India needs Pfizer vaccines—but company demand for legal protection is holding things up

In late May, the government of Indian Prime Minister Narendra Modi made a bold promise: to vaccinate every one of India’s 950 million adults against COVID-19 by the end of the year. But that ambitious plan is being held up, in part, by a critical issue: whether the government will protect foreign vaccine suppliers from legal liability over vaccine complications.

V.K. Paul, member of government think tank NITI Aayog, suggested to reporters last Friday that such requests from foreign companies, specifically Pfizer, are delaying purchase agreements for vaccines that India desperately needs.

“We are in negotiations with them. There is no decision at the moment,” Paul said. “In principal, they expect [indemnification] to be given. This has been the case all over the world.”

Indemnifying vaccine makers from liability is an unusual move that has become pro forma during the pandemic. Such legal protection incentivizes manufacturers to get vaccines to market as fast as possible and lowers the price they charge for doses while shielding corporations from having to pay damages for vaccine complications unless they result from willful negligence. It’s what manufacturers have asked for, and the U.S., the U.K., and European Union—eager to get lifesaving jabs into arms—have all granted the demand.

These governments and others have determined that the issue is a no-brainer, given the severity of the pandemic, so public health experts in India are puzzled as to why Narendra Modi’s administration has yet to come to the same conclusion.

Naushad Forbes, past president of the Confederation of Indian Industry, is confident India will eventually grant manufacturers indemnity, “but we will do it at a leisurely pace,” he says. “I am unable to understand why there are these delays.”

India’s vaccine demand

India has little time to waste.

The country launched its vaccination campaign in January, but in March the need to vaccinate became more urgent as a deadly second wave of COVID washed over the country, overwhelming hospitals and triggering massive lockdowns. In the past six weeks, COVID has infected millions and killed tens of thousands. Case numbers are decreasing, reaching around 94,052 daily infections on Thursday from a peak of above 400,000 in early May, but policymakers have warned of a possible third wave if there is not enough vaccine coverage. 

So far, 236 million people—or 17% of Indians—have received at least one dose of a vaccine; 46.6 million are fully vaccinated, according to the latest government data, far off pace from the government’s goal of reaching 950 million people by the end of 2021. 

An Indian Ministry of Finance report on Wednesday called for stepping up the immunization drive to cover 700 million people by September to speed up the country’s economic recovery.

India is well suited to carry out a massive vaccination campaign. It’s the world’s largest supplier of vaccines, and two of its biggest manufacturers, the Serum Institute of India and Bharat Biotech, announced in March that they would fulfill domestic need before producing any jabs for export. Still, supply of the three jabs India has approved—the Serum Institute of India’s Covishield version of the AstraZeneca vaccine, Bharat Biotech’s Covaxin, and Russia’s Sputnik V—have run short as millions of Indians have flocked to vaccination centers. 

To boost supply, the government said earlier this month it would approve some foreign vaccines even if manufacturers hadn’t conducted trials in India, a standard process that can take months, if not years, to complete. 

But so far, India has granted approval to only one foreign-made vaccine—Sputnik V—despite being in talks with Pfizer and Johnson & Johnson. A spokesman for Dr Reddy’s Laboratories, the Indian company that imported the Russian-made vaccine, did not comment on whether the company had sought indemnity.

“Pfizer’s discussions with the government of India are ongoing, and we are hopeful to bring the Pfizer-BioNTech COVID-19 vaccine for use in the country,” a company spokesman said in a written response to Fortune. 

A Johnson & Johnson spokesperson said the company is engaged in talks with the Indian government to supply vaccines.

“[The manufacturers] have vaccine stocks available with them. The price levels are also not unreasonable. The only thing coming in the way is indemnity,” Forbes said.

Industry executives, who asked not to be named, say negotiations between the government and vaccine makers are partly hung up on whether lawsuits that do arise will be tried in Indian or international courts. Indian policymakers are also concerned about appearing to grant the foreign companies too many concessions.

Amir Ullah Khan, an economist and former policy adviser for the Bill and Melinda Gates Foundation, said that it would be fair for India to haggle over indemnity in normal circumstances, but not now.

“People are dying right now, and we don’t have space to bury them. In such a situation, where there is such a supply problem, it makes no sense to insist on negotiating over indemnity,” he said. 

Payout program

Khan suggests that the government waive the legal liability for vaccine makers for a limited period, such as six months to one year. During that time, the government should provide compensation to anyone who experiences unintentional adverse side effects. This, he notes, is the strategy employed by the U.S., which has some of the world’s toughest product liability and safety laws.

The U.S. introduced a vaccine compensation scheme that pays parties who are injured by the vaccines. Health care experts say the tactic satisfies drugmakers’ indemnity demands and gives the public recourse if they suffer irreparable harm from the jabs, though such programs are notoriously stingy with payouts.

It’s unclear if the manufacturers behind the vaccines already in the Indian market secured any level of indemnification from the government. The Serum Institute has argued that domestic manufacturers should receive the same indemnity as foreign vaccine makers. Paul, of the government’s NITI Aayog, has only said the Indian government is looking into the demand.

The Serum Institute and Bharat Biotech did not respond to requests for comment.

K. Srinath Reddy, president of the Public Health Foundation of India, expects the government to grant indemnity because the risk of missing out on vaccines is too high.

“It is a seller’s market,” he says.

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