October 17, 2004

Vaccine liability

In which a post about liability rules turns inexorably towards a rant against right-wing zealots and libertarian ideologues...

The flu vaccine shortage has called attention to the dangerous consequences of relying on a flawed system for assigning liability.

This article (via Kevin, M.D.) by William Tucker argues persuasively that the threat of lawsuits has reduced the number of firms willing to manufacture and sell vaccines. Tucker suggests that this has resulted in higher vaccine prices, vaccine shortages, and an increased chance that the available vaccines won't be effective.

Prior to 1986, liability for vaccine-caused injuries was assigned by the regular product-liability tort system. If you or your child were injured by a vaccine, you called your lawyer and sued the manufacturer. Most jurisdictions adhered to the "strict liability" doctrine that required the plaintiff to prove only that the vaccine was defective, not that the manufacturer was in any way at fault. This led to unpredictably high costs for manufacturers, many of whom simply stopped selling vaccines entirely.

In 1986, Congress tried to solve these problems by changing the liability system. It established the National Vaccine Injury Compensation Program, which set up a system whereby the federal government would compensate families injured by childhood immunizations out of a trust fund financed by a surcharge on vaccine sales (more details here). The maximum amount of compensation under this plan was fixed, however, and plaintiffs were still able to sue the manufacturers. Tucker suggests that this continued exposure of vaccine makers to liability has led to the failure of the compensation program to preserve the number of vaccine suppliers.

If Tucker is right, we might go a long way toward solving our vaccine problems by making some small changes to the legal regime. One attractive option might be to abandon the strict liability standard. Everyone who chooses to bypass the government's no-fault compensation system would have to prove that the vaccine maker was negligent, instead of merely that the vaccine was defective. This higher standard of proof might lower the number of lawsuits. Another possible solution might be to cap the size of damage awards in successful suits, or permit suits only after the government's compensation program review process determines that the injury was actually caused by the vaccine.

It seems like the tort liability system is actually one of the culprits behind our vaccine shortages. Admitting this should be our first step. However, this admission might itself be more dangerous than it should be, thanks to the unrelenting pressure from right-wing "tort reformers" whose goal is primarily to insulate corporations from all liability regardless of the consequences for public health. Often, these right-wing tort reformers are also in favor of reduced government regulation. They want to free corporations from responsibility both before and after they cause accidents. They say it's "good for the economy," but it's really a threat to our public health and safety.

Corporations, like individuals, should be held accountable. Unlike the right-wing tort-reform zealots, most people don't believe that this accountability can be provided entirely by the unregulated market. There are simply too many imbalances of purchasing power and information. In cases where corporations are not subject to significant tort liability, and are freed from regulatory oversight at the same time, the public becomes dependent upon the goodwill of corporate executives. Even if these people are the sweetest and most lovable individuals on Earth, in their role as corporate executives they are (should be?) under enormous pressure to maximize profits, often over the short-term. This pressure can override ethical concerns, and subject the public to harm. The corporate scandals that have stained our economy--Enron, Arthur Anderson, Tyco, MCI--happened because of the Republican ideological commitment to "small government" that "stays out of the way." This ideology might make sense as a rule of thumb for regulating individuals, but as a policy for governing gigantic multinational corporations whose structural imperative is to maximize profits over the short-term, it's a complete disaster.

In an environment where the right-wing zealots are breathing down our necks and control the White House, it doesn't seem safe to suggest that we tinker with the liability system. It's likely that any reform process will be hijacked for the benefit of the corporations and the detriment of the public. Perhaps, if the zealots lost control of the Presidency, the time might be ripe for some real progress on liability reform. Vaccines, medical malpractice. . . passenger trains. Sigh.

It's past time to replace George W. Bush.

Posted by Carey at October 17, 2004 10:30 AM
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