INDEMNITY CLAUSE AND COVID 19 VACCINES

INDEMNITY CLAUSE AND COVID 19 VACCINES

Subject: Science & tech

Context: The Union government is in talks with foreign manufacturers of COVID-19 vaccines on their demand for indemnity from liability as a condition for selling their vaccines to the country.

Concept:

• Pfizer, which supplies the Pfizer-Biotech mRNA vaccine, is said to have requested that the government indemnify it from any claim that may arise from vaccine users in the future based on any adverse effects after getting the jab.
• No decision has been made yet on the request. However, it has already given rise to a similar demand from domestic vaccine-maker Serum Institute of India (SII), which says all players should be treated the same way.

Indemnity from liability Clause

• In simple terms, indemnity means security against a loss or other financial stress.
• In legal terms, it means a contractual obligation of one party to compensate another party due to the acts of the former.
• The clause is commonly used in insurance contracts.
• In the case of India, if the government gives an indemnity to foreign vaccine makers to roll out their vaccine in the country, the government, and not the vaccine maker, would be liable to compensate any citizen who claims to have side effects after taking the vaccine jab.

What are ‘Bridging trials’?

• ‘Bridging trials’ are localized clinical trials which generate data related to the impact of foreign medicines/vaccines on the indigenous population before they are rolled out for the public.
• These trials are important in ascertaining the efficacy and potential side-effects related to the medicine/vaccine.
• Besides clearance on indemnity clause, foreign vaccine makers including Pfizer and Moderna had sought relaxation on the requirement for a post-approval bridging trial for its vaccine.

Are there any exceptions to indemnification?

• There are a number of common exceptions to indemnification.
• An indemnification provision may exclude indemnification for claims or losses that result from the indemnified party’s:

Negligence or gross negligence.

Improper use of the products.

Bad faith failure to comply with its obligations in the agreement.