Canada needs two vaccine suppliers, Ottawa admits

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Canada needs more than one vaccine manufacturer to deal with future flu pandemics and to avoid production delays that have affected the fight against the H1N1 virus, federal officials say.

"There is no debate. We all feel that when the time will come to renegotiate, we will go to tenders on a two-part contract to ensure maximum flexibility," said a senior official who has been working directly on the file.

While the Harper government has applauded GlaxoSmithKline Inc. for making more than 6 million doses so far at its facility in Ste-Foy, Que., a number of officials involved in the crisis said Canada deserves a second producer in the future.

Had that been the case this time, one manufacturer could have worked on the production of vaccines with the adjuvant additive, while the other one could have produced non-adjuvanted vaccines for pregnant women.

GSK was forced to make changes to its production line in mid-course, which caused delays in the delivery of vaccines to the provinces.

The official said that a simple stroke of bad luck can endanger thousands of doses of vaccine, and that it's better to "be safe than sorry" when it comes to production matters.

The GSK contract dates back more than a decade when health officials across Canada began planning for a pandemic, and mass inoculations, in the wake of an avian flu scare.

At the time, officials feared a global flu outbreak would prompt countries with vaccine plants to close their borders and hoard supplies. John Spika, a senior federal health official, led an effort to secure a Canadian-based vaccine supplier, arguing in 2000 that "we feel the only vaccine we could be assured of having would be produced here in Canada."

The only Canadian-based supplier was BioChem Pharma Inc. of Laval, Que., which got into the flu vaccine business in the early 1990s. The company's chief executive at the time, Claude Vézeau, saw the federal pandemic preparations as something of a godsend for the company.

"We were losing money manufacturing the [seasonal flu]vaccine," Dr. Vézeau recalled yesterday. "So we went to the government and said, 'Listen for this to be a viable manufacturer we need to increase the price of our vaccine.' "

The price hike became part of the pandemic-planning negotiations and in 2001 the federal government signed a 10-year contract with the company worth around $300-million. The contract required BioChem to supply all vaccination needs in the event of a pandemic and the government agreed to buy half of its annual flu vaccine from BioChem at a higher price. The company also received some help from the government to expand the Ste. Foy plant.

Over the next few years the flu vaccine business became more lucrative for multinational drug giants and they began snapping up facilities. BioChem was sold several times and ended up in the hands of GSK in 2005 as part of the company's $5-billion expansion of its global vaccine business.

Dr. Vézeau defended the government's decision to go to a local supplier, saying the fears about closed borders were legitimate. But others tried to stop the move.

"We at the time argued, unsuccessfully, that while [fear of supply]might be a concern it wasn't the only concern," said Rob Van Exan, an executive with the Canadian division of French drug maker Sanofi-Aventis SA.

Mr. Van Exan said flu vaccines are difficult to make, which is why many countries have more than one supplier. If one company has a problem, the other supplier can step in. The United States has five suppliers including Sanofi, which has been making H1N1 vaccines at plants in France and the United States nonstop since September.

While controversy over the contract continues, GSK took time out yesterday to vaccinate some employees at the plant. GSK spokeswoman Megan Spoore said yesterday that Health Canada authorized the vaccinations. Only those employees considered essential workers who work daily on vaccine production and their families were to be vaccinated, she said. .

With reports from Caroline Alphonso in Toronto and Rhéal Séguin in Quebec City