India must begin talks on indemnities for Covid-vaccine makers, EU’s AstraZeneca deal offers a template

Given how the development and approval of Covid-19 vaccines have been compressed dramatically, from 4-5 years normally to less than a year, it is not surprising those making vaccines are looking for indemnities from the governments of most countries; Serum Institute of India CEO Aadar Poonawalla made this demand a few days ago. To be sure, even in these compressed timeframes, vaccine-makers are doing all the testing they can, but there are always unexpected serious adverse events (USAE) that can take place with any vaccine. In the case of the polio vaccine, it was found that one in 2.7 million doses could result in vaccine-associated paralytic polio (VAPP), in which the attenuated poliovirus in the oral polio vaccine (OPV) somehow mutates in the recipient’s intestine and causes VAPP in the recipient. But, vaccine testing/approval so far has allowed insurers to assess risk over a long period. That opportunity lacking, covering Covid-19 vaccines isn’t going to be easy for insurers; in which case, the only workable solution is for governments to indemnify vaccine-makers against claims and law-suits; naturally, this does not apply to flaws that can possibly take place in the mass production of the vaccine.

Many jurisdictions, especially the ones that have already entered into deals with the developers of the three leading vaccine candidates (Pfizer, Moderna and Astra Zeneca) or are in advanced stages of negotiations, are already firming up their view on indemnity protection. While the UK and Australia have offered legal indemnity to Pfizer—this means the drug behemoth is protected from legal suits over establishing its liability for any USAE that may arise—the US and Canada both have laws to grant legal protection to vaccine-makers. The UK’s newly drafted Regulation 345 of Human Medicines Regulators 2012 protects Pfizer and those involved in its distribution from civil liability over any damage that may arise from the vaccine despite its use being in the manner as recommended. It is not as if those who suffer USAE because of the vaccine are left in the lurch—those who can show that they have been left severely disabled because of the vaccine can claim a one-time payment 120,000 pounds under the UK’s Vaccine Damage Payments Scheme. Similarly, in the US, the government will bear any compensation burden for vaccine damage under its Countermeasures Injury Compensation Program (CICP), though experts have questioned the programme’s efficacy; since 2010, while 485 cases came up for review, only 39 cases have received compensation. The WHO, in a draft note, is also unambiguous on the need for indemnity for manufacturers, distributors, donors, etc, of the vaccines under its Covax programme that seeks to make Covid-19 shots available to poor countries, qualifying this with the provision that this will not include wilful misconduct or negligence or non-compliance with regulations.

As India looks at rolling out a vaccine, it needs to look at the EU’s approach towards indemnity for vaccine candidates; in September, EU authorities struck a deal with AstraZeneca under which member-country governments will pay claims above a threshold. In return, it will have to give its vaccine at a cheaper rate than the market one. India must start negotiations with vaccine developers to either give the vaccine at a greatly subsidised rate or trim their profit margin—Pfizer, for instance, had made it clear early in the vaccine race that it would follow a for-profit route for its vaccine—in return for indemnity, either partial or full. While the government has begun planning its distribution strategy, it needs to work on the indemnities as well; else, producers will be reluctant to sell their vaccines in India.