President George W. Bush on Tuesday proposed a $7.1-billion campaign to thwart a possible pandemic of avian flu by producing 20 million doses of vaccine, stockpiling treatments, and shielding manufacturers from liability.

“There is no pandemic flu in our country or in the world at this time, but if we wait for a pandemic to appear, it will be too late to prepare, and one day many lives could be needlessly lost because we failed to act today,” the president said in an address to the National Institutes of Health.

He requested $1.52 billion to produce the H5N1 flu vaccine. He also asked Congress to approve $1.03 billion to stockpile antivirual drugs, $2.8 billion for the development of cell-culture technologies, $251 million to help detect outbreaks, $800 million for development of new treatments, and $644 million to ensure state, local, and federal officials are prepared to respond to an outbreak in the United States.

Mr. Bush called the current process of producing flu vaccine “antiquated” and asked Congress to protect companies manufacturing flu vaccine against “the growing burden” of litigation. “We must increase the number of vaccine manufacturers in our country, and improve our domestic production capacity,” he said.

There is only one U.S.-based company that can produce flu vaccine, Chiron, and a Swiss company, Novartis, this week announced plans to buy it out (see Novartis Buys Chiron). SanofiPasteur, based in Paris, also produces vaccine at a plant in Pennsylvania. During the 1970s, at least 25 companies produced vaccine in the U.S.

Mr. Bush noted that most vaccines are still produced using a 1950s technology in which chicken eggs are infected with the virus and then used to develop vaccines. “In the event of a pandemic, this antiquated process would take many, many months to produce a vaccine, and it would not allow us to produce enough vaccine for every American in time,” he said.

Scientists said Monday they had developed a technique to more efficiently produce disarmed viruses that serve as seed stock in flu vaccine (see Profs Make Flu Vaccine Quicker).

Officials agree that the U.S. is currently ill-prepared for the evolution of a pandemic flu. This is thought most likely to happen if a strain belonging to the H5N1 subtype of the flu virus mutates in such a way that it can be passed from human to human.

First, U.S. hospitals are already full and lack the extra space required if significant proportions of citizens become ill from infectious disease. Second, the U.S. healthcare system places insufficient emphasis on vaccination, according to a report by the independent government advisor, the Institute of Medicine.

“We must… continue to trumpet a message of urgency and concern,” said a 2003 Institute of Medicine report, Microbial Threats to Health: Emergence, Detection, and Response. “That message is basically this: the magnitude of the problem requires renewed commitment.”

In October, President Bush met CEOs from Wyeth, GlaxoSmithKline, Chiron (acquired by Novartis on Monday, see Novartis Buys Chiron), Merck, and Sanofi Pasteur (the vaccine arm of Sanofi-Aventis), to encourage them to build more vaccine-manufacturing plants in the U.S.

Little Profit in Vaccines

For the past decade, the pharmaceutical industry has viewed vaccine development as a relatively unprofitable venture, with much lower profit margins than drugs, according to Scott Lundstrom, vice president of research at Life Science Insights, IDC’s biosciences arm.

This is because vaccines are a very different species for a marketing or sales executive compared to the most profitable pills. These are typically taken daily and treat chronic diseases.

In contrast, vaccines are typically given once to each patient and are usually purchased in bulk orders by government bodies or development charities that expect low prices. And such low prices have historically meant that a single legal case against a manufacturer can wipe out all profits the company would have made from the vaccine.

“Because we know that liability is an issue that keeps companies away from making vaccines, we need to resolve this, particularly when it comes to making vaccines for an influenza pandemic,” said Michael Leavitt, the U.S. Secretary for Health and Human Services.

In September, the U.S. government awarded a $100-million contract to Sanofi Pasteur to manufacture 3.3 million doses of the H5N1 vaccine. This would be enough for 1.67 million people.

On Thursday, Mr. Leavitt announced a similar contract with Chiron, worth $62.5 million.

Reuters contributed to this report.