• This is a rush transcript from "The Journal Editorial Report," May 2, 2009. This copy may not be in its final form and may be updated.

    PAUL GIGOT, HOST: Up next on "The Journal Editorial Report," as swine flu spreads, a new vaccine could be our best protection. But will Washington politics get in the way?

    And Obama Motors. The president says he doesn't want to run the auto companies, so why is he partnering with big labor to do just that?

    Those topics, and the Supreme Court after David Souter, "The Journal Editorial Reports" begins now.

    Welcome to "The Journal Editorial Report." I'm Paul Gigot.

    As the number of swine flu cases in the United States continues to climb, health officials are preparing for the possibility that a new vaccine will be necessary to control the outbreak. And on that front there's some good news and some bad news. The good news, under President Bush, the federal government worked with manufacturers to accelerate vaccine development. The bad news, politics on Capital hill could still get in the way.

    Here to explain is Dr. Scott Gottlieb, the former number two at the Food and Drug Administration and now a fellow at the American Enterprise Institute and an advisor for health care investment firms.

    Scott Gottlieb, good to have you back on the program.

    SCOTT GOTTLIEB, FELLOW, AMERICAN ENTERPRISE INSTITUTE: Thanks a lot.

    GIGOT: We have these periodic flu scares. And years ago, there was some concern we weren't prepared. Are we better prepared now to cope with this particular potential pandemic?

    GOTTLIEB: Well, I think we absolutely are. The good news is that FDA, in particular, has taken a number of steps over the last four years to really increase the number of options that policy makers have and these were efforts that were led by some of the scientific staff at FDA. Jessie Goodman, in particular, who was then head of the Biologic Center, is now a key point person in the Obama administration, their and response to the potential pandemic.

    And did three things in particular I would point out. The first was that they issued a series of guidance documents to industry on laying out a more rational, expedited pathway to get the vaccines approved for flu and pandemic flu. And that enticed a lot of manufacturers into the space.

    GIGOT: I want to...

    GOTTLIEB: We have three times the number.

    GIGOT: Go ahead. That's a very interesting fact. Three times the number of manufacturers now into this business than used to be in several years ago. Because when I was first — started writing about vaccines, I remember everybody was leaving the business. They couldn't stand — they said, look, we've got so much lawsuit liability, we can't make a profit on it. You're saying that has changed?

    GOTTLIEB: It's changed to a degree. You've seen — the liability concerns are still there, but the regulatory pathway to get a vaccine on to the market has been opened up some. And it's not just that the manufacturers have come back and entered the market with flu vaccines, they've also found they could make money and have substantial businesses selling vaccines for other purposes like human papilloma virus or herpes zoster. So you've seen new vaccines come to the market. And I think that's the result of some more rational thinking on the part of the regulatory agency.

    GIGOT: Is there — have been any changes in law that have really made a difference?

    GOTTLIEB: Under the Bush administration, you saw them go forward with some programs to provided additional incentives to vaccine manufacturers as well as some limited liability protection and that's made a difference, particularly the incentives. You've seen some target grants from the government for the construction of some facilities in the U.S. where the development of different kinds of vaccines. That might become very important in the near future. and the liability protection certainly have had an impact.

    GIGOT: What about the Bush administration's bioterror efforts? They had a program called Bioshield, which was supposed to develop potential vaccines or drugs that could cope with potential bioterror. Has that made a difference and spilled over into the effort with just taking care of the flu?

    GOTTLIEB: Well, I think it has. I mean, Bioshield — some of the grants on the Bioshield have been targeted for the production of vaccines to fight a pandemic. For example, there's a facility being built in North Carolina that produces vaccines to a different method. That might become very important. A grant from the government was used to subsidize the construction of that facility. That probably wouldn't have been economic without the grant.