Frist said the $7.1 billion that the Bush administration seeks for more medicine and better surveillance accounts for only about 1 percent of the hit that the economy would take if a pandemic were to occur.
"A $675 billion hit to the economy is without question a grim prognosis," said Frist, R-Tenn., said Thursday. "The good news is that our hands are not tied."
Frist cited a Congressional Budget Office report released Thursday that studied the impact a pandemic would have on the economy. It estimates the chances of such a severe flu are less than one-third of 1 percent annually.
Thursday's report analyzed a worst-case scenario, similar to the 1918-1919 Spanish flu that took hold around the world.
The CBO defined a severe pandemic scenario as one in which 90 million Americans are infected and 2 million die. About 30 percent of workers in urban areas would become sick, and 2.5 percent of those would die.
In related developments:
First among those proposals was the formation of a communications structure that would update the public every 6-8 hours about symptoms, cases and outbreak locations.
"To allay irrational fear, communication must be the bedrock of every public policy response," Frist said.
The report said that most people would simply stay home to avoid the bird flu. They would stop going to restaurants, stores and entertainment venues like stadiums and theaters. A significant portion of the work force would miss an average of three weeks of work.
Plus, proposals in Congress would exempt companies that manufacture vaccines and drugs for pandemics from lawsuits. That's a necessary safeguard to promote interest in developing those medicines, drug makers say.
"We won't do it without indemnification," said Len Lavenda, a spokesman for Sanofi Pasteur, the vaccine arm of Sanofi-Aventis SA.
But some insist immunizing drug companies won't be enough to spark interest in a field fraught with an uncertain pricing structure. Unlike drugs for conditions such as cholesterol and high blood pressure, which have guaranteed markets, medicines for pandemics will only be used sporadically, if at all.
The government adds to the pricing pressure. The Centers for Disease Control and Prevention buys 55 percent of the recommended childhood vaccines and pays substantially less than the private sector, so some experts suspect payments for pandemic treatments will be less than generous.
When anthrax fears surfaced after the Sept. 11 attacks, the U.S. government threatened to break the patent covering Cipro, an antibiotic made by Bayer AG. And Roche Holding Ltd. has already been under tremendous pressure to lower the cost of its Tamiflu, which is believed to be effective against bird flu, and give others permission to make it.
"Companies are worried about low prices," said Frank Sloan, professor of health policy, law and management at Duke University. "They are worried they won't recoup their research and development costs. That is the real problem."
In a statement, Sen. Edward Kennedy called the attempts to indemnify companies "a sweetheart deal for the drug industry."
Sen. Charles Schumer, D-N.Y., said that Roche Holding AG has agreed to a deal with 15 drug producers that would dramatically increase the world's supply of Tamiflu in preparation for a possible flu pandemic.
Company officials denied any final agreement has been reached with the companies, however, a spokesman did confirm that Roche is in "advanced discussions" with potential partners.
Tamiflu is in great demand in many parts of the world because of the fear of bird flu, a form of influenza that has been contracted by about 120 humans who have had close contact with infected poultry. Tamiflu can reduce the severity of the disease if taken early enough.