Explainer: What the indemnity clause is and how its waiver will accelerate COVID-19 vaccine process in India

Vaccine manufacturers Moderna and Pfizer are ready to supply their COVID-19 vaccines to India provided the Government of India gives them indemnity against any liabilities from the usage of their vaccines.

The "indemnity clause" is reportedly one of the main reasons why the two vaccine manufacturers have stayed out of India despite a staggering shortage of vaccines in the country, and independent tenders being floated by several state governments across India.

What is indemnity?

The Oxford English Dictionary defines indemnity (against something) as "protection against damage or loss, especially in the form of a promise to pay for any damage or loss that happens".

The word is most commonly used for contracts and in the insurance industry. For example, a car insurance gives one indemnity against any claims made in case of a car accident. In case of claims, the insurance company pays the claimant and not the car owner, subject to the terms and conditions.

What indemnity are Pfizer, Moderna seeking?

In the current scenario, both Pfizer and Moderna are seeking a legal indemnity against any liabilities arising out of the use of the vaccine.

Given that most  COVID-19 vaccines have been cleared for emergency use under special circumstances, there is a lot about how they impact the human body that needs further investigation. While some of the life-threatening side effects like blood clots in the case of AstraZeneca/Covishield vaccine have become known, other side effects such as a possible link between Myocarditis and Pfizer's COVID-19 vaccine are still under investigation. There may also be other long-term adverse effects that may emerge much later.

Indian drug manufacturer Cipla, which has tied with Modern to bring its mRNA vaccine to India, has sought indemnity in case of any adverse effects or complications caused by the Moderna vaccine.

The company has cited instances of the US Countermeasures Injury Compensation Program (CICP) and similar programmes in the UK, Canada, EU, Singapore and even the WHO-led Covax, that protect vaccine manufacturers/distributors from claims and underwrite the compensation burden in support of its demand for the same.

Pfizer is also seeking legal protection from any liability. In fact, its demands for indemnity has been a major hurdle. The company has so far refused to discuss vaccine supply with state governments despite repeated requests, and instead sought discussions with the Centre.

While the exact natures of the protectiosn sought will become known only once the purchase orders are made public.

How will removing indemnity clause help solve India's vaccine shortage

The Government of India aims to make some 216 crore doses available by the end of 2021, which should roughly be enough to inoculate its adult population above the age of 18 (90 to 95 crore), according to this BBC report. However, this doesn't account for the remaining 30-35 crore younger population as per 2011 Census, who according to experts are at a greater risk of infection as the virus mutates further.

Though reports claim that India is expecting to purchase 50 million doses from Pfizer, there has been no official clarity on the doses these companies are willing to sell.

Niti Aayog's Dr VK Paul had said in May that Pfizer has indicated the availability of a certain volume of vaccines in the coming months, but it has "requested indemnity against liability to all the nations".

But if the reported numbers are true, the 50 millin Pfizer shots should be enough to vaccinate all children between 12 to 18 years (over 18 percent of India's population was aged below 9 as per 2011 Census data).

The Pfizer vaccine has shown 100 percent efficacy in children.

Besides Pfizer's mRNA vaccine, so far, there is no vaccine that has been approved for usage in children. Trials are underway for several candidates including Moderna and Johnson & Johsnon as well as India's indigenous COVAXIN. SII's Covovac is another candidate, but is yet to begin trials. Then there's Ahmedabad-based Zydus Cadila, which is reportedly planning to test its ZyKov-D vaccine for children between 5 to 12 years of age.

Moderna's vaccine has shown 93% efficacy in children aged 12-17 after first shot and 100% two weeks after the second dose during phase 2/3 trials. And Cipla expects 50 million doses of the Moderna vaccine, but they will be available only in 2022.

Is India offering indemnity to others

No. India doesn't give any protection to COVID-19 vaccine manufacturers against any complications or adverse effects that arise from the administration of their jabs.

Both Serum Institute of India and Bharat Biotech, the manufacturers of Covishiled and Covaxin, respectively, have to report all health complications arising out of vaccine use to the authorities.

"Company shall be liable for all adversities as per CDSCO/Drugs and Cosmetics Act/DCGI policy/approval," the purchase order signed between Government of India and Indian vaccine manufacturers said, according to a report in The Economic Times.