Americans remain deeply concerned by the ongoing inflation pressures on their pocketbooks, including medical costs—which now beats out both rent and food as the public’s top budgetary worry.
And yet high-ranking officials within the Trump Administration and members of his own party in Congress are pushing for policy changes that could accelerate the economic harm and exacerbate a large cost driver that has long wreaked havoc on affordability efforts: the trial lawyer lobby.
America’s tort system currently imposes a staggering cost of $529 billion annually, accounting for more than 2 percent of our entire GDP. That's right: one in every fifty dollars in the American economy is siphoned off by lawsuits, settlements, and legal fees. In the health care sector alone, this ‘tort tax’ costs over $47 billion per year, nearly 1 percent of all domestic health care spending.
Workers, small businesses, and families bear the brunt of the tort tax. Additionally, the specter of unwarranted legal action against businesses is a significant factor in suppressing innovation and making essential services scarcer.
So, it is startling to see that trial lawyers—long a reliable faction of the Democrats’ coalition—are on the cusp of an underhanded coup under unified Republican government.
The trial lobby is enlisting allies in the administration and Congress to undermine the National Vaccine Injury Compensation Program (VICP). For nearly 40 years, VICP has served as a guardrail protecting consumers from runaway health care costs and has made lifesaving and life-enhancing treatments more available and affordable.
President Ronald Reagan and Congress created VICP in 1986 to solve a crisis created and perpetuated by—you guessed it—the trial lawyer lobby. Litigation costs were driving vaccine manufacturers out of the market, and threatening the nation's vaccine supply.
VICP undid a system in which only well-connected claimants got justice, and all Americans suffered from vaccine shortages. It established a streamlined, no-fault compensation mechanism that pays claimants faster than the civil court system while shielding the supply chain from the volatility of predatory lawsuits. On top of that, VICP operates with a surplus of $4 billion, funded entirely by flat excise taxes on manufacturers.
But this successful model of consumer and business protection is at risk, thanks to Kennedy’s recent purge of FDA leadership without cause and forcibly circumventing scientific recommendations about vaccine use.
Trial lawyers are cheering the chance to dismantle VICP’s regulatory certainty for vaccine manufacturers, effectively returning to the legal turmoil of the 1980s, with huge negative repercussions for Americans.
Prior to VICP, many manufacturers had elected to leave the U.S. market. If that were to occur again, there is a risk that many modern medicines could become luxury goods. Wealthy Americans would still be able to travel to access to the treatments they need, while those with compromised immune systems, and low-income families (already less likely to get their children vaccinated) would be left to navigate a collapsing system designed to reward the trial lobby.
Meanwhile, claimants who rely on VICP’s streamlined compensation process would be pushed into the civil court system, becoming dependent on trial lawyers focused on securing large settlements, with typical contingency fees of 30 to 40 percent. Low-income claimants would be the least attractive cases, as their lower lifetime earnings often translate into smaller damage awards, leaving many who have worthy cases without any meaningful recourse.
Contrast that with VICP, which pays attorney fees entirely separate from a claimant's award. The guaranteed compensation incentivizes attorneys to take cases based on the veracity of a claim, not potential profitability, while a successfully represented party receives any awarded compensation.
The trial bar has had it out for VICP since its inception, precisely because its existence is a direct rebuke to them. If Kennedy and his allies remove liability protections to collapse the program under its own weight, or if the trial lawyers’ newfound Republican allies succeed in legislative efforts to achieve similar goals, it would come as a massive blow to the American public. The dissolution of VICP would be an undeserved gift for trial lawyers, while increasing pressure on already high healthcare costs.
President Trump proudly proclaimed that he would let Kennedy “run wild” as Secretary of Health and Human Services. But it is remarkable to watch Kennedy and his trial lawyer friends take advantage of the chaos, especially as it undermines Trump’s “affordability” efforts right under his nose and belies supposed efforts to “Make America Healthy Again.”
Mario H. Lopez is the President of the Hispanic Leadership Fund, a public policy organization that advocates for liberty, opportunity, and prosperity for all Americans.
