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Explained: Covid-19 vaccine makers and indemnity

In talks over supply of their vaccines in India, Pfizer and Moderna are seeking indemnity against costs of compensation for adverse events. Which countries provide such indemnity, and what is the law in India?

Covid vaccination, Coronavirus vaccination, coronavirus vaccines, pfizer vaccine, Moderna vaccineSyringes being filled with Pfizer’s vaccine at a clinic in Bellingham, Washington. The Indian government is examining Pfizer’s request for indemnity. (AP Photo: Elaine Thompson, File)

Multiple rounds of discussion have taken place between the government and pharma giants Pfizer and Moderna over the supply of their Covid-19 vaccines in India. What has been contentious is the question of indemnity, and these negotiations are now said to be in the final stages. Globally, the two companies have supplied their Covid-19 vaccines only after indemnities were given against the costs of compensation for adverse effects due to vaccination. This means that they cannot be sued in those countries on account of such effects.

Grant of indemnity does not always mean beneficiaries cannot seek compensation for adverse events, but the bar is very high. A look at how indemnity works in various countries, and why it has been an issue in the companies’ negotiations with the Indian government:

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What do we know about negotiations between the government and Pfizer?

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Details of the negotiations between the government and Pfizer have not been made public. Pfizer and other vaccine manufacturers invoke a confidentiality clause while finalising commercial contracts with countries. The firms say this is to protect sensitive negotiations as well as business-related information.

The head of India’s Covid-19 task force, Dr V K Paul, said Pfizer has indicated to India on availability of a “certain amount” of its mRNA Covid-19 vaccine, “possibly starting in July”. However, the government is still examining Pfizer’s request of indemnity against the cost of compensation for any severe side effects.

“Similarly, they have requested indemnity from all nations. That is their expectation, that liability should be indemnified. They have expressed this in legal language. We are examining this request and we will make a decision in the larger interest of people and on merits. This is under discussion but there is no decision as of now,” Paul said.

Are companies not granted indemnity under Indian law?


The Indian drug regulator has not granted indemnity against the costs of compensation for severe side effects to the manufacturers of any of the three Covid-19 vaccines — Covishield, Covaxin and Sputnik V — to which it has given emergency use authorisation.

For clinical trials, Indian law has laid out rules and a formula for grant of compensation in case of injury or death of any trial subject.

But when a vaccine is approved for commercial use, there is no specific provision under the Drugs and Cosmetic Act for compensation. However, beneficiaries seeking compensation can file petitions before legal forums, such as consumer courts or a High Court. Also, the drug regulator can take action under law for violation of any clause when a registration certificate is granted for import of vaccines.

Which countries have granted indemnity to Covid-19 vaccine manufacturers ?


The US, which began vaccinating its population in December, was the first country to provide such legal protection to Covid-19 vaccine manufacturer. The UK too has granted indemnity to vaccine manufacturers. And the World Health Organization (WHO) has a special compensation programme for low-income countries covered under its COVAX facility.

How does indemnity work in the US?

Pfizer and Moderna, the first two manufacturers to receive emergency use authorisation for their m-RNA Covid-19 vaccines, were granted immunity from liability by the US government. This protects them, until 2024, from lawsuits arising out of any foreseen and unintentional medical complications as a result of vaccination against Covid-19. Sovereign immunity also protects the US Food and Drug Administration; vaccine recipients cannot sue the FDA for approving the vaccine.

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Which legal provision enabled such blanket protection?

The Public Readiness and Emergency Preparedness Act (PREP) Act authorises the US Secretary of Health and Human Services (HHS) to limit legal liability for losses relating to the administration of medical countermeasures such as vaccines. On February 4, 2020, the Secretary of HHS invoked the PREP Act and declared Covid-19 a public health emergency “warranting liability protections for covered countermeasures”. Under the HHS Declaration and its amendments, manufacturers and distributors that are covered, state and local governments that supervise the immunisation programme, and health professionals who administer the vaccine are immune from legal liability for losses due to administration of covered countermeasures against Covid-19.

Immunity under the PREP Act covers “all claims for loss” — death; physical, mental, or emotional injury, illness, disability, or condition; fear of such injury, including medical monitoring costs; and loss of or damage to property, including business interruption loss.

Covid vaccination, Coronavirus vaccination, coronavirus vaccines, pfizer vaccine, Moderna vaccine Moderna and Pfizer Covid-19 vaccines sit in a refrigerator at a vaccination site in Cranston, R.I., Thursday, June 10, 2021. (AP Photo: David Goldman, File)

Is there no provision for compensation?

Covid-19 vaccines are covered by the US Countermeasures Injury Compensation Program (CICP), under which individuals who die or suffer serious injuries directly caused by the administration of covered countermeasures may be eligible to receive compensation. Under the PREP Act, CICP can provide benefits to “certain individuals” who sustain “a covered serious physical injury as the direct result of the administration” of the Covid-19 vaccine.


However, the bar for compensation under CCIP is very high, and compensation very rare. Since 2010, CICP has received 1,360 claim filings, of which only 29 claims were compensated, totalling over $6 million.

Covid-19 vaccines are not covered under the US National Vaccine Injury Compensation Program (VICP). To seek compensation under VICP, the beneficiary files a petition with the US Court of Federal Claims, which decides on it based on a review and submissions by the government. VICP covers 16 vaccines, including those for seasonal influenza.


How does the UK provide compensation?

The UK has a Vaccine Damage Payment. This is not a compensation scheme. However, someone severely disabled as a result of vaccination against certain diseases could get a one-off tax-free payment of £120,000, under Vaccine Damage Payment. This covers 19 vaccines, including Covid-19 vaccines.

“Currently, in order to qualify for the payment, it must be accepted, on the balance of probability, that there is a causal link between the vaccine and the claimed disability and that the resulting disability amounts to severe (ie at least 60%) disablement,” the UK Department of Health and Social Care states.

How does the WHO special compensation programme work?

In February, the WHO started a “No-Fault compensation programme” for Covid-19 vaccines for 92 low- and middle-income countries. This is the only global vaccine injury compensation mechanism so far, and is funded by a small levy on each dose supported by the Gavi COVAX Advance Market Commitment. The programme is available for rare but serious adverse events associated with COVAX-distributed vaccines until June 2022.

It covers serious injury or illness that is suffered by a patient and that: requires hospitalisation or prolongs an existing hospitalisation, and results in permanent impairment; or is a congenital birth injury or illness in an unborn or newborn child of a woman who received a vaccine and results in permanent total or partial impairment; or results in death.

First published on: 25-06-2021 at 04:35:44 am
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