Attorney General Writes Seasonal Flu Vaccine Makers, Distributors Regarding Alleged Price Gouging, Preferential Treatment

Attorney General Writes Seasonal Flu Vaccine Makers, Distributors Regarding Alleged Price Gouging, Preferential Treatment

November 2, 2009

Attorney General Richard Blumenthal has written 13 makers and distributors of scarce seasonal flu vaccine regarding allegations under investigation by his office of price fixing and preferential treatment for big retailers.

Seasonal flu vaccine is in short supply primarily because drug makers switched to producing H1N1 flu vaccine.

Blumenthal said his office has received complaints of season flu vaccines being offered at many times the normal price, as much as $100 a dose or higher. Other allegations include distributors and manufacturers reneging on price agreements by demanding new, higher prices for already-ordered doses, and distributors buying back vaccine for resale at inflated prices.

Blumenthal said that the Visiting Nurse Association, private physicians, emergency services agencies and others also have complained to his office about receiving a small fraction of the seasonal flu vaccine they ordered. Many have expressed concerns that pharmacy chains and other large retailers may be receiving preferential treatment in the distribution of the vaccine.

Blumenthal, who negotiated with Novartis to get several Connecticut VNAs their full vaccine supply as well as to double its doses to national VNAs, asks the four manufacturers and nine distributors to provide supply levels and prices, and explain distribution methods and criteria.

"My office is vigorously and aggressively investigating allegations of price gouging and favoritism in distribution of seasonal flu vaccine," Blumenthal said. "A flu shot can mean life or death for seniors and the sick, requiring we assure limited supplies are distributed equitably at a fair price. Price gouging or preferential distribution of such life-saving medication would be unconscionable and unacceptable. I will prosecute to the fullest extent of the law companies or individuals who seek to profiteer from the seasonal flu vaccine shortage.

"The vaccine shortage need not shortchange the vulnerable. Need -- not price gouging or buying power -- should dictate allocation of severely limited supply. We must assure that these potentially life-saving vaccines are available to all who truly need them.

"I am asking vaccine makers and distributors to detail, prices, supply levels and distribution methods and criteria to guard against favoritism and gouging. I will fight to assure no one makes a killing off the seasonal flu vaccine shortage -- potentially endangering seniors and the sick -- and everyone who needs a shot gets one."

Regarding alleged price gouging, Blumenthal's letter asks the three drug makers and nine distributors:

How much they charge for seasonal flu vaccine and how much they charged three months, six months and one year ago;

To explain why prices have risen, if they have;

Whether they are honoring original prices agreed to before the seasonal flu vaccine shortage;

Whether they are repurchasing vaccine. If so, what are they charging and are they making it available to customers with open orders at originally agreed prices?

Regarding alleged preferential distribution of limited vaccine supplies, Blumenthal asks:

How many seasonal flu vaccine doses they have and whether they expect supplies to increase before the end of flu season and if so, how much;

What criteria and rationales they have used to allocate limited supplies shipped to date;

Whether they have guaranteed refunds to customers not receiving their full orders without diminishing their ability to order additional doses if they become available;
What steps they can take to better assure equitable distribution of limited vaccine supplies;

Whether they can donate vaccine to charitable health organizations to assure vaccination of health care workers and the vulnerable.

Blumenthal's letters went to vaccine makers GlaxoSmithKline of Brentford, Middlesex, United Kingdom, MedImmune Vaccines, Inc. of Gaithersburg, Md., Sanofi Pasteur of Swiftwater, Penn., and CSL Biotherapies of King of Prussia, Penn.

He also sent the letters to distributors: ABO Pharmaceuticals of San Diego; Cal.; Atlantic Biologicals Corp. of Miami, Fl.; BDI Pharma of Columbia, S.C.; Besse Medical of West Chester, Ohio; Dubin Medical, Inc. of San Diego, Cal.; FFF Enterprises of Temecula, Cal.; Gulf Coast Pharmaceuticals of Ocean Springs, Md.; Nationwide Medical Surgical, Inc. of Van Nuys, Cal.; and STAT Pharmaceuticals, Inc. of Santee, Cal.

The letters give the companies until November 15 to provide the requested information.