Report: A flu pandemic could push U.S. economy into recession

"A $675 billion hit to the economy is without question a grim prognosis," said Frist, R-Tenn., said Thursday. "The good news is that our hands are not tied."

Frist cited a Congressional Budget Office report released Thursday that studied the impact a pandemic would have on the economy. It estimates the chances of such a severe flu are less than one-third of 1 percent annually.

Thursday's report analyzed a worst-case scenario, similar to the 1918-1919 Spanish flu that took hold around the world.

The CBO defined a severe pandemic scenario as one in which 90 million Americans are infected and 2 million die. About 30 percent of workers in urban areas would become sick, and 2.5 percent of those would die.

Frist, a doctor, used the CBO study to tout six proposals that he said would reduce the economic impact of a pandemic.

First among those proposals was the formation of a communications structure that would update the public every 6-8 hours about symptoms, cases and outbreak locations.

"To allay irrational fear, communication must be the bedrock of every public policy response," Frist said.

The CBO report said that most people would simply stay home to avoid the bird flu. They would stop going to restaurants, stores and entertainment venues like stadiums and theaters. A significant portion of the work force would miss an average of three weeks of work.

Health officials are concerned about the bird flu virus because humans have no immunity to the strain spreading across Asia and into Europe.

Some critics suggest the flu threat has been overstated, while Frist said he was concerned that the public might lose concern about a superflu threat.

Among Frist's other recommendations:

--Invest $1 billion on surveillance systems to improve detection around the world.

--Stockpile enough Tamiflu to treat 25 percent of the U.S. population, $1.35 billion.

--Take steps to boost the vaccine manufacturing base by increasing demand for regular flu vaccines, passing tax credits and offering more liability protection from civil lawsuits.

--Invest more in new technology to speed vaccine production.

Health and Human Services Secretary Mike Leavitt applauded Frist's speech.

"While the analysis estimates a $675 billion hit to the American economy, it is clear that this impact can be lessened by actions we take today," Leavitt said.

But one interest group, Public Citizen, said Frist was fanning public fears of bird flu in order to speed into law liability protections for drug manufacturers. The group says the protections Frist seeks are too sweeping and will make it nearly impossible for people harmed by a pandemic flu vaccine to get compensation.

In other action on Capitol Hill, Sen. Charles Schumer, D-N.Y., said that Roche Holding AG has agreed to a deal with 15 drug producers that would dramatically increase the world's supply of Tamiflu in preparation for a possible flu pandemic.

Company officials denied any final agreement has been reached with the companies, however, a spokesman did confirm that Roche is in "advanced discussions" with potential partners.

Tamiflu is in great demand in many parts of the world because of the fear of bird flu, a form of influenza that has been contracted by about 120 humans who have had close contact with infected poultry. Tamiflu can reduce the severity of the disease if taken early enough.

Roche has received inquiries from more than 200 companies and governments expressing an interest in helping with some or all of the manufacture of Tamiflu.

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Associated Press Writer John J. Lumpkin contributed to this report.<