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VACCINE INJURY COMPENSATION: INCORPORATING COSTS INTO VACCINE PRICING

Executive Summary

VACCINE INJURY COMPENSATION: INCORPORATING COSTS INTO VACCINE PRICING could be possible if federal legislation eliminates the option of the tort system for victims, Lederle President Robert Johnson told the House Energy & Commerce health subcmte. at a Sept. 10 hearing. Testifying on subcmte. Chairman Waxman's (D-Calif.) vaccine-injury compensation bill (HR 5810), Johnson said: "Congressional action taken in this area (BRACKET)should(BRACKET) include as an indispensable objective the establishment of an effective level of predictability in vaccine injury compensation costs. This may make it possible for vaccine mfrs. themselves to carry compensation costs in vaccine prices and obviate the need for expensive and complex governmental surcharge and disbursement mechanisms." Johnson maintained that jury decisions in liability cases are unfair and unpredictable in terms of outcome and the size of awards for damages. "Under the present tort law remedy it is simply impossible to predict costs of the vaccine business, and a mfr. is constantly faced with the possibility of court and jury awards which may wipe out the entire income of one or more years of vaccine sales," the Lederle president said. "It is clear that for the attainment of predictability, it is essential that a compensation system be established as the exclusive remedy for cases where no party is at fault.The tort system is inappropriate and unfair in such cases." Waxman, who introduced HR 5810 in June, asserted that the subcmte.'s majority and minority members "will be working together through the coming months to arrive at a bill that both can support in the" next Congress. In the Senate, Sen. Hawkins (R-Fla.) has been pushing for similar legislation (S 2117) since last year. Both the House and Senate versions of the measure currently allow vaccine injury victims the option either to pursue compensation that would be fixed by legislation or to seek damages in court. In testimony before Sen. Hawkins, MS&D President John Lyons said the tort option should be available only when there is evidence of negligence by the mfr. or the health care provider ("The Pink Sheet" May 7, T&G-10). Johnson told Waxman that under a federal compensation program only the govt. should bring suit if there are indications of negligence. HHS Asst. Secty. for Health Brandt testified that the Administration cannot support the bill as written because the proposed compensation provisions are not exclusive. The option to seek damages in court "is inconsistent with one of the major stated purposes of the bill, which is to relieve the pressure of litigation on vaccine mfrs.," Brandt said. In addition, the bill's list of compensable conditions is too broad, he maintained. The criteria for qualification are broad enough to permit compensation in a wide variety of circumstances, including situations in which the relationship of the vaccine to the injury is not clear."

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