How the Government Makes Vaccines Less Safe
The 1986 Vaccine Act distorts the market for vaccines and makes them less safe.
I first warned of government limits on liability for vaccines in May 2020 before the COVID vaccines hit the market. I was dismayed to see some classical liberals, especially economists, raucously cheering for this collectivist solution. They were afraid, like many others, and with fear, reason left their minds. We all make mistakes, but unfortunately, they have never stopped clapping and continue to be willfully unaware of market distortions impacting vaccines. My 2020 essay can be found here:
My latest essay for the AIER explains the 1986 Vaccine Act, which distorts the market for vaccines and makes them less safe.
Robert Kennedy Jr. is the new Secretary of Health and Human Services. If you enjoy emotionally charged events, you might have found the Senate confirmation hearings regarding Kennedy’s nomination compelling.
Senator Elizabeth Warren, among others, criticized Kennedy for his “dangerous views.” In his book Thinking Fast and Slow, the late Nobel laureate in economics, Daniel Kahneman, cautions against emotionally charged declarations: “It is wise to take admissions of uncertainty seriously, but declarations of high confidence mainly tell you that an individual has constructed a coherent story in his mind, not necessarily that the story is true.”
Kahneman explained that some make decisions involving risk by consulting their emotions: “Do I like it? Do I hate it? How strongly do I feel about it?”
The result is that “the answer to an easy question (How do I feel about it?) serves as an answer to a much harder question (What do I think about it?).” During the Kennedy hearings, many feelings were displayed, but little thinking.
If you lean towards a powerful government and prefer delegating important health choices to experts, you may be at ease with emotional governance, which hides the fact that liability waivers and government schedules undermine natural market incentives to prioritize vaccine safety.
Warren was confident of the “coherent story” in her mind as she railed against Kennedy. She was concerned that Kennedy would make lawsuits against pharmaceutical companies so easy that he’d “shut down access and manufacturing for vaccines for every one of us.” She opined that “Vaccine manufacturers often operate on very slim profit margins. If they get sued repeatedly and successfully, they simply move out of the vaccine space.”
Warren champions legislation that one analyst says would result in “wholesale expropriation of private enterprise.” How ironic that Warren now wants to exempt some corporations from market forces.
In this essay, I won’t try to settle the charged issue of vaccine safety. However, as an economist, I can identify market distortions resulting from corporations being exempt from market forces like liability.
You may have seen the Hims & Hers Super Bowl ad promoting their weight-loss medications. While the ad avoided naming specific drugs, its visuals showed injection pens similar to those used for Novo Nordisk’s popular Ozempic diabetes treatment.
Like all pharmaceuticals, Ozempic comes with side effects. Some of the side effects are very serious, including vision impairment. For some, the benefits exceed the risks of taking Ozempic for weight loss.
Product liability lawsuits are possible when the product is defective, or consumers are not fully informed of risky side effects whose magnitude is often not evident until years later.
Would a law exempting Ozempic from product liability make these drugs safer or more dangerous? Using her logic at the Kennedy hearings, Senator Warren might argue that such an exemption is necessary in the fight against the nation’s obesity epidemic.
A similar argument was used to pass the National Childhood Vaccine Injury Act of 1986 (Vaccine Act). The Vaccine Act granted pharmaceutical manufacturers broad legal immunity from lawsuits for vaccine injuries. The Act included “preemption of state tort claims… alleging design defects and warning defects.” Further, once approved, a vaccine manufacturer “does not have a statutory obligation to actively collect and analyze safety and efficacy data, nor are manufacturers obligated to update vaccine formulas in light of new scientific advancements.”
The Vaccine Act did provide for a “compensation program for vaccine-related injuries.” Despite original intentions, families of the vaccine-injured face “complex legal hurdles for obtaining Compensation” in a process that has become “adversarial.”
Corporate immunity from lawsuits provides vaccines with a hidden subsidy.
Consequently, the number of vaccines a child receives from birth until 18 has exploded. By one count, in 1983 there were 24 doses of four vaccines administered between birth and age 18. In 2023 up to 88 doses of 16 vaccines were recommended. The Centers for Disease Control (CDC) vaccine recommendations are wide-reaching because they guide the states to set vaccine requirements to attend public schools.
Recommendations from the CDC weren’t handed down from above. CDC recommendations are influenced by politics and the financially intertwined relationships between government and industry.
Dr. Frederik Schaltz-Buchholze, a Danish vaccine expert, counts “11 separate vaccine injections to Danish children, whereas it seems that American children would receive 72 vaccine injections up to 18 years of age.” Dr. Schaltz-Buchholze adds, “I consider several of the vaccines (e.g. hepatitis B, COVID-19, influenza) in the US program to be completely unnecessary and I would not subject my children to this vaccination program if I lived in the US.”
At the Kennedy confirmation hearing, Senator Rand Paul raised the issue of the hepatitis B vaccine administered at birth. Are Drs. Paul and Schaltz-Buchholze anti-vaxxers? Both are clear they are not.
Accusations of being anti-vaccine are used to silence inquiry and debate over concerns about vaccine safety and the schedule for administering vaccines.
Senator Warren is someone for whom inquiry is unnecessary, for she is sure the coherent story in her mind is true. In her story, increasing the number of vaccinations leads to more lives being saved and a healthier nation.
As an economist, I’m raising a cautionary flag. Early in my career, I investigated how insurance regulates risk in nuclear power. I testified before Congress about the Price-Anderson Act’s limitations on nuclear power liability in accidents. Incidentally, conservative supporters of subsidized nuclear power used the same rhetoric now used by those who liability exemptions for vaccines: I support it, the country needs it, so let’s subsidize it.
The issue of limiting liability has been examined by classical liberal law professor Richard Epstein. Writing about the British Petroleum 2010 oil spill in the Gulf of Mexico, he explained why “the best way to deter future spills is to expose drillers to the full costs of any mistake and not let any company without proper insurance near an oil derrick.”
Epstein added, “Solid insurance underwriting is likely to do a better job in pricing risk than any program of direct government oversight.”
The 1986 Vaccine Act is subject to Epstein’s logic. The need for insurance coverage would encourage pharmaceutical firms to prioritize vaccine safety.
Those who support liability exemptions say they are safeguarding public health. Like Warren, they believe that otherwise, vaccine production would be inadequate. They reject criticism of the CDC vaccine recommendations.
Let’s be clear: Rejecting liability shields is not a rejection of vaccines. Liability waivers undermine incentives to prioritize vaccine safety.
Today, I read a case in point about liability and safety: a large product recall of canned tuna due to a risk of food poisoning because of a defect in the can’s pull-tab lid. The manufacturer recalled the product “out of an abundance of caution” despite no reported injuries.
The recall is both expensive and extensive. Why would the manufacturer shoulder this massive cost for what appears to be minimal risk? The answer to that question is straightforward and extends past moral considerations. The manufacturer will be accountable for all product liability claims if the risk proves to be greater than anticipated. It’s smarter to bear a relatively small expense than risk bankruptcy if people start dying.
Under tort law, the need for food doesn’t exempt manufacturers from liability. The need for pharmaceuticals shouldn’t be a defense against tort claims. Emotional governance makes compelling theater, but it is not a search for truth about safety. Eliminating the guard rails of the market process places the public in jeopardy.
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Clear concise and logical. This is not hard people. The fact that people are still tossing around the epithet ‘anti-vaxxer’ boggles the mind. Ah well…
This explanation of how & why incentives matter in economics should be required reading for politicians. As far as I'm concerned, any pharmaceutical company that produces vaccines or other drugs and has either been found guilty of fraud or settled a fraud case to avoid trial should automatically lose their vaccine liability immunity, which they never should have had in the first place.