What is indemnity? Why are foreign vaccine makers like Pfizer, Moderna demanding Indemnity from Indian Govt?

Pfizer and Moderna are seeking indemnity from the countries they are supplying their vaccines so that they can get legal protection. 

Created On: Jun 25, 2021 16:51 ISTModified On: Jun 25, 2021 16:51 IST

India is very close to granting indemnity to foreign COVID-19 vaccine makers such as Pfizer and Moderna and their negotiations are now said to be in the final stages, as per sources. 

The vaccine makers have supplied their COVID-19 vaccines globally only after being granted indemnity. On the other hand, India has not granted indemnity to any vaccine maker so far. 

However, as per sources, the government will grant indemnity to these vaccine makers. This follows multiple rounds of discussion between the centre and pharma giants Pfizer and Moderna. 

What is indemnity?

An indemnity is a comprehensive form of insurance compensation for damages or loss. In the legal sense, Indemnity refers to an exemption from liability for damages. It is a contractual agreement between two parties, under which, one party agrees to pay for potential losses or damages caused by another party. 

Why are Pfizer and Moderna seeking indemnity for supplying their COVID-19 vaccines?

Pfizer and Moderna are seeking indemnity from the countries they are supplying their vaccines so that they can get legal protection. Getting indemnity, in this case, means that the companies cannot be sued on the account of any adverse events after vaccination. 

This will make the vaccine makers immune to any kind of monetary or other costs of compensation filed in India with respect to their vaccine doses. 

Benefit- This will make the vaccines more affordable as the manufacturers will not have to worry about insurance or claims-compensation-related elements.

Have other countries granted indemnity to the vaccine makers?

• Pfizer and Moderna have not sold their vaccines to any country without obtaining indemnity against legal action over any adverse effects of their product. Pfizer has obtained indemnity where its vaccines are already in use, including the UK and the US. 

• The US was the first country to provide such legal protection to Covid-19 vaccine manufacturers. A federal court in the US had granted Pfizer and Moderna immunity from liability in December 2020. Hence, these companies cannot be sued for compensation if there are any adverse effects from their shots.

• The UK also has granted indemnity to vaccine manufacturers. The World Health Organization (WHO) also has a special compensation programme for low-income countries that are covered under its COVAX facility.

Will India grant indemnity to these foreign vaccine makers?

• While the details of the negotiations between the government and Pfizer have not been made public, granting indemnity was a contentious issue between the government and the vaccine makers, as India has not granted indemnity to any COVID-19 vaccine maker before and Pfizer and other vaccine manufacturers invoke a confidentiality clause while finalising commercial contracts with countries. 

• Pfizer and Moderna have requested indemnity from all nations and this is their expectation. India is reportedly examining the request and will reportedly soon grant these vaccine manufacturers the legal protection they are demanding to expand its immunisation campaign, which is facing a delay due to acute shortages in vaccines. 

• The government will probably look at the practices that have been followed in other countries on granting indemnity coverage.

Are there any risks to granting indemnity to the foreign vaccine makers?

As per experts, the benefits far more outweigh any risks in the risk-benefit ratio in vaccination. 

Does this mean vaccine beneficiaries cannot seek compensation for adverse events?

No, this does not mean that the beneficiaries cannot seek compensation for adverse events, but the bar is very high generally. Ever country has a different rule for compensation in case of any adverse event after compensation. 

For example, WHO's “No-Fault compensation programme” for Covid-19 vaccines is funded by a small levy on each dose supported by the Gavi COVAX Advance Market Commitment. The compensation covers rare but serious adverse events associated with the vaccines distributed under the Covax facility till June 2022. 

It covers serious illness that is suffered by a patient, which either requires hospitalisation or prolongs an existing hospitalisation and results in permanent impairment.

Will India have to grant indemnity to all vaccine makers?

According to experts, if the government grants indemnity to foreign vaccine makers it may have to grant it to the Indian vaccine makers such as Serum Institute and Bharat Biotech as well to maintain a standard policy. 

When will Pzifer's vaccine come to India?

According to the head of India’s Covid-19 task force, Dr V K Paul, Pfizer has indicated to India on availability of a “certain amount” of its mRNA Covid-19 vaccine, “possibly starting in July”. This is only if the government approves Pfizer’s request of indemnity against the cost of compensation for any severe side effects.


India had invited Pfizer, Moderna and Johnson & Johnson in April 2021 to supply their vaccines in Idia after the deadly second wave of COVID-19 rocked the entire country amid vaccine shortages. No deal has been signed yet. 

India has already bent its rules to meet one of Pfizer's key demands of dropping the requirement that foreign vaccines must undergo local trials in India. 

The global market for COVID-19 vaccines is a seller’s market. Very few citizen claims are entertained. Even in the United States, people can’t sue the U.S. FDA (Food & Drug Administration) for approving or disapproving a drug.


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