Introduction

The Department of Health (the Department) and the National Health Service in England spent £195 million on routine vaccine procurement in 2001-02. Of this, the Department's national vaccine programme cost £83 million.[1]

The limited number of vaccine manufacturers in the market, and the complex manufacturing processes involved, results in shortages in the supply of some vaccines in the UK. So there is a risk that manufacturers may charge higher prices as they will have a near monopoly of supply for certain vaccines.[2]

In April 2002, the Department, with the Ministry of Defence, let a contract for £32.5 million, excluding value added tax, with PowderJect Pharmaceuticals PLC for the supply of 20 million doses of smallpox vaccine. The Department used the exemptions under European Union regulations and the Public Supply Contracts Regulations 1995 that, on grounds of national security, enabled it to adopt confidential procurement procedures for these supplies. Concerns had been raised among some suppliers, and in Parliament and the media, about the Department's handling of the procurement and about any link between the political donations made by the then Chief Executive of PowderJect and the award of the contract.[3]

On the basis of a Report by the Comptroller and Auditor General[4] and a memorandum from the Department of Health,[5] we examined the Department on the robustness of its central purchasing arrangements, the lessons to be learned from the procurement of smallpox vaccine, and the measures it has put in place to avoid or mitigate the impact of vaccine shortages in general.