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Bureaucratic Roadblocks in Vaccines' Path

September 21, 2004|Henry I. Miller | Henry I. Miller is a fellow at the Hoover Institution.

Infectious viral diseases are not the dreaded killers and cripplers they were half a century ago, but they still exact a huge toll. Every year in this country influenza kills about 35,000 and requires the hospitalization of nearly a quarter-million. During the last two years, the mosquito-spread West Nile virus has caused more than 11,000 serious illnesses and about 300 deaths. Nearly 4 million Americans have been infected with hepatitis C virus, and there are 25,000 new cases annually. American drug and biotech companies should be burning the midnight oil working on vaccines to prevent such diseases, but flawed public policy has discouraged vaccine development to the point that supplies of lifesaving vaccines are in jeopardy. The fundamental problem is that government policies discourage companies from investing aggressively to develop new vaccines. Producers have abandoned the field in droves, leaving only four major producers and a few dozen products. As a result, the country has experienced dangerous shortages of several essential vaccines, and some school systems have been forced to waive immunization requirements because there aren't enough vaccines available.

Vaccination to prevent viral and bacterial diseases is modern medicine's most cost-effective intervention. Although their social value is high, their economic value to pharmaceutical companies is low because of vaccines' low return on investment and the exposure to legal liability they bring manufacturers.

These problems are largely the result of wrongheaded public policy: Federal bureaucrats seem not to understand the concept of carrots and sticks. For example, the U.S. Centers for Disease Control and Prevention, the largest domestic purchaser of vaccines, uses its buying clout to compel deep discounts for purchases. Arbitrary and excessive regulation also blocks progress. Consider, for instance, the Food and Drug Administration's position on a vaccine to prevent meningitis C, a bacterial illness that infects thousands of Americans and kills hundreds each year. No state-of-the-art vaccine against this infectious disease is approved for use in the United States, although three excellent products are available in Canada and Europe. The safety and efficacy of these vaccines have been amply demonstrated, with more than 20 million doses administered. Yet the FDA refuses to recognize the foreign approvals.

Moreover, the FDA has a history of removing safe and effective vaccines from the market based merely on perceptions of excessive side effects -- a prospect that terrifies manufacturers.

Finally, the potent trial-lawyer lobby opposes changes in vaccine liability that would reduce the frequency of huge judgments.

We need a fundamental change in mind-set: The rewards for creating, testing and producing vaccines must become commensurate with their benefits to society, as is the case for therapeutic pharmaceuticals.

First, our government should accept reciprocity of vaccine regulatory approvals between the United States and the European Union. This would cut development costs significantly. Second, public agencies must stop extorting huge discounts for vaccines.

Companies should be given tax credits to defray research and development costs. And vaccine developers should be guaranteed exclusive market rights for a fixed period. Healthcare insurers should be required to exempt vaccinations from deductibles under their plans. And finally, a regulatory-compliance defense should be allowed so that after a manufacturer meets the rigorous regulatory requirements for vaccine approval, any mishap from use of the product is considered to be nonculpable, and damages would be compensated by the government.

These needed reforms won't come easy. Getting the government to adopt them will be about as easy as dragging a child to the doctor for a painful shot.

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