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Biden Vaccine Donations Test Drugmakers’ Liability Shield Abroad

June 9, 2021, 9:31 AM

Pfizer Inc. and other Covid-19 vaccine makers may face new liability risks for adverse effects after the Biden administration donated 25 million doses abroad, where vaccine legal protections generally aren’t as strong as in the U.S., health law experts say.

The liability shields granted under a 2005 U.S. public readiness law safeguard drugmakers and other entities from stateside lawsuits over alleged Covid-19 vaccine complications unless there’s willful misconduct. Those protections are more solid than what’s afforded in other countries—heightening the risk that companies will have to defend lawsuits in the regions that are getting their products.

“If there is a major adverse event in a country, there are likely to be lawsuits,” said Lawrence Gostin, director of the O’Neill Institute for National and Global Health Law at Georgetown University. The drug companies “can be on the legal hook.”

Liability is a risky proposition for drugmakers, complicating desires to share their products through national immunization efforts while threatening financial and reputational damages at the height of a global pandemic.

“Companies are worried about lawsuits when people face catastrophic illnesses which are in proximity to the administration of the vaccine but aren’t caused by the vaccine,” Gostin said. “When you’re rolling this out across the globe, you’re going to get a huge number of adverse events that may or may not be caused by vaccines and companies don’t want to defend lawsuits across the world.”

The number of vaccine complications appears relatively low. In the U.S., severe allergic reactions to the shot occurred in approximately two to five people per million, according to the Centers for Disease Control and Prevention.

From Dec. 14, 2020, to May 24, the Department of Health and Human Services received 4,863 reports of deaths among recipients of Covid-19 vaccines—about 0.0017% of those vaccinated. The CDC website however notes that death reports “do not necessarily mean the vaccine caused the death.”

Balancing Risk

The U.S. plans to distribute 75% of its 25 million doses to dozens of countries across South America, Central America, Asia, and Africa through COVAX, a World Health Organization-backed program for equitable vaccine access. Meanwhile, 6 million doses will be sent directly to countries like Kosovo, Ukraine, Georgia, Jordan, Egypt, and Iraq.

In the U.S., the Public Readiness and Emergency Preparedness (PREP) Act of 2005 protects companies making Covid-19 products from liability for personal injuries or death.

But in countries with less or no legal protection, drugmakers could face several different types of claims over alleged vaccine injuries, Dorit Reiss, a UC Hastings Law professor who specializes in vaccine law and policy, said. Those could include allegations of negligent vaccine distribution, or manufacturing or design defect claims.

Claims that a vaccine’s design creates unreasonable risks would be tough to push, however, as “every design is a balance between safety and effectiveness,” Reiss said. “A lot of products have risks, and litigating these risks undermine those products.”

If a design defect claim were to hold up in court, other litigants would be able to point to it, and vaccine developers might end up losing other cases over the same product, she said.

Significant Shield

The PREP act “is as close to a complete shield as you’re going to find” in U.S. law, said Nicholas M. Pace, a senior social scientist at the RAND Corporation.

That law also created the Countermeasures Injury Compensation Program as a means for the injured to obtain compensation. The CICP is a government program that pays individuals allegedly harmed from covered vaccines, medications, and devices related to events like a pandemic.

France, Germany, Denmark, and the U.K. are also among the countries with their own vaccine injury compensation programs. COVAX likewise has a “no-fault compensation programme” meant to “significantly reduce the need for recourse to the law courts,” according to the WHO.

Still, compensation programs don’t necessarily block lawsuits, Pace said, noting there is litigation in Europe over H1N1 flu vaccinations arising from the 2009 pandemic.

‘Incredible Milestone’

Some lawyers say the U.S. itself is protected from legal liability over its shared doses.

“Countries around the world—China, Russia, the U.K., the European Union and India—have been donating doses, and it’s never come back to bite them,” Gostin said.

While vaccine manufacturers negotiating directly with countries may secure specific liability protections, Gostin said the U.S. as intermediary “takes away their ability to really demand complete and utter compensation and protection.”

The Biden administration’s vaccine donations will help achieve the goal of getting shots in arms as quickly as possible, said Brian Newell, spokesman at the Pharmaceutical Research and Manufacturers of America, an industry group representing drug companies.

“The world just surpassed an incredible milestone of administering 2 billion vaccine doses globally, and we look forward to continuing our work with the Biden administration and other leaders to defeat the pandemic here in the U.S. and around the world,” Newell said.

The vaccine sharing is a worthwhile step to quelling infection rates throughout the world, but more needs to be done, according to Tahir Amin, co-founder of the Initiative for Medicines, Access and Knowledge.

Donations, taken alongside steps like waiving vaccine intellectual property protections and boosting drugmaker partnerships, could put a dent in pandemic numbers.

“Getting as many manufacturers as possible globally” is the path, Amin said.

To contact the reporter on this story: Ian Lopez in Washington at ilopez@bloomberglaw.com

To contact the editors responsible for this story: Fawn Johnson at fjohnson@bloombergindustry.com; Alexis Kramer at akramer@bloomberglaw.com

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