A Shot in the Arm

Vaccines have been a lousy business. But Novartis senses an opportunity

In the annals of pharmaceutical fumbles--and there have been some real doozies--the flu-vaccine shortage of fall 2004 occupies a special place. That crisis began when California biotech company Chiron was forced to dump 48 million doses of its flu vaccine, nearly half the U.S. supply.

Reason: British health inspectors had detected bacterial contamination at Chiron's plant in Liverpool, England, and shuttered the facility. Grumpy lines formed at clinics across the U.S., and angry investors pounded the stock, while profits sank. As if that weren't bad enough, Chiron closed another plant in Germany last July for similar reasons. That closing didn't affect...

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