UPDATE 2-US court to decide if vaccine makers can be sued
* Case involves Wyeth, which Pfizer purchased last year
* Child developed seizures after third dose of DTP vaccine
* Supreme Court to hear arguments in upcoming term
* Pfizer shares fall 1 percent (Adds Pfizer comments, shares)
By James Vicini
WASHINGTON, March 8 (Reuters) - The U.S. Supreme Court said on Monday that it would decide whether a federal law protects vaccine manufacturers from lawsuits in state court seeking damages for alleged design defects.
The high court agreed to hear a Pennsylvania case involving a lawsuit by the parents of a child who suffered seizures after her third dose of a diphtheria-tetanus-pertussis (DTP) vaccine. They sued the vaccine manufacturer, Wyeth, which Pfizer Inc (PFE.N) purchased last year.
Pfizer shares fell 1 percent to $17.30 in morning trading on the New York Stock Exchange.
At issue was the National Childhood Vaccine Injury Act of 1986. It says no manufacturer "shall be liable in any civil action" for any injury that "resulted from side effects that were unavoidable even though the vaccine was properly prepared and was accompanied by proper directions and warnings."
The justices agreed to decide the issue after conflicting lower-court rulings.
The Georgia Supreme Court ruled the federal law allows some design defect claims against vaccine manufacturers while a U.S. appeals court based in Philadelphia ruled Congress expressly prohibited such lawsuits in an effort to shield manufacturers from liability.
The Obama administration said the federal law expressly prevented design defect lawsuits in state court, but said the uncertainty caused by the conflicting rulings warranted the Supreme Court getting involved.
While the issue remains unsettled, manufacturers' uncertainty about potential liability may harm the public health by deterring development and production of vaccines, administration attorneys said.
Pfizer, in a statement, said it was "hopeful that the Supreme Court will affirm" the Philadelphia appeals court ruling in Wyeth's favor.
"Pfizer is pleased that the U.S. Supreme Court has agreed to resolve this legal issue, which is of critical importance to national public health policy," the company said.
There are about 5,000 claims pending under the process set out under federal law alleging a link between childhood vaccines and neurological damage such as autism. The legal issue would affect whether those claimants can also seek damages under state law, the attorneys said.
The case from Pennsylvania involved Hannah Bruesewitz. Her parents in their lawsuit alleged her seizure disorder and serious developmental delay stemmed from toxins inherent in the vaccine design.
After their claims were rejected under the federal compensation process, they filed a lawsuit in state court. But a federal judge and the appeals court based in Philadelphia both ruled that the federal law barred such lawsuits.
The Supreme Court is expected to hear arguments in the case and to issue its decision during its upcoming term that begins in October. Chief Justice John Roberts did not take part in considering the case, an action he usually takes when he owns stock in a company in the case before the court. (Reporting by Jim Vicini and Lisa Richwine; Editing by Gerald E. McCormick, Dave Zimmerman)