COVID-19 Vaccine Cross-Border Liability and Compensation
Feb 2, 2021
The United States is pursuing a comprehensive vaccine campaign to stop the spread of coronavirus disease 2019 (COVID-19). Speed is crucial, given concerns that current vaccines might not be as effective against emerging variants. However, polls suggest that one-third of Americans are skeptical of or unwilling to receive COVID-19 vaccines, fearing that they might suffer an adverse reaction.
Although serious vaccine injuries are very rare, the United States has two federal compensation systems for people who have been harmed by vaccines: the Countermeasures Injury Compensation Program (CICP) and the National Vaccine Injury Compensation Program. COVID-19 vaccine claims will be handled by the CICP, and the level of benefits provided by that system — and the speed which with claims are processed — could affect whether some Americans are willing to be vaccinated.
The RAND Institute for Civil Justice and the RAND Kenneth R. Feinberg Center for Catastrophic Risk Management and Compensation presented a virtual event that explored how those who believe that they have been injured by COVID-19 vaccines in the United States can seek compensation and how the two federal compensation systems differ.
Okay, good morning, everyone or afternoon everyone. Let’s get going here with the webinar on Vaccine Compensation and Liability. My name is Lloyd Dixon and I‘m Director of RAND’s Feinberg Center for Catastrophic Risk Management and Compensation.
Today’s webinar is the second of a two-part series on liability and compensation for potential side effects from COVID-19 vaccines. How these issues are addressed will affect fairness to those who happen to suffer adverse outcomes and possibly to the vaccine uptake rate. Today’s webinar will focus on liability and compensation inside the United States. A previous webinar examined issues related to vaccine liability and compensation in other countries. A recording of that webinar is available on the RAND website as well as a written Perspective on the issues.
Today’s webinar is sponsored by the Feinberg Center and RAND‘s Institute for Civil Justice. The Feinberg Center focuses on the design and performance of compensation systems and the role [of] insurance markets in providing coverage for events that cause widespread loss. The Institute for Civil Justice is dedicated to making the civil justice system more efficient and equitable through objective analytic research. Both these centers operate at RAND, which is a nonprofit institution that helps improve policy and decision making through research and analysis.
Let me introduce today’s participants. Today’s discussion will be moderated by Nick Pace. Nick is a lawyer and senior social scientist at RAND. Over his 30 plus years at RAND he has contributed to a wide range of studies on the civil justice issues often involving large scale, groundbreaking data collection. In the Feinberg Center, he has led studies on alternatives for assigning liability after disaster and on issues [in the] potentially responsible–party space when deciding whether to provide assistance to victims in the immediate aftermath of a disaster.
Ken Feinberg—we’re thrilled to have Ken participating in the webinar today—is one of the nation’s leading experts in alternative dispute resolution. Having served as special master for a large number of compensation funds and programs over the past 35 years. Examples include the 9/11 Victim Compensation Fund, the Agent Orange victim compensation program, the Deepwater Horizon Spill compensation program, and most recently he serves as the administrator of the New York State Diocese, Independent Reconciliation and Compensation fund and is the court appointed settlement master in the Fiat Chrysler Diesel Emissions class action litigation in San Francisco.
Paul Rheingold practices on the plaintiff side of personal injury cases, and in recent years has specialized in mass tort litigation. He is the author of the two-volume work Litigating Mass Tort Cases, and he has been active on steering committees for products such as Benicar, NuvaRing, Ephedra, and Fen-Phen. He has lectured on mass torts at many conferences, taught at law schools, and written a number of law review articles on the subjects. He has served on a number of ABA and New York Bar Association commissions including on lawyer advertising and on punitive damages. He is a former officer of the American Association of Justice.
We’re pleased to have these two with Nick—tremendous participants in the panel today. We had hoped that Tamara Overby who is Acting Director of the Division of Injury Compensation Programs at the Department of Health and Human Services would be able to participate, but she was unfortunately unable to participate due to unforeseen circumstances. With that let me just say, one point before we get started, we’re recording the webinar and we’ll post it on the website. So now Nick over to you to kick it off.
Okay. The miracle of Zoom. I’m Nick Pace, and good day to all of you and by the standards of the last 12 months, it is indeed a very good day. It’s a day when at least some people are actually being injected with effective and safe vaccines against the virus that has killed an estimated 2.9 million victims across the planet. But there’s still much to be done here. Obviously we need to produce unprecedented amounts of these vaccines. We need to move them to where they are needed and critically, we need to get just about everyone with a pulse in this country to roll up their sleeves. That last need is an important one because vaccine uptake we believe is influenced to some degree by the subjects of today’s webinar.
One aspect involves the assessment of liability or fault on the part of those involved in the supply chain, from vaccine development through administration, for harms caused by any side effects of those inoculations. The other aspect is the provision of compensation or monetary relief for those vaccine recipients who have incurred adverse reactions, typically covering the cost of medical care, loss of income, and the like. Let’s first take a look at liability. It’s important to keep in mind that vaccines constitute a relatively small proportion of most pharmaceutical companies’ portfolios, if the company makes them at all. Investment in drugs, even those that are administered to a relatively small number of people, can be far more profitable than vaccines. Also, vaccines are very safe, but they are not risk-free. Seriously adverse reactions do occur. Some, unfortunately, result in long-term disabling consequences or even death.
Though small, that risk is magnified in the aggregate by the extremely wide distribution of vaccine. For example, last year the tuberculosis vaccine was administered to 90 percent of all infants on the planet—huge distribution. As a result, even though they are safe, vaccine distribution can expose a pharmaceutical company to the potential threat of mass litigation or to an inability to invest in future research against emerging biological threats. We’ve seen this happen in the United States at a number of points in the last half century. So, in order to encourage vaccine research, development, and production, some governments, the United States included, have given manufacturers and others special protections against liability for vaccine side effects. They can do so by providing them with, for example, various degrees of immunity from lawsuits. The government can act as the responsible party in any litigation, effectively making a suit against a private person or organization a suit against the government themselves.
They can indemnify components of the vaccine supply chain, in other words, agreeing to pay for any settlements or verdicts that companies would have to pay., And they can make it more difficult for someone to proceed in that country’s courts on these claims, or do some combination of these four different approaches. In the case of COVID-19 vaccines, the United States took the first approach listed here: that of providing immunity as a way to shield vaccine manufacturers, distributors, and others from the cost of lawsuits, verdicts and settlements, and associated legal expenditures.
That was accomplished by the passage of the Public Readiness and Emergency Preparedness Act of 2005 or PREP as it is commonly known, which essentially immunizes all components of the supply chain that are involved in what are characterized as countermeasures against disease outbreaks or bioterrorism threats. Basically, anything that the Secretary of Health and Human Services considers to be such a countermeasure would receive that immunity following the issuance of a declaration of a public health emergency. Previous PREP declarations have covered, for example, smallpox, Ebola, anthrax, H1N1 swine flu, and weaponized nerve gasses.
The HHS Secretary made the requisite declaration related to COVID-19 last March with retroactive effective to February of 2020. And as you can see here, the scope of that declaration is quite broad. Any antiviral, drug, biologic, diagnostic, device, or vaccine used to diagnose, mitigate, prevent, treat, or cure COVID-19 or the virus that causes it, or any mutations of that virus would be covered.
PREP shield is a simple one, really. A covered person, defined by the HHS Secretary, which includes as of right now everything from the company that developed the vaccine to a midwife who delivers the injection has, with one exception, complete immunity against any claim for damages related to the vaccine. The scope here is intentionally broad and would not only protect the researchers that developed a vaccine for any flaws in its design, but also injury claims related to the way the vaccines are administered. Including, for example, a claim that one was hurt when the crowd at the local vaccination site got out of control due to lack of security and knocked the plaintiff down. There is but one exception, and that’s for instances of willful misconduct, which is an extremely rare event in the context of side effect claims involving vaccines or pharmaceuticals more generally.
Willful misconduct goes far beyond simple negligence or a defect in the vaccine’s design or failure to warn of side effects. It requires an intentional act done in the knowledge that there was no legal or factual justification for doing so and done in disregard of a known or obvious risk that the harm created would exceed any sort of benefit. Moreover, PREP ups the plaintiff’s burden of proof. In most tort litigation, a plaintiff need only meet a preponderance of the evidence standard, which might be thought of as asking the jury deciding the case whether 51 percent or more of the evidence favored the plaintiff’s case. A clear and convincing standard, however, essentially means that the plaintiff’s evidence must be highly and substantially more likely to be true than not.
Now, that’s not quite to the level of beyond a reasonable doubt standard like we use in criminal cases, but it certainly is a higher bar to clear than a mere preponderance of the evidence standard. I want to be clear here that there are some things that PREP won’t bar. For example, the United States is perfectly capable of suing the manufacturer for regulatory violations related to COVID-19 vaccines for fraud and the like, but a person who believes that he or she was injured by the vaccine or the vaccination itself would find that that the odds are stacked heavily against any side effect litigation having a successful outcome for a plaintiff.
Though one can make a pretty good argument that PREP’s shields may have helped facilitate, or at least they weren’t a bar toward the development of vaccines to fight COVID-19, such liability protections are not without their critics. One commonly voiced criticism is that when you essentially remove all concern about the threat of litigation over personal injuries or deaths, you also remove some of the incentives for manufacturers and others to ensure that their products are as safe as practical. Now, the exact impact of liability shields on safety can be difficult to measure. But what isn’t difficult to see is that when we make it nearly impossible to sue over injuries, there’s going to be some, absent some other approach, some people out there that through no fault of their own wind up with severe injuries and no practical means for forcing those who caused the harm to pay reasonable compensation.
So, in many instances where special liability protections are enacted by Congress over the years, or a state legislature, the quid pro quo for doing so is often the implementation of some sort of theoretically streamlined or user-friendly or more generous alternative compensation program for victims. Now, the term, no-fault here is commonly used because unlike in traditional tort liability, the claimant doesn’t always have to provide compelling scientific evidence to prove a link between the product causing the harm and the resulting medical condition. Now it’s not quite as simple as filling out a short form and getting a check in the mail next week, but it’s a process that conceivably wouldn’t require, in most instances, someone to hire an attorney or appear in court. That’s the way it’s usually designed. One reason why they create these programs, as I indicated, is to offset the fact that liability protections are going to make it very difficult to recover compensation for serious adverse events through the normal legal process.
Funding for running these sorts of programs and for paying any sort of resulting awards usually comes from government appropriations or perhaps a special tax on each product. In the context of vaccines such funding is an acknowledgement, I think, that vaccines are different than most drugs. Because here society is asking healthy people to put a foreign substance in their body. Not because it’s going to cure them of any disease, but instead, because we want to move to a point where the virus or the bacteria, or what have you, can no longer spread like wildfire and disrupt the economy, cause widespread human suffering and overwhelm our healthcare system. Now, despite the best intentions of their designers, these administrative compensation systems can sometimes be difficult to navigate. They can sometimes require extensive evidence of the harm, or they can take a very, very long time before any money is paid out.
One administrative compensation system you may be familiar with is workers’ compensation. Workers’ comp is a no-fault administrative compensation system in many states, not all, but many. As many people who have experience in seeking benefits in your workers‘ compensation program can attest, it’s a process that sometimes can be extremely slow, highly adversarial, and quite formal. What sort of compensation system is in place to deal with vaccine injuries? Well, the U.S. has two separate vaccine programs in place at the moment. One is the Countermeasures Injury Compensation Program, or CICP, which is the PREP Act’s program for any sort of declared countermeasure, including COVID-19 vaccines. The other program is one for injury claims related to certain vaccines that are recommended for administration to children or pregnant women, such as vaccines for seasonal flu, measles, hepatitis A and B, or for certain types of pneumonia. That’s the National Vaccine Injury Compensation Program, or VICP; we’re going to come back to those in a moment. There are two other programs I want to mention briefly because we may touch on them later. One was the Smallpox Vaccine Injury Compensation Program that went into effect in 2003. And while it’s not operational anymore, the PREP Act’s CICP was essentially based on the benefits available in and the processes contemplated by this smallpox program. The other was a Department of Justice–run program to receive and evaluate claims related to injuries from vaccines against swine flu, an H1N1 variant. There was concern this would be a potential pandemic. That, thankfully, was never realized, though some 45 million vaccinations were given.
Why is the compensation an important consideration in the context of making the COVID-19 vaccination campaign as successful as possible? If someone thinks that they’ve been injured from a vaccine, that person’s already received it, so uptake really isn’t affected by the injuries themselves. But, in fact, compensation for side effects could become a problem. Now, most people would be willing, I think, to be vaccinated in order to protect themselves, their family, their friends, et cetera, and I think the data shows that most people in this country are willing to get vaccine, though there are pockets where there’s resistance to [it]. But if there is a widespread perception that the risks of side effects from the new vaccines are neither trivial nor theoretical, uptake is likely to suffer. And we think that there could be additional pushback from those that have concerns about their ability to shoulder potentially extensive healthcare costs and income losses that arise from the adverse side effects.
There is evidence of this happening in the past. In the run up to the invasion of Iraq, a campaign was launched to inoculate about 10 million civilian medical and emergency personnel with smallpox vaccines. The theory being that for Saddam Hussein or his partners, smallpox was an easy way to strike a blow against the United States. They backed up that campaign with an administrative compensation program that is essentially identical to the CICP, to provide medical and wage benefits, and lost income benefits if the vaccine recipients incurred severe injuries from side effects. Now, during that campaign, a survey was conducted of a sample of healthcare workers who were asked to volunteer for these inoculations. About half of those who refuse to be vaccinated indicated that they believed that if they were to incur severe side effects, the chances of them receiving anything at all was low or very low. In contrast, those who did sign up for the vaccinations were far less worried about getting compensation, with only 23 percent indicating their belief of a low or very low chance.
That’s a statistically significant difference from the refusers. The researchers in the study concluded that when the health benefits of the vaccination might clearly outweigh a person’s concerns about efficacy, cost, and safety (usually the things that people mention first), then the potential for compensation or the perceived lack thereof can be a factor in one’s decision whether or not to volunteer for an inoculation. The placement of this issue of whether the compensation process available under the CICP is generous enough or user-friendly enough to allay the sorts of concerns that these healthcare workers had in the earlier studies related to smallpox, is the fact that the CICP is not the only game in town. We‘re going to talk about both the CICP and the National Vaccine Injury Program. The CICP is really, as I indicated before, it’s supposed to be a claimant-friendly administrative process that, in theory, saves time and money compared to going to court.
They’re looking at serious injuries and claims. A couple of days of feeling awful after your second vaccination isn’t going to be enough. Your injuries are going to need to put you in a hospital, have caused some sort of permanent impairment, or killed you before you can receive any compensation at all. You do have to do some work to get your claim approved. You need to either prove that the vaccine was the cause of whatever injuries you’re claiming. To do that you have to provide compelling medical and scientific evidence, just like in any sort of traditional pharmaceutical liability lawsuit, or you can avoid the need for expert testimony on that causation, if your injuries have been described in an injury table, created by HHS, that lists various medical conditions that are known to be associated with the vaccine, and if the onset of that condition happened within a particular window of time. This is a segment from the vaccine injury table that was created for 2009 H1N1 vaccines. If you come down, you can see in the last line there, if you come down with Guillain-Barré syndrome, and that onset was not less than 72 hours after the injection, not more than 42 days, you can receive a presumption that the vaccine had caused your condition. If this condition or you’re asserting that it happened in one day, came on, or it can happen in 50 days it’s not part of the table and you’re going to have to come back and prove it with compelling medical and scientific evidence. Assuming that you meet one of those two tests, you will be eligible for monetary benefits. Though, of course, not as much as you’d receive if you had had a successful lawsuit. On the other hand, you wouldn’t be paying attorney’s fees either.
To put the CICP in context, we need to know something about the other vaccination program, the VICP. The National Childhood Vaccine Injury Act has been in effect since 1986. Those intended to address vaccines that would be used for children and then recommended for pregnant women. In fact, many of the vaccines now covered are performed are common ones. I’m neither a child, nor am I pregnant, but the last three vaccines I’ve received, other than for COVID-19, have been my seasonal flu shot, the pneumonia vaccine, and a Hepatitis B shot were all covered underneath the National Vaccine Act umbrella. Like PREP, this act makes it very difficult to successfully sue a vaccine manufacturer, distributor, or administrator, though that bar you have to clear is not as daunting as that one imposed by the PREP Act. Before you can sue though, you have to first make a claim with the national Vaccine Injury Compensation Program, or VICP, a process that is intended to replace the need for litigation.
As is true with PREP’s CICP (the Countermeasures Injury Compensation Program), a plaintiff can avoid having to present complex and often expensive evidence, if the nature of the condition or the timing of the onset of the problem falls within the guidelines of an HHS injury table. Where these two compensation programs differ most is in the available benefits. The Countermeasures Injury Program is the first column in this table, and the second one is the National Vaccine Program. I’ve included a third column for traditional litigation as a point of reference. When it comes to medical benefits, there is no difference between the two. Both will reimburse your medical expenses. As for wage loss, the National Vaccine Program will fully compensate all proven claims for lost income, but the PREP program provides only partial payment. They cap losses at two thirds of your income, three fourths if you have dependents, and you have a $50,000/year cap on benefits. For death benefits, the PREP Act the single payment of $360,000 or so is more generous than the one available underneath the National Vaccine Program, though death claims related to vaccines are exceedingly rare. PREP provides no compensation for pain, suffering, or similar damages, while the National Vaccine Program allows up to a $250,000 recovery for such losses, making it the more generous of the two programs. As such, someone under PREP, someone who’s retired and on Medicare or stays home to take care of the kids, but has medical insurance. In other words, those are not likely to have any out-of-pocket expenses at all, are also not likely to receive any compensation at all, despite qualifying as one who’s severely injured as a direct result of the vaccine. Under the National Vaccine Program, such people would receive benefits to offset the trauma of what they went through. Finally, under PREP, you have to pay your own attorney’s fees and costs, while the National Vaccine Program will reimburse such expenses for good faith claimants, regardless of how their claims turn out. As I mentioned, these claims can involve complex issues of scientific evidence, something I suggest you don’t attempt without an attorney. Under the National Vaccine Program obtaining legal counsel on expert witnesses is made less difficult if that claim is brought in good faith because of the potential that you’d be able to pay your attorneys and the experts, while in the CICP such counsel and other costs could be a very expensive proposition for you. Here, the National Vaccine Program is clearly the more generous of the two, both for this particular benefit and pretty much across the board for any vaccine injury claim. One difference we don’t show on this table involves appeal rights. I should have put it in there. The National Vaccine Program allows either party to seek review by a federal court of appeal of the decision made on a claim while the CICP has a process, that of administrative reconsideration of the decision, but there is no ability to appeal that reconsideration to a court of law.
What do we know about the countermeasures program, and how it works in actual practice? Not much, really. The program has received about 700 claims since it was created in 2005, but generally, except for some information that has been recently put on their website, there hasn’t been a lot of detail about what those claims were about. Our guess is that at least 150 COVID-19 claims have come in so far as of April 1st. It might be more than that. Most claims are associated with the CICP. The bulk of the 701 claims were related to the rollout of the 2009 H1N1 swine flu vaccine of which about 46 million inoculations were made in the United States. Thirty nine of the nearly 500 closed claims were deemed to be eligible for compensation because they involve serious injuries or deaths.
Notice that 10 of those claims received nothing, presumably because the claimant had no wage loss or medical expenses that would be compensable under the Act. Note that, because information about the substance of these claims—such as why 452 were denied, what sort of countermeasures were involved, what was the criteria for making that denial—are not made public without a Freedom of Information Act request. In contrast, the National Vaccine Program provides detailed monthly updates on claim processing, and it publishes its decisions online for public review. We do have some information about how the CICP discharged its duties the last time it faced a pandemic. We know, for example, that it took about a year for the program to even begin to process H1N1 vaccine claims back in 2009. Right now there is no COVID-19–specific claim rules or regulations about the process.
We assume that it will be the same one that has been in existence since 2009, but of particular importance, there is no vaccine injury table for claimants to receive any presumption of causation. Now, arguably there probably won’t be a table until we know more about COVID-19 side effects and folks can figure out what are the most likely side effects when they happen, what they look like, and everything else, and that might be for a while. At the moment, if you file a claim, you are going to have to show medical and scientific evidence that proves your case, or you just have to wait until they come up with a table. So far the data suggests that the vaccine rollout has been free of widespread safety issues.
The last few days of stories in the papers—keep in mind, we’re talking about 7 million people—seven people out of 7 million inoculations of Johnson and Johnson that developed these blood clots is a very small number, or percentage. But with so many people that are receiving a variety of newly created vaccines, there’s bound to be a cluster of claims to process. Now, one would assume that unless the infrastructure of the CICP is scaled up from one that has been handling say 700 claims or really getting decisions on about 500 claims since 2009, the program may have trouble processing claims arising out of something like 300 million inoculations administered within a year or two in a very timely manner. There are two key concerns here that we think, one involves the potential for inequitable treatment in which people with similar injuries and losses were going to receive different benefits simply because of the type of vaccine they received. There’s already talk that we’ll need yearly COVID-19 vaccinations the same way we receive yearly flu shots. And the concern here is that the effect of future media reports of people that are injured by COVID-19 vaccinations and receiving compensation that may be a fraction of what would have been available under the program for equally common seasonal flu vaccinations. The question is how those reports are going to influence those that are on the fence about being vaccinated. It may not have any effect to people that are firmly against the idea of being vaccinated. It may have no effect on people that have been waiting in line for the vaccinations and they can’t wait to get it, but the folks in the fence may be influenced.
The other issue involves possible delays in CICP’s claim process. Right now, we don’t have any evidence of that. But again, media reports of having to wait months for a decision due to backlogs or the need to develop more evidence or whatever, may add to some people’s reluctance to receive the inoculation. In contrast, we do know that despite some problems, the National Vaccine Program has been handling tens of thousands of claims for more than 30 years. It’s got a robust process for appealing decisions, as we talked about, it’s very transparent, and it’s relatively consistent in its decisions. So, if these are issues, what might people think about doing?
Well, one could be that you could amend the benefits available under the CICP for COVID-19 vaccine claims, only not for the other kinds of smallpox and the like, but so these particular vaccine claims match up to those available under the National Vaccine Program for routine seasonal flu shots. That’s something that could be done while still giving manufacturers and others the benefits of liability shields, and the CICP does all the claims processing. This is not an easy thing to do. It’s more than just a decision by HHS to make this change; it requires congressional action.
A second option would be to take that step further by having the National Vaccine Program handle all aspects of COVID-19 vaccine claim processing and benefit calculations. Again, the liability standards provisions could remain as they are now. This would address both benefit disparity and the possibility that a flood of COVID-19 claims could overwhelm the countermeasures program. Again, congressional legislation would be needed. As always, we have the third option of just seeing what unfolds in the months ahead. I’m going to ask my fellow panelists to come back on board and turn on their video cameras.
Paul Rheingold wants to talk a little bit about these programs. Paul?
Okay. Can you hear me okay?
My talk is going to be to show the inadequacy of the present program, which Nick has done a great job on, but I’ll focus on some cases that we’ve actually been looking at in our office. I do want to start with a kind of disclaimer that I think any talk about, “Oh, there’s horrible injuries and there’s compensation,” is very bad because we don’t want to scare people away. I’m a great believer in the vaccination. I have my proof here that I got my shots. While we are discussing compensation, I don’t think that we should make a big thing of it because overall we want people to get their vaccinations.
Now, because this is a big governmental and public health push, where we want people to do it and it’s for the good of the whole community, the herd, of benefit, you would think that the government would have a good, robust compensation system to pay people in the very, very small chance that they are seriously injured. But they have a system that just goes the other way, as I’ll demonstrate even a little more than Nick did, that really it’s a system that goes out of the way to prevent you from getting compensation. Then I’ll show you that there’s some ways around that. I might start off with some calls. We get many, many calls as a plaintiff’s firm about, “Can I sue for my injuries from the vaccine?” Most of these are trivial—they’re not serious—so a lawyer wouldn’t take them. And of course the CIPC law won’t take them because it says serious, whether it’s a rash or they were sick for 24 hours, we’re not going to sue for that. To give you an example of some of the cases we have, we have a lady who had her shot in Virginia. She went out in the parking lot, sat down in their car, was told to wait there 15 minutes and she died. But she’s an older woman and she only has adult children and we’ll see what type of compensation there is for her. They have another woman. She had gotten the dose experimentally. She developed a weird condition that only at a major hospital where the tests they found out, she had something called short nerve fiber neuropathy which I had not heard of before, but it’s pretty clearly due to the vaccine, and it causes her intense burning pain in her extremities for which there’s no treatment. The third is a person who developed what’s called central poststroke pain on one side. Again, vaccine related, in my opinion, and in his doctor’s opinion. And, no, pain relievers don’t work.
So why have we not made claims for those three people with these horrible events? Because they have no damages that are compensable under the CIPC because that’s what they’ve seen to. As Nick said, there’s no payment for pain, suffering, or disability. When older people—let’s say you go blind—or someone like me, if it doesn’t cause any medical bills, [they say] “Oh, it’s too bad you’re blind, but we don’t cover that.” One thing Nick didn’t emphasize is on the loss of earnings or the medical bills, the rules clearly make the government the payer of last resort. In other words, you got approved shots, you can send in and say, I had these medical bills. You have to prove that you didn’t have any source of getting paid, and most people these days, fortunately, we have excellent sources of private plans. They have Medicare, Medicaid, and they don’t get stuck with any bills or maybe a little copay. Same with loss of earnings—people on the job. They have all types of benefits, insurance, they have workers’ comp. If they were injured in getting a shot because it was part of their work or they were a nurse or something, again, they’re payer of last resort (in any case, only up to 50,000, and that’s a very small amount if you have a permanent injury). Even the wrongful death is skewed. This old lady didn’t have any dependents under 21, so she doesn’t get anything even though the law has this supposedly generous benefit for wrongful death. And Nick, you’re not up to date. The $365,000 this year went up to $370,376, and they may never pay a penny for all we know.
Let’s just assume that somehow I had some valid compensation and made it worth suing and I was going to take the case on a contingent fee because of course the government’s not going to pay as they would under the regular Vaccine Act. What are the hurdles they have to go through? I certainly wouldn’t make light of the degree of proof that the law requires. Nick read it to you, I’ll read it again. Compelling, reliable, valid, medical, and scientific evidence. Now, if I wanted to be fair about, let’s say medical evidence or to a reasonable medical certainty or whatever happens in court every day. But compelling? I use a compelling term of a layman, they’ll say, “Well, that movie was really compelling, when it told about this or that.” What’s compelling? That’s not a medical standard. I don’t know if you could find a medical law case that uses the term compelling. So that’s really a giveaway that when they created this law way back, long before anybody ever heard of COVID[-19], they intended not to pay. Furthermore, some of the H1N1 cases, according to these reports we heard were not paid because a plaintiff, they put the burden on the claimant to provide epidemiology and peer-reviewed literature that there was causation. Well, take my three cases there. How many years are we going to have to wait before there’s epidemiology or peer-reviewed literature that shows causation. Really the government in its little hut somewhere (we don’t know who the people are looking at these, a mysterious group of, I don’t know, doctors, nurses, lawyers, or whatever), could sit back and say, “Well, you didn’t send us any epidemiology,” and I’d say, “Well, you have to make her claim within a year. It takes five years for epidemiology to get published.” Just doing everything they can to avoid payment and there’s no judge brought out, there’s no appeal except an in-house appeal, which is probably the same people. Really if what you wanted to do, in my opinion, to encourage people to take a shot because they get compensation, then I think what you might do is have a little transparency at least, and try and explain what’s going on. Now, I wouldn’t even go into all the other problems we’ve heard about that Nick laid out there, the delay in payment. Who knows when they’re going to start looking at these; who knows what percent they’re going to pay. I do think some major changes can be made to make this plan fairer and more hospitable within the administrative basis without going to Congress.
What I understand the speakers then speak today I was going to say is, teach us, go to Congress and get a change, get this pushed over to the VICP. Well, that’s a good step but before that, don’t forget, these are administrative rules. The amount of benefit they’re getting, the last payer language, the compelling evidence requirement, the appeal process, and the speed to resolution—all that is just regulations. The Secretary of HHS can change the regulations without Congress involved. As a show of faith, they could be much more transparent and tell us, “Oh, we got 23 claims for this short nerve fiber neuropathy.” That would help each of us knowing that there’s other claims that have come in, where it’s secret now. Also, I believe the Health and Human Services Secretary, Mr. Becerra, could convert this to the VIC plan from the CIPC plan right now.
It can’t be as long as it’s an emergency, but once they say, “Hey, this is no longer an emergency vaccine, but this is a regular vaccine. It’s not like the flu.” We heard Pfizer say yesterday that you’re going to need booster shots at the end of the year. We’ve heard it said that with variants coming in, you may need boosters. It’s seasonal. Let’s just make this a regular vaccine under the Vaccine Injury Compensation Act, which you’ve heard the benefits of, including attorney’s fees, which would encourage more lawyers to take cases. Of course, we can work on a congressional approach too, although it’s hard with this Congress.
Lastly, and I hope it doesn’t happen, if there’s a gigantic outbreak of some long run problems, maybe with the mRNA approach, something we didn’t know about, and all of a sudden hundreds of people are injured, you can bet the plaintiff’s lawyers who, me included, will be in there trying to argue that this diversion of cases into an administrative program provides unequal protection under the law, might be a constitutional challenge, and getting these cases back where they should be, that is, suing the drug manufacturers if there’s a serious side effect and one that they knew about or should have known about. That’s my little complaint about the present system.
Ken, did you want to make some remarks?
Okay, let me just make a few points. First of all, I want to thank RAND for the webinar. Nobody in the country is spending more time and research and thought than RAND, Lloyd, and especially Nick, in this area. Secondly, I’m honored to be on a program with Paul Rheingold—for decades I’ve known him—a national resource in this whole area of products, liability, and tort and a very wise thinker in all of these topics.
I don’t want to repeat what Nick and Paul said. Instead, in seven minutes, let me give everybody sort of the seven building blocks that I’ve found to be critical in any effective administrative compensation system, which is an alternative to tort. Whether it’s 9/11 or the BP Oil Spill, or Agent Orange, or the Boston Marathon bombings, or the GM ignition switch program that I administered and designed, there are really seven positive characteristics of any of these programs mentioned in whole or in part by Nick and Paul, that everybody ought to be thinking about in evaluating vaccine compensation.
First, the administrative program must be very transparent, very clear. A lot of sunlight. Everybody should see and understand the terms and conditions of the program in simple language. Let nobody believe that the program is biased or in favor of one type of claimant over another. The program is subject to scrutiny. It’s public. This is it in its entirety. There are no hidden agendas, very important. Reached by the way, after outpouring outreach, we’ve decided this is the program after receiving input from just about everybody. That’s very, very important, that’s first.
Second, the program must provide certainty. Certainty, a minimum of administrative subjective discretion. Here the objective criteria, here is what happens if you meet these criteria, and there was a certain result (unlike the courtroom with the role of the dice: who’s your lawyer, who’s the judge, who’s the jury), certainty is critical to the success of any administrative program so that people know if they satisfy the rules, they will receive X. That’s second.
Third, there must be broad-based eligibility. When in doubt, the person is eligible. It’s important that the program not be constrained in interpretation so that only a small number of people are eligible to participate. The broader the eligibility criteria, whether it’s damage or medical prerequisites, but you want to encourage people to participate in the program with broad eligibility, nonrestrictive criteria for entrance into the program.
Four, speed. This is critical. From the time you file a claim until it’s processed and paid, you’re talking about a matter of months, not years. For the 9/11 program from the time your claim was substantially complete, you got paid within 60 days. We found that even though there might be some people who were of marginal eligibility or might not satisfy the clearer criteria, we implemented a series of presumptions to cut through the adversarial-ness in favor of the claimant, in order to promote the speed of the program.
And the fifth point, efficiency. You can have a lawyer, especially if it’s Paul Rheingold, but you don’t need a lawyer. That’s up to you. The program is efficient. It’s cost effective. It’s speedy. So that from the time you file, whether you’re pro se or whether you have a lawyer, we’re nonadversarial, we’re trying to help the claimant. That’s very, very important in terms of goes with speed. Speed and efficient, certain resolution.
Sixth, there must be an element of due process. Now, this is tricky. In virtually all of the programs that I’ve designed and administered there’s some opportunity to be heard before a decision is rendered or after a decision is rendered and you’re not happy with it and you want to come and see me for some sort of administrative nonjudicial appeal. But due process may slow down the process a bit, but providing everybody with the opportunity, not to be just an assembly line individual but your individual application has been considered and you’re given an opportunity somehow, whatever that definition of due process might be, you are provided some opportunity to be heard.
Now, I must say in the programs I’ve administered, one due process element is always available, but is not available in vaccine compensation. In every single program that I’ve administered, including 9/11, the administrative alternative was voluntary. Nobody was compelled to come into the program. You could evaluate the program and decide, I’d rather go to court. Now we design these programs with speed, efficiency, certainty, generosity, so that virtually everybody voluntarily is incentivized to come into the program. In 9/11, 97 percent of all eligible families came into the program. General Motors ignition switch, 96 percent. BP Oil Spill, the Deepwater Horizon, 92 percent, but they were all voluntary. Here, contrary to the normal way I’m familiar with these compensation programs, it’s mandatory. You have no voluntary choice.
Well, if that’s going to be the case and you want the public and the claimant to accept this program, mandatory, you better make it speedy, efficient, and you better make it generous. Because if it’s not generous, then you’re going to run into this program where you’re going to be accused of railroading individuals into a strange uncertain administrative program, a bureaucratic program, where you lack the opportunity to select a different option, the courtroom. This a big due process issue. It’s a given in all in these vaccine programs, but if you have to come in, you better make sure that you’re providing all of these other characteristics to anticipate criticism if the program doesn’t work as intended and if the compensation isn’t generous. By the way, in all of these programs, the compensation once it’s awarded should be unrestricted. It can’t be, we’ll give you X dollars, but only if you do this with it. Any money that is ultimately in the hands of the victim or of the claimant must be unrestricted to be used as the claimant wants.
Final point. Nick talks about the discrepancy in awards between and among various compensation programs. This is a big challenge. What I’ve learned in all of these programs that I’ve designed and administered—everybody counts other people’s money, it’s human nature. If your providing X dollars under this program and Y dollars under that program, and you have no choice as to which program, indeed, if you’re offering X dollars in one program and Y dollars in the same program, brace yourself for the criticism that’s going to come. There may be rationales why, but everybody counts other people’s money and you don’t get away with those hollow explanations. That’s just a little bit of a summary adding on to what Nick said with all the great work RAND is doing and what Paul said. He’s an individual everybody better be listening to because he knows this stuff, so thanks Nick.
Paul, let me ask you how important is the right to appeal? The CICP allows us administrative reconsideration of [an] eligibility decision, a benefit decision, but that’s going to be where the claim ends. The National Vaccine Program does allow you to move into the courts of appeal, is administrative reconsideration enough? Does it help keep costs down by not having those appeals, or what do you think?
Well, let Paul comment, he’s an old-fashioned plaintiff lawyer. I can tell you that in all of the programs that I’ve administered, there’s an administrative appeal. Don’t forget the 9/11 Fund by statute prohibited appeals to the courts. I’ve found that administrative appeal won’t slow things down. It will accelerate payment. As long as it’s administrative, it’s efficient, it’s quick. I have no problem with that. I think it’s a plus in terms of perceiving the bona fide good faith of the programs.
Well, I certainly don’t think an appeal to the court from this system that’s currently in place for COVID[-19] vaccine injuries makes any sense. The plan is so bad. What would I be appealing? I’d be appealing the inadequacy of the plan rather than some sort of decision. Their decision might be, well, we can’t prove causation. Now what’s the court going to do? I don’t see the court as an appeal result. We need a more basic overhaul of the program than that.
When we’re talking about during the first set of slides, we were talking about delay. Ken, can you talk a little bit about what the sources of delay would be in a compensation program? Is it not having enough bodies to process the claims? Is it something about the process itself? Is it about the amount of support for the claim you have to give? What seems to be the bottleneck?
I think it’s the administrative bureaucracy and the tendency, almost by experience, the tendency to drift into adversarial-ness. There’s not enough evidence. Let’s go back to the claimant, please supplement the record. We are not quite certain you’re qualified, supplement the record. The way we have avoided those issues over the years are with the presumptions.
Presumptions in favor of the claimant. Yes, perhaps there will be a few more claimants found eligible and compensated than might otherwise be the case with more evidentiary restrictions, but at a terrible price, in terms of the perceived efficiency and streamlining of the program. One of the great benefits of any administrative alternative to tort, to litigation: speed, efficient, quick. And the way you get that way, I think, is by writing right into your transparent protocol, the rules and conditions, presumptions. You are presumed eligible if this. Your causal requirements are presumed met by this, and accelerate the process. That’s key.
Okay. Let me turn to Paul here for a second. Given what you know about the PREP’s liability shields. What do you think in terms of a path forward for somebody who wants to sue them? Is this willful misconduct exception one that essentially is an impenetrable shield? Have you ever been involved in pharmaceutical litigation in which the acts that you’ve complaining about have reached this level of willful misconduct as defined in the PREP Act?
Yes. I could equate willful conduct to that type of conduct which merits punitive damages. I think it’s very similar and of course we know, rarely, but on occasions, plaintiff’s lawyers have gotten punitive damages awarded by a jury in drug cases. The evidence has inevitably been concealment that the company knew something as very often shown by emails saying, “Well let’s not share that with FDA,” or “Let’s get that investigator to drop that line of work.” That’s something that a jury understands as willful concealment from the physicians, from the FDA, or from the patient.
I hope to God there’s no willful misconduct on the part of Pfizer, Moderna, or J&J and I certainly don’t think there was. But, should it happen, it would be the type of situation I’m talking about. Take this venous clotting and women, and I’m not at all suggesting it’s true. It’s strictly hypothetical. It turns out that they saw this in some clinical investigation, one group of critical investigators did, they reported it to the manufacturer and the manufacturer quashed it. Said we just won’t report that. That would be willful, and that would be what plaintiffs would love to get their hands on. So, we would get around to tort suits there. But as I say, hopefully that won’t be the case.
Sure. Paul you’ve had experience going way back, with swine flu back in 1976. Certainly, things have changed since then. Do you have anything to comment about that?
Yeah, I would like to tell all your listeners about that as a unique example, and then Ken with his experience in various compensation systems might well give his comments on what he thinks about this. I have to set the stage a little bit. First of all, it’s obvious I’m pretty old if I handled the 1976 swine flu vaccine litigation, where I was on the plaintiff’s steering committee and litigated quite a few cases. But most people don’t remember, in fact, I had to refresh my own memory. In 1976, a young army recruit in New Jersey came down with a flu that was tested and looked like the same flu as a Spanish flu or swine flu of 1918. At that time, it was still more in people’s minds than today about that horrible pandemic that killed over a million people.
And there was one case and the scientists got together and said, look, this could be the start of another 1918. What we’ve got to do is create a vaccine and vaccinate every person in the United States. There was a certain degree of a consensus among scientists, it went to government and government said, “Go at it.” By the way, I refreshed my memory by reading this book that came out on this whole story. So, the vaccine manufacturers got going and were able by the summer to have a vaccine for this type of flu, influenza. However, they said, we’re not going to put it out because we can’t get insurance. We’re not going to risk getting sued. That was kind of the primitive days of mass torts but nonetheless, there are examples.
They asked the government for immunity and various things were proposed, but eventually by congressional act Congress said that the government will step into the shoes of the manufacturers. You can sue the government for anything you could have sued the manufacturers for, but we’re going to handle that where you sue government on the Federal Tort Claims Act. The law that existed then, and exists, with its peculiarities about how you have to give six months’ notice, and no juries, and so on. People forgot about that, and on October 1st, 1976 President Ford was on TV. He said, “Every man, woman and child in the United States must get this vaccine, and I am going to be the first person to get it” and he was given it. Then there was a rollout and it was widely given just as the COVID[-19] vaccine is given now.
Then within about a month, someone came out with Guillain-Barré syndrome, which you heard mentioned before. That’s a peripheral neuropathy that’s very serious, you’re paralyzed, at least for a period of time. Then someone else did, and someone else did, and someone else did. They brought the program to a screeching halt. After that, no one ever (a) ever got the swine flu vaccine and (b) no one ever developed swine flu anyway. It was a complete false alarm. There was never a need for the program to begin with, because only one person ever got it. But 4,000 people got Guillain-Barré syndrome and the plaintiff’s lawyers got together and we sued. This was in the very early days of multidistrict litigation.
The cases were assigned to Judge Gerhard Gesell in the District of Columbia. Before you knew it, he had 4,000 plaintiffs there all under the Federal Tort Claims Act where we had to give notice and sit around, and special rules and so on. He ordered discovery which I, and a lot of other lawyers much older than me, did. We finally found one person in the CDC who, we didn’t have emails in those days, had written a memo to his boss that says, “Sure as shooting, we’re going to see Guillain-Barré syndrome from this vaccine.” The way it was made, which was they put in eggs, and it grew all winter, little legs or something. With that the government finally decided to concede liability because it was on notice, there was no warning and it’s looking pretty bad because no one was getting the disease anyways.
So then came the litigation phase, which our government fought. They admitted liability because they fought causation. These cases right now will retransferred back and I had someone in the Southern Eastern District in New York and we won some and lost some on causation some really weren’t GBS [Guillain-Barré syndrome] conditions. Finally, the government threw in the sponge and said, we will set up a settlement program. This was now four years, three years later, 1981. They settled all 4,000 cases and that was the end of it. So that’s the one and only time the Federal Tort Claims Act with our government standing in for tort immunity compared to the type of administrative immunity that has taken over now. I would like to ask Ken. What do you think about that system?
That’s a bad system, but I’ll tell you what everybody ought to be thinking about. It would be the subject of another great RAND webinar. That is in all of these areas, what constitutes an effective government-private partnership in dealing with potential liability. Vaccines is one example, but RAND did some unbelievably effective research on the Terrorism Risk Insurance Act enacted by Congress post-9/11 to backstop private insurance against terrorist attacks, still on the books. The Price Anderson Act from the 1950s of government-private partnership in the construction and administration of nuclear plants and the role that the government plays in backstopping private insurance in the event of a Three Mile Island or a Chernobyl. It’s a fascinating area as to the appropriate role that the federal government should play with private partners. As you know, Lloyd Dixon, RAND has done a lot of research on this showing how effective a public-private partnership can be when it comes to the insurability of risky initiatives.
I think we have some time for some questions from the audience. Jamie Morikawa can you let us know if anybody’s been asking questions out there?
Yes, we do have some questions from the audience. The first one is about how the two programs are funded. Is the fact that the CICP is funded through congressional appropriations rather than an excise tax, like the VICP, impacting its readiness to handle COVID[-19] vaccine claims? The way the two programs are funded. Does that impact their readiness to handle these claims?
My understanding is that the big Acts, the CARES Act and other acts that were passed in the early days of the pandemic put aside money for HHS. Every time I see references to it, they say, “Well, this is what we’re going to use for compensation.” I do know that the VICP requires for a vaccine to be underneath the umbrella of the National Vaccine Program. An excise tax has to be in existence—it’s something that Congress would have to deal with. I believe that right now, the CICP has the money for both administration of claims and also for payout.
If the panelists don’t want to address that question, I have a couple more questions actually. This one I’m just going to read, because I don’t think I could do it any better. “I think it’s misleading to propose that a solution to the CICP’s problems is to transfer COVID[-19] vaccine cases to the VICP without recognizing that the VICP currently has a very serious problem with backlog in deciding its cases. The problem would have to be addressed for example, by adding many more special masters in the VICP.”
I agree with that. That’s not a new criticism and I don’t think the answer is just more special masters. I think the problem is the procedural evidentiary requirements. I think that the absence of more streamlined presumptions that I spoke about and streamlining the whole process, special masters might be one solution, but doesn’t that just magnify more delay for each special master? I think that the terms, the conditions, the rules, the regulations should be streamlined to be more claimant-friendly and to process quicker and more efficiently.
Paul or Nick? Okay. We have one more question. That question is, What are the liability ramifications of employer mandated vaccination?
The person asking who might be liable if it’s required. First of all, it could be a worker’s compensation issue, because if I required that an employee of mine, a paralegal in order to work had the shot and that was legal. That’s entry on the job so workers’ compensation’s going to handle that. But more broadly, I think it’s a great question that isn’t answered about where that claim right now goes or otherwise it’s a vaccine injury on the Vaccine Act it’s going to go to this CIPC group that we’d been roundly criticizing all along.
I would note that folks at HHS tell me that it’s not a matter of them being stingy or about benefits. They are simply following the law. They’re simply following what Congress has mandated. Though as Paul pointed out, there’s a lot of discretion given to the Secretary of HHS, but some of the benefits levels are mandated in the original PREP Act and are an outgrowth of the original Smallpox Vaccine Act. I just want to make that clear here that they are working within the bounds of their legislative statutory framework here. They’re just trying to do a good job doing it. This wasn’t a webinar to bash the folks at HHS. But we ought to think about these issues.
We have to think about compensation. We’re not talking this webinar about the liability. There’s a lot of folks out there that think that giving carte blanche to the manufacturers of products that are being injected into your body and relieving them from all liability, as I indicated earlier, is something that we have to think hard and long about. That’s not what we’re here to talk about today. We are just talking about compensation and hopefully this is a nonevent. Hopefully we walk away from here in the next couple of weeks, and we think how silly it was, the stories about compensation, because nobody is making claims. We are seeing claims now. We think based upon comparison of CICP data that they’ve released, there’s been this 150, 200 uptake since March or February.
So, some people are making claims. Whether those claims satisfy the test for serious injuries or not is currently unknown. That’s the problem that I as a researcher have. I don’t like unknowns. I don’t like unknowns when it’s my money as a taxpayer being spent and possibly me as a claimant down the line. I want to know what’s being done and why it’s being done. I think that they’ll eventually get to that point. You see, in the CICP recently, more and more transparency coming down the pipe. You see just the fact that we have numbers now that talk about how many claims they have total. They don’t tell you what they’re for, but we can learn a lot of things about the change over time. It is interesting to note that I looked at the website yesterday morning. There’s a nice little thing says, if you want more information, here’s how you do it: The Freedom of Information Act. I’m thinking, do we have to go that far? Do we have to really file a FOIA request to get information about how things are working out?
We have two more. If we have time, we have two more audience questions that just came in. The first one is, do you think offering no-fault compensation systems has any impact on individuals’ decisions about vaccination?
I’ll answer that first. The people I’ve been interviewing people almost every day because we’re advertising for these cases and not one of them had any thought in mind, (a) of getting injured or (b) “My God, if I get injured, what will be the compensation?” Nick referred to some research I’d like to hear about that might be different, but I think that when people line up maybe they’re a little apprehensive about being sick the next day or something, but I don’t think there’s anybody except people looking for contorted rationalizations for confirming they’re not going to do it anyways, have ever thought about, “What is the compensation if I do get injured?”
I agree with that.
It’s likely that they probably don’t know what the compensation rules are. If I was in a line for vaccinations, if I walked up to 20 people of those in line with a mask on and ask them “What happens if you get injured?” They’d probably say “I will sue the manufacturer, I’d sue the county for giving me that . . .”
Yeah. The nurse.
They’d probably have no idea of the fact you wouldn’t be able to sue or be unlikely to be able to sue, and you’d wind up going through a compensation system. I can’t believe that this isn’t going to become more known generally. This is a topic that seems to be heating up a little bit. But we’ll see how it works down the line.
Then our final question of the day is, “Wouldn’t it be a good alternative to set up a new standalone COVID[-19] vaccine compensation program like Ken Feinberg’s 9/11 compensation fund?”
It’s easy to give that answer. The answer is no: under no circumstances. First of all, I’m much too busy. Second of all, the problem with a national 9/11-type COVID[-19] compensation program, just think about it. Who’s eligible? What’s the methodology you’re going to use for calculating awards? What are the proof requirements? Who’s going to pay for this? Can you imagine if hundreds of thousands of victims who don’t die, they don’t even go to the hospital, but they have the disease? It is too broad-based to even think about. I believe in some sort of national program is a substitute for less-pervasive alternatives, like those that Paul and Nick have talked about today.
Well, I’m going to go back to say thank you to both Ken and Paul for your help. I want to thank all the folks that helped put this seminar on today. Lloyd, do you have any final thoughts you want to share?
Yeah, just I think it’s a very valuable contribution to informing our discussion about how to proceed in this area and what makes most sense from the social point of view. I think I want to thank Paul, Nick, and Ken for a terrific webinar.
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