Sen. Gregg Eyes Flu Vaccine Manufacturer Liability Protections In Biodefense Bill

The Senate Appropriations/Homeland Security Subcommittee chairman indicates he may consider stronger liability protections for flu vaccine manufacturers in S 3, his biodefense bill.

Sen. Judd Gregg (R-N.H.) is considering possible revisions to drug manufacturer liability language included in his biodefense bill, particularly as it relates to flu vaccines.

During a Senate Appropriations/Homeland Security Subcommittee hearing April 28 on bioterrorism and BioShield, Gregg suggested that including stronger protections for flu vaccine manufacturers in his biodefense bill (S 3) may help boost the industry.

Gregg, who chairs the subcommittee, asked McKenna, Long & Aldridge partner John Clerici to provide legislative language that would address liability for flu vaccine manufacturers. Clerici testified at the hearing.

The chairman's request followed witness testimony that the liability provisions in S 3 would not work for a pandemic that involved vaccines on a massive scale.

Gregg said the research and vaccine industries are not as vigorous as he would like to see them. "I do believe that unless we address this issue of liability we'll never get the participation we want," he said.

Gregg introduced S 3 in January with the goal of encouraging development of biodefense products (¹ (Also see "GOP Bioterror Bill Includes Vaccine Liability Reform, FDA "Rapid-Action" Team" - Pink Sheet, 25 Jan, 2005.)).

Clerici said that while the liability protections in S 3 are likely sufficient to induce manufacturers to undertake bioterrorism work, flu vaccine manufacturing is a different matter.

"For pandemic flu, I'm not sure it's going to be enough because providers of that vaccine know that at the end of the day their vaccine is going into the arms of 300 mil. people, that even under the legislation proposed in S 3 you're still going to be in federal court defending lawsuits around the country," Clerici said.

"The predictability of what a federal judge may do with the legislation and the fact that plaintiffs could certainly file litigation in every jurisdiction throughout the land would be problematic for the company," the attorney said. "Companies that would do vaccines would be larger and would have the most shareholders and most concerns being a large public company."

In his written testimony, Clerici said that liability protections for pandemic flu vaccine providers "must be at least as strong as those protections given to providers of smallpox vaccine under the Homeland Security Act of 2002."

The 2002 law provides liability immunity to manufacturers, suppliers and providers of smallpox vaccine during a declared emergency.

"While there are several improvements that should be made to this legislation to ensure health care workers are properly compensated, these same types of protections must be extended to providers of pandemic influenza vaccine," Clerici said.

Alloy Ventures General Partner J. Leighton Read told the subcommittee that additional incentives are needed to attract "larger, more capable companies" into the bioterrorism defense market. Larger companies are needed to develop technology from start-ups and small companies, he said.

"The experience factor is so important that a biodefense procurement strategy that relies on companies with scant experience in launching commercial products is likely to incur extra delays and other down-side surprises," Read said. "Yet this appears to be exactly where we are heading with BioShield because the market incentives are not yet in place to attract the most capable innovators."

Current law does not provide sufficient market size and predictability to entice investors because it "fails to adequately signal the government's intention to purchase successful countermeasures that are still years away from completion," he said.

On April 28, Sens. Orrin Hatch (R-Utah), Sam Brownback (R-Kan.) and Joe Lieberman (D-Conn.) introduced the Project BioShield II Act of 2005.

The legislation includes liability protections for biodefense product manufacturers under certain circumstances and a modified "wild card" patent term extension provision (² (Also see "BioShield II Extends Liability Protection To All Covered Countermeasures" - Pink Sheet, 28 Mar, 2005.)).

- Nellie Bristol