How lawsuits can kill

This year's flu-vaccine shortfall is just one of many dangerous shortages of essential vaccines—and it need not have happened. <?xml:namespace prefix = o ns = “urn:schemas-microsoft-com:office:office” />

Congress has been holding hearings to try to affix blame but seems determined to ignore the broader questions:

— Why are there only two companies in the world that produce flu vaccine for the <?xml:namespace prefix = st1 ns = “urn:schemas-microsoft-com:office:smarttags” />U.S. market?

— How did we get to the point where the entire nation's health is jeopardized by a single vaccine manufacturer's inability to meet the demand during one flu season?

— Why are other essential vaccines in short supply?

A large part of the answer is litigation. Lawsuits are killing us.

A recent commentary in The Weekly Standard observed, “Vaccines are the one area where trial lawyers are almost completely responsible for the problem. Lawyers have won the vaccine game so completely that nobody wants to play.”

Although there are other factors that discourage vaccine R&D, including the FDA's over-regulation and the Centers for Disease Control and Prevention's extortionate demands on manufacturers for huge discounts, fear of lawsuits is a major deterrent.

In spite of a generally high level of quality control in the industry and intense scrutiny by the FDA, drug and vaccine manufacturers are tempting targets for litigation. The threat of liability suits—even in the absence of evidence of any wrongdoing or product defect—makes these companies wary, but it also shifts their focus from whether the product actually is safe to how vulnerable the product is to lawsuits. A perfect example is a drug called Bendectin, which for many years was an excellent treatment for the morning sickness of pregnancy, until the manufacturer stopped selling the drug in the United States.

Safety problems? Unprofitability? Not at all. Frivolous, debilitating lawsuits killed this drug and relegated American women to munching crackers and quack cures. During the 1970s and 1980s, almost 2,000 lawsuits were filed, alleging that Bendectin had caused birth defects. Not a single judgment went against the manufacturer, but Bendectin was pulled from the market because of fears that an unreasonable and hostile jury might someday award huge damages.

To return to the flu-vaccine fiasco, the entire U.S. flu-vaccine supply is now made by only two companies, neither of which is in this country. This reflects an ominous trend. From 1967 to 1984, the number of U.S. vaccine manufacturers fell from 37 to 15, while the number of FDA-approved vaccines declined from 380 to 88. There are now only four major producers and a few dozen products, reflecting that government policies and litigation have conspired to make vaccine development a low-profit/high-(financial) risk endeavor. Fewer vaccine manufacturers means less vaccines for everyone, less resilience in the industry, and more illness, as in the current flu threat.

Runaway litigation also drives up costs for health care, makes doctors practice medicine defensively and stifles innovation. A study by Price Waterhouse Coopers said it best: “In the last 20 years, personal injury lawyers have found litigation against health-care providers and pharmaceutical manufacturers to be a lucrative growth area in their practices. Litigation that has enriched personal-injury lawyers, however, is adversely impacting both the quality and the cost of health care for the rest of us.” (“The Factors Fueling Rising Health-care Costs,” April 2002)

The scare tactics used by some personal-injury lawyers trolling for clients frightens patients off their medications, discourages doctors from prescribing others and causes parents to withhold vaccinations from their children. How can we possibly have quality health care in such an environment?

Fixing the problem won't be easy, but hugely disproportionate legal liability is a drag on national competitiveness and detrimental to public health. Such a state of affairs in the United States is nauseating. Or maybe I'm just getting the flu.