In a late-night move that could be worth billions of dollars to a small group of major drug manufacturers, Senate Majority Leader Bill Frist (R-Tenn.) and Speaker Dennis Hastert (R-Ill.) inserted language into the fiscal year 2006 Defense Department spending conference report.
Shortly before midnight on Sunday, the leaders agreed — after House and Senate negotiators had already signed the report and announced its details to the public — to insert controversial language that protects vaccine manufacturers from product liability claims in the event of a viral pandemic, such as one caused by avian flu.
Observers familiar with the procedural history of conference reports said that they were unaware of any precedent for inserting language after conferees had signed off on the report. A review of several Congressional Research Service guides to conference proceedings make no reference to any prior example.
The language gives the Secretary of Health and Human Services the ability to suspend the ability of the public to file liability claims against vaccine manufacturers if he or she determines that there is an imminent threat of a pandemic viral outbreak.
If the law is applied as Frist and other supporters intend, it will represent enormous financial relief for a small group of largely foreign-owned pharmaceutical companies that have worked to promote vaccine liability protection. The companies include the Dutch vaccine manufacturer, Sanofi Pasteur, and the Swiss-based pharmaceutical giant, Novartis.
These companies have wielded substantial influence in Washington, D.C. Campaign finance disclosures show that the companies at the center of Congressional bird flu efforts have significant Washington-based operations, including well-funded corporate political action committees and a host of top lobbyists on retainer.
Employees and PACs controlled by Sanofi Pasteur, which Frist specifically mentioned during a Dec. 9 speech at the National Press Club outlining his avian flu plan, have made more than $83,000 in contributions to Republican and Democratic campaigns and PACs this year, including $5,000 to Frist’s Volunteer PAC and $5,000 to the Making Business Excel PAC, which is associated with Senate Health, Education, Labor and Pension Chairman Mike Enzi (R-Wyo.).
During the 2004 cycle, the company was also busy in the political money game, donating nearly $345,000 to candidates, candidate PACs and both parties.
Novartis has spent hundreds of thousands of dollars in lobbying and campaign contributions over the past few years, including more than $127,000 since the beginning of 2005.
This is not the first time Frist has come under fire following the discovery of controversial language being added to a spending bill at the last minute, noted Chris Mather, a spokeswoman for the Association of Trial Lawyers of America, which opposes the language inserted on Sunday.
Democrats and moderate Republicans lashed out at the GOP leadership last December when it was discovered that someone had slipped provisions into the omnibus spending bill that allowed some committee staff to view personal tax filings of citizens.
And in 2002, Frist found himself on the defensive after he inserted language into the Homeland Security spending bill giving Eli Lilly Co., a major GOP donor, a liability shield. In both cases Frist and Hastert were forced to remove the language.
Sunday’s legislative push has already drawn the ire of critics who complain that it represents a multibillion dollar giveaway to the pharmaceutical industry.
Critics of the liability shield worry it will be used as a backdoor way to cripple consumer’s ability to file liability suits against negligent companies, particularly since it includes no review mechanism.
During an early-morning meeting of the House Rules Committee on the bill, Rep. Dan Burton (R-Ind.), a vocal critic of the vaccine industry, complained bitterly that he had been assured the language would not be included in the bill. “This kind of thing should not be done at 11 at night,” he said.
House Appropriations Committee ranking member David Obey (D-Wis.) accused the GOP of tricking conferees, saying on the House floor that he had been assured the liability provision would not make it into the defense bill.
A group called Protect American Families last week announced a new online ad campaign criticizing the Majority Leader’s support for the avian flu bill, complaining that Frist is attempting to “sneak” overly broad liability language into the Defense spending bill.
Republicans strongly denied that they misled negotiators and insist that the unusual arrangement to include the language was struck only because the provisions had been inadvertently left out.
“There appears to have been some administrative snafu ... that led to much confusion,” a Senate Republican aide familiar with the situation said, adding that it took “several hours’ work to clear up that the avian package ... were indeed physically included along the lines understood by the Leader and the Speaker.”
The aide also noted the provisions are to apply only to a narrow section of the drug industry. Republicans also say that their most vocal critics in the legal world also stand to lose financially if liability claims are curtailed.
“Sen. Frist supports the PREP Act and the $3.8 billion in funding signed by a majority of the conferees to ensure we have the capacity to develop products to rapidly protect the American people from a bioterror attack or flu pandemic,” said Frist spokeswoman Amy Call.
Although exact figures of the level of liability vaccine makers could face are unknown, the government is planning to stockpile enough medicine to treat at least one quarter of the population. If recent cases over faulty medication are extrapolated outward, the shield could be worth billions in avoided legal costs.
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Each year since 1990, CQ Roll Call has reviewed the financial disclosures of all 541 senators, representatives and delegates to determine the 50 richest members of Congress. This year's report, derived from forms covering the calendar year 2012, shows it took a net worth of $6.67 million to crack the exclusive club.