Why are COVID vaccine manufacturers so keen on indemnity?

Why are COVID vaccine manufacturers so keen on indemnity?

There is much uncertainty surrounding the COVID virus and its variants, and vaccine makers are looking to hedge their risks through the indemnity clause

There has been as much debate, controversy and confusion surrounding the COVID vaccine as there has been around the viral disease itself. While nations elsewhere in the world were quick to place the need for speedy vaccination well above every other concern, the story in India has been different.

In India, from day one, the COVID vaccination drive has been lukewarm at best, guided perhaps by a misplaced sense of triumph over the pandemic. The government miscalculated the numbers, did not place adequate orders, and let domestic producers accept huge export orders. The widely prevalent vaccine hesitancy in the country did not help either.

Now, following biting criticism, the Centre is trying to bring in vaccines in large numbers, and a huge speed-breaker here is the foreign pharma majors insisting on indemnity from legal liability. Now, however, the Centre is set to grant such indemnity to Pfizer and Moderna to speed up vaccine approvals.

What does indemnity do?

The indemnity will protect the companies from any potential legal hassle that may arise from the administering of their vaccines. Pfizer enjoys such immunity in the US (where it is based) and other countries — if a lawsuit is filed over adverse vaccine side-effect, the respective government will bear the compensation burden.  All the countries that Pfizer has exported its vaccine to have agreed to this clause.

Not to be outdone, Serum Institute of India (SII), the Pune-based pharma firm that bought a manufacturing licence from AstraZeneca to produce its vaccine candidate in India under the Covishield brand, wants similar treatment. SII and other domestic manufacturers do have a fair point: if taxpayer money can be used to provide indemnity to a for-profit foreign company, why not to them, too.

Why the urgent need now?

Drug firms have been developing and selling vaccines for several virulent diseases for centuries now. So why does the COVID vaccine attract so much attention? Why are drugmakers so particular about the indemnity clause?

Also read: India’s failure on the vaccine front, and what needs to be done now

The answer perhaps lies in the fact that the COVID vaccine was among the quickest to hit the market. While vaccine candidates are typically tested over several rounds of trials, over several years, the COVID vaccines were out in less than a year after the viral disease hit pandemic proportions. This brings with it a lingering sense of fear.

There have been claims of adverse reactions that are further pushing vaccine makers to demand indemnity from liability. From allergic reactions to respiratory symptoms the blood clots, the alleged effects traverse a wide range. No vaccine maker wants a pile of lawsuits to deal with.

Who will bear the cost of indemnity?

The vaccines are critical, and their manufacturers want indemnity against legal action. Yet, the Indian government not granted it till now, for strong reasons.

Firstly, it is a lot of money. Both Pfizer and Moderna are giant multinational companies. Their estimated legal burden, especially in a highly populated country like India, is bound to be huge. If SII, Bharat Biologicals (Hyderabad-based company producing Covaxin) and other domestic firms that enter the vaccine fray later want indemnity, too, the bill could become massive. This is an expenditure that requires careful thought.

There is also the question of why. As legal experts point out, the companies are selling the vaccines at a profit, which should cover the potential legal cost, too. Unlike the domestic makers, the foreign firms — including Russia’s Sputnik V — have not promised any subsidised sale to the government. That being the case, why should taxpayer money go into protecting them from legal action?

To date, the government has not given any manufacturer indemnity against legal action over adverse side effects. But it may do so shortly, media reports said, so that the vaccination drive can be hastened and the second wave of COVID addressed. That would be prioritising public health over everything else, akin to nations that have beaten the pandemic.

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