May 4, 2006

Drug Industry, Sen. Frist and the White House Conspired to Obtain Broad Liability Shield for Lawsuits Related to Pandemic Illnesses

Public Citizen Report Reveals Behind-the-Scenes Lobbying; Language Inserted Into Bill Without Lawmakers’ Knowledge

WASHINGTON, D.C. – Drug industry lobbyists conspired with the White House and Senate Majority Leader Bill Frist (R-Tenn.) last year to craft a sweeping liability provision that shields the industry from lawsuits over products used to treat pandemic illnesses, even in cases of gross negligence or gross recklessness, according to a report issued today by Public Citizen.

The report, Willful Misconduct: How Bill Frist and the Drug Lobby Covertly Bagged a Liability Shield, relies on internal documents and e-mails of the Biotechnology Industry Organization (BIO) to illustrate the degree to which Frist’s office deferred to drug industry demands and describes Frist’s sleight of hand in securing passage of the provision. It underscores the enormous power of the drug industry and its lobbyists to steer a highly controversial provision into law.

Frist inserted the shield provision into an already-completed conference report for the defense appropriations bill in the dead of night, with the aid of House Majority Leader Dennis Hastert (R-Ill.). Many of the members of the conference committee had never seen the language, let alone approved it. Committee leaders explicitly assured Democrats, made wary by rumors circulating in the preceding days, that no attempt would be made to insert the liability measure into the spending bill.

The shield is unnecessary because the government now can – and does – indemnify drug companies in contracts, using provisions saying that the government will cover costs in excess of the companies’ insurance.

The pharmaceutical industry used legions of influence-peddlers to push for the measure. The industry deployed at least 158 lobbyists to influence policies relating to vaccines and pandemic preparedness in 2004 and 2005, including 84 who were previously employed by the federal government. Of those, seven were former members of Congress, two were former top health care aides to Frist and another was the son of the speaker of the House.

“This is a case in which the drug industry used clout, stealth and cunning to put one over on Congress and the American public,” said Joan Claybrook, president of Public Citizen. “The industry crafted a liability shield that is unprecedented in its scope and will literally allow it to harm innocent people and get off scot-free.”

Claybrook called for Congress to revoke the provision.

The liability shield is extremely broad, applying to far more than just avian flu vaccines and going well beyond the liability protections initially proposed by the Bush administration. It bars all state and federal claims arising from the use of a drug, vaccine or medical device related to any government-declared health emergency. It extends to all companies, state officials, healthcare workers and others involved in combating an actual or potential health emergency.

It even encompasses all aspects of drug, vaccine and medical device production and delivery, including design, development, testing, manufacture, labeling, distribution, formulation, packaging, marketing, dispensing and prescribing. What’s more, it shields pharmaceutical companies from liability for long-used drugs, even those causing death or injury due to a manufacturing error, so long as the drug is used to treat a condition related to an officially declared health emergency.

The only exception is if an injured party can show by “clear and convincing evidence” – a heightened standard of proof – that a defendant’s “willful misconduct” caused serious injury or death. According to the law, “willful misconduct” does not encompass “gross negligence” or “gross recklessness,” but only “intentional, voluntary and conscious actions, or failures to act, undertaken to achieve a wrongful purpose.”

The BIO documents obtained by Public Citizen and detailed in the report show the extraordinary access to White House and congressional officials that industry lobbyists enjoyed. On Nov. 15, 2005, for example, Dave Boyer, director of federal relations for BIO, sent an e-mail message to an undisclosed list announcing that BIO had been summoned to a White House meeting to discuss the liability shield proposal.

Several days later, Boyer and lobbyists for three drug companies met with Frist’s staff – along with representatives from the Justice Department, the Department of Health and Human Services and the White House – for further discussions.

The drug industry has long been among the most generous contributors to congressional campaigns. The three lawmakers who were most responsible for the waiver’s passage were Sen. Richard Burr (R-N.C.), who drafted the liability shield that served as a template for the text Frist inserted into the defense bill; Hastert, who enabled Frist to make his move; and Frist. Each of the three ranks in the top 10 in campaign contributions from the pharmaceutical and biotechnology industries since the 2000 election cycle; together they have collected more than $1.2 million in total receipts.

“This midnight assault on consumer safety puts a new and dangerous spin on the notion of public-private partnership,” said Jillian Aldebron, legislative counsel for Public Citizen’s Congress Watch division. “If Congress doesn’t repeal this law, people are going to be hit with the double-whammy of paying for injuries and deaths caused by the drugs meant to keep them safe on top of whatever damage is caused by the pandemic diseases themselves.”

A copy of the report is available here.

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