KDCA to Review Appropriateness of Influenza Vaccine Bidding Method

[Image source=Yonhap News]

[Asia Economy Reporter Cho Hyun-ui] The Korea Disease Control and Prevention Agency (KDCA) stated on the 23rd that regarding concerns that the fundamental cause of this year's suspension of the influenza (flu) vaccination project lies in procurement issues, "We will consult with the Public Procurement Service and others to review the appropriateness of the bidding method." The Public Procurement Service is responsible for announcing vaccine procurement, selecting contracted companies, and reviewing vaccine transportation and storage.

Within the industry, after the national vaccination project was abruptly halted on the 21st due to influenza vaccines, which must be distributed refrigerated, being exposed to room temperature, claims arose that the government’s insistence on excessively low prices led inexperienced companies to handle distribution, resulting in the incident.

This year, despite the vaccine being quadrivalent, the government set the base price excessively low, similar to previous years’ trivalent vaccines, causing difficulties in the bidding process. In fact, the Public Procurement Service issued five announcements before finally selecting a company. The bidding alone took two months.

The procurement unit price for the hard-won quadrivalent flu vaccine is 8,620 KRW per dose. Last year, the trivalent vaccine was priced at 7,605 KRW per dose.

The government proposed a price in the 8,000 KRW range, but the industry reportedly requested prices in the high 9,000 KRW range. On the previous day, Kang Ki-yoon, a member of the People Power Party, pointed out in a press release, "The hospital delivery price for paid vaccines is about 14,000 KRW, but the KDCA set the free vaccine price too low at 8,620 KRW, creating a structural problem where sound and verified companies did not actively participate in the bidding."

The lengthy bidding process also meant that Shinseong Pharmaceutical had insufficient time to prepare vaccine supply. This company took on influenza vaccine procurement for the first time this year. Shinseong Pharmaceutical also stated that the current situation was due to the tight delivery schedule.

The procurement contract between the government and Shinseong Pharmaceutical was only finalized on the 4th of this month. Shinseong Pharmaceutical had to distribute flu vaccines before the vaccination for ages 13 to 18 began on the 22nd. Last year, the vaccination project started in mid-October, and the company was selected by the end of July. Compared to that, this year’s company selection was about one month later, and the vaccination start date was one month earlier.

A special background that other distributors are currently under prosecution also had an impact. Companies that had previously procured vaccines were under investigation by prosecutors for "bid rigging," which prevented sufficient supply commitment letters from vaccine manufacturers and importers.

The government announced the start of company selection for influenza vaccine procurement on June 30th, but the bidding failed because participating companies could not obtain supply commitment letters from vaccine manufacturers and importers. To deliver flu vaccines, at least five companies must provide supply commitment letters.

The government re-announced the bidding on July 21st, but it failed again as only one company participated. Subsequent announcements on July 28th and August 11th also failed because companies could not secure commitment letters. Only after the fifth announcement on August 27th was Shinseong Pharmaceutical finally selected with difficulty.