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The Vaccine Business

In response to:

Department of Defense from the October 8, 1987 issue

To the Editors:

In an interesting review of Robert Desowitz’s The Thorn in the Starfish [NYR, October 8, 1987], M.F. Perutz falls into a common error about the relationship between tort liability and economic activity. He writes that “[vaccination] is now threatened by…huge damages awarded against pharmaceutical firms whose vaccines have accidentally caused illness or death. Courts should realize that it is no more possible to manufacture an absolutely safe vaccine than it is to make a faultless car, and the public must accept a minimum of risk in return for the immense benefits; otherwise pharmaceutical firms will give up the manufacture of vaccines, since zero risk can be bought only at infinite expense.”

Neither courts nor pharmaceutical firms are that dumb. The law imposes liability upon vaccine manufacturers for two reasons. First, they are in the best position to render their products optimally safe (not absolutely safe); the threat of liability gives them an incentive to do so. Second, the cost of illness or death caused by vaccines can be catastrophic to the individual or family; it is both more humane and less socially dislocating to spread that cost widely. Holding the vaccine manufacturer liable results in the internalization of accident costs in the vaccine price, which is then paid by all who use the vaccine (and benefit from it). Pharmaceutical firms are profit-making enterprises, which often earn huge profits from proprietary drugs. Notwithstanding their cries of outrage at damage awards, they will not go out of business as long as they are making a profit. And when they cease to make a profit (because the public concludes that the cost of the vaccine outweighs its benefit) they ought to stop manufacturing the vaccine.

Richard Abel

Professor of Law

University of California, Los Angeles

M.F Perutz replies:

I dispute Professor Abel’s arguments that manufacturers need the threat of liability to make safe vaccines, that it is in the public interest to add the cost of litigation to the vaccines’ price, and that manufacturers ought to stop making vaccines if the public concludes that their cost outweighs the benefit. This would be tantamount to deciding that thousands of children’s lives are not worth saving.

The manufacture of vaccines is difficult because of its complexity and the need for extensive tests at all its stages. In view of the great risks to public health of defective vaccines, control authorities inspect vaccine manufacturers’ premises regularly and they also examine the records of manufacture and testing of each batch for safety and efficacy before releasing it for sale. They also test some vaccines, such as the oral polio vaccine, in their own laboratories. Therefore the public does not need the threat of litigation to ensure the safety of vaccines.

Accidents occur exceedingly rarely, but they cannot be eliminated entirely. For example, a vaccine that works safely in millions of children may provoke severe allergic or idiosyncratic reactions in a few individuals. Even so, American manufacturers are held responsible and I understand that they are also held liable for incidents that are temporally, though not causally, related to the accident. For example, when someone developed polio after taking the oral polio vaccine, analysis proved that he was attacked by a virulent strain of virus that could not have been a contaminant of the vaccine, but the manufacturer was held liable all the same.*

Many firms have found that vaccines do not give an adequate return on the capital invested and have therefore ceased to manufacture them. In 1964 twelve firms made vaccines in the United States; by 1984 that number had shrunk to five. Tragically, this contraction comes at a time when advances in molecular biology are leading to the development of vaccines against malaria, hepatitis B, cholera, and other diseases that affect the greatest number of people in the world, and when there is also a desperate need for a vaccine to stem the AIDS epidemic. The few remaining firms have recently increased the price of certain vaccines to recoup some of the cost of litigation. Insurance against the risks of litigation following the use of whooping cough vaccine is unobtainable. As a result the price of a vaccine against diphtheria, tetanus, and whooping cough has risen from sixteen cents to ten dollars, a sixty-fold increase. The scarcity of vaccine manufacturers and the raised price of vaccines present a greater risk to public health than the very rare accidents that vaccines cause.

The Scandinavian countries and Germany have solved the liability problem by a system that assesses vaccine damage and awards compensation from public funds without costly and protracted lawsuits. The commissions that administer the scheme can sue the manufacturer if negligence is suspected, but the patient cannot. Such schemes protect both patient and manufacturer and they promote the public interest in the continued manufacture of vaccines.

  1. *

    A.J. Beale, Vaccines 85, R.A. Lerner, R.M. Channock, F. Brown, eds. (Cold Spring Harbor Laboratory, 1985), p. 377.

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