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8
Vaccine Injury Compensation
and Liability Remedies
The committee believes that the goal of advancing the control of
infectious diseases with vaccines should be pursued in a socially
responsible and just manner. Its review of available scientific
information led to the conclusion that a small number of severe
adverse reactions are inevitable with existing vaccines, even when
they are manufactured according to licensed procedures and
administered in accordance with recommended medical practice. Most
vaccines are promoted (or required) by the government for the public
good; therefore, the committee believes that society has a
responsibility to develop some means of compensating those with
vaccine-related injuries.
At present, injured individuals or their families can seek
compensation through the tort system, but the results are not certain
and the process is protracted (Chapter 6~. In addition, the courts'
unpredictable handling of liability for vaccine-related injuries has
created apprehension among manufacturers that ultimately could
threaten the vaccine supply in the United States.
The committee recognizes that solutions to the problems of
providing just compensation for vaccine-related injuries and
maintaining vaccine supply and innovation must be forged in a
political setting. It concluded, therefore, that its most useful
contribution would be to identify and evaluate a series of options
available to those seeking alternatives to the current situation.
Following a description of these options, the committee examines
the rationale for compensating those with vaccine-related injuries
and the major features desirable in a potential compensation system.
COMPENSATION AD LIABILITY OPTIONS
The need to compensate injured individuals and the need to reduce
deterrents to vaccine manufacturing are two separate but closely
related problems. Some of the possible solutions to the compensation
problem would markedly increase the predictability of the liability
situation; others would not. In contrast, certain actions that would
provide greater predictability for manufacturers on the potential
136
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137
magnitude of costs resulting from vaccine-related injury would not
necessarily ensure compensation to injured individuals. A range of
possible options and combinations of options are:
1. A supplementary (non-exclusive) compensation system, established
by federal legislation, would give claimants an alternative to
pursuing a tort remedy.
2. A compensation system with restricted tort options, established
by federal legislation, would provide a way for individuals
expenses resulting from vaccine-related injury. under such
manufacturers (but not others) would be protected from tort
brought directly by individuals; the administrators of the
compensation system would be empowered to pursue action for
to recover
a system,
actions
reimbursement in cases of misconduct in manufacturing (or deviation
from recommended medical practices).
3. Mandatory claim review by a compensation board with tort option,
established by federal legislation, under which claims for alleged
vaccine-related injury would be reviewed by a compensation board that
would render opinions on (1) whether the injury is vaccine related and
hence eligible for compensation and (2) whether there is evidence of
misconduct in manufacturing or administration. Claimants would then
be free to pursue tort action irrespective of the compensation
system's decisions, but not if they accept compensation.
4 A vaccine sunolv Public insurance Program. created to protect
manufacturers against excessive payments tor Recense and settlement of
vaccine-related injury claims (see Appendix B), would operate in
conjunction with the current tort system.
5. No-fault insurance for vaccine-related injury could be promoted
by groups such as medical specialty organizations. Under this
approach, an insurance contract would be established whereby health
care Providers (through insurers) would before a vaccine is
, ~ _
administered, guarantee to tender wltnln a set perloa to a person
seriously affected by a vaccine the claimant's net economic loss. The
criteria of eligibility would be predetermined in the ~nsurer's
cc~ntract The claimant would be aiven a set her iod to accent the
tender or to choose to pursue the claim under tor t law. upon
acceptance of the tender, the claimant would be required to waive tort
claims against the tendering party, and in some instances, against
other parties as well (see Appendix C).
6. A supplementary compensation system and a vaccine supply public
insurance program could operate as tandem mechanisms.
7. A vaccine supply public insurance program and promotion of
no-fault insurance for vaccine-related injury also could be linked.
8. Change the tort law relating to liability for vaccine-related
injury. Two examples are described in tables 8.8 A and B. Both could
be used in conjunction with other schemes. Under example A, n failure
to warn" would be eliminated as grounds for action against a manu-
facturer (but not others); liability would be limited to misconduct
during manufacturing (e.g., deviation from approved procedures).
Under example B. limits would be set on the types and amount of
damages recoverable through vaccine-related injury claims.
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138
9. Federal assumption of liability for all vaccine-related injury
could create a system similar to that resulting from the swine flu
statute.
10. Acceptance of vaccine price increases to cover liability costs
would entail assuring manufacturers that federal purchasers would
allow increases in the prices of vaccines sufficient to cover
anticipated future liability losses--the current tort system would
continue.
The first three options focus on different approaches to
compensation. Possible alternatives in this area range from a purely
supplementary compensation system to a totally exclusive system,
precluding vaccine-related injury claims against manufacturers or
physicians. Between these poles lie a host of options in which tort
rights can be broadly or narrowly defined and the timing of the
surrender of those rights can be varied. Resource constraints
prevented the committee from undertaking a detailed legal, opera-
tional, and economic analysis of injury compensation systems in other
fields (Appendix D); however, such an analysis might prove useful to
those involved in the operational design of a vaccine-injury
compensation system. Information on arrangements made in other
countries for payments to vaccine-injured individuals are described in
Appendix E.
The fourth and fifth options involve two types of insurance
programs that could contribute to the resolution of current problems.
The vaccine supply insurance program addresses the unpredictability of
manufacturers' liability costs, but would not provide compensation.
No-fault insurance would provide payments to those injured individuals
covered by the insurance. The sixth option examines the effects of
combining a vaccine supply public insurance program with a compensa-
tion system, and the seventh explores the impact of providing both
forms of insurance.
Option eight presents two of many possible changes in the tort law
relating to vaccine injury. Changes in tort law could be used to
complement other approaches to these problems. Fuller assessments of
these options appear in Tables 8.1 to 8.10. Their probable effects
are compared in Table 8.11.
The public health consequences of failing to deal with the vaccine
injury compensation and liability issues are difficult to predict.
Manufacturers may raise vaccine prices substantially to protect
themselves against the expected costs of settling future injury
compensation claims; or manufacturers may be unwilling to operate in a
market characterized by an unpredictable risk of potentially over-
whelming financial loss. Large increases in price could have adverse
consequences for the federal consolidated vaccine purchases by which
states obtain their vaccine supplies for public programs.
If the remaining single-supplier companies were to withdraw from
vaccine production, the committee believes that it is unlikely that
other companies would enter the market. If replacements were found
from domestic or foreign sources, new suppliers probably would be
aware of the potential liability costs and set prices accordingly.
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139
TABLE 8.1 A Supplementary (Nonexclusive) Compensation System
Intent
To provide {as an alternative to the tort system) compensation to
individuals sustaining vaccine-related injury.
Precedent
Similar system proposed as part of S.2117 and H.5810, National
Childhood Vaccine-Injury Compensation Act.
Requirements for Establishment
Federal legislation.
Operational Features
Requires development of schedules of compensable events and
payments. Early waiving of tort rights by claimants entering the
system desirable to reduce administrative costs. Costs could be
covered by surcharge on vaccine prices.
Suggested Benefits
Establishes a more certain means of providing payments to injured
parties than the tort system. May reduce the number of tort
claims. Creates a central location for collection of information
on vaccine-related injury claims.
to promote safe performance.
Suggested Disadvantages
Maintains liability incentives
Would not relieve manufacturers' apprehensions over the
unpredictability of claims and/or settlements for vaccine-related
injury. Extent of recovery for some events would be limited.
Time to Effects
Time to establishment depends on enactment of federal legislation
some delay anticipated before effects (if any) are observed on
manufacturers' apprehensions over liability.
Additional Comments
;
Probably no immediate effect on certainty of vaccine supply. could
be used in combination with other systems.
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140
TABLE 8.2 A Compensation System with Restricted Tort Options
Intent
To provide a compensation system for individuals sustaining
vaccine-related injury; to maintain incentives for safe performance.
Precedent
.
Legislation related to compensation for workpJ ace injuries
(Appendix D).
Requirements for Establishment
Federal legislation.
Operational Features
System would require development of a schedule of compensable
events and payments. Claimants would waive tort rights (if any) as
a condition of receiving payment from system. Manufacturers (but
not others) protected from individual tort actions involving
alleged vaccine-related injury. Administrators of the system
required to review cases for misconduct in manufacturing (e.g.,
failure to follow approved procedures) or deviation from
recommended medical practices, and empowered to take action in
cases of probable misconduct. Vaccine price surcharge could cover
costs.
Suggested Benefits
Establishes a more certain means of providing payments to injured
parties than the tort system. Relieves manufacturers of
apprehension over the unpredictability of claims and/or settlements
relating to ~unavoidable" vaccine injury. Maintains duty to warn
and incentives for safe performance. Creates a central location
for collection of information on vaccine-related injury claims.
Suggested Disadvantages
Loss of the individual's right to sue manufacturers for misconduct,
which reduces the number of possible sources of tort action,
perhaps dilutes the pressure for safe performance by
manufacturers. System administrators may not pursue misconduct
actions vigorously. Extent of recovery for some events would be
limited. Removes whatever incentives present tort system has to
· e
Improve vaccines.
Time to Effects
Time to establishment depends on enactment of federal legislation.
Relief of manufacturers' apprehensions would be immediate.
Additional Comments
Probably would have immediate beneficial effect on certainty of
vaccine supply.
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141
TABLE 8.3 Mandatory Claim Review by a Compensation Board with Tort
Option
Intent
To provide a compensation system for individuals sustaining
vaccine-related injury; to maintain the option for tort action; to
provide an impartial opinion on the possibility that injuries are
vaccine-related and the question of misconduct.
Precedent
,
The mechanism for handling medical malpractice claims in New Mexico
(Medical Malpractice Act, 41-5-1 to 41-5-28 NMSA 19781.
Requirements for Establishment
Federal legislation.
Operational Features
All claims relating to alleged vacc~ne-related injury would be
filed initially with the administrators of a compensation system.
Within a short predetermined period the administrators would render
opinions on (1) whether the injury is vaccine related and hence
eligible for compensation and (2) whether there is evidence of
misconduct in manufacturing or administration. Claimants then
would be free to pursue tort action irrespective of the system's
decision, but not if they accept compensation.
Suggested Benefits
Establishes a more certain means of providing payments to injured
parties. Maintains the right to tort action. In cases in which
claimants are eligible for compensation, encourages rapid
settlement rather than protracted, uncertain tort remedy. Hence.
may reduce the number of tort claims. Creates a central location
for collection of information on vaccine-related injury claims.
Provides impartial information to the courts on the probable cause
of the injury and the question of misconduct.
Suggested Disadvantages
May cause brief delay (while system administrators process cases)
in the filing of tort claims. Does not preclude tort action.
Hence, does not totally remove uncertainty for manufacturers.
Time to Effects
Time to establishment depends on enactment of federal legislation.
Some delay anticipated before effects (if any) on manufacturers'
apprehensions over liability.
Additional Comments
Could be used in combination with other systems, e.g., with a
vaccine supply insurance program. Experience with malpractice
prescreening panels in various jurisdictions suggests that the
terms of reference need to be established carefully.
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142
TABLE 8.4 Vaccine Supply Public Insurance Program
Intent
-
To protect manufacturers against excessive costs from vaccine
related injury claims.
Precedent
Federal Deposit Insurance Corporation; Federal Savings and Loan
Insurance Corporation; Small Investor Protection Corporation for
brokerage houses; Price-Anderson Act (protecting operators of
nuclear reactors against excessive liabilities).
Requirements for Establishment
Federal legislation.
Operational Features
Manufacturers would be protected against vaccine-related injury
claim losses above a predetermined amount. Requires specification
of the limits of manufacturers' responsibilities (e.g., production
by approved procedures and duty to warn). Costs of defense and
settlements must be reviewed to determine eligibility for
reimbursement. Manufacturers would remain responsible for
organization of the defense of all claims, including ~unavoidable"
injuries, if no compensation scheme is created.
Suggested Benefits
Could provide relief of manufacturers' apprehensions over the
unpredictability of vaccine injury claims and/or settlements.
Suggested Disadvantages
Establishment of such a system alone would not provide a more
certain or equitable system of dealing with vaccine injury, because
of continued reliance on the tort system to provide compensation.
Time to Effects
Time to establishment depends on enactment of federal legislation.
Additional Comments
~.
Could be used in combination with other systems.
NOTE: See Appendix B for detailed explanation.
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143
TABLE 8.5 Promotion of No-Fault Insurance for Vaccine-Related Injury
Intent
To establish an insurance option that requires the liability
carrier (on behalf of the health-care provider) to make an offer to
the injured party to reimburse economic losses in exchange for a
release of tort rights, if any.
Precedent
Similar no-fault insurance schemes have been adopted for serious
high school athletic injuries under the auspices of the National
Federation of High School Athletic Associations.
Requirements for Establishment
No legislative involvement.
Operational Features
Criteria for eligibility (and possibly payments) would be specified
in the insurance contract.
Suggested Benefits
If widely adopted, would offer a more certain means of providing
payments to injured parties than the tort system. May reduce the
number of tort claims. Could be adopted immediately.
Suggested Disadvantages
Availability of compensation provided by such insurance would
depend on its adoption by providers, i.e., universal availability
of compensation would not be guaranteed. Does not preclude tort
claims--manufacturers still at risk from tort claims for
unavoidable injuries.
Time to Effects
Dependent on rate of widespread adoption of such insurance.
Ultimate effects on the predictability of vaccine injury tort
claims and the certainty of vaccine sunolv not clear without
operational experience.
Additional Comments
Differences between insurance contract tenders and post-injury,
out-of-court settlement offers are discussed in Appendix C.
Medical specialty organizations could have a role in promoting the
availability and adoption of such an option.
NOTE: See Appendix C for detailed explanation.
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144
TABLE 8.6 Supplementary Compensation System and a Vaccine Supply
Public Insurance Program
Intent
To provide compensation for individuals injured by vaccines (as an
alternative to the tort system); to protect manufacturers against
excessive costs from vaccine injury claims.
Precedent
See separate comments for each option. Similar scheme proposed in
National Childhood Vaccine Injury Compensation Act of 1985, S. 827.
Requirements for Establishment
Federal legislation for both components of scheme.
Operational Features
See comments for each option.
Suggested Benefits
Establishes an option of more certain payment than the tort system
and could provide relief of manufacturers' apprehensions over
unpredictability of vaccine injury claims and/or settlements.
Number of tort claims may be reduced.
Suggested Disadvantages
Manufacturers and vaccine providers still at some risk from tort
claims for injuries that are unavoidable and still responsible for
organization of defense of tort claims.
Time to Effects
See comments for each option.
Additional Comments
Administration may be complex.
TABLE 8.7 Vaccine Supply Public Insurance Program and Promotion of
No-Fault Insurance for Vaccine-Related Injury
Intent
To protect manufacturers against excessive losses from vaccine
injury claims; to establish an insurance option under which injured
parties would receive an offer of rapid settlement of economic
losses in exchange for a waiver of tort rights.
Precedent
See comments for each option, no precedent for such a joint venture.
Requirements for Establishment
Federal legislation required for one component of scheme.
Operational Features
See comments for each option.
Suggested Benefits
Could provide compensation and some relief of manufacturers'
apprehensions over unpredictability of vaccine injury claims and/or
settlements.
Suggested Disadvantages
Uniform availability of compensation for injuries is dependent on
widespread adoption of the no-fault insurance aspect of the joint
scheme. Manufacturers still at some risk from tort claims for
unavoidable injuries.
Time to Effects
See comments for each option.
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145
TABLE 8.8A Change in Tort Law (Example A)
Intent
To eliminate n failure to warn" as grounds for action against a
manufacturer, but not others; manufacturers' liability would be
limited to misconduct in manufacturing, e.g., deviation from
approved procedures.
Precedent
None.
Requirements for Establishment
Action at the federal level or by all state legislatures
Operational Features
Would operate through tort system.
Suggested Benefits
~ -
Manufacturers, in theory, would not be liable for unavoidable
· ~
Injury e
Suggested Disadvantages
Manufacturers still would be required to defend all claims. If
action were at the state level, differences among states might make
the situation unclear. Theoretically, unavoidable injuries would
not be compensated.
Time to Effects
Legislation likely to be delayed by need to establish that
vaccine-related injury liability deserves unique treatment.
Operational experience needed to gauge effects.
Additional Comments
This is one of many possible changes in the tort law pertaining to
vaccine-related injury liability; chosen for illustrative purposes
only. Alone, it does not address the fundamental need for rapid
and equitable compensation.
other approaches.
Could be used in combination with
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146
TABLE 8.8B Change in Tort Law (Example B)
Intent
To limit the damages recoverable from manufacturers for
vaccine-related injury and therefore provide them a greater degree
of predictability.
Precedent
None.
Requirements for Establishment
Action at the federal level or by all state legislatures.
Operational Features
Would operate through the tort system. A limit could be placed on
some types of recovery (e.g., for pain and suffering); other types
(e.g., punitive damages) could be eliminated.
Suggested Benefits
Manufacturers would be better able to predict the extent of their
potential liability for vaccine-related injury.
Suggested Disadvantages
Manufacturers still would be required to defend all claims. If
action were at the state level, differences among states might make
the situation unclear. Theoretically, unavoidable injuries would
not be compensated. Could reduce incentives to safe performance.
Time to Effects
Legislation likely to be delayed by the need to establish that
vaccine-related injury liability deserves unique treatment.
Operational experience needed to gauge effects.
Additional Comments
This is one of many possible changes in the tort law pertaining to
vaccine-related injury liability; chosen for illustrative purposes
only. Alone, it does not address the fundamental need for rapid
and equitable compensation. Could be used in combination with
other approaches. Constitutionality issues regarding the removal
of tort rights (without compensation) would need to be addressed
before this approach could be implemented.
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151
immunization programs often are mandatory; when not required, they are
often encouraged by the government. Therefore, vaccine recipients and
their families lack the free choice about participation and risk-
taking that characterizes many medical situations.
In addition, vaccination programs are justified as being for the
public good. In some cases, the principal reason to vaccinate a
person is to protect others from a disease. Thus, the victim of an
adverse reaction to a vaccine may be seen as a casualty of the public
health, and therefore especially deserving of compensation. Moreover,
assuring potential vaccine recipients, providers, and producers that
compensation for untoward consequences is available would remove one
potential disincentive to participation in vaccination programs.
Other publicly promoted or required activities also involve a
combination of risk to the individual and benefit to society.
Examples include military conscription, travel to and from school, and
the use of food preservatives. Vaccine injury is unique, however, in
that individuals are required to submit to an invasive medical
procedure for their own and society's benefit. To suggest that the
victims should bear their own losses (in cases in which there is no
misconduct) because they could have avoided injury and the resulting
medical and economic expenses simply by not obtaining a vaccination
would be unreasonable. (The question of informed consent is discussed
later in this chapter.)
The nature and current state of the vaccine industry suggest
additional reasons for treating vaccines differently from other
injury-causing products and activities. The vaccine industry is
vitally important to public health, yet the number of vaccine
manufacturers in the United States continues to decline. Two
manufacturers of pertussis vaccine ceased distribution of their
products during the tenure of this committee (Chapter 3~.*
The liability situation is a major source of concern for the
industry. A small number of large tort awards, coupled to a confused
and unstable legal situation (especially with regard to "unavoidable"
injury), make liability difficult to predict and potentially
destructive (Chapter 6~. Therefore, the evaluation of options to
provide compensation for vaccine-related injuries should include an
assessment of their potential effects on the vaccine industry and,
through vaccine supply, on public health.
Finally, the issue of compensation for vaccine-related injuries is
especially unwieldy for the common law tort system. Like other medical
and technical issues, putative vaccine injury poses very difficult
problems of proof (Chapters 5 and 6~. Judges and lay jurors, informed
primarily by lawyers and hired experts (whose testimony has been
structured by lawyers), are unable to determine with acceptable
accuracy the likelihood of a causal relationship between a vaccine and
an injury. The tort system is just beginning to consider ways to
improve the use of scientific evidence,3'4 including the possibility
*Immediately prior to the printing of this report, Connaught
Laboratories, Inc., resumed distribution of DTP vaccine.
152
of proportional damage awards in cases of statistically probable
causal relationships that cannot be proved definitively. Rather
than allow potential injustice to injured claimants, continued
apprehension and confusion on the part of manufacturers, and peril to
the public health (from possible cessation of vaccine production),
compensation for vaccine-related injuries should be restructured in a
more fair, certain, and consistent manner.
Based on these considerations, the committee concluded that persons
injured by vaccines should be compensated; that compensation should
not imperil the vaccine industry, but should be seen as part of a
general program to promote public health; and that any vaccine
compensation mechanism must accommodate the fact that resolution of
causation may not be possible in some cases.
The common law tort system is not able to provide predictable,
rapid, and equitable compensation for vaccine-related injuries because
each claim requires an extended, costly, and complex adjudicative
procedure that results in unpredictable outcomes (Chapter 6~.
THE COMPENSATION MECHANISM
The primary objective in designing a system to provide payments to
individuals with vaccine-related injuries is to find an approach (or
combination of actions) that (1) provides predictable, rapid, and
equitable compensation for those injured; (2) ensures that no party is
shielded from action for suspected misconduct; and (3) reduces or
Removes disincentives to vaccine manufacturing.
The compensation system envisioned by the committee would be created
by federal legislation. It could be established within an existing
government department or as a new entity. It would be empowered to
raise and distribute funds to compensate persons with vaccine-related
injuries. The compensation system administrators would be encouraged
to obtain advice from the vaccine commission discussed elsewhere in
this report, but the two bodies should be separate. Specific issues
relating to the operation of the system are discussed below.
Provision of Payments
To achieve rapid payments, all claims made to the compensation
system should be processed without regard to "fault," i.e., the
possibility that misconduct may have occurred. A determination would
be made with the assistance of a schedule of compensable events
whether the alleged injury was vaccine related. Eligible parties
would be compensated. A review of cases for misconduct would be
required to determine if the system should recover payments from
responsible parties. The conclusions of the system administrators
about the relationship between vaccination and the alleged injury and
about the possibility of misconduct would be made available to the
courts (in addition to the scientific data and reasoning upon which
they were based) to aid in any further evaluations.
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The creation of a compensation system is not intended to provide
protection for wrongdoers. Legal action should be possible it- there
is evidence of misconduct. The committee believes, however, that any
injury resulting from a vaccine that has been correctly manufactured
and administered in accordance with recommended medical practices
should be treated essentially as a no-fault injury.6 This position
appears to be in accordance with the legal theory that some products
are unavoidably unsafe (Chapter 6~.
The committee was concerned that apprehensions over liability on
the part of health care providers might become a disincentive to their
participation in immunization programs. In its review of the state of
the law, however, the committee found little evidence that liability
had been imposed on health care providers except in situations
involving failure to follow accepted medical procedures. The
committee presently does not recommend any change in the rules
applicable to health professionals because liability for improper
administration is appropriate;* it recognizes, however, that if any
proposal limiting recovery against manufacturers were adopted without
provision for reasonable compensation, lawsuits might be redirected
from the manufacturer to the administering professional. This could
have deleterious effects on the willingness of health care providers
to participate in immunization programs. Such a situation would
require careful monitoring. Tracking shifts in litigation and
recommending remedial action would be one of the functions of the
proposed vaccine commission (Chapter 7~.
The possible elimination of the individual's tort remedy against
manufacturers (as envisaged in a compensation system with restricted
tort options) would in no way affect other legal and administrative
controls over vaccine manufacturers or providers, e.g.' in cases of
serious misconduct, such as the intentional falsification of data to
obtain certification.
The Amount and Nature of Payments
The committee's conclusion that persons who suffer vaccine-related
injuries should be compensated does not mean that they all should
receive the same high compensation now awarded to some by the tort
system. One distinguished critic of the tort system has referred to
the current situation as a "lottery. n7 A plaintiff who enters the
system has a large chance of winning nothing and a small chance of
winning a great deal. Goals in vaccine injury compensation should be
to remove chance from the system, to decide on an appropriate and fair
level of compensation, and to ensure that all deserving claimants
receive that amount.
An appropriate amount of compensation (1) removes financial
*The committee recognized that malpractice claims, in general,
represent a major concern of the medical profession, but it did not
feel that the malpractice issue was within the scope of its charge.
154
disincentives for participation in vaccination programs; (2) prevents
financial devastation of victims and their families; (3) keeps vaccine
costs low enough to permit universal use; (4) avoids disproportionate
expenditures on an area of public health that, although important, is
not the only legitimate claim on the nation's resources; and (5)
avoids creating incentives to litigate.
These goals lead to several general suggestions. First, small
injuries that do not pose a risk of significant financial loss should
not be compensated. The compensation system should make no award to
persons whose out-of-pocket losses are less than a specified minor
amount, which should be reset periodically.
At the other end of the injury spectrum, limits should be placed on
maximum recoveries. Predetermined dollar limits are undesirable,
however, because they discriminate against those most severely
injured. To ensure fair compensation and at the same time keep total
costs reasonable, compensation for nonmonetary losses (e.g., pain and
suffering, emotional distress, and loss of companionship) should be
strictly defined and limited by the bodies establishing the schedules
of compensable events and payments. Projections for the proposed
National Childhood Vaccine Injury Compensation Act suggest that a
large proportion of costs (90 percent) could arise from loss of future
earnings.8 Hence, any estimates of future earning potential should
be made carefully. Because most injuries occur in young children,
whose potentials are unknown, an award based on the "average" worker's
earnings projected over the period of the claimant's working life
expectancy appears reasonable. Finally, fees for the attorneys of
claimants should be paid by the compensation system according to a fee
schedule.
In sum, an injured person should be reimbursed for all present and
future out-of-pocket losses for medical, hospital, nursing home,
personal assistance, special training, special equipment, legal, and
other expenditures plausibly caused by the vaccine injury, and receive
a limited amount for lost earnings. Awards for future costs should be
paid over time through a system of periodic payments so that the
compensation fund is protected from depletion.
Defining Compensable Events
The scope of the schedule of compensable events and the manner in
which it is established will affect operational costs of the system,
the ease of administration, and the likelihood that it will be
acceptable, or preferred over other remedies (if any are available).
Establishing a schedule of compensable events can begin with
evaluation of pertinent scientific information, especially
epidemiologic data, and proceed to the use of the resulting
conclusions to formulate policy, i.e., the actual schedule. In the
latter phase, the scientific evidence (and its limitations) must be
balanced with other considerations, such as likely costs and ease of
administration.
155
The section on untoward reactions to vaccines in Chapter 5
describes the problems of establishing association or causation in
cases of possible vaccine injury. The difficulty of proving or
disproving a causal relationship between a given vaccine and a
particular injury suggests that if causation is required, for payment
of compensation, outcomes will depend on who is required to carry the
burden of proof. Moreover, these efforts to prove causation will be
time-consuming, expensive, and probably inconclusive.
Given the current situation, little purpose will be served by
efforts to determine causation on a case-by-case basis. The best way
to control expenses for any payment system will be to establish a
generally acceptable schedule of compensable events that can be
administered without frequent specialist intervention or judgment.
The schedule should reflect the best available scientific information
and judgment on the existence (or absence) of associations between
specific conditions and vaccine administration.
Only those conditions for which scientific evidence indicates a
plausible association with vaccination should be included on the
schedule of compensable events. To be eligible to receive payments,
claimants also should meet at least two additional criteria--onset of
the condition should be within some specified time after vaccine
administration and there should be no evidence that establishes a
different cause.
It was not within the committee's purview or resources to undertake
elaboration of a detailed schedule of compensable events, although its
review of untoward reactions to vaccines (Chapter 5) could serve as a
starting point for such an effort. The committee recommends that if
the decision is made to establish a compensation system, a group of
experts in the necessary disciplines should be convened by an inde-
pendent body or organization to develop it. In addition, it would be
preferable to establish the schedule by administrative rule, rather
than legislation, to allow updating. However, an interim schedule may
be developed to allow rapid implementation of the compensation system.
Establishing a workable schedule would entail recognition of the
fact that some individuals whose injuries were not actually caused by
vaccination would receive compensation (i.e., those "background rate"
cases of conditions listed on the schedule of compensable events but,
in fact, related only temporally to the vaccination). Such "mistakes"
are extremely difficult to avoid. They would be on the side of
compensation and, if few in number, would be tolerable. The schedule
of compensable events must be drawn carefully to ensure that such
mistakes are few, that nuisance or fraudulent suits are discouraged,
and that the social policy of promoting vaccine use while compensating
its victims is not perverted by extraneous payments or administrative
costs.
To minimize administrative costs, review and appeal mechanisms
should be strictly limited. Judicial review should be limited to
abuse of discretion. A board of scientific advisors could be convened
to assist the system's administrators with cases in which inter-
pretation or application of the schedule is unclear.
156
Establishing a Schedule of Payments
Final determination of medical and other costs (e.g., special
education and rehabilitation) that should be covered for each con-
dition and the size of different types of payments should be made by
an independent group of experts in the economic analysis of medical
costs. As with the schedule of compensable events, the payment
schedule should be formulated administratively rather than legis-
latively to allow updating. Periodic (structured) payments rather
than lump sums should be favored. Again, an interim schedule may be
used initially.
Source of Funding
Because vaccine programs are for the public good and are frequently
endorsed or mandated by government, public funds may appear to be an
attractive source of compensation for those with vaccine injuries.
However, promotion of a compensation system funded from general tax
revenues would encounter several obstacles.
Such a system may be unattractive to many legislators because it
could be characterized as a "give-away" program, an unjustified tax
increase, or an undeserved windfall to one industry. These charges
are difficult to refute, especially during a period of increasing
concern about the federal deficit. Moreover, insistence on a
federally financed compensation system would place an undue burden on
the argument that the vaccine injury compensation problem is unique.
Jeopardizing the proposal to establish a compensation system by
exposing it to such political risks should not be necessary. Certain
nonpolitical arguments provide support for an alternative approach to
raising funds.
A well-designed vaccine price surcharge plan could assign injury
costs in an economical, predictable, and therefore manageable way.
Moreover, by revealing the true costs of vaccines {the cost of
compensating injuries, as well as the costs of production, marketing,
etc.), it would offer society an opportunity for rational decision
making. For example, if it were learned that a vaccine caused 31
million worth of injuries per year and prevented $1 billion worth of
injuries from the target disease, decisions about use of the vaccine
would be very different from those made if the figures were reversed.
In either event, there would be a basis for rational, rather than
intuitive, decision making.
The surcharge ultimately would be paid by recipients of vaccines or
others who purchase them. As a practical matter, it should be noted
that because a large proportion of vaccines are purchased with federal
funds for public programs, society at large would contribute to the
compensation fund generated by the surcharge.
The surcharge should be based on the best available actuarial
judgments about vaccine risks, and should be reset at least annually
to reflect previous over- or underestimates of needs. The money
obtained from the surcharge should be the primary source of
157
compensation for vaccine-related injuries. If the surcharge fund
becomes exhausted at any time, the federal government should be
obligated to lend the compensation system enough money to pay claims,
and the system obligated to make sufficient adjustments in its future
surcharges to repay the loan.
An early problem in establishing the compensation mechanism will be
whether to establish one surcharge fund to pay all vaccine injuries or
to have different funds for different vaccines. Each vaccine should
have its own fund if the major goal is to reveal the true costs of
these vaccines. However, that approach sacrifices the benefits of
aggregation of resources and adds an element of luck to the fund's
management. For example, if in any given year the pertussis fund were
low and the measles fund were high, and the compensation system were
faced with several pertussis and no measles claims, it would have to
borrow to pay pertussis claims while hoarding measles money, or start
borrowing from itself. In addition, the complexity of multiple funds
would increase management and administrative costs, which should be
kept low. Finally, a vaccine-by-vaccine approach would result in the
creation of "orphan" injuries, for which no adequate compensation
would be available and for which borrowing would not be feasible. For
all these reasons, the committee favors creation of only one vaccine
injury fund, although the amount of the surcharge may vary from
vaccine to vaccine.
Informed Consent
Every effort should be made to promote the availability to
potential vaccine recipients (or their parents) of information on the
risks and benefits of vaccination. However, the overall goal of
providing appropriate compensation expeditiously will be ill-served if
the administrators must attempt to base eligibility for compensation
on the difficult question of whether the vaccine recipient gave
n informed consent. n Indeed, informed consent may be a meaningless
concept in the context of a public health program with legal
requirements for vaccination. Attempting such a determination would
slow dispute resolution and increase administrative costs. Thus. the
giving of informed consent should not preclude eligibility for
compensation.
Administrative Location
To be accepted as an alternative to the tort system, any new
mechanism for achieving compensation for vaccine injury must be
regarded as providing fair and adequate payments. It is essential,
therefore, that the mechanism not be located in or associated with a
body whose existing functions might be perceived as conflicting with
the provision of equitable compensation. The administration of a
vaccine-injury compensation scheme by the Public Health Service, whose
responsibilities include the promotion of vaccine use, might be
158
regarded as a potential conflict of interest and therefore is not
desirable.
A variety of alternative administrative locations are possible,
including the Department of Justice, the Social Security Admin-
istration, the Health Care Financing Administration, and a nonprofit
compensation corporation.
Additional Issues
A number of other issues should be resolved prior to the final
design and implementation of a vaccine-related injury compensation
system.
The purpose of establishing such a compensation scheme would be to
provide a more rapid, equitable mechanism for payment to injured
parties, not to increase the amount received by some individuals.
Hence, the committee believes that payments from only one source
should be possible. A claimant/plaintiff should be required to choose
between the compensation system and tort remedy, or to waive tort
rights a a condition of receiving payment.
Additional questions that must be answered include:
· Which vaccines should be covered? It seems logical to be
comprehensive because the arguments for a compensation scheme do not
hinge solely on the fact that some vaccines are mandatory. Vaccina-
tions given to adults, like pediatric vaccinations, are desirable on
the basis of overall benefits to public health, e.g., they reduce
disease transmission. The injured parties are equally deserving of
compensation.
· How are initial compensation funds to be raised? A number of
options are available. A price surcharge could be applied for a
number of years before the system goes into operation. Alternatively,
a one-time government appropriation could be made or a loan negotiated.
· Will the system be retroactive? If so, to what extent, and
how will tort claims in process be handled? Because immunization,
especially of children, has been widely promoted for many decades,
there is a potential backlog of claims for vaccine injury. A number
of options are available on these questions. Resolution of questions
over retroactivity is important because payments for previous injuries
could, in the early years of operation, far outweigh the routine
annual incidence of claims.8 The question of whether these initial
costs would be paid from general revenues or the surcharge set to
recoup them also needs to be addressed.
· A number of questions involving the relative commercial
competitiveness of present manufacturers and possible new entries into
the vaccine market could arise depending on how retroactivity, claims
in process, and the levying of the surcharge are handled. These must
be resolved in an equitable fashion.
· Should new mechanisms be instituted at the state or federal
level? Notwithstanding the fact that liability is currently governed
by state law, a number of factors strongly support the proposition
159
that a federal solution is needed. A multiplicity of approaches
probably would arise at the state level to what is essentially a
uniform problem for the entire country. Undesirable differences would
develop in access to and magnitude of compensation. Also, vaccine
manufacturers operate on a national scale and it would be best to
avoid a situation in which they are discouraged from supplying
products to some areas where they remain subject to unpredictable
litigation.
The committee did not attempt to prescribe detailed approaches to
each of these sets of problems, but identifies them because the manner
of their resolution could significantly affect the costs and operation
of the compensation system.
SUMMARY AND CONCLUSIONS
A variety of methods exist for dealing with the problems arising
from vaccine-related injury, the most serious of which are the need to
compensate injured individuals and the need to reduce deterrents to
vaccine manufacturing. The committee evaluated eight individual
options and two combined approaches from the range of possible
actions--some address only one facet of this complex situation and
others address a broader range of issues. The 10 alternatives are:
.
a supplementary (non-exclusive) compensation system
· a compensation system with restricted tort options
· mandatory claim review by a compensation board with tort option
· a vaccine supply public insurance program
· promotion of no-fault insurance for vaccine-related injury
· a supplementary compensation system and a vaccine supply
public insurance program
· a vaccine supply public insurance program and promotion of
no-fault insurance for vaccine-related injury
· changes in the tort law relating to liability for vaccine-
related injury
· federal assumption of liability for all vaccine-related injury
· acceptance of vaccine price increases to cover liability costs
The committee believes that the goal of advancing the control of
infectious diseases with vaccines should be pursued in as just and
fair a manner as possible. Those who respond to the government's
promotion of or legal requirement for vaccination convey benefits to
other members of society because they reduce the risk of disease in
the community. If vaccination results in an injury, the injured
individual should be certain of receiving rapid and adequate
compensation. The common law tort system can not be relied on to
provide such compensation because each claim requires an extended,
costly, and complex adjudicative procedure to establish liability.
The results of these procedures are erratic and unpredictable, and
therefore inequitable.
160
The committee urges political decision makers to develop a
compensation system for vaccine-related injury with the features
outlined in this report. It also recommends that action be taken to
reduce the serious deterrents to vaccine manufacturing and innovation
that arise from the unpredictable nature of the current liability
situation (such action should not be designed to shield those
suspected of possible misconduct). The information and analysis
presented in this report should help guide policymakers in the choice
of appropriate solutions.
REFERENCES AND NOTES
1. Beale, A.J. 1985. Modern approaches to the development of
vaccines: perspective of a traditional manufacturer. Pp. 377-381
in Vaccines 85. Molecular and Chemical Basis of Resistance to
Parasitic, Bacterial, and Viral Diseases, R.A. Lerner, R.M.
Chanock, and F. Brown, eds. Cold Spring Harbor, N.Y.: Cold Spring
Harbor Laboratory.
2. Coe, F.A., Jr. 1983. A vaccine manufacturer's view of the vaccine
market. Prepared for the Institute of Medicine Conference on
Barriers to Vaccine Innovation, November 28-29, 1984, Washington,
D.C.
3. Pharmaceutical Manufacturers Association. 1985. Jury rules that
bendectin did not cause birth defects. PMA Newsletter 27:1.
4. Curran, W.J. 1983. The acceptance of scientific evidence in the
courts. N. Engl. J. Med. 309:713-714.
5. See, e.~., Sindell v. Abbott Laboratories, 26 Cal.3d 588, 607 P.2d
~ _
924, 163 Cal. Rptr. 132 (1980), Rosenberg, The Causal Connection in
Mass Exposure Cases. A n Public Law" Vision of the Tort System, 97
Harv. L. Rev. 849 (1984~; Comment, DES and a Proposed Theory of
Enterprise Liability, 46 Fordham L. Rev. 963 (1978~.
6. In this regard the licensing approvals and Good Manufacturing
Practices of the Food and Drug Administration and the
recommendations of the Centers for Disease Control Advisory
Committee on Immunization Practices should serve as guidelines.
7. Franklin, Replacing the Negligence Lottery: compensation and
Selective Reimbursement, 53 Va. L. Rev. 774 (1967~.
8. Penner, R.G. 1984. Letter to Sen. Orrin Hatch, February 7, 1984,
on preliminary Congressional Budget Office cost estimates of S.
2117, the National Childhood Vaccine Injury Compensation Act.
