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VACCINE COMPENSATION: ALTERNATIVE FUNDING WILL BE NEEDED AFTER 1991

Executive Summary

VACCINE COMPENSATION: ALTERNATIVE FUNDING WILL BE NEEDED AFTER 1991, said Martin Smith, MD, chairman of the Health Resources and Services Administration's Advisory Commission on Childhood Vaccines. Referring to comments by HHS Assistant Secretary for Health James Mason, Smith told a Jan. 8 meeting of the National Vaccine Advisory Committee that when told the vaccine injury compensation for pre-1988 claims could cost over $ 1 bil., the assistant secretary warned "money was not in sight" beyond 1991 "and that we all need to be looking at other ways of dealing with this." Additional funding for vaccine compensation was one of four recommendations made by the commission to Mason in a December meeting. The recommendations were developed by the commission at its November meeting to deal with the influx of over 3,200 claims to the compensation program ("The Pink Sheet" Dec. 10, T&G-10). The commission is set to meet again on March 13 and 14. Smith reported that Mason "readily accepted" the first three recommendations made by the commission group: increased staffing for HHS medical case reviewers, claims court special masters and the Justice Department related to vaccine compensation; funding for new staff to come out of interest on the vaccine trust fund; and extending the statutory period for resolving pre-1988 claims by 12 months, from the current 20 to 32 months. Mason indicated that he would begin work on those three recommendations immediately, Smith noted. A Dec. 31 letter from the commission to HHS Secretary Sullivan specifically recommends amendments to the National Childhood Injury Act of 1986 that would authorize appropriations from the vaccine trust fund interest to increase funding for HHS staffing from $ 1.5 mil. to $ 3.5 mil. for fiscal years 1991, 1992 and 1993. The proposal also would authorize hiring 15 special masters instead of eight and increase funding for fiscal 1992 and 1993 to $ 3.5 mil. per year. Noting that the total amount of awards "could be as high as $ 1 bil. to $ 3 bil.," the commission states that "the existing statutory ceiling of $ 80 mil. per year on authorizations of appropriations is [clearly] inadequate." One possibility for pre-1988 cases may be to provide compensation from the vaccine trust fund for post-1988 injuries, which is financed by a surtax on current vaccine sales. "What Dr. Mason did right away, and it is what others are sure to do, is to cast an eye on that trust fund which is sitting there so invitingly," Smith remarked. "Reality may force that sort of decision down the road," he said, "but I think it is unfair to put the burden on the present day vaccine user to settle all of those past cases." He also pointed out that the $ 235 mil. currently in the fund "is too little to go very far" and might lead to a temptation to increase the surtax and increase vaccine cost. During its deliberations, the National Vaccine Advisory Committee adopted 13 recommendations toward a measles immunization policy to prevent and deal with future measles outbreaks. The most recent outbreaks in 1989 resulted in 41 deaths. The committee's "white paper" will be included in the National Vaccine Program's annual report, which is expected to be sent to Congress in the next two months. The committee suggested that "vigorous efforts should be made, including legislation, if necessary, to assure that insurers provide or reimburse for immunizations as part of their basic health benefits package." In addition, "all managed health care systems, including health maintenance organizations, [should] provide routine vaccination services." According to a 1989 Health Insurance Association of America survey, only 45% of employment- based health insurers cover basic childhood vaccinations, while 62% of preferred provider organizations (PPOs) and 98% of health maintenance organizations (HMOs) offer coverage. In an effort to reduce the costs to Medicaid providers, vaccines "should be purchased at low federal contract prices," the committee suggested. Merck, Sharp & Dohme, the sole manufacturer of the measles, mumps, rubella (MMR) vaccine, charges the federal government $ 14.71 per dose; Merck's price to the private sector is $ 24.07 per dose. The committee recommended full implementation of the new two-dose schedule of MMR throughout the U.S. However, the federal government currently is able to provide vaccine to only 50% of the public sector. While the committee emphasized that many of the recommendations, most of which deal with enhanced management and delivery of immunizations, "can and should be implemented without the need for new resources," it estimated that implementation of all of the recommendations "will require a net increase of $ 40 to $ 50 annually" in federal funding.
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