Informist, Friday, Jul 2, 2021
By Shruti Mahajan
NEW DELHI - At a time when the world is scrambling for vaccines against COVID-19, some vaccine manufacturers have been accused of flexing their muscles.
There have been reports that US-headquartered pharmaceutical major Pfizer demanded sovereign assets from some Latin American countries, including Brazil, as a collateral against potential future lawsuits.
Pandemic-battered Brazil did buy the Pfizer vaccine, but the deal is shrouded in confidentiality. The country's death toll from COVID crossed 500,000 last month. India is just behind Brazil, with its death toll topping 400,000 today.
India is currently in talks with Pfizer and recently granted restricted use authorisation to another American pharma major, Moderna, both of which have demanded indemnity from the government to protect them against potential lawsuits in case of any adverse reaction.
Consultations on indemnifying foreign vaccine manufacturers are still underway, COVID-19 National Task Force Chairman V. K. Paul said this week. At the heart of the negotiations is the demand by foreign manufacturers for indemnity against any compensation claims from the recipients of COVID-19 vaccines in India.
Indemnity essentially means a protective cover against legal action for monetary claims or compensation demands that can be made for harm caused to a recipient of the vaccine. It is crucial as COVID-19 vaccines are not time-tested--they were developed at breakneck speed with fast-tracked clinical trials and regulatory approvals.
Indemnifying Pfizer and Moderna will mean shifting the responsibility from the vaccine manufacturer to possibly the government in case of any adverse effects.
This paradigm shift, besides placing the burden on the government, is likely to open the floodgates for similar demands, experts said.
If the government agrees to indemnify foreign manufactures, the likelihood of similar demands from domestic companies is high, said Anant Bhan, former president of the International Association of Bioethics.
"If the government allows Pfizer to have the exception of an indemnity, then why not to other companies?" Bhan wondered.
Serum Institute of India's Adar Poonawalla has already called for indemnity to all vaccine manufacturers should the demand by Pfizer and Moderna be acceded to.
Propriety demands that if liability waiver is given to foreign vaccine manufacturers, the same standards should be applied to domestic companies.
After all, don't the same standards apply for same class of products?
Murali Neelakantan, principal lawyer at Amicus, doesn't believe so. The chances of indemnity for Pfizer and Moderna leading to a domino effect are very slim, he said.
Once a contract has been signed, the terms cannot be renegotiated, he said.
The government has already signed separate agreements with vaccine manufacturers, including Serum Institute and Bharat Biotech, for procurement. Each of these agreements is separate and negotiated individually, Neelkantan said.
The terms of these agreements cover all aspects of procurement, including pricing, deadlines, grounds for fixing liability, as well as legal recourse in the event of a dispute.
The demand for indemnity by Pfizer and Moderna is not unique to India. Pfizer has protection from liability from every country it is supplying COVID-19 vaccines to.
The protection against civil liability has been either through indemnity or through the inclusion of COVID-19 vaccines in the vaccine compensation regimes of respective regulatory jurisdictions.
Many developed nations have compensation regimes in place that cover no-fault liability against claims of adverse events. Unlike developed countries, India has no such system for compensation to patients in case of adverse events.
If indemnity is given to Pfizer and Moderna, those who take vaccines manufactured by these companies in India will technically have no recourse to monetary compensation under the current scheme of things.
The suspension of liability of a manufacturer, therefore, must mean that the government steps in and discharges the duty of compensating the vaccine recipient, activists said.
"From the perspective of the rights of the recipients, the minimum requirement is that someone has to take accountability," Bhan said.
"The recipient of the vaccine should not be left bereft of protection, including a right to legal claim, and someone has to take on the onus agreeing to be the other party."
This is the ground on which many public health activists are calling for greater accountability.
"At the heart of indemnity issue is the right of the patients to seek legal redress or compensation from the company itself,: Leena Menghaney, advisor to the MSF Access Campaign, said.
The issue boils down to compensation in the event of an adverse effect.
"Indemnity and compensation cannot be de-linked," said Malini Aisola, co-convenor of All India Drug Action Network.
"There already exists a deep imbalance, particularly in developing countries, so we have to be mindful of the safety and welfare of the people," Aisola said.
Neelakantan, however, said there seems to be a misconception that there will not be any remedy for injury or death caused by COVID-19 vaccines. "Nobody is saying that the right to compensation is being taken away. If somebody suffers a loss, which is injury or death caused by the vaccine, the Indian government may take on the liability for compensation."
In doing so, however, the government needs to be mindful of not setting a wrong or negative precedent, Menghaney said.
"Unless these issues are ironed out about who will pay compensation, how the claims will be assessed, how will the rights of those who suffer adverse events be protected, I think it's difficult to grant indemnity," she said.
Procuring from foreign manufacturers is crucial as India will need about 1.85 bln doses of COVID-19 vaccines to inoculate about 70% of the population to achieve herd immunity.
After accounting for vaccine doses available till the end of July, India will still need another 1.35 bln doses, according to government estimates.
One would have assumed India, which claims to be the world's vaccine factory, to have an upper hand in negotiations with vaccine manufacturers, but a global pandemic of unparalleled severity has turned negotiation dynamics on its head.
The vaccine manufacturers are at a better bargaining position owing to the pandemic.
"The vaccine manufacturers are not desperate to sell you vaccines. You have to persuade them to sell it to you. It's a marketing job for India and other countries," Neelkantan said.
To add to it, Pfizer's talks with the government have been covered with a veil of secrecy making public engagement or consultation with respect to its demands impossible.
Public health activist Dinesh Thakur said that the terms of such agreements may or may not be justified, but these transactions are commercial and contractual in nature.
"This is a business deal between two parties. One party – the manufacturer, which has an upper hand today - is making demands which it thinks it can make because of its position. It is up to the second party – the Indian government, in this case - to assess to what extent it can afford to comply."
According to Neelakantan it is just a fight over pennies.
"Considering that the number of vaccines that are going to be procured from Pfizer is going to be quite small and the fact that compensation pay-outs in India are not large, the insurance premium to cover that risk will probably be just a few lakhs of rupees," Neelakantan said.
"We are more or less fighting over pennies, really," he said.
While compensation claims may be seen as a big risk by pharmaceutical companies in the US, these can be small very in India in the absence of any compensation mechanism.
When compensation scheme for participants of clinical trials was formulated under the New Drugs and Clinical Trials Rules of 2019, it required causality between the product under trial and the adverse effect claimed to be established. Only in a fraction of the cases, this causality was established.
Thakur said the government should consider establishing a compensation regime regardless of which vaccine is
administered.
"This should be a non-judicial institutional mechanism for compensating victims of adverse events."
If the government fails to protect consumer rights, the route through the Indian courts, albeit longer, remains open for victims. End
Edited by Vandana Hingorani
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