Pandemic Planning Critical to Nation's Security, Health and Future

George Abercrombie
President and Chief Executive Officer, Hoffmann-La Roche

Town Hall Los Angeles Speech
April 19, 2007

Thank you, Dr. Goodman, for both your very generous introduction and your wonderful California weather - quite a welcome change from our freezing and wet spring back east!

Town Hall has a long standing dedication to creating dialogue about the important issues facing business, and it’s clear to me why the organization has earned such a strong and credible reputation in Los Angeles and throughout the nation. This is a truly unique and important forum, and I’m greatly honored to be here today.

Additionally, I’m grateful to Mr. Bob Graziano, Managing Partner of Northern Trust and the sponsors of this important discussion.

I want to talk to you today about a situation that some Hollywood producers might say has the potential to be a blockbuster movie. And while Los Angeles is of course the birthplace of the "Hollywood ending," the real life script for the topic I will discuss today…so to speak…might not have the ending any of us would want to experience.

Looking out at this audience of influential Los Angelenos, business leaders and members of prestigious Town Hall, I’d like to start things off with a question:

What would you say about what keeps you up and awake at night? I mean, when your head hits the pillow, what do you start thinking about…that you’d rather not be thinking about?

I could probably predict with some level of confidence that among the top three things some of you worry about, two might involve natural disasters – the next big earthquake or an out-of-control brush fire.

We all have our lists; and some are longer than others.

So the next time you find yourself trying to drift off to sleep… and hopefully that won’t be during the next thirty minutes or so… go through your list.

I wish I could tell you that I’m here today with answers for the things that keep you awake at night. But unless you already appreciate the potential business implications of a global influenza pandemic, I’m afraid all I’m going to do is add one new item to your list.

A global influenza pandemic is indeed at the top of my list for I believe an influenza pandemic is one of the most important health concerns facing this country and the world.

But of course, at this moment, there is no global pandemic.

In the four years since the first human death from the H5N1 strain of influenza virus, about 175 people have died from bird flu. H5N1 is a deadly disease with almost 60% of untreated infected humans succumbing to death. Geographically, the deaths have been diverse, occurring from Asia to Africa to the Middle East. But almost all victims had one thing in common: close daily contact with infected birds. H5N1 currently has great difficulty moving from the digestive tract of an infected bird… to the respiratory tract of a human being. Over 200 million birds have died, either from contracting the H5N1 virus, or, far more likely, from the attempts to eliminate the virus before it can mutate into a strain that easily passes from the respiratory tract of one human being… to another.

My company, Roche, is a research-based pharmaceutical company with global headquarters in Basel, Switzerland. Roche’s sole mission is to discover, develop, manufacture and market innovative medicines. We’re the world leader in cancer medicines. We’ve created pharmaceutical products that make organ transplantation possible… and therapies which have brought advances to the treatment of hepatitis B and C, osteoporosis, and HIV/AIDS.

Yet these days, with all of the media attention on avian flu, the Roche product that gets the most attention is Tamiflu, an antiviral that’s one of the few available defensive treatments… and prevention options… against influenza. Many companies are working on avian flu vaccines, which – unlike antivirals – must be specifically tailored to individual strains of flu virus. The challenge in coming up with an effective vaccine is that pandemics begin when a virus mutates. That means we won’t know much about the virus that causes the next pandemic… until it’s already well-established in the human population. That makes the antivirals, including Roche’s Tamiflu, the first line of defense, and an important treatment even after an effective vaccine is available.

Another pharmaceutical company, Sanofi-Aventis recently developed a vaccine which, at its highest dose, protects only 45% of adults from the current H5N1 strain. And that’s good news. The fact that a federal advisory panel recommended that the Food and Drug Administration approve the vaccine - - with only a 45% efficacy rate…and the fact that the U.S. is now stockpiling it… is a telling indication of how seriously the potential for pandemic is being taken at the highest levels of government.

Over the last four years, I’ve spent a lot of time on pandemic planning. I’ve worked with Mike Leavitt, the Secretary of Health and Human Services.

I’ve spoken with members of the President’s Domestic Policy Council in the West Wing of the White House. I’ve testified before both houses of Congress. And the vocabulary that swirls around this issue is loaded.

Words like “unstoppable” and “inevitable.” Words like “devastating” and “catastrophic.” What has to be the worst word of all is… “unthinkable.”

Because right now is the time we need to be thinking about how to handle a pandemic.

As part of its “Global Influenza Pandemic Preparedness Plan,” the World Health Organization has developed a six-phase sequence of events leading to a full blown global pandemic.

It includes one phase to cover the period when a global influenza pandemic is underway… and five phases that lead up to that point… five true warning phases, each based on specific criteria… each associated with specific national and international public health actions… each focused on elimination or mitigation of the threat.

Warning phases. That sounds familiar.

Remember the Y2K warnings? The polar opposite of avian flu, because we knew precisely when…but we didn’t know precisely what.

How about Homeland Security Advisory System warnings, currently at “yellow,” or “elevated,” the exact same level the system started at, five years ago? We’ve raised the national advisory level five times - never for more than a month - and we’ve lowered it five times.

Do you remember SARS? The virus that made the jump from animals to humans and infected over 8,000 people between late 2002 and mid-2003. According to The New York Times, SARS “…brought dire predictions of recurring and deadly plague.”

Warned about Y2K…no Y2K. Warned about additional acts of terror on U.S. soil… no subsequent incidents. Warned about SARS… and then SARS seemed to disappear.

Net result? We’ve all learned to ignore warnings.

Today, on April 19, 2007---with hindsight can we say these warning were blown out of proportion? Well…maybe.

Yes…“maybe.”…except when it comes to SARS.

When the W.H.O. issued its definitions for pandemic phases, focusing on pre-pandemic warnings, they stated that “…early disease recognition…rapid implementation of global and national actions… high-level political support… and transparent communication [were responsible for] the successful control of severe acute respiratory syndrome (SARS) in 2003.”

In other words, warnings, preparedness and planning worked in the case of SARS. Based on the SARS experience, the World Health Organization now has what it calls “a promising new paradigm for management of epidemics.”

Learning from SARS, right now, it’s vital that we take pre-emptive action to control the threat of a pandemic influenza outbreak…in other words, now is the time to plan.

So, I’m here today to say that the threat of a global pandemic is very real.

On September 18 of last year, Richard Nesbitt of the World Health Organization told reporters that the risk of a bird flu pandemic continues unabated. He added, “After three years now, I’m sure many journalists and the public are starting to get tired of the same message” – that a global outbreak could strike any time – “but we have an obligation to keep giving this message.”

Most businesses in the U.S. have not established pandemic plans for continued operation and viability during an influenza pandemic.

After several years of hard work, we do have a plan at Roche… but what about all of the companies we rely upon, the vendors and suppliers we depend on for the goods and services Roche needs to continue our operations?

That’s why I’m here today. Each time I persuade one person at one company to start planning… that person will, as the pandemic plan is developed for their organization, of necessity contact the vendors and suppliers they depend upon for goods and services. The fundamental interrelatedness of the free market provides the perfect structure within which to grow and strengthen our country’s pandemic preparedness.

My company has more to offer the business community than our products. In developing a comprehensive pandemic plan for our own business, we have covered much of the ground all businesses need to cover, as specified in the Federal Government’s National Strategy for Pandemic Influenza, introduced in November 2005.

The President called this national strategic plan “…[Our country’s] approach to address the threat… [which] outlines how we intend to prepare, detect, and respond to a pandemic.

It… outlines the important roles to be played not only by the Federal Government, but also by State and local governments, private industry… international partners, and…individual citizens.”

The National Strategy delineates roles and responsibilities for each of these groups. Here’s what the strategy has to say about private industry:

“While a pandemic will not damage power lines, banks, or computer networks, it will ultimately threaten all critical infrastructure by removing essential personnel from the workplace for weeks or months.”

“The private sector represents an essential pillar of our society, because of the essential goods and services that it provides. Moreover, it touches the majority of our population on a daily basis, through an employer-employee or vendor-customer relationship. For these reasons, it is essential that the U.S. private sector be engaged in all preparedness and response activities for a pandemic.”

So the World Health Organization has a plan; the Federal Government has a plan; OSHA has just introduced a plan; The California Department of Health Services has a plan; and the Los Angeles County Department of Health Services has a plan. The consistency of these plans, from the one that covers the entire world… to the one that covers the ten million people of this County… is remarkable and heartening. The L.A. County plan, for example, lists specific actions to be taken locally in response to each of the six phases in the W.H.O. plan.

The best business pandemic plans work exactly the same way.

Now, back to the W.H.O.’s six-stage sequence leading to a pandemic.

At this moment, according to the W.H.O., the world is at Phase Three.

In Phase Three, there are “…human infections with a new [influenza] subtype, but no human-to-human spread, or at most, rare instance of spread to a close contact.”

Additionally, in Phase Three the virus has mutated -- moving beyond fowl to infect mammals, including cats, leopards, tigers, and pigs.

The next phase, Phase Four, is the tipping point, characterized by “…[highly localized] small clusters with limited human-to-human transmission…”

When we hit Phase Four… which could literally happen tomorrow… the opportunity for individual businesses to develop pandemic plans will effectively be over. Business continuity experts consider Phase Three the “planning phase.” When the W.H.O. announces Phase Four, we move into the implementation phase.

And that’s alarming because the announcement of human-to-human transmission may well be what finally pushes some corporations… the ones former Secretary of HHS Tommy Thompson said are viewing a potential pandemic “… like a deer in the headlights…” to begin thinking about their options. And believe me, they won’t have many options at stage 4 if they are only beginning to plan. Alternatively, there are corporations out there, my own included, that are poised to implement specific actions on the day human-to-human transmission is announced.

Early last year, an article by David Brown in the Washington Post highlighted the fact that most businesses had not prepared for the possibility of a global flu pandemic. The article stated that more than half of all U.S. business executives surveyed expected a global flu epidemic within two years. Two-thirds of the group expected that it would seriously disrupt their organizations and cause social unrest. But two-thirds also said they were not prepared. Had someone been appointed to plan for a pandemic? One-third said that no one within their organization had been selected. And one-fourth of the executives could not… or would not… answer the question. Another survey of senior management, taken just a few months earlier, may explain this response… nearly 40% said they believed there wasn’t much a company could actually do to prepare.

There are reasons to believe that since these surveys, many more business people have come to realize that they can prepare… and must prepare. The Federal Government has made it clear that it will do everything within its power to ensure preparedness and communication… provide continuous surveillance and detection… in order to be ready to respond and contain a future outbreak.

At the same time, the Federal Government explicitly stated in its National Strategy for Pandemic Influenza that “…preparing for, and responding to a pandemic cannot be viewed as a purely federal responsibility.”

At a 2006 summit on corporate pandemic preparations, U.S. Department of Health and Human Services Secretary Mike Leavitt made this point in blunt language when he stated that “Avian flu… will severely test the best-laid plans… and many companies are not making any plans at all. Those expecting the Federal Government to ride in and come to their rescue [will] be sorely disappointed.”

In 2003, when the H5N1 strain roared back into life in Asia and the very first human infections were reported… teams from Roche met with teams from HHS and the CDC.

At that time, the World Health Organization and other authorities recommended that governments start stockpiling antivirals and other essential supplies in preparation for pandemic influenza. Suddenly, all eyes focused on Tamiflu, which appeared to work against the H5N1 strain.

Then, as now, it was recognized that the development of a strain-specific vaccine was the ultimate goal. Then, as now, developing such a vaccine requires knowledge and samples of the actual mutated pandemic influenza strain capable of human-to-human transmission. And then, as now, that strain would clearly only become available… once the pandemic was underway.

So antivirals were, and are, the first line of defense until the right vaccine can be produced in sufficient quantities to inoculate the population.

Stockpiling of Tamiflu is necessary… because the manufacturing cycle takes from six to nine months - sometimes upwards of 12 months - from beginning to end. Before H5N1, our historical production capability for Tamiflu was determined by the normal demand for seasonal influenza. To stockpile enough to treat 25% of the U.S. population, the Federal Government’s ultimate goal, about 80 million courses of therapy would be needed, and that represented a phenomenal increase over usual seasonal demand.

So we at Roche went into overdrive. Without affecting the production or availability of our other medicines that treat life-threatening diseases like cancer, hepatitis C, and HIV/AIDS, we ramped up Tamiflu production. We doubled our production capacity in 2004. Doubled it again it 2005. The government asked for special packaging. We made special packaging. They asked for studies on mixing Tamiflu with flavored syrups for children. We conducted the studies. They asked that we consider extended dating. Shelf life is now five years.

We had no Tamiflu manufacturing facility in the United States. Today, we have one --as a matter of fact-- along with a dedicated U.S.-specific supply chain. We’ve granted licenses to manufacturers in India and China for supplies to these countries only. We’ve recognized developing countries that can’t afford to purchase Tamiflu and have donated 3 million courses of therapy to the W.H.O. for their use.

We donated another 2 million courses to the W.H.O. for use as a rapid deployment stockpile to help contain an initial influenza outbreak before it has a chance to expand.

Supply was an issue, just a few years ago.

Supply is no longer an issue.

I believe wholeheartedly that efforts made within the private sector to plan for continued business operations during a pandemic are essential. I take my cue from the Federal Government’s National Strategy for Pandemic Influenza, which states in no uncertain terms that “…the private sector should play an integral role in preparedness before a pandemic begins, and should be part of the national response.”

Allow me to me tell you why that’s a good idea, not only for the businesses that create pandemic plans, but for the entire country.

Right now, you and I are about a third of a mile from the emergency room at UCLA Medical Center. If one of us needed immediate care, we could be there in a matter of minutes. If the UCLA emergency room was busy and backlogged, we could go instead to one of the 21 hospitals within a ten-mile radius of this spot. Technically, we could still go to UCLA, because federal and state law mandates that an emergency room cannot turn a patient away for any reason. But it would be pretty foolish to go there if the EMT’s were told that the UCLA emergency room was closed.

Emergency rooms effectively close when crowding conditions become unmanageable. They divert incoming ambulances to other facilities. That’s a big issue here in Los Angeles County, where 9 of the 84 hospitals open in 2000 had closed permanently by 2006.

Two years ago, the UCLA School of Public Affairs did a study on emergency room diversion. They found that nationally, two out of three hospitals “go on diversion” at least once per year. Los Angeles emergency rooms, on average, “go on diversion” six hours out of every day. The situation is serious enough that one year ago, California passed a law that required hospitals “on diversion” to re-open their emergency rooms for 15 minutes out of every hour they’re closed.

Last month, Governor Schwarzenegger called California’s healthcare system “broken” and announced his plan to fix it. To draw attention to the issue, the Governor toured crowded emergency rooms.

What happens to healthcare services that are already stretched to the limit during a pandemic?

Influenza pandemics are not static events like a hurricane or tornado, nor confined to a specific area. Pandemics come in multiple waves, each one affecting a given area from four to twelve weeks. During the first wave, officials expect 20 to 30% of people will become ill. Here in Los Angeles County, that’s 2-to-3 million people who will get very sick in a very short period of time, inundating emergency rooms already strained to near capacity.

People without symptoms will be struck suddenly, and within hours, be too feeble to walk. Many people will die within days. Some experts believe the majority of deaths will likely occur among young healthy people, unlike common influenzas which kill mostly newborns and the elderly. Medical experts call this a cytokine storm, where the intense immune response within the bodies of young people caused the organs to shut down.

Governor Schwarzenegger is committed to emergency preparedness and has very specifically addressed and funded pandemic influenza planning. California began its pandemic planning years ago, and this state’s Preparedness and Response Plan is among the best in the nation.

All of this leads to the conclusion that a pandemic will effectively shut the healthcare system down. Even with a plan that includes the use of National Guard armories and indoor basketball stadiums as emergency rooms – and indoor ice rinks as temporary morgues – the system will simply be overwhelmed. There will be shortages not only of space, but also of supplies, including beds and ventilators. And if 20 to 30% of people are sickened in the first wave, 20 to 30% of doctors, nurses, and other essential healthcare personnel will be missing from their jobs.

To my way of thinking, that is one of the best reasons to have a business community that’s prepared, supplied and ready to step in and take over tasks critical to the well-being of their employees… and critical to the well-being and, indeed, survival of the business.

As you know, pandemic influenza did sweep across this country, and the world, in 1918 – the so-called ‘Spanish Flu.’ Now, that was a long time ago. Therefore, it’s of limited value to cite facts and figures from 1918, let alone draw conclusions about what might happen tomorrow based on what did happen nearly ninety years ago. Some changes have helped us… for example, the capability we have for advanced warning through vastly improved international communication, and a far better understanding of how influenza works and how it kills.

We have antivirals we can use immediately and vaccines in development we can fine-tune once the pandemic virus has been identified.

On the other hand, people living in… or escaping from… outbreak areas on the other side of the world… are now only hours away from any city in the world.

In the United States, during the Spanish Flu Pandemic, about 28% of the population came down with flu, and somewhere between 500,000 and 700,000 died. Even in areas where mortality was low, the numbers of those incapacitated by the illness were often so great as to bring much of everyday life to a complete stop.

Here in Los Angeles, in the fall of 1918, it was announced that there was no cause for alarm… and then two days later, schools, churches, theaters and other public places were closed in an attempt at containing the virus.

In San Francisco, if you appeared on a city street without a surgical-style mask over your nose and mouth, you could be arrested. Some communities placed armed guards at their borders to quarantine or turn back travelers. One U.S. town outlawed shaking hands.

And nothing much helped. Books about life and death during the 1918 pandemic read pretty much like Stephen King novels. People had to deal with “the unthinkable” every day.

There have been two pandemics since 1918 – the Asian Flu in 1957… and the Hong Kong Flu in 1968. Death tolls were significantly lower, possibly due to advances in healthcare, disease surveillance, and available treatments… possibly due to less virulent strains of flu… or perhaps both.

Experts concur that another pandemic is inevitable, and some of the predictions being made about the next pandemic are disturbing, to say the least.

Even if closings are not mandated by the local or federal government, people will avoid public places like shopping malls. They’ll have to go to the grocery store, but they won’t like it. If half of the check-out clerks are sick at home, and a significant portion of the other half are afraid to show up at work, fearing infection, the lines will be long…that is if there is any food to purchase at all. If 40% of the truck drivers who transport goods to the store are sick, there won’t be much on the shelves. And if members of the police force find themselves too sick to work… it’s not a pretty picture.

There will be a drop in demand for products and services. There will be a decline in discretionary income, as businesses are forced to halt operations.

The Trust for America’s Health is a nonpartisan, nonprofit organization that recently released a report titled “Pandemic Flu and the Potential for U.S. Economic Recession.” This study predicts, the loss to California’s GDP would be nearly $87 billion as a result of a major pandemic. Industry sectors such as agriculture, manufacturing, transportation and warehousing, food services and hospitality, and the one that has the biggest impact on the local economy of Los Angeles – the entertainment industry – would be among the hardest hit. If we look at the entertainment industry alone, the losses would be approximately $4 billion. That is…the work of the movie studios and television networks would come to almost a complete halt.

Planning for a Pandemic

So that’s why we have to think, in ways we’ve never thought before, about protecting our employees and keeping the critical components of our businesses running. Who comes to work? Who can work from home? Which positions are essential to keep the core part of the business running? Who gets cross-training as an ‘understudy,’ ready to take over a critical task that absenteeism leaves empty? How will you service customers? How will you get raw ingredients? How will you run your factories and ship your products? How will the entertainment industry produce its programs, shoot movies, keep the hundred of thousands of workers employed who support this industry?

At Roche, we’ve been thinking about these questions for our own business continuity plan for many years. We don’t have all the answers, and what’s right for our business may not be what’s right for yours, but we can offer advice and do have suggestions that can help you create or update your pandemic response plan. We’ve put this information on the web at www.pandemictoolkit.com.

This planning is not easy by any means. It takes time and effort. I know…the same folks in your companies doing the planning also have day jobs running the business.

So what is the alternative to planning, now?

We certainly can hope that it never becomes necessary to implement the federal, state and local pandemic plans. We can hope that when H5N1 mutates and becomes transmissible between humans, it loses some of its power in the process, which is certainly possible. We can hope that if and when we are threatened by some other virus that realizes its pandemic potential, the results resemble 1968 or 1957 more than they do 1918.

But if all you have is hope… you’re also going to have a lot of sleepless nights…and you’re not going to be ready. Remember, the W.H.O. says stage 3…the state we are in now…is the time to plan. When we hit stage 4 it is too late to plan.

When H5N1, or another strain, mutates allowing easy human-to-human transmission…and an infected passenger arrives at LAX, it will be time to implement your plan. It will be impossible to effectively begin planning in stage four as pandemic panic begins to spread across America.

So, I urge you to act now… to minimize and mitigate the effects of a pandemic… for your business, for the continued strength of the American economy, and for the safety and well-being of your employees.