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 With vaccines being developed at record speed during the pandemic,
there is potentially a greater risk they may have unexpected
consequences or may not be effective. The financial coverage of
these liabilities is a key feature of drugmakers' talks with
governments keen to secure vaccine shots in advance.
In these extraordinary circumstances, EU governments "are ready to
financially cover certain of the companies' risks", an EU official
told Reuters. The official added, however, that the EU's strict
rules on liability remain in place.
These rules consider vaccine makers and other manufacturers liable
for their products on sale in the EU, apart from rare cases when,
for instance, they did not put them into circulation.
The EU's top court increased the burden on drugmakers in 2017 when
it ruled vaccine users were entitled to compensation if they could
prove a shot caused a negative side-effect, even when there was no
scientific consensus on the matter.
Reducing the legal burden for vaccine makers has been an EU priority
during the pandemic because it is considered crucial to convincing
drugmakers to invest in risky vaccines, an EU internal document
dated May 7 and seen by Reuters shows.
STUMBLING BLOCK
But offers made to vaccine makers have not always been in line with
their expectations.
EU officials involved in the confidential negotiations told Reuters
in July that liability issues were among the stumbling blocks in
talks with U.S. drugmakers Johnson & Johnson (J&J) <JNJ.N> and
Pfizer <PFE.N>, which is developing a potential COVID-19 vaccine
with German biotech firm BioNtech <BNTX.O>.
The EU later said negotiations with J&J were at an advanced stage,
though no deal has yet been reached.
A European Commission spokesman declined to comment on whether
liability issues have been a hurdle in talks with vaccine makers.
The supply agreement the EU reached earlier in August on the
potential COVID-19 vaccine developed by AstraZeneca <AZN.L> and the
University of Oxford - the only deal struck so far by Brussels -
offers only partial liability coverage.
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"The contract foresees that liabilities and financial costs are shared among the
parties," the Belgian medicines agency said in a statement about the deal the
Commission reached with AstraZeneca on behalf of all 27 EU states, including
Belgium.
"Advance purchase agreements provide for member states to indemnify the
manufacturer for certain liabilities incurred," a Commission official said when
asked about the deal. The official gave no further details.
The industry trading body, Vaccines Europe, said it was working with relavant
authorities to agree a system of compensation that would avoid "endless delays
through prohibitively expensive litigation with uncertain outcomes".
Among its members are AstraZeneca, Pfizer, Sanofi <SASY.PA>, GlaxoSmithKline <GSK.L>
and CureVac <CVAC.O>, all of which have been involved in talks with the EU on
their potential COVID-19 vaccines.
The EU stance on liabilities could partly explain why, despite having a bigger
population than the United States, it is lagging Washington in securing
potential COVID-19 vaccines.
The U.S. system shifts liability for vaccines fully to the government and
shields drugmakers because widespread inoculation against disease is considered
a benefit to society.
Congress set aside $30 billion this year to fight COVID-19, including funding
vaccine development and possibly any necessary compensation.
The EU's equivalent to that is an emergency fund that has been tapped during the
pandemic and is expected to use about 2 billion euros ($2.4 billion) to help
vaccine makers to develop shots and cover their liabilities, EU officials said.
(Reporting by Francesco Guarascio @fraguarascio; Editing by Mark Potter and
David Goodman)
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