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Don't Give Trial Lawyers This Booster Shot

Friday, October 15, 2010

Anyone who thinks the vaccine case now before the Supreme Court is merely a matter of giving injured plaintiffs their day in court has misconceived the stakes for those who reap the benefits of vaccines.

The U.S. Supreme Court has just heard oral arguments in the case of Bruesewitz v. Wyeth, in which the parents of a severely disabled child wish to sue the manufacturer of a childhood vaccine for causing their child’s disability. At this stage, the dispute is over a purely legal issue: the scope of federal preemption. The 1986 National Childhood Vaccine Injury Act largely removed childhood vaccines from the tort liability system, channeling injury claims through a specialized court that focuses on science and provides no-fault compensation for injuries actually caused (or probably caused) by vaccines. The question before the court is whether this law barring ordinary injury suits applies to “design defects,” such as when the manufacturer allegedly could have offered an alternative vaccine with the same benefits and lower risk—even though the law does not explicitly mention design defects.

Congress created the vaccine compensation mechanism after litigation had largely destroyed the child vaccine market in the mid-1980s.

The public policy issues extend far beyond these legalities. Congress created the vaccine compensation mechanism after litigation had largely destroyed the child vaccine market in the mid-1980s. What litigation did then, it could do today if offered the chance. This is clear when we look at the essential features of child vaccine litigation. Virtually all children are vaccinated several times, sometimes receiving two or more vaccines in a single combination shot. Almost all those children are perfectly healthy, but a few will be unfortunate enough to become ill within days or weeks after vaccination, and some of them will suffer grievous irreparable harm. It is usually impossible to figure out whether one particular vaccination caused this harm. Assessing this kind of causation typically requires years of clinical trials and epidemiological studies. That is exactly what is done for all vaccines, especially those given to healthy people, including children. The result is that child vaccines are extremely safe, but not perfectly so. It is reasonably well established that some vaccines do in fact rarely cause certain conditions. It is for those conditions that the National Vaccine Injury Compensation Program provides payments to children or their parents, which averaged $1 million apiece for 154 cases last year, but had amounted to an average of $68 million annually in the previous five years.

The prospect of billions of dollars of new costs for vaccine manufacturers, with a corresponding escalation in prices, would be very real.

If the plaintiffs win in Bruesewitz v. Wyeth, child vaccine design defects will be litigated in ordinary courts instead of the vaccine compensation system. That would be a very bad thing indeed. The reason lies in the fundamental nature of vaccine litigation. Almost never will the jury be able to determine whether the vaccine caused the injury in question. After listening to conflicting expert testimony, they will simply have to guess. In doing so, they will surely be influenced by human factors like pain and suffering, which, tragic as they are, have nothing whatever to do with injury causation. The scientific fact that the vaccines almost never caused the injury at issue will become only marginally relevant. Often, the result will be a verdict for the plaintiff. Absent unusual legal issues, such verdicts will survive all appeals because juries are trusted to make factual decisions in this kind of litigation.

If that were the end of the story, a new era of child vaccine litigation would be costly but not tragic. A relatively small number of children who suffer harm shortly after being vaccinated would be treated and cared for at the expense of vaccine manufacturers, regardless of what caused their conditions. The costs would be passed on to vaccine buyers including parents, insurance firms, and government.

To a jury, the scientific fact that the vaccines almost never caused the injury at issue will become only marginally relevant.

But that is not the end of the story. A central lesson from the 1980s is that child vaccine damages awards tend to be very high. They cover economic costs (lost income, the costs of care, etc.); pain and suffering, which in some states at least is nearly unlimited beyond the juries’ own instincts; and often punitive damages, which can multiply the total award several-fold or more. The seminal studies by Richard Manning1 showed that at the time the childhood vaccine market collapsed, roughly 90 percent of vaccine prices served only to cover expected liability awards. This was enough to persuade parents and others that vaccines were not worth the cost, and manufacturers quickly exited the market as shortages arose for those who still wanted the shots.

This is jackpot justice, in which some injured plaintiffs reap millions while other injured parties in essentially identical circumstances get nothing, regardless of what caused the injury. Recent empirical research suggests that jackpot justice is relatively rare in some of the most studied areas such as medical malpractice2. But that is no reason to feel comfortable about child vaccines in the liability system. Even if juries sometimes do a decent job with the highly circumstantial evidence in malpractice cases, their task in vaccine litigation would be hopeless. That applies with particular force to what is likely to be the dominant class of child vaccine litigation: the allegation that vaccines cause autism, a devastating condition that often arises during the vaccination years of childhood. There is overwhelming evidence that vaccines have nothing whatever to do with autism, as was made clear in Paul Offit’s excellent book, Autism’s False Prophets: Bad Science, Risky Medicine, and the Search for a Cure, (which he presented at an American Enterprise Institute conference). But when a jury has to decide whether one particular vaccination caused one particular case of autism, this otherwise compelling evidence could easily be lost amid conflicting expert opinions in an emotionally charged trial. Wrestling with the remarkably plastic concept of “design defect,” juries will sometimes—perhaps usually—side with the plaintiff. When they do, they may well award millions or tens of millions of dollars. Multiply this by the thousands of autism cases that have already been filed, possibly to be joined by a larger number if current barriers to litigation were removed. The prospect of billions of dollars of new costs for vaccine manufacturers, with a corresponding escalation in prices, would be very real.

At the time the childhood vaccine market collapsed, roughly 90 percent of vaccine prices served only to cover expected liability awards.

It was outsized and unjustified damage awards that drove childhood vaccine manufacturers out of the market with astonishing speed in the 1980s. It was the creation of the Vaccine Compensation Fund and its legal underpinnings that restored normalcy, brought manufacturers back into the market, and encouraged research to develop new vaccines for other childhood illnesses such as pneumonia. Anyone who thinks the vaccine litigation case now before the Supreme Court is merely a matter of giving injured plaintiffs their day in court has misconceived both the dynamics of vaccine litigation and the stakes for those who reap the huge benefits of vaccines. 

John E. Calfee is a resident scholar at the American Enterprise Institute.

FURTHER READING: Calfee questions “How Much Transparency Do We Want in Healthcare Pricing,” discussed “Something Old, Something New: Biotech’s Enormous Potential,” and explained “What Do Vitamins and Fish Oil Tell Us about Drug Research.” Roger Bate asked, “How Safe Are Your Medicines?” and encourages “Making the World Safe for Rx.com.”

 

Footnotes
1. Manning, Richard L. "Changing Rules in Tort Law and the Market for Child¬hood Vaccines," Journal of Law and Economics, v. 37, n. 1, p. 247-286; “Is the Insurance Aspect of Producer Liability Valued by Consumers? Liability Changes and Childhood Vaccine Consumption," forthcoming in Journal of Risk and Uncertainty;  “Products Liability and Prescription Drug Prices in Canada and the United States,” Journal of Law and Economics, v. 40, n. 1, p. 203-244 (April).
2. Hyman, David, Bernard Black, Charles Silver, and William Sage (2005) “Stability, Not Crisis: Medical Malpractice Claim Outcomes in Texas, 1988-2002” Journal of Empirical Legal Studies, v. 2, p. 207-259.

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