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Trial Lawyers Inc.

   Trial Lawyers Inc.: Health Care
    The Lawsuit Industry's Effect on American Health, 2005


The Lawsuit Industry's Effect on American Health: Condition Critical?
Trial Lawyers Inc. Health Care
A Message from the Director

Focus: Lines of Business
Drugs and Medical Devices
Special Focus: Vaccines
Medical Malpractice
Special Focus: Hospitals
Health Maintenance Organizations

Government Relations/Public Relations
Outlook and Conclusion

Other Resources
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The Manhattan Insitute's Center for Legal Policy.
Walter Olson's OverLawyered.com.



After almost killing the childhood vaccine market, Trial Lawyers, Inc. takes another stab at these vital medications.

Vaccines are among the greatest accomplishments of modern medicine, eliminating the widespread scourge of killer diseases like diphtheria, polio, and smallpox. Each year, millions of American children are vaccinated against many such infectious diseases, an essential precaution for the broader public health.[101] Unfortunately, a very small percentage of vaccinated children can develop side effects, or even die.[102] Thus it was that, beginning in the 1960s and accelerating in the early 1980s, the market for vaccines faced a new plague that threatened its very existence—one that continues to infect vaccine manufacturing today and that has proven itself resistant to statutory remedy. The plague, of course, is the virulent lawsuit abuse sponsored by Trial Lawyers, Inc.

The 1980s Vaccine Litigation Explosion

The sordid story of lawsuits targeting vaccine side effects is one of the most compelling examples of what ails our liability system. As late as 1965, the Second Restatement of Torts opined that drug and vaccine manufacturers could not be held strictly liable for selling unavoidably dangerous products, since such products are "apparently useful and desirable . . . with a known but apparently reasonable risk."[103]

In the 1960s and 1970s, however, courts loosened these requirements in permitting liability for the Sabin live-virus polio vaccine under a "failure to warn" theory.[104] Moreover, the federal government assumed liability for side effects caused by the swine-flu vaccine in the 1970s and soon faced more than 4,000 claims, upon which it paid out over $72 million.[105] As the courts continued to apply novel liability theories, vaccine manufacturers were flooded with lawsuits, which, in the case of the diphtheria, pertussis, and tetanus (“DPT”) vaccine, escalated from one suit in 1979 to 255 in 1986.[106]

A watershed was breached in 1984, when juries slapped vaccine makers with huge verdicts over two individual claims: the first—against a manufacturer of the DPT vaccine—was for over $1 million;[107] and the second—against a manufacturer of the Sabin polio vaccine—was for $10 million, including $8 million in punitive damages.[108] Each case was predicated on the theory that alternative vaccines were available or could have been developed[109]—an interesting irony. Although the latter verdict was subsequently overturned, the damage had been done. Claims multiplied: vaccine maker Lederle estimated that total sales of its 1983 polio vaccine were only one-twelfth the value of claims filed against it;[110] its 1983 DPT vaccine sales were dwarfed by claims 200 to 1.[111]

Vaccine manufacturers responded predictably to this avalanche of lawsuits. First, they exited the market: of the 26 vaccine manufacturers in business in 1967, 15 were still extant in the early 1980s, but the number plummeted to three by the middle of the decade.[112] Second, they raised prices: DPT vaccine cost 10,000 percent more in 1986 than it did in 1980.[113] The few remaining suppliers reported that they were having trouble finding liability insurance at all, and the Centers for Disease Control, fearing a shortage, asked doctors to delay giving children DPT booster shots.[114]

Congress Steps In

Responding to the crisis, Congress passed legislation in 1986 establishing the Vaccine Injury Compensation Program ("VICP"), which bars all tort claims until parents of children allegedly injured by a vaccine have exhausted a no-fault remedy.[115] In essence, the system makes the federal government the insurer for vaccine-related injuries, with payouts coming from a fund supported by a small vaccine surtax.[116] Claimants appear before a special master and have the burden of establishing injury, according to a "vaccine injury table," and if successful, the Justice Department has the option of contesting the finding if it can show that the injury was not caused by the vaccine.[117]

There are now only two flu-vaccine makers worldwide—down from five in 1994—and supply shortages are an annual rite of winter.

The VICP largely stemmed the tide of vaccine lawsuits. Having reached a high of 255 suits in 1986, the number of DPT suits fell to only 19 by 1990 (see graph).[118] In general, the program effectively compensated those legitimately injured and rejected bad claims.[119] The average award under the system has been high—$824,463—for the minority of claims that have been compensated,[120] but with much lower administrative costs than traditional tort litigation—only 9 percent under the VICP, compared with 54 percent for the average tort claim.[121]

With the liability climate more stable and predictable, research into new vaccines began to proliferate: safer "whole cell" DPT vaccines replaced older versions, and several new vaccines were widely adopted.[122] Having only recently been a dead-end field for R&D, the vaccine industry was now attracting new entrants, including biotechnology firms.[123]

Trial Lawyers, Inc. Fights Back

While the VICP has been successful in protecting those vaccines designed for childhood diseases, Trial Lawyers, Inc. has continued to attack the supply of vaccines that fall outside the law's ambit. In 1999, less than a year after GlaxoSmithKline introduced LYMErix, an adult vaccine for Lyme disease (the multi-symptom inflammatory and neurological ailment that has affected more than 150,000 people since 1982), Trial Lawyers, Inc. brought a class-action suit claiming that the vaccine causes chronic arthritis.[124] By 2002, LYMErix was off the market—and reported cases of Lyme disease, stable since the vaccine's introduction, jumped 40 percent.[125]

Trial Lawyers, Inc. has also sued flu-vaccine manufacturers, despite the fact that influenza kills 36,000 people annually and costs the U.S. economy over $12 billion each year in lost work time.[126] Unsurprisingly, there are now only two vaccine makers worldwide—down from five in 1994—and supply shortages are now an annual rite of winter.[127]

Trial Lawyers, Inc.'s latest gambit is to claim injury caused not by vaccines themselves but by thimerosal, the mercury-based compound used to preserve them.[128] Unsurprisingly, the litigation industry's claims lack solid scientific foundations. The thimerosal furor erupted in 1999, when the Environmental Protection Agency hypothesized that, theoretically, a combination of infant vaccines could lead to blood mercury levels above EPA guidelines.[129] That same year, the Clinton administration recommended removing thimerosal from vaccines, and drug manufacturers began doing so when possible.[130]

While high doses of mercury can indeed cause neurological damage, subsequent research has concluded that "mercury was cleared from the blood in infants exposed to thimerosal faster than would be predicted for methyl mercury," such that "[b]lood levels of mercury did not exceed [EPA] safety guidelines for methyl mercury for all infants in these studies."[131] Moreover, last year the Institute of Medicine's Immunization Safety Review Committee issued a definitive report concluding that the “body of evidence favors rejection of a causal relationship between thimerosalcontaining vaccines and autism,"[132] the ailment typically associated with the preservative in suits by Trial Lawyers, Inc.[133] Little wonder that the American Academy of Pediatrics continues to advise giving thimerosal-preserved flu shots to children as young as six months old,[134] and that the World Health Organization still recommends using thimerosal as a vaccine preservative.[135]

Regardless of the scientific evidence—and despite the fact that a vaccine's preservative plausibly fits within the statutory protection that Congress erected against vaccine litigation—the lawsuits came. In 2001, four Oregon families filed a class-action suit against 12 drug companies, alleging that 6 million children in the United States received potentially toxic doses of mercury from thimerosal-laced vaccines.[136] In another suit, plaintiffs are seeking $30 billion in damages—from an industry with total annual sales of barely $6 billion.[137] Such continuing outbreaks of vaccine litigation, even in the face of congressional action designed to stop them, show just how difficult it is to inoculate society against the infectious reach of Trial Lawyers, Inc.

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101. See generally Thomas F. Burke, Lawyers, Lawsuits, and LegaL Rights: The BattlLe Over Litigation In American Society 142-70 (2002).
102. See generally id.
103. Restatement of the Law 2d, Torts, § 402A comment k (American Law Institute 1965).
104. See Givens v. Lederle, 556 F.2d 1341 (5th Cir. 1977); Reyes v. Wyeth Laboratories, Inc., 498 F.2d 1264 (5th Cir. 1974); Davis v. Wyeth Laboratories, 399 F.2d 121 (9th Cir. 1968).
105. See Burke, supra note 101, at 144 (citing Edward W. Kitch, Vaccines and Product Liability: A Case of Contagious Litigation, Regulation, May/June 1985, at 13).
106. See id. at 163.
107. See Toner v. Lederle, 828 F.2d 510 (1987).
108. See Johnson v. Amer. Cyanamid Co., 718 P.2d 1318 (Kan. 1986).
109. See Burke, supra note 101, at 144.
110. Statement of Robert B. Johnson, president, Lederle Laboratories Division, American Cyanamid, House Subcommittee on Health and the Environment, Vaccine Injury Compensation, Sept. 10, 1984, cited in Burke, supra note 101, at 250 n.30.
111. Id.
112. See U.S. General Accounting Office, Childhood Vaccines: Ensuring an Adequate Supply Poses Continuing Challenges 5 (Sept. 2002), available at http://www.gao.gov/new.items/d02987.pdf; Jim Copland, Liable to Infection Flu Vaccine in Short Supply Partly Because of Trial Lawyers and "Tort Tax," Dallas Morning News, Dec. 14, 2003, available at http://www.manhattan-institute.org/html/_dmn-liable_to_infection_flu.htm.
113. See Burke, supra note 101, at 150.
114. See Testimony of James Mason, director, Division of Immunization of the Center for Prevention Services, Centers for Disease Control, Public Health Service, House Subcommittee on Health and the Environment, Vaccine Injury Compensation, Dec. 19, 1984, cited in Burke, supra note 101, at 250 n.29.
115. See National Childhood Vaccine Injury Act of 1986, 42 U.S.C. § 300 (2004).
116. See Burke, supra note 101, at 160-61.
117. See id.
118. See id. at 163 (citing U.S. Dept. of Health & Human Services).
119. See id. at 161.
120. See id.
121. See id.
122. See id. at 163.
123. See id.
124. See Centers for Disease Control, Lyme Disease—United States, 2001–2002, at http://www.cdc.gov/mmwr/preview/mmwrhtml/mm5317a4.htm; Centers for Disease Control, Lyme Disease— United States, 1999, at http://www.cdc.gov/mmwr/preview/mmwrhtml/mm5010a1.htm. For an example of class-action litigation over LYMErix, see the practice area under the firm website for the law firm Sheller Ludwig & Badley, at http://sheller.com/PracticeAreas.asp.
125. See Kenneth Todar, Lyme Disease, Todar's Online TextBook of Bacteriology, at http://textbookofbacteriology.net/Lyme.html ("Between 1996 and 2001 the number was level at about 17,000 new cases per year, but increased by nearly 7,000 cases in 2002.").
126. See William Tucker, La Grippe of the Trial Lawyers, Weekly Standard, Oct. 25, 2004, available at http://www.weeklystandard.com/Content/Public/Articles/000/000/004/793dgqvs.asp; Richard Kent Zimmerman, American Academy of Family Physicians, Lowering the Age for Routine Influenza Vaccination to 50 Years: AAFP Leads the Nation in Influenza Vaccine Policy, Nov. 1, 1999 (citing W. W. Williams et al., Immunization Policies and Vaccine Coverage among Adults: The Risk for Missed Opportunities, 108 Ann. Intern. Med. 616, 616-25 (1988)).
127. See News Release, U.S. Department of Health & Human Services, HHS Says Supply of Flu Vaccines, Medicines Will Help Keep People Safe During Coming Flu Season, Oct. 19, 2004, available at http://www.hhs.gov/news/press/2004pres/20041019a.html.
128. See Copland, supra note 112.
129. See U.S. Food and Drug Administration, Thimerosal in Vaccines, at http://www.fda.gov/cber/vaccine/thimerosal.htm ("At the initial National Vaccine Advisory Committee-sponsored meeting on thimerosal in 1999, concerns were expressed that infants may lack the ability to eliminate mercury.").
130. See Politicizing Vaccines, Wall St. J., Nov. 18, 2002, available at http://www.ph.ucla.edu/epi/bioter/politicizingvaccines.html.
131. U.S. Food and Drug Administration, supra note 129.
132. Id.
133. See Copland, supra note 112.
134. See American Academy of Pediatrics, Recommended Childhood and Adolescent Immunization Schedule, United States, 2005, at http://www.cispimmunize.org/IZSchedule.pdf.
135. See World Health Organization, Statement on Thiomersal, Aug. 2003, at http://www.who.int/vaccine_safety/topics/thiomersal/statement200308/en/index.html ("The Global Advisory Committee on Vaccine Safety . . . . concluded that the latest pharmacokinetic and developmental studies do not support concerns over safety of thiomersal (ethyl mercury) in vaccines. The Committee has concluded, and advises accordingly, that there is no reason on grounds of safety to change current immunization practices with thiomersal-containing vaccines, since the benefits outweigh any unproven risks.").
136. See Lawsuits Indicate Growing National Movement to Hold Vaccine Producers Liable for Mercury Poisoning Epidemic, Idaho Observer, Aug. 2001, available at http://proliberty.com/observer/20010807.htm.
137. See Copland, supra note 112.





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