WASHINGTON – The research chief of Gaithersburg-based MedImmune told a House committee Thursday that the company may get out of the vaccine-production business, following disappointing sales of its nasal-spray vaccine this flu season.
The company, which is one of only three in the country that manufacture flu vaccines, plans to destroy nearly 4 million of its 5 million doses of FluMist, said James Young, president of research and development for MedImmune. Young said it took the company 30 years and $1 billion in research and development to produce the spray.
“It’s hard to justify staying in the business, if we are hemorrhaging left to right,” Young said.
He noted that the company even tried giving away up to 1 million doses to local jurisdictions, but there were no takers.
Maryland was offered 250,000 free doses of FluMist in late January, but health officials declined, saying that they had enough vaccine doses in stock.
MedImmune reported fourth-quarter profits slipped 9 percent after FluMist hit the market in September. For the quarter ending Dec. 31, the company said its earnings dropped from $84.6 million (33 cents a share) a year earlier to $76.6 million (30 cents a share), according to financial documents.
Those documents also said that the company said it expects sales for FluMist in 2003 to be about $30 million.
But MedImmune was still able to report record revenues last year, thanks to its top-selling drugs Synagis, a drug for infant lung infections, and Ethyol, a cancer medication. MedImmune reported that revenues for 2003 grew 24 percent to surpass $1 billion for the first time in the company’s history.
Young blamed poor sales of FluMist partly on an inaccurate report on a government Web site that said FluMist could cause the flu. Young later said the Web site belonged to the Centers for Disease Control and Prevention.
“While the statement on the Web site was ultimately changed, it was not changed until after the media ran with the erroneous information,” Young said.
He also blamed the poor sales on age restrictions on FluMist: The drug can only be administered to people between ages 5 and 49. Young said he would like to see that restriction lifted so FluMist could be available to “all Americans.”
Nearly 36,000 people die from the flu every year, according to the CDC.
David W. Siegrist, a research fellow at the Potomac Institute for Policy Studies who specializes in biosurveillance, said that many industry people were sure FluMist would be a best seller.
“A lot of people have been surprised at the low sales on FluMist,” Siegrist said. “Being able to deliver large molecules without directly injecting into the bloodstream — a lot of folks thought that would be highly successful.”
Since FluMist did not sell well, Siegrist said he did not expect there would be a serious short-term effect on public health if MedImmune gets out of the vaccine-production business. But there would be a long-term effect, he said.
“It’s always worse for the country’s health when producers drop out,” Siegrist said.
All the witnesses at the Committee on Government Reform hearing on this year’s flu season agreed that there are not a lot of vaccine manufacturers, because companies do not make much money off vaccines — they have to make new ones every year to counter new strains of influenza.
Siegrist also said that the failure of a nasal version of a flu vaccine will definitely make companies think twice about developing nasal versions of other drugs, such as insulin, at a time when the industry is looking for the least intrusive way to deliver medicine.
“The fact that it (FluMist) failed . . . now places a shadow over that,” Siegrist said.
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