Sunday, October 17, 2004

Vaccines and Trial Lawyers

So what is the true story on the shortage of the flu vaccine this year? There is a fundamental problem. How exactly did the US get to the point where only 2 foreign pharmaceutical companies make the flu vaccine for the entire population? Link here (Hat tip: Sean O.) to read a great historical perspective as to how we arrived here.
So why is it that 100 percent of our flu vaccines are now made by two companies in Europe? The answer is simple. Trial lawyers drove the American manufacturers out of the business.

In 1967 there were 26 companies making vaccines in the United States. Today there are only four that make any type of vaccine and none making flu vaccine. Wyeth was the last to fall, dropping flu shots

after 2002. For recently emerging illnesses such as Lyme disease, there is no commercial vaccine, even though one has been approved by the Food and Drug Administration.

All this is the result of a legal concept called "liability without fault" that emerged from the hothouse atmosphere of the law schools in the 1960s and became the law of the land. Under the old "negligence" regime, you had to prove a product manufacturer had done something wrong in order to hold it liable for damages. Under liability without fault, on the other hand, the manufacturer can be held responsible for harm from its products, whether blameworthy or not. Add to that the jackpot awards that come from pain-and-suffering and punitive damages, and you have a legal climate that no manufacturer wants to risk.

In theory, prices might have been jacked up enough to make vaccine production profitable even with the lawsuit risk, but federal intervention made vaccines a low-margin business. Before 1993, manufacturers sold vaccines to doctors, doctors prescribed them to patients, and there was some markup. Then Congress adopted the Vaccine for Children Act, which made the government a monopsony buyer. The feds now purchase over half of all vaccines at a low fixed price and distribute them to doctors. This has essentially finished off the private market.

As recently as 1980, 18 American companies made eight different vaccines for various childhood diseases. Today, four companies--GlaxoSmithKline, Aventis, Merck, and Wyeth--make 12 vaccines. Of the 12, seven are made by only one company and only one is made by more than two. "There are constant shortages," says Dr. Paul Offit, head of the Vaccine Education Center at Children's Hospital of Philadelphia. "With only one supplier for so many vaccines, the whole system is fragile. When even the smallest thing goes wrong, children miss their vaccinations."

So when you hear John Kerry whining and crying about the flu vaccine shortage, remember who exactly put a trial lawyer on his team. Kerry talking about reforming healthcare with Edwards on his ticket is laughable. As I read somewhere, 'It's like letting the fox guard the hen house."

Now here's a question for all the physicians and other health-care providers out there. How many are going to vote for Kerry/Edwards? You would not think many would, however, here in the very blue state of Rhode Island many of them will vote for this ticket. It blows my mind!

Look here to get a great run down on who is trying to get John Edwards into the White House.
According to several analyses of the Federal Election Commission's first-quarter campaign finance reports, Senator Edwards landed on the top of the Democratic money-raising heap, pulling in $7.4 million from donors. This is impressive, but the more amazing number is that nearly two-thirds of his cash came from attorneys and their families, or other law firm staff. And only a fraction of the funds originated in Mr. Edwards's home state of North Carolina. The rest came from a Who's Who of every class-action law firm in the nation.

There is, for instance, Mr. Edwards's national finance co-chairman, Fred Baron (asbestos). Lawyers from his firm donated $56,250, people who lived at the same address as those lawyers gave another $24,000, and Mr. Baron provided a private airplane for the Senator on 15 different occasions. Of course, the Senator hasn't relied exclusively on Mr. Baron's aircraft--he's used jets from four other law firms too, including those from Girardi & Keese (toxic chemicals) and Wilkes & McHugh (nursing homes).

There are donations from the "Texas Five" law firms (cigarettes), which landed $3.3 billion representing the Lone Star state in the national tobacco settlement. And there have been contributions from lawyers at Milberg Weiss (shareholder lawsuits) and also from Ness Motley (lead poisoning/medical devices/whistleblowers/you name it).

Curiously, even the firms' support staff and trainees are apparently desperate to help Mr. Edwards. At least 20 people on his fund-raising report are listed as "paralegals" and another nine as "legal assistants"--and all gave the maximum $2,000 to his campaign. One receptionist at the Alabama plaintiffs' firm of Morris, Haynes & Hornsby also gave the full legal amount.

We were trying to figure out what a secretary in Alabama earns these days when the Senator's campaign announced it would return $10,000 to employees of a Little Rock, Arkansas, law firm after one law clerk acknowledged that she expected her boss to pay her back for her $2,000 donation. Michelle D. Abu-Halmeh said that her boss, Tab Turner of Turner & Associates (SUV rollovers), "asked for people to support Edwards," and said "he would reimburse us." Mr. Turner then told reporters that he wasn't reimbursing her, because "apparently" it was illegal to do so. Apparently?

Now ask yourself, Why in the world do you think the biggest trial lawyers want to desperately get Edwards in or near the White House? I assure you it is not to get reduced rates on the tour.