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The Slippery Slope of Indemnity for COVID-19 Vaccine Manufacturers – The Wire Science



Syringes filled with a dose of the Pfizer-BioNTech COVID-19 vaccine in Brussels, Belgium, January 21, 2021. Photo: Reuters/Yves Herman

India needs to vaccinate 135 crore people in a short period of time. Thus far, we have administered 24 crore doses, with 4.5 crore people fully vaccinated and 19 crores having received one dose. With the emergence of new novel coronavirus variants, there is no effective herd immunity target that we can count on. Vaccinating as many citizens as possible is the best way forward.

India has the world’s largest childhood immunisation scheme, larger than all the European and Middle Eastern countries combined. We cater to more than 50% of the global demand for various vaccines necessary for various vaccination programmes and are also one of the largest manufacturers of COVID-19 vaccines. Though there was significant vaccine hesitancy and wastage at the beginning of the vaccination campaign, the situation has improved somewhat since. However, mistakes on the government’s part left India with a substantial supply-demand gap of vaccines that is yet to be resolved.

To this end, the government has waived the requirement for foreign vaccines to complete bridging trials in India pursuant to approval. We have also done away with the need for quality control checks of individual vaccine batches.

However, several foreign vaccine manufacturers have advanced one more demand: indemnity from litigation.

What is the issue?

Vaccines can have rare yet serious side effects, generally called adverse events following immunisation (AEFIs), that can be debilitating.

Vaccine recipients have a legal right to sue the vaccine’s manufacturer for compensation. And mass litigation over unexpected side-effects can land the manufacturer in severe financial and legal troubles. This prospect often discourages the manufacturers from supplying their vaccines in countries where they don’t have protection against such legal action.

The scientific community has developed COVID-19 vaccines at a swift pace, with limited trial cohorts and durations. As a result, if a vaccine does have rare side-effects, they may not become apparent until millions of people have received the vaccine.

Is the request for indemnity justified?

There are two sides to this puzzle.

The prospect of litigation can discourage vaccine-manufacturers from investing in research and production. In the 1980s, numerous cases against manufacturers of the DPT vaccine and healthcare providers in the US resulted in vaccine deficiency. The government set up the Vaccine Injury Compensation Program (VICP) as a remedial measure, under which vaccine-manufacturers wouldn’t be held responsible for compensating for any vaccine-related injury claims. Instead, the government-owned VICP would provide compensation to eligible individuals. The program covers 16 routine vaccines.

The system has helped maintain an adequate supply of vaccines at a stable cost, and maintains a forum in which eligible individuals can receive compensation reasonably quickly. If a litigant is not satisfied with a ruling of the VICP vaccine court, they can approach the regular courts.

Unfortunately, VICP doesn’t cover COVID-19 vaccines. The Countermeasures Injury Compensation Program (CICP), a less popular and more complicated system, may be the only way out for US consumers.

The UK has included COVID-19 vaccines in its existing Vaccine Damages Payment Scheme (VDPS).

Thus far, 25 countries have implemented a no-fault compensation scheme for childhood immunisation and other vaccines in their respective national programmes. The definition of the scheme and the level of injury covered vary. In 2019, for example, Japan certified 88 out of 134 damage claims, and paid out $22 million. The Japanese scheme covers both vaccines and drugs.

Since 1988, the US programme has evaluated more than 19,500 claims and approved 7,807, and has disbursed $5 billion in compensation.

Functional and fair vaccine injury compensation programmes have the potential to boost confidence among the people.

Who funds vaccine injury compensation schemes?

The sources of the money used to support compensation schemes in various countries include the government, pharmaceutical companies’ contributions to the insurance sector, general taxes, levies collected from employee earnings, etc.

The US scheme follows a flat-rate tax per vaccine dose. To support the program, the US government set up a trust that levies an excise tax of $0.75 on the sale of every vaccine vial. This tax is then used to fund the compensation program.

Finland and Sweden run their compensation programmes using insurance payments from pharmaceutical companies. Here, the central governments, provincial governments and insurance companies are responsible to different extents for managing their respective schemes.

The COVAX no-fault compensation programme

The WHO has set up a COVID-19 vaccine injury compensation programme. To this end, COVAX has allocated $150 million to cover compensation payments to eligible individuals in 92 lower-income countries and economies – the Gavi COVAX Advance Market Commitment (AMC) eligible economies.

According to the WHO website, “The purpose of the programme is to provide no-fault compensation in full and final settlement of any claims to those individuals who suffer a serious adverse event resulting in permanent impairment or death associated with a COVID-19 vaccine received through the COVAX Facility, or the administration of such a vaccine, within any AMC eligible economy.”

Pitfalls of compensation schemes

It is tough to differentiate a vaccine-related adverse event from an injury due to mistakes in manufacturing. Though this could be the company’s liability, it will be complicated to prove errors in the manufacturing practice. If India is to provide compensation for these mistakes as well, it will prove an excessive burden. Such a situation is also more likely in India considering the government has decided to waive the need to check individual batches of certain foreign-made vaccines.

Without a well-established vaccine injury compensation scheme, a citizen injured by a vaccine still has to go through the existing legal system to receive any compensation. And the case will have to be fought against the government and its lawyers. Legal action against the government is bound to be financially draining. It will be challenging to prove the existence of a causal relationship between a vaccine and injury in the existing legal system, and it will also be tough to prove that an injury is due to the vaccine’s composition or its faulty administration.5 So most individuals who experience severe and genuine adverse effects after receiving a vaccine are unlikely to receive compensation.

Pros and cons of India providing indemnity

If the Government of India agrees to indemnify vaccine-manufacturing firms, who will be responsible for compensating any unfortunate individuals who have had an AEFI – government or the institution that provided the vaccine?

If we agree to indemnify to foreign companies, we will need to extend Indian companies the same privilege. In addition, if we indemnify firms making COVID-19 vaccines, we will also need to extend the privilege to the makers of other vaccines in our national programme – as is the system in most other countries with similar schemes.

Since we have the most extensive childhood immunisation programme in the world, we will have to designate a big chunk of our vaccination budget for the resulting national vaccine compensation scheme.

Compared to the US and other countries, there have been fewer lawsuits related to AEFIs in India. Two reasons are that it is complicated to prove that a vaccination and an AEFI are linked, and that only the rich can afford lawsuits against pharma companies with deep pockets.

The situation may change if the government sets up a vaccine compensation scheme like in the US – where you may not need a lawyer and the process is much faster. The odds of being compensated are also quite high, even if the compensation amount could be lower. But will India be able to afford compensating a very large number of people? That is the question.

The country definitely needs more COVID-19 vaccines, and if the government is cornered, it may yet grant the privilege. But if it does, it should establish a well-oiled, well-funded vaccine compensation programme, open it up to all vaccines in the childhood immunisation scheme, and anticipate a tsunami of claims.

It is easy for us to claim that we were under pressure and that that is why we decided to indemnify a few foreign vaccine firms. But the real options before us are the following: no indemnity to any company on COVID-19 vaccines or indemnity for all vaccine manufacturers in the national programme. Whatever our decision, we should stick to it; it just can’t be a half-measure.

Abdul Ghafur is a consultant in infectious diseases at Apollo Hospitals, Chennai, and coordinator of the Chennai Declaration on antimicrobial resistance.



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