[Congressional Record Volume 144, Number 64 (Tuesday, May 19, 1998)]
[House]
[Pages H3377-H3392]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




              RICKY RAY HEMOPHILIA RELIEF FUND ACT OF 1998

  Mr. HYDE. Madam Speaker, I move to suspend the rules and pass the 
bill (H.R. 1023) to provide for compassionate payments with regard to 
individuals with blood-clotting disorders, such as hemophilia, who 
contracted human immunodeficiency virus due to contaminated blood 
products, and for other purposes, as amended.
  The Clerk read as follows:

                               H.R. 1023

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

       (a) Short Title.--This Act may be cited as the ``Ricky Ray 
     Hemophilia Relief Fund Act of 1998''.
       (b) Table of Contents.--The table of contents of this Act 
     is as follows:

Sec. 1. Short title; table of contents.

                    TITLE I--HEMOPHILIA RELIEF FUND

Sec. 101. Ricky Ray Hemophilia Relief Fund.
Sec. 102. Compassionate payment relating to individuals with blood-
              clotting disorders and HIV.
Sec. 103. Determination and payment.
Sec. 104. Limitation on transfer of rights and number of petitions.
Sec. 105. Time limitation.
Sec. 106. Certain claims not affected by payment.
Sec. 107. Limitation on agent and attorney fees.
Sec. 108. Definitions.

     TITLE II--TREATMENT OF CERTAIN PRIVATE SETTLEMENT PAYMENTS IN 
  HEMOPHILIA-CLOTTING-FACTOR SUIT UNDER THE MEDICAID AND SSI PROGRAMS

Sec. 201. Treatment of certain private settlement payments in 
              hemophilia-clotting-factor suit under the Medicaid and 
              SSI programs.
                    TITLE I--HEMOPHILIA RELIEF FUND

     SEC. 101. RICKY RAY HEMOPHILIA RELIEF FUND.

       (a) Establishment.--There is established in the Treasury of 
     the United States a trust fund to be known as the ``Ricky Ray 
     Hemophilia Relief Fund'', which shall be administered by the 
     Secretary of the Treasury.
       (b) Investment of Amounts in Fund.--Amounts in the Fund 
     shall be invested in accordance with section 9702 of title 
     31, United States Code, and any interest on and proceeds from 
     any such investment shall be credited to and become part of 
     the Fund.
       (c) Availability of Fund.--Amounts in the Fund shall be 
     available only for disbursement by the Secretary of Health 
     and Human Services under section 103.
       (d) Termination.--The Fund shall terminate upon the 
     expiration of the 5-year period beginning on the date of the 
     enactment of this Act. If all of the amounts in the Fund have 
     not been expended by the end of the 5-year period, 
     investments of amounts in the Fund shall be liquidated, the 
     receipts of such liquidation shall be deposited in the Fund, 
     and all funds remaining in the Fund shall be deposited in the 
     miscellaneous receipts account in the Treasury of the United 
     States.
       (e) Authorization of Appropriations.--There is authorized 
     to be appropriated to the Fund to carry out this title 
     $750,000,000.

     SEC. 102. COMPASSIONATE PAYMENT RELATING TO INDIVIDUALS WITH 
                   BLOOD-CLOTTING DISORDERS AND HIV.

       (a) In General.--If the conditions described in subsection 
     (b) are met and if there are sufficient amounts in the Fund 
     to make each payment, the Secretary shall make a single 
     payment of $100,000 from the Fund to any individual who has 
     an HIV infection and who is described in one of the following 
     paragraphs:
       (1) The individual has any form of blood-clotting disorder, 
     such as hemophilia, and was treated with antihemophilic 
     factor at any time during the period beginning on July 1, 
     1982, and ending on December 31, 1987.
       (2) The individual --
       (A) is the lawful spouse of an individual described in 
     paragraph (1); or
       (B) is the former lawful spouse of an individual described 
     in paragraph (1) and was the lawful spouse of the individual 
     at any time after a date, within the period described in such 
     subparagraph, on which the individual was treated as 
     described in such paragraph and through medical documentation 
     can assert reasonable certainty of transmission of HIV from 
     individual described in paragraph (1).
       (3) The individual acquired the HIV infection through 
     perinatal transmission from a parent who is an individual 
     described in paragraph (1) or (2).
       (b) Conditions.--The conditions described in this 
     subsection are, with respect to an individual, as follows:
       (1) Submission of medical documentation of hiv infection.--
     The individual submits to the Secretary written medical 
     documentation that the individual has an HIV infection.
       (2) Petition.--A petition for the payment is filed with the 
     Secretary by or on behalf of the individual.
       (3) Determination.--The Secretary determines, in accordance 
     with section 103(b), that the petition meets the requirements 
     of this title.

     SEC. 103. DETERMINATION AND PAYMENT.

       (a) Establishment of Filing Procedures.--The Secretary of 
     Health and Human Services shall establish procedures under 
     which individuals may submit petitions for payment under this 
     title. The procedures shall include a requirement that each 
     petition filed under this Act include written medical 
     documentation that the relevant individual described in 
     section 102(a)(1) has (or had) a blood-clotting disorder, 
     such as hemophilia, and was treated as described in such 
     section.
       (b) Determination.--For each petition filed under this 
     title, the Secretary shall determine whether the petition 
     meets the requirements of this title.
       (c) Payment.--
       (1) In general.--To the extent there are sufficient amounts 
     in the Fund to cover each payment, the Secretary shall pay, 
     from the Fund, each petition that the Secretary determines 
     meets the requirements of this title in the order received.
       (2) Payments in case of deceased individuals.--
       (A) In general.--In the case of an individual referred to 
     in section 102(a) who is deceased at the time that payment is 
     made under this section on a petition filed by or on behalf 
     of the individual, the payment shall be made as follows:
       (i) If the individual is survived by a spouse who is living 
     at the time of payment, the payment shall be made to such 
     surviving spouse.

[[Page H3378]]

       (ii) If the individual is not survived by a spouse 
     described in clause (i), the payment shall be made in equal 
     shares to all children of the individual who are living at 
     the time of the payment.
       (iii) If the individual is not survived by a person 
     described in clause (i) or (ii), the payment shall be made in 
     equal shares to the parents of the individual who are living 
     at the time of payment.
       (iv) If the individual is not survived by a person 
     described in clause (i), (ii), or (iii), the payment shall 
     revert back to the Fund.
       (B) Filing of petition by survivor.--If an individual 
     eligible for payment under section 102(a) dies before filing 
     a petition under this title, a survivor of the individual may 
     file a petition for payment under this title on behalf of the 
     individual if the survivor may receive payment under 
     subparagraph (A).
       (C) Definitions.--For purposes of this paragraph:
       (i) The term ``spouse'' means an individual who was 
     lawfully married to the relevant individual at the time of 
     death.
       (ii) The term ``child'' includes a recognized natural 
     child, a stepchild who lived with the relevant individual in 
     a regular parent-child relationship, and an adopted child.
       (iii) The term ``parent'' includes fathers and mothers 
     through adoption.
       (3) Timing of payment.--The Secretary may not make a 
     payment on a petition under this title before the expiration 
     of the 120-day period beginning on the date of the enactment 
     of this Act or after the expiration of the 5-year period 
     beginning on the date of the enactment of this Act.
       (d) Action on Petitions.--The Secretary shall complete the 
     determination required by subsection (b) regarding a petition 
     not later than 120 days after the date the petition is filed 
     under this title.
       (e) Humanitarian Nature of Payment.--This Act does not 
     create or admit any claim of or on behalf of the individual 
     against the United States or against any officer, employee, 
     or agent thereof acting within the scope of employment or 
     agency that relate to an HIV infection arising from treatment 
     with antihemophilic factor, at any time during the period 
     beginning on July 1, 1982, and ending on December 31, 1987. A 
     payment under this Act shall, however, when accepted by or on 
     behalf of the individual, be in full satisfaction of all such 
     claims by or on behalf of that individual.
       (f) Administrative Costs Not Paid From Fund.--No costs 
     incurred by the Secretary in carrying out this title may be 
     paid from the Fund or set off against, or otherwise deducted 
     from, any payment made under subsection (c)(1).
       (g) Termination of Duties of Secretary.--The duties of the 
     Secretary under this section shall cease when the Fund 
     terminates.
       (h) Treatment of Payments Under Other Laws.--A payment 
     under subsection (c)(1) to an individual--
       (1) shall be treated for purposes of the Internal Revenue 
     Code of 1986 as damages described in section 104(a)(2) of 
     such Code;
       (2) shall not be included as income or resources for 
     purposes of determining the eligibility of the individual to 
     receive benefits described in section 3803(c)(2)(C) of title 
     31, United States Code, or the amount of such benefits, and 
     such benefits shall not be secondary to, conditioned upon 
     reimbursement from, or subject to any reduction because of 
     receipt of, any such payment; and
       (3) shall not be treated as a third party payment or 
     payment in relation to a legal liability with respect to such 
     benefits and shall not be subject (whether by subrogation or 
     otherwise) to recovery, recoupment, reimbursement, or 
     collection with respect to such benefits (including the 
     Federal or State governments or any entity that provides such 
     benefits under a contract).
       (i) Regulatory Authority.--The Secretary may issue 
     regulations necessary to carry out this title.
       (j) Time of Issuance of Procedures.--The Secretary shall, 
     through the promulgation of appropriate regulations, 
     guidelines, or otherwise, first establish the procedures to 
     carry out this title not later than 120 days after the date 
     of the enactment of this Act.

     SEC. 104. LIMITATION ON TRANSFER OF RIGHTS AND NUMBER OF 
                   PETITIONS.

       (a) Rights Not Assignable or Transferable.--Any right under 
     this title shall not be assignable or transferable.
       (b) 1 Petition With Respect to Each Victim.--With respect 
     to each individual described in paragraph (1), (2), or (3) of 
     section 102(a), the Secretary may not make payment with 
     respect to more than 1 petition filed in respect to an 
     individual.

     SEC. 105. TIME LIMITATION.

       The Secretary may not make any payment with respect to any 
     petition filed under this title unless the petition is filed 
     within 3 years after the date of the enactment of this Act.

     SEC. 106. CERTAIN CLAIMS NOT AFFECTED BY PAYMENT.

       A payment made under section 103(c)(1) shall not be 
     considered as any form of compensation, or reimbursement for 
     a loss, for purposes of imposing liability on the individual 
     receiving the payment, on the basis of such receipt, to repay 
     any insurance carrier for insurance payments or to repay any 
     person on account of worker's compensation payments. A 
     payment under this title shall not affect any claim against 
     an insurance carrier with respect to insurance or against any 
     person with respect to worker's compensation.

     SEC. 107. LIMITATION ON AGENT AND ATTORNEY FEES.

       Notwithstanding any contract, the representative of an 
     individual may not receive, for services rendered in 
     connection with the petition of an individual under this 
     title, more than 5 percent of a payment made under this title 
     on the petition. Any such representative who violates this 
     section shall be fined not more than $50,000.

     SEC. 108. DEFINITIONS.

       For purposes of this title:
       (1) The term ``AIDS'' means acquired immune deficiency 
     syndrome.
       (2) The term ``Fund'' means the Ricky Ray Hemophilia Relief 
     Fund.
       (3) The term ``HIV'' means human immunodeficiency virus.
       (4) Unless otherwise provided, the term ``Secretary'' means 
     Secretary of Health and Human Services.
 TITLE II--TREATMENT OF CERTAIN PAYMENTS IN HEMOPHILIA-CLOTTING-FACTOR 
                       SUIT UNDER THE SSI PROGRAM

     SEC. 201. TREATMENT OF CERTAIN PAYMENTS IN HEMOPHILIA-
                   CLOTTING-FACTOR SUIT UNDER THE MEDICAID AND SSI 
                   PROGRAMS.

       (a) Private Payments.--
       (1) In general.--Notwithstanding any other provision of 
     law, the payments described in paragraph (2) shall not be 
     considered income or resources in determining eligibility 
     for, or the amount of--
       (A) medical assistance under title XIX of the Social 
     Security Act, or
       (B) supplemental security income benefits under title XVI 
     of the Social Security Act .
       (2) Private payments described.--The payments described in 
     this subsection are--
       (A) payments made from any fund established pursuant to a 
     class settlement in the case of Susan Walker v. Bayer 
     Corporation, et al., 96-C-5024 (N.D. Ill.); and
       (B) payments made pursuant to a release of all claims in a 
     case--
       (i) that is entered into in lieu of the class settlement 
     referred to in subparagraph (A); and
       (ii) that is signed by all affected parties in such case on 
     or before the later of--

       (I) December 31, 1997, or
       (II) the date that is 270 days after the date on which such 
     release is first sent to the persons (or the legal 
     representative of such persons) to whom the payment is to be 
     made.

       (b) Government Payments.--
       (1) In general.--Notwithstanding any other provision of 
     law, the payments described in paragraph (2) shall not be 
     considered income or resources in determining eligibility 
     for, or the amount of supplemental security income benefits 
     under title XVI of the Social Security Act.
       (2) Government payments described.--The payments described 
     in this subsection are payments made from the fund 
     established pursuant to section 101 of this Act.
       Amend the title so as to read: ``A bill to provide for 
     compassionate payments with regard to individuals with blood-
     clotting disorders, such as hemophilia, who contracted human 
     immunodeficiency virus due to contaminated antihemophilic 
     factor, and for other purposes.''.

  The SPEAKER pro tempore. Pursuant to the rule, the gentleman from 
Illinois (Mr. Hyde) and the gentleman from Virginia (Mr. Scott) each 
will control 20 minutes.
  The Chair recognizes the gentleman from Illinois (Mr. Hyde).


                             General Leave

  Mr. HYDE. Madam Speaker, I ask unanimous consent that all Members may 
have 5 legislative days within which to revise and extend their remarks 
on the bill presently under consideration.
  The SPEAKER pro tempore. Is there objection to the request of the 
gentleman from Illinois?
  There was no objection.
  Mr. HYDE. Madam Speaker, I yield myself such time as I may consume.
  Madam Speaker, I rise in support of H.R. 1023, the Ricky Ray 
Hemophilia Relief Fund Act of 1998. This legislation has 270 cosponsors 
in the House, including our distinguished Speaker; and I am informed 
the Minority Leader also supports this legislation.
  When communities in our great Nation are devastated by a natural 
disaster such as floods or tornadoes, we rush to their aid, as well we 
should. The hemophilia community has been devastated by another type of 
natural disaster, the HIV contamination of the blood-clotting products 
which they need to treat their hemophilia. This legislation provides 
the disaster relief necessary to assist this community through a very 
difficult time.
  In the late 1970s and early 1980s, half of all people with blood-
clotting disorders in the United States were infected with HIV due to 
their use of blood-clotting products which were on the market at that 
time. During this period, people with blood-clotting disorders needed 
to use these products to live a relatively normal life; and because 
each dose came from a pool of

[[Page H3379]]

thousands of blood donors, it was almost certain that they would become 
HIV infected.

                              {time}  1215

  However, at that time HIV had not been identified and no tests were 
available to detect its presence. Most people with blood clotting 
disorders are already financially strapped by the medical costs they 
incur to treat their disorder. With earlier medical costs of over 
$150,000 and the added tragedies of an HIV infection, these families 
have been emotionally and financially devastated.
  In cases involving other types of blood and blood products, such as 
transfusion cases, where a primary provider or a small child was 
infected, settlements usually were for hundreds of thousands of 
dollars. Many of the HIV infected people with hemophilia were young 
fathers and children.
  After many years of litigation, the manufacturers of these blood 
clotting products containing HIV have set up a fund which provides 
$100,000 to individuals and their families. However, when considering 
the incredible financial burden placed on these families due to medical 
costs and, in many cases, loss of the primary provider of the family, 
this amount will not sufficiently lift this community out of the 
financial crisis that has developed.
  While no amount will completely alleviate the losses felt, H.R. 1023 
provides a payment equal to that of the industry. The amount available 
to these families would then be comparable to that potentially realized 
by other HIV-infected blood victims through settlement.
  There is a manager's amendment to this legislation. The bill as 
reported by the committee included a provision of no more than 2 
percent of these payments that may be used for attorneys' fees. Concern 
was raised during committee consideration that should there be a 
complication in the processing of an individual's application, 2 
percent would be insufficient to address that concern, and the 2 
percent limitation on attorneys' fees has been increased to 5 percent.
  I know my budget-conscious colleagues may balk at this expenditure, 
but when an extreme crisis hits an American community, we should as a 
Nation respond to that community's need. That is what this bill does. 
To aid this community in crisis, I urge a favorable vote on H.R. 1023.
  Madam Speaker, I reserve the balance of my time.
  Mr. SCOTT. Madam Speaker, I yield myself such time as I may consume.
  Madam Speaker, I rise in support of H.R. 1023, the Ricky Ray 
Hemophilia Relief Fund Act of 1998. The purpose of the bill is to 
establish a fund to provide compassionate payments of $100,000 to 
individuals with hemophilia who contracted HIV, the AIDS virus, from 
contaminated blood-clotting products.
  Hemophilia is a blood-clotting disorder genetically passed to sons by 
their mothers. In the late 1970s and early 1980s approximately 7,200 
boys and men were infected with HIV through the use of blood-clotting 
products. That is nearly half of all people with hemophilia in the 
United States.
  Because these blood-clotting products were derived from pools made up 
of literally thousands of donors, including prisoners, it has been 
nearly impossible to conclude causation and liability to any one 
manufacturer for selling contaminated blood products. Although, as the 
chairman mentioned, many cases have been settled, of the dozen or so 
cases that eventually went to trial, the manufacturers were only held 
liable in two cases, one of which was reversed and the other is still 
on appeal. To make matters worse, many of the States have passed so-
called blood shield laws to protect blood banks from liability when 
blood-based diseases are passed on to users.
  Notwithstanding the industry's courtroom success and new blood shield 
laws, the industry recently established a fund to provide $100,000 to 
individuals who contracted HIV through contaminated blood-clotting 
products in exchange for signing waivers releasing the industry from 
any future liability. Many hemophiliacs and their families have 
accepted this offer. Unfortunately, the $100,000 industry payment is 
insufficient to cover the enormous costs of blood-clotting drugs which 
people with hemophilia must continue to have in order to live a 
relatively normal life, and the enormous costs of drugs to combat the 
AIDS virus. Accordingly, this legislation is necessary to provide 
additional financial assistance.
  The administration supports this proposal. We want to thank the 
chairman for the manager's amendment to increase the attorneys' fee 
provision from 2 to 5 percent, because we support this amendment, 
because we believe that it will allow claimants greater access to legal 
counsel in processing their applications under the bill.
  Madam Speaker, I reserve the balance of my time.
  Mr. HYDE. Madam Speaker, I am pleased to yield 8 minutes to the 
distinguished gentleman from Florida (Mr. Goss), one of the driving 
forces behind this excellent legislation.
  (Mr. GOSS asked and was given permission to revise and extend his 
remarks and include extraneous material.)
  Mr. GOSS. Madam Speaker, I thank the distinguished gentleman from 
Illinois (Mr. Henry Hyde), chairman of the Committee on the Judiciary, 
with my great respect for him, and I thank him personally from my heart 
for getting this legislation this far.
  Madam Speaker, I rise today in support of H.R. 1023, the Ricky Ray 
Hemophilia Relief Fund Act, which is designed to respond to the 
tragedies of hemophilia-associated AIDS.
  I first became involved in this issue some nine years ago when I met 
the Ray family. Ricky Ray, like his two brothers, contracted HIV 
through the use of contaminated blood products. Ricky, the eldest of 
the three boys, died of AIDS in 1992 at the age of 15. Before his death 
Ricky and his family courageously spoke out and became national symbols 
of the terrible situation we are facing. He inspired many of his peers 
to tell their stories and begin seeking answers from the Federal 
Government and the blood product manufacturing industry.
  I am saddened that he did not live to see the day when legislation 
named in his honor would win the approval of this body. But we know his 
brothers and sisters, his parents, and the extended family of friends 
he established around the country recognize the enormous contribution 
that he made in his very short life. It is appropriate that the 
legislation before us bears his name, and I am pleased that Ricky's 
mother Louise is here with us today.
  Madam Speaker, hemophilia is an inherited blood-clotting disorder 
causing serious internal bleeding episodes that, if left untreated, can 
lead to disfigurement and death. People with hemophilia rely on blood 
products, commonly called factor, which are manufactured and sold by 
pharmaceutical companies.
  Because these products are made from the pooled blood of thousands of 
people, the potential for infection with a blood-borne disease among 
those who use them is obviously very high, something that has been 
known for decades. In fact, hemophilia sufferers have long been 
described as the canaries in the coal mine, because when something goes 
wrong with the blood supply it shows up in the hemophilia community 
first.
  Soon after the introduction of clotting factor in the 1970s, the 
hepatitis virus swept through the hemophilia community. Largely as a 
result of the hemophilia community's experience with the hepatitis 
virus, the Federal Government adopted the national blood policy, which 
charged the Public Health Service, including the Centers for Disease 
Control, Food and Drug, and the National Institutes of Health with 
ensuring the safety and adequacy of the Nation's blood supply. It is 
worth noting that the Federal responsibility for blood and blood 
products is indeed unique. No other product has a national policy.
  In the early 1980s a much more deadly disease struck as approximately 
one-half of the Nation's hemophiliacs, some 7,200 people at a minimum, 
became infected with HIV through the use of contaminated blood 
products. How did this happen? Why did the system that was established 
to safeguard the supply of blood and blood products fail to heed the 
early warning signs and prove so slow to respond to a dangerous threat?
  In 1993 I joined with Senators Graham of Florida and Kennedy of 
Massachusetts in asking the Department of Health and Human Services to

[[Page H3380]]

conduct a review of the events surrounding this medical disaster. The 
results of that intensive and objective review are contained in a 
report prepared by the Institute of Medicine, an arm of the National 
Academy of Sciences.
  The IOM found ``a failure of leadership and inadequate institutional 
decision-making processes'' in the system responsible for ensuring 
blood safety, concluding that ``a failure of leadership led to less 
than effective donor screening, weak regulatory actions, and 
insufficient communication to patients about the risk of AIDS.''
  While the IOM report is important, it does not begin to quantify the 
human dimension. For me, that is the most compelling part of this 
tragedy. We cannot talk to these victims without being moved by what 
they have gone through. It is important to keep in mind that the people 
with hemophilia already have to manage a sometimes debilitating 
disease. The average person with hemophilia spends approximately 
$100,000 per year on clotting factor alone. Many people with hemophilia 
have had a difficult time obtaining both health and life insurance, 
understandably.
  In addition to the difficulties associated with hemophilia itself, 
the added complication of HIV AIDS has hit the hemophilia community 
particularly hard. Each treatment costs somewhere in the range of 
$10,000 to $50,000 per year, varying on the stage of the disease and 
the course of the treatment.
  As a result of these extraordinary costs and the disproportionate 
impact of this tragedy on men, who most typically suffer from 
hemophilia and who tended to be the head of many of these households, 
many of these folks have been financially devastated. In some cases 
entire generations have been wiped out: fathers, sons, uncles. Most 
tragically, some men infected their wives with HIV before they became 
aware that they had contracted the disease. We know of cases where 
unborn children in these circumstances were also infected.

  The emotional toll on all of these families has been immense. Madam 
Speaker, the Federal Government cannot become involved in every tragic 
case that occurs in this country, but this case is unique. I believe 
the Federal Government can and should, for compassionate reasons, act 
to help the hemophilia community.
  While we cannot right all the wrongs in the world, we should pass 
this legislation to acknowledge the unique responsibility of the 
government to protect the blood supply and provide some measure of 
compassionate assistance to these victims. While I am encouraged that a 
final class settlement between the people of hemophilia and the blood 
product manufacturing companies is in fact going forward, it does not 
change my view that government also must act.
  As my colleagues know, and as the hemophilia community has learned 
firsthand, moving a bill through the legislative process is a slow, 
difficult, and sometimes frustrating experience, amen. When I first 
introduced the Ricky Ray bill, we had about two dozen cosponsors. Since 
then support for the bill has swelled to 270 cosponsors, and we have 
secured unanimous approval for all three committees with jurisdiction.
  This incredible progress is the direct result of the courage, 
diligence, and hard work of the hemophilia community. Of particular 
notice is the work of a group of high school students from Robinson 
Secondary School in Fairfax, Virginia. For several years these kids, as 
part of a marketing education program called DECA, have lobbied to pass 
this bill. Their efforts have been extraordinary, and they show that 
democracy can and does work.
  Finally, Madam Speaker, let me say thank you to the congressional 
staff that have worked with me through the years to research and 
understand this tragedy, explain it to the House, and get this bill 
moving.
  Madam Speaker, for too long the hemophilia community has felt that 
government first let them down and later abandoned them. I sincerely 
hope that the House action today will provide some measure of 
reassurance that their voices do count, that the legislative process 
does work, and that we have not forgotten them or the tragedy that 
befell their community. I only wish we had a cure for AIDS.
  I strongly urge my colleagues to support this important legislation.
  Madam Speaker, I include for the Record the following CRS report.
  The report referred to is as follows:

 CSR Report for Congress--Blood and Blood Products: Federal Regulation 
                           and Tort Liability

(By Diane T. Duffy and Henry Cohen, Legislative Attorneys, American Law 
                               Division)


                                summary

       Part I of this report, by Diane Duffy, Legislative 
     Attorney, provides an overview of the Federal government's 
     regulation of blood products. Part II, by Henry Cohen, 
     Legislative Attorney, examines tort liability for injuries 
     caused by defective blood or blood products.
       The Food and Drug Administration (FDA) regulates blood and 
     blood products under two statutes which overlap to a certain 
     degree: the Federal Food, Drug and Cosmetic Act [FFDCA] and 
     the Public Health Services Act (PHSA). Regulations are issued 
     in order to implement the provisions of these statutes. 
     Current statutory and regulatory law operates to govern the 
     licensing, production, testing, distribution, labeling, 
     review and approval of all drugs and biologics. Specifically, 
     under the FFDCA, drugs, which include biologics such as blood 
     and blood components or derivatives, which are intended to 
     cure, mitigate, or prevent disease, are regulated. The 
     enforcement and penalties provisions of the FFDCA can be 
     applied to biological product manufacturers. Within the 
     agency, the Center for Biologics Evaluation and Review has 
     jurisdiction over the regulation of these articles.
       Tort liability for injuries caused by defective blood or 
     blood products is a form of products liability, which is 
     governed primarily by state law. Products liability is strict 
     liability, which means that, to recover, the plaintiff does 
     not have to prove that the defendant was negligent, but need 
     prove only that the defendant sold a defective product and 
     that the plaintiff's injury resulted from the defect. 
     However, all 50 states--48 through ``blood shield'' 
     statutes--provide that blood transfusions are not subject to 
     strict liability. The primary rationale for this is the 
     belief that holding suppliers of blood or blood products 
     strictly liability would make blood transfusions too 
     expensive.
       Part I of this report, by Diane Duffy, Legislative 
     Attorney, provides an overview of the Federal government's 
     regulation of blood products. Part II, by Henry Cohen, 
     Legislative Attorney, examines tort liability for injuries 
     caused by defective blood or blood products.


              part i: federal regulation of blood products

       Issues relating to the regulation of blood products have 
     been raised in the context of individuals with hemophilia who 
     contracted Human Immunodeficiency Virus (HIV), the virus 
     which causes AIDS, through the use of contaminated blood 
     products. In the 104th Congress, bills have been introduced 
     by Rep. Goss and Sen. DeWine which would establish a trust 
     fund to compensate hemophiliacs, their spouses or estates, 
     who contracted HIV through tainted blood products. This part 
     of the report summarizes Rep. Goss' bill (H.R. 1023, 104th 
     Congress) \1\; discusses current Federal law that directs and 
     authorizes the regulation of blood products; and discusses 
     regulatory issues and events which are notable in this 
     context. In particular, it focuses issues which tend to 
     indicate that the regulation of blood products has been 
     different than the regulation of other articles which are 
     within the jurisdiction of the Food and Drug Administration 
     (FDA).
---------------------------------------------------------------------------
     Footnotes at end of article.
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     Summary: The Ricky Ray Hemophilia Relief Fund Act of 1995
       H.R. 1023, 104th Congress, introduced by Rep. Goss, 
     establishes procedures for claims for compassionate payments 
     with regard to persons with blood clotting disorders, e.g., 
     hemophilia, who contracted HIV due to contaminated blood 
     products. The bill, entitled the Ricky Ray Hemophilia Relief 
     Fund Act of 1995, states that about half of all individuals 
     in the U.S. who suffer from blood clotting diseases like 
     hemophilia, were exposed to HIV through the use of blood 
     clotting agents. The bill finds that the Federal government 
     has a shared responsibility with the blood products industry 
     for protecting the safety of the blood supply and for 
     regulating blood clotting agents. H.R. 1023 finds that people 
     with blood clotting disorders were at a very high risk of 
     contracting HIV during the period beginning in 1980 and 
     ending in 1987, when the last mass recall of contaminated 
     anti-hemophilic factor (AHF) occurred. The bill states that 
     it was during this period that the Federal government did not 
     require the blood products industry to use means to ensure 
     safety of blood products that were marketed for sale to 
     people with blood clotting disorders. Moreover, it finds that 
     the government did not require that all available information 
     about the risks of contamination be dispensed and failed to 
     properly regulate the blood products industry. Based upon 
     these and other findings, the bill establishes a fund to 
     compensate individuals in this circumstance. The fund is 
     named after a child born with hemophilia who, like his two 
     younger brothers and others, became infected with HIV through 
     the use of contaminated blood clotting products.\2\

[[Page H3381]]

       Specifically, the fund provides for partial restitution to 
     people who were infected with HIV after treatment, during the 
     period of 1980-1987, with contaminated blood products. The 
     fund is established in the Department of the Treasury, is to 
     be administered by the Secretary, and is to remain viable for 
     five years after the date of enactment. The bill authorizes 
     to be appropriated to the fund $1,000,000,000, to be 
     disbursed by the Attorney General. H.R. 1023 provides that 
     any person who submits to the Attorney General written 
     medical documentation that he has an HIV infection shall 
     receive $125,000 if each of these conditions is met:
       (A) 1. The person has any form of blood clotting disorder 
     and was treated with blood clotting agency in the form of 
     blood components or blood products at any time during the 
     period of January 1, 1980 and ending December 31, 1987; or
       2. The person is the lawful spouse of the infected person 
     or is the former lawful spouse of the infected person at the 
     time so described in the bill.
       3. The person acquired HIV through perinatal transmission 
     from a parent who is an individual described in the above 
     paragraphs.
       (B) A claim for payment is filed with the Attorney General.
       (C) The Attorney General determines that the claim meets 
     the requirements under this bill, if enacted.
       The Attorney General is required to establish procedures 
     for the claims and payments and must determine whether the 
     claim meets all the requirements. Claims are to be assessed 
     and paid, if appropriate, within 90 days of their filing. In 
     the case of a deceased claimant, the payment is to be made to 
     the deceased's estate or in the manner set forth in the bill. 
     Payments made from the fund shall be in full satisfaction of 
     all claims of or on behalf of the individual against the 
     United States that arise out of both the HIV infection and 
     treatment during the period of time noted. With regard to 
     judicial review, any person whose claim is denied may seek 
     judicial review in a district court of the U.S. The court 
     shall review the denial on the administrative record and hold 
     unlawful and set aside the denial if it was arbitrary, 
     capricious, an abuse of discretion, or otherwise not in 
     accordance with the law.
     Regulation of blood products
       The Food and Drug Administration (FDA) regulates blood and 
     blood products under two statutes which overlap to a certain 
     degree: the Federal Food, Drug and Cosmetic Act [FFDCA] \3\ 
     and the Public Health Services Act (PHSA)\4\ and implementing 
     regulations.\5\ Current statutory and regulatory law operates 
     to govern the licensing, production, testing, distribution, 
     labeling, review and approval of all drugs and biologics. 
     Under the FFDCA, drugs intended for the cure, mitigation, or 
     prevention of disease, which include biologics such as blood 
     and blood components or derivatives, are regulated.\6\ 
     Biological products are regulated by the FDA's Center for 
     Biologics Evaluation and Review under the authority of the 
     FFDCA, PHSA and implementing regulations.\7\ The FDA is the 
     primary agency for protecting the nation's blood supply and 
     it is directed and authorized to regulate blood-banking, the 
     handling of source plasma, and the manufacturer of blood 
     products. Investigations of a new biological product is done 
     under investigational new drug procedures found in the drug 
     section of the FFDCA because the PHSA specifically regulates 
     after the product is in the stream of commerce, not before. 
     The enforcement and penalties provisions of the FFDCA can be 
     applied to biological product manufacturers.
       Under section 351 of the PHSA \8\, blood products are 
     regulated under the category of biological products. Current 
     law provides that no person may sell, barter, exchange or 
     offer to sell, barter, exchange or conduct interstate 
     commerce of the same or bring from a foreign country any 
     virus, therapeutic serum, toxin, antitoxin, vaccine, blood, 
     blood component or derivative, allergenic products, or 
     analogous products applicable to the prevention, treatment, 
     or cure of diseases or injuries of man unless the same has 
     been propagated or manufactured and prepared at an 
     establishment holding an unsuspended or unrevoked license, 
     issued by the Secretary, to propagate or manufacture and 
     prepare the biological product.
       Moreover, the law provides that each package of the product 
     must be plainly marked with the proper name of the product, 
     the name, address and license number of the manufacturer and 
     the expiration date. The statute prohibits the false labeling 
     or marking of any package or container containing the 
     biological product and authorizes department officials to 
     inspect establishments. Current law governs licensing for 
     both the establishment and the product. For example, the 
     statute provides that licenses for the maintenance of the 
     establishment are issued after a showing that the 
     establishment and the products meet standards designed to 
     insure the continued safety, purity and potency of the 
     products. Further authority is provided for suspending and 
     revoking licenses. Also, when a batch, lot or other quantity 
     of a licensed product presents an imminent or substantial 
     hazard to the public health, the Secretary shall issue an 
     order, under 5 U.S.C. Sec. 554, immediately ordering the 
     recall of the quantity. The assessment of civil money 
     penalties is authorized for violations. Any person who 
     violates this section or aids in the violation of this 
     section may be punished upon conviction by a fine or 
     imprisonment or both. In sum, the agency is authorized to 
     enforce the law through various enforcement tools including, 
     seizure, application for recall, injunction, criminal 
     prosecution, or administrative techniques, e.g. suspension, 
     revocation of license.\9\
       Implementing regulations governing blood and blood products 
     provide further detail. For example, 21 C.F.R. Part 600 
     addresses general standards for establishments that 
     manufacture a product subject to licensing as a blood 
     product. It defines critical terms, e.g., biological product, 
     sterility, purity, establishment, etc. These regulations 
     state that with respect to an establishment, a person shall 
     be designated as the ``responsible head who shall exercise 
     control of the establishment in all matters relating to 
     compliance with the provisions'' of these regulations.\10\ 
     This part governs inspections with respect to time of 
     inspection, duties of inspectors and more. In addition, 
     regulations require other actions, for instance, the post-
     market reporting of adverse experiences.\11\
       Part 601 governs two types of licensing: the establishment 
     and the product.\12\ The FDA is charged with issuing licenses 
     only after all pertinent requirements and conditions are met. 
     The agency is authorized to enforce provisions of current law 
     through administrative measures to revoke or suspend a 
     license. Provisions for review of the agency's decision 
     regarding suspension or revocation are also addressed. 
     Section 601.25 establishes the review procedures to determine 
     that licensed biological products are safe and effective and 
     not misbranded under prescribed, recommended or suggested 
     conditions of use. Notably, Subpart E provides for the 
     accelerated approval of biological products for serious or 
     life threatening illnesses. This section permits the agency 
     to approve products on a fast track to provide meaningful 
     therapeutic benefit to patients over existing treatments, 
     that is, to treat patients unresponsive to or intolerant of, 
     available therapy.
       To assist the agency in fulfilling its duty to evaluate the 
     safety and effectiveness and labeling of biological products, 
     Part 601 also authorizes the FDA to appoint advisory review 
     panels to (1) evaluate the safety and effectiveness of 
     biological products for which a license has been issued under 
     Sec. 351 of the PHSA; (2) review the labeling of such 
     biological products; and (3) advise the Commissioner on which 
     of the biological products under review are safe, effective 
     and not misbranded. The members of the panel shall be 
     qualified experts, appointed by the Commissioner, and shall 
     include persons from lists submitted by organizations 
     representing professional, consumer, and industry interests. 
     Such persons shall represent a wide divergence of responsible 
     medical and scientific opinion. The Commissioner designates 
     the chair of each panel (for each type of biological product) 
     and minutes of all meetings must be made. Additionally, 
     regulations provide that interested persons can participate 
     in the advisory panels sessions to the extent that the FDA 
     must publish a notice in the Federal Register requesting 
     interested persons to submit, for review and evaluation by 
     the advisory panel, published and unpublished data and 
     information pertinent to the biological products.
       To a certain extent, the industry regulates itself through 
     the adherence to good manufacturing practices (GMPs). Part 
     606 sets forth these GMPs for blood \13\ and blood components 
     and provides uniform and industry-specific guidelines and 
     requirements to insure safety, effectiveness, purity and 
     other important features of blood products.\14\ These 
     regulations pertain to personnel of the establishment, e.g., 
     requirement to designate person in control of establishment; 
     facilities maintenance, e.g., adequate space, quarantine 
     storage, orderly collection of blood, etc.; equipment, e.g., 
     calibrated, properly maintained, etc.; and, supplies and 
     reagents, e.g., storage in a safe, sanitary and orderly 
     manner. The GMPs detail finished product controls, container 
     labels, records and reporting procedures and importantly, the 
     adverse reaction process.
       Part 607 requires the registration of establishments which 
     include human blood and plasma donor centers, blood banks, 
     transfusion services, other blood product manufacturers and 
     independent laboratories that engage in quality control and 
     testing for registered blood product establishments. The 
     regulations also provide special standards for human blood 
     and blood products, some of which apply directly to those 
     being treated for hemophilia. For example, Part 640 addresses 
     the product known as Cryoprecipitated AHF, a preparation of 
     antihemophilic factor which is obtained from a single unit of 
     plasma collected and processed in a closed system. The source 
     material for this product is plasma which may be obtained by 
     whole blood collection or plasmapheresis.\16\ The regulations 
     establish procedures pertaining to the suitability of donors; 
     the collection of source material; the testing of blood; 
     processing; quality control; and further requirements. With 
     specific regard to donor testing, the regulations provide 
     that the blood from which the plasma is separated must be 
     tested as prescribed in Sec. Sec. 610.40 [Test for hepatitis 
     B], 610.45 [Test for HIV] and 640.5 [Test for syphilis, blood 
     group, and Rh factors]. The test must be conducted on a 
     sample of the blood collected at the time of donation and the 
     container must be properly labeled. Manufacturers of this 
     product are responsible for testing and record-keeping. 
     Moreover, quality control tests for potency of the 
     antihemophilic factor must

[[Page H3382]]

     be conducted each month on at least four representative 
     containers of Cryoprecipitated AHF. The results must be 
     maintained at the establishment for inspection and review by 
     the FDA.
       As soon from the above examination of statutory and 
     regulatory law, the legal requirements and procedures, as 
     well as industry GMPs, create a complex and far-reaching 
     regulatory structure for biological products and blood 
     products in particular. To a certain extent, under the FFDCA 
     and the PHSA, the licensing of biologics is more restrictive 
     than that for other regulated articles, e.g., new drug. For 
     example, a new drug under the FFDCA needs an approved new 
     drug application (NDA), however, a new biologic needs to 
     fulfill higher requirements. A generic biological product 
     such as a serum must be approved by the FDA under the PHSA 
     for its purity, potency and effectiveness based upon data 
     submissions.\16\ The PHSA states that licenses for new 
     products may be issued only upon a showing that meets these 
     express standards.\17\ Additionally, related regulations and 
     GMPs must be fully satisfied to ensure compliance.
       Second, manufacturers of the product are individually 
     licensed as capable of making the product on the particular 
     manufacturing site.\18\ Regulations at Part 607, discussed 
     above, must be fully met for each establishment and for 
     each product. Enforcement and inspection authority under 
     the Act may be triggered to address alleged violations of 
     the law or regulations or to insure ongoing compliance. 
     Inspectors are authorized to examine records of the 
     licensed establishments while GMPs guide recordkeeping, 
     facility and equipment management, personnel regulations 
     and similar procedures. Moreover, the FDA inspectors are 
     granted special inspection authority for biological 
     products and special procedures apply. For instance, as 
     noted above, a specific person must be designated as being 
     in control of the facility for regulatory and compliance 
     purposes.\19\ Moreover, and particularly with regard to 
     blood clotting agents for hemophilia, extensive and 
     frequent testing of lots and batches is required after 
     initial production. The FDA may exercise its enforcement 
     authority under the FFDCA and PHSA to suspend or revoke 
     the license for either the product or the establishment, 
     to seize, to seek recalls, injunctions, assess penalties, 
     and to exercise a range of impressive enforcement 
     tools.\20\
       The entire licensure process is complex and intended to 
     insure purity, potency and prevent misbranding. Some view it 
     as the functional equivalent to a NDA for a new drug. 
     Regulation of biological products is more restrictive in 
     scope and has appeared to evolve to meet the unique needs and 
     characteristics of biological products. While there are many 
     similarities in the regulation of the drugs, devices, and 
     biological products during pre-market and post-market phases, 
     there appears to be a greater emphasis on regulatory 
     standards and requirements for biologics at the manufacturing 
     level. Commentators have noted that the unique and separate 
     histories of the regulation of drugs and biologics may 
     account for the difference in regulatory approach.\21\ One 
     reason may be attributed to the fact that the Biologics Act 
     \22\ predates the FFDCA and that it was not enforced by the 
     FDA until 1972, when jurisdiction for these matters was 
     transferred to the FDA from the National Institutes of 
     Health. Extensive government involvement and regulation of 
     the manufacturing process grew out of early tragic incidents 
     when it was determined that microbes contaminated 
     vaccines.\23\ Thus, where the primary focus is on the final 
     product for drugs and devices, for biologics, it was 
     determined that government regulation was needed much earlier 
     and more strictly than for other articles under the various 
     pertinent statutes.
       Additionally, blood and blood products are the subject of 
     an articulated national policy. Other articles under the 
     FFDCA and PHSA have not been focused upon nationally in such 
     a way. In 1973, the National Blood Policy was announced and 
     the Public Health Service, including the CDC, the FDA and 
     NIH, was charged with responsibility for protecting the 
     nation's blood supply. The Policy recognized that reliance on 
     ``commercial sources of blood and blood components for 
     transfusion, therapy . . . contributed to significantly 
     disproportionate incidence of hepatitis, since such blood is 
     often collected from sectors of society in which 
     transmissible hepatitis is more prevalent.'' \24\ The Policy 
     encouraged efforts to establish an all-volunteer blood 
     donation system and to eliminate commercialized acquisition 
     of blood and blood components.
       The Policy listed four goals: to provide an adequate supply 
     of blood; to ensure a higher quality of blood; to facilitate 
     maximum accessibility to services; and to achieve total 
     efficiency.\25\ According to the Institute of Medicine's 
     [IOM] 1995 study, the first actions under the policy included 
     adoption of an all-volunteer blood collection system; 
     coordination of costs; regionalization of blood collection 
     and distribution; and, an examination of standards of care 
     for hemophiliacs and other special groups. The Policy did not 
     address the commercialization of plasma, the preparation and 
     marketing of plasma derivatives, and the commercial 
     acquisition of blood for diagnostic reagents.\26\
     Contaminated blood products and brief overview of Government 
         actions during the 1980's
       In the context of blood products regulation and the 
     government's focus on the nation's blood supply, events 
     occurred in the 1980s which led hemophiliacs and others to 
     contract HIV from contaminated blood and blood products. The 
     IOM study indicates that in September of 1982, of the 593 
     cases of AIDs reported to the CDC, 3 were hemophiliacs. 
     Later, the CDC noted that the hemophilia patients who had 
     AIDS had all received large amounts of a commercially 
     manufactured anticoagulant known as AHF (antihemophilic 
     factor) \27\ Evidence seemed to indicate that children with 
     hemophilia were at risk for the disease.\28\ As more cases 
     were reported, the IOM report states that a national survey 
     indicated that 30% or more of all hemophiliacs had abnormal 
     immunological tests. By January 1983, evidence from CDC 
     investigations strongly indicated that blood and blood 
     products transmitted AIDS and that it could be transmitted 
     through sexual contact. It appeared that AIDS was occurring 
     in individuals with hemophilia who had received AHF 
     concentrate.\29\ In March, 1983, the PHS issued its first 
     formal recommendations on the prevention of AIDS and with 
     regard to hemophiliacs, the recommendation stated that 
     work should continue toward development of safer blood 
     products for use by hemophiliac patients.\30\ H.R. 1023 
     states that thousands became infected with HIV through the 
     use of contaminated blood clotting products.\31\
       The IOM report indicates that numerous measures were 
     publicized and taken with regard to blood and plasma 
     donations, collection and use, e.g. quarantine and disposal. 
     The FDA announced that it approved a heat treatment to 
     inactivate viruses in AHF concentrate, which purported to 
     help protect individuals with hemophilia from Hepatitis B, 
     and perhaps, AIDs.\32\ The IOM report states that: 
     ``Government and private agencies identified, considered, and 
     in some cases adopted strategies for dealing with the risk of 
     transmitting AIDs through blood and blood products. The 
     recommended safety measures were limited in scope. . . .'' 
     \33\
       In 1983, the FDA's Blood Product Advisory Committee (BPAC) 
     met to reconsider blood and blood products policies. One 
     company recalled AHF concentrate when it determined that the 
     concentrate was made from pools containing plasma from a 
     person diagnosed with AIDs. However the IOM report notes that 
     this recall was expressly not viewed as a recall of all such 
     products and that the agency did not initially initiate a 
     nationwide call of the concentrate.\34\ The BPAC stated in 
     mid-1983 that the criteria for deciding to withdraw lots of 
     AHF concentrate should be based on evidence that plasma from 
     a donor with AIDs had been present in the pooled plasma from 
     which the lot was manufactured and recommended to the FDA a 
     case-by-case decision regarding withdrawal for each lot that 
     included plasma from a person who had AIDS or was suspected 
     of having AIDS.\35\ Some physicians switched from AHF 
     concentrate to cryoprecipitate in those with less severe 
     hemophilia. The IOM concluded ``[b]lood safety policies 
     changed very little during 1983 [and that there] were missed 
     opportunities to learn from pilot tests to screen potentially 
     infected donors or implement other control strategies that 
     had been rejected as national policy.'' \36\ Inaction 
     relating to donor screening and surrogate marker testing was 
     emphasized in the report.\37\
       BPAC served as an advisory committee for the FDA and was 
     the forum for industry and interested entities to participate 
     in and influence the FDA's policy regarding blood products 
     regulation.\38\ According to the IOM report, BPAC's 
     membership included blood and plasma organization 
     representatives, scientists, and physicians.\39\ The report 
     concluded that valuable screening measures were not 
     recommended by the BPAC due to uncertainties regarding 
     scientific data, i.e., data from CDC, and ``pressures from 
     the blood industry and special interest groups.'' \40\ Thus, 
     options that could have reduced infection were not pursued. 
     HIV testing and additional donor screening procedures were 
     implemented in 1985. The IOM concluded that the FDA relied 
     too heavily on BPAC and did not independently assess its 
     recommendations and statements, and did not observe 
     principles for proper management of advisory committees.\41\ 
     Moreover, IOM concluded that the membership of BPAC limited 
     the information and points of view expressed to the agency 
     and found possible issues relating to conflicts of interest. 
     The report focused on the agency's role as being responsible 
     for protecting the nation's blood supply, providing 
     leadership and communication of information to those at 
     risk.\42\
     Conclusion to Part I
       In sum, the blood and blood products regulation under the 
     FFDCA and PHSA are restrictive and complex, governing 
     primarily licensing of products and sites, as well as the 
     final product, and authorize extensive enforcement actions. 
     The FDA is the lead agency responsible for regulation of 
     these articles and was charged with this responsibility in 
     1972. The products themselves seem to have been accorded 
     special status, to a certain degree, under the statutes 
     for regulation. Moreover, blood and blood products have 
     been part of an articulated National Blood Policy. Events 
     of the 1980s resulted in individuals with hemophilia, and 
     many others, to contract HIV through the use of 
     contaminated blood and blood products. This spurred 
     intense examination of the FDA, its regulatory actions, 
     and the use of its advisory committee BPAC, during this 
     period. H.R. 1023, and S. 1189, were introduced to provide 
     for payments from a trust fund to those with

[[Page H3383]]

     blood clotting disorders who contracted HIV at this time.


part ii: tort liability for injuries caused by defective blood or blood 
                                products

       ``Products liability'' refers to the liability of a product 
     manufacturer or subsequent seller for damages resulting from 
     an injury caused by a product defect. Products liability is 
     governed primarily by state common (i.e., court-made) law, as 
     modified by state statute, although federal statutes 
     occasionally preempt aspects of state products liability law. 
     For example, prior to filing suit under state law for 
     injuries caused by defective vaccines, one must file a claim 
     under the National Children Vaccine Injury Act of 1986, as 
     amended.\43\
       Products liability differs from most other liability for 
     non-intentional torts because products liability is strict 
     liability, which means that, to recover, the plaintiff does 
     not have to prove that the defendant was negligent (i.e., 
     failed to exercise due care). All the plaintiff generally 
     must prove in a products liability action is that the 
     defendant sold a defective product and that the plaintiff's 
     injury resulted from the defect.\44\
       Products liability suits sometimes also allege a breach of 
     warranty, on the theory that the fact that the product was 
     defective constitutes a breach of the implied warranties that 
     goods shall be merchantable (fit for ordinary purposes) and 
     fit for any particular purpose for which they are required. 
     These implied warranties arise under Uniform Commercial Code 
     Sec. Sec. 2-314 and 2-315, which has been enacted into law in 
     every state but Louisiana. A suit for breach of warranty is 
     similar to one for strict liability in tort in that in 
     neither type of case need the plaintiff prove negligence. 
     Breach of warranty suits predate strict tort liability suits, 
     which came into being only in the 1960s.
       One situation in which strict liability is generally not 
     applied is in suits involving unavoidably unsafe products, 
     among which, as noted below, some courts include blood. 
     Restatement (Second) of Torts Sec. 402A comment k, which 
     courts generally follow, provides: ``There are some products 
     which, in the present state of human knowledge, are quite 
     incapable of being made safe for their intended and ordinary 
     use. This is especially common in the field of drugs. An 
     outstanding example is the vaccine for the Pasteur treatment 
     of rabies, which not uncommonly leads to very serious and 
     damaging side effects when it is injected. Since the disease 
     itself inevitably leads to a dreadful death, both the 
     marketing and the use of the vaccine are fully justified, 
     notwithstanding the unavoidable high degree of risk which 
     they involve. Such a product, properly prepared, and 
     accompanied by proper directions and warnings, is not 
     defective, nor is it unreasonably dangerous'' [emphasis in 
     original].
     Case law
       The seminal products liability blood transfusion case was 
     Perlmutter v. Beth David Hospital, decided by the New York 
     Court of Appeals in 1954.\45\ It was a breach of warranty 
     case (as it predated strict tort liability), and the issue 
     was whether a transfusion constituted the sale of a product, 
     in which case a transfusion of contaminated blood would 
     constitute a breach of warranty, or whether it constituted 
     the provision of a medical service, in which case the 
     plaintiff would have to prove negligence to recover. This 
     distinction was critical because there was no means to detect 
     the presence of the hepatitis virus in blood, nor a practical 
     method to treat the blood to eliminate the danger of 
     hepatitis. Therefore, if the court deemed the transfusion a 
     sale, it would turn hospitals into insurers of the risk of 
     contaminated blood, but if it deemed it a service, then 
     plaintiffs in most cases would go uncompensated because of 
     the difficulty in proving negligence.
       The court held that the transfusion should be treated as a 
     service, because, ``when service predominates, and the 
     transfer of personal property is but an incidental feature of 
     the transaction, the transaction is not deemed a sale. . . 
     .'' \46\ The Perimutter decision was widely followed by the 
     courts, and extended to blood banks as well as hospitals. In 
     Community Blood Bank, Inc. v. Russell, however, a Florida 
     court found it ``a distortion to take what is, at least 
     arguably, a sale, twist it into the shape of a service, and 
     then employ this transformed material in erecting the 
     framework of a major policy decision.'' \47\ This policy 
     decision, of course, is whether ``the social utility of an 
     abundant blood supply outweighs the risks to individuals'' 
     \48\ The Florida court, needless to say, found the 
     transfusion to be a sale, and a transfer of contaminated 
     blood to be a breach of warranty.
       ``Community Blood Bank thus paved the way for the greatest 
     assault on the Perlmutter citadel, which came in Cunningham 
     v. MacNeal Memorial Hospital,\49\ where the defendant once 
     again was a hospital, not a blood bank.'' \50\ The plaintiff, 
     who had contracted serum hepatitis from defective blood 
     supplied by the hospital during a transfusion, asserted a 
     claim in strict liability and won, with the court refusing to 
     allow the hospital the defense that there was no means to 
     detect the existence of serum hepatitis in whole blood. The 
     court wrote: ``To allow a defense to strict liability on the 
     ground that there is no way, either practical or theoretical, 
     for a defendant to ascertain the existence of impurities in 
     his product would be to emasculate the doctrine and in a very 
     real sense return to a negligence theory.'' \51\
       Some courts, even if they treated a transfusion as the sale 
     of a product and not as a service, found for the defendant 
     under Restatement (Second) of Torts Sec. 402A comment k, 
     mentioned above. They ``considered whether liability without 
     fault was applicable in view of a claim that blood containing 
     hepatitis is a product which is unavoidably unsafe and thus 
     is not an unreasonably dangerous product for which the blood 
     bank could be held liable without fault. With some authority 
     to the contrary, the courts have reasoned that blood infected 
     with hepatitis virus is such an unavoidably unsafe product, 
     since there is a great need for blood for operations and 
     surgical procedures, but the possibility of blood being 
     infected with hepatitis cannot be totally eliminated despite 
     due care being taken, and therefore they have held that a 
     blood bank cannot be held liable without fault for injuries 
     to a patient who contracted hepatitis from the blood it 
     supplied.'' \52\
     Blood shield statutes; negligence suits
       The Illinois legislature responded to the Cunningham 
     decision by enacting a statute that provides, in part: ``The 
     procuring, furnishing, donating, processing, distributing or 
     using human whole blood, plasma, blood products, blood 
     derivatives and products, corneas, bones, or organs or other 
     human tissue for the purpose of injecting, transfusing or 
     transplanting any of them in the human body is declared for 
     purposes of liability in tort or contract [i.e., breach of 
     warranty] to be the rendition of a service . . . and is 
     declared not to be a sale of any such items and no warranties 
     of any kind or description nor strict tort liability shall be 
     applicable thereto, except as provided in Section 3 [which 
     imposes liability for negligence].'' \53\
       A subsequent Illinois case upheld the constitutionality of 
     this statute, writing: ``[I]t was predicted at the time 
     Cunningham was handed down that the imposition of liability 
     without fault on the distributors of blood would cause the 
     cost of transfusions to skyrocket. . . . Moreover, implicit 
     in the legislature's declaration of public policy is the fear 
     that the imposition of strict tort liability would cause the 
     financial considerations arising out of increased exposure to 
     tort litigation to impinge on the exercise of sound medial 
     judgment in a field where an individual's life might be at 
     stake.'' \54\
       Illinois' approach is now the approach of all 50 states, 
     with 48 states having enacted blood shield statutes, and 
     Minnesota, New Jersey, and District of Columbia courts having 
     reached the same result on their own.\55\ Blood shield 
     statues ``expressly characterize blood transfusions as 
     services or explicitly state that blood transfusions will not 
     be subject to strict liability.'' \56\ A 1990 Washington 
     case articulated the policy justifications for blood 
     shield statutes: ``First, the societal need to ensure an 
     affordable, adequate bloody supply furnishes a persuasive 
     reason for distinguishing between victims of defective 
     blood and victims of other defective products. Second, 
     strict liability cannot provide an incentive to promote 
     all possible means of screening the blood for HIV. Third, 
     although the producers may be in a better position to 
     spread the costs, it is not in society's best interest to 
     have the price of a transfusion reflect its true costs.'' 
     \57\
       Blood shield statutes do not preclude all lawsuits alleging 
     injuries caused by contaminated blood. Even in a state with a 
     blood shield statute, one commentator notes, ``It seems 
     likely that an action in express warranty or innocent 
     tortious misrepresentation would lie if a supplier of a blood 
     product misrepresented the product's safety, and a plaintiff 
     relied on the misrepresentation to his detriment in the 
     purchase of use of the product.'' \58\
       Another commentator addresses a different situation in 
     which strict liability may remain: ``So blood shield statutes 
     were expressly enacted to address only the threat of serum 
     hepatitis, and it was not until after it was discovered that 
     the HIV virus was transmittable through blood that 
     legislatures amended these statutes to deal with potential 
     AIDS liability. Courts have held that these amendments are 
     not to be applied retroactively. Consequently, plaintiffs who 
     received contaminated transfusions before the amendment are 
     not barred by the blood shield statutes from bring strict 
     liability actions.'' \59\
       A blood shield statute was also held inapplicable in a suit 
     against a pharmaceutical company where the relevant statute 
     (Indiana Code 16-41-12-11) applied to the distribution of 
     blood by a ``bank, storage facility, or hospital.'' The 
     Indian Court of Appeals wrote: ``[W]e simply cannot conclude 
     that our legislature intended to include a pharmaceutical 
     company, which commercially produces blood products for mass 
     distribution, as an entity within the same class described as 
     an organ or a blood ``bank or storage facility.'' The 
     manufacture and distribution of blood products by 
     pharmaceutical companies is better characterized as the sale 
     of a product rather than the provision of a service. . . . It 
     is quite unlikely that our legislature intended to include 
     pharmaceutical companies in its definition of ``bank or 
     storage facility'' simply because the manufacture or 
     production of blood products incidentally involves their 
     storage.'' \60\
       Finally, blood shield statutes do not, of course, preclude 
     suits for damages caused by negligence, and, ``[w]ith strict 
     liability effectively eliminated as a possible remedy [in 
     transfusion cases], negligence remains the only viable 
     alternative.'' \61\ ``To recover under a negligence cause of 
     action a transfusion-related AIDS victim must prove that

[[Page H3384]]

     a standard of care existed, that the defendant's conduct fell 
     below that standards, and that this conduct was the proximate 
     cause of the plaintiff's injury. Plaintiffs who have 
     contracted AIDS through transfusions of blood and blood 
     products have alleged negligence in both blood testing and 
     donor screening.'' \62\
       It is relevant to note here that, in 1985, the Food and 
     Drug Administration (FDA) licensed the enzyme-linked 
     immunsorbent assay (ELISA) test, which ``has proven 98.6% 
     effective in detecting exposure to AIDS [in blood], and when 
     coupled with a second test, the Western Blot Analysis, the 
     rate of detection rises to 100%.'' \63\ The existence of this 
     test enables plaintiffs to argue that a failure to use this 
     test constitutes negligence. A federal court of appeals 
     wrote: ``We believe that the FDA's recommendation of February 
     19, 1985, that blood facilities begin testing all donated 
     blood as soon as testing supplies become commercially 
     available imposed a duty on [the blood bank] to test all 
     its blood supplies for antibodies to the AIDS virus.'' 
     \64\
       One commentator reports: ``As the rampant spread of AIDS 
     continues and its devastating effects, both socially as well 
     as personally, are being publicized, courts are weighing the 
     consequences of the AIDS epidemic against the necessity of 
     assuring an adequate supply of blood. . . . In the past 
     several years, courts have started to rethink their position 
     on denying recovery to victims of AIDS-tainted transfusions. 
     Several approaches [to proving negligence] have been utilized 
     with some success. These approaches include: (1) failure of 
     the blood supplier or doctor to adequately warn the blood 
     recipient of the inherent dangers associated with a blood 
     transfusion [thus denying] the patient the opportunity to 
     make an informed choice; (2) inadequate screening of blood 
     donors [thus] allowing high-risk individuals to continue 
     donating blood; and (3) using a blood transfusion when an 
     alternate, safer method of sustaining life was available.'' 
     \65\
     Selected recommendations in the legal literature; The 
         National Childhood Vaccine Injury Act of 1986
       One commentator writes: ``Although absolute protection for 
     these entities [blood banks and blood product manufacturers] 
     may have been logical or desirable when the HIV virus was 
     undetectable in blood, the better view based on current 
     medical and scientific knowledge would be to allow post-1985 
     recipients of contaminated transfusions to recover under the 
     theories of strict liability and breach of warranty. This 
     would place the burden on the blood banks and blood products 
     manufacturers to ensure the safety of the products they 
     distribute.'' \66\
       The same writer adds: ``Moreover, court and legislatures 
     should distinguish between hospitals, blood banks, and blood 
     products manufacturers. Blood banks, and especially blood 
     products manufacturers, are active players in the economic 
     marketplace, selling goods rather than providing services.'' 
     \67\
       These views are echoed by another commentator: ``While 
     hospitals may be characterized as service-providers, it is 
     merely a legal fiction to so characterize blood and blood 
     products providers. To hold them liable only in negligence--
     and then to allow the blood industry itself to set the 
     standard of care accepted in the community, thus requiring 
     innocent plaintiffs to shoulder an extraordinary burden of 
     proof--violates all notions of fair play. It is time that 
     blood products purchased for a price, and particularly 
     manufactured blood derivative products, be recognized for the 
     products they are. Even under the 402A comment k exception 
     for ``unavoidably unsafe'' products, it would be unthinkable 
     to term blood contaminated by the HIV virus as not 
     ``unreasonably dangerous.'' It would be hard to think of 
     anything more unreasonably dangerous.''\68\
       An advocate of the blood shield statutes could respond to 
     these arguments by quoting the justifications various courts 
     have proffered for the statutes.\69\
       Finally, one commentator proposes: ``The National Childhood 
     Vaccine Injury Act (NCVIA) should serve as the structural 
     model for ``alternative legislation.'' . . . [P]otential 
     claimants should seek capped [no-fault] compensation in a 
     court of claims on waiver of potential tort claims against 
     blood products manufacturers. Petitions should receive 
     compensation from a fund financed by both congressional 
     appropriations and revenue raised through an industry tax 
     based on the sale of blood products.'' \70\
       The National Childhood Vaccine Injury Act of 1986,\71\ was 
     enacted because Congress feared that some vaccine 
     manufacturers might leave the market, which could create a 
     genuine health hazard in the United States. The Act provides 
     federal no-fault compensation to persons who suffer injury or 
     death from specified vaccines. It allows more limited 
     recovery than is generally allowed against manufacturers 
     under state tort law, but it was hoped that ``the relative 
     certainty and generosity of the system's awards will divert a 
     significant number of potential plaintiffs from litigation.'' 
     \72\
       The Act established a National Vaccine Injury Compensation 
     Program funded by a manufacturers' excise tax on certain 
     vaccines. Persons injured by a vaccine administered after 
     October 1, 1988, with claims of more than $1,000, may not sue 
     the vaccine administrator or manufacturer unless they first 
     file a petition in the United States Court of Federal Claims 
     for compensation under the Program. Upon the filing of a 
     petition, the court must issue a decision within a specified 
     period. Under the Program, compensation is limited to actual 
     reimbursable expenses, up to $250,000 for pain and suffering 
     and emotional distress, $250,000 in the event of a vaccine-
     related death, actual and anticipated loss of earnings, and 
     attorney's fees and other costs, but no punitive damages.
       A petitioner dissatisfied with his recovery under the 
     Program may reject it and file a tort suit (state statutes of 
     limitations are stayed during the pendency of the federal 
     petition), which is governed by state law, with some 
     limitations, such as that there are rebuttable presumptions 
     that manufacturers who comply with federal regulations are 
     not subject to failure to warn suits or to punitive damages.
     Treatment of blood and blood products in 104th Congress 
         products liability legislation
       On May 2, 1996, President Clinton vetoed H.R. 956, 104th 
     Congress, the Common Sense Product Liability Legal Reform Act 
     of 1996. On May 9, the House failed to override the veto.\73\ 
     The vetoed bill had been agreed upon in a House-Senate 
     conference, which adopted the Senate version of the provision 
     that dealt with blood and blood products.
       Both the House and Senate versions addressed blood and 
     blood products in their respective definitions of 
     ``product.'' Section 108(8)(B) of the House-passed bill 
     provided: ``The term [``product''] does not include . . . 
     ``human tissue, human organs, human blood, and human blood 
     products.''
       Section 101(13)(B) of the Senate-passed bill, by contrast, 
     provided: ``The term `products' does not include . . . 
     tissue, organs, blood, and blood products used for 
     therapeutic or medical purposes, except to the extent that 
     such tissue, organs, blood, and blood products (or the 
     provision thereof), are subject, under applicable State law, 
     to a standard of liability other than negligence. . . .''
       The Senate bill, in others words, did apply to blood and 
     blood products in strict liability and breach of warranty 
     actions, although these actions are precluded by all state 
     laws, except apparently in the limited instances noted on 
     page 15 of this report.\74\ The Senate-passed bill did not 
     apply in blood and blood products that are the subject of 
     negligence actions. The House-passed bill did not apply in 
     any suits involving blood or blood products.
       The committee report that accompanied the House bill states 
     merely, with respect to the exclusion: ``Tissue, organs, 
     blood, and blood products--that are human in origin--. . . 
     are explicitly excluded from the product definition.'' \75\ 
     The committee report that accompanied the Senate bill goes 
     into more detail: \76\ ``Claims for harm caused by tissue, 
     organs, blood and blood products used for therapeutic or 
     medical purposes are, in the view of most courts, claims for 
     negligently performed services and are not subject to strict 
     product liability.\77\ The Act thus respects state law by 
     providing that, in those states, the law with respect to 
     harms caused by these substances will not be changed.\78\ In 
     the past, however, a few states have held that claims for 
     these substances are subject to a standard of liability other 
     than negligence, and this Act does not prevent them from 
     doing so.\79\ See, e.g., Cunningham v. MacNeal Memorial 
     Hosp., 266 N.E.2d 897 (Ill. 1970) (overturned by Ill. Ann. 
     Stat. Ch. 111\1/2\, sections 2 and 3).\80\ Such actions 
     would be governed by the Act. . . .''\81\
       The conference committee version of H.R. 956, as noted, 
     adopted the Senate provision that dealt with blood and blood 
     products (renumbered as Sec. 101(14)(B)). The joint 
     explanatory statement of the conference committee, did not, 
     however, discuss the provision.\82\
     Recent settlement \83\
       On August 14, 1996, a federal judge gave preliminary 
     approval to a settlement between hemophiliacs infected with 
     AIDS and four pharmaceutical companies that allegedly had 
     manufactured blood clotting products contaminated with 
     HIV.\84\ Judge John F. Grady of the U.S. District Court for 
     the Northern District of Illinois tentatively certified a 
     settlement class, preliminarily approved the settlement 
     agreement, and authorized the parties to begin notifying 
     class members.
       The plaintiffs contended that the companies sold tainted 
     blood clotting products from 1978 until 1985, when new heat 
     sterilization procedures came into practice. Under the 
     settlement, each class member would receive $100,000, 
     regardless of the number of class members; the total number 
     of class members reportedly could range as high as 10,000. A 
     fairness hearing is scheduled before Judge Grady on November 
     25, 1996.
                                  ____



                               footnotes

     \1\ Sen. DeWine's bill is substantially similar to H.R. 1023.
     \2\ The bill indicates that Ricky Ray died at age 15 of 
     hemophilia-associated AIDS.
     \3\ 21 U.S.C. Sec. Sec. 301 et seq.
     \4\ 42 U.S.C. Sec. 262.
     \5\ FDA regulations pertaining to blood products are set 
     forth at 21 C.F.R. Parts 600 [Biological products; general]; 
     601 [Licensing]; 606 [Good manufacturing practices for blood 
     and blood products]; 607 [Establishment registration and 
     product listing for manufacturers of human blood and blood 
     products]; 610 [General biological products standards]; and, 
     640 [Additional standards for human blood and blood 
     products].
     \6\ 21 U.S.C. Sec. 321(g)(1) [Definitions; drug].
     \7\ According to an intra-agency agreement that 
     differentiates drugs and biologics, biologics include: 
     vaccines, allergens and in vivo diagnostic allergenic 
     products; human blood and blood derived products; 
     immunoglobulin products; products composed of or intended to 
     contact intact cells or intact microorganisms including 
     viruses, bacteria, fungi, etc.; non-

[[Page H3385]]

     antibiotic products that are proteins, peptides, or 
     carbohydrate products produced by cell culture; protein 
     products produced in animal body fluids by genetic alteration 
     of the animal; venoms and their constituents; synthetically 
     produced allergenic products intended to specifically alter 
     the immune response to a specific antigen or allergen; and 
     certain drugs used in conjunction with blood banking or 
     transfusion. ``FDA's Intercenter Agreement,'' Treatise on 
     Food and Drug Administration, James O'Reilly, Sec. 13.21 
     [Biological Products].
     \8\ 42 U.S.C. Sec. 262.
     \9\ The FDA is not authorized to mandate recalls.
     \10\ 21 C.F.R. Sec. 600.10.
     \11\ 21 C.F.R. Sec. 600.80.
     \12\ This also includes the licensing of foreign 
     establishments and products.
     \13\ Blood means whole blood collected from a single donor 
     and processed either for transfusion or further 
     manufacturing.
     \14\ Component means that part of a single donor unit of 
     blood separated by physical or mechanical means.
     \15\ Subpart F; 21 C.F.R. Sec. 640.50.
     \16\ 42 U.S.C. Sec. 262(d).
     \17\ Id.
     \18\ Id.; Food and Drug Regulation, James O'Reilly, 
     Sec. 13.22.
     \19\ 21 C.F.R. Part 606.
     \20\ The FDA is authorized to act via the misbranding and 
     adulteration sections of the FFDCA and can take various 
     actions for enforcement under 21 U.S.C. Sec. 357.
     \21\ See, for example, Regulation of Biologics Manufacturing: 
     Questioning the Premise, Food and Drug Law Journal, Vol. 49, 
     No. 1, 1994, pp. 213, 216.
     \22\ The Act was originally enacted in 1902 and reenacted in 
     1944 when the PHSA was enacted; codified at 42 U.S.C. 
     Sec. 262.
     \23\ FDLJ, infra, at 216.
     \24\ Reprinted in the Institute of Medicine's [IOM] ``HIV and 
     the Blood Supply,'' National Academy of Sciences, 1995, p. 
     41.
     \25\ Id.
     \26\ Id.
     \27\ IOM, at p. 68.
     \28\ Id.
     \29\ Id., at p. 70. AHF concentrate is manufactured from 
     pools containing plasma from donors.
     \30\ Id., at p. 73.
     \31\ H.R. 1023, Sec. 2 (10).
     \32\ Id., at p. 73.
     \33\ Id., at pp. 73-4.
     \34\ Id., at p. 74.
     \35\ Id., at p. 75.
     \36\ Id., at p. 75-6.
     \37\ IOM, at pp. 101-133.
     \38\ The FDA is authorized, or at times directed, to use 
     advisory committees. The Federal Advisory Committee Act, 
     FACA, is applicable to the FDA and defines ``advisory 
     committee'' as any committee, board, commission, counsel, 
     conference, panel task force or, other similar group . . . 
     which is established by a statute, established or used by the 
     President, or established or utilized by the one or more 
     agencies in the interest of obtaining advice or 
     recommendations.'' 5 U.S.C. App. Sec. 3. As discussed above, 
     FDA regulations provide additional and specific requirements 
     for advisory committees, how they are constituted, meetings, 
     participation by interested persons, and similar issues.
     \39\ IOM, at p. 121.
     \40\ Id., at p. 127.
     \41\ IOM, at p. 213.
     \42\ Id., at p. 215.
     \43\ 42 U.S.C. Sec. Sec. 300aa et seq., discussed infra, at 
     pp. 18-19.
     \44\ To recover in a products liability suit, the plaintiff 
     must prove that the defect was present at the time it left 
     the hands of the defendant. If a defect was present at the 
     time of manufacture, but a plaintiff sues a seller instead of 
     the manufacturer, then the seller may recover from the 
     manufacturer any damages it pays to the plaintiff. In the 
     past decade, almost half the states have enacted statutes 
     making product sellers other than manufacturers strictly 
     liable only when the manufacturer cannot be sued or would be 
     unable to satisfy a judgment. See Fifty-State Surveys of 
     Selected Products Liability Issues (CRS Report No. 95-300 A).
     \45\ 123 N.E.2d 792 (N.Y. 1954).
     \46\ Id. at 794.
     \47\ 185 So.2d 749 (Fla. Dist. Ct. App. 1966), aff'd as 
     modified, 196 So.2d 115 (Fla. 1967).
     \48\ Terri S. Hall, Bad Blood: Blood Industry's Immunity From 
     Liability For Transfusion-Borne Disease, 12 Journal of 
     Products Liability 25, 33 (1989).
     \49\ 266 N.E.2d 897 (Ill. 1970).
     \50\ Hall, supra note 48.
     \51\ Cunningham, supra note 49, at 902.
     \52\ Annotation, Liability of Blood Supplier or Donor for 
     Injury or Death Resulting from Blood Transfusion, 34 ALR4th 
     508, 513.
     \53\ 745 Ill. Compiled Stat. Ann. 40/2 (Smith-Hurd).
     \54\ Glass v. Ingalls Memorial Hospital, 336 N.E.2d 495, 499 
     (Ill. 1975).
     \55\ Andrew R. Klein, Beyond DES: Rejecting the Application 
     of Market Share Liability in Blood Products Litigation, 68 
     Tulane Law Review 883, 915 (1994). The citations to 44 of the 
     48 state blood shield statutes appear in M. Stuart Madden, 
     PRODUCTS LIABILITY (2d ed. 1988 & Supp. 1993) Sec. 6.19 n.1. 
     Minnesota repealed its statute, Minn. Stat. Sec. 525.928, in 
     1991.
     \56\ Dana J. Finberg, Blood Bank and Blood Products 
     Manufacturer Liability in Transfusion-Related AIDS Cases, 26 
     University of Richmond Law Review 519, 524 (1992).
     \57\ Howell v. Spokane & Inland Empire Blood Bank, 785 P.2d 
     815, 817 (Wash. 1990).
     \58\ Robert E. Cartwright and Jerry J. Phillips, PRODUCTS 
     LIABILITY (1986 & Supp. 1992) at Sec. 4.03 (Supp. p. 127). Of 
     course, a blood supplier may avoid this liability simply by 
     not making warranties or representations as to a product's 
     safety.
     \59\ Finberg, supra note 56, at 525-526.
     \60\ JKB, SR., and VB v. Armour Pharmaceutical Company, 660 
     N.E.2d 602 (Ind. App. 1996).
     \61\ Kathryn Glasgow Lofti, Suppliers of AIDS-Contaminated 
     Blood Now Face Liability, 34 Howard Law Review 183, 196 
     (1991).
     \62\ Finberg, supra note 56, at 533.
     \63\ Id. at 521.
     \64\ Kirkendall v. Harbor Insurance Co., 887 F.2d 857, 861 
     (8th Cir. 1989).
     \65\ Lofti, supra note 61, at 200, 197.
     \66\ Finberg, supra note 56, at 537.
     \67\ Id.
     \68\ Hall supra note 48, at 43.
     \69\ See, text accompanying notes 54 and 57, supra.
     \70\ Klein, supra note 55, at 931, 932-933. The author of 
     this proposal, however, would not allow a petitioner to use 
     the no-fault compensation scheme unless he first 
     ``demonstrate[d] a diligent, but unsuccessful, effort to 
     prove which manufacturer produced the product that caused his 
     infection. Thus, only plaintiffs unable to prove traditional 
     cause in fact would use alternative legislation.'' Id. at 
     933.
     \71\ 42 U.S.C. Sec. Sec. 300aa et seq. The summary of the Act 
     that follows draws heavily from Lester S. Jayson, Handling 
     Federal Tort Claims: Administrative and Judicial Remedies 
     Sec. 1.25 (1996).
     \72\ H.R. Rep. No. 99-908, Part 1, 99th Cong., 2d Sess. 13 
     (1986).
     \73\ For additional information see The Products Liability 
     Conference Committee Bill (CRS Rep. No. 96-276 A).
     \74\ See, text accompanying note 48, supra.
     \75\ H.R. Rep. No. 104-64, Part 1, 104th Cong., 1st Sess. 30 
     (1995).
     \76\ The footnotes that accompany the following quotation are 
     all by the author of this memorandum; they do not appear in 
     the Senate report.
     \77\ This, of course, is because the blood shield statutes 
     generally preclude suits except in negligence.
     \78\ This statement does not explain the reluctance to change 
     negligence actions involving tissue, organs, blood, and blood 
     products, when there is no reluctance to change negligence 
     actions involving other products. Section 102(a)(1) of the 
     bill provides that the bill would apply to any product 
     liability action (with exceptions not relevant here), and 
     section 101(14) defines ``product liability action'' as ``a 
     civil action brought under any theory [i.e., including 
     negligence] for harm caused by a product.''
     \79\ This is true, but does not explain why the bill would 
     apply to strict liability actions involving tissue, organs, 
     blood, and blood products, but not to negligence actions 
     involving those products. Whether the bill would apply to a 
     particular type of suit is unrelated to the question of 
     whether that type of suit may be brought. This is because the 
     bill would affect only particular aspects of products 
     liability suit; it would not alter their nature as 
     negligence, breach of warranty, or strict liability suits.
     \80\ This statute was renumbered as indicated in note 53, 
     supra.
     \81\ S. Rep. No. 104-69, 104th Cong., 1st Sess. 24 n.86 
     (1995).
     \82\ H.R. Rep. No. 104-481, 104th Cong., 2d Sess. (1996).
     \83\ The following is based on an article in 24 Products 
     Safety & Liability Reporter 761 (Aug. 16, 1996).
     \84\ Walker v. Bayer AG (N.D. Ill., MDL No. 93-C-7452).

 [From the Committee to Study HIV Transmission Through Blood and Blood 
    Products, Division of Health Promotion and Disease Prevention, 
 Institute of Medicine, National Academy Press, Washington, D.C., 1995]

     HIV and the Blood Supply: An Analysis of Crisis Decisionmaking

    (By Lauren B. Leveton, Harold C. Sox, Jr., and Michael A. Stoto)


                           executive summary

       A nation's blood supply is a unique, life-giving resource 
     and an expression of its sense of community. In 1993, 
     voluntary donors gave over 14 million units of blood in the 
     United States (Wallace, et al. 1993). However, the 
     characteristic that makes donated blood an expression of the 
     highest motives also makes it a threat to health. Derived 
     from human tissue, blood and blood products can effectively 
     transmit infections such as hepatitis, cytomegalovirus, 
     syphilis, and malaria from person to person (IOM 1992). In 
     the early 1980s blood became a vector for HIV infection and 
     transmitted a fatal illness to more than half of the 16,000 
     hemophiliacs in the United States and over 12,000 blood 
     transfusion recipients (CDC, MMWR; July 1993).
       Each year, approximately four million patients in the 
     United States receive transfusions of approximately 20 
     million units of whole blood and blood components. The blood 
     for these products is collected from voluntary donors through 
     a network of nonprofit community and hospital blood banks. 
     Individuals with hemophilia depend upon blood coagulation 
     products, called antihemophilic factor (AHF) concentrate, to 
     alleviate the effect of an inherited deficiency in a protein 
     that is necessary for normal blood clotting. The AHF 
     concentrate is manufactured from blood plasma derived from 
     1,000 to 20,000 or more donors, exposing individuals with 
     hemophilia to a high risk of infection by blood-borne 
     viruses.
       The safety of the blood supply is a shared responsibility 
     of many organizations including the plasma fractionation 
     industry, community blood banks, the federal government, and 
     others. The Food and Drug Administration (FDA) has regulatory 
     authority over plasma collection establishments, blood banks, 
     and all blood products. Since 1973, the FDA has established 
     standards for plasma collection and plasma product 
     manufacture and a system for licensing those who met 
     standards. The Centers for Disease Control and Prevention 
     (CDC) has responsibility for surveillance, detection, and 
     warning of potential public health risks within the blood 
     supply. The National Institutes of Health (NIH) supports 
     these efforts through fundamental research. During the 
     1950s and 1960s, blood shield laws were adopted by 47 
     states. These laws exempt blood and blood products from 
     strict liability or implied warranty claims on the grounds 
     that they are a service rather than a product. The laws 
     were developed on the premise that given the inherently 
     risky nature of blood and blood products, those providing 
     them required protection if the blood system was to be a 
     reliable resource.
       As a whole, this system works effectively to supply the 
     nation with necessary blood and blood products, and its 
     quality control mechanisms check most human safety threats. 
     The events of the early 1980s, however, revealed an important 
     weakness in the system--in its ability to deal with a new 
     threat that was characterized by substantial uncertainty. 
     With intent to prepare the guardians of the blood supply for 
     future threats concerning blood safety, the Department of 
     Health and Human Services commissioned the Institute of 
     Medicine to study the

[[Page H3386]]

     transmission of HIV through the blood supply. The Committee 
     to Study HIV Transmission Through Blood and Blood Products 
     undertook this assignment fully aware of the advantages and 
     dangers of hindsight. Hindsight offers an opportunity to gain 
     the understanding needed to confront the next threat to the 
     blood supply. The danger of hindsight is unfairly finding 
     fault with decisions that were made in the context of great 
     uncertainty.


                                HISTORY

                            The Risk of AIDS

       Starting with the identification of 26 homosexual men with 
     opportunistic diseases in June 1981, the CDC's Morbidity and 
     Mortality Weekly Report became the source for reports of the 
     epidemic. By July 1982, enough cases had occurred with common 
     symptomatology to name the new disease ``acquired immune 
     deficiency syndrome'' (AIDS). By January 1983, 
     epidemiological evidence from CDC's investigations strongly 
     suggested that blood and blood products transmitted the agent 
     causing AIDS and that the disease could also be transmitted 
     through intimate heterosexual contact. The conclusion that 
     the AIDS agent was blood-borne was based on two findings. 
     First, AIDS was occurring in transfusion recipients and 
     individuals with hemophilia who had received AHF concentrate; 
     these patients did not belong to any previously defined group 
     at risk for contracting AIDS. Second, the epidemiologic 
     pattern of AIDS was similar to hepatitis B, another blood-
     borne disease.

    Immediate Responses to Evidence of Blood-Borne AIDS Transmission

       In the first months of 1983, the epidemiological evidence 
     that the AIDS agent was blood-borne led to meetings and 
     public and private decisions that set the pattern of the 
     blood industry's response to AIDS, starting with a public 
     meeting convened by the CDC in Atlanta on January 4, 1983. 
     Later that month, the leading blood bank organizations, and, 
     separately, the National Hemophilia Foundation (NHF) and the 
     blood products industry, issued statements about preventing 
     exposure to AIDS. In March 1983, the Assistant Secretary for 
     Health promulgated the first official Public Health Services 
     (PHS) recommendations for preventing AIDS, and the FDA 
     codified safe practices for blood and plasma collection.
       The government and private agencies quickly identified, 
     considered, and in some cases adopted strategies for dealing 
     with the risk of transmitting AIDS through blood and blood 
     products. The recommended safety measures, however, were 
     limited in scope. Examples include: questions to eliminate 
     high-risk groups such as intravenous drug users, recent 
     immigrants from Haiti, and those with early symptoms of AIDS 
     or exposure to patients with AIDS; direct questions about 
     high-risk sexual practices were generally not used. These 
     questions reflected a lack of consensus about the magnitude 
     of the threat, especially among physicians and public health 
     officials who had trouble interpreting the unique 
     epidemiological pattern of AIDS. The recommendations also 
     reflected uncertainty about the benefits of identifying and 
     deferring potentially infected blood and plasma donors, 
     treatment of blood products to inactivate viruses, recall of 
     products derived from donors known to have or suspected of 
     having AIDS, and changes in transfusion practice and blood 
     product usage. The costs, risks, and benefits of these and 
     other potential control strategies were uncertain.

                  Opportunities to Reformulate Policy

       In the interval between the decisions of early 1983 and the 
     availability of a blood test for HIV in 1985, public health 
     and blood industry officials became more certain that AIDS 
     was a blood-borne disease as the number of reported cases of 
     AIDS among hemophiliacs and transfused patients grew. As 
     their knowledge grew, these officials had to decide about 
     recall of contaminated blood products and possible 
     implementation of a surrogate test for HIV. Meetings of the 
     FDA's Blood Products Advisory Committee in January, February, 
     July and December 1983 offered major opportunities to 
     discuss, consider, and reconsider the limited tenor of the 
     policies.
       Despite these and other opportunities to review new 
     evidence and to reconsider earlier decisions, blood safety 
     policies changed very little during 1983. Many officials of 
     the blood banks, the plasma fractionation industry, and the 
     FDA accepted with little question estimates that the risk 
     of AIDS was low (``one in a million transfusions''), and 
     they accepted advice that control strategies (such as 
     automatic withdrawal of AHF concentrate lots containing 
     blood from donors suspected of having AIDS, or a switch 
     from AHF concentrate to cryoprecipitate in mild or 
     moderate hemophiliacs) would be ineffective, too costly, 
     or too risky. During this period, there were missed 
     opportunities to learn from local attempts to screen 
     potentially infected donors or implement other control 
     strategies that had been rejected as national policy.

                          Research Activities

       From 1983 through 1985, research on AIDS included 
     epidemiological analysis to understand patterns of spread and 
     etiology, the search for methods to control or eliminate the 
     disease, and evaluation of the efficacy of potential safety 
     measures such as surrogate tests for the infection. Related 
     research on methods to inactivate hepatitis B virus in AHF 
     concentrate had begun in the 1970s and came to fruition in 
     the early 1980s.
       Scientists at the Pasteur Institute in Paris first isolated 
     the retrovirus now known as HIV-1 in 1983. Investigators at 
     the National Institutes of Health (NIH) provided convincing 
     evidence that HIV-1 was the causative infectious agent of 
     AIDS in 1984, and were also able to propagate HIV-1 in the 
     laboratory, thus providing the basis for a blood test to 
     identify individuals infected by the virus. Scientists at NIH 
     isolated and characterized HIV in 1984. Viral inactivation 
     methods for AHF concentrate were developed in laboratories of 
     the plasma fractionators, and the FDA licensed the new 
     processes quickly. Although the pace of viral inactivation 
     research had been slow, it accelerated in the 1980s, largely 
     in response to hepatitis, and had identified effective 
     strategies by 1984. However, research into other potential 
     ways to safeguard the blood supply such as the use of 
     surrogate tests was not pursued vigorously, and there was 
     relatively little research on blood safety issues per se.


                                findings

       The Committee framed its approach by examining four topics 
     that are essential components of a focused strategy for 
     ensuring the safety of the blood supply: blood product 
     treatment, donor screening and deferral, regulation of 
     removal of contaminated products from the market, and 
     communication to physicians and patients.

                           Product Treatment

       Plasma products can be treated by a variety of physical and 
     chemical processes to inactivate viruses and thus to produce 
     a product free from contamination and relatively safe for 
     transfusion. Shortly after the development of the technology 
     to manufacture AHF concentrate, it was recognized that these 
     products carried a substantial risk of transmitting hepatitis 
     B. Although some blood derivative products had been treated 
     with heat to destroy live viruses since the late 1940s, 
     Factor VIII and IX concentrates in the United States were not 
     subject to viral inactivation procedures until 1983 and 1984. 
     If this technology had been developed and introduced before 
     1980 to inactivate hepatitis B virus and non-A, non-B 
     hepatitis virus, fewer individuals with hemophilia might have 
     been infected with HIV.
       Overall, the record of the plasma fractionators and the FDA 
     with respect to the development and implementation of heat 
     treatment is mixed. The Committee's analysis focused on 
     whether the basic knowledge and technology for inactivating 
     viruses in AHF concentrate had been available before 1980 and 
     whether industry had appropriate incentives (from FDA, NIH, 
     NHF, or others) to develop viral inactivation procedures. In 
     the Committee's judgment, heat treatment processes to prevent 
     the transmission of hepatitis, an advance that would have 
     prevented many cases of AIDS in individuals with hemophilia, 
     might have been developed before 1980. For a variety of 
     reasons (e.g., concern about possible development of 
     inhibitors and higher costs), however, neither physicians 
     caring for individuals with hemophilia nor the Public Health 
     Service agencies actively encouraged the plasma fractionation 
     companies to develop heat treatment measures earlier. The 
     absence of incentives, as well as the lack of a 
     countervailing force to advocate blood product safety, 
     contributed to the plasma fractionation industry's slow rate 
     of progress toward the development of heat-treated products. 
     Once plasma fractionators developed inactivation methods, 
     however, the FDA moved expeditiously to license them.

                 Donor Screening and Deferral Policies

       The purpose of donor screening and deferral procedures is 
     to minimize the possibility of transmitting an infectious 
     agent from a unit of donated blood to the recipient of that 
     unit, as well as to ensure the welfare of the donor. Donor 
     screening includes the identification of suitable donors; the 
     recruitment of donors; and the exclusion of high-risk 
     individuals through methods and procedures used at the time 
     of donation, such as questionnaires, interviews, medical 
     exams, blood tests, and providing donors with the opportunity 
     to self-defer. Donor deferral is the temporary or permanent 
     rejection of a donor based on the results of the screening 
     measures.
       By January 1983, in addition to suggesting that the agent 
     causing AIDS was transmitted through blood and blood products 
     and could be sexually transmitted, the epidemiological 
     evidence also demonstrated that there were several groups who 
     had an increased risk of developing AIDS. The highest 
     incidence of the disease was in male homosexuals, who donated 
     blood frequently in some geographic regions. The Committee 
     found that organizations implemented donor screening measures 
     in different ways at different times. Plasma collection 
     agencies had begun screening potential donors and excluding 
     those in any of the known risk groups as early as December 
     1982, and CDC scientists suggested in January 1983 that blood 
     banks do likewise. Also in January, the blood-banking 
     organizations (the American Association of Blood Banks, the 
     American Red Cross, and the Council of Community Blood 
     Center) issued a joint statement that recommended the use of 
     donor screening questions to detect early symptoms of AIDS or 
     exposure to AIDS patients. The statement, however, did not 
     advocate directly questioning donors about their sexual 
     preferences. Blood banks did institute some screening

[[Page H3387]]

     measures in early 1983, but only a few asked potential donors 
     questions about homosexual activities. At the same time, CDC 
     scientists also suggested that all blood and plasma 
     collection agencies employ an available surrogate test for 
     hepatitis B core antigen (anti-HBc). Most blood and plasma 
     collection agencies rejected this recommendation. Although 
     the precise impact of these two actions is not known, earlier 
     implementation of either probably would have reduced the 
     number of individuals infected with HIV through blood and 
     blood products. In March 1983 the PHS issued recommendations 
     that identified high-risk individuals for AIDS and stated 
     that these individuals should not donate plasma or blood.
       Based on its review of the evidence, the Committee found 
     that decisionmakers involved with donor screening and 
     deferral acted with good intent in some instances. In other 
     instances, however, preference for the status quo under the 
     prevailing conditions of uncertainty and danger led 
     decisionmakers to underestimate the threat of AIDS for blood 
     recipients. The Committee concluded that when confronted with 
     a range of options for using donor screening and deferral to 
     reduce the probability of spreading HIV through the blood 
     supply, blood bank officials and federal authorities 
     consistently chose the least aggressive option that was 
     justifiable. In adopting this limited approach, policymakers 
     often passed over options that might have initially slowed 
     the spread of HIV to individuals with hemophilia and other 
     recipients of blood and blood products, for example, by 
     screening male donors for a history of sexual activity with 
     other males and screening donated blood for the anti-HBc 
     antibody. The Committee believes that it was reasonable to 
     require blood banks to implement these two screening 
     procedures in January 1983. The FDA's failure to require this 
     is evidence that the agency did not adequately use its 
     regulatory authority and therefore missed opportunities to 
     protect the public health.

                         Regulations and Recall

       The FDA is the principal regulatory agency with authority 
     for blood and blood products, but it exercises its authority 
     largely through informal action. Recall--the removal of a 
     product from the market--exemplifies the relationship between 
     the FDA's potent formal powers and its informal modus 
     operandi. Recall is a voluntary act undertaken by the 
     manufacturer but overseen by the FDA, which has the authority 
     to seize or revoke the license of a product. Regulation of 
     blood and blood products has been generally based on 
     establishing a scientific consensus. Because the FDA's 
     resources are limited, it relies upon the blood industry and 
     others for cooperation. The FDA's Blood Products Advisory 
     Committee is a venue for consensus-building about blood 
     regulatory policy. In an industry in which firm and product 
     reputation is critical to market success, the FDA's collegial 
     approach is usually effective.
       The Committee analyzed the FDA's exercise of its regulatory 
     powers by examining how it acted during four critical events: 
     (1) letters issued by the FDA in March 1983 requiring 
     particular practices related to donor screening and the 
     segregation of high-risk plasma supplies; (2) a July 1983 
     decision not to recall plasma products ``automatically'' 
     whenever they could be linked to individual donors who had 
     been identified as having or as suspected of having AIDS; (3) 
     a decision not to recall nontreated AHF concentrate when 
     heat-treated AHF concentrate became available in 1983; and 
     (4) a delay of years in the FDA's formal decision to 
     recommend tracing recipients of transfusions from a donor who 
     was later found to have HIV. For each of these, the Committee 
     posed a series of hypotheses to explain the FDA's actions. 
     These focused on the reach of the agency's legal powers, the 
     information available at the time in relation to relevant 
     public health considerations, the agency's resources, the 
     FDA's institutional culture, the economic costs of particular 
     actions, and the prevailing political climate.
       The analysis of these four events led the Committee to 
     identify several weaknesses in the FDA's regulatory approach 
     to blood safety issues. The agency's March 1983 letters may 
     have been unclear concerning whether all of their 
     recommendations were required to be implemented by the 
     addressed. Handling of the case-by-case recall decision 
     suggested that the agency lacked both the capacity to 
     structure its advisory process adequately and to analyze 
     independently the recommendations that were made to it. In 
     the Committee's judgment, these and other events indicate the 
     need for a more systematic approach to blood safety 
     regulation when there is uncertainty and danger to the 
     public.

                Communication to Physicians and Patients

       As evidence accrued on the possibility that the blood 
     supply was a vector for AIDS consumers of blood and blood 
     products and their physicians found themselves in a complex 
     dilemma about how to reduce the risk of infection. 
     Restricting or abandoning the use of blood and blood products 
     could lead to increased mortality and morbidity. On the other 
     hand, continued use of these products apparently increased 
     the risk of AIDS. The Committee investigated the processes by 
     which physicians and patients obtained information about the 
     epidemic and the costs, risks, and benefits of their clinical 
     options.
       A wide range of clinical options were available by late 
     1982 and might, in some instances, have reduced or eliminated 
     dependence on AHF concentrate and there by reduce the risk of 
     HIV transmission. As often happens in times of intense 
     scientific and medical uncertainty such as in the early 
     1980s, individuals with hemophilia and transfusion recipients 
     had little information about risks, benefits, and clinical 
     options for their use of blood and blood products.
       The dramatic successes of treatment with AHF concentrate in 
     the 1970s provided a context in which thresholds for 
     abandoning or radically restricting the use of these products 
     for individuals with severe hemophilia were high. both 
     physicians and individuals with hemophilia express reluctance 
     about returning to the era of clinical treatment before the 
     introduction of AHF concentrate. The National Hemophilia 
     Foundation (NHF) and physicians, in their effort to find the 
     right balance between the risks and benefits of continued use 
     of AHF concentrate, tended to overweight the well-established 
     benefits of AHF concentrate and underestimate the risks of 
     AIDS, which were still uncertain.
       In addition, the Committee found that prevailing 
     assumptions about medically acceptable risks, especially 
     regarding hepatitis, led to complacency and a failure to act 
     with sufficient concern upon reports of a new infectious 
     risk. Ultimately, assumptions about medical decisionmaking 
     practices in which patient played a relatively passive role 
     led to failures to disclose completely the risk of using AHF 
     concentrate and thereby did not enable individuals to make 
     informed decisions of themselves. As the potential dimensions 
     of the epidemic among individuals with hemophilia became 
     clear, communication between physicians and patients was 
     further compromised by physicians' reticence to discuss the 
     dire implications of widespread infection with their patients 
     and families.
       Institutional barriers to patient-physician communications 
     and relationships between relevant organizations also impeded 
     the flow of information. If the NHF had received input from a 
     wider group of scientific and medical experts, more explicit 
     and systematic dissemination of a range of clinical options 
     might well have been possible. In addition, the financial and 
     other relationships between the NHF and the plasma 
     fractionation industry created a conflict of interest that 
     seriously compromised the perceived independence of NHF's 
     recommendations.
       No organization stepped forward to communicate widely the 
     risks of blood transfusions to potential recipients. Many 
     blood bank officials during this period publicly denied that 
     AIDS posed any significant risk to blood recipients. In this 
     context, and because many transfusions occurred on an 
     emergency basis, patients were typically not apprised of the 
     growing concerns about the contamination of the blood supply. 
     For both individuals with hemophilia and recipients of blood 
     transfusion, physicians concern that their patients might 
     refuse care deemed a ``medical necessity'' further 
     contributed to failure to inform them of the risks.


                              CONCLUSIONS

                    Decisionmaking Under Uncertainty

       The events and decisions that the Committee has analyzed 
     underscore the difficulty of personal and institutional 
     decisionmaking when the stakes are high, when knowledge is 
     imprecise and incomplete, and when decisionmakers may have 
     personal or institutional biases. The Committee attempted to 
     understand the complexities of the decisionmaking process 
     during this uncertain period and to develop lessons to 
     protect the blood supply in the future. In retrospect, the 
     system did not deal well with contemporaneous blood safety 
     issues such as hepatitis, and was not prepared to deal with 
     the far greater challenge of AIDS.
       Although enough epidemiological evidence has emerged by 
     January 1983 to strongly suggest that the agent causing AIDS 
     was transmitted through blood and blood products and could be 
     sexually transmitted to sexual partners, the magnitude of the 
     risk for transfusion and blood product recipients was not 
     know at this time. Policymakers quickly developed several 
     clinical and public health options to reduce the risk of AIDS 
     transmission. There was, however, substantial scientific 
     uncertainty about the costs and benefits of the available 
     options. The result was a pattern of responses which, while 
     not in conflict with the available scientific information, 
     were very cautious and exposed the decisionmakers and their 
     organizations to a minimum of criticism.
       Blood safety is a shared responsibility of many diverse 
     organizations. They include U.S. Public Health Service 
     agencies such as the CDC, the FDA, and the NIH, and private-
     sector organizations such as community blood banks and the 
     American Red Cross, blood and plasma collection agencies, 
     blood product manufacturers, groups like the National 
     Hemophilia Foundation, and others. The problems the Committee 
     found indicated a failure of leadership and inadequate 
     institutional decision making process in 1983 and 1984. No 
     person or agency was able to coordinate all of the 
     organizations sharing the public health responsibility for 
     achieving a safe blood supply.

              Bureaucratic Management of Potential Crises

       Federal agencies had the primary responsibility for dealing 
     with the national emergency posed by the AIDS epidemic. The 
     Committee scrutinized bureaucratic function closely and came 
     to the following conclusions about the management of 
     potential crises.

[[Page H3388]]

       First, unless someone from the top exerts strong 
     leadership, legal and competitive concerns may inhibit 
     effective action by agencies of the federal government. 
     Similarly, when policymaking occurs against a backdrop of a 
     great deal of scientific uncertainty, bureaucratic standard 
     operating procedures designed for routine circumstances seem 
     to take over unless there is a clear-cut decision-making 
     hierarchy. An effective leader will insist upon coordinated 
     planning and execution. Focusing efforts and 
     responsibilities, setting timetables and agendas, and 
     assuming accountability for expeditious action cannot be left 
     to ordinary standard operating procedures. These actions are 
     the responsibilities of the highest levels of the public 
     health establishment.
       Second, the FDA and other agencies in the early 1980s 
     lacked a systematic approach to conducting advisory committee 
     processes. These agencies should tell their advisory 
     committees what it expects from them, keep attention focused 
     on high-priority topics, and independently evaluate their 
     advice. Because mistakes will always be made and 
     opportunities missed, regulatory structures must organize and 
     manage their advisory boards to assure both the reality and 
     the continuous appearance of propriety.
       Third, agencies should not rely upon the entities they 
     regulate for analysis of data and modeling of decision 
     problems.
       Fourth, agencies need to think far ahead. They must monitor 
     more systematically the long-term outcomes of blood 
     transfusion and blood product infusion to anticipate both new 
     technologies and new threats to the safety of the blood 
     supply. The Committee believes that the Public Health Service 
     should plan what it will do if there is a threat to the blood 
     supply. It should specify actions that will occur once the 
     level of concern passes a specified threshold. The Committee 
     favors a series of criteria or triggers for taking regulatory 
     or other public health actions in which the response is 
     proportional to the magnitude of the risk and the quality of 
     the information on which the risk estimate is based. Taking 
     on small steps allows for careful reconsideration of options, 
     particularly as information about uncertain risks unfolds. 
     Not all triggering events need lead to drastic action; some 
     may merely require careful reconsideration of the options or 
     obtaining new information.


                            recommendations

       The Committee's charge was to learn from the events of the 
     early 1980s to help the nation prepare for future threats to 
     the blood supply. From the record assembled for this study, 
     the Committee identified potential problems with the system 
     in place at that time and has identified some changes that 
     might have moderated some of the effects of the AIDS epidemic 
     on recipients of blood and blood products. The federal and 
     private organizations responsible for blood safety and the 
     public health more generally will have to evaluate their 
     current polices and procedures to see if they fully address 
     the issues raised by these recommendations.

                       The Public Health Service

       Several agencies necessarily play important, often 
     differentiated, roles in managing a public health crisis such 
     as the contamination of blood and blood products by the AIDS 
     virus. The National Blood Policy of 1973 charged the PHS 
     (including the CDC, the FDA, and the NIH) with responsibility 
     for protecting the nation's blood supply.
       The Committee has come to believe that a failure of 
     leadership may have delayed effective action during the 
     period from 1982 to 1984. This failure led to less than 
     effective donor screening, weak regulatory actions, and 
     insufficient communication to patients about the risks of 
     AIDS. In the event of a threat to the blood supply, the 
     Public Health Service must, as in any public health crisis, 
     insist upon coordinated action. The Secretary of Health and 
     Human Service is responsible for all the agencies of the 
     Public Health Service,\1\ and therefore the Committee makes--
     Recommendation 1: The Secretary of Health and Human Services 
     should designate a Blood Safety Director, at the level of a 
     deputy assistant secretary or higher, to be responsible for 
     the federal government's efforts to maintain the safety of 
     the nation's blood supply.
---------------------------------------------------------------------------
     Footnotes appear at the end of article.
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       To be effective in coordinating the various agencies of the 
     PHS, the Blood Safety Director should be at the level of a 
     deputy assistant secretary or higher, and should not be a 
     representative of any single PHS agency.
       In considering the history of the contamination of the 
     blood supply with HIV and the current surveillance, 
     regulatory, and administrative structures for ensuring the 
     safety of our nation's blood resources, the Committee became 
     convinced that the nation needs a far more responsive and 
     integrated process to ensure blood safety. To this end, the 
     Committee makes--Recommendation 2: The PHS should establish a 
     Blood Safety Council to assess current and potential future 
     threats to the blood supply, to propose strategies for 
     overcoming these threats, to evaluate the response of the PHS 
     to these proposals, and to monitor the implementation of 
     these strategies. The Council should report to the Blood 
     Safety Director (see Recommendation 1). The Council should 
     also serve to alert scientists about the needs and 
     opportunities for research to maximize the safety of blood 
     and blood products. The Blood Safety Council should take the 
     lead to ensure the education of public health officials, 
     clinicians, and the public about the nature of threats to our 
     nation's blood supply and the public health strategies for 
     dealing with these threats.
       The proposed Blood Safety Council would facilitate the 
     timely transmission of information, assessment of risk, and 
     initiation of appropriate action both during times of 
     stability and during a crisis. The Council should report to 
     the Blood Safety Director (see Recommendation 1). The Council 
     would not replace the PHS agencies responsible for blood 
     safety but would complement them by providing a forum for 
     them to work together and with private organizations. The PHS 
     agencies would be represented on the Council.
       The Blood Safety Council should consider the following 
     activities and issues: to deliberate the need for a system of 
     active surveillance for adverse reactions in blood 
     recipients; to establish a panel of experts to provide 
     information about risks and benefits, alternative options for 
     treatment, and recommended best practices (see Recommendation 
     13); and to investigate methods to make blood products safer, 
     such as double inactivation processes and reduction of plasma 
     pool size.
       When a product or service provided for the public good has 
     inherent risks, the common law tort system fails to protect 
     the rightful interests of patients who suffer harms resulting 
     from the use of those products and services. To address this 
     deficiency, the Committee makes--Recommendation 3: The 
     federal government should consider establishing a no-fault 
     compensation system for individuals who suffer adverse 
     consequences from the use of blood or blood products. \2\
       For such a no-fault system to be effective, standards and 
     procedures would have to be determined prospectively to guide 
     its operations. There needs to be an objective, science-based 
     process to decide which kinds of adverse outcomes are caused 
     by blood-borne pathogens and which individual cases of these 
     adverse outcomes deserve compensation. As with vaccines, such 
     a system could be financed by a tax or fee paid by all 
     manufacturers or by the ultimate recipients of blood 
     products. However, had there been a no-fault compensation 
     system in the early 1980s, it could have relieved much 
     financial hardship suffered by many who became infected with 
     HIV through blood and blood products in the United States. 
     The no-fault principles outlined in this recommendation might 
     serve to guide policymakers as they consider whether to 
     implement a compensation system for those infected in the 
     1980s.

             The Centers for Disease Control and Prevention

       The CDC has an indispensable role in protecting our 
     nation's health: to detect potential public health risks and 
     sound the alert. In order to improve CDC's efficacy in this 
     critical role, the Committee makes--Recommendation 4: Other 
     federal agencies must understand, support, and respond to the 
     CDC's responsibility to serve as the nation's early warning 
     system for threats to the health of the public.
       One way to begin to implement this recommendation is for 
     the Secretary of Health and Human Services to insist that an 
     agency that wishes to disregard a CDC alert should support 
     its position with evidence that meets the same standard as 
     that used by the CDC in raising the alert.
       In order to carry out its early warning responsibility 
     effectively, the CDC needs good surveillance systems. The 
     Committee, believing that the degree of surveillance should 
     be proportional to the level of risk inherent in blood and 
     blood products and should include both immediate and delayed 
     effects, makes Recommendation 5: The PHS should establish a 
     surveillance system, lodged in the CDC, that will detect, 
     monitor, and warn of adverse effects in the recipients of 
     blood and blood products.

                    The Food and Drug Administration

       The FDA has legal authority to protect the safety of the 
     nation's blood supply, and it is the lead federal agency in 
     regulating blood banking practice, the handling of source 
     plasma, and the manufacture of blood products from plasma. 
     The Committee's recommendations focus on decisionmaking and 
     the role of advisory committees in formulating the FDA's 
     response to crises.
       In the Committee's judgment, a more systematic approach to 
     blood safety regulation, one that is better suited to 
     conditions of uncertainty, is needed. In particular, the 
     Committee recommends (see Chapter 8) that the PHS develop a 
     series of criteria or triggers for taking regulatory or other 
     public health actions for which the response is proportional 
     to the magnitude of the risk and the quality of the 
     information on which the risk estimate is based. In order 
     that the perfect not be the enemy of the good, the Committee 
     makes--Recommendation 6: Where uncertainties or 
     countervailing public health concerns preclude completely 
     eliminating potential risks, the FDA should encourage, and 
     where necessary require, the blood industry to implement 
     partial solutions that have little risk of causing harm.
       In all fields, decisionmaking under uncertainty requires an 
     iterative process. As the knowledge base for a decision 
     changes, the responsible agency should reexamine the facts 
     and be prepared to change its decision. The agency should 
     also assign specific responsibility for monitoring conditions 
     and identifying opportunities for change. In order to 
     implement these principles at the FDA, the Committee makes--
     Recommendation 7: The FDA should periodically review

[[Page H3389]]

     important decisions that it made when it was uncertain about 
     the value of key decision variables.
       Although the FDA has a great deal of regulatory power over 
     the blood products industry, the agency appears to regulate 
     by expressing its will in subtle, understated directives. 
     Taking this into account, the Committee makes--Recommendation 
     8: Because regulators must rely heavily on the performance of 
     the industry to accomplish blood safety goals, the FDA must 
     articulate its requests or requirements in forms that are 
     understandable and implementable by regulated entities. In 
     particular, when issuing instructions to regulated entities, 
     the FDA should specify clearly whether it is demanding 
     specific compliance with legal requirements or is merely 
     providing advice for careful consideration.
       In the early 1980s, the FDA appeared too reliant upon 
     analyses provided by industry-based members of the Blood 
     Products Advisory Committee (BPAC). Thus the Committee 
     arrived at--Recommendation 9: The FDA should ensure that the 
     composition of the Blood Products Advisory Committee reflects 
     a proper balance between members who are connected with the 
     blood and blood products industry and members who are 
     independent of industry.
       An agency that is well-practiced in orderly decisionmaking 
     procedures will be able to respond to the much greater 
     requirements of a crisis. This consideration leads to--
     Recommendation 10: The FDA should tell its advisory 
     committees what it expects from them and should independently 
     evaluate their agendas and their performance.
       Advisory committees provide scientific advice to the FDA, 
     but they do not make regulatory decisions for the agency. The 
     FDA's lack of independent information and an analytic 
     capability of its own meant that it had little choice but to 
     incorporate the advice of BPAC into its policy 
     recommendations. To ensure the proper degree of independence 
     between the FDA and the BPAC, the Committee makes--
     Recommendation 11: The FDA should develop reliable sources of 
     the information that it needs to make decisions about the 
     blood supply. The FDA should have its own capacity to analyze 
     this information and to predict the effects of regulatory 
     decisions.

                Communication to Physicians and Patients

       One of the crucial elements of the system for collecting 
     blood and distributing blood products to patients is the 
     means to convey concern about the risks inherent in blood 
     products. In today's practice of medicine, in contrast to 
     that of the early 1980s, patients and physicians each 
     accept a share of responsibility for making decisions.
       In instances of great uncertainty, it is crucial for 
     patients to be fully apprised of the full range of options 
     available and to become active participants in the 
     consideration and evaluation of the relative risks and 
     benefits of alternative treatments. To encourage better 
     communication, the Committee makes--Recommendation 12: When 
     faced with a decision in which the options all carry risk, 
     especially if the amount of risk is uncertain, physicians and 
     patients should take extra care to discuss a wide range of 
     options.
       Given the inherent risks and uncertainties in all blood 
     products, the public and providers of care need expert, 
     unbiased information about the blood supply. This information 
     includes risks and benefits, alternatives to using blood 
     products, and recommended best practices. In order to provide 
     the public and providers of care with information they need, 
     the Committee makes--Recommendation 13: The Department of 
     Health and Human Services should convene a standing expert 
     panel to inform the providers of care and the public about 
     the risks associated with blood and blood products, about 
     alternatives to using them, and about treatments that have 
     the support of the scientific record.
       One lesson of the AIDS crisis is that a well-established, 
     orderly decisionmaking process is important for successfully 
     managing a crisis. This applies as much to clinical 
     decisionmaking as to the public health decision process 
     addressed by earlier recommendations. As the narrative 
     indicates, there are both public health and clinical 
     approaches to reducing the risk of blood-borne diseases. The 
     Blood Safety Council called for in Recommendation 2 would 
     deal primarily with risk assessment and actions in the public 
     health domain that would reduce the chance that blood 
     products could be vectors of infectious agents. The primary 
     responsibility of the expert panel on best practices called 
     for in Recommendation 13 would be to provide the clinical 
     information that physicians and their patients need to guide 
     their individual health care choices. To be most effective, 
     this panel should be lodged in the Blood Safety Council (see 
     Recommendation 2) so that both bodies can interact and 
     coordinate their activities in order to share information 
     about emerging risks and clinical options.
       Recommendation 14: Voluntary organizations that make 
     recommendations about using commercial products must avoid 
     conflicts of interest, maintain independent judgment, and 
     otherwise act so as to earn the confidence of the public and 
     patients.
       One of the difficulties with using experts to give advice 
     is the interconnections that experts accumulate during their 
     careers. As a result, an expert may have a history of 
     relationships that raise concerns about whether he or she can 
     be truly impartial when advising a course of action in a 
     complex situation. One way to avoid these risks is to choose 
     some panelists who are not expert in the subject of the 
     panel's assignment but have a reputation for expertise in 
     evaluating evidence, sound clinical judgment, and 
     impartiality.
       Financial conflicts of interest influence organizations as 
     well as individuals. The standards for acknowledging, and in 
     some cases avoiding, conflicts of interest are higher than 
     they were 12 years ago. Public health officials, the medical 
     professions, and private organizations must uphold this new, 
     difficult standard. Failure to do so will threaten the fabric 
     of trust that holds our society together.


                               references

     Centers for Disease Control, Morbidity and Mortality Weekly 
     Report, July 23, 1993. Institute of Medicine, Emerging 
     Infections. Washington, D.C.: National Academy Press, 1992.
     Wallace, E.L., et al. Collection and Transfusion of Blood and 
     Blood Components in the United States. Transfusion, vol. 33, 
     1993.


                               footnotes

     \1\ In the 1980s and now, the PHS agencies report to the 
     Assistant Secretary of Health. As this report was being 
     written, the Department of Health and Human Services has 
     proposed to eliminate the office of the Assistant Secretary, 
     so that the PHS agencies would report directly to the 
     Secretary.
     \2\ One Committee member (Martha Derthick) abstains from this 
     recommendation because she believes that it falls outside of 
     the Committee's charge.

  Mr. SCOTT. Madam Speaker, I yield such time as he may consume to the 
distinguished gentleman from Massachusetts (Mr. Delahunt).
  Mr. DELAHUNT. Madam Speaker, I thank the gentleman for yielding me 
the time.
  Madam Speaker, I, too, rise in strong support of H.R. 1023, the Ricky 
Ray Hemophilia Relief Fund Act. Before I begin my statement, I want to 
acknowledge and commend the fine work of my colleague, the gentleman 
from Florida (Mr. Porter Goss). He has truly provided outstanding 
leadership in this particular issue.
  Let me ask Members to imagine that they are the parent of three fine 
sons, each of whom has inherited the gene for hemophilia. Now imagine, 
if you can, that each of your sons acquires the AIDS virus through a 
contaminated blood transfusion. Two brothers die before age 40, and the 
third is very sick. Among them, they have 9 children, your 
grandchildren, all of whom will be left fatherless.
  At least one family in my district does not have to imagine what that 
would be like, Madam Speaker. They know, because this is precisely what 
is happening to them. Nor is their heartbreaking story, unfortunately, 
unique. I have received letters from people in Abingdon, Weymouth, 
Ducksbury, and other towns throughout Massachusetts who have lost 
family members and friends to hemophilia-associated AIDS.
  Every death from AIDS is a tragedy that touches many lives. Yet, who 
can fathom the sheer devastation that is visited on families such as 
these? The enormity of their experience becomes still more compelling 
when one learns that the government, our government, could have acted 
to prevent it.
  In 1980 when the first Americans began to fall ill from the 
mysterious ailment that would ultimately be called AIDS, the technology 
became available to pasteurize blood-clotting agents. Yet, for 7 years 
the government failed to require the blood products industry to make 
use of this technology, nor did the government require the industry to 
inform the public about the risks of contamination with HIV and other 
blood-borne pathogens.

                              {time}  1230

  As a result, at least 8,000 people with hemophilia and other blood-
clotting disorders contracted HIV/AIDS from transfusions of 
contaminated antihemophilic factor or AHF between 1980 and 1987. This 
means that as many as 50 percent of all individuals who suffer from 
blood-clotting disorders were exposed to HIV through their use of AHF.
  In 1995, an independent scientific review conducted by the Institute 
of Medicine concluded that this tragedy occurred because the government 
failed to take the steps that could have prevented it. Some might argue 
that we cannot afford to do anything about that, but I believe we have 
an obligation to acknowledge what happened and make restitution to the 
victims of this disaster and their families.
  This bill will not compensate them for the terrible harm that was 
done to them, nor will it begin to cover their medical costs. But it 
will mean a great

[[Page H3390]]

deal to them to know that their country has not abandoned them. I am 
proud to be an original cosponsor of this bill and urge all of my 
colleagues to join in supporting it today.
  Mr. HYDE. Madam Speaker, I yield 1 minute and 30 seconds to the 
gentleman Arizona (Mr. Hayworth).
  Mr. HAYWORTH. Madam Speaker, I thank my colleague, the gentleman from 
Florida (Mr. Goss), for his hard work on this legislation.
  I am pleased to come to the well today to speak in behalf of passage 
of this legislation because, Madam Speaker, I had a chance to listen to 
a young man from my State recount the very real difficulties that he 
confronted from receiving a transfusion of HIV-tainted blood. His name, 
Jeremy Storms.
  Jeremy lived the Scriptures in which he so fervently believed. He let 
his light shine among men and, despite all the medical difficulties he 
encountered, many times he traveled here to Washington to tell us of 
the challenges he faced. He had a wisdom beyond his years. He would 
joke, you know, I used to be upset that I was a hemophiliac. Now I wish 
it was the only problem I had.
  Jeremy passed away a few short months ago, but he did not live in 
vain. For his mother and father and family and for countless other 
families, this House on this day at this hour acknowledges the role of 
the Federal Government in public health and, yes, in personal 
responsibility.
  I would urge this body, adopt this legislation in memory of Ricky 
Ray, Jeremy Storms and so many others.
  Mr. SCOTT. Madam Speaker, I yield 2 minutes to the gentlewoman from 
Texas (Ms. Eddie Bernice Johnson).
  Ms. EDDIE BERNICE JOHNSON of Texas. Madam Speaker, I rise in support 
of this bill. Having functioned as a registered professional nurse, I 
have observed over the years persons who are afflicted and need 
frequent transfusions are more subjected to the risk of HIV than others 
on a normal basis. This has been one of the viruses that has come along 
in our history that we have not found any way to conquer it. That we 
must always be mindful of.
  Nothing is more important than assuring a family that when they have 
a loved one that needs a transfusion it is free of viruses and any 
other bacteria. We have gone a long way in that. We have had to deal 
with the virus of the 1930s for pneumonia and the virus of polio for 
the 1950s. Now we are having to deal with another major virus, the HIV 
virus.
  So many people are so unaware of their risk for this disease, for the 
disease which the virus will cause. We must do all that we can to 
protect the general public, and this bill goes a long way in protecting 
the hemophiliacs because they can not get around having the 
transfusions.
  I have observed too many families, heterosexual, intact families be 
destroyed by contamination from the young children and some young 
adults getting transfusions, blood transfusions. I do think, and I 
agree with the gentleman that there is a public health responsibility 
of our Federal Government, and this is one of those major issues that, 
until we find medical breakthroughs, we as a government need to take 
the responsibility of ensuring the availability of safe, virus-free 
blood.
  Mr. HYDE. Madam Speaker, I yield 3 minutes to the gentleman from 
Florida (Mr. Bilirakis).
  Mr. BILIRAKIS. Madam Speaker, I, too, rise in strong support of H.R. 
1023.
  First and foremost, I want to commend my colleague, the gentleman 
from Florida (Mr. Goss), for his tireless efforts to secure passage of 
this important measure.
  As chairman of the Subcommittee on Health and Environment of the 
Committee on Commerce, I am pleased to be an original cosponsor of the 
bill.
  As my colleagues have already noted, H.R. 1023 provides compassionate 
payments to individuals with blood-clotting disorders who contracted 
HIV due to contaminated blood products. The National Hemophilia 
Foundation estimates that nearly 8,000 individuals with hemophilia 
contracted HIV from the Nation's blood supply which became contaminated 
before the identification of and development of tests to detect its 
presence.
  These individuals and their families were already burdened by the 
medical costs of treating their blood-clotting disorders, and many have 
been financially devastated by the costs associated with HIV infection. 
This is a tragedy, and I share the Foundation's view that passage of 
this bill will serve to rebuild trust in the Federal Government in its 
essential role of protecting the U.S. blood supply and blood products.
  A number of my constituents, including Margie and Johnny Kellar of 
Palm Harbor, have contacted me to urge enactment of this critical 
legislation. I share the desire to secure prompt passage of the bill, 
and I am pleased that the House is considering it today under a 
suspension of the rules.
  As Members know, provisions of H.R. 1023 which fall within the 
jurisdiction of the House Committee on Commerce were enacted last year 
as part of the balanced budget law. Those provisions exempted the 
private settlement funds from the calculation of income for the 
purposes of determining Medicaid eligibility. This language was 
designed to ensure that those who accepted the private settlement would 
not lose their eligibility under the Medicaid program.
  My Subcommittee on Health and Environment has jurisdiction over the 
Medicaid provisions, and I was pleased to secure their enactment as 
part of the 1997 balanced budget law.
  The measure before us today extends similar protections to recipients 
of Supplemental Security Income benefits.
  Again, I want to commend the gentleman from Florida (Mr. Goss) for 
his leadership on this issue and his diligent efforts in bringing H.R. 
1023 to the floor. I urge all of my colleagues to lend their 
wholehearted support to passage of this important bill.
  Mr. SCOTT. Madam Speaker, I reserve the balance of my time.
  Mr. HYDE. Madam Speaker, may I inquire how much time remains?
  The SPEAKER pro tempore (Mrs. Emerson). The gentleman from Illinois 
(Mr. Hyde) has 5 minutes remaining.
  Mr. HYDE. Madam Speaker, I yield 2 minutes to the gentleman from 
Florida (Mr. Stearns).
  Mr. STEARNS. Madam Speaker, I thank the gentleman for yielding me 
this time.
  I commend my colleague the gentleman from Florida (Mr. Goss) for his 
vigilance in getting this legislation to the floor. I also am an 
original cosponsor of the Ricky Ray Relief Act. I am deeply committed 
to seeing this bill become public law.
  Madam Speaker, my involvement in this issue began back in 1994 when 
I, too, was contacted by Gale and Randy Ellman. The Ellmans lost their 
son Eric Brandon when he was 14 years old. Eric died as a result of 
infusing a clotting factor that was tainted with HIV. His death is a 
double tragedy because it could have been avoided.
  While we cannot bring back Ricky or Eric, we can try today to rectify 
this wrong. According to best estimates, about 8,000 hemophiliacs have 
been infected with HIV. This represents half the hemophiliacs in the 
country. By passing this bill we are simply saying that we acknowledge 
the government's failure, through the FDA, to protect our Nation's 
blood supply and regulate the sale of blood products.
  Will $100,000 make up for the pain and suffering these families had 
to endure? The answer is no. But what it will do is say to thousands of 
people so deeply affected by this tragedy that your government wants to 
right the wrong.
  The Ellmans called my office this morning to express their heartfelt 
gratitude for my support for this legislation and for my other 
colleagues' support. I say to the Ellmans and the many other families 
so devastated by what has happened to them, it is the very least we can 
do.
  The SPEAKER pro tempore. The gentleman from Virginia (Mr. Scott) has 
11\1/2\ minutes remaining.
  Mr. SCOTT. Madam Speaker, I reserve the balance of my time.
  Mr. HYDE. Madam Speaker, I yield 2 minutes to the distinguished 
gentleman from Virginia (Mr. Davis).
  (Mr. DAVIS of Virginia asked and was given permission to revise and 
extend his remarks.)
  Mr. DAVIS of Virginia. Madam Speaker, I rise today to voice my strong 
support for H.R. 1023, the Ricky Ray Hemophilia Relief Fund Act.
  As an original cosponsor in both this Congress and the 104th 
Congress, I am

[[Page H3391]]

enormously proud that we have been able to bring this bill to the floor 
in a bipartisan manner with the support and cosponsorship of over 270 
Members.
  The gentleman from Florida (Mr. Goss) has done a tremendous job in 
garnering support for the Ricky Ray Act and ensuring that it come 
before the full House today.
  I also express my appreciation to the chairman of the Committee on 
the Judiciary, the gentleman from Illinois (Mr. Hyde), as well.
  I also want to recognize the hard work of the students at the 
Robinson Secondary School in Fairfax, Virginia, on behalf of the 
thousands of hemophiliacs suffering from AIDS. They have dedicated 
themselves over the past couple of years to winning passage of this 
legislation and are now witnessing that democracy does work.
  As my colleagues know, this legislation is named for Ricky Ray, a 
young boy from Florida who died in 1992 of hemophilia-related AIDS that 
he contracted through the use of blood-clotting products. Approximately 
one-half of all hemophilia sufferers were infected with HIV through the 
use of blood-clotting products between 1980 and 1987. The Federal 
Government has a shared responsibility for this tragedy because it 
failed to fulfill its responsibility to protect the Nation's blood 
supply and to regulate the safety of blood products.
  The Ricky Ray bill gives a one-time payment of $100,000 each to about 
7,200 hemophiliacs, about half of whom are still surviving, who were 
infected with the AIDS virus from blood-clotting agents between July 1, 
1982, and December 31, 1987. It also implements a sunset provision 
after 5 years from the date of the bill's enactment.
  Passage of this legislation will mark a defining and critical moment 
in the lives of many innocent AIDS sufferers, not because of the 
relatively small amount of money they receive but because of the peace 
they and their families will have in knowing that their government has 
taken responsibility for what happened to them and is attempting to 
compensate them for their suffering to the extent that we are able to 
do so.
  I strongly urge all of my colleagues to vote in favor of the Ricky 
Ray bill.
  Mr. SCOTT. Madam Speaker, I yield 4 minutes to the gentlewoman from 
California (Ms. Pelosi).
  Ms. PELOSI. Madam Speaker, I thank my colleague from Virginia for 
yielding me this time.
  I rise in strong support of the Ricky Ray Hemophilia Relief Fund Act. 
I want to commend our colleague, the gentleman from Florida (Mr. Goss), 
for his leadership and compassion in bringing this legislation to the 
floor as a sponsor of this bill.
  The life of the boy who gave his name to this legislation should 
remind all of us of the many different tragedies and demonstrations of 
courage and compassion the AIDS epidemic has brought us.
  In his short life, Ricky witnessed the prejudice and fear which 
surrounded hemophilia, AIDS particularly, in its first decade but which 
is still all too common today. He had hemophilia, but he contracted 
AIDS and was the victim of much discrimination. He and his family 
watched their home burn down because neighbors were afraid of his 
illness.

                              {time}  1245

  His family struggled with the tremendous financial burden of 
providing for a child with hemophilia and AIDS. Ricky's parents saw 
their son pass away as they confronted the limits of treatment to fight 
the HIV disease.
  Each of these aspects of Ricky's life is important to remember today: 
The prejudice, the crushing financial burden, the hope for cures which 
have yet to come, and the inspiring courage and compassion of this 
young man, his family and friends. This was Ricky's story, and it is 
the story of thousands of other people, many of whom have died, many 
are living today with hemophilia, HIV and AIDS.
  The resources that Congress can provide will not solve the tragedy of 
hemophilia and AIDS for Ricky Ray and others like him, but they will 
help individuals, families and communities begin to recover from the 
calamity that has befallen them. Whether the Federal Government acted 
appropriately to protect blood clotting products in the 1980s is not 
the issue today. At issue now is providing assistance to individuals 
and families who have been forced to confront a personal and financial 
crisis brought by two debilitating diseases.
  The Federal Government must do many things to respond to the AIDS 
epidemic and to hemophilia. It must protect the Nation's blood supply; 
provide prevention interventions; in the case of HIV-AIDS, fund 
research to find a cure and a vaccine; and support health care and 
needed services for those who are ill.
  But as with other major catastrophes, the Federal Government also 
must provide the resources which help families and communities take the 
first steps toward recovery. For that I am grateful to the gentleman 
from Florida (Mr. Goss) for his leadership, to the gentleman from 
Virginia (Mr. Scott) for his participation in this, as well as the 
gentleman from Illinois (Mr. Hyde) and others, and I urge my colleagues 
to support H.R. 1023.
  Mr. HYDE. Madam Speaker, I have no further requests for time, and I 
yield back the balance of my time.
  Mr. SCOTT. Madam Speaker, I yield myself such time as I may consume 
just to thank the gentleman from Florida (Mr. Goss) for his hard work 
on this, the gentleman from Illinois (Mr. Hyde) for his leadership, and 
the gentleman from North Carolina (Mr. Watt), whose subcommittee 
considered this.
  Ms. CHRISTIAN-GREEN. Madam Speaker, I rise today in strong support of 
H.R. 1023, a bill to provide compassionate payments to individuals with 
blood-clotting disorders such as, Hemophilia, who contracted the HIV 
virus due to contaminated blood.
  My colleagues, children, especially minority children, are one of the 
most rapidly increasing segments of our population being infected with 
HIV. And, in all cases they are the innocent victims. Any legislation 
which helps to improve the quality of life of these children is worthy 
of all of our support.
  Prevention programs, while available to all, often do not reach out 
to the most needy populations. Where we most need to improve our effort 
in this regard, is in making sure that the treatments which have been 
developed and proven to improve lives and health, are made accessible 
to all who need it. This bill does it.
  As a family physician who has treated several patients with 
hemophilia, I am pleased to support H.R. 1023 and urge all my 
colleagues to do so as well.
  Ms. JACKSON-LEE of Texas. Madam Speaker, as Chair of the Children's 
Congressional Caucus, and a co-sponsor of this bill, I want to take a 
few minutes to speak about the importance of this issue and this bill.
  H.R. 1023 is named after Ricky Ray, a child victim of hemophiliac 
associated AIDS. Like thousands of others, Ricky Ray became infected 
with HIV through the use of contaminated blood products. Ricky brought 
national attention to this tragedy before he died from AIDS at age 15, 
1992.
  The Ricky Ray Hemophilia Relief Fund Act will not only acknowledge 
the federal government's unique responsibility to protect the nation's 
blood supply, it will also provide recognition to and some small solace 
to those living with hemophilia related HIV and their families. Almost 
50% of the U.S. hemophilia population has been infected with HIV 
through tainted blood products. This bill will also authorize a $750 
million dollar fund to provide compassionate assistance to individuals 
struggling with the emotional and financial costs of this disease.
  In my home state of Texas, AIDS was the sixth leading cause of death 
among young people aged 13-24, and currently worldwide approximately 
775,000 Americans are infected with the HIV virus.
  Although we can never fully compensate the victims and families of 
those who are living with hemophilia related AIDS and HIV, we must show 
our compassion and our recognition of their plight, through the 
legislation here today.
  Ms. FURSE. Madam Speaker, I rise today in support of H.R. 1023, the 
Ricky Ray Hemophilia Relief Fund Act. I want to congratulate my 
colleague, Mr. Goss, for his hard work and relentless efforts to pass 
this bill through the House.
  In 1994, shortly after I was first elected to the House, a 
constituent of mine named Katherine Royer brought to my attention the 
plight of people with hemophilia who became infected with HIV through 
tainted blood products. Many of these people were children. Until I met 
Katherine, I had no idea that over 7000 people with hemophilia had 
become infected with HIV, and their already complicated lives were 
getting even more difficult. Her family's story was powerful, and 
Katherine has relentlessly pursued this issue in her community and with 
her elected officials.
  I strongly support H.R. 1023 because it acknowledges that the 
government must protect

[[Page H3392]]

the nation's blood supply, and provides assistance to the victims of 
this tragedy. With yearly medical costs of over $150,000, and a lack of 
legal options, many of the affected families have been devastated 
financially. While this bill can not bring back loved ones, it can 
provide those who are still living with some degree of financial 
relief. In addition, it recognizes, finally, the tragedy that occurred 
and the impact it had on the entire hemophilia community.
  I thank Katherine for bringing this issue to my attention, and am 
pleased that H.R. 1023 is finally on the floor of the House. I strongly 
urge all my colleagues to support it.
  Mr. SHAW. Madam Speaker, I strongly support H.R. 1023, the ``Ricky 
Ray Hemophilia Relief Fund Act of 1998.''
  H.R. 1023, sponsored by my friend Porter Goss, is named for Ricky 
Ray, a 15 year old Florida hemophiliac who died in 1992. This bill 
represents the best of what government can do to help needy families 
struggling to overcome personal tragedy. From some, including for the 
bill's namesake, H.R. 1023 comes too late to provide help. But for many 
others it will provide welcome relief, and I am proud not only to be an 
original cosponsor, but also to have helped H.R. 1023 progress through 
the Ways and Means Committee to the House floor today.
  Even though the bill was first marked up by the Judiciary Committee, 
an important component is the promise H.R. 1023 would keep by 
continuing Supplemental Security Income (SSI) benefits to needy 
individuals, which falls under the jurisdiction of the Committee on 
Ways and Means and the Subcommittee on Human Resources that I chair. 
These critical benefits will remain available despite a recent 
settlement and also new federal funds that otherwise would disqualify 
hemophiliacs who contracted the AIDS virus through tainted blood 
products in the 1980s from continued SSI eligibility. There is ample 
precedent for SSI to ignore such payments, and I can scarcely think of 
a more worthy class than this limited number of hemophiliacs, many of 
them children at the time, who have been afflicted with the AIDS virus. 
The Congressional Budget Office has told us the cost is minimal, 
especially when compared with the tragedy these individuals and their 
families have already experienced.
  Another important feature of the bill is that it would exempt the 
payments from federal income taxes. Chairman Bill Archer summarized the 
issue well when the Committee on Ways and Means unanimously approved 
H.R. 1023 last month: ``No amount of money in the world can fix this 
tragedy, but we want to make sure that the federal payments are treated 
as tax-free, as they should be, and that SSI benefits stay unchanged 
for these innocent victims. They've been through enough as it is.''
  Madam Speaker, I commend Congressman Goss for his diligence in 
pressing for passage of this important bill, and urge all of our 
colleagues to support it.
  Mr. ARCHER. Madam Speaker, I rise today in support of H.R. 1023, the 
Ricky Ray Hemophilia Relief Act. As an original cosponsor to the 
legislation introduced by my friend and colleague, Porter Goss, I 
believe that H.R. 1023 takes a positive step in addressing a great 
wrong that was committed affecting seven thousand Americans; over half 
of the hemophilia community.
  In 1995, the Institute of Medicine conducted an independent review 
which concluded that the system designed to ensure the safety of blood 
and blood products had been ill-prepared to deal with the dangers of 
blood-borne viruses and had failed to protect the public health. As a 
result, thousands of Americans with hemophilia became infected with HIV 
through the use of these contaminated blood products.
  The portion of the legislation that came before the Ways and Means 
Committee ensures that payments to people with hemophilia who 
contracted HIV from tainted blood products will be tax-free and not 
threaten benefits under the Supplemental Security Income (SSI) system. 
While no amount of money in the world can fix this tragedy, Congress 
must do all it can to make certain that the SSI benefits of these 
individuals living with two chronic and expensive diseases remain 
unchanged.
  Finally, I want to commend: Congressman Goss; Chairmen Hyde and 
Bliley; the National Hemophilia Foundation (NHF); Ray Stenhope, a 
Houstonian who is Past-President of NHF; Dr. Keith Hoots and the folks 
at the Gulf States Hemophilia Treatment Center at Hermann Hospital in 
Houston; and everyone else who worked long and hard to bring this 
legislation before the House of Representatives. While I realize that 
these courageous individuals and their families will have to continue 
to live with the horrors of this tragedy, I hope that this bill will at 
least bring them some comfort.
  Mr. SCOTT. Madam Speaker, I have no further requests for time, and I 
yield back the balance of my time.
  The SPEAKER pro tempore (Mrs. Emerson). The question is on the motion 
offered by the gentleman from Illinois (Mr. Hyde) that the House 
suspend the rules and pass the bill, H.R. 1023, as amended.
  The question was taken; and (two-thirds having voted in favor 
thereof) the rules were suspended and the bill, as amended, was passed.
  The title was amended so as to read: ``A bill to provide for 
compassionate payments with regard to individuals with blood-clotting 
disorders, such as hemophilia, who contracted human immunodeficiency 
virus due to contaminated antihemophilic factor, and for other 
purposes.''.
  A motion to reconsider was laid on the table.

                          ____________________