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BIRD WATCHING
Bush delivers for the drug companies
BY DAVID S. BERNSTEIN

On Tuesday, George W. Bush announced his long-awaited plan to save us all from pandemic avian flu. As predicted in these pages (see "Yes, you should be afraid," News and Features, October 21), the administration intends to address the problem by showering the pharmaceutical industry with money and favors.

Anticipating Bush’s largesse, Swiss drug giant Novartis paid $5.1 billion on Monday to buy the US’s only flu-vaccine maker, Chiron. As Citigroup analyst Kevin Wilson said on MarketWatch on Monday, vaccine manufacturing is "a market which has become much more attractive recently over concerns about an avian-flu pandemic."

Bush did not disappoint. The US government had already contracted to pay $62.5 million to Chiron, and $100 million to French company Sanofi-Avantis, for an avian-flu vaccine. On Tuesday, Bush upped the ante, asking Congress to buy another $1.2 billion worth — notwithstanding the fact that, as Bush conceded, all this vaccine would probably be ineffective against whatever mutated strain of virus actually spreads among humans.

The hope is that by spending enough money on unnecessary vaccines, the US will create the "surge capacity" of physical facilities, personnel, and distribution structures necessary to someday make the vaccine we actually will need, in enormous quantities, very quickly.

To create the infrastructure in the event of a pandemic is important — and such capacity currently doesn’t exist in this country. Why? According to Bush, the answer can be summed up in two words: trial lawyers.

"Congress must pass liability protection for the makers of lifesaving vaccines," Bush said on Tuesday. He called civil litigation "one of the greatest obstacles to domestic vaccine production."

This was music to the ears of the major drug-manufacturing companies — which, despite the daunting obstacle of product-liability lawsuits, currently operate on a combined 23 percent profit margin. Their lobby group, Pharmaceutical Research and Manufacturers of America (PhRMA), issued a press release applauding the Bush proposal. "Liability reform is a critically important part of this plan," the release said. Until such reform happens, it went on, companies will be hamstrung by "the certain knowledge that trial lawyers will pursue claims exploiting the inherent risks of vaccine development."

Actually, it hasn’t been trial lawyers that have stymied Chiron. It’s been contamination problems at the company’s Liverpool facility — which led to last year’s flu-vaccine shortage — and quality-control problems at its Germany plant. In fact, ongoing production problems led the company to announce last month that it would produce barely half its planned quantity of Fluvirin this year. About a week later, the US awarded Chiron the $62.5 million avian-flu contract. It’s an attractive market indeed.


Issue Date: November 4 - 10, 2005
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