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[Congressional Record Volume 141, Number 77 (Wednesday, May 10, 1995)]
[Senate]
[Pages S6453-S6455]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

                     PRODUCT LIABILITY FAIRNESS ACT

  Mr. DODD. Mr. President, today the Senate passed the Product 
Liability Fairness Act, which I have cosponsored, by an overwhelming 
vote of 61-37. For those of us who have been working on this issue for 
a long time--my involvement dates back to 1985--this is an historic 
day. With passage of this balanced measure, we have taken a huge step 
toward improving the product liability system for everyone--for the 
injured people who need fast and fair compensation, for consumers who 
need quality products to choose from, for those American businesses who 
are at the cutting edge of international competition, and for workers 
who depend on a strong economy to support their families.
  I commend Senator Rockefeller and Senator Gorton, and their staffs, 
for their heroic efforts on this measure. From drafting the 
legislation, to skillfully guiding it through a lengthy debate on the 
Senate floor, they have worked extremely effectively. Their success is 
reflected in the broad bipartisan coalition that supported the bill.
  I also commend Senator Lieberman, my colleague from my home State of 
Connecticut. He authored an important section on biomaterials. That 
provision is designed to ensure that manufacturers of life-saving and 
life-enhancing medical devices have access to raw materials. In recent 
years, the supply of raw materials has been threatened by litigation. 
This is a critical problem, and I commend Senator Lieberman for 
crafting a promising solution.
  Of course, like any compromise, this bill will not please everyone in 
all respects. I had drafted, for example, an amendment providing a 
different approach to punitive damages. under my amendment, the jury 
would determine whether punitive damages are appropriate, and the 
judge, guided by certain factors, would determine the amount. That 
procedure, in my view, offers a better approach to punitive damages 
than one which provides limits, or caps. Senators Rockefeller and 
Gorton incorporated some aspects of my proposal in the final provision, 
and I appreciate their efforts on this difficult issue.
  The final version of this bill does not contain a provision that I 
have supported in the past--the Government standards defense. One 
aspects of that defense, related to approval of drugs and medical 
devices by the Food and Drug Administration, was passed by voice vote 
in the House and will, I understand, be considered in conference. I ask 
unanimous consent that a number of letters supporting this provision be 
printed in the Record at the end of my remarks. As these letters point 
out, inappropriate punitive damages have convinced many corporate 
researchers to avoid the search for safer and more effective drugs.
  Once again, I commend my colleagues, particularly Senators 
Rockefeller and Gorton, for their bipartisan efforts on the Product 
Liability Fairness Act.
  There being no objection, the letters were ordered to be printed in 
the Record, as follows:

                                       Pharmaceutical Research and

                                     Manufacturers of America,

                                   Washington, DC, April 25, 1995.
     Hon. Christopher J. Dodd,
     U.S. Senate,
     Washington, DC
       Dear Senator Dodd: As a physician volunteer, I treat AIDS 
     patients at the Whitman-Walker Clinic. The suffering that I 
     see--and the threat of an ever-wider epidemic--convince me 
     that the greatest gift anyone could give to society would be 
     an AIDS vaccine. If I were the chairman of a philanthropic 
     foundation, I would invest every dollar in vaccine research.
       However, if I were CEO of a pharmaceutical company, knowing 
     that the investment in my company represented the retirement 
     and college savings of many of my stockholders, I wouldn't 
     touch AIDS vaccine research with a ten-foot pole--until the 
     liability issue has been successfully addressed.
       Even the safest, most widely accepted vaccines entail 
     risks--and potentially bankrupting liability burdens. 
     Childhood vaccines are available in adequate supply only 
     because Congress passed the Childhood Vaccine Compensation 
     Act. This came about only because several manufacturers got 
     out of the business of manufacturing childhood vaccines due 
     to liability concerns--raising fears of a dangerous scarcity.
       In 1975, a man who got polio after changing his baby's 
     diaper sued the manufacturer of the Sabin polio vaccine, 
     which the baby had received. The risk of polio transmission 
     was known, but small--about 1 in 1 million. Nevertheless, the 
     jury awarded punitive damages. The award was later reversed, 
     but only by the narrowest possible margin. The very fact that 
     such a widely acclaimed health advance could expose a 
     manufacturer to punitive damages would certainly give pause 
     to any manufacturer considering research on an AIDS vaccine--
     which entails special liability risks.
       With a preventive AIDS vaccine, people who are vaccinated 
     will probably turn HIV positive--with all the social stigma 
     and threat of job loss or insurance loss that this involves. 
     There is a risk that a very small number of people will get 
     AIDS from the vaccine. Additionally, there is the risk that 
     the vaccine won't ``take'' in all cases and that some people 
     who think they are protected may engage in risky behavior and 
     come down with AIDS. All of these eventualities could result 
     in lawsuits.
       In the case of therapeutic vaccines for people who already 
     have the disease, it would be very difficult to distinguish 
     the symptoms of AIDS from any side-effects of the vaccine. 
     And people with AIDS, prodded by unscrupulous lawyers, might 
     easily be tempted to sue vaccine manufacturers.
       Unless the liability threat is alleviated--at least by 
     exempting manufacturers of FDA-approved products from 
     punitive damages--developing an AIDS vaccine is decidedly a 
     ``no-win'' proposition. This is outrageous, unfair, tragic--
     but true.
           Sincerely,
     John D. Siegfried, M.D.
                                                                    ____

                                                      May 2, 1995.
     Hon. Christopher J. Dodd,
     U.S. Senate,
     Washington, DC.
       Dear Senator Dodd: We are writing to ask that you vote in 
     favor of a proposal that we believe will have a positive 
     effect on research and development of new medicines and 
     medical devices. American innovation is in trouble in the 
     courts particularly in the high risk areas of reproductive 
     health. Liability fears have caused the withdrawal of new 
     drugs and medical devices that the Food and Drug 
     Administration (FDA) considers safe and effective. We 
     understand that when S. 565, the ``Product Liability Fairness 
     Act of 1995'' is considered on the Senate floor, an amendment 
     will be offered that would prevent juries from second-
     guessing the FDA's scientific decisions that a drug is safe 
     insofar as punitive damages are concerned.
       The proposed FDA-approval defense to punitive damages would 
     establish a defense to punitive damages in tort actions 
     involving drugs or devices approved by the FDA and subject to 
     FDA regulation. The defense would apply only to punitive 
     damages, and would not be available to a manufacturer that 
     has withheld or misrepresented information to the FDA, 
     including all required post-approval disclosure of unexpected 
     adverse effects.
       In the past twenty years, most companies have halted U.S. 
     research on contraceptives and drugs to combat infertility 
     and morning sickness. As a case in point, Bendectin, a 
     morning-sickness drug, was removed from the market by its 
     manufacturer in 1984 after more than 2,000 lawsuits were 
     filed claiming it caused birth defects. Merrell Dow has spent 
     over $100 million defending those suits and is still doing 
     so. Even though almost every court which has looked at the 
     issue has determined that there is no scientific evidence to 
     support the contention that the drug causes birth defects, 
     and even though Bendectin is still approved by the FDA for 
     use in pregnancy, no manufacturer will risk making a morning 
     sickness drug.
       The 1970s brought more litigation over oral contraceptives 
     than any other drug. In the early 1970s, there were 13 
     companies doing research and development on contraceptives. 
     Eight of these were American. Today there are only two major 
     U.S. companies doing such research. In 1990, a distinguished 
     panel of scientists put together by the National Academy of 
     Sciences noted that due to fear of lawsuits, the United 
     States is decades behind Europe and other countries in the 
     contraceptive choices it offers women.
       In early 1994, because it had spent tens of millions of 
     dollars defending against suits by people claiming injury 
     from tempero-mandibular joint implants, DuPont announced it 
     would no longer make polymers available to the medical device 
     industry in the United States. These polymers are used in 
     artificial hearts, pacemakers, catheters, hip and knee 
     prostheses, and a host of other implantable devices. We have 
     not even begun to feel the full impact of that decision.
       The Senate is taking advantage of an unprecedented 
     opportunity to fix a flawed product liability system. We ask 
     that you include 
        [[Page S6454]] a reform that will encourage the 
     development of better medical products without impairing the 
     ability of people who are injured from recovering just 
     compensation.
           Sincerely,
     Nancy Sander,
         Allergy and Asthma Network/Mothers of Asthmatics, 
           Fairfax, Virginia.
     Patricia Tompkins,
         National Black Nurses' Association, Washington, DC.
     Dorothy I. Heigh,
         National Council of Negro Women, Inc., Washington, DC.
     Adele Baker,
         Wright, Robinson, McCammon, Osthimer and Taturn, 
           Washington, DC.
     Susan Walden,
         Renaissance Women Foundation, Washington, DC.
                                                                    ____

         National Family Planning & Reproductive Health 
           Association,
                                      Washington, DC, May 1, 1995.
       Dear Senator: As the Senate considers S. 565, ``The Product 
     Liability Fairness Act of 1995,'' we urge you to support a 
     provision known as the FDA defense. With the FDA defense, 
     companies would not be held liable for punitive damages in a 
     lawsuit if the drug or medical device involved received pre-
     market approval from the FDA, and if the company fully 
     complied with the FDA's rigorous requirements, which include 
     specifying the warnings that companies must provide about 
     their products and furnishing post-market reports on adverse 
     reactions.
       As an organization dedicated to expanding medical research 
     and increasing access to products that can improve women's 
     reproductive health, we know firsthand the extent to which 
     the current liability system is impeding these important 
     goals. In 1990, a distinguished panel of scientists put 
     together by the National Academy of Sciences noted that due 
     to U.S. Pharmaceutical companies fear of lawsuits, the United 
     States is decades behind Europe and other countries in the 
     contraceptive choices it offers women. An FDA defense would 
     begin to turn the tide on this disturbing trend by 
     encouraging research and development of products women need 
     without impairing the ability of women who are injured by 
     drugs and medical devices to recover just compensation.
       We are deeply distressed that opponents of reform are 
     mounting a fear-based campaign directed at women as their 
     strategy to block change. A great deal of misinformation has 
     been circulated concerning the impact of the FDA defense on 
     women. We certainly recognize that women have had a painful 
     history with medical products, such as DES and the Dalkon 
     Shield, which have caused tragic injuries to women and their 
     children. Opponents of an FDA defense are mistaken, however, 
     in claiming this provision would have prevented plaintiffs 
     from collecting punitive damages in these cases. In fact, the 
     Dalkon Shield was on the market before the Medical Devices 
     Amendment was adopted in 1976, and thus, was never approved 
     by the FDA. As for DES, various manufacturers involved are 
     alleged to have defrauded or withheld information from the 
     FDA, and therefore would not be covered by the FDA defense.
       The FDA defense would allow plaintiffs to obtain full 
     compensatory damages and non-economic damages, including 
     medical costs, lost wages, loss of functioning, and pain and 
     suffering. We would not support the FDA defense if limited a 
     plaintiff's ability to obtain full compensatory and non-
     economic damages in any manner. The FDA defense would limit 
     only punitive damages. Also, the FDA defense would not be 
     available to any company that is found to have lied or 
     withheld information from the FDA or otherwise failed to 
     comply with FDA rules.
       The FDA defense is crucial given the current legal climate. 
     A quick review of recent events clearly points out the impact 
     of current policies. During the 1970s, there were 13 
     companies doing research and development on contraceptives. 
     Eight of these companies were American. Today, only two 
     American companies continue to conduct such research.
       Given the current legal climate, it is easy to understand 
     why companies are increasingly reluctant to make available 
     products, despite their known therapeutic value. Two cases in 
     point:
       Bendectin, a morning sickness drug that was taken by over 
     30 million American women, was removed from the market by its 
     manufacturer in 1984, after more than 2,000 lawsuits were 
     filled claiming it caused birth defects. The manufacturer has 
     spent over $100 million defending those lawsuits and is still 
     doing so. Even though almost every court that has looked at 
     the issue has determined there is no scientific evidence to 
     support the contention that the drug causes birth defects, 
     and even though Bendectin is still approved by the FDA for 
     use during pregnancy, no other manufacturer will risk making 
     a morning sickness drug.
       Norplant, one of the most significant contraceptive 
     developments of the past 20 yeas in the United States, was 
     approved by the FDA in 1990. It is now the target of numerous 
     cookie cutter, mass-produced class action lawsuits fueled by 
     sensationalism and slick advertising directed at women. 
     Despite the fact that Norplant continues to be supported by 
     the medical community--as recently as a March 1995 
     endorsement by the American Society for Reproductive 
     Medicine--many women have been driven by unwarranted fears 
     away from a safe and effective contraceptive product.
       Punitive damages are meant to punish willful, flagrant, 
     malicious or grossly illegal behavior. A company that has 
     compiled in good faith with the FDA's regulations cannot be 
     guilty of such behavior and should not be threatened with 
     punitive damages. Nor should juries be permitted to second-
     guess the expert judgment of the FDA on whether the benefits 
     of a drug outweigh the risks.
       Increasingly, the legitimate concerns for the health and 
     welfare of American women are being sidelined in the pursuit 
     of large financial settlements. It is our view that inclusion 
     of a FDA defense, similar to the one included in the House-
     passed product liability bill, would provide a much needed 
     incentive for increased investment in women's health research 
     and technologies. We believe this is a measured response and 
     we urge you to adopt an FDA defense in any final product 
     liability legislation.
           Sincerely,
     Judith M. DeSarno,
         President/CEO, National Family Planning and Reproductive 
           Health Association.
     Phyllis Greenberger,
         Executive Director, Society of the Advancement of Women's 
           Health Research.
     Dennis Barbour, J.D.
         President, Association of Reproductive Health 
           Professionals.
     Linda Barnes Bolton, Dr. P.H., R.N, FAAN,
         President, National Black Nurses' Association, Inc.
     Susan Wysocki, RNC, NP,
         President, National Association of Nurse Practitioners in 
           Reproductive Health.
                                                                    ____

                                                      May 1, 1995.
     Hon. Christopher J. Dodd,
     SR-444 Russell Senate Office Building, Washington, DC.
       Dear Senator Dodd: We have been asked to convey our views 
     with regard to an amendment to H.R. 956, the Product 
     Liability Fairness Act, to establish a defense to punitive 
     damages for FDA-approved drugs and devices. Each of the 
     undersigned has served at some time as Chief Counsel to the 
     Food and Drug Administration. Each of us, in our current 
     professional capacities, advises firms engaged in the 
     manufacture of drugs and devices. However, the views 
     expressed in this letter reflect our shared personal 
     judgment.
       The proposed defense to punitive damages for the marketing 
     of medical products that meet applicable federal regulatory 
     requirements makes eminent sense as a matter of public policy 
     and can be expected to facilitate the development and 
     continued availability of important products to treat and 
     prevent serious disease and to address other significant 
     health concerns. We describe below FDA's philosophy of new 
     drug regulation and its powers in this area, which, we 
     believe, strongly support the defense.
       FDA exercises sweeping authority over the development, 
     manufacture, and marketing of pharmaceuticals. Indeed, no 
     other industry in this country is subject to such a 
     comprehensive regulatory scheme. Pursuant to its statutory 
     mandate, FDA requires premarket approval of all new drugs. A 
     new drug may not be approved unless it has been shown to be 
     safe and effective under the conditions of use described in 
     its labeling.
       In making their approval decisions, FDA physicians and 
     scientists employ a risk-benefit standard. This standard 
     recognizes that all drugs have unavoidable risks, some of 
     them very serious. Therefore, FDA allows drugs onto the 
     market only when the benefits from using a drug outweigh 
     those risks. A drug's labeling is an important factor in 
     making the approval decision. Once a drug is available, the 
     treating physician, apprised of the recognized significant 
     risks of a drug, can make an informed decision whether a drug 
     is appropriate for use in a particular patient.
       Inevitably, not all of the risks from a drug can be 
     discovered prior to approval. While manufacturers are 
     required to conduct extensive clinical trials, often in 
     thousands of patients, some adverse events are so rare that 
     they emerge only after a drug is in widespread use after 
     approval. FDA therefore requires manufacturers to report all 
     adverse events to the agency. The most serious of these must 
     be reported within 15 days. FDA and the Justice Department 
     have vigorously enforced the adverse event reporting 
     requirements through a series of widely publicized criminal 
     prosecutions.
       FDA has the power to act swiftly and decisively when 
     postmarket surveillance does identify a safety issue. The 
     Secretary of Health and Human Services can immediately 
     suspend approval of a drug that poses an imminent hazard, 
     prior even to granting the manufacturer a hearing. FDA also 
     can compel labeling changes to incorporate new safety 
     information. As a practical matter, formal action under any 
     of these authorities is rarely necessary because, in our 
     experience, companies generally comply voluntarily with 
     agency requests.
       With this context, the desirability of the punitive damages 
     defense is readily apparent. Where manufacturers have 
     complied with all of FDA's approval, labeling, and safety 
     reporting requirements, they should not be open to punishment 
     through the imposition of punitive damages. This defense does 
     nothing to restrict the availability of 
      [[Page S6455]] compensatory damages. Injured persons will 
     still be made whole for their losses under the law. And they 
     will even be able to recover punitive damages in cases where 
     their injuries were caused by violations of FDA regulations. 
     The defense simply recognizes--as a clear rule--that 
     manufacturers who comply with FDA's comprehensive regulatory 
     process do not manifest the type of willful misconduct that 
     could merit punitive damages.
       While we recognize that the imposition of punitive damages 
     is a comparatively rare (but by no means unknown) event, the 
     threat of punitive damage awards skews the entire litigation 
     process and, with it, the process for developing new drugs 
     and making them available to the public. Pharmaceutical 
     manufacturers have withdrawn beneficial products from the 
     market and have ceased promising research because of this 
     threat. Congress is now in the position to remove this 
     obstacle and thereby to make a genuine contribution to the 
     public health. We therefore urge you to support the FDA 
     approval amendment to H.R. 956.
       Sincerely,
     Thomas Scarlett,
         Hyman Phelps & McNamara, Chief Counsel--1981-89.
     Nancy L. Buc,
         Buc Levitt & Beardsley, Chief Counsel--1980-81.
     Richard A. Merrill,
         Covington & Burling, Chief Counsel--1975-77.
     Richard M. Cooper,
         Williams & Connolly, Chief Counsel--1977-79.
     Peter Barton Hutt,
         Covington & Burling, Chief Counsel--1971-75.
         

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