November 14, 1986

I am today signing S. 1744, an omnibus health measure, with mixed feelings. On the one hand, I warmly endorse provisions of this legislation permitting the export of unapproved drugs and biologicals under certain conditions and repealing the Federal health planning authorities. These are changes in the law my administration has long sought. On the other hand, I have serious reservations about the portion of the bill that would establish a Federal vaccine injury compensation program. The administration has also objected to other portions that create a new program of State mental health planning grants and enact superfluous new authorities such as that for Alzheimer's disease research, education, and information dissemination activities.

The centerpiece of S. 1744 is title I, which allows the export of drugs and biologicals awaiting approval in the United States to foreign nations in which their use is allowed. I cannot emphasize too strongly the positive effects of this provision. It will increase the competitiveness of the American pharmaceutical industry abroad, create jobs, foster biotechnology, and aid other nations. I commend the Congress for its fine work in developing and passing this measure. The provisions of this well-crafted legislation strike an appropriate balance between permitting drug exports to countries that have adequate processes for making their own approval decisions, while at the same time reserving to the Secretary of Health and Human Services sufficient authority to protect the public health in the United States.

It is also with great pleasure that I can finally lay to rest the Federal health planning authorities. I have sought their repeal since I assumed office. These authorities, while perhaps well intentioned when they were enacted in the 1970's, have only served to insert the Federal Government into a process that is best reserved to the marketplace. Health planning has proved to be a process that was costly to the Federal Government, in the last analysis without benefit, and even detrimental to the rational allocation of economic resources for health care.

As noted, however, I do have serious reservations about title III of S. 1744, which creates the framework for a vaccine injury compensation program and a national vaccine program. Title III would establish a court-administered program to compensate persons who suffer an injury as a result of receiving a childhood vaccination. Although the goal of compensating those persons is a worthy one, the program that would be established by title III has serious deficiencies.

The administration has been greatly concerned for some time that unpredictable tort liability has caused many vaccine manufacturers to abandon production of childhood vaccines. Last year we proposed legislation to address the liability concerns underlying this serious problem so that vaccine manufacturers can produce these vital vaccines without jeopardizing the viability of their companies. Title III addresses only the worthy purpose of compensating persons who may have been injured by a childhood vaccination. Even in this regard, however, it suffers from substantial deficiencies. For example, under this title there continues to be the opportunity for very substantial and inequitable differences in liability judgments awarded similarly situated plaintiffs. Another serious deficiency of title III is that it would create a program administered not by the executive branch, but by the Federal judiciary. This is an unprecedented arrangement that represents a poor choice to ensure a well-managed and effective program.

A major factor in my decision to approve S. 1744 despite the serious deficiencies in title III is that the bill provides that the vaccine compensation program established in that title will not be effective until a separate measure funding the program is enacted. This provision offers the opportunity to ensure that any funding measure enacted by the next Congress to implement the compensation feature of title III will not call for any part of the cost to be borne by the Federal taxpayer, and will also include certain key corrective program changes addressing the problems I have noted. In this regard, title III should be modified to ensure that childhood vaccines will be available to all American children. Second, there should be an acceptable resolution to the separation of powers concerns raised by the bill, resulting in a structure compatible with the inherent responsibilities of the executive and the judiciary in the administration of entitlement programs. Third, any acceptable measure to implement a vaccine compensation program should structure the program so that no funding will be provided from the Treasury of the United States.

In addition to my concerns regarding title III, I also have reservations about titles IV and V of S. 1744. Title IV, which is concerned with certain aspects of medical malpractice, has been modified and improved substantially from earlier versions. Nevertheless, I am concerned that the provisions of this title may increase anticompetitive behavior among physicians, raise the cost of health care, and reduce its quality. At my request, Secretary of Health and Human Services Bowen has established a task force that is examining the whole range of issues related to medical malpractice, and I look forward to his additional recommendations early next year.

Title V requires States to develop and implement comprehensive mental health services plans. States that do not submit such plans or fail to implement such plans would not be eligible to receive funding under the Alcohol, Drug Abuse, and Mental Health Services Block Grant. These provisions not only intrude into traditional State responsibilities and prerogatives concerning health care regulation but also undermine States' flexibility regarding the provision of specified health care services. The provisions are also unnecessary since the Public Health Service Act already permits States to use block grant funds to prepare comprehensive mental health services plans.

Despite these concerns, I believe that the benefits of S. 1744 outweigh its defects; and therefore, with some reluctance, I am approving the bill.

Note: S. 1744, approved November 14, was assigned Public Law No. 99 - 660.