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SEC probes Chiron over vaccine
Congress wants to know if FDA overlooked problems; SEC launches an informal investigation.
October 13, 2004: 6:26 PM EDT

NEW YORK (CNN/Money) - Flu vaccine maker Chiron Corp. said Wednesday that the Securities and Exchange Commission (SEC) has launched an informal inquiry into the company's handling of regulators' halt on its flu vaccine operation.

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CNNfn's Fred Katayama reports on widespread price gouging due to a shortage of flu vaccine.

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The U.S. Congress also began investigating whether the Food and Drug Administration (FDA) overlooked problems at Chiron's plant in Liverpool, England that led to the withdrawal of half the U.S.'s flu vaccine supply.

Separately, the American Society of Health-System Pharmacists (ASHP), a professional association for hospital pharmacists, said in a survey that 55 percent of respondents said they have been contacted by opportunistic vendors offering to sell flu vaccine at vastly inflated prices.

Earlier this month Britain's Medicines and Healthcare Products Regulatory Agency suspended Chiron's license to ship influenza vaccine from its Liverpool plant, saying it had found systemic problems that led to some bacterial contamination.

The House Government Reform Committee and the Senate Health, Education, Labor and Pensions Committee each sent letters to the FDA asking what the agency knew and when about the decision on Chiron.

"There have been conflicting assertions about whether the FDA ignored early warning signals about problems at the Chiron plant," said Rep. Henry Waxman of California, the senior Democrat on the House committee.

The British regulators' decision may mean the destruction of 48 million doses of vaccine, out of 100 million doses destined for the U.S. market from Chiron and Aventis-Pasteur. Another 2 million doses will be available from MedImmune, which makes a nasal vaccine called FluMist for healthy adults.

The FDA has said it was caught by surprise by the MHRA's decision, but Acting FDA Commissioner Dr. Lester Crawford has said that his agency would likely have made the same decision.

The FDA says the British regulators got a final briefing from Chiron before their U.S. counterparts did, and apparently made the decision based on this briefing.

Shares of Chiron (down $1.87 to $31.87, Research) stock tumbled 5.5 percent on Nasdaq.

Agencies deny early knowledge

The FDA and MHRA made a joint announcement on Wednesday denying reports that officials knew about the extent of the problem earlier.

"Contrary to some reported statements, MHRA, as the responsible regulatory authority in the United Kingdom, made the decision to suspend Chiron's license after an internal meeting on October 4 and first informed the company and the FDA of this decision on October 5," MHRA chief executive officer Kent Woods said in a statement.

"At the same time, we informed other drug regulatory authorities via an intergovernmental rapid information alert."

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The House and Senate committees said they would ask FDA about news reports saying the Centers for Disease Control and Prevention and FDA officials knew as early as Sept. 13 that the MHRA might refuse to license the vaccine.

A federal grand jury is investigating whether Chiron broke any securities laws in handling the British license suspension, which came after weeks of checks over a bacterial contamination of some of the batches of vaccine.

Chiron confirmed it was cooperating with an informal SEC civil probe on how the company acted in the weeks leading up to the suspension.

Chiron told regulators weeks ago about the contamination, pledged to clean it up, and FDA officials said the problem seemed to have been dealt with. They were preparing to announce the vaccine was ready to be shipped when the MHRA acted.

Across the United States the CDC and state health officials were working to redistribute flu shot supplies to make sure those most in need got them.

The CDC asked that only high-risk people, such as the elderly, babies, chronically ill and their caregivers get the vaccine.

The flu usually claims some 36,000 lives and makes 200,000 sick enough to go to the hospital in the U.S.  Top of page


-- Reuters contributed to the story




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