Are Billions of Dollars in Revenue at Risk?

The highest judicial authority in our land will soon decide the validity of a made-up court. No, not the People's Court; Judge Wapner's and colleagues' decisions remain binding. We're talking about the Vaccine Court, where things are a little more complicated.

Congress established this judicial forum in 1986 to settle disputes over the safety of immunizations. To encourage drugmakers to develop vaccines for children, Congress was willing to lower the threat of lawsuits.

And boy, has it ever increased the development -- and sales -- of vaccines:

Source: Company press releases.
*Only includes 2.5 months post Wyeth acquisition.

But the protection from lawsuits that drugmakers have enjoyed will come under a microscope later this year. Yesterday, the Supreme Court agreed to hear a case from a family that sued in state court -- outside the vaccine court -- because their daughter started having seizures after being given a vaccine made by Wyeth.

The drugmakers seem fairly confident in their ability to win in the high court; they encouraged the Supreme Court to hear the case, even though Wyeth actually won in the lower courts. The problem is that different states are treating the ability to work around the Vaccine Court differently, and drugmakers would like to have some clarification.

Given the big business vaccines have become, and the additional interest from new players -- Johnson & Johnson's (NYSE: JNJ) deal with Crucell (Nasdaq: CRXL), for instance -- all eyes will be on Washington later this year.

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