Childhood Vaccine Financing: Implications for States

Childhood Vaccine Financing: Implications for States

National Vaccine Advisory CommitteeNovember 29, 2005

Washington, DC

Lance E. Rodewald, MDLance E. Rodewald, MD

Director, Immunization Services DivisionDirector, Immunization Services Division

National Immunization Program, CDCNational Immunization Program, CDC

TopicsTopics

Sources of childhood vaccine financingSources of childhood vaccine financing

Financial implications of ACIP votesFinancial implications of ACIP votes

Stress in the system: now and futureStress in the system: now and future

Next stepsNext steps

Federal Contract Prices for Vaccines Recommended Federal Contract Prices for Vaccines Recommended Universally for Universally for

Children and Adolescents 1985 – 2005Children and Adolescents 1985 – 2005

$0

$100

$200

$300

$400

$500

$600

$700

1985 1995 2005

Do

llars

2 Hep A

1 Mening

1 Td/ Tdap

4 PCV7

3 Flu

1 Var

2-3 Hep B

3-4 Hib

1-2 MMR

4 Polio

5 DTaP

Federal contract price shown for 1985 and 1995 are averages that account for price changes within that year.

The 2005 contract prices reflect prices on the Sept 1st, 2005.

In 2005, Tdap replaced Td as the adolescent booster.

$45

$155

$621

Section 3178%

Vaccines for Children

40%State 7%

Private Sector45%

Childhood Vaccine Doses Childhood Vaccine Doses Distributed by Funding SourceDistributed by Funding Source

Calendar Year 2004Calendar Year 2004

Source: Biologics Surveillance Data 2004

Contrasts Among Government Contrasts Among Government Funding SourcesFunding Sources

AttributesAttributes StateState 317317 VFCVFC

SourceSourceDiscretionary Discretionary

annual annual appropriationappropriation

Discretionary Discretionary annual annual

appropriationappropriationEntitlementEntitlement

EligibilityEligibility VariesVaries NotNot restrictedrestricted

Medicaid-enrolled; Medicaid-enrolled; Uninsured; Native Uninsured; Native American, Alaska American, Alaska

Native; Underinsured*Native; Underinsured*

StabilityStability Significant Significant fluctuations fluctuations

possiblepossible

Significant Significant fluctuations fluctuations

possiblepossibleMandatory fundingMandatory funding

* Underinsured only at FQHC

ACIP Role in VFC ProgramACIP Role in VFC Program

By statute: ACIP establishes, maintains, and revises By statute: ACIP establishes, maintains, and revises the VFC vaccine listthe VFC vaccine list

According to Congress, with regard to VFC According to Congress, with regard to VFC resolutions, ACIP should conduct its work resolutions, ACIP should conduct its work objectivelyobjectively– Only concerns: public health and medicineOnly concerns: public health and medicine– Work separated from budget considerationsWork separated from budget considerations– Only Secretary can question validity of ACIP Only Secretary can question validity of ACIP

recommendation, and propose changes to Congressrecommendation, and propose changes to Congress

Funding for vaccines in the ACIP list is mandatory, Funding for vaccines in the ACIP list is mandatory, implying that ACIP can raise vaccine funding for implying that ACIP can raise vaccine funding for about 45% of U.S. children by a voteabout 45% of U.S. children by a vote

Section 3178%

Vaccines for Children

40%State 7%

Private Sector45%

Childhood Vaccine Doses Childhood Vaccine Doses Distributed by Funding SourceDistributed by Funding Source

Calendar Year 2004Calendar Year 2004

Source: Biologics Surveillance Data 2004

Number of Children and Adolescents Number of Children and Adolescents Who Could Potentially Receive Who Could Potentially Receive

Full Series with 317 fundsFull Series with 317 funds

364378441

522548

515

638

747

0

100

200

300

400

500

600

700

800

1999 2000 2001 2002 2003 2004 2005est.

2006est.

Nu

mber

of

Ch

ildre

n(T

hou

san

ds)

2005 estimate includes the cost to vaccinate one adolescent with one dose of Meningococcal and one dose of Td.

2004 and 2005 reflect new budget lines 1) Business Services Support and 2) Public Health Improvement & Leadership — which were created to the show CDC indirect cost assessments to programs

Td was not included in the cost of the full series 1999-2004. States negotiated their own contracts because there was no federal contract for this vaccine.

TdaP is expected to be licensed and recommended in FY2006; CDC estimates the new vaccine may be used 50% of the time in adolescents and the current Td vaccine used the remaining 50% of the time.

Pneumococcal Conjugate Vaccine (PCV) Pneumococcal Conjugate Vaccine (PCV) Two-Tier Policies, by State, Two-Tier Policies, by State,

United States*United States*

States with a two-tiered PCV policy States with a two-tiered PCV policy (19 states are not implementing PCV with 317 funds)(19 states are not implementing PCV with 317 funds)

States without a two-tiered PCV policyStates without a two-tiered PCV policy

D.C.D.C.

*As of February 2003*As of February 2003

If all States implemented PCV and flu, the 2004 funding shortfall would be $55 Million

Unresolved Problem of Unresolved Problem of UnderinsuredUnderinsured

Public health safety net is missing in Public health safety net is missing in many locationsmany locations

Underinsured crisis likely to worsenUnderinsured crisis likely to worsen

Ethical tension for states and providersEthical tension for states and providers

ACIP Vote ImplicationsACIP Vote Implications

VFC entitlement must be fulfilledVFC entitlement must be fulfilled

States’ options for underinsuredStates’ options for underinsured– Raise funding consistent with purchase policyRaise funding consistent with purchase policy– Selectively implement a vaccineSelectively implement a vaccine

Providers’ options for underinsuredProviders’ options for underinsured– Ask parents to payAsk parents to pay– Refer patients out, if possibleRefer patients out, if possible– Take a financial loss?Take a financial loss?– Stop vaccinating?Stop vaccinating?

New Vaccines and Vaccines on New Vaccines and Vaccines on the Horizonthe Horizon

New Vaccine/Indication New Vaccine/Indication TimeframeTimeframe

TDaP (adolescents/adults)TDaP (adolescents/adults) 20052005

Universal hepatitis AUniversal hepatitis A 20052005

MMRVMMRV 20052005

MCV4MCV4 20052005

Varicella to prevent zosterVaricella to prevent zoster 20062006

Rotavirus (infants)Rotavirus (infants) 20062006

Human PapillomavirusHuman Papillomavirus 20062006

Expanding influenza vaccine useExpanding influenza vaccine use ????????

President’s Proposed Extension of President’s Proposed Extension of Access to VFC VaccineAccess to VFC Vaccine

Children Eligible for VFC Vaccine.

State & Local Public Health

ClinicsPrivate

Providers

Federally Qualified Health Clinks (FQHC)

Rural Health Clinics (RHC)

VFC Current LawUninsured X X X XMedicaid Eligible X X X XAmerican Indian/ Alaska Native X X X XUnderinsured * X X

VFC Proposed LawUninsured X X X XMedicaid Eligible X X X XAmerican Indian/ Alaska Native X X X XUnderinsured * X X X

*Children whose insurance does not cover the cost of immunizations.

VFC Vaccination Access Points

Additional Challenges for Additional Challenges for StatesStates

State immunization requirements for childrenState immunization requirements for children

Maintaining immunization insurance regulations in Maintaining immunization insurance regulations in the face of ERISAthe face of ERISA

Responding to vaccine safety concernsResponding to vaccine safety concerns

Responding to outbreaksResponding to outbreaks

Managing vaccine supply issuesManaging vaccine supply issues

Cost sharing the VFC administration feeCost sharing the VFC administration fee

Actual vs Allowable State Medicaid Actual vs Allowable State Medicaid VFC Vaccine Administration Fees VFC Vaccine Administration Fees

for CY2000for CY2000

$0.00

$5.00

$10.00

$15.00

$20.00

Adm Fee Fee Cap

*

*Universal purchase states are allowedto develop their own maximum fees.

*

Cost to Administer Three Cost to Administer Three VaccinesVaccines

0

5

10

15

20

25

DTaP IPV MMR

$

Fontanesi J et al. The Price of Prevention: Cost of Recommended Activities to ImproveImmunization. Am J Prev Med 2003; 1:41-45.

Medicaid average admin fee2000

NVAC Leadership in Vaccine NVAC Leadership in Vaccine FinancingFinancing

Measles White PaperMeasles White Paper

Strategies to Sustain SuccessStrategies to Sustain Success

Review of IOM report, “Calling the Shots”Review of IOM report, “Calling the Shots”

Review of IOM “Financing Vaccines for the Review of IOM “Financing Vaccines for the 2121stst Century” Century”

Recommendations for financing vaccinesRecommendations for financing vaccines

ConclusionsConclusions

Childhood vaccine financing has not changed Childhood vaccine financing has not changed qualitatively since prior to the IOM vaccine financing qualitatively since prior to the IOM vaccine financing studystudy

VFC entitlement is a major benefit to the health of VFC entitlement is a major benefit to the health of children, but its underinsured gap leaves the safety children, but its underinsured gap leaves the safety net vulnerable, especially for new vaccinesnet vulnerable, especially for new vaccines

Administration fees vary substantially, and in many Administration fees vary substantially, and in many places do not support the service rendered by the places do not support the service rendered by the providerprovider

States face very difficult choicesStates face very difficult choices

How Can NVAC Help?How Can NVAC Help?

Evaluate the vaccine financing crisis Evaluate the vaccine financing crisis through testimony and review of the through testimony and review of the evidenceevidence

Develop and publish strategic plan with Develop and publish strategic plan with key stakeholders to improve vaccine key stakeholders to improve vaccine financingfinancing

Monitor and guide implementation of Monitor and guide implementation of strategic planstrategic plan

Extra Slides Start HereExtra Slides Start HereExtra Slides Start HereExtra Slides Start Here

Vaccine Purchase Policy: 50 Vaccine Purchase Policy: 50 States, DC, VI, PR: 2005States, DC, VI, PR: 2005

10

4

166

17UniversalUniv. selectVFC / UIVFC/ UI selectVFC only

States with immunization mandates and/or universal programs (n = 51)

GWU/SPHHS/CHSRP Analysis of State Immunization Laws, Winter 2003

WA

OR

ID

MTND

WYSD

MNWI

MI

IL INOH

PA

NY

ME

CA

NVUT

CO

NE

KS

IA

MOKY

WVVA

NC

TX

NMAZ OK AR

LA

TNSC

GA

FL

ALMS

RI

CT

VT

MA

NH

AK

HI

DE

MD

DC

Mandate Only (AR, CA, CO, DE, DC, FL, GA, IL, KS, LA, MD, MI, MN, MS, MO, MT, NE, NJ, NY, OH, OK, PA, TX, VA, WVA, WI)

Mandate and Universal (MA, NM, NC, RI)

Mandate and Universal Select (CT, HI, ND)

Universal or Universal Select Only (AK, ID, ME, NV, NH, SD, VT, WA, WY)

No Mandate and No Universal or Universal Select (AL, AZ, IN, IA, KY, OR, SC, TN, UT)