Will Congress Give Vaccine Makers a Shot in the Arm?
Marcia Coyle
The National Law Journal
Fear of lawsuits, hostility toward trial lawyers, short-sightedness and pandering to special interests are behind a Republican-led effort to enact quickly unprecedented vaccine liability protection for drug manufacturers and sellers with little or no compensation for injured victims in the event of a pandemic flu outbreak, say a host of health, consumer, union and other groups.
Many of those groups have joined together in an effort to force into the open what have been closed-door negotiations by Senate and House Republicans over a plan to attach the liability waiver to a pending Department of Defense appropriations bill expected to pass both chambers before the year's end.
"They are putting this provision on the Defense appropriation because they know it's insufficient standing alone and that's how you get it through the Congress," said Barbara Coufal, legislative affairs specialist for the American Federation of State, County and Municipal Employees. "I think that speaks to the inadequacy of this one-sided approach."
Democrats appear to be locked out of the negotiations in the Senate. Their staffers and the groups' legislative directors have been unable to get details of what's being proposed, other than the broad liability protection for vaccine manufacturers. The groups themselves are divided on the need for liability protection to encourage vaccine production, but they are united in the belief that any liability protection must be coupled with a compensation program if a vaccination effort is to succeed.
"[Senate Majority Leader Bill] Frist says the industry needs this protection in order to motivate it," said Jillian Aldebron, civil justice counsel for Public Citizen's Congress Watch. "It's not even true. They're all falling all over each other to get into the bird flu business. The prospect of global disease and big government purchases has them all salivating."
"We're concerned about making sure that, like first responders, consumers will have somewhere to turn if there is gross negligence and the like [in vaccine production and use]," said Helen Gonzales, policy director for USAction.
"For Republican leadership to be moving forward with a very broad liability waiver while doing nothing for first responders and consumers seems not the proper way to do this," she said. "You can do it quickly, but not in the middle of night in a secret way."
The nation's experience with vaccination programs, particularly the recent and spectacular failure of the federal smallpox vaccination program, proves the truth of what Gonzales says, according to Michael Greenberger of the University of Maryland School of Law, director of the university's Center for Health and Homeland Security.
"It's a very, very complicated issue," he said. "There is no doubt vaccine manufacturers need sufficient liability protection, but it has to be accompanied by a sophisticated and adequate compensation policy for those injured by the vaccine. What's driving policymakers now is they fear and dread the onset of attorneys bringing frivolous lawsuits. Certainly that can be worked out in the compensation process."
The federal government has implemented three major vaccine liability and compensation programs in the last 30 years: the National Swine Flu Immunization Program of 1976, the National Childhood Vaccine Injury Compensation Act of 1986 and the so-called Phase I smallpox vaccination program launched in 2003.
Fear of a swine flu pandemic surfaced in January 1976 when four cases of swine flu were reported in New Jersey. Congress authorized the purchase of about 200 million doses of the swine flu vaccine in April of that year.
But concerns about vaccine manufacturers' liability, according to Greenberger, did not arise until insurers -- pointing to a federal court decision holding polio vaccine manufacturers strictly liable for failing to provide product warnings directly to consumers -- announced they would end coverage in June of that year.
Congress responded with the Swine Flu Act, under which the United States assumed the liability of manufacturers, distributors and vaccinators. Injured parties filed their court claims against the government under the Federal Tort Claims Act after first filing an administrative claim. The act allowed the government to seek indemnification from negligent parties covered by the liability protections. The act also did not limit the amount of awards to injured claimants.
By 1985, the government had paid $90 million in awards to injured claimants and thus began, said Greenberger, the government's increasing reluctance to assume the financial risks in vaccination programs.
Congress got back into the vaccine business in the mid-1980s in response to a decline in the number of manufacturers making childhood vaccines. However, the lawmakers drafted a more limited liability and compensation policy under the National Childhood Vaccine Injury Compensation Act than provided by the Swine Flu Act.
NCVICA set up a two-stage compensation system for specific childhood vaccines. In the first and mandatory stage, a federal court special master administered no-fault compensation for specific injuries. Awards are capped and the government is the defendant.
If dissatisfied with the administrative result, claimants could sue the vaccine manufacturer in the tort system -- the second stage under NCVICA. But Congress enacted certain liability protections for the manufacturers here, such as immunity from punitive damages if they had complied with the Federal Food, Drug and Cosmetic Act and the Public Health Service Act. NCVICA also made compensation secondary to federal, state and private sources of compensation.
In January 2003, the Bush administration launched the Phase I smallpox vaccination program, designed to vaccinate 500,000 civilian first responders with an existing smallpox vaccine.
The program initially relied on Section 304 of the Homeland Security Act of 2002 for liability protection and compensation. But it soon became clear, as health care workers and unions balked at being vaccinated, that those provisions were neither clear nor adequate to overcome first responders' concerns that if injured by the vaccine, they would be compensated.
Congress worked on additional liability and compensation provisions over the next few months. Ultimately, however, the program failed to achieve its goal. Roughly 40,000 first responders out of the targeted 500,000 have been vaccinated.
"The program sort of disappeared off the face of the earth," said Greenberger, who wrote about all three programs in a recent law review article. "The overwhelming problem pre-event -- and vaccination for a flu pandemic will need to be done pre-event -- is that health care unions don't want to participate if they are not assured their workers will receive adequate compensation if injured," he said.
There are reports that the pandemic flu vaccine being developed appears to be very effective, he said. The United States has ordered about 2 million doses and the message is going out that hospital and health care workers will have to be vaccinated.
"We are going to go through the exact thing again, as with smallpox, if there's not an adequate compensation program," said Greenberger. "The cost of an adequate program is quite small compared to the public health benefits to be derived."
NO LIABILITY, NO MONEY
The focus of the behind-closed-door negotiations on pandemic flu vaccine liability appears to be Section 6 of S. 1873, the Biodefense and Pandemic Vaccine and Drug Development Act of 2005, sponsored by Senator Richard Burr, R-N.C.
Under that section, vaccine manufacturers are immune from any liability except in the case of willful misconduct. And a willful misconduct claim is determined by the secretary of the Department of Health and Human Services. The bill would provide compensation for injured persons in accordance with the compensation provisions of the small pox vaccination program.
But various Hill sources contend that Republican leaders are only preparing the immunity side of the equation for amendment to the Defense appropriations bill. And that section has been expanded to allow the secretary to waive liability under certain emergency conditions.
"The immunity there is fairly broad," said Joanne Doroshow of the Center for Justice & Democracy. "It doesn't allow any lawsuit for gross negligence or recklessness. In order for even a claim of intentional misconduct, the secretary of HHS would have to designate it as such before a suit could go forward and there's no compensation at all."
The Burr bill itself is "problematic," said AFSCME's Coufal, because it uses the smallpox program as a compensation model. "We don't think that's appropriate because it only covers first responders and health care workers," she said. "We think any compensation program has to cover the entire public."
Burr spokesman Doug Heye said his boss is still working with Democrats on a bipartisan compromise on the bill that Burr hopes will be the Senate vehicle because it represents a more comprehensive approach to a bioterror threat.
Republican leaders negotiating the liability provision may believe they can deal with compensation later, said Julie M. Mair of Johns Hopkins Bloomberg School of Public Health. "With pandemic flu, the compensation issues might be different. For smallpox, we wanted people to volunteer to be vaccinated. You needed compensation. People probably will be rushing down the door to get pandemic flu vaccine. It needs to be investigated, but I would not say it's a definite component."
But some question whether liability protection is necessary. "Is this what is affecting vaccine production?" asked Doroshow. "Experts pretty universally say this is not the reason. A study in the Journal of the American Medical Association a month ago said liability has nothing to do with this. The reasoning behind liability protection is a lot of hype, anti-trial lawyer hype."
Public Citizen's Aldebron agreed, adding that the industry already has indemnification under Bush Executive Order 10789, which has been made part of HHS' pandemic flu plan. "They're holding us hostage. Let's call their bluff."
The drug companies have been quiet on the negotiations. When Bush announced a pandemic flu plan last month, drug manufacturers said liability protection was essential. "The liability provision is not finished yet, so we're not ready to say something," said a spokesperson for the Biotechnology Industry Organization.
Greenberger said that manufacturers are interested, but the country is not going to get the amount of vaccine it needs quickly without liability protection.
"With such hostility towards plaintiff litigation, that's a very hard thing to sell, but I feel strongly the government needs to step in here," he said.
"It can fight off frivolous lawsuits or have lawsuits dealt with in an administrative process, but to say there is no compensation is asking for trouble."
