WASHINGTON - Manufacturers of vaccines and contraceptives are,potentially, the most vulnerable to punitive damage awards whichcould be limited if Congress enacts product liability reformlegislation.

So say a group of pharmaceutical executives gathered Friday at apress conference called by the Pharmaceutical Research andManufacturers of America (PhRMA) to highlight the risk itsmembers face from punitive damage awards resulting from productliability lawsuits. The press conference is one in a series of publicrelations events orchestrated by proponents and opponents alike ofthe product liability reform legislation pending in the Senate. Debateon the bill will continue next week.

PhRMA, the Biotechnology Industry Organization (BIO) and HealthIndustry Manufacturers Association (HIMA) are all lobbying forinclusion of the FDA defense in the pending Senate bill (seeBioWorld Today, April 27, p. 2) in order to protect their membersagainst enormously costly punitive damages awards. However, itremains doubtful that the Senate will accept an FDA defenseamendment offered during floor debate.

Some opponents of product liability reform are "willfullymisrepresenting the manner in which the FDA defense would work,"said William Ruane, assistant general counsel, American HomeProducts Corp., in New York "The FDA defense still permitsconsumers to sue for compensatory damages for their out-of-pocketeconomic damages such as lost wages and hospital expenses.

"They would also retain the right to sue for non-economic damagessuch as pain and suffering. Punitive damages could be sought if themanufacturer willfully circumvented FDA product approval andmarketing requirements. Then all bets would be off," said Ruane.

Each pharmaceutical representative said that the lack of protectionsagainst massive punitive damages has forced manufacturers ofvaccines and contraceptives to scuttle or sharply curtail their researchactivities.

Any suggestion that punitive damages are a deterrent to unlawful orirresponsible behavior by manufacturers is "ridiculous," said StevenKany, senior assistant general counsel at Pfizer Inc., New York. Heestimated that Pfizer faces 100 to 200 lawsuits each year that areresolved without proceeding to litigation for settlement amountsranging from $20,000 to $100,000.

"Pfizer makes settlements based on our estimates of the costs todefend the company from the lawsuit and the real possibility of apunitive damage award," he said.

Several women's health organizations have added their voices tothose of the medical products manufacturers in support of the FDAdefense. The Society for the Advancement of Women's HealthResearch and 90 percent of the nation's family planning clinics arebacking the FDA defense as a means to encourage manufacturers todevelop and market more contraceptives.

The only contraceptive now undergoing development in the U.S. isthe RU 486 abortifacient under license to the Population Council.

Like contraceptives, the number of companies engaged in themanufacture of vaccines has dropped significantly in the past 15years. Even the enactment of the 1986 vaccine compensation act "didnot go far enough to protect manufacturers from punitive damages,"said Janice Toran, assistant general counsel at G. D. Searle & Co.,Skokie, Ill. n

-- Michele L. Robinson Washington Editor

(c) 1997 American Health Consultants. All rights reserved.