Category Archives: Economics

Impact of the tort system on flu vaccine availability in the United States

It is well known that the U.S. tort system undermines incentives for U.S. pharmaceutical corporations to bring innovative, yet risky drugs to market.  This is particularly apparent in the case of vaccines against infectious diseases, where the “tort tax” is by far and away the most significant cost component in the manufacturing and distribution of vaccines.  With this in mind, it is interesting to consider the consequences for the United States of today’s decision by the UK’s Medicines and Healthcare Products Regulatory Agency (MHRA) to suspend Chiron Corporation’s license to manufacture influenza virus vaccine in its Liverpool facility, which in turn will prevent the company from releasing any of the product during the 2004-2005 influenza season.  This doesn’t seem like it should be that big of a deal until one considers the fact that the United States was counting on U.S.-based Chiron Corporation to provide roughly 1/2 of its total flu vaccine for the upcoming flu season.  Now that Chiron is out of the picture, the only supply source for flu vaccine for the entire United States is a French company called Aventis Corporation, and Aventis has made it quite clear that it cannot possibly scale its manufacturing to meet the needs of the United States during the upcoming flu season. (Fortunately for Baylor University students, faculty and staff, Baylor was prescient enough this past spring to contract with Aventis to provide an adequate vaccine supply this fall for the Baylor community).

Needless to say, it seems pathetic that only two (one U.S., the other French) corporations are willing to accept the risk of being sued for products liability by marketing flu vaccines in the United States.  Unfortunately, this situation has created a serious capacity constraint which in turn has given rise to a potentially serious public health problem for the United States which is now looming.  According to the Centers for Disease Control in Atlanta, GA, influenza typically accounts for as many as 140,000 hospitalizations and 40,000 deaths annually in the United States.  Since these are the statistics which obtain under more “normal” (adequately supplied) flu vaccine scenarios, one can only wonder how many more thousands of people will likely die during the upcoming flu season because the highly dysfunctional US tort liability system has persuaded most companies to not bother with trying to compete in the market for flu vaccines!

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