of  distribution  in  this  country 
which  is  very  effective,  and  instead  of  reproducing  the  same  net- 
work over  and  over  again  in  order  to  be  able  to  compete — and 
therefore,  incidentally,  later  on  passing  on  those  costs  to  the  pub- 
lic— we  feel  that  there  are  better  solutions. 

The  Chairman.  Thank  you  very  much.  I'll  submit  my  other  ques- 
tions. 

Mr.  Waxman.  Mr.  Greenwood. 

Mr.  Greenwood.  Thank  you,  Mr.  Chairman. 

I  would  address  my  question  to  any  or  all  of  the  panelists  who 
can  respond.  Earlier,  I  asked  Dr.  David  Smith,  representing  the  As- 
sociation of  State  and  Territorial  Health  Officers  why  we  can  get 
kids  immunized  in  time  for  school,  but  not  when  they  are  2,  which 
is  when  they  ought  to  be  immunized.  Part  of  Dr.  Smith's  response 
was  that  a  contributing  factor  is  the  inadequate  supply  of  the  vac- 
cines. I  wonder  if  any  of  you  heard  that  portion  of  his  response  and 
if  you  have  any  comment  to  make  in  that  regard. 

Mr.  Williams.  I  think  I  addressed  that  in  my  testimony.  Each 
year,  the  Centers  for  Disease  Control  publishes  information  on  the 
amount  of  vaccine  that  is  put  into  the  distribution  system.  Each 
year  over  the  last  five  or  6  years,  that  amount  has  averaged  about 
110  percent  of  the  vaccine  necessary  to  immunize  every  child  on 
time  up  to  the  age  of  5,  with  the  exception  of  hepatitis  B,  which 
is  a  new  vaccine  and  on  the  upswing  in  terms  of  utilization. 

So  we  really  see  no  supply  problem  for  vaccines  in  this  country. 
And  we  are  not  at  capacity.  If  more  vaccine  were  needed,  we  would 
be  in  a  position  to  provide  it. 

Mr.  Greenwood.  Does  anyone  have  a  different  comment? 

Dr.  Saldarini.  No.  I  would  just  confirm  what  David  is  saying, 
and  that  is  what  orders  are  placed  on  us,  the  vaccines  are  delivered 
from  those  of  us  who  have  contracts  with  the  CDC,  and  there  has 
never  been  a  supply  issue. 


155 
Mr.  Greenwood.  Let  me  move  on  to  another  point- 


Dr.  Douglas.  I'd  like  to  add  to  that  point.  We  have  traditionally 
sold  about  6  million  doses  of  MMR  in  the  United  States  to  vac- 
cinate 4  million  children  once  before  the  second  dose  recommenda- 
tion. There  has  always  been  plenty  of  vaccine. 

Mr.  Greenwood.  OK.  In  her  testimony,  Secretary  Shalala  stated 
that  "universal  purchase,  by  assuring  a  stable  price  for  vaccines, 
will  stimulate  rather  than  inhibit  competition."  The  Secretary  stat- 
ed that,  and  I  am  quoting  here,  "some  manufacturers  actually 
could  return  to  the  vaccine  market  because  of  the  stability  and  reli- 
ability inherent  in  the  President's  plan." 

I'd  like  your  comments  on  that.  Do  you  think  this  is  a  likely  out- 
come of  this  proposal  before  us? 

Dr.  Saldarini.  I  suppose  I  would  ask  if  the  Secretary  has  any 
companies  that  she  has  talked  to  that  have  expressed  a  willingness 
to  come  back  into  the  business  under  that  type  of  scenario.  I  think 
that  prospect  would  be  a  very  difficult  one  to  entertain. 

Mr.  Greenwood.  So  you  would  contest  that  part  of  her  testi- 
mony? 

Dr.  Saldarlni.  I  think  "contest"  is  perhaps  too  strong  a  word,  but 
I'd  certainly  be  willing  to  debate  the  issue  with  her.  I'm  just  not 
entirely  sure.  I  think  it  depends  a  lot  on  the  circumstances  of  the 
individual  companies — not  my  company. 

Dr.  Douglas.  Can  I  add  to  that? 

Mr.  Greenwood.  Sure. 

Dr.  Douglas.  We  do  not  see  Federal  Government  purchase  as 
creating  a  stable  environment  to  induce  the  long-term  investment 
in  research  and  development  and  in  manufacturing.  It  takes  10  to 
15  years  to  make  a  new  vaccine,  and  one  tries  to  predict  what  the 
playing  field  is  going  to  look  like  in  the  future  when  one  makes  in- 
vestments today. 

We  have  seen,  for  example,  reductions  in  other  entitlement  pro- 
grams by  the  government;  we  saw  a  reduction  in  the  NIH  budget 
this  year  for  R  and  D,  or  at  least  a  very  low  increase.  And  these 
kinds  of  things  give  us  great  pause  for  concern.  We  would  rather 
deal  with  an  open  marketplace,  even  if  that  marketplace  included 
managed  competition,  etc.,  where  we  have  a  better  prediction  of 
what  the  future  will  bring. 

Mr.  Greenwood.  There  has  been  some  discussion  today  with  re- 
gard to  the  increasing  cost  of  immunizations  over  the  past  10 
years.  I  think  the  implication  has  been  that  the  increased  cost  has 
been  the  result  of  profit-taking.  Can  any  or  all  of  you  comment  as 
to  the  costs  which  have  been  built  into  tne  increase  over  time? 

Dr.  Saldarini.  I  tried  in  my  comments  earlier  to  indicate  that. 
The  cost  of  vaccines  for  sure  has  gone  up  and  on  existing  products, 
which  has  been  an  issue  that  has  often  come  up  in  committee  hear- 
ings or  in  any  kind  of  dialogue  where  I  have  been  involved,  or  with 
other  manufacturers.  What  I  am  trying  to  say  is  that  those  dollars 
were  required  in  order  to  allow  the  industry,  certainly  my  com- 
pany, to  begin  the  investment  process  required  both  in  research 
and  development  and  new  facilities  construction,  in  order  for  us  to 
start  making  products  that  we  felt  biotechnology,  the  new  tech- 
nology, could  actually  help  us  create. 


156 

And  in  fact,  as  I  have  tried  to  point  out,  the  fruits  of  five  to  10 
years'  worth  of  labor  have  now  begin  to  be  borne  in  the  form  of  a 
new  vaccine  for  haemophilus,  a  new  vaccine  for  pertussis,  and  a 
new  combination  product  that  is  pivotal.  And  that  investment,  from 
my  company's  standpoint,  has  been  in  excess  of  $300  million,  which 
is  a  substantial  amount  of  money  and  which,  if  we  had  not  had  an 
open  marketplace  to  deliberate  on,  we  might  not  have  made  those 
decisions. 

Mr.  Garnber.  May  I  comment  on  this  question,  too? 

Mr.  Waxman.  If  I  might  just  interrupt,  because  we  are  being 
summoned  to  the  House  floor  for  a  vote,  and  Mr.  Greenwood's  time 
has  expired,  and  I  want  to  pursue  this  issue  as  well.  So  perhaps 
we  can  get  some  of  the  answers  you  want  to  give  to  some  of  the 
questions  that  I  am  going  to  ask  that  are  related  to  it. 

As  I  hear  what  all  four  of  you  are  saying,  you  like  the  idea  of 
a  vaccine  program,  you  like  almost  everything  in  this  administra- 
tion's bill  because  it  will  reach  more  kids  with  immunizations,  but 
you  don't  like  the  idea  of  the  government  buying  all  the  vaccines 
from  you  because  you  are  afraid  you  are  going  to  get  less  money. 
Is  that  an  accurate  statement? 

Dr.  Saldarini.  It's  not  entirely  accurate  in  the  way  you  put  it. 
We  are  going  to  have  less  flexibility,  I  think,  we  feel,  in  terms  of 
making  decisions  about  research,  research  projects,  vaccine  projects 
and  so  forth. 

Mr.  Waxman.  Government  isn't  going  to  tell  you  what  to  do  in 
terms  of  your  budgets  on  research.  Government  is  simply  going  to 
say:  You  are  selling  a  vaccine.  We  want  to  purchase  it  so  everybody 
in  this  country  will  have  it  available  to  them,  and  we're  going  to 
negotiate  the  price  and  pay  you  that  price. 

Dr.  Saldarini.  One  of  our  concerns  about  the  government  taking 
over  this  role  is  that  while  this  may  be  a  very  strong  issue  this 
year — and  most  assuredly,  it  deserves  to  be  a  strong  issue — in  next 
year's  budget,  we  are  already  faced  with  a  budget  deficit,  we  are 
already  faced  with  entitlements  that  are  being  cut  in  1993  to  Med- 
icaid. This  is  part  of  President  Clinton's  plan,  as  I  have  understood 
it,  to  cut  back  on  certain  entitlements  associated  with  Medicare 
and  Medicaid. 

We  are  concerned  that,  as  Dr.  Douglas  has  indicated,  we  spend 
10  to  15  years  looking  out,  and  if  the  government  funding  is  not 
reliable  in  years  to  come — and  it  well  could  be  that  our  flexibility 
is  limited,  and  you  may  be  losing  an  opportunity  to  introduce  valu- 
able new  products  to  the  American  health  community. 

Mr.  Waxman.  I  hear  what  you  are  saying,  but  I  want  to  express 
some  skepticism,  because  what  I  hear  you  saying  is  that  you  are 
worried  tnat  you  won't  be  able  to  continue  a  program  where  you 
sell  vaccines  to  the  public  for  a  lower  price  than  what  you  sell  to 
the  private  payers  of  vaccines,  and  what  you  are  able  to  sell  to  the 
private  payers  is  at  a  higher  rate,  and  if  you  have  to  use  the  same 
price,  you  are  going  to  reduce  your  revenues,  and  therefore,  if  you 
reduce  your  revenues  as  you  look  down  the  road,  you  won't  have 
some  of  those  revenues  to  use  for  other  purposes. 

But  the  reason  I'm  skeptical  is  that  I  have  been  around  for  a 
while,  and  I  recall  in  1986  your  company,  Dr.  Saldarini,  a  rep- 
resentative testifying  before  my  subcommittee  saying  the  only  rea- 


157 

son  there  were  increases  in  the  price  of  the  vaccine  was  because 
of  the  liability  situation. 

Dr.  Saldarini.  Well,  to  be  sure,  liability  was  a  part  of  it, 
Congressman 

Mr.  Waxman.  No,  not  a  part  of  it.  The  statement  was  due  en- 
tirely to  the  liability  claims  situation.  The  increase  in  DTP  vaccine 
was  taking  place  in  1986,  and  your  president  said  that  the  price 
of  vaccine  included  $8  a  dose  for  liability  reserve.  And  then  we  pass 
a  vaccine  compensation  program,  but  the  price  of  vaccine  was  never 
reduced,  and  during  this  whole  time,  there  has  never  been  another 
liability  problem.  What  happened  to  that  $8  a  dose  that  went  to  li- 
ability cost? 

Dr.  Saldarini.  The  $8  a  dose — as  the  Vaccine  Injury  Compensa- 
tion Act  took  effect  over  time,  that  price  has  dropped.  And  the  price 
of  the  product  in  those  days  was  about  $11.40,  and  today  it  is 
$5.41,  so  as  we  have  seen  a  reduced  liability  exposure,  which  the 
National  Vaccine  Injury  Compensation  Act  has  helped  us 

Mr.  Waxman.  Have  you  dropped  your  price  by  $8,  which  was  the 
cost  for  the  liability? 

Dr.  Saldarini.  Absolutely,  absolutely. 

Mr.  Waxman.  It  is  your  testimony  that  the  price  of  your  vaccine 
has  dropped  $8  after  the  Vaccine 

Dr.  Saldarini.  No,  not  $8.  The  price  of  my  vaccines  has  dropped 
from  $11.40  in  1986  to  $5.40  in  1992.  So  it  is  not  an  $8  drop,  but 
it  is  a  significant  drop,  and  it  reflects  our  experience  with  the  Na- 
tional Vaccine  Injury  Compensation  Act. 

Mr.  Waxman.  The  compensation  program  is  one  that  I  am  cer- 
tainly proud  of;  I  think  it  has  worked  well.  It  held  down  the  costs 
you  were  incurring  for  liability  expenditures,  yet  I  haven't  seen  the 
kind  of  recouping  for  the  public  of  the  lower  prices. 

Now,  what  are  your  proposed  price  increases  for  this  next  year? 

Dr.  Saldarini.  Our  price  increases  for  1993  are  frozen,  and  our 
price  increases  for  1994  are  within  the  framework  of  the  Consumer 
Price  Index,  and  that's  on  a  product-by-product  basis. 

Mr.  Waxman.  So  if  you  froze  your  prices  and  had  the  government 
purchase  them  at  that  price,  you  know  what  your  incomes  will  be 
for  the  next  several  years,  and  you  could  then  make  your  plans  ac- 
cordingly. 

Dr.  Saldarini.  I  understand  where  you  are  coming  from,  Con- 
gressman, but  I  am  saying  to  you  that  from  our  perspective,  if  the 
government  rather  than  the  marketplace  becomes  the  arbiter  of  our 
activities  in  R  and  D,  in  manufacturing  and  so  forth,  I  think  over 
time,  in  our  opinion,  the  quality  of  the  programs  will  suffer,  and 
I  think  that  will  have  a  damaging  effect  on  our  ability  to  bring  vac- 
cines further  forward. 

Mr.  Waxman.  It's  certainly  something  we  have  to  be  concerned 
about,  but  then  we  look  at  so  many  other  countries  where  they 
have  a  national  program  to  immunize  all  their  kids,  the  govern- 
ment purchases  the  vaccines,  they  pay  you  a  set  amount — as  I  un- 
derstand Mr.  Garnier's  testimony,  the  companies  still  make  a  prof- 
it. And  if  we  are  paying  higher  prices  for  vaccines  in  this  country, 
the  American  public  wants  to  know  why  and  what  in  fact  we're  get- 
ting out  of  it.  That's  the  question  that  I  think  we  have  to  look  at. 

Thank  you. 


158 

The  Chairman.  Thank  you  very  much. 

I  just  have  one  final  question.  Dr.  Williams,  in  your  testimony 
on  page  3,  you  say,  "If  vaccine  cost  is  a  major  barrier  at  2,  why 
is  it  no  longer  a  barrier  at  age  5?" 

What  is  the  difference  in  cost  for  school  entry  vaccination  of  an 
unimmunized  child  compared  to  a  child  who  is  fully  immunized  by 
the  age  of  2? 

Mr.  Williams.  There  is  no  difference  in  the  price  of  a  vaccine 
whether  you  are  selling  it  for  someone  who  is  going  to  be  2  months 
of  age  or  5  months  of  age;  the  cost  of  the  vaccine  is  going  to  be  the 
same. 

The  Chairman.  Then  this  refers  not  to  what  the  total  costs  are 
for  a  2-year-old  and  a  5-year-old;  you're  just  talking  about 

Mr.  Williams.  What  I  am  referring  to  there  is  that  it  has  been 
held  up  that  cost  is  a  major  barrier,  and  that  children  are  not  being 
immunized  at  various  ages  because  they  cannot  afford  vaccine;  and 
it  has  been  held  up  primarily  age  the  age  of  2. 

Well,  my  question  to  you  is  what  happens  between  age  2  and  age 
5?  When  it  is  mandatory  for  them  to  become  vaccinated  to  enter 
school,  those  children  find  a  way  to  pay  for  vaccine.  So  that  the 
systems  of  today  are  providing  the  vaccines  at  today's  cost  that 
allow  those  children  to  get  into  school.  That's  the  point  we're  mak- 
ing. 

The  Chairman.  Well,  still,  obviously,  the  costs  are  a  lot  more  if 
you  have  a  child  immunized  the  way  they  should  be  at  the  age  of 
2,  isn't  that  true,  than  the  amount  that  would  be  necessary  at  the 
age  of  5? 

Mr.  Williams.  They  will  be  slightly  less,  but  the  amounts  are 
still,  we  think,  in  line  with  the  overall  immunization  cost. 

I  think  it  is  a  point  very  definitely  worthy  of  making. 

The  Chairman.  Senator  Riegle. 

Senator  Riegle.  Thank  you. 

Gentlemen,  in  Canada,  as  I  understand  it,  the  country  contracts 
with  vaccine  manufacturers,  negotiating  to  purchase  all  of  the  vac- 
cines. You  are  familiar  with  that,  I'm  sure.  They  have  an  immuni- 
zation rate  for  one-year-olds  of  85  percent,  while  ours  is  at  about 
48  percent;  so  they  are  obviously  getting  that  job  done  better  than 
we  are.  But  I  am  told  that  the  cost  to  fully  immunize  a  child  in 
Canada  is  about  half  what  it  is  in  the  United  States.  Is  that  gen- 
erally the  case?  What  price  do  you  sell  vaccines  to  Canada  for? 

Mr.  Williams.  I  think  in  Canada,  it  isn't  50  percent,  but  it's 
much  closer  to  that.  They  have  a  different  liability 

Senator  Riegle.  Fifty  percent  in  terms  of  the  cost? 

Mr.  Williams.  They  have  a  liability  system  in  Canada  that  is  far 
different  than  the  liability  system  in  this  country.  I  think  the  point 
that  has  to  be  made  on  Canada  is  not  so  much  a  point  of  cost,  but 
a  point  of  outreach  and  infrastructure.  This  is  a  country  that  has 
one  of  the  best  outreach  programs  and  one  of  the  best  infrastruc- 
tures in  the  world. 

Senator  Riegle.  We  don't  disagree  on  that,  but  let  me  stay  on 
the  cost  issue,  because  I  really  resent  you  moving  off  that  point 
when  that's  the  point  I  am  raising  with  you.  So  let  me  just  stay 
on  the  cost  issue. 


159 

I  want  to  know  the  difference  in  cost — and  I'd  like  an  answer 
from  each  of  you — between  what  you  sell  those  vaccines  for  in  Can- 
ada versus  wnat  you  sell  them  for  in  the  United  States.  Do  you  sell 
them  to  Canada  for  less  than  you  sell  them  here  in  the  United 
States? 

Mr.  Williams.  There  is  a  difference 

Senator  Riegle.  There  is  a  difference?  How  big  a  difference? 

Mr.  Williams.  We'd  be  pleased  to  provide  that  information. 

Senator  Riegle.  You  don't  know  that  number? 

Mr.  Williams.  I  don't  have  it  with  me. 

Senator  Riegle.  Do  you  have  any  idea? 

Mr.  Williams.  I  think  it  is  in  the  15  to  20  percent  range,  and 
I'll  be  pleased  to  provide  that  to  you. 

Senator  Riegle.  Does  anybody  else  here  have  any  information? 

Dr.  Saldarini.  Yes.  The  vaccines  that  I  sell  in  Canada  are 
equivalently  priced 

Senator  Riegle.  What  does  that  mean? 

Dr.  Saldarini.  "Equivalent"  meaning  that  sometimes,  exchange 
rates  might  change  momentarily 

Senator  Riegle.  But  other  than  that,  dollar  for  dollar,  it  is  the 
same? 

Dr.  Saldarini.  The  prices  are  essentially  equivalent;  that's  cor- 
rect. 

Senator  Rdzgle.  Would  that  be  true  of  your  company,  Mr. 
Gamier? 

Mr.  Garndzr.  In  our  case,  I  want  to  stress  that  negotiations  with 
governments  on  vaccine  price  are  not  the  most  rational  and  logical 
approaches  to  pricing  products,  and  therefore,  when  we  negotiate 
with  different  countries,  we  arrive  at  different  prices. 

For  instance,  the  marketplace,  which  really  determined  the  price 
in  the  U.S.,  is  actually  benefiting  the  consumers  as  far  as  Engerix- 
B,  the  hepatitis  B  vaccine,  is  concerned.  Our  price  in  the  U.S.  is 
below  the  price  in  the  U.K.,  where  we  have  a  negotiated  agreement 
with  the  government;  it  is  below  the  price  in  Spain,  and  it  is  below 
the  price  in  Italy.  It  happens  to  be  above  the  price  in  Canada  by 
about  35  percent. 

So  I  think  that  these  comparisons  between  countries  are  very  dif- 
ficult to  take  at  face  value. 

Senator  Riegle.  Well,  that  may  be.  That's  what  I  am  trying  to 
get  to. 

Mr.  Williams.  One  of  the  problems 

Senator  Rdjgle.  If  you  could  just  wait  a  minute,  I  am  question- 
ing this  gentleman;  I  might  come  back  to  you,  but  you've  already 
had  a  chance  to  speak,  and  I  would  like  to  hear  from  the  others. 

With  respect  to  the  price  you  charge  in  Canada,  are  you  selling 
below  cost  in  Canada,  or  do  you  make  a  profit  on  that  sale  in  Can- 
ada? 

Mr.  Garmer.  We  are  making  a  profit  in  Canada.  But  again,  you 
can't  look  at  every  country  as  an  incremental  stream  of  revenue. 
The  fixed  costs  have  to  be  paid  by  somebody.  Therefore,  it  is  a  little 
difficult  to  simplify  the  profit  discussion  to  whether  we  are  covering 
our  cost  of  manufacturing.  Of  course,  we  are  covering  our  cost  of 
m  anufacturing. 


160 

Senator  Riegle.  I  didn't  ask  you  if  you  were  covering  your  cost 
of  manufacturing.  I  asked  you  if  you  were  making  a  profit.  And  I 
assume  in  scoring  your  profit  is  the  cost  of  manufacturing,  it  is  the 
cost  of  selling — it  is  all  costs,  isn't  it?  You  are  still  making  money 
on  the  prices  you  charge  in  Canada.  I  think  that's  what  you  just 
said.  Is  that  right  or  wrong? 

Mr.  Garnier.  Yes.  I'm  not  going  to  try  to  tell  you  that  we  aren't 
making  a  money  by  selling  in  Canada.  Yes,  we  are,  but  the  way 
we  measure  our  profitability,  again 

Senator  Riegle.  But  you  sell  there  for- 


Mr.  Garnier.  — if  I  may,  is  by  consolidating  all  our  revenues  and 
comparing  them  to  the  fixed  costs  we  have  to  pay  every  year  for 
research  and  the  rest. 

Senator  Riegle.  Now,  do  you  manufacture  some  of  those  vaccines 
you  sell  in  Canada  here  in  the  United  States? 

Mr.  Garnier.  No;  as  a  matter  of  fact,  the  vaccines  sold  in  Can- 
ada are  manufactured  partially  in  Belgium. 

Senator  Riegle.  Partially  in  Belgium.  None  are  manufactured  in 
the  United  States? 

Mr.  Garnier.  No. 

Senator  Riegle.  So  you  have  to  bring  them  from  Belgium  here, 
and  also  to  Canada;  is  that  right? 

Mr.  Garnier.  Right,  that's  correct. 

Senator  Riegle.  OK.  But  you  bring  them  to  Canada,  and  you  sell 
them  at  a  much  lower  price,  even  though  you  make  a  profit;  and 
you  sell  them  at  a  higher  price  in  the  United  States,  and  I  assume 
you  make  even  a  bigger  profit. 

Mr.  Garnier.  No — actually,  yes,  you  are  correct,  but  why  do  we 
limit  our  comparison  to  the  United  States  and  Canada?  Why  don't 
we  compare  to  the  U.K.  and  Spain  and  Italy? 

Senator  Riegle.  Well,  I  am  happy  to  do  that.  The  reason  that  I 
am  picking  that  is  because  we  live  right  beside  Canada.  I  think  the 
travel  costs  are  about  the  same.  I  think  the  difference  is  that  they 
have  a  different  strategy  for  buying  the  vaccines.  And  we  are  talk- 
ing here  about  using  a  strategy  similar  to  theirs — in  other  words, 
buying  the  vaccines  as  a  government  exercise  so  we  can  do  exactly 
what  they  have  done.  They  have  gotten  a  better  price  out  of  you. 

What  can  I  do,  short  of  doing  that,  to  get  the  same  price  out  of 
you  that  you  give  Canada? 

Mr.  Garnier.  I  think  that  it  is  fair  to  say  that  in  the  case  of  hep- 
atitis B,  we  introduced  our  product  3  years  ago,  and  the  price  has 
declined  substantially  since,  so  every  year  we  have  had  to  make 
more  favorable  concessions  to  the  marketplace.  This  is  market  dy- 
namics. 

Senator  Riegle.  Yes,  but  you  are  dodging  my  question,  with  all 
due  respect.  The  question  is  if  today  you  are  selling  that  vaccine 
in  Canada  at  a  lower  figure,  what  do  I  have  to  do,  or  what  does 
this  government  have  to  do,  to  get  at  least  as  good  a  price  out  of 
you  as  Canada  is  getting?  I  mean,  why  should  we  concede  to  you 
a  higher  profit  when  the  country  living  right  next  door  has  figured 
out  how  to  get  you  to  sell  them  exactly  the  same  vaccine  at  a  Tower 
price?  Why  should  we  spend  money  we  don't  need  to  spend  that 
they  aren't  spending,  so  you  can  have  more  profit?  Is  that  fair? 


161 

Mr.  Garnier.  No,  but  let  me  try  to  address  the  question.  The 
reason  we  are  uncomfortable  having  a  discussion  like  this  obviously 
is  because  the  criteria  upon  which  governments  negotiate  with  us 
the  price  of  our  vaccines  vary  enormously,  so  it  is  very  difficult  to 
answer  your  question  because  we  are  not  comfortable  with  the 
process  that  is  being  used  in  Canada  and  the  U.K.  and  so  forth 

Senator  Riegle.  Let  me  just  ask  you  this.  What  am  I  missing? 
If  a  vaccine  is  made  in  Belgium,  and  it  is  shipped  over  to  Canada, 
to  Windsor,  or  right  across  the  Detroit  River  into  Detroit,  MI,  how 
is  the  manufacturing  cost  any  different — or  how  is  any  cost  any  dif- 
ferent? The  only  thing  that  I  see  is  different  is  the  fact  that  price 
is  different;  they're  getting  a  better  price,  and  we're  getting  a  worse 
price. 

Mr.  Garnier.  But  you  have  to  relate  it  to  the  cost  of  living  of  the 
country  and  the  exchange  rate.  When  we  started  to  sell  our  vaccine 
of  Engerix-B  in  Canada,  in  fact,  the  price  translation  between  the 
U.S.  and  Canada  was  essentially  the  same. 

°nr  Policy  is  t0  trv  to  sel1  tne  same  product  at  the  same  price 
in  all  the  Western  countries.  And  what  happened  over  three  or  4 
years  is  the  exchange  rate  has  an  enormous  impact,  and  I  can  show 
you  variations  of  30  to  40  percent  solely  attributable  to  foreign  ex- 
change losses.  So  we  are  not  trying  to  get  the  products  sold  at  dif- 
ferent prices  in  different  countries.  By  the  way,  there  is  nothing 
unusual  about  this  for  vaccines  or  pharmaceuticals.  All  products 
sold  in  all  countries  go  through  the  same  process. 

Senator  Riegle.  Let  me  just  finish  in  the  time  that  I  have.  The 
data  that  I  have  show  that  Canada  is  much  more  effective  in  hold- 
ing down  the  cost  and  the  price  for  these  vaccines  by  using  their 
national  buying  mechanism  than  we  are  here.  That's  just  what  the 
facts  show.  It  isn't  just  with  your  company;  it  is  with  all  companies. 
The  average  cost  of  vaccinations  up  there  is  far  less  because  they 
have  used  the  strength  of  their  buying  consortium  to  get  a  better 
price  out  of  you. 

Now,  I  know  you'd  rather  not  deal  with  that.  I'm  sure  you  wish 
that  weren't  so,  and  you  like  the  system  here.  But  let's  at  least  be 
honest  about  what  is  going  on.  And  the  fact  is,  you  are  still  able 
to  sell  at  a  profit  in  Canada.  You  haven't  stopped  selling  up  there. 
You  are  selling  up  there  because  you  are  making  money.  You  aren't 
making  as  much  money  as  you  are  making  here,  so  I  can  see  why 
you'd  just  as  soon  not  have  us  change  the  system  here,  because  it 
is  more  profitable  for  you  now  the  way  it  is  here  at  the  present 
time.  But  from  a  public  interest  point  of  view,  I  hope  you  can  un- 
derstand why,  if  the  Canadians  have  figured  out  how  to  get  more 
vaccine  for  less  money,  or  the  same  amount  of  vaccine  for  far  less 
money,  and  to  vaccinate  their  people  less  expensively,  we  ought  to 
be  smart  enough  to  find  a  method  and  a  means  here  to  do  exactly 
the  same  thing,  because  frankly,  we  don't  have  the  extra  money  to 
give  you  anymore. 

Thank  you. 

The  Chairman.  Senator  Kassebaum. 

Senator  Kassebaum.  Thank  you,  Mr.  Chairman. 

I  apologize  for  coming  late  to  this  discussion,  so  I  guess  I  would 
only  add  a  bit,  just  following  on  Senator  Riegle's  questioning. 


162 

This  is  the  question  you  hear  most  as  you  visit  around  your 
State.  You  hear  it  from  pharmacists,  you  hear  it  from  constituents: 
Why  do  drugs  cost  less,  for  instance,  in  Canada  or  some  other  coun- 
try abroad  tnan  here?  I  think  that  we  all  have  to  feel  comfortable 
with  an  answer  to  that. 

I  think  we  can  also  ask,  however,  how  many  blockbuster  drugs 
have  been  developed  in  Canada?  Does  one  think  of  Canada  as  a 
place  where  research  has  been  done  necessarily  to  the  degree  that 
it  has  been  done  here? 

I  think  the  other  side  of  that  coin  is  the  ability  to  have  the  inno- 
vation and  research  that  is  important  in  the  development  of  drugs. 
Now,  whether  that  explains  the  difference  in  costs  here  and 
abroad,  I  am  not  sure,  but  I  think  that  we  are  going  to  have  to  be 
able  to  answer  this  question  to  the  satisfaction  at  least  of  those 
who  are  really  trying  nard  to  understand  what  factors  go  into  drug 
pricing.  Maybe  there  is  research  that  is  being  done  in  Canada  and 
would  continue  being  done  there;  whether  that  even  weighs  into 
that  price  differential  or  not,  I'm  not  sure.  Does  anybody  nave  an 
answer? 

Mr.  Williams.  I  might  make  a  couple  of  points,  Senator.  I  think 
that  one  of  the  ways  we  look  at  our  measles-mumps-rubella  vaccine 
is  that  we  sell  it  almost  exclusively  in  the  developed  world.  There 
is  very  little  either  demand  for  it  or  want  for  it  in  the  underdevel- 
oped world.  Our  average  price  outside  the  United  States  is  slightly 
more  than  our  average  price  in  the  United  States. 

Now,  there  are  countries  where  we  sell  it  at  a  lower  price  than 
we  do  in  the  United  States.  There  are  countries,  like  Germany, 
where  we  sell  it  considerably  higher  than  we  do  in  the  United 
States.  A  lot  of  that  has  to  do  with  variations  in  exchange  rates 
that  have  occurred  since  the  introduction  of  the  product,  when  a 
price  was  fixed,  and  in  many  countries  you  cannot  then  change  the 
price.  And  many  of  these  complexities  have  been  mentioned  pre- 
viously in  the  panel.  But  we  look  at  the  total  return  on  non-U. S. 
sales  of  vaccine,  and  therefore  we  can  accept  these  variations  as 
they  occur  naturally  and  you  can't  do  very  much  about. 

Mr.  Garnier.  If  I  may  add  also,  the  consequence  if  we  were  to 
take  one  of  the  lowest,  or  in  fact,  the  lowest-priced  country  for 
Engerix-B  or  hepatitis  vaccine,  and  if  we  were  to  align  ourselves 
with  that  price,  we  would  have  a  considerable  loss  for  the  company. 
This  is  the  idea  of  having  to  cover  your  fixed  costs.  You  cannot  look 
at  one  market  and  say,  "The  price  is  low  here,  so  how  come  we 
don't  get  it?"  At  some  point,  the  fixed  costs  that  we  are  incurring, 
most  of  it  for  research,  have  to  be  covered  by  our  total  worldwide 
revenues.  In  the  case  of  SmithKline  Beecham  and  Engerix-B,  as  I 
said  before,  the  U.S.  happens  to  be  a  very  reasonably  priced  mar- 
ket if  you  compare  it  to  Spain,  Italy,  the  U.K.,  Germany,  Japan; 
all  those  markets  have  a  higher  price. 

So  it  is  a  little  unfair  to  pick  on  the  lowest  country  where  we  do 
get  incremental  profits  from  that  country  and  say,  "Why  don't  you 
align  your  price  to  the  lowest  country  and  start  to  live  like  this?" 
We  would  not  be  able  to  reinvest  in  research  as  we  currently  do. 
So  one  has  to  be  careful  in  how  we  look  at  the  worldwide  picture 
for  the  pricing  of  our  products. 
Senator  Kassebaum.  Thank  you. 


163 

The  Chairman.  The  onlv  point  is  why  the  Americans  have  to  be 
the  ones  to  pick  up  the  tab.  What  I  am  hearing  from  you  is,  "Look, 
we  may  be  selling  this  at  cheaper  prices,  but  unless  we  can  get  real 
profits  out  of  some  countries,  we  aren't  going  to  be  able  to  afford 
this  kind  of  work."  I  think  the  frustration  that  we  are  hearing  from 
parents  all  over  this  country  is  that  they  have  been  paying  more, 
and  they  want  to  find  out  why  that  is  the  case.  And  I  think  the 
burden  is  really  on  the  companies  to  demonstrate  their  prices  are 
fair — well  put  the  comparisons  in  the  record.  I  hope  youll  provide 
for  us  a  detailed  account,  country-by-country,  where  you  are  selling 
each  of  the  products,  which  we  will  make  part  of  the  record.  And 
well  put  in  the  record  this  same  information  as  well  for  the  other 
companies  that  are  producing  other  essential  vaccines  for  children. 
I  think  it  is  important  to  have  that  as  a  matter  of  public  informa- 
tion. 

We  want  to  thank  you  all  for  being  here.  You  might  wonder 
sometimes  whether  you  are  welcome,  but  I  think  this  is  an  enor- 
mously important  issue,  and  there  are  strong  views.  Just  speaking 
personally,  I  am  a  strong  supporter  of  the  administration's  pro- 
posal, but  as  one  whose  family  has  probably  benefited  more  from 
the  innovation  and  the  creativity  ana  the  work  that  has  been  done 
by  many  of  the  pharmaceutical  companies  in  a  number  of  different 
situations,  I  think  I  can  speak  for  many  Americans.  We  are  obvi- 
ously very  grateful  for  the  progress  that  has  been  made  by  medical 
research. 

We  are  in  this  together,  in  the  same  boat,  quite  frankly,  because 
we've  got  this  issue  of  underimmunized  children.  We've  got  health 
insurance  reform  coming  along,  and  we  want  to  be  able  to  work 
with  you  on  that  as  well  to  insure  access  to  preventive  health  care. 
We  are  going  to  have  some  differences  as  we  look  for  solutions,  but 
we  are  going  to  have  to  try  to  work  through  those.  But  hopefully, 
you  have  some  sense  of  the  concern  that  millions  of  families  have 
regarding  immunizations  and  the  difficulty  they  face  in  obtaining 
them  for  their  children.  Resolving  the  public  policy  questions  is  of 
great  importance  and  urgency.  We  are  very  interested  in  the  sug- 
gestions that  have  been  made,  and  we'll  go  over  those  in  greater 
detail. 

Senator  Riegle. 

Senator  Riegle.  Senator  Kennedy,  if  I  may  just  add  one  final 
comment  myself,  and  that  is  that  I  appreciate  the  forward  move- 
ment of  the  science  in  vaccines  and  in  medicines,  generally,  and  I 
would  not  want  that  to  be  misunderstood.  I  want  to  see  us  develop 
a  system  here  that  provides  for  a  fair  rate  of  return  and  for  the 
money  that  is  needed  for  continued  research  and  development. 

I  came  out  of  the  private  sector  before  coming  here,  and  I  think 
I  understand  how  it  works  in  that  respect,  so  I  don't  want  anything 
that  I  have  said  to  be  contrary  to  that. 

By  the  same  token — and  let  me  make  it  just  as  plain  as  I  know 
how  to  put  the  words,  because  we  are  going  to  go  through  health 
care  reform,  and  you  can  either  help  us  or  you  can  work  against 
us,  and  I  hope  you  will  help  us  and  that  we'll  work  together — we 
are  not  going  to  be  able  to  tolerate  these  differentials  such  as  they 
exist  now.  We  cannot  have  a  situation  where  these  bulk  buying 
programs  in  an  adjacent  country  like  Canada,  a  developed  country, 


164 

where  those  drugs  are  available  at  a  much  lower  cost  than  they  are 
here  in  the  United  States.  And  there  aren't  going  to  be  any  excep- 
tions made  for  anybody,  so  you  might  as  well  just  figure  that  out 
and  decide  in  that  respect  to  become  team  players  with  this  coun- 
try. 

It  is  a  very  sensitive  issue.  We're  talking  about  getting  children 
immunized,  and  we  cannot  afford  to  pay  premium  expenses  for  that 
that  aren't  justified  and  that  aren't  being  paid  in  Canada  or  in  a 
lot  of  other  countries.  The  fact  that  you've  got  these  other  pricing 
anomalies  in  other  countries,  so  be  it.  We  don't  run  the  affairs  in 
those  countries.  But  we  are  going  to  have  to  change  the  system 
here,  and  you  should  be  helping  us.  And  you  can  make  it  more  dif- 
ficult, or  we  can  figure  out  a  way  to  work  together.  I'd  like  to  work 
together.  But  if  anybody  is  thinking  that  maintaining  the  status 
quo  and  those  kinds  of  differentials  is  working  together,  then  that 
isn't  going  to  work. 

Dr.  Saldarini.  Senator,  I  appreciate  your  comments,  and  I  cer- 
tainly do  want  to  work  with  the  committee  on  the  initiatives  of  the 
Health  Care  Reform  Task  Force.  I  would  just  make  one  point  to 
your  comment,  and  that  is  we  are  an  American  company;  we  are 
manufacturing  here,  and  we  are  selling  here,  and  we  sell  from  here 
abroad. 
Thank  you. 

Senator  Riegle.  We  want  you  to  be  able  to  continue  to  do  that, 
and  we  want  the  best  price  here  in  the  United  States.  There  are 
no  transportation  costs,  no  transportation  premiums  of  anything 
made  here  that  is  kept  here.  It  costs  more  to  send  things  out  of 
here  than  it  does  to  keep  them  and  consume  them  here. 

The  Chairman.  I  would  say  that  we  appreciate  the  companies 
that  have  stayed  here.  Many  have  moved  abroad,  but  that's  an 
issue  for  another  day.  In  any  event,  I  certainly  appreciate  those 
that  have  stayed  in  the  vaccine  production  business. 

And  as  a  personal  note,  let  me  just  say  that  my  sense  is  that 
about  half  of  the  major  pharmaceutical  companies  are  really  doing 
a  bang-up  job  on  research,  and  the  other  half  are  just  drawing 
down  on  this  perception  but  aren't  doing  the  kind  of  creative  work, 
and  are  taking  a  ride  on  the  increase  in  the  price  of  pharma- 
ceuticals. That  is  my  view;  I  might  be  wrong,  but  I  don't  believe 
that  I  am.  I  think  most  of  us  who  have  been  dealing  with  this  issue 
over  some  period  of  time  on  both  sides  could  name  them. 

And  one  of  the  problems  that  we're  going  to  have  is  that  the  in- 
dustry will  need  to  participate  in  the  solutions.  The  good  companies 
that  are  really  on  the  cutting  edge,  doing  the  job— really  out  there 
in  terms  of  investing  and  doing  the  kinds  of  things  that  all  of  us 
expect  and  hope  for — they  have  got  to  help  the  Congress  in  terms 
of  the  other  groups  that  are  just  along  for  the  ride,  because  they 
are  dragging  them  down.  It  is  going  to  be  very  tough  in  terms  of 
legislating  to  try  to  achieve  the  cooperation  of  all  involved.  But  that 
isn't  a  phenomenon  unique  to  the  pharmaceutical  industry — it's 
true  about  politicians  as  well,  and  others.  So  that  is  the  part  of  the 
frustration — and  we  won't  get  into  it  today  deeply— but  we  want  to 
work  for  the  best  outcome,  and  we  won't  tolerate  those  who  aren't 
really  committed  to  achieving  the  goal  of  immunizing  all  children. 


165 

We'll  try  and  work  with  you,  and  I  hope  you  will  join  with  us  to 
help  our  Nation  reach  this  important  objective. 

Thank  you  very  much. 

The  Chairman.  Our  next  panel  includes  Dr.  Ed  Marcuse,  presi- 
dent of  the  Washington  Chapter  of  the  American  Academy  of  Pedi- 
atrics, and  director  of  ambulatory  services  at  Children's  Hospital 
and  Medical  Center,  at  the  University  of  Washington,  in  Seattle; 
and  Dr.  Richard  Duma,  executive  director  of  the  National  Founda- 
tion for  Infectious  Diseases  in  Bethesda,  MD. 

I  want  to  thank  both  of  you.  We  have  your  written  statements, 
and  they  will  be  made  part  of  the  record  in  their  entirety,  and  we 
hope  you  can  comply  with  the  time  limitations. 

Dr.  Marcuse. 

STATEMENTS  OF  DR.  ED  MARCUSE,  PRESIDENT,  WASHINGTON 
CHAPTER,  AMERICAN  ACADEMY  OF  PEDIATRICS,  AND  DI- 
RECTOR, AMBULATORY  CARE  SERVICES,  CHILDREN'S  HOS- 
PITAL AND  MEDICAL  CENTER,  UNIVERSITY  OF  WASHING- 
TON, SEATTLE,  WA;  AND  DR.  RICHARD  J.  DUMA,  EXECUTIVE 
DIRECTOR,  NATIONAL  FOUNDATION  FOR  INFECTIOUS  DIS- 
EASES, BETHESDA,  MD 

Dr.  Marcuse.  Thank  you. 

My  name  is  Ed  Marcuse.  I  am  a  pediatrician  at  Seattle's  Chil- 
dren's Hospital,  and  I  am  here  today  representing  the  American 
Academy  of  Pediatrics. 

Senator,  I  think  everyone's  appetite  for  rhetoric  has  been  sated, 
and  I  have  handed  in  some  written  remarks,  and  I  will  just  make 
a  few  points. 

The  Academy  enthusiastically  supports  the  Comprehensive  Child 
Immunization  Act  of  1993.  We  are  pleased  for  the  priority  on  im- 
munization. We  see  it  as  the  first  step  toward  reaching  the  goal  of 
assuring  basic  health  care  for  all  of  America's  children. 

Simply  put,  our  Nation's  immunization  system  for  infants  today 
is  like  a  car  with  four  flat  tires.  One  flat  is  the  major  out-of-pocket 
expenses  for  immunization.  A  second  flat  is  that  the  immunization 
services  are  not  readily  accessible.  A  third  is  that  the  immunization 
schedule  is  complex,  and  American  families  move.  And  the  fourth 
is  the  immunization  simply  has  not  been  a  high  priority. 

As  you  have  heard,  we  can  now  protect  children  against  nine  dis- 
eases. This  requires  15  doses  of  five  vaccines,  administered  in  the 
first  2  years  of  life. 

A  car  with  four  flat  tires  is  not  going  to  get  very  far  down  the 
road  unless  we  change  all  four  tires  at  the  same  time.  We  have  to 
increase  the  demand,  we  have  to  develop  a  tracking  system,  we 
have  to  make  immunization  accessible  to  all  children,  and  we've 
got  to  remove  all  the  financial  barriers  to  vaccines.  Fixing  only  one 
or  two  of  these  is  going  to  leave  us  with  a  car  with  one  flat  tire, 
and  we  are  still  not  going  to  be  able  to  make  the  trip  we  need  to. 

In  Washington  State  in  about  1989,  we  knew  that  46  percent  of 
our  2-vear-olds  were  getting  immunized  on  time,  and  that's  just 
with  the  old  vaccines — DTP,  MMR  and  OPV.  In  the  decade  before 
that,  prices  had  gone  up  10  to  12  times  in  the  public  sector,  and 
there  had  been  a  shift  of  patients  from  the  private  sector  into  our 
health  departments,  which  were  ill-equipped  to  handle  more  pa- 


166 

tients.  We  had  some  pertussis  outbreaks.  It  was  the  beginning  of 
the  measles  resurgence  in  the  country. 

We  looked  around  the  country  to  figure  out  what  we  could  do.  We 
looked  to  New  England,  we  looked  to  Massachusetts,  and  we  saw 
that  they  had  universal  purchase  programs,  and  pediatricians  and 
family  practitioners  administering  vaccines  in  their  offices.  I  per- 
sonally did  a  survey  in  Washington  State,  and  93  percent  of  our  pe- 
diatricians said  they  had  administered  health  department-pur- 
chased vaccines  in  their  offices.  Pediatricians  really  do  believe  in 
comprehensive  care  and  really  do  want  to  immunize  kids. 

So,  with  bipartisan  support,  our  legislature  allocated  the  funds 
to  buy  the  vaccine.  The  first  year,  it  was  bumpy.  There  are  10  re- 
quirements or  so  that  pediatricians  and  other  primary  care  docs 
have  to  fiilfill  in  order  to  use  State  vaccine.  They  have  to  limit  ad- 
ministration fees  to  $10;  they  have  to  give  the  vaccine  without 
charge  if  the  family  can't  afford  it  and  post  a  sign  in  the  Waiting 
room  that  says  that;  they  have  to  develop  a  tracking  and  recall  sys- 
tem and  do  several  other  things. 

The  first  year  was  bumpy.  There  were  delivery  problems.  Health 
departments  ran  out  of  vaccine.  There  were  misunderstandings  and 
disputes.  But  by  the  end  of  the  year,  we  had  solved  that,  and  the 
system  now  works.  Not  every  doctor  in  the  State  participates,  but 
overall,  last  year  we  gave  835,000  doses  of  publicly-purchased  vac- 
cine, and  70  percent  of  that  is  administered  in  private  offices  by 
physicians.  It  is  working. 

We  believe  that  immunization  is  a  shared  responsibility  between 
the  community  and  the  parents.  Protecting  the  public  health,  con- 
trolling communicable  disease,  is  a  fundamental  responsibility  of 
government.  Our  Nation's  measles  resurgence  was  due  to  failure  to 
immunize.  Forty-three  percent  of  the  measles  cases  occurred  among 
unimmunized  preschoolers,  and  the  cost  for  that  was  borne  by  the 
entire  Nation.  No  Nation  in  the  world  has  achieved  satisfactory  im- 
munization levels  vaccinating  only  disadvantaged  children. 

We  have  a. two-class  immunization  system  in  the  United  States 
today,  and  the  middle  class  who  can  afford  vaccine  is  paying  for  it 
three  times  over.  They  are  paying  a  higher  price  than  the  public 
sector  price  for  vaccine.  They  are  paying  for  the  Medicaid  fees 
through  Social  Security  taxes,  and  in  addition,  they  are  paying  the 
taxes  that  fund  our  local  health  departments. 

We  think  we  need  to  have  a  system  that  will  use  all  providers, 
public  and  private,  to  get  our  kids  immunized.  Doing  this  just  in 
the  public  sector,  we  can't  get  the  job  done.  We  can  enlist  all  the 
private  providers  and  the  public  providers  through  this  legislation. 

Thank  you. 

Sentor  Riegle.  Thank  you  very  much. 

[The  prepared  statement  of  Dr.  Marcuse  follows:] 

Prepared  Statement  of  Ed  Marcuse 

My  name  is  Ed  Marcuse,  M.D.  I  am  a  pediatrician  at  Seattle's  Children's  Hospital 
and  am  here  today  representing  the  America  Academy  of  Pediatrics.  I  have  recently 
completed  a  term  appointment  on  the  National  Vaccine  Advisory  Committee,  am  a 
member  of  the  Academy's  Committee  on  Infectious  Diseases  ad  currently  serve  as 
President  of  the  Washington  Chapter  of  the  America  Academy  of  Pediatrics. 

The  Academy  enthusiastically  supports  "The  Comprehensive  Child  Immunization 
Act  of  1993."  Basic  health  care  for  all  American  children  is  a  goal  that  is  long  over- 


167 

due.  We  view  the  priority  placed  on  immunizations  as  a  important  first  step  in 
reaching  that  goal. 

From  the  pediatric  perspective,  immunizations  delayed  are  immunizations  denied. 
Barriers  leading  to  such  delays  cross  all  income  levels  ad  exist  in  every  State.  Our 
immunization  program  is  falling  our  children  because  access  to  vaccines  has  been 
hampered  by  costs,  by  problems  in  service  delivery,  by  a  lack  of  appropriate  infor- 
mation ad  by  our  inability  to  keep  track  of  children's  immunizations.  Countries 
which  provide  for  universal  childhood  immunization  delivery  ad  tracking  do  far  bet- 
ter than  our  current  best  efforts.  And  as  you  well  know,  the  costs  of  our  failure  to 
immunize  our  children  are  borne  by  the  entire  country  in  unnecessary  medical  costs, 
outbreak  control,  costs  of  life-long  ability,  and  lost  productivity  of  affected  children 
ad  their  parents. 

Today,  we  can  protect  infants  from  nine  diseases:  diphtheria,  tetanus,  whopping 
cough,  polio,  measles,  mumps,  rubella,  hemophilus  B  and  hepatitis  B.  To  accomplish 
this  requires  that  we  administer  to  every  infant  a  total  of  15  doses  of  5  vaccines 
before  their  second  birthday.  We  have  never  had  an  immunization  delivery  system 
capable  of  doing  this.  As  you  have  heard,  only  40  to  60  percent  of  VS.  infants  re- 
ceive all  of  the  8  needed  doses  of  DTP,  OPV  and  MMR — vaccines  recommended  by 
2  years  of  age  that  have  been  available  for  over  20  years.  Far  fewer  receive  the 
newer  vaccines. 

Simply  put,  our  Nation's  immunization  system  for  children  is  like  a  car  with  four 
flat  tires: 

because  immunization  is  a  major  out-of-pocket  expense  for  too  may, 

because  immunization  services  are  not  readily  accessible, 

because  the  immunization  schedule  is  complex  and  America  families  move,  and 

because  immunization  is  not  a  high  priority  for  many  young  families. 

A  car  with  four  flat  tires  isn't  going  to  go  very  far  very  fast  until  we  fix  all  four 
flats.  To  protect  our  children  and  really  the  potential  savings  in  medical  costs,  we 
must:  ensure  that  immunization  is  in  fact  truly  accessible  to  all  children  in  all  areas 
of  the  United  States;  remove  all  financial  barriers  to  this  cost-effective  preventive 
service;  develop  a  tracking  and  recall  system  to  cope  with  the  complex  schedule  and 
our  mobile  population;  ad,  increase  the  demand  for  immunization  services.  I  believe 
that  the  Comprehensive  Child  Immunization  Act  of  1993  is  the  new  set  of  tires  we 
need  to  get  our  country's  immunization  program  going. 

Fixing  one  or  two  or  three  of  these  problems  still  leaves  us  with  one  or  more  flat 
tires.  We  must  address  all  four  issues  simultaneously. 

WASHINGTON  STATE  EXPERIENCE 

As  the  1980's  drew  to  a  close  it  was  apparent  that  the  immunization  program  in 
Washington  State  had  four  flat  tires.  By  1989,  we  recognized  we  were  not  doing  the 
job  as  the  costs  of  vaccines  skyrocketed  ad  new  vaccines  were  added  to  the  schedule. 
Although  we  had  not  quantitated  the  problem.it  was  our  impression  that  the  immi- 
gration of  children  from  the  private  to  public  sector  to  receive  immunizations  that 
was  occurring  across  the  Nation  was  occurring  in  Washington  state  as  well.  We 
were  aware  that  the  number  of  cases  of  measles  was  increasing  and  we  experienced 
outbreaks  of  pertussis.  We  knew  that  in  New  England  States  such  as  Massachusetts 
health  departments  purchased  vaccine  and  distributed  it  to  private  physicians  to  ad- 
minister. In  planning  to  change  our  immunization  program  we  surveyed  Washing- 
ton pediatricians  in  1989  and  learned  that  93  percent  would  administer  vaccines 
supplied  by  the  health  departments  in  their  offices.  Working  in  the  spirit  of  a  long 
tradition  of  public-private  immunization  partnership,  in  1990  our  State  expanded  its 
vaccine  purchase  program  to  cover  100  percent  of  children  born  each  year.  Immuni- 
zation of  children  was  a  bipartisan  priority  for  our  State  legislators;  they  appro- 
priated funds  to  purchase  under  Federal  contract  (as  had  the  New  England  States) 
all  recommended  vaccines  for  70,000  children  born  in  the  State  each  year. 

We  traveled  a  very  bumpy  road  that  first  year.  To  receive  State  purchased  vac- 
cines physicians  have  to  agree  to: 

limit  their  administration  fee  to  $10  or  less 

give  the  vaccine  for  free  if  a  parent  could  not  pay  an  administration  fee  and 

post  a  sign  about  this  practice 

have  a  tracking  ad  recall  system 

get  a  parent's  signature  for  informed  request  for  each  dose  of  vaccine 

report  summary  statistics 

monitor  the  temperature  of  stored  vaccine 


168 

There  were  misunderstandings  ad  disputes  about  these  things.  And  there  were 
major  supply  and  delivery  problems.  Health  departments  filled  only  partial  orders, 
ran  out  of  some  vaccines,  kept  physician  office  personnel  waiting  for  long  times  to 
pick  up  supplies.  But  during  that  year  our  local  health  departments  learned  how 
to  do  the  job.  The  next  year  it  worked. 

Last  year  (1992),  Washington  State  purchased  835,101  doses  of  vaccine — 70  per- 
cent of  them  were  administered  by  private  providers. 

Not  every  private  provider  participated.  Some  dropped  out  at  the  start  and  are 
not  yet  ready  to  participate.  Some  don't  want  to  be  hassled  by  one  or  another  of 
the  State's  requirements  for  participation.  Several  say  they  are  waiting  to  sign  on 
until  the  State  buys  all  vaccines  including  hepatitis  B.  We  estimate  that  today  at 
lease  65  percent  of  our  State's  total  childhood  vaccine  needs  are  now  being  met  by 
this  program.  We  do  not  know  what  proportion  of  the  remaining  35  percent  are  met 
by  private  purchase  of  vaccines  or  remains  unmet. 

Since  beginning  the  program  we  have  not  experienced  a  shift  from  private  to  pub- 
lic sector.  In  several  areas  practitioners  tell  me  they  match  their  administration  fees 
to  those  of  the  local  health  department  to  avoid  any  incentive  for  fragmentation  of 
care.  (Pediatricians  really  believe  in  comprehensive  child  health  care — that  is  the 
way  they  want  to  practice.) 

But  we  have  a  long  road  left  to  travel.  Only  about  60  percent  of  our  2-year-olds 
are  fully  immunized/We  believe  the  reason  is  we  have  changed  only  one  of  the  four 
flat  tires.  So  we  have  set  about  changing  the  other  three.  But  we  need  help  with 
the  resources. 

Tracking  ad  recall:  We  have  a  coordinated  effort  between  the  State  Health 
Department,  two  local  health  departments,  health  professionals,  volunteers  and 
an  impressive  coalition  of  private  hospitals  to  develop  an  immunization  registry. 
Increase  access  to  immunization:  Each  of  the  State's  32  health  districts  is  im- 
plementing a  plan  to  increase  the  availability  of  immunization  services.  Local 
communities  are  increasing  the  hours  of  climes,  offering  evening  and  weekend 
clinics,  often  supported  byJunior  League  or  service  clubs. 

Increase  demand  for  timely  immunization:  In  several  areas,  including  Seattle 
the  hospitals  where  a  baby  is  born  have  agreed  to  send  out  individualized  im- 
munization reminders  to  their  infants — the  first  step  in  establishing  a  registry. 

We  think  we  have  made  a  good  start.  The  Comprehensive  Child  Immunization  Act 
of  1993  will  provide  the  motivation  and  opportunity  to  fully  implement  these  initia- 
tives and  get  all  four  fiat  tires  on  the  road. 

ISSUES  ADDRESSED  IN  THE  COMPREHENSIVE  CHILD  IMMUNIZATION  ACT  OF  1993 

Access 

Clinics,  particularly  in  inner  cities  too  often  have  policies  that  function  as  barriers 
to  accessing  immunizations.  These  include:  no  evening/weekend  appointment  hours 
usually  due  to  staffing  constraints,  long  waiting  times  Doth  in  clinic  and  for  appoint- 
ments requiring  excessive  time  away  from  work  for  a  parent.  The  irony  is  that  the 
private  sector  has  removed  may  of  these  barriers  through  extended  office  hours,  effi- 
cient scheduling  of  appointments,  and  by  making  immunization  available  in  hos- 
pitals, hospital  outpatient  clinics,  and  in  community  health  centers — but  at  a  much 
higher  cost  for  the  vaccine  to  the  family.  Current  immunization  plans  and  this  bill 
provide  funding  to  address  these  problems. 

Costs  of  immunization 

Vaccine  costs  to  the  private  sector  are  considerably  higher  than  the  costs  of  those 
very  same  vaccines  purchased  by  the  public  sector — 1.7  times  higher  for  DPT  and 
MMR,  4.6  times  higher  for  OPY\  The  cost  to  the  private  sector  for  one  child's  vac- 
cines from  birth  to  school  entry  is  about  $250  without  any  administration  fee.  (See 
tables.)  Since  immunizations  are  generally  not  covered  by  health  insurance,  the  cost 
must  be  paid  by  parents  out  of  pocket,  causing  financial  hardship  to  many  working, 
middle  class  families. 

Today,  in  many  communities,  private  physicians  often  feel  obliged  to  offer  their 
paying  patients  the  option  of  receiving  vaccines  at  health  department  clinics  which 
nave  access  to  lower  cost  vaccine  purchase  under  federal  contract.  Dallas  County 
Texas  has  experienced  a  700  percent  increase  in  children  receiving  vaccines  in  pub- 
lic clinics. 

Vaccine  costs  are  also  having  a  negative  impact  on  this  Committee's  tireless  ef- 
forts to  improve  Medicaid  coverage  and  eligibility.  While  may  Medicaid-eligible  chil- 
dren now  have  what  we  call  a  medical  home — an  ongoing,  comprehensive  source  of 
medical  care — in  areas  where  Medicaid  reimbursement  is  less  than  the  cost  of  these 
vaccines,  physicians  are  forced  to  refer  these  children  to  public  clinics  for  their  im- 


169 

munizations.  At  best,  this  fragments  their  care,  delays  their  immunization  and 
complicates  record  keeping  for  these  families.  At  worse,  these  children  never  make 
the  trip  to  their  local  clinic. 

We  have  US.  Public  Health  Service'  immunization  recommendations  that  advise 
new  vaccines  ad  new  vaccine  schedules  yet  may  public  clinics  cannot  implement 
these  recommendations  largely  due  to  the  lack  of  adequate  funding.  This  means  that 
many  children  are  denied  a  second  MMR  or  meningitis  or  hepatitis  B  vaccines  that 
are  simply  not  available  for  children  dependent  on  public  programs  for  their  immu- 
nizations. 

Tracking  system 

The  tracking  system  established  by  this  bill  will  perhaps  prove  to  be  the  most  im- 
portant part  of  our  Nation's  long  term  vaccine  strategy.  The  recommended  schedule 
of  immunizations  is  complicated  and  it  is  changing  because  science  and  technology 
are  making  available  marvelous  safe  and  effective  new  vaccines. 

Even  if  we  remove  the  barriers  of  cost  and  access  to  immunization  and  signifi- 
cantly strengthen  our  outreach  capabilities,  we  will  not  recognize  our  progress  if  we 
do  not  put  in  place  a  practical  tracking  system  and  develop  a  nationwide  immuniza- 
tion registry. 

The  complexity  of  today's  immunization  schedule  and  the  mobility  of  our  popu- 
lation require  this  new  tool  to  get  the  job  of  immunizing  our  children  done.  We  need 
to  merge  the  record-keeping  experience  of  public  programs,  such  as  medicaid  and 
Maternal  and  Child  Health,  with  existing  computer  technology  and  private  sector 
needs  to  create  a  practical  system  that  can  function  in  a  busy  clinic  or  office  without 
admng8ignificant  C08t*  Mo8t  EuroPean  countries  have  tracking  systems  that  begin 
r  u  nua  are  df""^01  to  assure  continuing  participation  of  the  infant  in  a  system 
of  health  care.  We  now  have  legislation  that  provides  motivation  and  opportunity 
to  develop  such  a  system  in  the  United  States. 

Immunization  receives  low  priority 

Many  US.  children  live  in  poverty.  For  their  parents,  shelter,  food,  and  protection 
irom  violence  are  all  of  higher  priority  than  is  preventive  health  care.  Even  for  the 
more  affluent,  immunization  is  not  always  a  high  priority.  Parents  of  young  children 
lead  hectic  lives,  juggling  work,  child  care,  shopping,  meals,  laundry.  Immunizing 
their  child  on  tune  often  does  not  rank  high  enough  to  make  the  cut,  particularly 
if  immunization  services  are  not  readily  accessible. 

May  parents  simply  do  not  recognize  these  diseases  as  a  threat  to  their  children— 
in  contrast  to  substance  abuse  or  environmental  hazards. 

i  J£Lpay  a  Wgh  pri^  for  our  immunization  failures.  In  1989  there  were  more  than 
16,000  cases  of  measles  in  the  United  States  with  41  deaths.  The  number  of  measles 
cases  rose  in  1990  to  more  than  27,700.  Forty-six  percent  of  the  cases  were  in 
unimmunized  preschool  children.  In  1991,  there  were  more  tha  60  measles  deaths 
nationwide  CDC  has  reported  more  than  a  three-fold  increase  in  the  number  of 
cases  of  rubella  m  1990  as  compared  with  1989.  Recently,  pertussis  cases  have  in- 
creased 17  percent,  with  rates  highest  in  children  under  one  year  of  age  This  bill 
makes  immunization  a  high  national  priority  and  educational  efforts  aimed  at  par- 
ents and  providers  will  raise  levels  of  awareness. 

The  case  for  universal  purchase 

t  J^^mg  the  public  health  by  controlling  communicable  diseases  is  a  fundamen- 
tal mnction  of  any  government.  Immunizations  of  children  is  a  responsibility  shared 
by  a  child  b  parents  and  the  community.  No  nation  has  achieved  satisfactory  immu- 
nization levels  vaccinating  only  disadvantaged  children.  This  bill  recognizes  this  re- 
sponsibility ad  provides  vaccine  for  all  children. 

Today,  we  have  a  two-class  immunization  system,  where  one  class  subsidizes  the 
other  for  the  costs  of  vaccine.  Those  who  are  immunized  in  the  private  sector  pay 
lor  the  vaccine  three  times  over:  first,  they  pay  up  to  four  times  the  price  for  the 
vaccines  themselves,  subsidizing  the  artificially  low  public  sector  price:  second, 
through  social  security  taxes  which  fund  Medicaid;  ad  third,  by  paying  the  State 
and  federal  taxes  that  fund  local  health  departments.  In  essence,  working  families 
with  young  children,  who  have  the  least  insurance  coverage  ad  least  disposable  in- 
COI^e'Laf?  subsidizing  public  clinics.  Such  a  two-class  immunization  does  not  serve 
well  children  in  either  class.  To  immunize  all  our  Nation's  children  on  lime  requires 
utilizing  all  available  qualified  providers— private  offices,  hospitals,  public  health 
departments,  and  community  clinics.  All  must  be  utilized  to  provide  the  cost-effec- 
tive preventive  care  to  children  who  need  it  at  every  opportunity. 

Requiring  private  providers  to  means  test  each  patient  to  determine  from  which 
vial  to  draw  the  vaccine  would  destroy  the  public  private  partnership  we  need  to 
get  the  job  done.  The  cost  of  failure  to  immunize  in  my  community  are  ultimately 


170 

borne  by  the  Nation.  A  measles  outbreak  in  Los  Angeles  or  Dallas  can  cjuickly 
spread  to  Boston  or  Yakima.  We  must  find  a  way  to  facilitate  timely  immunization 
of  all  U.S.  children  in  every  community.  This  requires  a  negotiated  federal  purchase 
price  for  childhood  vaccine.  As  stated  in  the  bill  the  price  should: 

1)  ensure  incentives  for  private  sector  research; 

2)  preserve  multiple  manufacturers  in  the  marketplace;  and 

3)  allow  fair  profit  margins  for  manufacturers. 

In  exchange  for  the  provision  of  vaccines  provider  charges  would  only  reflect  a 
reasonable  administration  fee. 

Vaccine  compensation  amendments 

I  would  be  remiss  if  I  did  not  briefly  comment  on  the  section  of  the  bill  that  deals 
with  vital  amendments  to  the  Vaccine  Injury  Compensation  Program.  The  viability 
of  the  childhood  immunization  program  is  closely  tied  to  the  National  Vaccine  Injury 
Compensation  Act. 

This  program  is  now  in  "limbo"  due  to  the  expiration  of  the  excise  taxes  on  Janu- 
ary 1  of  this  year.  This  compensation  program  has  stabilized  vaccine  prices,  encour- 
aged private  physicians  to  continue  providing  immunizations,  enticed  new  manufac- 
turers into  the  marketplace,  and  has  fairly  compensated  families  who's  child  may 
have  been  unavoidably  injured  by  vaccines.  Without  a  immediate  restoration  of  this 
vital  program,  vaccine  prices  may  rise  (to  cover  manufacturers'  liability),  patients 
may  be  shifted  to  public  clinics  because  of  physician  renewed  liability  concerns  and 
more  parents  may  delay  immunizing  their  children  if  no  recourse  for  adverse  reac- 
tions is  available.  The  losers,  obviously,  during  this  period  of  "limbo"  are  our  chil- 
dren. 

Once  the  program  is  restored,  then  we  must  focus  our  attention  on  the  other  need- 
ed amendments  also  spelled  out  in  this  bill  including:  the  addition  of  new  vaccines; 
the  simplification  of  the  parent  information  materials;  and  extension  for  filing  peri- 
ods. 

As  the  debate  for  national  health  care  reform  continues,  we  can  do  no  less  than 
insist  that  childhood  immunizations  be  assured  for  all  our  children. 


171 


VACCINE  COSTS  -  PUBLIC  VS  PRIVATE 
COST  TO  IMMUNIZE  A  CHILD  TO  AGE  TWO  IN  WASHINGTON  STATE 


COST  OF*  WA§RIN(5TOTI  EHUD'S  IMMUNIZATION      " 
IN  THE  PUBLIC  SECTOR  FROM  BIRTH  TO  AGE  2 

1993 
VACCINE^UPPUED  6FP;" 
iifEDfeRAL  CONTRACT^ 


Haemophilus^ 


B  Hepatitis  B^ 
EMP  STATE  PRICE 


COMPARE 


*COST  OF  A  WASHmOTO^  CRILFS  iMfoUTJIZATiOn 
IN  THE  PRIVATE  SECTOR  FROM  BIRTH  TO  AGE  2 


1993 


VACCINE 


DTP 


DTaP 


OPV 


e-IPV 


Haemophilus  b 


MMR 


_HepatiMsB 


COST  (1/93) 


PRIVATE  VENDOR  j, 
SUPPLIED  VACCINE: 


J0.04 
15.56 


9.91 


17.79 


J5.J3 
25.29 


21.46 


DOSES 


4  Mj  N/3  MAX 
4TH  DS  ONLY 


1 


TOTAL 


'^.m 


MIN  TOTAL 


40.16 


N/A 


29.73 
_N/A 

__60.52 
25.29 


64.38 


220.08 


MAX  TOTAL 


30.12 


15.56 


N/A 


53.37 


60.52 


25.29 


64.38 


$249.24! 


ggST  DIFFERENCES  BETWEEN  PUBLIC  VS  PlayTV  5Upa[EDVACcTtiEg-j| 
pJivatb  MiN  TOTAL      MAX  TOTAL D 

pub?!*  $  22°08  $24924 

-  $  98.33  $119.84 


SAVINGS  USING  PUBLICVACCiNPfi" 


JL= 


121.75 


129.60 


172 

COST  TO  IMMUNIZE  A  CHILD  TO  AGE  TWO  IN  WASHINGTON  STATE 
VACCINE  COST  WITH  ADMINISTRATION  FEE 


"CQSTQF  A"WAsWlNGTON  CMlLbS  IMMUNIZATION 
IN  THE  PUBLIC  SECTOR  FROM  BIRTH  TO  AGE  TWO 

1993 


"VACCINE 


DTP 


DTaP 


OPV 


i-IPV 


H?^jUiHi-VACCINESUPPUEnOFFy:^^;:^v^HHi^'.:««5rJ«^i;;«^ 


CC^f  ?I793) 


5.99 


1101 

2.16 


7.69 


Admin;  FBI3 


10 


10 


JO 
10 


MIN  4 /MAX  3 


4TH  OS  ONLM 


63.96 


N/A 


$36.48 


N/A 


47.97 


21.01 


N/A 


62.77 


Haemophilus  b 


6.37 


MMR 


15.33 


JO 
10 


_6L48 
25.33 


Hep atills  B  # 10.36 

#  TEMP  STATE  CONTRACT 


10 


TOTAL 


61.08 
$248.33 


61.48 


25.33 


61.08 


$269.64 


*  Medicaid  Fees  are:  $4.07  for  Hlth  Depts  (Admin.  only),  as  of  7/1/92. 

COMPARE 


J                       cdst  of"  A  WA§HiNG?&& BHlL6S"JMW0WizAtloN 

IN  THE  PRIVATE  SECTOR  FROM  BIRTH  TO  AGE  TWO 

1993 

1  :ur::.^---i^r.jc»^^ 

VACCINE 

COST  (1/93) 

ADMIN.  FEE* 

DOSES 

MIN  TOTAL 

MAX  TOTAL 

DTP 

10.04 

10 

MIN  4  /MAX  3 

$80.16 

60.12 

DTaP 

15.56 

10 

4TH  DS  ONUf 

N/A 

25.56 

OPV 

9.91 

10 

3 

59.73 

N/A 

8-IPV 

17.79 

10 

3 

N/A 

83.37 

Haemophilus  b 

15.13 

10 

4 

100.52 

100.52 

MMR 

25.29 

10 

1 

35.29 

35.29 

Hepatitis  B 

21.46 

10 

3 

94.38 

94.38 

TOTAL 

370.08 

$399.24 

*  $2.71  X  Unit  Price  of  Vaccine  for  MEDICAIO/EPSDT  Providers  (Admin.  &  supplies). 

~CO§T  DIFFERENCES  BetWEEH  PUBLIC  VS  PRIVATE  SUPPLIED  VACCINES 
1993                                                                                        MIN  TOTAL  MAX  TOTAL 
PRIVATE                                                                                   $             370.08  $399.59 

PUBLIC  _ ~$ 248.33 $269.64 


121.76 


$129.95 


173 

Senator  Reigle.  Dr.  Duma,  we'd  like  to  hear  from  you  now, 
please. 

Dr.  Duma.  Messrs.  Chairmen  and  members  of  the  committees, 
my  name  is  Richard  J.  Duma.  I  am  an  infectious  disease  specialist 
and  executive  director  of  the  National  Foundation  for  Infectious 
Diseases,  a  nonprofit  foundation  which  has  as  its  goals  education 
of  the  public  and  professionals  about,  prevention  of,  and  support  for 
research  in  infectious  diseases.  The  Foundation  commends  the  com- 
mittee for  holding  these  hearings  to  address  a  major  health  care 
problem,  namely,  appropriate  immunization  of  all  our  children. 

NFID  has  been  heavily  committed  to  promoting  immunizations, 
not  only  of  infants  and  children,  but  also  for  adults — the  forgotten 
segment  of  the  population  in  these  deliberations. 

At  the  risk  of  attacking  "motherhood  and  apple  pie,"  let  me  State 
that  those  of  us  intimately  familiar  with  and  engaged  in  the  prob- 
lems of  immunizing  people  are  very  concerned  that  the  current  pro- 
posal for  universal  purchase  of  vaccines  for  all  our  children  is  being 
perceived  by  many  as  the  solution  to  immunization  problems.  Pub- 
lic support  for  this  may  be  great  because  it  is  a  "freebie" — but  is 
it  really?  I  doubt  if  the  public  realizes  what  the  long-term  con- 
sequences might  be — that  it  may  be  at  the  expense  of  more  badly 
needed  programs  involving  vaccine  delivery  and  education. 

The  notion  of  universal  purchase  to  provide  free  vaccine  to  all 
our  children  is  popular  among  the  naive — this  is  to  say,  among 
those  who  have  never  given  a  shot  or  chased  a  family  of  kids  to 
get  them  immunized. 

In  this  country,  the  major  problems  responsible  for  unsatisfactory 
immunization  rates  of  infants  and  children,  and  adults  as  well,  is 
not  the  vaccine  cost — far  from  it.  The  major  problems  are  edu- 
cation, attitudes,  delivery,  and  tracking. 

NFID  has  conducted  a  number  of  programs  in  which  vaccines 
and  their  administration  have  been  offered  free  of  charge,  but  en- 
countered little  to  no  use  of  those  vaccines  unless  we  educated, 
pleaded,  promoted,  and  virtually  delivered  recipients  to  vaccination 
sites. 

Ladies  and  gentlemen,  we  live  in  a  country  in  which  we  graduate 
thousands  of  high  school  students  who,  upon  graduation,  get  mar- 
ried and  have  children.  The  vast  majority  of  these  young  people 
have  not  learned  in  school  what  the  word  "vaccine"  or  "immuniza- 
tion" means,  and  yet  they  are  expected  to  properly  care  for  them- 
selves and  their  children. 

Nothing  in  our  school  systems  educates  students  about  common 
preventable  infectious  diseases.  Even  among  the  educated,  we  are 
combating  apathy,  indifference  and  complacency. 

In  this  Sunday's  Washington  Post,  an  excellent  article  by  staff 
reporter  Barbara  Vobejda,  which  I  commend  to  your  reading,  con- 
cerns volunteer  attempts  at  door-to-door  home  immunizations  in 
Atlanta,  in  which  as  an  incentive  to  become  immunized,  people 
were  offered,  as  you  have  already  heard,  free  tickets  to  hear  Mi- 
chael Jackson.  The  article  states  that,  "the  most  daunting  obstacle 
is  not  the  cost  of  the  vaccines;  it  is  finding  the  children  that  need 
them,  persuading  parents  to  bring  them  in,  and  encouraging  public 
health  clinics  to  make  the  process  easier."  Volunteers  found  some 


174 

parents  oblivious  to  the  need  for  immunization,  others  too  bur- 
dened to  battle  the  public  system. 

Even  physicians  in  this  country  lack  the  training,  drive  and  moti- 
vation necessary  to  promote  immunizations.  Our  medical  schools  do 
a  great  job  in  training  physicians  to  care  for  the  sick,  but  not  in 
how  to  prevent  diseases.  We  need  to  insist  that  all  our  medical 
schools  emphasize  preventive  medicine  more  than  they  do,  espe- 
cially vaccines  and  immunization  strategies. 

Combined  with  education  of  the  public  and  professionals,  we  des- 
perately need  to  improve  the  infrastructure  of  our  public  health 
care  systems  which  currently  is  in  shambles.  The  public  health 
clinics  need  more  trained  people  to  administer  vaccines  and  counsel 
the  public.  Also,  very  importantly,  the  public  health  clinics  need 
the  assistance  and  involvement  of  the  private  medical  sector  if  they 
are  to  successfully  immunize  all  our  children. 

Much  has  been  said  of  tracking.  It  seems  incredible  in  this  day 
of  computers,  Social  Security  numbers,  bulk  mailings  and  mass 
communications  that  we  can't  keep  track  of  our  children's  immuni- 
zation records.  But  we  do  have  to  worry  about  the  uneducated,  the 
apathetic,  the  disinterested,  the  unavailable,  the  difficult-to-reach 
people.  If  we  could  identify  them  and  serve  them  notice,  we  could 
probably  achieve  100  percent  immunization  rates.  For  those  identi- 
fied as  indigent,  for  whom  money  truly  is  an  obstacle,  free  immuni- 
zation could  be  provided. 

As  an  aside,  for  those  who  are  insured,  we  must  get  insurance 
companies  to  accept  and  underwrite  preventive  medicine.  Our  in- 
surance system  is  long  overdue  in  including  in  their  policies  appro- 
priate cost-effective  immunizations  and  preventive  medicine  prac- 
tices. 

Finally,  just  when  the  science  of  immunology  and  vaccines  are  at 
the  threshold  of  great  discoveries,  and  just  when  many  new  promis- 
ing biotech  companies  are  entering  the  arena  of  vaccinology,  the 
notion  of  government  control  over  vaccines  threatens  to  stifle  their 
involvement  and  their  new  developments.  The  bright  people  these 
companies  contain,  as  well  as  the  venture  capitalists  that  support 
them,  may  soon  be  departing. 

We  have  witnessed  a  terrific  decline  in  vaccine  producers  and  de- 
velopers between  the  1950s  and  1990s,  and  only  recently  have  we 
seen  an  interest  by  many  companies,  old  and  new,  to  reinvest  in 
this  field.  It  is  a  very  sensitive  industry.] 

There  are  many  new  vaccines  right  around  the  corner  that  ex- 
ceed anything  we  ever  dreamed  possible  a  century  ago,  and  U.S. 
industry  is  playing  a  major  role  in  their  development.  We  do  not 
want  to  find  ourselves  in  a  few  years  bargaining  with  a  foreign 
power  for  the  purchase  of  vaccines  who  see  development,  manufac- 
ture and  quality  control  may  not  meet  our  own  standards.  Our  gov- 
ernment must  do  everything  it  can  to  preserve  the  vaccine  exper- 
tise which  exists  in  the  Nation  today.  Thoughtless  denunciation  of 
vaccine  producers  and  frightening  away  venture  capitalists  are  not 
in  the  best  interest  of  the  public. 

I  urge  each  member  to  carefully  consider  the  issue.  We  don't 
want  to  kill  the  goose  that  laid  the  golden  eggs.  The  fate  of  vaccine 
research  and  development  truly  is  in  your  hands. 


175 

In  summary,  quite  frankly,  the  current  cost  of  vaccines  today  is 
probably  the  least  of  our  problems  in  regards  to  poor  immunization 
rates.  Our  scarce  dollars  and  resources  should  be  expended  on  im- 
proved delivery,  accessibility,  education  of  both  professionals  and 
the  public,  and  development  of  a  reliable  tracking  system.  This  is 
where  the  action  is. 

Thank  you. 

Senator  Rjegle.  Thank  you  very  much. 

[The  prepared  statement  of  Dr.  Duma  follows:] 


176 
Prepared  Statement  op  Richard  J.  Duma 

MISTERS  CHAIRMEN  AND  MEMBERS  OF  THE  COMMITTEES: 

MY  NAME  IS  RICHARD  J.  DUMA.   I  AM  AN  INFECTIOUS 
DISEASE  SPECIALIST  AND  EXECUTIVE  DIRECTOR  OF  THE 
NATIONAL  FOUNDATION  FOR  INFECTIOUS  DISEASES  (NFID),  A 
NON-PROFIT  PUBLIC  FOUNDATION,  WHICH  HAS  AS  ITS  OOALS 
pplirATlON  OF  THE  PUBLIC  AND  PROFESSIONALS  ABOUT, 
PRFVFNTTON  OF.  AND  SUPPORT  FOR  RESEARCH  IN  INFECTIOUS 
DISEASES.   lUE  F0UNDA110N  COMMENDS  THE  COMMITTEE  FOR 
HOLDINO  THESE  HEARINGS  TO  ADDRESS  A  MAJOR  HEALTH  CARE 
PROBLEM  —  NAMELY,  APPROPRIATE  IMMUNIZATION  OF  ALL  OUR 
CHILDREN. 

NFID  HAS  BEEN  HEAVILY  COMMITTED  TO  PROMOTING 
IMMUNIZATIONS,  NOT  ONLY  OF  INFANTS  AND  CHILDREN.  BUT 
ALSO  OF  ADULTS  —  THE  FORGOTTEN  SEGMENT  OF  THE 
POPULATION  IN  THESE  DEUBERATIONS. 

AT  THE  RISK  OF  ATTACKING  "MOTHERHOOD  AND  APPLE 
PIE,"  LET  ME  STATE  THAT  THOSE  OF  US  INTIMATELY  FAMILIAR 
WITH,  AND  ENGAGED  W,  THE  PROBLEMS  OF  IMMUNIZING  PEOPLE, 
ARE  VERY  CONCERNED  THAT  THB  CURRENT  PROPOSAL  FOR 
UNIVERSAL  PURCHASE  OF  VACCINES  FOR  ALL  OUR  CHILDREN  IS 
BEING  PERCEIVED  BY  MANY  AS  THE  SOLUTION  TO  OUR 
IMMUNIZATION  PROBLEMS.   PUBLIC  SUPPORT  FOR  THIS  MAY  BE 
ORBAT  BECAUSE  IT  IS  A  "FREEBIE"  —  BUT  IS  IT  REALLY?    1  DOUBT 


177 
IF  THE  PUBUC  REALIZES  WHAT  THE  LONO  TERM  CONSEQUENCES 
MIOHT  BE.   THAT  IT  MAY  BE  AT  THE  EXPENSE  OF  MORE  BADLY 
NEEDED  PROORAMS  INVOLVING  VACCINE  DELIVERY  AND 
EDUCATION.   THE  NOTION  OF  UNIVERSAL  PURCHASE  TO  PROVIDE 
FREE  VACCINE  TO  ALL  OUR  CHILDREN  IS  POPULAR  AMONO  THE 
NAIVE  —  THIS  IS  TO  SAY  AMONO  THOSE  WHO  HAVE  NEVER  GIVEN 
A  SHOT  OR  CHASED  A  FAMILY  OP  KIDS  TO  OET  THEM  IMMUNIZED. 

'  IN  THIS  COUNTRY,  THE  MAJOR  PROBLEMS  RESPONSIBLE  FOR 
UNSATISFACTORY  IMMUNIZATION  RATES  OF  INFANTS  AND 
CHILDREN  —  AND  ADULTS  AS  WELL  —  IS  NOT  THE  VACCINE  COST 
~  FAR  FROM  IT.   THE  MAJOR  PROBLEMS  ARE  EDUCATION, 
ATTITUDES.  DELIVERY,  AND  TRACKING.    NF1D  HAS  CONDUCTED  A 
NUMBER  OF  PROGRAMS  IN,  WHICH  VACCINES  AND  THEIR 
ADMINISTRATION  HAVE  BEEN  OFFERED  FREB  OF  CHARGE,  BUT 
ENCOUNTERED  LITTLE-TO-NO-USE  OF  THOSE  VACCINES  UNLESS 
WE  EDUCATED,  PLEADED,  PROMOTED,  AND  VIRTUALLY 
DELIVERED  RECIPIENTS  TO  VACCINATION  SITES. 

LADIES  AND  OENTLBMEN,  WE  LIVE  IN  A  COUNTRY  IN  WHICH 
WE  GRADUATE  THOUSANDS  OF  HIGH  SCHOOL  STUDENTS  WHO 
UPON  GRADUATION  GET  MARRIED  AND  HAVE  CHILDREN.   THE 
VAST  MAJORITY  OP  THESE  YOUNG  PEOPLE  HAVE  NOT  LEARNED  IN 


178 
SCHOOL  WHAT  THE  WORD  VACCINE  OR  IMMUNIZATION  MEANS, 
AND  YET  THEY  ARE  BXPECTED  TO  PROPERLY  CARE  FOR 
THEMSELVES  AND  THEIR  CHILDREN.  NOTHINO  IN  OUR  SCHOOL 
SYSTEMS  EDUCATES  STUDENTS  ABOUT  COMMON  PREVENTABLE 
INFECTIOUS  DISEASES.   EVEN  AMONG  THE  EDUCATED,  WE  ARE 
COMBATING  APATHY,  INDIFPERENCE,  AND  COMPLACENCY. 

IN  THIS  SUNDAY'S  WASHINGTON  POST  (APRIL  18,  1993),  AN 
EXCELLENT  ARTICLE  BY  STAFF  REPORTER  BARBARA  VOBEJDA, 
WHICH  I  COMMEND  TO  YOUR  READING,  CONCERNS  VOLUNTEER 
ATTEMPTS  AT  DOOR-TO-DOOR  HOME  IMMUNIZATIONS  IN 
ATLANTA,  IN  WHICH  AS  AN  INCENTIVE  TO  BECOME  IMMUNIZED 
PEOPLE  WERE  OFFERED  FREE  TICKETS  TO  HEAR  MICHAEL 
JACKSON    THE  ARTICLE  STATES  THAT  "...THE  MOST  DAUNTING 
OBSTACLE  IS  NOT  THE  COST  OF  THE  VACCINES.    IT  IS  FINDING  THE 
CHILDREN  THAT  NEED  THEM,  PERSUADING  PARENTS  TO  BRING 
THEM  IN,  AND  ENCOURAGING  PUBLIC  HEALTH  CLINICS  TO  MAKE 
THE  PROCESS  EASIER.   VOLUNTEERS  FOUND  SOME  PARENTS 
OBLIVIOUS  TO  THE  NEED  FOR  IMMUNIZATION,  OTHERS  TOO 
BURDENED  TO  BATTLE  THE  PUBLIC  SYSTEM. 

EVEN  PHYSICIANS  IN  THIS  COUNTRY  LACK  THE  TRAINING, 
DRIVE,  AND  MOTIVATION  NECESSARY  TO  PROMOTE 
IMMUNIZATIONS.    OUR  MEDICAL  SCHOOLS  DO  A  OREAT  JOB  IN 


179 
TRAINTNO  PHYSICIANS  TO  CARE  FOR  THE  SICK,  BUT  NOT  IN  HOW 
TO  PREVENT  DISEASES.   WE  NEBD  TO  INSIST  THAT  ALL  OUR 
MEDICAL  SCHOOLS  EMPHASIZE  PREVENTIVE  MEDICINE  MORE 
THAN  THEY  DO,  ESPECIALLY  VACCINES  AND  IMMUNIZATION 
STRATEGIES. 

COMBINED  WITH  EDUCATION  OF  THE  PUBLIC  AND 
PROFESSIONALS,  WE  DESPERATELY  NEED  TO  IMPROVE  THE 
INFRASTRUCTURE  OF  OUR  PUBLtC  CARE  HEALTH  SYSTEMS  WHICH 
CURRENTLY  IS  IN  SHAMBLES.  THE  PUBLIC  HEALTH  CLINICS  NEED 
MORE  TRAINED  PEOPLE  TO  ADMINISTER  VACCINES  AND  COUNSEL 
THE  PUBLIC,   ALSO,  VERY  IMPORTANTLY,  THE  PUBUC  HEALTH 
CLINICS  NEED  THE  ASSISTANCE  AND  INVOLVEMENT  OF  THE 
PRIVATE  MEDICAL  SECTOR  IF  THEY  ARE  TO  SUCCESSFULLY 
IMMUNIZE  ALL  OF  OUR  CHILDREN. 

MUCH  HAS  BEEN  SAID  OF  TRACK1NO."    IT  SEEMS 
INCREDIBLE  TH  THIS  DAY  OF  COMPUTERS,  SOCIAL  SECURITY 
NUMBERS,  BULK  MAJUNOS,  AND  MASS  COMMUNICATIONS  THAT 
WE  CANT  KEEP  TRACK  OF  OUR  CHILDREN'S  IMMUNIZATION 
RECORDS.    BUT  WE  DO  HAVE  TO  WORRY  ABOUT  THE 
UNEDUCATED,  1HE  APATHETIC,  THE  DISINTERESTED,  THE 
UNAVAILABLE,  THE  DB7FICULT  TO  REACH  PEOPLE.    IF  WE  COULD 
IDENTIFY  THEM  AND  SERVE  THEM  NOTICE,  WE  COULD  PROBABLY 


180 
ACHIEVE  100  PERCENT  IMMUNIZATION  RATES.    FOR  THOSE 
IDENTIFIED  AS  INDIGENT,  FOR  WHOM  MONEY  TRULY  IS  AN 
OBSTACLE,  FREB  IMMUNIZATION  COULD  BE  PROVIDED. 

AS  AN  ASIDE,  FOR  THOSE  WHO  ARE  INSURED,  WE  MUST  GET 
INSURANCE  COMPANIES  TO  ACCEPT  AND  UNDERWRITE 
PREVENTIVE  MEDICINE.    OUR  INSURANCE  SYSTEM  IS  LONG 
OVERDUE  IN  INCLUDINO  IN  THEIR  POLICIES  APPROPRIATE  COST 
EFFECTIVE  IMMUNIZATIONS  AND  PREVENTIVE  MEDICINE 
PRACTICES. 

FINALLY,  JUST  WHEN  THE  SCIENCE  OF  IMMUNOLOGY  AND 
VACCINES  ARE  AT  THE  THRESHOLD  OF  GREAT  DISCOVERIES.  AND 
JUST  WHEN  MANY  NEW  PROMISING.  BIO-TECH  COMPANIES  ARE 
ENTERING  THE  ARENA  OF  VACCINOLOOY,  THE  NOTION  OF 
GOVERNMENT  CONTROL  QVER  VACCINES  THREATENS  TO  STIFLE 
THEIR  INVOLVEMENT  AND  THEIR  NEW  DEVELOPMENTS.   THE 
BRIGHT  PEOPLE  THESE  COMPANIES  CONTAIN,  AS  WELL  AS  THE 
VENTURE  CAPITALISTS  THAT  SUPPORT  THEM,  MAY  SOON  BE 
DEPARTING. 

WE  HAVE  WITNESSED  A  TERRIFIC  DECLINE  IN  VACCINE 
PRODUCERS  AND  DEVELOPERS  BETWEEN  THE  1950S  AND  THE 
1990'S,  AND  ONLY  RECENTLY  HAVE  WE  SEEN  AN  INTEREST  BY 
MANY  COMPANIES  -  OLD  AND  NEW  -  TO  REINVEST  IN  THIS  FIELD. 


181 
ITISA  VERY  SENSITIVE  INDUSTRY. 

THERB  ARE  MANY  NEW  VACCINES  RIGHT  AROUND  THE 
CORNER  THAT  EXCEED  ANYTHING  WE  EVER  DREAMED  POSSIBLE 
A  CENTURY  AOO,  AND  U.S.  INDUSTRY  IS  PLAYING  A  MAJOR  ROLE 
IN  THEIR  DEVELOPMENT.  jffyU  WE  DONT  WANT  TO  FIND 
OURSELVES  IN  A  FEW  YEARS  BARGAINING  WITH  A  FOREION 
POWER  FOR  THE  PURCHASE  OP  VACCINES,  WHOSE  DEVELOPMENT, 
MANUFACTURE  AND  QUALITY  CONTROL  MAY  NOT  MEET  OUR 
OWN  STANDARDS.   OUR  GOVERNMENT  MUST  DO  EVERYTHING  IT 
CAN  TO  PRESERVE  THE  VACCINE  EXPERTISE  WHICH  EXISTS  IN  THE 
NATION  TODAY.   THOUGHTLESS  DENUNCIATION  OP  VACCINE 
PRODUCERS  AND  FRIGHTENING  AWAY  VENTURE  CAPITALISTS  ARE 
NOT  IN  THE  BEST  INTEREST  OF  THE  PUBLIC. 

I  URGE  EACH  MEMBER  TO  CAREFULLY  CONSIDER  THIS 
ISSUE.    WE  DONT  WANT  TO  KILL  THE  GOOSP.  THAT'S  1  AID  THF 
GOLDEN  FXiOS.   THE  FATE  OF  VACCINE  RESEARCH  AND 
DEVELOPMENT  IS  IN  YOUR  HANDS. 

IN  SUMMARY,  QUrTE  FRANKLY,  THE  CURRENT  COST  OF 
VACCINES  TODAY  IS  PROBABLY  THE  LEAST  OF  OUR  PROBLEMS  IN 
REGARDS  TO  POOR  IMMUNIZATION  RATES.   OUR  SCARCE  DOLLARS 
AND  RESOURCES  SHOULD  BE  EXPENDED  ON  IMPROVED  DELIVERY, 
ACCESSIBILITY.  EDUCATION  OF  ROTH  PROFESSIONALS  AND  THF 

PUBLIC.  AND  DBVBmPMENT  OP  A  RELIABLE  TRACKING  SYSTEM. 
THIS  IS  WHERE  THE  ACTION  IS. 


182 

Senator  Riegije.  Dr.  Duma,  as  I  understand  it,  the  National 
Foundation  for  Infectious  Diseases  is  a  nonprofit  public  foundation. 
Is  that  correct? 

Dr.  Duma.  That's  correct. 

Senator  Riegle.  And  you  are  the  executive  director. 

Dr.  Duma.  That's  correct. 

Senator  Riegle.  Can  you  tell  me  what  percentage  of  the  founda- 
tion's endowment  and  operating  funds  come  directly  or  indirectly 
from  contributors  in  the  pharmaceutical  industry? 

Dr.  Duma.  It  would  probably  be  in  the  area  of  maybe  30  percent, 
something  in  that  order. 

Senator  Riegle.  It  wouldn't  be  higher  than  30  percent? 

Dr.  Duma.  It  might  be.  I  can't  give  you  the  exact  figure  right 
now,  but  it  is  less  than  50  percent. 

Senator  Riegle.  Where  does  the  rest  come  from? 

Dr.  Duma.  It  comes  from  various  foundations.  It  has  come  in  the 
past  from  the  Rockefeller  Foundation,  from  the  Theresa  Thomas 
Foundation,  from  the  American  Foundation  for  Microbiology  and 
others;  it  has  come  from  the  Federal  Government;  it  has  come  from 
a  wide  number  of  contributors  throughout  the  Nation. 

Senator  Riegle.  Is  there  any  single  group  that  would  be  as  large 
as  the  30  percent  or  so  that  you  get  from  the  pharmaceutical  indus- 
try? 

Dr.  Duma.  No,  not  one  single  group,  because  by  IRS  regulations, 
we  really  can't  have  one  single  group  dominate  any  contributions. 

Senator  Riegle.  The  reason  I  ask  that — and  no  disrespect  to 
you— -but  I  found  a  real  overlap  between  what  you  were  saying,  and 
sort  of  downplaying  the  importance  of  the  price  as  a  factor  with  re- 
spect to  vaccine  cost,  and  what  I  heard  the  last  panel  say.  I  mean, 
I  know  you  are  here  as  a  separate  panel,  but  there  was  just  such 
an  overlap  that  I  was  very  struck  by  it. 

From  all  the  data  that  I  have  seen,  to  dismiss,  quite  frankly,  the 
notion  that  vaccine  cost  isn't  really  the  problem,  that  it  is  edu- 
cation, that  it  is  this  or  that,  that  it  is  everything  else — that  could 
almost  come  from  somebody  in  the  pharmaceutical  industry.  I'm 
not  saying  that  isn't  your  view;  you  have  obviously  stated  it  as  your 
view. 

Dr.  Duma.  I  am  just  giving  vou  my  honest  opinion  in  terms  of 
my  30  years  of  experience  in  infectious  diseases. 

Senator  Riegle.  I'm  sure  you  are,  I'm  sure  you  are.  But  I  assume 
by  the  same  token,  you  can  see  the  degree  to  which  that  runs  par- 
allel to  what  we  just  heard  from  the  pharmaceutical  industry,  too, 
can't  you? 

Dr.  Duma.  I  am  sure  it  runs  parallel  to  many  other  testimonies 
that  you  have  heard  from  a  variety  of  other  groups.  It  seems  like 
many  people  are  saying  basically  the  same  thing. 

Senator  Riegle.  I  have  not  heard  that  today.  I  think  what  you 
have  said  has  been  closer  to  what  I  heard  them  say  than  anybody 
else  I've  heard,  but  that's  just  how  it  sounded  to  my  ears. 

Dr.  Marcuse,  let  me  ask  you  this.  With  respect  to  the  issue  of 
price  of  vaccines,  and  the  degree  to  which  that  is  or  isn't  a  relevant 
factor  as  a  disincentive  for  families  and  parents  getting  their  chil- 
dren vaccinated  on  time  and  the  sufficient  number  of  shots,  what 
has  been  your  finding?  Does  price  matter  here,  when  people  come 


183 

in  to  get  their  shots?  I  mean,  is  there  an  economic  factor  at  work 
here,  or  is  that  alliust  myth? 

Dr.  Marcuse.  TTiere  is  certainly  an  economic  factor.  There  are 
other  factors,  but  that  is  a  big  factor.  The  cost  for  vaccines  alone 
to  immunize  a  child  through  age  2  in  the  private  sector  is  some- 
where around  $240.  For  most  young  parents,  that's  an  out-of-pock- 
et expense.  It  is  not  covered  by  insurance.  Only  half  the  indemnity 
insurance  plans  cover  immunization.  And  the  price  difference  is 
enormous.  For  polio  vaccines,  $2.16  in  the  public  sector,  and  $9.91 
in  the  private  sector.  A  kid  needs  four  doses  of  that.  That's  $30 
more  just  for  polio.  For  Haemophilus  conjugate  vaccine,  it  is  an- 
other $30;  for  DTP,  it  is  another  $20— just  for  that  one  set  of  three 
vaccines  from  one  manufacturer,  it  costs  $80  more  per  child  for  the 
first  2  years  of  life. 

In  Washington  State,  we  have  70,000  kids  born  each  year.  With 
a  little  multiplication,  you  get  up  to  $3  or  $4  million  more  money. 

Senator  Riegle.  The  problem  here  is  that  I  think  how  it  looks 
sort  of  depends  upon  where  you  stand.  In  other  words,  I  think  for 
people  who  are  in  higher  income  situations  and  who  are  in  more 
favored  circumstances,  that  amount  of  money  may  not  seem  like 
much.  I  mean,  it  may  not  be  particularly  relevant  in  their  personal 
experience.  But  I  think  for  rank-and-file  citizens,  and  particularly 
to  lower-income  families — and  more  and  more  families  are  in  that 
category;  we've  got  more  and  more  families  now  where  it  takes  two 
people  working  to  earn  as  much  as  one  person  could  earn  20  years 
ago— these  expenditures  on  the  margin  are  very  significant,  be- 
cause that  isnt  the  only  bill  they  have  to  pay.  They  have  to  buy 
shoes,  they  have  to  buy  clothes,  they  have  to  buy  car  insurance, 
they  have  to  put  a  roof  over  the  family's  head,  and  so  forth. 

So  the  figures  that  I  have  show  me  that  the  private  sector  cata- 
log price  of  the  vaccines,  all  of  which  have  to  be  administered  over 
a  period  of  up  through,  say,  age  4  to  6,  just  the  vaccines  alone, 
$232.72.  But  that's  just  the  beginning.  There  has  got  to  be  a  cost 
as  an  overlay  on  that — I'm  talking  about  if  you're  going  to  go  into 
a  private  doctor's  office  to  get  this,  the  doctors  aren't  going  to  do 
this  for  free,  and  they  aren  t  doing  it  for  free,  for  the  most  part — 
maybe  occasionally,  they  do — so  we  are  talking  about  a  figure  that 
is  much  higher  than  that. 

The  economics  are  a  factor  here,  and  I  guess  I'm  a  little  taken 
aback  when  I  hear  the  argument  made  by  those  for  whom  it  may 
not  be  a  problem,  whether  they  are  in  the  pharmaceutical  industry 
or  outside  of  it,  and  where  a  few  hundred  dollars  may  be  a  big 
deal — a  few  hundred  dollars  is  a  big  deal,  especially  when  it  be- 
comes a  barrier  to  getting  children  protected.  And  I  think  clearly, 
it  is.  A  lot  of  these  families  have  two,  three,  and  four  children.  So 
you  can  multiply  this  times  the  number  of  children,  and  then  it  be- 
comes a  very  significant  cost  barrier. 

I  realize  in  Washington,  where  we  live  with  millions  and  hun- 
dreds of  millions  and  billions  and  trillions  that  a  few  hundred  dol- 
lars may  not  sound  like  much,  but  I  think  that's  part  of  what  has 
gone  wrong  around  here,  it's  part  of  the  detachment  of  Washington 
from  what  is  going  on  in  the  lives  of  real  people.  And  I'm  troubled 
about  it.  I  was  troubled  about  the  answer  that  I  got  from  one  wit- 
ness on  the  issue  of  why  the  costs  of  these  vaccines  are  so  much 


184 

less  in  Canada  than  they  are  here  in  the  United  States,  and  that 
we  should  sit  around  and  congratulate  ourselves  for  the  fact  that 
we  are  paving  more  than  they  are  for  the  very  same  thing,  and 
therefore  doing  a  less  effective  job  dollar-wise  of  protecting  our  peo- 
ple. They  have  their  immunization  rate  in  Canada  now  up  to  85 
percent  for  their  2-year-olds,  and  we  are  down  at  48  percent,  and 

{>art  of  it  is  because  we  spend  a  lot  more  doing  it.  And  there  is  real- 
y  no  excuse  for  it,  as  I  see  this  data. 

Thank  you. 

Senator  Kassebaum. 

Senator  Kassebaum.  I  think  the  economic  factor  is  a  consider- 
ation, and  I  think  all  of  us  would  agree  with  that.  I  think  how  it 
weighs  in  in  the  overall  picture  of  eliminating  these  barriers  to  im- 
munizations is  what  is  important. 

Dr.  Marcuse,  I  would  like  to  ask  you,  because  you  have  had  some 
real  experience  with  that,  in  light  of  the  fact  that  we  have  talked 
about  the  barriers  to  delivery  and  education  and  the  problems  in 
Medicaid  reimbursement  rates,  timely  repayment,  and  paperwork 
hassles  and  so  forth,  I  would  like  to  ask  why  Washington  decided 
to  go  with  the  vaccine  purchase  before  improving — and  maybe  you 
had;  maybe  this  is  not  a  problem — some  of  these  other  barriers 
we've  talked  about — through  more  of  outreach  programs  with  com- 
munity health  centers  and  so  forth.  Have  you  found  that  providing 
free  vaccines  has  made  the  difference? 

Dr.  Marcuse.  Senator,  we  set  about  doing  all  four  things.  Vac- 
cine purchase  was  a  major  initial  step.  At  the  same  time  we  did 
that,  we  increased  Medicaid  reimbursement  for  vaccine  administra- 
tion, and  in  our  State,  poor  Medicaid  reimbursement  is  not  the 
problem. 

In  various  of  our  32  health  districts,  we  have  done  many  things 
to  increase  availability  of  vaccines.  We  have  the  beginnings  of  a 
tracking  system,  but  only  the  beginnings  of  a  tracking  system,  and 
we  have  tried  to  begin  to  increase  public  demand. 

We  very  much  feel  that  all  four  of  those  things  need  to  be  done 
simultaneously.  Making  vaccine  available  alone  won't  solve  the 
problem,  but  without  making  vaccine  available,  the  problem  can't 
be  solved. 

We  have  been  very  successful  in  preventing  a  shift  of  our  pa- 
tients from  the  private  sector  into  the  public  sector,  and  while 
today  our  assessment  capabilities  to  figure  out  what  proportion  of 
kids  are  fully  protected  are  limited,  we  can't  say  that  we're  much 
better  than  60-65  percent  of  our  kids  immunized  by  age  2.  We 
think  we've  got  the  infrastructure  in  place  to  begin  to  build  on  that. 

Senator  Kassebaum.  When  did  you  start  that  program? 

Dr.  Marcuse.  Of  providing  vaccines? 

Senator  Kassebaum.  Yes. 

Dr.  Marcuse.  It  began  in  1990.  The  first  year  was  rocky,  and 
we've  really  only  had  2  years. 

Senator  Kassebaum.  Is  Carol  Washburn  still  assistant  secretary 
for  health  in  the  State  of  Washington? 

Dr.  Marcuse.  Yes. 

Senator  Kassebaum.  I  know  that  she  testified  before  the  Na- 
tional Vaccine  Advisory  Committee  that  immunization  rates  in  the 
State  are  still  low  despite  the  universal  purchase 


185 

Dr.  Marcuse.  I  do  regard  65  percent  as  low.  We  would  like  90. 

Senator  Kassebaum.  — and  that  the  pediatricians  are  reluctant 
to  administer  free  vaccines  unless  they  can  charge  an  administra- 
tive fee.  That's  not  a  problem? 

Dr.  Marcuse.  As  I  said,  Senator,  in  our  community,  70  percent 
of  the  State-purchased  vaccines  are  administered  by  pediatricians 
who  have  agreed  to  limit  their  administration  fees.  The  reluctance 
of  physicians  to  participate — and  not  all  do  participate — relates  to 
a  number  of  things. 

First,  unfortunately,  all  recommended  vaccines  are  not  available 
through  Federal  purchase.  We  don't  have  money  for  hepatitis  B, 
and  that's  a  major  reason  pediatricians  don't  participate. 

Senator  Kassebaum.  Well,  hepatitis  B  has  just  been  approved, 
has  it  not,  as  a  needed  vaccine? 

Dr.  Marcuse.  About  a  year  ago. 

Senator  Kassebaum.  And  of  course,  I  think  that  goes  back  to 
education.  With  my  children,  we  never  would  have  thought  of  a 
hepatitis  B  vaccine  when  they  were  babies.  My  grandchildren,  I 
suppose,  now  will  receive  this  vaccine.  But  I  think  again,  this  goes 
back  to  the  education  process  and,  for  many  young  parents,  the  al- 
most fear,  perhaps,  sometimes  of  the  unknown.  I  think  there  are 
a  lot  of  concerns  in  iust  trying  to  understand  from  a  medical  stand- 
point the  pluses  ana  minuses  of  this. 

Kansas  this  coming  weekend  is  launching  an  "Operation  Immu- 
nize" program,  in  which  they  are  going  out  into  the  State  with  mo- 
bile units,  going  to  shopping  malls,  utilizing  the  National  Guard 
and  other  volunteer  groups,  doing  a  lot  of  public  service  advertis- 
ing, trying  to  have  an  outreach  effort  to  help  people  to  understand 
why  immunization  is  important. 

I  think  that  programs  such  as  this  are  what  should  come  first. 
All  of  the  problems  that  I  believe  are  attendant  in  universal  pur- 
chase will  be  subsumed  if  we  assume  that  universal  purchase  is 
the  key  to  our  immunization  problem,  and  the  other  areas  where 
we  really  need  to  focus  will  get  lost.  We  don't  really  understand 
some  of  the  full  ramifications  of  universal  purchase. 

I  appreciate  what  you  are  saying — it  all  has  to  be  done  at  the 
same  time.  This  is,  of  course,  what  the  Secretary  said  this  morning 
as  well.  But  I  think  those  of  us  who  question  whether  universal 
purchase  is  the  right  approach,  I  would  suggest  to  Senator  Riegle, 
who  has  now  left,  aren't  just  necessarily  trying  to  make  a  case  for 
the  pharmaceutical  companies.  I  think  there  are  a  number  of  peo- 
ple in  the  public  health  field,  a  number  who  have  served  as  gov- 
ernors, such  as  Senator  Gregg,  who  have  understood  our  immuni- 
zation problem  from  a  different  perspective.  I  really  think  if  we  are 
going  to  come  together  in  shaping  a  successful  answer  to  that  prob- 
lem, we  have  to  take  all  these  things  into  consideration,  rather 
than  trying  to  just  blame  it  on  one  aspect  or  another,  such  as  vac- 
cine cost. 

Dr.  Duma.  If  I  can  interject  or  add  something  to  that,  Senator, 
I  certainly  agree  with  you.  I  think  that  those  people  in  the  trenches 
who  have  been  involved  in  immunization  programs  and  actually 
administering  vaccines  find  that  you  have  to  do  all  sorts  of  things 
to  reach  out,  to  bring  people  in,  to  get  them  involved  and  be  immu- 
nized. It  is  a  very  complicated  area,  and  we  have  done  all  sorts  of 


186 

things,  and  it  does  require  involvement  of  television,  the  media, 
getting  at  it  with  ice  cream  trucks  if  you  need,  and  giving  vaccines. 
There  are  all  sorts  of  tricks  that  have  to  be  employed  to  get  people 
to  participate. 

The  Senator  mentioned  that  $300  is  not  much — it  is  a  lot  to  a 
lot  of  people— but  it  isn't  the  money.  It  is  a  question  of  is  that  cost 
a  barrier,  at  least  in  the  current  situation.  We  have  a  significant 
amount  of  vaccine  that  is  available  free  of  charge  to  many  people 
who  need  it,  and  we  have  a  significant  portion  of  the  population 
who  can  afford  it  and  who  are  paying  for  it,  and  everybody  gripes 
about  paying  a  few  hundred  dollars  for  vaccinating  the  complete 
immunization  program  for  their  children.  But  that  isn't  the  real 
barrier.  The  real  barriers  are  some  of  the  other  things  that  we  have 
already  mentioned  here. 

Senator  Kassebaum.  Well,  this  "Operation  Immunize"  which 
Kansas  is  doing  is  free  for  everybody.  So  again,  it  is  trying  to  bring 
people  in,  and  that  is  going  to  be  difficult  in  and  of  itself.  I  think 
there  are  going  to  be  a  lot  of  young  parents  who  will  wonder  about 
hepatitis  B,  is  this  really  necessary.  Again,  it  really  involves  many 
different  things  other  than,  I  would  argue,  just  universal  purchase. 

Dr.  Duma.  Well,  you  mentioned  and  it  has  been  mentioned  about 
physicians  in  terms  of  referring  their  families  or  children  that  they 
are  taking  care  of  to  the  public  health  sector  for  immunizations, 
and  I  was  interested,  at  least,  when  Dr.  Edelman  mentioned  that 
it  was  for  financial  reasons,  basically.  I  don't  know  whether  it's  the 
financial  reasons  of  the  patient  or  the  doctor.  I  think  when  you 
really  look  at  it,  there  are  many  physicians  other  than  pediatri- 
cians who  are  administering  vaccines,  that  the  administration  fees 
are  inadequate  in  many  of  these  situations,  the  complexity  of  forms 
that  have  to  be  filled  out,  the  explanations  and  the  complicated 
forms  in  terms  of  consent  forms  between  you  and  the  patients  and 
so  forth.  There  are  a  lot  of  barriers  at  those  levels  that,  even  if  the 
vaccine  were  made  available  free-of-charge,  I'm  sure  there  are 
many  physicians  who  would  just  simply  turn  their  backs  on  it. 

Senator  Kassebaum.  Dr.  Marcuse. 

Dr.  Marcuse.  There  are  pediatricians  all  over  the  country  who 
feel  that,  reluctantly,  they  must  advise  their  patients  that  vaccines 
are  available  at  a  lower  cost  at  the  health  department,  because  it 
is  a  major  cost  factor. 

There  are  several  pediatricians  in  my  community  who  set  their 
administration  fees  to  match  the  local  health  departments  so  there 
will  be  no  incentive  for  fragmenting  care.  We  do  need  to  do  all  of 
these  tilings  simultaneously.  Diseases  like  measles,  mumps,  rubella 
and  diphtheria  have  no  more  relevance  for  most  people  in  the  Unit- 
ed States  today  than  black  plague,  leprosy,  malaria,  and  things 
they  have  read  about  in  textbooks.  We  need  to  make  these  threats 
real  enough  that  people  will  understand  the  importance  of  immuni- 
zation, but  it  is  still  in  part  a  public  health  responsibility,  because 
a  case  of  measles  in  Kansas  can  spread  to  Yakima,  WA  overnight. 

Senator  Kassebaum.  Thank  you  very  much. 

Senator  Gregg. 

Senator  Gregg.  Thank  you.  I  just  want  to  clarify  the  record  a  lit- 
tle bit,  because  I  did  hear  one  of  the  Senators  mention  that  they 
had  not  heard  anywhere,  other  than  from  Dr.  Duma  and  from  the 


187 

drug  companies  that  universal  purchase  wasn't  very  important  in 
the  essence  of  the  problem.  There  have  been  a  number  of  studies 
which  have  basically  said  that  it  isn't  universal  purchase  and  dis- 
tribution of  this  drug  that  is  going  to  solve  the  problem.  In  fact, 
the  National  Vaccine  Advisory  Committee's  1991  report  in  JAMA 
didn't  even  mention  the  concept  of  universal  purchase  as  being  one 
of  the  critical  problems.  They  cited  a  whole  series  of  problems,  most 
of  which  dealt  with  poor  delivery,  such  as  missed  opportunities,  ap- 
pointment-based system,  long  waiting  lines,  transportation,  edu- 
cation, poor  Medicaid  system.  And  then  GAO  has  already  done  a 
report  in  this  area  in  1993  which  says  savings  on  vaccine  cost,  the 
price  of  vaccine,  is  not  the  issue  and  will  have  little  to  do  with  im- 
proved preschool  immunization  levels  unless  funds  are  provided  for 
educating  parents,  tracking,  and  following  up  on  the  immunization 
status  oicnildren. 

And  the  statistics  speak  for  themselves  on  this  issue.  The  fact  is 
that  when  you've  got  95  percent  of  the  kids  in  grade  schools  immu- 
nized, then  it  is  obvious  that  it  isn't  the  availability  of  the  commod- 
ity that  is  the  problem;  it's  the  fact  that  people  are  not  taking  ad- 
vantage of  the  availability.  And  when  you've  got  universal  avail- 
ability States  such  as  New  Hampshire  and  the  State  of  Washing- 
ton, which  still  have — in  the  State  of  Washington,  according  to  the 
testimony— -35  percent  of  the  kids  not  being  immunized,  it  is  the 
people  coming  to  use  the  available  drug  supply  which  is  the  issue 
here.  And  what  we  are  going  to  end  up  doing  if  we  go  down  the 
road  of  universal  purchase  and  distribution  is  we  are  going  to  end 
up  saying,  well,  we've  taken  the  magic  wand  of  the  Federal  Gov- 
ernment to  this  problem,  and  we  have  solved  it.  And  as  a  result, 
we  are  not  only  not  going  to  solve  it,  but  we  are  going  to  end  up 
undermining  the  systems  which  we  should  be  putting  in  place  to 
solve  it.  And  we  are  also,  in  my  opinion,  going  to  end  up  undermin- 
ing in  the  long  run  the  research  effort  in  the  area  of  the  private 
sector  that  is  being  made  to  produce  better  vaccines. 

So  I  think  we  are  coming  at  this  backwards,  and  it  is  not  un- 
usual for  the  Federal  Government  to  do  that,  but  as  a  practical 
matter,  in  this  instance,  we  can't  afford  to  come  at  it  backward.  We 
have  got  to  get  the  drugs  out  there,  and  the  way  you  do  that  is  by 
getting  into  the  issue  of  how  you  get  the  parent  to  act  responsibly 
and  to  come  in  and  use  the  available  drugs,  and  how  you  create 
a  system  which  educates  the  parents  as  to  the  need  to  be  respon- 
sible and  immunize  their  children.  Until  we  address  that,  this  con- 
cept of  nationalizing  the  drug  system  is  a  mistake,  in  my  opinion. 

Dr.  Duma.  Senator,  if  I  could  add  something  to  that  that  is  in 
my  unabridged  testimony  that  I  submitted,  there  was  a  very  com- 
prehensive article  entitled,  "Childhood  Immunizations,''  that  was 
very  severely  peer-reviewed  and  published  in  the  New  England 
Journal  of  Medicine  in  December  of  1992 

Senator  Gregg.  Is  that  a  tool  of  the  drug  companies,  the  New 
England  Journal  of  Medicine?  What  percentage  of  their  money 
comes  from  the  drug  companies? 

Dr.  Duma.  If  you  look  at  the  ads,  they  probably  own  the  whole 
thing.  [Laughter.] 

Dr.  George  Petier,  who  is  professor  of  pediatrics  and  head  of  in- 
fectious diseases  at  Brown  university,  stated  in  the  article — and 


188 

you  can  read  it — "Of  particular  importance  in  the  current  era  of  es- 
calating health  care  costs  is  the  fact  that  effective  childhood  vac- 
cines are  highly  economical  and  thus  represent  efficient  use  of  soci- 
ety's resources."  He  goes  on  to  say,  "Four  major  reasons  for  low 
rates  of  immunization  among  young  children  have  been  identified. 
First,  many  opportunities  to  vaccine  children  are  missed;  second, 
deficiencies  in  health  care  delivery  systems  in  the  public  sector,  in- 
cluding insufficient  staff  and  policies  that  serve  as  barriers,  have 
limited  the  administration  of  vaccines.  The  remaining  factors  are 
the  inadequate  access  to  medical  care  and  lack  of  public  awareness 
in  some  communities." 

Nowhere  is  cost  mentioned  as  a  barrier  in  his  article. 

Dr.  Marcuse.  Excuse  me,  but  Dr.  Petier  happens  to  be  from 
Rhode  Island  and  a  colleague,  and  that  is  a  State  that  happens  to 
utilize  distribution  of  vaccine  to  private  physicians  in  order  to  get 
kids  immunized. 

With  regard  to  the  National  Vaccine  Advisory  Committee  report, 
Senator,  with  respect,  I  chaired  the  committee  that  wrote  that  re- 
port; there  is  a  section  in  that  report  on  barriers  to  vaccine  which 
are  financial  barriers  and  include  cost  of  vaccine.  We  specifically 
dealt  with  the  issue  of  the  cost  of  the  vaccine,  the  lack  of  reim- 
bursement for  administering  vaccine,  and  specifically  included  in 
the  report  on  access,  a  statement  saying  that  universal  purchase 
of  vaccine  should  be  explored  as  one  of  the  alternatives.  Nowhere 
do  we  say  it  is  a  panacea,  but  it  is  one  of  the  things  that  should 
be  explored,  and  that  is  in  that  access  report,  sir. 

Senator  Gregg.  Well,  I  would  just  note  that  it  is  being  used  here 
as  a  panacea. 

Dr.  Marcuse.  Well,  I  really  think  my  analogy,  sir,  of  four  flat 
tires  works,  that  changing  one  tire  won't  fix  the  problem.  You  have 
got  to  do  all  four.  And  I  think  this  bill  includes  fixing  all  four. 

Senator  Kassebaum.  Well,  we  are  exploring  it,  since  that  was 
one  of  the  recommendations. 

I  very  much  appreciate,  Dr.  Marcuse  and  Dr.  Duma,  your  pa- 
tience tor  this  long  day,  but  it  has  been  important  testimony,  and 
we  appreciate  your  being  with  us. 

Dr.  Marcuse.  Thank  you. 

Dr.  Duma.  Thank  you. 

[Additional  material  follows.] 


189 
Additional  Material 

statement 
of  the  national  association  of  community  health  centers 

Thank  you  for  the  opportunity  to  express  the  views  of  the  National  Association  of 
Community  Health  Centers  (NACHC)  on  the  importance  of  President  Clinton's  Initiative 
to  safeguard  children  against  vaccine  preventible  disease  through  the  Comprehensive 
Childhood  Immunization  Act  of  1993. 

During  the  last  100  years,  great  strides  have  been  made  in  reducing  the  impact  of 
Infectious  disease  throughout  the  world.  With  broad  public  acceptance  of  the  power  of 
vaccines  through  the  near  eradication  of  diphtheria  and  poliomyelitis  in  the  United  States 
and  the  decline  in  other  contagious  childhood  diseases,  we,  as  citizens,  developed  a 
prevailing  view  that  children  are  entirely  protected  from  common  childhood  disease,  and 
therefore  that  our  efforts  could  be  relaxed.  The  truth  is  that  we  still  permit  what  Dr.  Martin 
Smith  of  the  American  Academy  of  Pediatrics  calls  "Sacrificial  Death";  that  is.  the  death 
of  children  from  vaccine  preventable  disease. 

Nearly  seven  million  people  -  including  almost  2  million  preschool  children  and 
another  1.5  million  children  of  school  age  -  across  the  country  rely  on  the  national 
network  of  over  600  Community  and  Migrant  Health  Centers  across  the  country  for  their 
comprehensive  primary  health  care  and  prevention  services.  Health  centers  provide  these 
services  to  people  who  are  economically  disadvantaged,  or  geographically  or  culturally 
Isolated.  Studies  have  demonstrated  the  effectiveness  of  these  health  centers  In  reducing 
the  numbers  of  preventable  Illnesses  In  the  communities  they  serve.  Community  health 
centers  are  well  positioned  to  respond  to  growing  concerns  about  the  immunization  status 
of  children  across  the  nation. 

We  fully  support  the  principle  that  the  cost  of  vaccines  should  not  be  a  barrier  to 
the  receipt  of  childhood  immunizations.   NACHC,  which  supports  the  availability  of  free 


190 

vaccines  for  all  children,  believes  that  all  C/MHCs  should  be  considered  a  part  of  the 
public  sector  vaccine  distribution  programs  in  every  state  and  territory.  Further  we  believe 
that  childhood  immunizations,  while  an  important  public  health  issue  in  itself,  should  be 
considered  as  a  component  of  primary  care  rather  than  be  uncoupled  from  It.  Therefore, 
the  best  way  to  address  the  issue  of  Improving  childhood  immunization  rates  Is  to  build 
and  design  systems  that  assure  access  for  all  children  to  community-based  primary  care. 

In  this  context,  we  fully  support  the  Clinton  Administration's  initiative  to  both  make 
childhood  vaccines  more  available  and  affordable  to  all,  and  to  support  the  infrastructure 
needed  to  deliver  the  immunizations  to  all  who  need  them. 

In  1991  the  National  Association  of  Community  Health  Centers  accepted  the 
challenge  issued  to  us  by  U.S.  Surgeon  General  Antonia  Novello  to  meet  the  nations'  plan 
to  reach  a  level  of  90  percent  age-appropriately  immunized  children  by  the  year  2000. 

Based  on  a  six-point  plan,  the  Association  initiated  a  "National  Immunization  Campaign- 
to  achieve  this  objective. 

To  date,  we  have  developed  "Accepting  the  Challenge:  A  Primary  Care  Manual  for 
Immunization  Services",  which  we  have  distributed  widely  among  private  and  public 
providers  of  immunization  services.  In  close  collaboration  with  the  staff  of  the  Centers  for 
Disease  Control  Infant  Immunization  Initiative,  the  Bureau  of  Primary  Health  Care  of  the 
Health  Resources  and  Services  Administration,  and  the  Aetna  Foundation  as  a  private 
partner,  NACHC  recently  conducted  a  national  conference  to  identify  local  obstacles  to 
Increasing  immunization  rates  and  strategies  to  breach  them. 

Participants  at  the  conference  Identified  "Action  Steps"  that  reaffirmed  two  major 
categories  of  obstacles.  The  first  is  infrastructure:  delivery,  access,  tracking  mechanisms. 
The  second  is  public  will:  the  acceptance  of  responsibility  by  parents  or  guardians  to 
assure  age-appropriate  Immunizations,  and  the  commitment  of  government  to  remove 
legislated  barriers,  especially  the  vaccine  consent  forms. 


191 

To  achieve  a  90  percent  immunization  rate  for  children  two  years  and  under,  we 
must  have  the  service  delivery  capacity  to  deliver  the  vaccines.  Universal  purchase  will 
ensure  vaccine  for  all,  but  the  doses  may  sit  in  warehouses  because  we  lack  the  service 
delivery  means.  To  achieve  the  capacity,  we  must  create  access:  access  at  the  point  In 
time  when  people  need  it;  locations  that  are  easy  to  reach;  translation  capacity;  and 
outreach  workers  to  provide  services. 

We  must  Institute  marketing  capacities  that  target  hard  to  reach  population 
segments;  develop  cultural  competencies;  provide  peer-to-peer  education;  and  produce 
motivational  Incentives. 

The  current  Infrastructure  often  relies  on  parents,  pieces  of  paper,  and/or  memory 
to  know  the  status  of  a  child's  vaccinations.  Among  mobile  people,  especially  migrant 
and  seasonal  farmworkers  and  homeless  families,  accurate  information  Is  often 
unattainable  because  of  lack  of  records  or  language  barriers.  As  a  result,  reports  Indicate 
that  some  children  are  often  Qyei  Immunized.  We  need  to  develop  In-house  tracking 
capacities  that  can  be  Integrated  with  local,  state  and  national  date  systems.  A  major 
obstacle  to  achieving  this  are  patient  confidentiality  laws.  It  Is  Imperative  that  the 
government  mandate  a  system  that  allows  Information  transfer  and  protects  the  privacy 
of  a  patient. 

Finally,  as  we  build  capacity  Infrastructure,  we  build  the  means  to  achieve  the 
preeminent  goal  of  the  National  Vaccine  Advisory  Committee,  which  Is  wholeheartedly 
endorsed  by  the  National  Association  of  Community  Health  Centers:  "Childhood 
Immunizations  should  be  given  as  part  of  comprehensive  child  health  care.  This  Is  the 
goal  toward  which  the  nation  must  strive  If  Americas  children  are  to  benefit  from  the  best 
disease  prevention  our  health  system  has  to  offer.* 


192 


President  and  Hrej  William  Clinton 
The  Vhlt«?  Houoe 
1600  Pennsylvania  Ave. 
Washington,  D. C.  20300 


•'MM* 

:   .  \.\.>jty 
1 


I 

II 


Si 
h 


suffered  from  childhood  vaccinations. 


!••; 


r 


Dear  President  and  Mrs.  Clinton  t  ?;J! 

1  am  writing  on  behalf  of  my  son  Soottle  and  th#  many 
others  who  have  died,  or,  cannot  walk,  read,  write,  or  speak 
for  themrfelvee,  because  of  the  devastating  injuries  they've  ii 

Your  administration's  plan  to  vaccinate < "all4  children  I 

.:•  •  •   :  I 

may  appear  on  the  surface  as  being  very  good,  and  I  do,  not  '•" 

■••I- 

question  the  sincere  intent.   After  all,  t  and  the  parents  of 

'    '  lit  •  ' 

the  disabled  mentioned  above  didn't  doubt  vaccines'  safety*  or; 
efficacy  either,  and  allowed  our.  innocent  children  to  fee  jjj  -rj 
vaccinated  in  good  faith,  only  to  have  bur  world  crash  down  > 


around  us  by  the  profound  injuries  our  children  sustained!)  j 

1  must  painfully  tell  you  there  is  ■  very  grim  aids  to  ( 

'  'i  l 


I 


the  vaccine  issue  and  I  respectfully  ask  that  you  take  a*. long, 


hard  look  at  the  other  side,  the  "true  side"  of  curr 


.m'IM 


vaccines  and  vaccine  procedures  before  you  embark  Upon  a  mass 

vaccination  program.   Please  notel  I  have  used  the  term  !]  j||  j  j 

.  ■  •      ! . 
vaccination,  not»  immunization,  because  unfortunately}  ths  i(j; 


vaccines  are  not  nearly  as  safe  or  effective  as  society  has  |. 
been  led  to  believe  they  are.   Thus,  leaving  large  numbers 
not  "immunized"  against  the  disease  for  which  they've 
received  vaccine.  Indeed,  they  were  exposed  to  the  risks 
of  the  vaccine,  without  protection.  A  classic  example  is  the 
government's  recommendation  of  the  re -vaccination  for 
measles.   Please  see  the  enclosed  May  19,  1992,  Dayton  Daily 
Mews,  OpEd,   (Ex.  #  1)  by i  Dr.   Kristine  Severyn,  whose 
professional  opinion  is  clearly  spelled  out  that  "vaccines 
may  do  more  harm  than  good.  " 

And  in  the  context  of  professionalism,  1  bring  to  your 
attention  a  news  item  egss4*B»*d  from  the  February  7,  1993, 


193 

Milwaukee  Journal,  <  r^G^rgS ,  In  which  your  Health  and  Human 
Services  Secretary,  Donna  Shalala  was  asked  how  she  was 
preparing  to  tackle  the  Issues  facing  her  department   Her 
answer  was:  "The  same  way  I  did  In  Wisconsin.  *_  9**.  smart 
people  and  listen  to  them. * 

President  and  Mrs.  Clinton,  that  will  be  the  best  news 
In  a  long  time,  providing,  the  smart  people  that  Dr.  Shalala 
chooses  to  listen  to  regarding  the  planned  vaccination 
program  will  be  advisors  (outside)  of  the  government,  the 
Academy  of  Pediatrics,  the  American  Medical  Association  and 

the 'realm  of  vaccine  manufacturer (s) .  Because,  unfortunately,' 

i 

these  entitles  have  built-in  conflict  of  Interests,  the 
tragic  consequences  of  which  have  been  well  proven  over  the 
years  resulting  in  ill-conceived  vaccine  programs. 

An  example  is  the  present  unconscionable  recommendation  to 
administer  as  many  different  vaccines  as  possible  at  one 
visit,  without  any  assurance  children  will  not  suffer 
Irreparable  harm.   •Common  sense"  tells  us,  it  could  be 
devastating  to  expose  a  13  month  child  to  "9"  vaccines  at  one 
time,  and  most  assuredly,   "impossible"  to  determine  which  of 
the  multiple  vaccines  is  responsible  for  the  injury,  or 
death,  when  such  an  event  occurs.  Obviously,  the  current 
advisors  don't  care,  since  this  totally  shields  their  good 
friends,  the  vaccine  administrator  and  manufacturer  from  any 
accountability  ...   or,  liability.  So,  please  be  assured, 
these  recommendations  are  by  design  . . .  not,  by  mistake. 

My  deep  concerned  curiosity  for  vaccine  safety  began 
31  years  ago,  after  Scottie  (at  6  months  of  age)  turned  from 
a  beautiful  bright-eyed  alert  and  observing  baby  with 
excellent  head  control  . . .  into  an  infant  who  lost  his  vision 
with  near  constant  seizures  and  whose  head  flopped  around 
like  a  rag  doll.   Scottie  literally  "wilted"  before  my  eyes 


194 


after  the  third  combined  DPT  and  polio  shot,  which  rendered 
him  a  permanent  nonambulatory  spastic  quadriplegic,  with 
severe  mental  retardation  and  visual  impairment.   His  present 
physical  capabilities  are  less  than  that  of  a  nine  month 
infant.   In  contrast,  his  understanding  in  most  common  areas 
is  that  of  about  age  seven  years.  He  is  dependent  upon  total 
24  hour  care  which  is  provided  in  our  home,  by  my  husband  Jim 
and  myself,  since  his  143  pound  weight  requires  both  of  us  to 

•lift"  him,  for  his  care. 

.The  Children's  Defense  Fund  has  stated  that  for  every 
sl.Qfe  spent  on  vaccines,  up  to  $10,00  is  saved.   Has  this 
group  ever  substantiated  the  calculation  of  these  purported 
savings?   If  so,  did  they  take  into  account  the  following... 

1.  How  do  you  measure  the  so-called  savings  for 
"pain  and  suffering"  the  vaccine  damaged 
and  their  families  are  forced  to  endure? 

2.  How  do  you  measure  the  cost  of  destruction 
to  entire  families  due  to  the  insurmountable 
expenses  incurred  by  the  vaccine  insured's  needs? 

3.  How  do  you  measure  the  emotional  and  physical  taxing 
impact  of  the  rigorous  'round-the-clock  schedule 
<for  a  life-time)  on  other  siblings  ...   and  on  a 
marriage? 

So  much  for  the  Children's  Defense  Fund's,  cost  savings. 

A  top  government  vaccine  official  was  quoted  in  the  news 
as  saying,  with  the  current  tvaccineJ  system,  access  to 
immunization  has  become  a  privilege,  and  he  believes  that 
every  child  has  a  right  to  be  vaccinated,  Just  as  everybody 
has  a  right  to  clean  water.   Frankly,  that's  a  preposterous 
statement,  since  vaccines  are  a  long  cry  from  being  clean  as 
water.   And,  he  knows  itl 


195 


Past  performance  reveals  mighty  serious  negligence  right, 
within  our  federal  regulating  agency,  the  Food  and  Drug 
Administration.   If  you  question  this,  check  with  the  near 
500  persona  who  vere  afflicted  with  Guilllan-Barre  paralysis 
during  the  mass  "swine  flu"  vaccine  fiasco  back  in  1976.  Or, 
Just  ask  the  seven  families  who  lost  loved  ones  due  to 
contracting  polio  . . .   from  polio  vaccine.   Please  see  the 

enclosed  January  27,  1993  Baltimore  Sun  news  item  on  this 

i 

matter.   <Cx.#C?J  My  blood  bolls  with  rage  to  read  i 
"...government  ...in  this  caae  approved  use  of  a  live-virus 
vacaine  that  did  not  meet  government  standards. . . these  people 
are  paralyzed  because  people  didn't  follow  the  law,  both  the 
government  and  the  company.  " 

If  you  folks  and  the  persons  you've  appointed  to  your 
administration  are  serious  about  true  health  care  for 
children,  then  you  must  not  ignore  the  poor  track-record 
of  past  administrations'  vaccine  studies.  I  must  tell  you, 
the  absolute  "true  facts"  of  one  of  the  largest  and  most 
Important  studies  done  in  our  country  on  "pertussis"  vaccine, 
which  was  tax-funded,  has  yet  to  be  published.   I  refer  to 
what  is  commonly  called  the  "UCLA*  study,  because  it  was 
conducted  at  the  University  of  California,  Los  Angeles,  from 
September  30,  1977,  to  December  31,  1979.  This  was  a  Food  and 
Drug  Administration  project,  directed  by  FDA's  Dr.  Charles 
Hanclark.  Assisted  by  Drs.  Baraff,  Cherry  and  Cody  at  UCLA. 

This  study  project  was  called,  "Rates,  Nature  and 
Etiology  of  Adverse  Reactions  Associated  With  DTP  Vaccine.  " 
The  contract  number  1st  USPHS/FDA-223-77-1203 

It  behooves  you  President  and  Mrs.  Clinton,  to  have 
Dr.  Shalala  request  and  read  thoroughly  the  "raw  data" 
of  the  above  mentioned  study  . . .   "before"  even  considering 
the  proposed  mass  immunization  plan.   You  all,  owe  it  to 


196 


our  children.  Naturally,  first  you  need  to  know  the  truth  . 
and  then,  we  shall  expect  nothing  less  from  you,  but  to 
exercise  that  truth  In  your  vaccine  endeavors.  We  cannot, 
and  do  not  fault  you  for  the  past  administrations'  serious 
inequities  relative  to  vaccines.  However,  you'll  have  no 
excuse  . . .  should  you  take  the  same  path,  or  even  worse, 
if  you  proceed  without  heeding  to  the  "red  flag"  which  I 
have  Just  raised.    (Ucase — nete  exhibits  4 — and — 5- 
axLt4re-jgB~f r-om-Thg^Eresno  Bgg  and_JLhe  eret 

■Ttu>-i>nantn»J<Hrh<nD'       in     HaPnGtt     HeWB; Of*— trho     aboVO • 

m_en_U-ened—  H6kA-«t*uly-. t-P«th  publiohed  in  December; — l~9fl<  >  .  - 

I  would  be  happy  to  meet  with  you  and  Dr.  Shalala  and, 
or,  to  provide  you  with  individuals  who  have  personal  vaccine 
expertise,  to  discuss  this  crucial  issue  of  mass 
immunization. 

1  served  on  the  national  Advisory  Commission  on 
Childhood  Vaccines  the  first  two  years  of  its  inception. 
This  is  the  commission  which  advises  the  secretary  of 
of  Health  and  Human  Services  on  vaccine  policy.  I  am  co- 
founder  of  Wisconsin's  Citizens  For  Free  Choice  In 
Immunizations  and  president  of  the  parents'  DPT  SHOT 
organization,  which  is  short  for:  Determined  Parents  To  §top 

Hurting  9_ur  T_°*-B. 

I  look  forward  to  your  early  response. 


Sincerely, 


Mrs.  Marge  Grant,   <DPT  SHOT) 
Determined  Parents  To  Stop 
Hurting  Our  Tots 


cct  Dr.  Shalala 

Various  members  of  the  Senate  and  House 


197 


OpEdPage «*Jjt 

"  OAVtOM  DAILY  HEWS    ^T  / 

.  ♦       ,  "ay  '9.  199?        I 

Vaccines  may  do  more  liai  in  Uian  gopcjl 


OyK/lillne.  M.  tuo.Yl. 

Ohio  parents  of  8'h  gtaders  ut  cur- 
rently being  notified  that  their  children 
InUSt  rerelic  I  Second  dose  of  mmr 
ftneasles.  mumos  arid  mb'tla)  vaccine 
hefote.lhey  msy  »|.trr  llh  gi  art-  Mils  fall. 
Aj  i  rcrlslcrrd  pharmacist,  with  an 
additional  I'll  O  In  blnpharmncruM'S,  I 
was  tadghl  (lint  V3crlnc>  rapt*  nil  the 
Mm*.  with  rxltruicly  true  aclvctse  ef- 
lecls  My rvtcnslve  research  In  this  mti 
Indlcatrs  that  neither  Is  trur 

The  -Ohio  Drpir'nienf  o'  llrnllh 
spoke-.tmui  quoted  'n  the  Apr  U  fl  r>»i  ten 
nm(i-  /v>«s.  ."Oft  shot*  oi  rmget  nil 
grade."  jnld  thrte  >v«rr  I.TiO  «»-*»  of 
measles  In  Ohio  lb. 1989.  What  fie  omll- 
I'd  KM  the  SJ.<  percent  Of  lhe-.a  rises 
occurred  In  previously  v.-irclimltd. peo- 
ple Th's  Is  reni'irnlstlve  rf  cutbtrpvj 
around  llir  US.  "hetcjbc  rra|e<r»v  of 

_xryi^eAtr^csja^L«ci3tadn.iati:lnaL 
— CdLrt3Jlj^_Jf"Jr|l'"1',''  among  IQOpcr. 

_£!U!LJ  3til!yEi'xiE.1illli7DL 

I  he  Adwsoty  rommklce  fut  Immunt-' 
r.ntlon  I'lacllces  IACII).  »hl<-h  lecem 
nftiiltiifitlbual  vaccine  policy,  reported. 
In  "Measles  rievenUort:  Rccniiunerida- 
Moni  .  .."  f.V'rbi'lHv  i<nd  Mc'WIl)- 
Wcektr  nr/iort  38  (H-9).  Dec  J9.  I9»», 
tint-  "Amonr.  school- iped  children,  oul- 
btcaks  have  occurred  In  schools  »iih 
vaccination  levels  of  filler  than  9*  p-r- 
cent.  Then  outbreaks  hive  occurred  In 
nil  parts  ef  the  country.  Including  areas 
that  had  not  reported  measles  for 
yens" 

floutlne  measles  vaccination  may 
hue  caused  ltd.'  problem  Prior  In  man- 
datory mrasles  vjcelne.  miASlei  «es 
generally  considered  la  be  brpign''  In. 
lchor-|.jgcd  chll'lren.  acrotdlng  lo  the 
l'  3.  rood  and  Drug  Adh'Ini-.tiMlon. 
Since  Ihe  svlderprean  u-e  of  measles 
vaccine  In  young  '-lilld'rp,  the  incidence 
of  the  disease  hat  shifted  to  atMc-cents 
and  younc;  n-lul's  where  It  pviy  he  more 
sellout  than  If  II  had  occurred  while  they 
wen!  children. 

Additionally,  motheis  who  caught 
mraile*  as  children  arnj'ilied  lifelong  Im- 
munity and  passed  n  eajlc  antl'Mitlet 
to  Ihelt  babl-i  during  ptegnruv  y,  giving 
the  n"V  bom  baby  •  lrrnp"ra|v  Immuni- 
ty lot  I  year  or  lonrer.  We  vt  now  find- 
ing thai  v.vclnMcd  mothers  do  not  hive 
till.'  stiong  Itlelong  Immunity,  and  can-  . 
not  px<s  Immunity  to  their  liable-,  l'»v- 
trig  '.hero  susceptible  to  measles  In  the. 
Hist  year  of  life. 

Despite  my  icclvtng  mea-le-  vaccine 
In  lfll.1.  I  hod  no  Immunity  lo  nieaslrj 
less  than  elfjht  year!  later,  as  measured 
by  blood  in'lboity  levels  the  manufac- 
luier  hlnhfis  'hilt 'vaccine  Induced  anti- 
body levels  peulst  for  nl  least  Hghl 
yean.  »H  bout  substantia)  decline." 

In  spite  of  Inadequate  cffi-cll*enessl 
the  numerous  publications  that  note 


TT!T7-TCTTC 

Ihli  column  (rives  readf n  a  formal  to 
ihare  Ideas.  oD'nions  and  erperf- 
enees  Columns  shou'd  be  of  interest 
lo  the  t«ncra|  public.  Il'nctv  and  con- 
cise loneth  should  be  bctv/c-n  <00 
»nd  l.ooo  weds.  Send  lo  Oihcf 
Voice'-,  P.irfeM  O.iih  Nm?,  r.o.  Oos 
128'  Dayion.  Oh'o  'IS'IOI  Include 
jrot"  »ddi"SS  and  •  lelrphonc  num- 
ber whero  you  can  be  reached  during 
business  hours. 


high  fa'l'jr.-  rales  of  measles  vscclne 
booster  she'.s,  and  the  ACir  a  a-.knowl- 
edging  that '  fjrllier  studies  are  needed 
to  det-Mnlne  '.he  duration  of  var'lne-ln- 
duced  Immunity.''  our  <tate  public 
health  rfticlrUJ  mandate  ■  second  dose 
otMlinrvclnc. 
.T"  make  ma'ters  aorse.  lhcy_lnclyjje. 

-15S J? HJ IfiCfJ-'  title V  ~  D'j'njr'  i\nj 
nibjla  —  wTJch  ACIC  .'tales  In  e  prm> 
Irms  with  ef-cthiness  tuit1_ean_  be 
harmful.  The)  aim  Irnore  wrnitnrs  Ey 
fije"  va'-clnr  uinnu'irluicr  no',  to  re  vac- 
Clnrte  mltl'ltBree*"  vacctnes.t~hrn  only" 
one  ma y T>e  needed 

i'Wo  Dep-vrlrornl  of  Health  Director 
Dr.  F.dward  O.  KUroy  stales,  "Ho  eom- 
plications  or  deaths  orcuired  In  Ohio 
children"  from  mex'les  dt'-cnjr-  Unfor- 
tunately rec'pl"nls  of  MMtl  vaccine 
have  rot  later  so  well 

The  federal  governments  Vicclne  In- 
Jury  Compensation  rT"gram  fVICD  re- 
cently reported  that  thei*  v-cie  311 
Claims  —  351  ln|uil  -•  and  31  death]  —  lo 
the  prorram  related  to  NIMH  vaccine  or 
one  of  Hs  components  —  measles, 
mumps  or  nihe'la 

In  Ohio  there  wre  U  Ml  III  —  or  com- 
penenl  —  vaccine  da-nege  claims  lo  the 
VlCf  f  ISInJrrrtes  and  rneilealh) 

the  VICI'  rep  rled  onj  May  31.  I»«l 
that  Ihe  federal  go'einriieni  hail  paid 
II0..151.13I  llii'i  far  lo  vfctlms  of  MMR 
yarctne  or  one  of  111  conipoheols  Con- 
Sh'eilng  '.hit  many  people  are  unaware 
of  the  vicr  —  seme  victims  have  sued 
out  side  the  VICP  —  or  more  rflen,  peo- 

file  do  not  know  Ihal  'acllnes  can  eause 
n)<iries.  the  total  victim  count  and  dol- 
lar amount  due  lo  MMtl  vaccine  may  be 
hlgh'r.  I 

Or  Kilt  ov  labels  vscclnje  Induced  Inju- 
ry 0'  deafh.  is  "only  lem0o>al,'°  mcining 
the  chOd  was  prcde.'.llned  to  die  or  be 
damar ed  near  vaccination  day  anyway. 
.  The  Tnjv-'nnese  government  lakes 
these  "temporal'  trperts  of  vaccine 
death  ierlo".*ly.  rrecntty  srispcndlng  use 
of  the  nrr  fdiphtherta,  pettuss's,  Uli- 
nusl  vaccine  aflet.the  dca'bs  of  five  In- 
finis  'vlthln  'hree  days  ol  receiving 
doses  (Drj-ton  DaJ/y  /Vew'j.  March  III. 


Aren't  0  3.  children  worth  th'itame 
i  concern  by  our  own  government  health 
officials?  Don  t  children  drmaged  or 
killed  hy  vaccines  deserve  the  sfcme  sym' ' 
pathy  and  attention  is  children  who 
happen  to  catch  •  communicable  dis- 
ease' 

Unbeknownst  to  twit  people,  the  rig- 
orous Standards  ui-et   by  the   FDA  to 
evaluate  new  diugs  are  not  applied  to  ! 
ne»-  vaccines,  resultbrg  In  vaccine  actu- 
ally being  'leal  ed"  on  pur  children 

The  MM)!  vaccine  package  Insert 
Stales  Ui*t  there  U  a  I J-SO  percent  Inci- 
dence of  severe  side  effects.  I  e...  tran- 
sient or  permanent  crippling  rheuma- 
toid uthrllls.  Inppsl-pubcsceptfdmales 
receiving  rvheUi  vaccine.  This  was  con- 
firmed  Ip  a  luge  ItlUonrl  In.-tltii"  of 
Medicine  study  released  In  July  1991.        • 

Government  health  officials  unfairly'. 
cMc  the  worldwide  death  rate  of  measles 
tr  p  istlfy  compulsory  vaccination  In  the  ■ 
U  S  The  death  rite  from  nreaile-  In  the 
US  Is  tar  below  that  of  Third  iWorld  . 
nations 

Another  mlslei'llng  nicy  I-  crediting  ! 
vaccines  »lth  the  drop  In  all  Communi- 
cable dL'ra-.ei  However,  history  Indl-: 
ca'.es  that  Ihe  Incidence  and  death  rales; 
of  many  of  these  dheases  weie  already' 
reduced  prior  lo  Ihe  Inltodueljon  nf  vac- 
cines. 

Concetn  about  health  earj  for  chB-, 
dten  Is  understandable.  Hpwtjverl  with- 
holding potentially  hnrmnjk;  vaccines' 
does  not  mean  denial  of  sppiqprtste' 
niedleal  cate  for  children.  Ooverprnent' 
health  officials  are  pressured  by  drug-, 
conipanles  lo  add  more  and  race  doses  - 
to  their  teoulted  list  of  vaccines,  despite . 
Ihe  rtik*  of  dubious  benefits. 

Since  Ihe  hid  I  vidua)  parent  wfjl  be  re-, 
soon'lhle  lot  the  cate  of  a  vaccine-dam-'' 
aged  cl'U  I  It  should  he  the  parenlr 
nqiil  i"d  responsibility  lo  rryike  an  In- 
formed  decision.  In  consultation  with, 
their  physician,  about  whlet  vicelnea,' 
are  appropriate  for  lbe|>  fejnllt.    I 

Most  of  the  world,  even  loess  coun- ' 
IHe'  wit h  compulsory  vaccloltleii  laws, 
and  !D  US  states,  alio*  r>artjn's  to 
cheo'e  v/h-thet  to  vaccinate; their  chO-. 
drcn  A  I!  of  Western  Europe.  Cans'  •.  la-, 
pan.  New  Zealand  and  Auatralla  allow 
philosophical  exemptions.  WJ'h  few  ex--' 
ce p'lons,  those  denying  thjl  right  are 
the  former  Communist  Easleg  Bloe 
fcounlries 

I  encnurrte  you  to  conl  act  vout  elect-, 
rd  officials  In  Columbus  antt  tell  them 
that  vpti,  litre  most  of  the  developed  hee 
world,  want  freedom  of  jeholee  In' 
vaccines.  | 

^ • 

•  KRISTINC  M.  SF.VERYN.  'ft.rh., 
Ph.D.,  Is  a  reijlslered  oharmacltt  In  Ohio  and 
Keoiucky  who  befoogs  lo  a  number  of  profes- 
sional societies.  She  aws  In  Ceniee<*St. 


198 


The  Baltimore  Sun— Wednesday,  January  27, 1993 


7  polio  victims'  families 
win  damages  from  U.S. 


From  Staff  and  Wire  Reports 

The  family  of  a  Maryland  man  who  died 
of  polio  eight  years  ago  will  collect  damages 
from  (he  federal  government  as  a  result  of 
an  appeals  court  ruling  In  a  liability  case 
focusing  In  part  on  the  safety  of  the  live-vi- 
rus Vaccine. 

The  4th  Circuit  Court  of  Appeals  In  Rich- 
mond. Va..  upheld  a  Baltimore  Judge's  ruling 
against  the  U.S.  government  In  seven  con- 
solidated cases  —  Including  that  of  Westing- 
house  engineer  William  F.  Miller  Jr.  of  Glen 
Bunile.  who  contracted  polio  from  his  Infant 
daughter  after  her  vaccination. 

Mark  S.  Moller.  a  New  York  lawyer  who 
was  co-counsef  for  the  victims  and  their 
families,  said  the  amount  of  the  damages  to 
be  collected  by  widow  Deborah  Miller  and 
the  couple's  (wo  children  —  daughter  Krts- 
lln.  now  9.  and  Michael.  1 1  —  was  scaled 
under  court  order  but  he  described  It  as 
"very  substantial." 

The  other  lawyer  representing  the  plain- 
tiffs. Stanley  P.  Hops  of  Philadelphia,  said 
the  ruling  —  upholding  a  decision  by  U.S. 
District  Judge  Frederick  Motz  In  Baltimore 
—  could  cost  the  government  more  than 
$20  million  In  damages.  Of  wider  Impor- 
tance, the  lawyers  said.  Is  that  the  decision 
holds  the  federal  government  accountable  If 
It  violates  Its  own  rules  —  In. this  case,  ap- 
proving use  of  a  live-virus  vaccine  that  did 
jjol  mcel  goycmmcnt.stanEarda. 

"It  tells  the  government,  you  make  the 
law.  you  have  to  follow  the  law."  Mr.  Kops 
said.  "This  Is  all  about  the  rule  of  law.  We 
are  a  nation,  that  Is  governed  by  law.  The.se. 
Ec.QGLc.3Lc..Pi!f^'l^?.bcca^s^p_TOnJcjdldn't 
Jg.'low..UlcJAw1_bgth  Mie  government  and  the 
company." 

Mr.  Moller  said  five  of  the  cases  Involved 
batches  of  vaccine  made  during  the  late 
1970s,  and  two  Involved  later  batches. 

Lederle  Laboratories  manufactured  the 
vaccine  In  all  seven  cases  and  has  settled 
out  of  court,  said  Craig  Engcsser.  a  spokes- 


man for  the  company,  which  Is  a  division  of 
Wayne.  N.J. -based  American  Cyanamld. 

Government  lawyers  Involved  In  the  case 
could  not  be  reached  for  comment  yesterday. 

Mr.  Miller  was  Infected  with  the  polio  vi- 
rus while  changing  the  diaper  of  his  daugh- 
ter, shortly  after  her  vaccination.  Symptoms 
developed  In  February  1984,  after  a  two-  i 
month  Incubatfon  period,  leading  to  com- 

fjlcte  paralysis  and  then  death  II  months 
ater  Mr.  Moller  was  unable  to  say  with 
certainty  why  Mr.  Miller's  own  childhood 
vaccination  did  not  protect  him  from  the 
virus  when  he  came  In  contact  with  the  i 
diaper  wastes. 

Another  plaintiff  In  the  case.  Randy  Mus- 

fjmve  of  Morrison.  Tcnn..  also  contracted  po- 
lo In  changing  a  child's  diaper  but  has  sur- 
vived —  with,  partial  paralysis.  The  other 
five  cases  Involved  children  In  various  states 
who  contracted  the  disease  and  suffered  pa- 
ralysis after  taking  the  oral  vaccine. 

,  Some  aspects  of  the  protracted  litigation 
reached  the  U.S-.  Supreme  Court,  which  de- 
cided In  19B8  to  revive  a  case  that  had  been  i 

thrown  out  by  a  Philadelphia  court  after  the 

§overnmenl  claimed  Immunity.  After  that 
cclslon,  the  seven  cases  from  around  the 
country.  Including  the  Philadelphia  case, 
were  consolldatedln  Baltimore  to  resolve 
common  Issues.  Mr.  Kops  said. 

The  high  court.  In  a  unanimous  decision 
written  by  the  late  Justice  Thurgood  Mar- 
shall, ruled  that  Immunity  only  exists  when 
an  agency  or  official  exercises  policy-making 
discretion  or  Judgment,  not  when  It  falls  to  : 
follow  Its  own  safety  standards. 

The  Reagan  administration  argued  at  the 
time  that  exposing  the  government  to  suits 
for  defective  vaccines  could  hinder  efforts  to 
control  diseases.  Judge  Motz  In  Baltimore 
sided  with  the  plalntllfs.  finding  that  offi- 
cials who  approved  the  vaccine  did  not  fol- 
low federal  guidelines  concerning  strength 
and  manufacturing  of  the  vaccine. 


199 

Senator  Kassebaum.  That  concludes  the  hearing. 
[Whereupon,  at  3:15  p.m.,  the  proceedings  were  concluded.] 


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