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COVID vaccination: Pharma companies turn to insurance policies to cover 'adverse effects' liabilities

The move towards ensuring insurance protection comes as the government clarified that drug manufacturers would be held liable for “adverse effects” arising due to their COVID-19 vaccine, same as with any other vaccine/drug.

January 18, 2021 / 03:13 PM IST
COVID-19 vaccination drive at Gautam Buddh Nagar, Uttar Pradesh

COVID-19 vaccination drive at Gautam Buddh Nagar, Uttar Pradesh

Vaccine manufacturers have ensured appropriate insurance cover for liability as India began its COVID-19 vaccination drive on January 16.

Ahead of the immunisation drive, most companies sought product liability policies to protect themselves, in addition to the clinical trial liability insurance taken during the vaccine trial phases, Business Standard reported.

Insurance companies on the other hand have approached the country’s largest reinsurer General Insurance Corporation (GIC Re) for support in provisioning product liability, the report said.

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A source told the paper that New India Assurance and ICICI Lombard have “sought reinsurance support of $5 million against risk” from GIC Re. The request has been accepted, the source added.

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COVID-19 Vaccine

Frequently Asked Questions

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How does a vaccine work?

A vaccine works by mimicking a natural infection. A vaccine not only induces immune response to protect people from any future COVID-19 infection, but also helps quickly build herd immunity to put an end to the pandemic. Herd immunity occurs when a sufficient percentage of a population becomes immune to a disease, making the spread of disease from person to person unlikely. The good news is that SARS-CoV-2 virus has been fairly stable, which increases the viability of a vaccine.

How many types of vaccines are there?

There are broadly four types of vaccine — one, a vaccine based on the whole virus (this could be either inactivated, or an attenuated [weakened] virus vaccine); two, a non-replicating viral vector vaccine that uses a benign virus as vector that carries the antigen of SARS-CoV; three, nucleic-acid vaccines that have genetic material like DNA and RNA of antigens like spike protein given to a person, helping human cells decode genetic material and produce the vaccine; and four, protein subunit vaccine wherein the recombinant proteins of SARS-COV-2 along with an adjuvant (booster) is given as a vaccine.

What does it take to develop a vaccine of this kind?

Vaccine development is a long, complex process. Unlike drugs that are given to people with a diseased, vaccines are given to healthy people and also vulnerable sections such as children, pregnant women and the elderly. So rigorous tests are compulsory. History says that the fastest time it took to develop a vaccine is five years, but it usually takes double or sometimes triple that time.

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Moneycontrol could not independently verify the report.

The report noted that insurers have only transferred “some part of the risk,” while GIC Re has retained its entire risk without support from the international market.

The move towards ensuring insurance protection comes as the government clarified that drug manufacturers would be held liable for “adverse effects” arising due to their COVID-19 vaccine, same as with any other vaccine/drug.

Check here for the latest updates on all COVID-19 vaccines

Pharma majors had requested the Centre to provide them indemnity from legal action related to the COVID-19 vaccine, and to hold liability in case of compensations.

Product liability can be called on in case of negative effects from the vaccine. Clinical trial liability insurance is a limited term policy protecting against legal liabilities that result from clinical trials – this ends when the vaccine goes into distribution.

Transit policy which provides pharma companies and traders insurance coverage for transport of the vaccines has also been accessed by firms.

Follow our full COVID-19 coverage here
Moneycontrol News
first published: Jan 18, 2021 03:13 pm

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