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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 
I MMUNIZATION 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 
IM MUNIZATION 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 Tn gham 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 Ca rrasn uilto left her New Haven ho me at 
about 9:30 Friday maro itig wrtn a q-monin-oifl neph-" 

cwintoV.i^ ■ : !^:-^- ^V"C * , T- : V r r ? 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 Center 1 
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 a 1 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 aga inst a cost oi diseases that can JdJI or caus e 
— 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 Co nnecticut, one of a 
handful of states to make the drugs 
a vaiiapic to every emid. Ciov. 
Lowell P. Weackcr Jr. has proposed 
additional funding to ***tf hnnatiti c 
B to the list of vaccin es provided. 

JBut even with roughly $4 mil- 
lion spent bv state omciats each 
year tor tne immunization prc&ram 
— eveu Wi lli - 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 ngmwi t nf Ih r. 

children havebeenjmmumzed by 
agelwu. . . 

Tf^Sornf^merican cities have an 
even lower rate -—in fionsto n for 
example^' on ly It) percerir oj 
dren have receivea snots. Nafa onal - 
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;^PK r 6bserve^^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, a Go 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 



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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 i mmuni zations. 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-^rri 2 montn8 °f a 8 e » 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 



90 



ATTACHMENT 2 



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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 immuniz ation 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- 
ing vaccinations 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 




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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. 



130 

— 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 
utility 1 *. 

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- 



1 GAO'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 an d 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. 



152 



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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 * wi 1 g m «a»P le 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. 

°n r P olic y 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 
a dm n g8ignificant C08t * Mo8t Euro P ean countries have tracking systems that begin 
r u nu a 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£L pay 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 'L a f? 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^ 




Haemop hilus^ 



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[ED VACcTtiEg-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 ?I79 3) 



5.99 



1101 

2.16 



7.69 



Admin; FBI 3 



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 



Haem op hilus 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. EDUCA TION OF ROTH PROFESSIONALS AND THF 

PUBLI C. 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* 

: . \.\.> j t y 
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 < "all 4 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 Journa l, < 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 — ne te e x hibits 4 — and — 5- 
axLt4re-jgB~f r-om- Thg^Eresno B g g and _ J L h e e ret 

■Ttu>-i>nantn»J<Hr h<nD' in H a PnGtt HeW B; Of*— tr h o a bo VO • 

m_en_U-ened— H6kA-«t*uly-. t-P« th publioh e d i n D ecembe r ; — 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 rr a|e<r» v of 

_xryi^eAtr^csja^L«ci3tadn.iati:lnaL 
— CdLrt3Jlj^_J f "Jr | l'" 1 ','' among IQOpcr. 

_£!U!LJ 3til!yEi'xiE. 1 illli7DL 

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 cf fi -cll*eness l 
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" mak e ma'ters aor se. 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 wr nitnrs Ey 
fije" va '- cln r uinnu'ir luicr no', to re vac- 
Clnrte m ltl'l tBree*" 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 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 g overnment accountable If 
It violates Its own rules — In. this ca se, ap - 
proving u se of a live-vi rus 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. 
E c .QGL c .3L c ..Pi!f^'l^?.bcca^s^p_TOnJcjdldn't 
Jg.'l ow ..UlcJAw 1 _bgth M ie g overnment 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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