• E-mail
• Print
• Comment
• Font Size
• Digg
• del.icio.us
• Discuss article

Drug Companies Demand Lawsuit Protection for Flu-Pandemic Vaccines

Posted on: Tuesday, 13 December 2005, 09:00 CST

By Theresa Agovino

Large pharmaceutical companies are approaching development of vaccines and drugs for potential pandemics with trepidation, even as fears abound of a bird flu outbreak and doctors lament a shortage of treatment options.

Drug makers are especially afraid of lawsuits stemming from vaccines, which unlike drugs, are given to healthy people, making any harm they cause an even bigger legal risk.

Proposals in Congress would exempt companies that manufacture vaccines and drugs for pandemics from lawsuits. Senator Bill Frist, R-Tenn., is trying to put a rider on a spending bill that would immunize drug makers and another freestanding bill introduced by Senator Richard Burr, R-N.C., seeks to accomplish the same goal.

That's a necessary safeguard to promote interest in developing those medicines, drug makers say.

"We won't do it without indemnification," said Len Lavenda, a spokesman for Sanofi Pasteur, the vaccine arm of Sanofi-Aventis SA.

But some insist immunizing drug companies won't be enough to spark interest in a field fraught with an uncertain pricing structure. Unlike drugs for conditions such as cholesterol and high blood pressure, which have guaranteed markets, medicines for pandemics will only be used sporadically, if at all.

The government adds to the pricing pressure. The Centers for Disease Control and Prevention buys 55 percent of the recommended childhood vaccines and pays substantially less than the private sector, so some experts suspect payments for pandemic treatments will be less than generous.

When anthrax fears surfaced after the Sept. 11 attacks, the U.S. government threatened to break the patent covering Cipro, an antibiotic made by Bayer AG. And Roche Holding Ltd. has already been under tremendous pressure to lower the cost of its Tamiflu, which is believed to be effective against bird flu, and give others permission to make it.

"Companies are worried about low prices," said Frank Sloan, professor of health policy, law and management at Duke University.

"They are worried they won't recoup their research and development costs," he said. "That is the real problem."

In a statement, Senator Edward Kennedy, D-Mass., called the attempts to indemnify companies "a sweetheart deal for the drug industry."

A spokesman for Burr said his bill contains provisions to compensate people hurt from treatments through government funds and that companies will only be indemnified when the product is used in a pandemic, not for a general medical problem.

The drug industry insists such moves are crucial. In a pandemic, a vaccine may be approved without the same level of testing that would be normally required and given to virtually all Americans.

"This is 300 million plaintiffs you are talking about," said John Clerici, a lawyer who represents Sanofi and other companies. "If they get anything, they'll blame it on the vaccine."

Sheltering drug companies from lawsuits isn't without precedent. Acambis PLC was protected to make an Anthrax vaccine and the manufacturers of swine flu vaccines were given the same treatment back in the 1970s.

Individuals seriously harmed by vaccines the U.S. government recommends for children are paid through a federal pool funded by a tax on inoculations. But Lavenda said lawyers are seeking ways to collect damages from companies instead of the government fund.

Chris Viehbacher, president of GlaxoSmithKline PLC's U.S. pharmaceuticals business, estimates the industry has spent $200 million preparing itself for lawsuits over a vaccine preservative in children' s vaccines.

Lavenda said the issue of immunity from lawsuits must be cleared before other negotiations can begin on issues such as price.

Lobbyists and pharmaceutical executives said the main force pushing for indemnity is not the drug industry, but the Biotechnology Industry Organization, a trade group. BIO declined comment, but lobbyists and analysts suggested its members are far more interested in pandemic medicines than drug companies.

"Biotech companies are more amenable to working in new areas. They are start-ups," said Christopher Milne, assistant director at the Tufts Center for the Study of Drug Development. "Big pharmaceutical companies are resistant to getting heavily involved where the government is paying. They remember the Cipro incident."

Generex Biotechnology Corp. recently hired a lobbying firm to help it get government contracts to develop its bird flu vaccine.

Anna Gluskin, Generex's chairwoman, CEO and president, said she isn't worried about lawsuits because the company's vaccine is made from synthetic proteins, which she maintains is a safer manufacturing process.

Gluskin is also unfazed by the lower government payments.

"We are a small company. We don't need to make a billion dollars," Gluskin said.

Some pharmaceutical companies have chosen to develop a vaccine for bird flu. Sanofi Pasteur has a government contract to produce 8,000 doses of an experimental vaccine, but it has received indemnity from lawsuits. Glaxo said it will start a small trial in Europe during the first quarter of next year, and discussions with regulators haven't progressed enough to have included the indemnity issue.

Viehbacher said any company that successfully creates a vaccine would have leverage over the government. Vaccine production is complicated, so breaking a patent wouldn't guarantee supply, he said.

Peter Paradiso, vice president of new business and scientific affairs at Wyeth, said bird flu has cast a spotlight on the dearth of vaccine makers serving the U.S. market and government should take steps to rectify it.

In 1967, there were 26 companies producing vaccines for the U.S. market and now there are five, according to an October article in the Journal of the American Medical Association. Litigation fears and low prices pushed many from the business.

However, some companies are embracing the vaccine business. Earlier this year, Glaxo inked a deal to buy ID Biomedical Corp., a Canadian maker of flu shots. In October, Novartis AG agreed to buy the 58 percent of Chiron Corp. that it didn't already own.

Viehbacher said flu vaccine prices rose after last year's debacle, when Chiron failed to deliver half of the U.S. inoculations because of a manufacturing problem, causing a huge shortage.

And vaccines are proving they can be blockbusters. Prevnar, Wyeth's children's pneumococcal vaccine, revenues total over $1 billion. Analysts think vaccines against human papilloma virus, a common sexually transmitted disease that is a major cause of cervical cancer, could be big sellers for Merck & Co. and Glaxo who are each developing one.

Source: Buffalo News

More News in this Category