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MERCK SUPPORTING WEIGHTED SURCHARGE TO FUND FEDERAL VACCINE COMPENSATION

Executive Summary

Merck endorses funding of a federal vaccine injury compensation program, with the surcharge dependent upon individual vaccines' adverse experience profiles, Government Relations Vice President Robert Ingram declared in an Oct. 22 letter to U.S. Attorney General Edwin Meese. "To assure that the compensation program is fiscally responsible," Ingram wrote, "Merck will continue to support the enactment of an excise tax on each dose of vaccine." Ingram quoted testimony by Merck Executive VP John Lyons before the House Commerce/Health Subcommittee last summer ("The Pink Sheet" July 28, p. 5). Lyons testified: "We believe [a vaccine surcharge or excise tax] should be weighted to reflect the differences in adverse experiences among vaccines. The funding of the compensation program in this manner helps meet the important objective of fiscal responsibility." The bill introduced by Rep. Waxman (D-Calif.) in July included provisions to authorize an excise tax on individual doses of vaccines. Under the bill (HR 5184), the tax varied with each vaccine, based on data compiled by the Centers for Disease Control. According to the bill's projections, the polio vaccine would require a surcharge of 1› or 10›, depending on whether it is inactivated or live virus, the measles-mumps-rubella vaccine a $1.52 surcharge, and the diphtheria-tetanus-pertussis a $6.24 surcharge ($1.56 for each of four doses). The tax provisions were later deleted after it became apparent that the House Ways & Means Committee would not be able to review them before the end of the session. The Justice Department and the Office of Management & Budget are considered the sole opponents of S 1744, the omnibus health care bill which passed Congress on Oct. 18 with provisions for a federal vaccine injury compensation program. Their objections include concern that the provisions would require a new tax for a costly federal program. Noting that the proposed program cannot become effective until separate legislation authorizing the funding tax is enacted, Ingram asserted: "We feel confident that we will be able to address adequately your concerns about the fiscal aspects of the program during consideration of the taxing mechanism during the next Congress." The excise tax legislation should "create a self-sustaining fund which would not be dependent upon appropriations from the general revenues of the federal government," Ingram maintained, adding that the tax should be "sufficient to repay any initial loan from the Treasury in the first five years of the program."

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