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Flu Shot Larceny

Caught off-guard by a last-minute flu vaccine shortage, hospitals and health officials are grappling with a side-effect perhaps more virulent than the bug itself: price gouging.

Around the country, officials say some vaccine suppliers are trying to cash in on the flu shot shortage by hiking up prices for hospitals and pharmacies. A recent survey found that the vaccine is sometimes being offered for 10 times its original value.

Colorado authorities are investigating the theft of vaccine from a Denver suburban medical office.

"Shame on the people who are price-gouging," said Dr. Julie Gerberding, director of the Centers for Disease Control and Prevention. "There's no room for this kind of behavior in an environment where we need to pull together as a country to protect our vulnerable populations."

Federal prosecutors could use a variety of fraud, conspiracy and other charges to pursue individuals or companies thought to be engaging in price-gouging. Some states are taking their own action.

Attorneys general in Kansas and Florida are suing Fort Lauderdale, Fla.-based Meds-Stat for allegedly trying to seek "unconscionable profits" by offering pharmacies flu shots for prices way above normal.

Connecticut officials have received numerous complaints about price gouging, state Attorney General Richard Blumenthal said. He said his office is investigating and may announce action against some flu shot providers as early as Thursday.

Blumenthal said the high prices hurt the elderly, the ill and the young — those recommended for flu shots: "Obviously the shortage of a vaccine combined with these very alarming abuses make these people victims twice over because they lack the vaccine and they may be price-gouged."

CBS News Medical Correspondent Dr. Emily Senay reports young children are also getting priority, as well as those who take care of children under 6 months old.

"The reason is these babies are not candidates for the vaccine so you want to protect them by making sure is it doesn't come into the house," she said on CBS News' The Early Show.

Over 60 boxes of flu vaccine were taken from a pediatric office, enough to supply shots to 620 children, Aurora detective Larry Martinez said Wednesday.

"I just can't believe anybody would do this," said Dr. David Roos, one of the pediatricians at Kids Aurora. "It means it probably is on the black market somewhere."

"I was very surprised. I could not believe that someone would actually steal a flu vaccine," said Regina Hostetter, who was bringing her son to the clinic.

"It's devastating to us, because we planned ahead and ordered our vaccines way ahead so we were sure we'd have enough for all of our patients," said Edie Greer of the clinic.

The nationwide scramble for the vaccine was triggered when Chiron Corp. — one of two firms that make the vaccine — announced it would be unable to provide the estimated 48 million shots expected this year. That's nearly half the supply federal health officials had counted on.

The remaining firm, Aventis Pasteur, can't make more vaccine in time for the flu season and it has only about 55.4 million doses available for this season, simply not enough to go around. The government is negotiating with other vaccine makers in hopes of shaking loose a bit more.

In his debate with Sen. John Kerry Wednesday night, President Bush said his administration was trying to obtain more doses of flu vaccine.

"We're working with Canada to hopefully ... that they'll produce a ... help us realize the vaccine necessary to make sure our citizens have got flu vaccinations during this upcoming season," Mr. Bush said.

He also called upon health Americans to skip their flu shots this year.

"I haven't gotten a flu shot, and I don't intend to because I want to make sure those who are most vulnerable get treated," he said.

"This really underscores the problem with the American health-care system," countered Kerry. "It's not working for the American family. And it's gotten worse under President Bush over the course of the last years."

"We're begging, borrowing and stealing from every source we can come up with," said Paula Frank, a clinical consulting nurse for the Bishop Drumm Retirement Center in Johnston, Iowa.

Visits to nursing homes in Oklahoma could be limited during the fall and winter months to protect residents from a flu outbreak, said state Epidemiologist Kristy Bradley.

When a flu shot leaves the factory, Aventis charges $8.50 for it, and the company says it has not raised the price since Chiron's announcement. But prices easily can rise under the existing distribution system, which allows vaccines to travel from manufacturer to middleman before it reaches a hospital or doctor's office. Those inflated costs are then passed on to consumers.

A recent survey by the American Society of Health-Systems Pharmacists indicated that the price of the vaccine went up more than four times the original market value. In some cases, the survey showed, the vaccine is being offered at $800 or more per 10-dose vial, which is more than 10 times the original value.

"There are companies out there that buy up and speculate on drugs that they think are at short supply and turn around and resell them at 10 to 100 times the mark up," said Bryant Herring, assistant pharmacy director for Wellmont Health System in Kingsport, Tenn., which has declined flu shot offers ranging from $65 to $100 a dose.

"It drives up health care costs and also limits the availability for patients who may not be able to afford it or need it most," Herring added.

In Wichita, Kan., officials at Wesley Medical Center needed 2,800 flu shots, but their supplier couldn't provide them. Plenty of other distributors were ready to meet his needs, though — for a price: as much as $600 for a vial of 10 flu shots that normally costs around $80.

With no other choices, Jack Bond, the hospital's pharmacy director, said he thought about paying that price "as a last resort." Fortunately, other health providers in the area came to the rescue, sharing their supplies.

The sudden nationwide crunch also may have inspired thieves to swipe 60 boxes of vaccine — enough for 620 children — from a suburban Denver medical office. Hospitals in Colorado have been offered vaccine for about $100 a shot.

As one remedy to problems caused by the shortage, the CDC and Aventis announced Tuesday a plan to redistribute the company's remaining shots directly to pediatricians, nursing homes and other places that care for high-risk patients.

"The new distribution plan... will minimize price-gouging because it will keep the vaccine out of that rather diffuse distribution system of professional distributors and sub-distributors," said vaccine expert Dr. William Schaffner, chairman of preventive medicine at Vanderbilt University in Nashville, Tenn.

It also will provide a shot in the arm to areas completely devoid of the vaccine.

"You can't get a flu shot at any price in Nashville — they're gone," Schaffner lamented.

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