Indemnity: What is it? Why do pharma majors like Pfizer, Moderna & SII want it?

Covid-19 vaccine Covishield maker Serum Institute of India (SII) has demanded indemnity from liability, reports said quoting sources. The SII said ‘all the vaccine companies should get indemnity protection against liabilities if foreign companies are granted it’.

This comes amid reports that India might grant indemnity to foreign drug companies such as Pfizer and Moderna.

Indemnity from liability is a key condition put forth by vaccine-makers Pfizer and Moderna for supplying their Covid shots to India. Pfizer has immunity in countries like the US where it cannot be sued for any adverse effects.

The government has not given any manufacturer indemnity or protection against legal action for any severe side effects so far.

What is indemnity and why are Covid vaccine makers seeking it?

With all the buzz around indemnity demand, one might wonder about the relevance of the term and why vaccine makers are pressing for it.

Indemnity is a legal clause mostly used by insurance companies and claims companies to seek to shield themselves from potential compensation demands from those who may experience adverse effects after getting vaccinated.

Indemnity is like granting a concessional request of legal defence from any claims associated with the use of companies' COVID vaccines in India

When a pharma company has indemnity granted by the government of the country it is operating, it means it cannot be sued for negligence related to administering the vaccine.

The company will not be liable to answer if someone suffers side effects and decides to take the matter to court. The government will instead have to become the respondent there.

What is the status in other countries?

Both Pfizer and Moderna have received protection against lawsuits through indemnity clauses for their Covid-19 vaccines in other countries, including the US and Brazil.

The vaccines developed by Pfizer and Moderna work on the same technology and they have proved to be more than 90 per cent effective against Covid-19. Also, these vaccines have been approved in more than 40 countries.

Will they? Will they not?

The Health Ministry, citing other countries have reportedly said and "there is no problem" in granting indemnity or legal protection from any claims linked to the use of a company's COVID-19 vaccine. The Health Ministry sources further said that indemnity can be given if foreign pharma companies have applied for Emergency Use Authorisation in India.

Pfizer and Moderna have said they will export their COVID-19 vaccines to India only if the company is guarded against legal cases.

In February this year, Pfizer became the first foreign drugmaker to apply for emergency use approval of its vaccine candidate in India, but the application was later withdrawn. Later, in May Pfizer said it is holding fresh talks with the Indian government. Pfizer’s spokesperson stressed that the safety and efficacy data of the vaccine had been backed by regulatory authorities in US, Britain, Japan and the World Health Organization.

In the wake of acute shortage of COVID-19 vaccine, the Centre has been strongly criticised for its vaccination policy. The government halted the exports of coronavirus vaccine shots earlier given under its "Vaccine Maitri" programme and scrambled to procure more jabs to address the shortage. In this scenario it looks likely that it will grant indemnity to Pfizer, Moderna, and SII to expedite the vaccination process in the country.

The government will look at the indemnity clause ‘on the basis of practices followed internationally’, sources said.