Obama Signs Law Closing Vaccine Loophole

Posted 26 June 2013 | By

US President Barack Obama has signed into law legislation intended to close a loophole that would have prevented a new vaccine manufactured by French manufacturer Sanofi from obtaining the same legal liability protections - and patients the access to injury compensation - as traditional vaccines.


The problem doesn't have to do with the safety of Sanofi's quadrivalent vaccine, known as Fluzone. By all accounts the vaccine is extremely safe, and regulators have only called for Sanofi to conduct postmarketing studies typically required of all vaccine products.

Rather, the problem has to do with vaccines more generally. As with all medicinal products, vaccines can lead to adverse events in some patients regardless of how safe they are. For example, even if a drug is 99.999% safe, that would statistically leave one person in 10,000 injured, perhaps seriously. This represents a problem because of the scale at which vaccines are adopted, often due to government requirements.

To incentivize research and development in vaccine products, the US government has set up a special fund, known as the National Vaccine Injury Compensation Program (NVICP), as well as a specific vaccine claims court system. The two are intended to serve two main purposes:

make sure those injured by vaccines are given fair compensation for their injuries, especially when they were compelled into participating in a vaccination program

make sure that claims are heard by a panel of experts, which serves to decrease the costs of litigation for companies engaged in the manufacture of vaccines by protecting them against potentially frivolous lawsuits

The NVCIP is funded by a tax assessed on vaccines as defined by the Internal Revenue Service (IRS) by the Internal Revenue Code of 1986.

The Problem and the Solution

And therein lies the problem, and specifically for Sanofi's quadrivalent vaccine. Under the IRS Code of 1986, an influenza vaccine was defined as only having as many as three strains in the product. Accordingly, the four-strain vaccine wouldn't be considered a taxable vaccine under the law, thereby depriving patients of NVICP benefits and Sanofi of legal protections under the law.

Legislators have moved with unusual speed and bipartisanship in recent weeks to close the loophole, with Rep. Jim Gerlach's HR 475 clearing the House on 18 June 2013, the Senate on 19 June, and obtaining Obama's signature on 25 June.

The bill amends the IRS Code by adding "any other vaccine against seasonal influenza" to the definition of taxable vaccine, thereby encompassing Sanofi's quadrivalent Fluzone.

The president issued no statement on the signing of the legislation.



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