Fri. Mar 29th, 2024

India’s vaccine story is at a stand-still, yet there is so much going underneath the surface.

India’s 5.9% or 4.58 crore population has been fully vaccinated. That’s bleak in comparison to other countries because of earlier vaccination hesitancy.

If the government aims to make 216 crores or 2 billion of doses available by 2021 (as per BBC report) to vaccinate its adult 18+ population (900-950 million) and 30-35 younger population at greater exposure of mutating strain, it needs to clear trials and make relevant decisions quickly.

While India stands at the crossroads, it faces yet another conundrum.

Pfizer, an international vaccine manufacturer wants the Indian government to include an indemnity clause in agreement against any claims for injury or death caused by the vaccine.

Sounds crazy? Let’s know what Indemnity is to ascertain our fears

Indemnity is tool of security or protection against a legal liability, loss or other financial stress.

In simple legal and business terms, it can act as a contractual obligation of one party to compensate the other party in case a legal obligation comes out of former’s acts.

This clause is commonly used in insurance contracts worldwide. For example, a car insurance.

Pfizer’s side of things: In future after having taken a Pfizer’s vaccine, if someone had an adverse effect, Pfizer will not be liable to pay damages that any court, whatsoever, may award.

In short, the government giving an indemnity to the vaccine maker to roll out their vaccines in the country, shall become liable to compensate the citizen who claims to have side effects after taking the vaccine shot.

Sounds harsh and unethical. What is government thinking?

Both the parties have not yet reached a satisfactory conclusion to these discussions and any decision is likely going to take time.

Pfizer wants to supply the vaccines only on terms it has with several other countries. It has stated its preference to only deal with the central government and not pay heed to individual state’s request.

Pfizer’s request, other countries and Indian law in regard:

The pharma company has obtained indemnity in many countries for supplying the shots being used there, including the UK and the US.

No current law on drugs in India have such a provision for indemnity relevant to grant of approval for any new drug or vaccine in the country.

“No Indian company has ever paid indemnity in India’s vaccination history, and neither the government, the biggest vaccine user, has done that. Even deaths after Covid-19 vaccination have not come under this umbrella,” a former ICMR chief asserts.

Section 124 of the Indian Contract Act, 1872 however, defines a contract of indemnity business contract where a party saves the other from any loss caused to the latter.

What all options do both these parties have?

In case the Indemnity is not granted:

Pfizer has two options here: to leave the Indian market and choose the next prospective buyer (in plenty) or it has to buy product liability insurance against risky claims in India and overseas through experienced insurance company in pharma sector or will self-insure for those future claims.

This may not have an additional cost added to vaccine.

In case of self-insurance, a provisioning has to be done i.e. setting side a sum of money to pay out as compensation.

Setting up a financial claim testing structure and dealing with compensations will dis-incentivize Pfizer to sell vaccines in India plus it may add significant cost to public.

Government, in this case, may rather choose to import such vaccines and then disburse as per needs.

In case indemnity is granted:

The Central government will procure vaccines from Pfizer for an agreed price, and then distributes these vaccines to the state governments as well as private companies in addition to keeping it to itself in the ratio 25:25:50 respectively.

In this case, Centre may “help” private entities purchase these vaccines from Pfizer and in turn ask them to undertake all involved liability for injury or death caused by the vaccine.

So, either the government or the private entities may pay the compensation.

The government, in turn for granting the indemnity, may play smart and negotiate with Pfizer to lower the purchase price in Indian market.

Pfizer already believes that compensation for injury or death to any victim caused by the vaccines is a risk to be best handled by the Indian government and will not be held accountable for the same.

Still the government may be able to calculate and assess the involved risk by testing the vaccines at CDL, a certified government lab.

In case vaccines meet the standards, they should be safe and efficacious to use and the risk would be low.

Also. in case of compensation claims, the Indian legal system will be geared enough to deal with them effectively, as and when required (Johnsons and Johnson’s knee replacement is a case in point here).

For instance, the US has setup a compensation fund by imposing a “cess” ranging from $0.75 to $4.50 on each vaccine dose which may cost anything from $12 – $220 per dose.

Similar approach by Indian government will therefore, not cost much and above all, could get India the vaccines it desperately needs now.

Following this, several other domestic as well as international vaccine manufacturers may demand such privilege in lieu of vaccine supply. Since they are the ones fulfilling India’s current die-hard needs, they are fully capable of asking such reward.

Poonawala’s Serum Institute of India has also sought legal protection from any such claims from Indian Government.

A source explains: “Not just Serum Institute of India (SII), all the vaccine companies should get indemnity protection against liabilities if foreign companies are granted the same”.

Exceptions to Indemnification:

Any grant of Indemnity may fail in scenarios the indemnified party does the following: negligence or gross negligence, Improper use of the products, failure to comply with the obligations of the agreement leading to bad faith in manufacturer.

How the indemnity in vaccines will likely affect us?

Drugs controller-general of India has done away with mandatory drug trials considering the difficult situation here. Centre had already granted the emergency use provision to those vaccines under WHO emergency use listing or by countries like UK, US, Japan and EU.

There existed a condition for post-approval bridging trials running parallel to vaccination drive. But that too has been exempted for good: the risks involved to participants and tiresome process.

These exemptions have anyhow reduced risk allocation for these vaccine making firms.

Price perspective: With indemnity being granted and government paying for the risks involved with vaccines, Companies would not care much about setting their money aside.

Hence cheaper prices for the same vaccines plus in granting a benefit of safety from legal claims, government may be able to secure lower prices and higher volumes for its needy public.

Compensation status: The judiciary in India already deals with exploitation of its citizens’ fundamental rights that includes right to life and guarantees their inherent safety.

overall vaccine compensation cases worldwide

The case may be filed and the involved entity can be sued by the victim for compensation. Either the government or manufacturer/private firm buying vaccines or the insurance company involved may become legible to pay for it.

Win-win situation: Government holds no responsibility to oversee the bridging trials been taken along with its superhuman efforts to get everyone vaccinated to reach herd immunity.

Also, vaccination without further delay may help Centre to appear efficient enough to serve its public.

All that Government needs to do is undertake regulation and scrutiny of vaccine-risk related cases seriously so that every victim gets compensated for loss and every manufacturer heard in lieu of its actions.

By Alaina Ali Beg

I am a lover of all arts and therefore can dream myself in all places where the World takes me. I am an avid animal lover and firmly believes that Nature is the true sorcerer.