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Child vaccines – the magic words that give drug firms legal immunity


RUSHING out a product that might subsequently prove to have a defective design is a risky venture because ordinarily manufacturers are liable for harms caused by defectively designed products. That’s unless you’re a pharmaceutical company or an ambitious biotech in the business of making vaccines targeted for use in children. Such vaccines have a major attraction because, perversely, if they succeed in getting something authorised for use and onto the US children’s vaccine schedule, they lower the company’s legal risk. 

Even before Dr Robert Kadlec launched his vaccine Manhattan Project, reported on here and here, this was exactly the strategy Moderna was pursuing.

The reason design defects aren’t mentioned in the 1986 Childhood Vaccine Injury Act which indemnifies the manufacturers is probably to protect the US National Institutes of Health (NIH), whose National Institute of Allergy and Infectious Disease (NIAID) division which was directed by Dr Anthony Fauci from 1984 to 2022, is actively involved in vaccine research. The Defense Advanced Research Projects Agency (DARPA), the research and development agency of the United States Department of Defense responsible for the development of emerging technologies for use by the military, or its civilian equivalent, the Biomedical Advanced Research and Development Authority (BARDA), will finance industry partners to develop and commercialise vaccine candidates through what is referred to as the ‘Valley of Death’ stage of development where most fail. Under the terms of the NIH’s research collaboration agreements with its industry partners, the companies agree to indemnify the NIH. The NIH has no statutory authority to offer any corresponding indemnity to the company. But if a product is authorised and added to the childhood vaccination schedule in the US, the company has hit the jackpot.

Moderna, named for the messenger RNA gene therapies it was developing, shifted focus from rare diseases to infectious diseases after being awarded a $25million DARPA grant at the end of 2013 to develop what it called an mRNA antibody therapeutic for the US military against the mosquito-borne tropical disease chikungunya.

While welcoming the DARPA cash, Stephane Bancel, Moderna’s CEO, sounded a caution. ‘The last thing we want to do is rush and make a mistake. We have a big responsibility to society. We believe we can bring forward new drugs to patients,’ he said. 

He recalled the death of Jesse Gelsinger, which I  reported on here,  in the safety trial phase for a chimpanzee adenoviral vector based gene therapy saying, ‘Remember gene therapy? They rushed it to the clinic in the 90s, and an 18-year-old died in a clinical trial. It set back the field for a decade. mRNA is brand new, and we don’t want to damage it – it’s our responsibility to society. We are being very responsible and careful, especially now that we have cash. It would be criminal to make a mistake now.’ 

What Bancel failed to mention is that his company’s products are gene therapies too. They genetically modify the recipient so that their own body is a bioreactor for the foreign protein their immune system is being trained to target.

After the DARPA grant, Moderna’s vaccine programme expanded. In 2015, it began collaborating with Merck & Co, an established vaccine manufacturer. Merck took a 50 per cent equity stake in Moderna’s infectious disease subsidiary and Moderna began developing vaccines for respiratory syncytial virus (RSV) and varicella-zoster (shingles) virus (VZV) which Merck was to commercialise for them.  

In September 2016, Moderna announced it would spend $110million on building a 200,000 square foot industrial-scale manufacturing facility, despite having no licensed products to manufacture and nothing in late-stage development. The company said, ‘Moderna has amassed deep institutional expertise in the US and global regulatory landscape. The ability to share and apply learnings from ongoing regulatory interactions across its ecosystem of internal therapeutically focused ventures and external partners generates a network effect that benefits Moderna and its partners, helping to advance programs through regulatory processes.’

By 2017, with Moderna’s plans for its stock market debut advancing, CEO Bancel said: ‘We very consciously decided to stay private to be able to turn on a dime based on what we learn in the labs initially. That has served us well, because over the six years the company has been operating, there have been a couple of bumps on the road on the science – and nobody panicked.’

Moderna revised its products plans in January 2017, just as the Coalition for Epidemic Preparedness Innovations (CEPI) was launched at DavosSTATnews, an industry trade paper, reported the news sceptically. 

A few months earlier Moderna shelved its flagship rare disease mRNA product, an advanced gene therapy for a serious liver condition called Crigler-Najjar syndrome, over safety concerns. The company’s market valuation of $4.7billion seemed too high for what STATnews characterised as a ‘modest pipeline’. Moderna said it was developing vaccine candidates for influenza and zika, plus another for a disease that STATnews reported remained a secret but which might have been the HIV vaccine candidate it agreed to develop for the Bill & Melinda Gates Foundation in March 2016.

Bancel told STATnews: ‘I’m sure that five years from now we’ll look at 2017 as the inflection point that Moderna went for a lift-off. We have a chance to transform medicine, and we won’t quit until we are done and we have impacted patients.’ 

In the prospectus for its 2018 stock market launch, Moderna lists vaccines as its ‘lowest risk’ product line. A vaccine for cytomegalavirus (CMV), a usually harmless virus, was one of the products clearly intended to lever open the market for its products via this route.

The prospectus said: ‘We believe this gives us greater potential to produce neutralizing antibodies that can block CMV transmission from the mother to the fetus. Our approach to block transmission could either be: direct, by vaccinating adolescents or adults of child-bearing potential (female and male); or indirect, by vaccinating toddlers who could spread CMV to each other, their mothers, and their childcare workers.’ 

On January 6, 2020, the day before SARS-CoV2 was identified as the causative agent of the Wuhan pneumonia, Moderna’s CEO wrote to shareholders, hyping with seer-like vision the ‘blockbuster potential’ of Moderna’s CMV vaccine and a couple of others. 

Bancel said: ‘Based on the clinical data we generated in 2019, I believe that infectious disease vaccines will be an important backbone of growth and stability for Moderna and provide large cash flows in years to come. We have an opportunity to reinvent the vaccine business -with our vaccines designed to cause cells to produce antigens that mimic the ones presented to the immune system during natural infection.’

The industry publication Pharmaceutical Technology explains the attraction of vaccines to Moderna (my emphasis): ‘Vaccines might not be the most profitable place to start, but vaccines offer some shelter from the most pressing scientific challenge of making mRNA therapy work – actually delivering the mRNA into cells. The introduction of synthetic mRNA to the body generally elicits an immune response to destroy it, which works to the advantage of vaccines intended to stimulate the immune system, but represents a problem for other treatments. Getting the mRNA may require the molecules to be delivered through lipid nanoparticles, which can cause dangerous side effects.’

Since the 1970s US courts have recognised vaccines as ‘unavoidably unsafe’ products. However, between 1980 and 1984 withlawsuits against manufacturers claiming $3.5billion worth of damages – most relating to injuries or cot deaths arising from DTP vaccine for diphtheria, tetanus and pertussis (whooping cough) – meandering through the US courts, companies began exiting the vaccine business.

In 1986, Congress, believing it to be for the greater good, stepped in to protect the childhood vaccination programme. It passed the National Childhood Vaccine Injury Act under which manufacturers were protected from liability for injuries arising from their unavoidably unsafe products, although they could still be sued for manufacturing defective batches of their products or for giving defective product warnings.

What was intended as a no-fault compensation programme was introduced to compensate the unfortunate ones injured by these products. The scheme was funded by a levy on each vaccine sold, the funds going into the US government’s general revenues with compensation paid out as per a table of recognised vaccine injuries. 

This did not help baby Hannah Bruesewitz or her parents. Within 24 hours of receiving a DTP vaccination, Hannah started suffering from seizures, 100 of them in the following month, leaving her profoundly disabled. The vaccine lot her shot came from was later linked to two deaths, 39 emergency room visits and two hospitalisations. In 1996, the vaccine given to Hannah was withdrawn from use. Althoughseizure disorders were a recognised DTP vaccine injury under the original no-fault insurance scheme, they had just been removed from the injury table when Hannah suffered hers. Hannah’s parents sued the manufacturer Wyeth, claiming that the design of the vaccine was defective and a safer design could have been used. (This is another category of manufacturers’ liability but not one expressly mentioned in the 1986 legislation.) They lost their lawsuit.

They appealed and the case eventually went to the US Supreme Court. But the manufacturers’ lawyers wanted more than just protection from liability for unavoidably unsafe products. During oral arguments, Justice Breyer pointed out that what they were asking the court for amounted to protection from avoidable harm by way of indemnification for all liability for designing defective products.

Justice Sotomayor had pointedly asked the attorney for Pfizer, which now owned Wyeth, ‘Point me to the FDA regulations or law where the FDA, in giving a license to or permitting a new vaccine, actually looks at whether that vaccine is the most efficacious way with the least serious harm to the population. Is there a regulation that requires that judgment by them before they issue permission to market?’ 

The consumer protection agency has no such obligation. In its 6-2 decision the Supreme Court sided with the manufacturers with the majority finding that Congress had intentionally excluded design defects. The involvement of US Federal agencies such as the NIH in developing vaccines may explain why they were omitted as a category of liability in the first place. To be afforded this absolute protection, vaccines need to be on the National Childhood Immunization Schedule.

In the event the childhood vaccine strategy wasn’t needed by Moderna to launch its first product. After the World Health Organization declared Sars-CoV2 a Public Health Emergency of International Concern (PHEIC) on January 30, 2020, Alex Azar, the US Health and Human Services Secretary, made a declaration that gave Moderna the absolute indemnity protection it had always been after. The Covid-19 vaccine that transformed its fortunes got an emergency use authorisation on December 18, 2020. Now all Moderna needs is for it to be added to the childhood schedule in order to keep the product on the market, liability free.

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Paula Jardine
Paula Jardine
Paula Jardine is a writer/researcher who has just completed the graduate diploma in law at ULaw. She has a history degree from the University of Toronto and a journalism degree from the University of King’s College in Halifax, Nova Scotia.

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