Are Lawyers the Problem with Flu Vaccines?

From early discoveries in vaccine development to the anti-vax movement, the industry has changed immensely; and attorneys are playing a more prominent role than ever.

Published January 1, 2005

By William Tucker

“British authorities certainly thought there was a problem with the Chiron Corporation manufacturing – although the company didn’t,” commented Paul A. Offit, MD, who until last year sat on the Center for Disease Control’s Advisory Committee on Immunization Practices. “And the FDA was certainly caught off guard by the British decision. That’s what brought us to the current crisis.

“But when you look at the whole 40-year history of the vaccine industry and how we got to where we are today, you realize that lawsuits and changes in civil law have been a big factor. Profit margins are very thin and if liability costs run too high it just doesn’t make sense to stay in the business.”

Dr. Offit isn’t just making this argument off the cuff. He’s researched a book, The Cutter Incident, which will be published by Yale University Press next year. The Cutter Incident tells the story of an error by a California company in producing the first round of Salk vaccinations in 1955, which led to the accidental exposure of thousands of children to live polio viruses. The parents of a child who contracted polio sued Cutter Laboratories in one of the nation’s earliest medical product liability cases.

“It was 1957 and the courts had just adopted the principle of liability without fault,” said Dr. Offit. “You no longer had to prove negligence. The jury found that Cutter was not negligent – the crisis atmosphere had created a rush and there were no clear standards. But they found Cutter liable anyway, on the principle of liability without fault, and awarded $150,000.” Melvin Belli, who represented the family, always said that this victory made Ralph Nader possible.

An On-Going Problem

Whether liability law would have proceeded without the Cutter incident is an open question. But Dr. Offit makes a strong case that lawsuits have reshaped the vaccine industry, leaving the U.S. in the vulnerable position of having only two manufacturers of flu vaccines, both with roots in other countries. “In 1980 there were 18 American companies making eight different vaccines for childhood diseases,” Dr. Offit said. “Today four companies – Aventis, GlaxoSmithKline, Merck, and Wyeth – make 12 vaccines. Of the 12, seven are made by only one company and only one is made by more than two. There’s no redundancy in the system. Whenever there’s a bump in the road – and it happens fairly frequently – there’s a new shortage.”

Dr. Offit sees the current flu vaccine shortage as only the latest in a long string of incidents. In 2003 there was another flu vaccine shortage and a mini-outbreak when the two vaccine makers and the Centers for Disease Control and Prevention made a wrong guess and decided to cultivate the A/Panamanian strain of the flu virus. Instead, a rogue A/Fujian strain emerged and vaccine makers were caught short.

Before that, there was a serious shortage of the 2000 DTP (diphtheria, tetanus, and pertussis) vaccine after the FDA decided to ban thimerosal, a mercury preservative in vaccines, because of rumors it caused autism. The vaccine industry is now facing over 300 lawsuits claiming five times its net income from vaccines over thimerosal, even though there does not seem to be any scientific evidence to back up the claim.

“Fear of Litigation”

“There are some new vaccines that are not being made because of fear of litigation,” said Dr. Offit. “In 1998 the FDA approved a vaccine for Lyme Disease, which strikes 23,000 people a year. GlaxoSmithKline (GSK) manufactured it for three years, but withdrew it immediately after class actions were filed on rumors that it caused arthritis. Companies just don’t want to deal with the threat of lawsuits anymore.”

There is general consensus that the nation’s vaccine base has become too narrow, but diverse opinion about what has led to it. “Vaccines are really a very small business,” said Dr. Gregory A. Poland, director of vaccine research at the Mayo Clinic. “This global market is $6 billion, while the world drug business is $340 billion. Frankly, given the small profit margins, risks, and huge manufacturing costs, I marvel there are still companies in the business.”

One major problem is that flu vaccines are only good for a year. The flu virus circles the globe every 12 months, visiting Asia and the Southern Hemisphere before returning to the U.S. for the winter. On the way a few surface proteins change and the inoculations must be adjusted accordingly. Every February, the CDC sits down with the vaccine makers – now only Chiron and Aventis – and makes an educated guess at what strain will emerge the following year.

Then everybody makes the same vaccine. This lack of competitive diversity might seem like a weakness in itself, although Dr. Offit believes the system works. “By and large, the CDC has done a pretty good job of picking the right strain,” he said.

Painful Production

The difficulty comes if there’s a mild flu season or for some other reason people don’t want the vaccine. Then the manufacturers have to discard the vaccine and swallow their losses. “I’ve suggested that the government incentivize private industry by negotiating a fair price for a major portion of each year’s production and then promising to buy the last 10% as well,” said Poland. “That would reduce some of the risk.”

Antiquated cultivation techniques are also regarded as a handicap. Influenza vaccine manufacture hasn’t changed much since the 19th century, when companies such as Aventis set up production in Pennsylvania because that state has the nation’s largest production of eggs. Viruses are grown by injecting them one-by-one into raw eggs, with each egg producing three to five doses. From start to finish, manufacturing takes six months and any number of things can go wrong. A bacterial contamination prevented distribution of Chiron’s vaccine this year. There’s plenty of talk about modernizing the system – growing viruses in mammalian cell cultures, for example – but so far nothing has happened.

One problem is the exacting standards set by the FDA. It’s not that safety shouldn’t be observed, but it takes a long time to figure out whether a new method will work. In 2002, Congress heard testimony from Wayne Pisano, executive vice president of Aventis Pasteur North America, the company that will be the nation’s sole supplier of flu vaccine this year.

At the time, Pisano was explaining the previous shortage of DTP vaccines. “The schedule for the removal of thimerosal from the vaccines was decided on without input from industry,” said Pisano. “If changes are required before we can make them and the FDA can approve, shortages will occur. Science, not manufacturing, is the limiting factor in developing new vaccines.”

“More Trouble Than It’s Worth”

Finally, as with any public good, there is a certain amount of free riding. If the flu season is mild, people tend to skip their shots. Just having a lot of other people vaccinated will slow the progress of a virus and provide protection to people who aren’t vaccinated. “People are prepared to spend thousands of dollars a year on a treatment once they contract a disease, but will balk at paying modest sums to prevent it from happening,” complained Pisano.

Yet at the same time, companies are reluctant to have Congress mandate flu vaccines for everyone, since that would probably lead to a low mandated price. “The Childhood Immunization Act of 1992 has led to government purchase of nearly 20% of every year’s output,” said Poland. “But the government’s price barely covers the costs. The only place vaccine companies make money is in the private market.”

All this led David Brown of the Washington Post to write a story claiming that drug companies have abandoned the flu vaccine because it’s “more trouble than it’s worth.”

Fears of Lawsuits

Historically, lawsuits also have played perhaps a key role in winnowing down the competitors. When “swine flu” broke out at Fort Dix, N.J., in 1976, Congress decided to inoculate the entire country. It was astonished to find the insurance companies would not participate. They claimed lawsuits from people who would inevitably experience bad reactions would wipe out any profit margin.

The Congressional Budget Office went to work and came up with a prediction that of 45 million Americans inoculated, 4,500 would file injury claims, resulting in 90 damage awards totaling $2 million. The insurance companies still refused to bite, so Congress provided the insurance instead.

As Peter Huber recounted in Liability: The Legal Revolution and Its Consequences, the first part of the CBO’s estimate proved to be uncannily accurate. A total of 4,169 damage claims were filed. However, 700 – not 90 – of these suits were successful and the total bill to Congress came to over $100 million, 50 times what the CBO had predicted. The insurance companies knew what they were doing.

Another episode Dr. Offit noted is the pertussis vaccine scare of the 1980s. In 1974, a British researcher published a paper claiming that the whooping cough vaccine had caused seizures in 36 children, leading to 22 cases of epilepsy or mental retardation. Subsequent studies proved the claim to be false, but in the meantime Japan canceled inoculations, resulting in 113 preventable whooping cough deaths. In the United States, 800 pertussis vaccine lawsuits asking a total of $21 million in damages were filed over the next decade. The cost of a vaccination rose from 21 cents to $11.

A Flawed Process

Every American drug company dropped pertussis vaccine except Lederle Laboratories. “The company was punished for its persistence,” Dr. Offit writes in his book. In 1980, Lederle lost a single liability suit for the paralysis of a three-month-old infant – even though there was little evidence implicating the vaccine. The damages were $1.1 million, more than half the company’s gross revenues for sale of the vaccine that year.

“These scares may have no scientific basis, but they tend to take on a life of their own in the courtroom,” said Dr. Offit. Peter Huber’s second book, Galileo’s Revenge, which coined the term “junk science,” had a tremendous impact in cleaning up evidentiary procedures. Plaintiffs no longer win damages on the “impact theory of cancer” or for “chemical AIDS.” But the general problem persists.

To protect the vaccine manufacturers, Congress set up the National Vaccine Injury Compensation Program (NVICP) in 1986. Like Worker’s Compensation, the bill created a national fund to compensate legitimate injuries. In exchange, the injured party gave up the right to sue the manufacturer. Unlike Worker’s Comp, however, the program was not mandatory. Injured parties and their lawyers retained the right to sue if they aren’t satisfied with the verdict of the National Vaccine Injury Board. “The result has been that the most obvious cases are compensated, while the most unlikely claims go back to court,” said Dr. Offit. “The manufacturers still have to defend themselves.”

The Anti-vax Movement

The thimerosal episode – currently the biggest sword hanging over the vaccine manufacturers – has completely bypassed the National Vaccine Injury process. Thimerosal is a preservative containing slight traces of mercury that has been added to vaccines since the 1930s. In the late 1980s, a few speculations began suggesting that the mercury exposure to infants might be causing brain damage. This was soon related to what was described as an “epidemic of autism.”

Lawyers quickly circumvented the NVICP by arguing that thimerosal was an additive and not the vaccine itself. At present there are 300 pending lawsuits asking several billion dollars in damages – more than the net worth of the entire vaccine industry, for example. There are now numerous “Vaccine Liberation” organizations and several national directories of law firms looking for clients.

“There have been four large epidemiological studies that have looked for a connection between vaccines and autism and found nothing,” Dr. Offit said. “There’s absolutely no scientific evidence.”

“Back Where We Started”

Try telling that to angry parents saddled with the costs of raising autistic children. In 2001, U.S. Senator Dan Burton, chairman of the Government Reform Committee, held hearings that widely publicized the claims.

With such passions afoot, there is a serious question of whether childhood vaccination programs can continue to be successful. “People forget that 100 years ago, bacterial and viral infections were the number one cause of death,” said Dr. Offit. “The reason the average lifespan was 45 in 1900 and nearly 80 today is because we’ve been successful in conquering infectious diseases. If people start refusing to take shots – or if the manufacturers will no longer supply them – we’re going to be right back where we started.”

* The views and opinions expressed in this article are those of the author and do not necessarily reflect the views or opinions of The New York Academy of Sciences.*

Also read: Law Experts Give Advice for Scientific Research

About the Author

William Tucker is a writer for The American Enterprise.