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February 01, 2005


WASHINGTON--U.S. Sen. James M. Inhofe (R-Okla.) introduced his Flu Vaccine Incentive Act (S. 96), which would encourage flu vaccine production by targeting federal dollars toward researching new production technologies, removing current vaccine price caps on government purchases, and creating an investment tax credit for vaccine manufacturers who construct further production facilities.

“There are promising new technologies for producing the flu vaccine in a shorter amount of time and this legislation will incentivize this industry to further develop and implement these new technologies,” Inhofe said. “Rather than temporarily masking problems through wasted spending on vaccine surpluses, my bill would ensure that the federal government invests in lasting solutions to the challenges of flu vaccine production.”

Senator Inhofe’s Flu Vaccine Incentive Act (Flu-VIA) is comprised of three major initiatives:

Targets Appropriated Funds for Research and Development of New Production Technologies

  • The fiscal year 2005 Omnibus bill provides $100 million to the Department of Health and Human Services (HHS) to ensure a year-round flu vaccine production capacity and for the development of rapidly expandable flu vaccine production technologies. The Omnibus language also permits HHS to purchase flu vaccine with these funds, if deemed necessary. Such costly purchasing is a waste of federal dollars that could otherwise be used for research through the National Institutes of Health to develop faster and safer vaccine production technology. Senator Inhofe’s bill removes the language that allows government purchasing of the flu vaccine with these funds.

Eliminates Suffocating Price Controls on Government Purchases

  • Price controls put in place during the Clinton Administration both discourage existing flu vaccine manufacturers from bidding on government contracts as well as destroying incentive for new manufactures to enter the market. New vaccine manufacturers are not interested in entering into the market because of the high-risk and low profit margin environment of flu vaccine production under these controls.

Creates Investment Tax Credit for Production Facility Construction

  • This legislation would also provide incentives for manufactures to increase production capacity in the flu vaccine industry by creating an investment tax credit toward the construction of flu vaccine production facilities.

Senator Inhofe introduced similar legislation (S. 2997) last year in the 108th Congress.



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