The increasing number of lawsuits against makers of the diphtheria, pertussis (whooping cough) and tetanus (DPT) vaccine has driven up its price throughout the 1970s and 1980s.

• The wholesale price of the DPT vaccine increased by more than 6,000 percent between 1970 and 1987.

• By 1986, the price was more than 18 times what it would have been had there been no change in liability rules.

• By 1987, the price was nearly 24 times what it would have been, indicating that 96 percent of the wholesale price was due to litigation costs.

Throughout the 1950s and 1960s, the wholesale price of the DPT vaccine was virtually the same as the wholesale price of the DT vaccine, which protects against diphtheria and tetanus but has no pertussis component. This strongly suggests that it cost little or nothing to manufacture the pertussis component.

But a limited number of children given the vaccine with the pertussis component - between 1 in 310,000 and 1 in 480,000 - experience a serious neurological reaction that has long-term con-sequences.

In the late 1970s, changes in liability laws allowed injured consumers to sue DPT producers. As lawsuits were filed, the price of DPT vaccine shot up while the price of DT stayed level.

• In 1978, only one lawsuit was filed against a DPT producer, and the wholesale price of a 15-dose container of DPT vaccine was only 34 cents more than the price of a 15-dose container of DT.

• In 1986, 255 lawsuits were filed - and the price of the same 15-dose container of DPT was $111.33 more than the price of a 15-dose container of DT.

Based on the increase in price, for every $1 of compensation transferred to injured consumers DPT producers expected to spend at least $5 and as much as $22 on legal expenses plus compensation.

The increased risk of lawsuits also drove DPT producers from the market. There were 10 DPT producers in 1954 and six in 1979. By 1989, there were only two. - David R. Henderson.

Source: Richard L. Manning, "Changing Rules in Tort Law and the Market for Childhood Vaccines," Journal of Law and Economics, Vol. 37, April 1994.