Having blundered on the COVID-19 vaccine front, the Narendra Modi government now appears to be pandering to the demands of the vaccine multinationals.
As India’s vaccination drive stalls dangerously, the Narendra Modi government appears to have pushed itself into a corner. Not having procured enough quantities of vaccines early enough, and caught unprepared in the midst of the second wave of the COVID-19 pandemic, the government has realised rather late the folly of its lackadaisical approach. But in trying to recover ground it appears to be allowing itself to be manoeuvred by the global vaccine-manufacturing companies.
As the government desperately scouts for vaccines at a time when countries across the world are trying urgently to source supplies, it has come under pressure from foreign vaccine suppliers, most notably those based in the Western world—Pfizer and Moderna. Three aspects of the Indian regulatory regime governing vaccines have come under pressure. The recent decision to amend two of the three elements of long-standing policies governing the terms on which foreign-made vaccines are used in India, and the reported consideration of the third, indicate that the government is wilting under pressure from the multinationals.
Among the demands raised by global vaccine makers, the first is for a waiver of mandatory “bridging trials” for vaccines that have got approval for Emergency Use Listing (EUL) from key international regulatory bodies such as the World Health Organisation (WHO) or the United States Food and Drug Administration. The second is for the lifting of the requirement that every batch of foreign-made vaccines be subjected to clearance by the Central Drugs Laboratory (CDL), Kasauli, Himachal Pradesh. On both these counts the government has announced a significant climbdown.
The third demand is that the government grant indemnity to vaccine makers, and global pharma companies have been vociferous in their insistence on this. In its negotiations with the government, Pfizer has insisted that granting indemnity is the norm the world over. Although no decision has been taken on the contentious issue yet, it appears that the government has in recent weeks been floating trial balloons in the media to gauge the extent of adverse reaction such a move would elicit. The indication is that the government, under pressure because of the massive bungling in its vaccination drive, is worried about this.
Dismantling safeguards
On June 2, the Drugs Controller General of India (DCGI) issued two notifications. One exempted imported vaccines from the mandatory post-approval bridging trials. The second waived mandatory testing of every batch of foreign-made COVID-19 vaccines at CDL. Foreign vaccine suppliers thus appear to have achieved two of their three key demands from a beleaguered government.
Media reports indicate that Pfizer, which has been involved in talks with the government for some weeks now, has in particular been vociferous in its demand for three changes in the regulatory process governing vaccines in India. The pharmaceutical multinational, the producer of the mRNA vaccine in partnership with BioNTech, a German biotechnology company, is reported to have offered to supply close to 50 million vaccine doses between July and October. However, its “offer” is apparently conditional on the government agreeing to amend the three key aspects of the regulatory process in India. The Indian pharma major Cipla, which is planning to source the Moderna vaccine, is also reported to have sought these waivers.
Pfizer, which was the first foreign vaccine manufacturer to seek EUL in India, has been in talks with the Indian government since January. In fact, in January NITI Aayog member V.K. Paul, who also heads the National Expert Group on Vaccine Administration for COVID-19 (NEGVAC), confirmed that vaccines produced by Pfizer and others would have to mandatorily undergo bridging trials before being allowed. “As of now, the pre-condition for any vaccine to be implemented in India is that you have to do a bridging trial,” Paul said then. After that Pfizer stayed away from talks, reinitiating them in recent weeks amidst the Indian vaccine crisis.
Aware of the pressure that was building on the government, the Jan Swasthya Abhiyan (JSA), an umbrella network of organisations active on public health issues, wrote to Prime Minister Narendra Modi asking the government to engage with Pfizer and other multinationals in a transparent manner. If vaccine suppliers were genuinely interested in supplying vaccines for India’s good, they “must do so in good faith and without such pre-conditions that harm public interest”, the JSA said. It urged the government to release details of the negotiations on “pricing of the mRNA vaccine, quantities, indemnity, and other public interest issues” immediately.
Anand Grover, senior lawyer at the Supreme Court and a member of the Global Commission on Drug Policy, says it remains to be seen whether the bypassing of the bridging trials is compatible with existing legal provisions. He pointed out the decision-making process is “completely opaque and arbitrary”. He pointed out that the process is unlike the case of the USFDA, which publishes the entire proceedings of the approval process, enabling public scrutiny.
Amitava Guha, National Coordinator of the JSA, told Frontline that the organisation will challenge the waiver of bridging trials. He pointed out that the Supreme Court is already hearing two relevant cases, one challenging the amendments to the rules governing clinical trials and the other pertaining to the supply of essential medical supplies including vaccines. Incidentally, the Supreme Court issued orders on May 31 in the case pertaining to the latter, in which it made sharp observations against the Union government’s vaccination policy, describing it as arbitrary and irrational. Following this, in a televised address on June 7, Modi announced significant modifications to the vaccine drive. In particular, he said the Union government would take responsibility for vaccine coverage of all citizens above the age of 18, instead of leaving the responsibility of vaccinating those between 18 and 45 to the State governments. Guha explained that the JSA was examining the option of raising the issues posed by the recent regulatory changes through an application in the ongoing case arguing that the government was taking measures that were “injurious” to public health.
Referring to the waiver of bridging trials, Guha pointed out that the “existing law does not allow such waivers”. The law, he said, states that every drug or vaccine, even if approved by other regulators across the world, ought to be subjected to a “last stage” trial in India. He pointed out that this is not necessarily a large-scale trial but is meant to verify the incidence of adverse reactions in actual conditions in India.
He said too that the waiver of mandatory batch-testing of vaccines was a risky move. He pointed out that since vaccines arise from biotechnological processes using living organisms, small variations in quality may have significant implications for the vaccine, its efficacy and in terms of public health consequences. Guha pointed out that bio-similarity tests, essentially akin to quality-control tests, were needed to ensure that batches of the same vaccine did not vary beyond accepted tolerance levels. The waiver of this rule is therefore highly irresponsible, he argued. “In fact, companies normally do these tests in their own labs. What is the problem in sending the samples to Kasauli for testing? It is just a matter of three of four days,” he said.
Grover pointed out that the waiver of mandatory testing of batches meant the regulator could not exercise policy control over the vaccine supplier. “This is like throwing the rule book out of the window,” he remarked.
Quality control of vaccines is critical for public health and safety. According to a recent report, the Canadian health authorities have decided not to release 3,10,000 doses of the Johnson and Johnson vaccine because of concerns that a vaccine component produced at a facility in Baltimore, U.S., suffers from possible errors. Although the final assembly of the vaccine was at a facility outside the U.S., the Canadian authorities ruled that the entire batch needed to be discarded because of safety concerns. This incident highlights the critical importance of testing every batch of every vaccine in India.
The issue of indemnity
The issue of indemnity has proved to be the most contentious one. This is indicated by the fact that government has only released carefully controlled information about its ongoing negotiations with Pfizer and other manufacturers. The reticence in understandable. It stems from the extreme sensitiveness to criticism of the government’s handling of every aspect of the vaccination drive—from production to distribution. Although a large section of the business media has conveyed the impression that granting indemnity to vaccine suppliers is the norm, as evidenced by such waivers in the U.S., the European Union and many other countries, they miss the point that in each one of those geographies a parallel system of protection has been extended to citizens. Thus, while these governments protect vaccine manufacturers from the hassle of having to deal with claims arising from the use of the vaccine, they have established legal systems, structures and processes that provide a pathway for citizens to stake claims when they are injured or even die because of adverse effects of the vaccine.
Murali Neelakantan, a lawyer with experience in the pharmaceutical industry, compares the normal no-fault indemnity provisions to the familiar comprehensive automobile insurance policies sold by insurers.
Neelakantan explains that it would be very difficult for an ordinary citizen to actually prove that a company, in this case a very large multinational, committed some “fault” that had caused injury or death. Companies, too, prefer government-sanctioned indemnity because it covers the costs associated with the risks of such claims. In effect, under normal circumstances, companies ought to be able to price their vaccines lower because the risk of compensation for death or injury is borne by the government.
India lacks a proper regime for indemnification of damages suffered by citizens. Leena Menghaney, Regional Head (South Asia), Médecins Sans Frontières (MSF) or Doctors Without Borders, told Frontline that despite the biggest industrial disaster at Bhopal in 1984, there is still no system for redress of grievances. “Where is the legal framework that protects citizens when they suffer adverse effects or even death?” she asked. “What is the process for making such claims? What kind of adverse events are covered?” She pointed out that globally the practice is to establish a legal process and back it with a fund instituted specifically for the purpose.
Balancing act
Clearly, a balance between two conflicting objectives requires action on both fronts. On the one hand, companies developing and producing vaccines may need protection from costly and prolonged litigation for damages that may arise in a small fraction of the population. However, this needs a democratically elected government to maintain balance by extending a foolproof system of protection to citizens. If this balance is not maintained, the government will be deemed to have forsaken its people for the benefit of a few large corporations.
In fact, the WHO established such a system in February 2021 for the COVAX (abbreviation for COVID-19 Vaccines Global Access) facility. The WHO signed an agreement with ESIS Inc., a company belonging to the Chubb Group, a global insurance company, for no-fault insurance coverage of all recipients of vaccines delivered by the COVAX facility. This protection is offered to recipients in 92 low- and middle-income countries across the world. Thus, the WHO and the COVAX facility have, while indemnifying vaccine companies, also instituted a mechanism for those who may be affected adversely.
In the U.S., too, the Public Readiness and Emergency Preparedness (PREP) Act of 2005 was invoked to extend protection to not just vaccine manufacturers and suppliers but all critical medical supplies. The only exception left uncovered by this blanket protection was “wilful misconduct”. This protection, offered until 2024, protects companies from being challenged in court for damages. However, even in the U.S. this blanket provision is balanced by other provisions in the PREP Act, which ensure that citizens are not left bleeding while companies are extended blanket immunity. The Countermeasures Injury Compensation Programme (CICP), which has been in place for a decade, provides not just a compensation fund but defines the process by which those affected adversely can access compensation. A successful application under the CICP can claim compensation of up to a maximum of $50,000 a year on account of lost wages and out-of-pocket expenses. In the event of death arising from vaccination, a maximum death benefit of $370,376 is payable from the fund. A measure of how small the risks for companies really are is indicated by the fact that only 29 of the 499 claims made under the provisions of the CICP in the last decade have been successful. In all, merely $6 million has been paid as compensation. A small fraction of the price of the vaccine, akin to a cess in India, goes into the fund.
Recent reports in the media indicate that the companies producing the two main vaccines in India, Serum Institute of India (Covishield) and Bharat Biotech International Ltd. (Covaxin), have both demanded indemnity waivers like the ones being demanded by Pfizer. The media reports calling for a “level playing field” are misplaced. As Neelakantan has pointed out on Twitter and elsewhere, the Indian government has already done deals with SII & BB. He has pointed out that the vaccine prices in those contracts implicitly include the risk premium that the companies have estimated in the absence of a government indemnity. To now ask for indemnity, as Pfizer and Moderna are asking, is patently unfair, unless there is a significant reduction in vaccine prices.
The argument that Pfizer would only offer a “lower” price if it were granted immunity from claims is also fraught with risk. This is because in the murky world of vaccine economics, where it has been difficult to establish capacities and output, the price of the vaccine is a major imponderable.
Pfizer under scrutiny
Pfizer’s conduct in Latin America has been a subject of media scrutiny since February when the Bureau of Investigative Journalism (BIJ) unearthed documents and other testimony from several countries that suggested that the company had indulged in “bullying” during its negotiations with several countries. In March, Knowledge Ecology International, a non-profit non-governmental organisation (NGO) based in the U.S., obtained a copy of the binding term sheet between Pfizer/BioNTech and the Dominican Republic. The first reports of this document appeared in the BIJ, which pointed out that the indemnity covered not just civil claims for damages arising from the vaccine but also those arising from “negligence, fraud or malice”.
The BIJ reported that in Argentina and Brazil the company “asked for sovereign assets to be put up as collateral for any future legal costs”. It quoted an unnamed official (because it would violate confidentiality clauses) in another Latin American country as saying “the government felt like it was being ‘held to ransom’ in order to access life-saving vaccines”.
Later, in April 2021, the BIJ unearthed unredacted draft documents between Pfizer and two other countries which revealed that the multinational demanded that it be indemnified for not just compensation claims by citizens being vaccinated but for any problems in its own supply chain. The document pertaining to the Dominican Republic show that the company made the outrageous demand that it be compensated for delays or losses suffered in the course of manufacturing, packaging and storage—all of which are way beyond the normal indemnity agreements that governments sign with vaccine makers.
In fact, in April the South African Health Minister, Zweli Mkhize, a doctor, said Pfizer’s conditions were “difficult” and “unreasonable”. In particular, he deemed Pfizer’s demand that the country offer its sovereign assets as collateral as “too risky”. The BIJ pointed out that the demand by Pfizer and other companies for complete confidentiality during the negotiating process with national governments has “prevent(ed) the public from knowing about issues including indemnity protection and price”.
Grover thinks that if India succumbs on the indemnity issue, the rest of the developing world may cave in too under the pressure of the multinationals selling the vaccines.
Is it worth India’s while to upset its entire regulatory regime governing vaccines just so that a multinational company can supply 50 million doses between July and October? At the current strike rate of about 3 million doses per day this would last about 17 days. About 240 million doses have been delivered so far, implying that more than 1.64 billion doses are needed in order to fully vaccinate the entire 18+ population—about 939 million persons. Effectively, Pfizer is offering too little in exchange for a policy twist that would gravely harm public health and welfare in the pandemic. Having bungled for over a year in handling the pandemic, the Modi regime will do well to spare the people this additional grievous injury.
(V. Sridhar, is Associate Editor with Frontline and specialises in economic journalism. Courtesy: Frontline Magazine.)
