In a new report released, "In the Wake of Wyeth v. Levine: Making the Case for FDA Preemption and Administrative Compensation," Manhattan Institute scholars Paul Howard and James Copland respond to the recent Supreme Court Case ruling in Wyeth v. Levine. This report offers an original proposal that would both protect innovation and offer real victims a remedy- an alternative compensation program for consumers injured by unknown drug side effects. The compensation system would be modeled after the vaccine compensation program that was created by Congress in the 1980's to redress patients injured by vaccines. A well-designed compensation program would offer as a substitute a mechanism for compensating the victims of unforeseen drug injuries, and it would do so without the uncertainty and expense of today's version of litigation. By limiting compensation to unforeseen injuries, the program they propose would also give companies a powerful incentive to rapidly update drug labels with new safety information and to invest further in both safety and effectiveness.

Why a compensation program for pharmaceuticals makes sense:

- Like vaccines, drugs as a group have enormous public health value.

- The testing, development, and marketing of drugs and vaccines are extensively regulated by the FDA.

- Experts recognize that it is impossible to attain absolute safety and that physicians and patients benefit from a wide range of therapeutic options with different risk and benefit profiles so that patients can find a product that "works for them."

Given the parallels, as well as society's profound interest in spurring additional pharmaceutical innovation, policymakers should consider implementing an administrative compensation system for pharmaceuticals similar to the VICP.

Features of an administrative compensation program:

-- Field Preemption of Pharmaceutical Claims

- An administrative compensation program for pharmaceuticals would be problematic-and perhaps worse than the status quo-unless coupled with field preemption for all drugs and devices. Were a substantial administrative remedy designed to operate alongside only narrow conflict or obstacle preemption rules, each case would face a separate trial-court factual determination

-- Limitation of Most Claims to Unforeseen Adverse Events

- A well-designed system limiting compensation to claims arising from injuries that were not anticipated by the FDA would have the salutary effect of encouraging drug manufacturers to be forthcoming with new information of adverse events as it was discovered during routine use

-- Clearly Defined Causation and Injury Requirements

- Individuals who took a drug before the adverse event or contraindication was listed on the label could make a claim for compensation. Those individuals would then have the burden of proving that the drug caused their injury, and the agency could consider the relative risk factors of the drug as well as various confounding factors in those individuals' medical history, such as age, weight, smoking, or preexisting conditions

-- System Funding

- Drug and device taxes to fund the system should initially be allocated on the basis of market share. Eventually system costs would most appropriately fall upon those manufacturers making the riskiest products

-- Independent Post-Market Drug Monitoring

- This program would create a post-market review process to keep extensive records of adverse drug events. The growing prevalence of information technology and sophisticated data-mining programs would enable regulators to quickly identify underlying trends that could then be subjected to further analysis and testing

-- Remaining Tort-Law Remedies

- Even though a well-constructed administrative compensation scheme would not offer a remedy to individuals affected by known side effects, they would retain the right to sue health-care providers for malpractice in the prescription of a contraindicated drug, or for the improper administration of a drug or device

To read the full report, visit here: http://www.manhattan-institute.org/html/fda_01.htm

Manhattan Institute