The number of manufacturers producing vaccines for the US market has been waning. In 1967, 26 companies produced vaccines.
In 1999, there were four; today, only three remain.7,8 This decline reflects the risk/reward balance companies must achieve to bring preventive vaccines to market. To tip this
balance, the US government implemented three vaccine liability and compensation programs in the last 30 years.9 These were designed to encourage vaccination by shielding manufacturers from liability while still providing consumers with
recompense for vaccine injury.
Under the national Swine Flu Immunization Program of 1976, the US government assumed liability. Claims were filed against
the government and award amounts were not limited under the act. The next program is a more limited liability and compensation
policy under the National Childhood Vaccine Injury Compensation Act (1986), which created the National Vaccine Injury Compensation
Program. Under this program, a two-step mandatory scheme is used. The first step involves no-fault compensation for injuries
following administration of included vaccines. Awards are paid by the government and their amounts are capped. Under the second
step, a dissatisfied claimant can sue the vaccine manufacturer.10
The Phase I Smallpox Vacci-nation Program was launched in 2003. This program relies on section 305 of the Homeland Security
Act of 2002 for liability protection and compensation, but the provisions are unclear and inadequate to address first-responders'
concerns of adequate compensation in the event of injury. Consequently, only 40,000 of a targeted 500,000 first responders
have been vaccinated.11
Proposed legislation to deal with liability for a pandemic flu vaccine is pending in the Senate. That legislation would cover
only first responders and health care workers, and would render manufacturers immune from any liability except for willful
misconduct.12 The extent to which this legislation (should it pass in its current form) impedes the public from seeking vaccination depends
on whether individuals' fears about succumbing in a flu pandemic outweigh concerns about uncompensated vaccine injury.
Additional economic and technical challenges remain to be solved to encourage production of a safe and effective pandemic
vaccine. These include correct prognostication of the pandemic strain. Because H5N1 is inefficiently transmitted from person
to person, a mutated strain would likely be responsible for pandemic infection. Other obstacles include cumbersome and difficult
manufacturing methods for producing vaccines, regulatory hurdles, market size, and price. While many of these challenges are not amenable to policy-based intervention, market size and price are two areas in which
govenment policy can make a difference. By initiating contracts that guarantee purchase of significant quantities of vaccine
at prices that provide a fair return on investment, the government can encourage development of vaccines to help safeguard
Michael J. Shuster, J.D., Ph.D., is a partner in the intellectual property group of Fenwick & West LLP, and co-chair of the firm's life sciences practice, 275 Battery Street, Suite 1500, San Francisco, CA 94111; 415.875.2413;
fax 415.281.1350, MShuster@fenwick.com
1. Fleming (2005), "Influenza Pandemics and Avian Flu," Br. Med. J. 331:1066-1069.
2. Beigel et al. (2005), "Avian Influenza A (H5N1) Infection in Humans," N Engl J Med 353(13):1374-1385.
3. Fleming (2005), "Influenza Pandemics and Avian Flu," Br. Med. J. 331:1066-1069.
4.Van Gelder (2005), "Patent Nonsense on Avian Flu," The Boston Globe, October 31, 2005.
6. See The Wall Street Journal, December 15, 2005, "Sanofi Bird Flu Vaccine Test Shows Positive Results."
7. Mello et al. (2005), "Legal Concerns and the Influenza Vaccine Shortage," JAMA 294(14):1817-1820.