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SENATE DEBATES LIABILITY LIMITS FOR BIOTERRORISM DRUG MAKERS.

As the Senate struggled last week to invoke cloture and take final action on a homeland security bill, new questions arose about whether the federal government should extend lawsuit protection to pharmaceutical manufacturers who develop products the government uses to protect citizens against bioterrorism threats.

President Bush had intended to rely on regulatory power to protect manufacturers who contract with the federal government to produce vaccines to protect the public against bioterrorism threats, and had given the secretary of Health and Human Services the power to indemnify contract manufacturers.

His executive order would make the government responsible for covering the costs of lawsuits filed against the manufacturer, and HHS Secretary Tommy G. Thompson reportedly has finalized contracts with the government agreeing to pick up any legal costs.

The White House, however, says manufacturers want more assurance because bioterrorism vaccines provide a low profit margin but a high risk of injury or death.

The bill which passed the House includes this indemnification provision: "Should a product liability or other lawsuit be filed for claims arising out of, relating to, or resulting from an act of terrorism when qualified anti-terrorism technologies approved by the Secretary . . . have been deployed in defense against or response or recovery from such act and such claims result or may result in loss to the Seller, there shall be a rebuttable presumption that the government contractor defense applies in such lawsuit.

"This presumption shall only be overcome by evidence showing that the Seller acted fraudulently or with willful misconduct in submitting information to the Secretary during the course of the Secretary's consideration of such technology."

Under a provision cosponsored by Sens. Joseph Lieberman (D-CT) and Orrin Hatch (R-UT), HHS would be given authority to enter into indemnification contracts and to require all cases to be filed in federal court with a cap on noneconomic damages at $250,000 or three times the economic damages.

Opponents say the indemnification provision would eliminate accountability for products that cause injury or death. Instead, they push other incentives, such as the patent benefits and tax credits included in the Lieberman-Hatch proposal.

The National Vaccine Injury Compensation Program was created by Congress in 1986 to resolve claims of injuries or deaths associated with childhood vaccines without attributing fault. Claims are argued before a special master at the U.S. Federal Court of Claims. So far, claims of $1.36 billion have been paid from fees included in the cost of the vaccines.
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Publication:Liability & Insurance Week
Date:Nov 18, 2002
Words:409
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