Good morning Mr. Chairman and members of the Committee. I am pleased to be here this
morning to talk with you about the National Vaccine Injury Compensation Program (the
Program), one of the most unique and innovative programs ever created by Congress. With me
to provide additional information if needed, are Dr. Geoffrey Evans, Medical Director for
the Program, and Mr. David Benor from our Office of the General Counsel.
In the United States
, the health of our Nation's children takes a high priority. In the recent past, our
children faced serious, debilitating, and deadly diseases with little protection and
parents lived in constant fear that their children would contract infectious diseases such
as polio. The modern miracle of vaccines has changed this by eliminating smallpox and
reducing the incidence of many childhood diseases to almost zero. This is a tremendous
accomplishment, but we often overlook one very significant component which has been
critical to the success of our Nation's immunization program over the past decade. This is the National Vaccine Injury
Compensation Program.
As recently as 1986, this country was on the verge of losing the battle against
preventable childhood diseases. The companies that produced vaccines were under serious
threats of legal action because of media reports of serious injuries or death thought to
be related to adverse reactions to vaccines. The potential costs of such lawsuits were
more than many vaccine companies were willing to risk, so some companies simply stopped
making vaccines, resulting in serious vaccine shortages throughout the United States
.
Demanding a national solution, a coalition made up of physician and public health
organizations, industry, government, and private citizens developed the idea for a
no-fault alternative to the tort system. This new system would reduce the tension
associated with traditional civil court proceedings by having the Federal Government
assume liability for injuries and deaths thought to be vaccine-related, and by allowing
payment of attorneys' fees and costs to petitioners regardless of whether compensation was awarded.
This became the National Vaccine Injury Compensation Program (the Program), which has been
hailed by Secretary Shalala as the cornerstone of our Nation's successful childhood
immunization program.
The National Vaccine Injury Compensation Program provides a unique service to families
suffering through one of the most difficult experiences imaginable. It makes a system
available through which families can receive financial help in the most efficient and fair
manner possible, while still preserving their rights to file suit in the tort system. The
Program significantly reduces, but cannot eliminate, the tension and adversity inherent
within any litigation process for resolving claims arising from conditions or injuries
thought to be related to childhood immunizations. The key words here are, "the most efficient and fair
manner possible." As with every Federal benefit program, even those subject to an administrative review,
there are going to be eligibility requirements which seem unfair to some applicants. I can
assure you that everyone involved in the administration of the Program makes a concerted
effort to ensure that fairness is the operative principle in dealing with every family
filing a claim under the Program. Petitioners are provided with every opportunity to
document and present their claims to Special Masters in the U.S. Court of Federal Claims
(the Court), who provide a great deal of flexibility to petitioners in meeting deadlines.
More than 1,400 families have received compensation under the Program through awards
totaling in excess of $1 billion. Currently, 42 percent of petitions adjudicated under the
Program have been awarded compensation. This compares to a compensation rate of only 23
percent for those who file medical malpractice lawsuits through the usual tort system. On
average, it takes only two years to resolve claims and issue any appropriate payments.
We have been listening to concerns raised by those who may feel the system has been
unfair and more adversarial than they had expected. It is critical to remember that
although the Program is far less adversarial than the tort system, which it was designed
to replace, it was established for a very specific group of intended beneficiaries. The
Program encourages anyone who believes they have a condition caused or aggravated by a
childhood vaccine to file a petition for compensation. Petitioners' rights are vigorously
defended and advocated by their attorneys, who are paid regardless of whether petitioners
are compensated. However, the Program was never intended to serve as a compensation source
for a wide range of naturally occurring illnesses and conditions, which unfortunately,
affect many of our children.
This Program was established by the National Childhood Vaccine Injury Act of 1986 (the
Act). At the time of enactment, the Congress recognized that there was public debate over
the incidence of illnesses that coincidentally occur within a short time of vaccination
and that the deeming of vaccine-relatedness adopted in the Act might result in the
provision of compensation to some children whose conditions or illnesses were not, in
fact, vaccine-related. In creating the Program, the Congress drew the original list of
injuries on the Vaccine Injury Table broadly to ensure that all injuries believed to be
vaccine-related at the time would be compensated. At the same time, scientific studies
were mandated to ensure that injuries related to vaccines were identified and that only
those with a scientific basis eventually would be compensated. The completion of these
studies and application of their findings were essential, because without scientifically
based evidence upon which to establish award decisions, countless unjustified awards might
be made. Potentially, this could lead to the exhaustion of the Vaccine Injury Compensation
Trust Fund (the Trust Fund), putting at risk the ability to compensate those with
demonstrated vaccine-related injuries. Coupled with the mandate in the original Act for
the Secretary of HHS to modify the Vaccine Injury Table to bring it in line with science,
the Internal Revenue Code, which governs payments out of the Trust Fund, is very specific
in requiring that no payments may be made from the Trust Fund except for the compensation
of vaccine-related injuries or deaths and for the administration of the Program.
The process of determining whether, and at what level, compensation should be awarded
will always involve conflicting opinions, and a natural tension. This has been recognized
by everyone involved in day-to-day administration of the Program as well as by the
Advisory Commission on Childhood Vaccines (ACCV), which was established by the Act to "advise the Secretary (of HHS)
on the implementation of the Program." The members of the ACCV include parents of children injured by vaccines, their
attorneys, representatives of vaccine companies, and recognized medical experts in
childhood diseases. This diverse body has provided constant oversight of the operation of
the Program, advised the Secretary on each and every modification of the Vaccine Injury
Table, and has made numerous legislative and administrative recommendations over the years
aimed at improving the operation of the Program. Most recently, it developed and approved
a series of recommendations that form the basis for legislation recently proposed by the
Secretary of HHS. These legislative proposals include many enhancements aimed at making
the Program more streamlined and less adversarial for its intended beneficiaries. The
proposals would double the statutory time limit for filing a claim, expand compensation to
families, and simplify the process for adjudicating claims. A draft bill titled, the "Vaccine Injury Compensation
Program Amendments of 1999" was sent to the Congress on June 14, and will hopefully
receive expeditious and favorable consideration.
I would like to talk for a minute about concerns related to the Vaccine Injury
Compensation Trust Fund. The Trust Fund was established to ensure that a constant source
of funding would be available for the payment of compensation for vaccine-related injuries
and deaths, as well as for attorney fees and costs incurred by families in presenting
their case to the Special Masters who adjudicate petitions. The Trust Fund is financed by
excise taxes of 75 cents per dose imposed on each vaccine covered under the Program. At
this time, the Trust Fund balance is in excess of $1.4 billion. During FY 1998, the Trust
Fund received total income of $183 million, with $116 million coming from excise tax
revenue. The remaining $67 million came from interest on the balances in the Trust Fund
and more than covered the FY 1998 outlays for awards, and for attorneys' fees and costs, of just less
than $50 million. The Trust Fund should be viewed as a specialized public health insurance
fund, maintained with adequate reserves to handle liability exposure as new childhood
vaccines come to the market and as important ongoing surveillance activities of the Public
Health Service spawn new scientific studies of theoretical vaccine-related adverse events.
Recently, coverage under the Program was expanded to include four additional vaccines (hepatitis B, Haemophilus influenzae type b, varicella, and rotavirus) for which 279 petitions have been filed. In
addition, there are more than 300 vaccines in various phases of research and development,
some of which may eventually be added for coverage under the Program and result in
increased liability.
There is good reason for the public to have confidence in the overall operation of the
Program. Just last year, the Federal Judicial Center completed a report on the Program
entitled "Use of
Expert Testimony, Specialized Decision Makers, and Case-Management Innovations in the
National Vaccine Injury Compensation Program." This report concluded in part, that ". . . the case-management innovations and handling of expert testimony . . . function well in the VICP." Currently, the General
Accounting Office (GAO) is conducting a review of the Program at the request of Senator
Jeffords, Chairman of the Senate Health, Education, Labor and Pensions Committee. The GAO
has indicated that the results of the review should be released by the end of this year.
All indications are that this Program is working very much as intended by Congress.
There will always be program areas that can be improved, and we continue to implement
initiatives to address these areas. The Program has always been open to advice from all
interested parties, and mechanisms are in place to assure that the varied interests of
families, health care professionals, attorneys, and the vaccine industry are represented
in a regular public forum. The ACCV, with its widely diverse membership, brings a good
balance of perspective and has been instrumental in identifying program improvements that
have consensus support. With strong ACCV support for the Administration's proposed legislative agenda
to make this innovative program even better, it is now up to Congress to move these
important changes forward as quickly as possible so that our children can reap the
benefits of the Program in "...the most efficient and fair manner possible."
Thank you once again for allowing me to come here today to tell you about the National
Vaccine Injury Compensation Program. I will be pleased to answer any additional questions
which you may have.