The demand for vaccine indemnity from countries & the terms of COVAX

Geneva Health Files
5 min readJul 6, 2021

Newsletter Edition #61 [The Weekly Primer]

Originally published June 8th, 2021 on Geneva Health Files.


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Vaccine Indemnity and The COVAX Facility

Some manufacturers have demanded indemnity against the introduction of vaccines, from countries. We wanted to know how this ties in with The COVAX Facility’s no-fault compensation fund. Here are some responses from a spokesperson from Gavi — The Vaccine Alliance. (See our earlier story on these issues)

[GHF] 1. Why did Facility leave the question of indemnity to individual countries participating in the Facility?

The foundational goal of COVAX is global equitable access to COVID-19 vaccines, which includes working to ensure that ability to pay is not a barrier to access. As we strive towards this goal at an unprecedented scale and speed, the issue of liability is one of many complex problems for which the world had to design new solutions in the midst of crisis. COVAX therefore worked urgently with all stakeholders — including AMC-eligible economies, procurement partners, and industry — towards establishing a comprehensive solution that addresses the need for indemnification while ensuring high risk individuals in AMC-eligible economies could benefit from rapid access to life-saving vaccines..

It was impossible to use the same systems utilised for the deployment of COVID-19 vaccines with that of normally licensed vaccines: the world is deploying recently licensed vaccines for which, due to the scale, timeframe, and scope of the deployment of these novel vaccines, normal tools to address potential liability such as product liability insurance are not available from the outset. This is an issue that arose during the H1N1 pandemic and was a clear concern shared by COVAX partners as well as organizations involved in the transport, storage and administration of vaccines.

It is therefore true that, because of the speed and scale of this rollout of novel products, all Facility participants must have signed indemnity agreements with the manufacturers in question in order to receive doses through COVAX — which would also be true for doses received via bilateral deals. However, barriers to equitable access COVAX has been asked to tackle, the Facility has helped — and is helping — facilitate the process of getting these agreements in place. This includes negotiating a common template agreement that AMC economies can use, negotiated with and agreed upon by all manufacturers — greatly reducing the legal burden on AMC participants.

[GHF] 2. How does this fit with the no-fault compensation mechanism established by COVAX.

This work to design a solution that would support countries and remove barriers to access included establishing a first-of-its-kind global no-fault compensation scheme to support 92 AMC-eligible economies. Guiding principles for this work were that this final solution would come online alongside first deliveries to AMC participants, was equitable to all stakeholders, implementable, and would not undermine confidence in vaccines. The No-Fault Compensation (NFC) mechanism is a key benefit available to AMC participants procuring doses through COVAX as compared to via bilateral deals.

[GHF] 3. Have there been any claims under this mechanism already?

(We were asked to get in touch with WHO on this. We did not receive a reply by the time this edition was released)

4. In terms of how this works, did COVAX buy an insurance policy from Chubb in order to cater to potential claims from countries?

NFC funding, paid by donor funding through a levy charged on each dose supported by the Gavi COVAX AMC, will cover the costs of the administrator, the Fund and the layer of insurance to be provided by Chubb. Following a comprehensive and competitive review process, ESIS — a wholly owned subsidiary of Chubb with more than 30 years of international experience — was selected as lead insurer for the program, in accordance with WHO procurement rules and procedures.

Image Credit: Photo by Lalesh Aldarwish from Pexels

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