THE DEVELOPMENT OF A NO-FAULT PLAN
The first important moment in the history of vaccine injury politics was the creation in 1982 of Dissatisfied Parents Together (DPT). In April 1982 WRC Television, an NBC affiliate in Washington, D.C., ran a news report claiming that 272 American children each year were left severely disabled and retarded by the vaccine for pertussis.[12] The pertussis vaccine
The parent group would eventually expand to include families of those injured by a range of vaccines, but at the outset the group's focus was on the pertussis vaccine. DPT's primary goals were to further research and expose the dangers of the DPT vaccine. But the parents also sought alternatives to costly lawsuits to get compensation for their children's injuries.[14] Soon after DPT's formation, the group began working with the American Academy of Pediatrics (AAP) on ways to restructure the tort litigation method of compensating families of vaccine-injured children. Pediatricians had been concerned with the problem of vaccine injuries for several years. In 1977 the AAP had concluded that vaccineinjured children should be compensated for their injuries without having to go to court and without having to prove that vaccine makers were at fault.[15] This "no-fault" approach to compensating vaccine injuries has been established in six European nations and, to a limited extent, in the state of California.[16]
No-fault systems, remember, aim to improve on the traditional tort method of compensation by replacing the disputing process with a firstparty insurance scheme. As the name implies, the issue of fault is eliminated. One is paid simply because an injury is sustained. Medical costs and wage losses are compensated, but the injured person generally agrees to limit or give up claims for punitive or pain-and-suffering damages, which can be quite high. In exchange the injured person receives compensation that is more prompt and more sure. No-fault systems are classic antilitigation devices because they attempt to take disputes out of the courtroom and bureaucratize them. But while all no-fault systems share this basic aim, they range widely in the way they are administered and funded. They vary, for example, in the degree to which they socialize the costs of injury. As the California no-fault auto case study suggests, nofault in the United States is usually run by private insurers. Many systems outside the United States are like New Zealand's, in which compensation comes out of a taxpayer-financed government program.
No-fault systems also vary in the degree to which they move away from the judicial model of decision making. In the New Zealand system one applies to a government bureau for compensation, and the ability to appeal the agency's decision is limited. In the U.S. workers’ compensation system, by contrast, administrative hearings take on a quasi-judicial tone, with lawyers for both sides arguing about the severity of an employee's injury and the amount of compensation deemed adequate.[17] In some nofault systems, such as New Zealand's, traditional tort recovery is almost completely barred; in others, such as the "add-on" no-fault automobile insurance programs in some states, the injured can choose between no fault and tort recovery. Thus no-fault systems vary tremendously in the degree to which they move away from traditional tort litigation.[18]
DPT was receptive to a no-fault system because it promised more adequate compensation for vaccine-injured children. The parents and the pediatricians, though, had quite different notions about what a good no fault system would look like. For more than a year the two groups traded comments on proposals. The most basic sticking point between DPT and the pediatricians was on who would administer the compensation scheme. This was an important point, because while a no-fault system would eliminate the issue of whether vaccine makers were negligent, it still left the troublesome matter of causation. In each case, the decision maker would still have to judge whether the child's symptoms were actually caused by a vaccine reaction. If the child's injuries were not the result of the vaccine, they would not be compensable. The pediatrician group wanted the compensation system to be administered by experts within the Department of Health and Human Services.[19] For the parents this was anathema. They told the pediatricians that they would never accept a plan that lodged control over compensation in the hands of health officials or medical experts.[20]
The parents’ aversion to a bureaucratic remedy stemmed from their perspective on the DPT vaccine. Health officials and pharmaceutical manufacturers believed that vaccine injuries were the inevitable—and rare—consequence of a nationwide vaccination program. The few cases of vaccine injury, they believed, were far outweighed by the dangers of unchecked disease. Many parents, however, believed that the pertussis vaccine was far more dangerous than the medical establishment would admit. Barbara Loe Fisher, a founding member of DPT, argued that the trials of DPT in Britain that had been cited to prove the safety and effectiveness of the vaccine used a less reactive formulation, were flawed in the manner in which adverse reactions were monitored, involved children
The parents maintained that evidence of the pertussis vaccine's hazards had been hushed up in a misguided effort to promote vaccination. Moreover, the system for reporting vaccine injuries was woefully inadequate, seemingly designed to minimize the vaccine's dangers. Thus many of the parents in DPT harbored a deep mistrust of the medical establishment. Fisher expressed this view of the scientists, drug manufacturers, doctors, and government health officials who had guided vaccine policy: "If they stubbornly refused to see the problem because of their eagerness to believe the vaccine was less dangerous than the disease, then they are guilty of engaging in bad science. If, on the other hand, they deliberately covered it up, they are guilty of systematically sacrificing a certain portion of our children without our knowledge."[22] DPT saw the Department of Health and Human Services as part of the vaccine problem rather than part of the solution. The Department's provaccine stance gave it an incentive to minimize the dangers of the pertussis vaccine. Thus DPT ardently opposed giving the department control over compensation.
Schwartz testified before the Senate Labor and Human Resources Committee while his organization was negotiating with the pediatricians. He stressed that the body deciding claims should be "completely independent of any governmental or private agency responsible for promoting vaccines or controlling health care costs."[23] An attorney who had represented several parents in lawsuits echoed Schwartz's argument, contending that putting Health and Human Services in control would be "somewhat analogous to putting Al Capone in charge of alcohol tax enforcement."[24]
There were other differences between the parents and the pediatricians. Whatever the shape of the compensation program, the parents wanted to preserve the ability to sue in a traditional tort claim. DPT was nervous about whether a no-fault system would work as promised and consequently wanted to be able to bypass it if necessary. Further, the parents wanted to preserve the tort system as a way of attracting public
The pediatrician group preferred an exclusive remedy but recognized that without the parents’ support no change in the vaccine litigation system was likely.[26] After months of haggling, AAP and DPT released a draft of a bill establishing a no-fault vaccine system financed through a surtax on vaccines. Parents would apply to the U.S. federal district court in Washington, D.C., which would appoint a special master to decide whether an injury was compensable based on a table of vaccine reactions. To win an award, parents would have only to demonstrate that their children had developed the reactions outlined in the table after a vaccination. If dissatisfied with the special master's ruling, parents could appeal it to the D.C. Circuit Court. The no-fault program would compensate for all unreimbursed medical and custodial costs and lost earnings, plus up to $100,000 for pain and suffering. Parents of children who died as a result of vaccine reactions were eligible to receive between $300,000 and $700,000. In addition, the plan provided for "reasonable attorney's fees," 20 to 25 percent of the total award. Most importantly, the bill allowed parents to choose between the new system and the tort system.
The draft agreement between DPT and AAP became Senate resolution 2117 (S. 2117), which was introduced into Congress by Senator Paula Hawkins, a Republican from Florida, in November of 1983.[27] In June 1984 Henry Waxman, a Democrat from California, introduced a companion measure in the House.
A "Precarious" Supply
Both Waxman and Hawkins had become interested in alternative compensation schemes because of their concerns about rising vaccine costs. By the fall of 1984 cost was not the only issue; some feared that the supply of vaccines, especially the DPT vaccine, was endangered. In that year Wyeth Pharmaceutical dropped out of distributing the DPT vaccine, leaving Lederle and Connaught as the only commercial suppliers.[28] Connaught, meanwhile, was reporting difficulty in finding liability insurance and was considering leaving the U.S. market. When two lots of Lederle's DPT vaccine failed to pass company standards, the Centers for Disease Control advised physicians to delay booster shots to children in order to avert a vaccine shortage.[29]
Representative Waxman called a hearing of the Subcommittee on Health and the Environment, which he chaired, to explore the causes and
The growth in litigation rates was well documented, but the dimensions of the supposed shortage proved difficult to specify. Wyeth at one point had told government officials that it planned to quit manufacturing DPT, but then changed plans and continued producing the vaccine. Wyeth's vaccine was sent to Lederle to distribute under its own name. Thus Waxman learned that Wyeth had not gotten out of the business after all.[32] Wyeth's maneuver led to charges that vaccine manufacturers were pursuing a "Chicken Little" strategy in order to get relief from vaccine liability. Jeffrey Schwartz charged that the "so-called ‘shortage’" was "primarily a public relations ruse intended to stampede the Congress into cutting off the rights of injured children to sue negligent drug companies."[33] Yet no one could dispute that the number of companies producing vaccines of all types had declined, creating fears about the nation's vaccine supply. Lederle was by 1984 the only maker of the polio vaccine. Merck made the only measles, mumps, and rubella vaccine. In 1985 a panel of experts commissioned to study the vaccine problem by the National Academy of Sciences’ Institute of Medicine concluded that "precarious" supplies of vaccines posed a "threat to the public's health."[34]
The DPT shortage, if there was a shortage, was eased in 1985 by the announcement that Connaught Laboratories had worked out an insurance arrangement and would continue to manufacture and distribute DPT. Wyeth meanwhile dropped out of the market entirely, leaving Lederle as the only other supplier. Connaught's occasional technical problems and both companies’ problems in securing insurance coverage led to continued fears of a shortage and pronouncements of crisis.[35] As already noted, Lederle's price for DPT reached $11.40 by 1986; it had been just 11 cents six years earlier. Of the increase, $8 was said to cover liability expenses.[36]
The Hawkins Bill and Its Critics
In April 1985 a revised version of the Hawkins-Waxman bill was introduced into the Senate by Paula Hawkins.[37] S. 827 tightened the original
For manufacturers the bill offered two new benefits. It authorized federal backup insurance in case they could not get liability coverage, and it foreclosed tort lawsuits based on the "duty to directly warn" theory of liability, a major line of litigation against the vaccine makers. Hawkins was trying to attract support for the compensation program from the manufacturers and from other health groups.
The vaccine makers, however, were unimpressed by both S. 827 and S. 2117. Wyeth, Lederle, Connaught, and Merck all criticized the bills for maintaining the tort option. From their perspective, the bills created a system of "double jeopardy": they would be paying a surtax to support the compensation program, but they would still be faced with the threat of unpredictable tort verdicts as well. Lederle, the only maker of polio vaccine and one of the DPT manufacturers, was particularly critical of the bills, arguing that they covered conditions that could not be linked to vaccines.[38]
The Reagan administration was even more critical. It opposed the basic concept of a no-fault program. The administration found "no compelling evidence that the existing method of compensating victims through the tort system is inadequate."[39] It criticized the program as overly generous to claimants, both in the kinds of conditions compensated and in the amount of compensation allowed.[40] The administration also criticized the special master process, arguing that any determination of compensation should be made by a judge, with the government acting as respondent in order to make sure weak claims were not compensated.[41] The administration had its own solution to the vaccine litigation problem, one more in keeping with its approach to product liability issues generally. The cause of the tort litigation problem, the administration argued, was the unpredictability of jury verdicts. By far the greatest share of this unpredictability came from punitive and pain-and-suffering awards. Thus the administration proposed a discouragement reform that
The administration proposal was just one of several being floated in the mid-1980s. The American Medical Association and the Pharmaceutical Manufacturers Association endorsed a plan created by a commission of representatives from medical and pharmaceutical groups. Under the plan, officials within the Department of Health and Human Services would administer a no-fault compensation program based on standards developed by medical experts. Claimants could appeal the department's decision in federal courts but only on restricted grounds. The AMA plan made the no-fault system an exclusive remedy; vaccine manufacturers could be sued only by the federal government to recover for claims resulting from negligent conduct.[43] The AMA criticized the Hawkins bill because it lodged the compensation program in the courts and created a nonexclusive remedy.
Illinois representative Edward Madigan, the ranking Republican on the House subcommittee, also worried that the bill gave claimants "two bites of the apple."[44] Early in 1985 Madigan introduced House resolution 1780 (H.R. 1780), a bill written by Lederle and supported by Wyeth. The Madigan plan created a system in which eleven regional panels of medical experts would arbitrate claims. The panels could award up to $1 million in damages paid directly by the manufacturer. If the parents rejected the panel's finding they could choose to bring a traditional tort claim, but total recovery would be capped at $1 million. Those choosing to avoid the panels entirely would not be limited by the cap.[45] The American Academy of Pediatrics and several of the vaccine manufacturers also created alternative vaccine compensation reforms, none of which reached Congress.[46] Many ideas were floated, but none advanced very far in the legislative process.