Proposed legislation to re-evaluate vaccine indemnity practices sparks heated debate

Pharma News: In a move that could reshape the landscape of vaccine procurement and liability, senators unveiled the Public Governance, Performance and Accountability Amendment (Vaccine Indemnity) Bill 2023 on the Senate floor yesterday. The proposed legislation, if passed, will change the way vaccine manufacturers are indemnified by the Commonwealth, marking a significant departure from the current status quo.

At the heart of the controversy lies the issue of indemnity clauses, the legally binding safety nets in contracts with pharmaceutical organisations. Under the proposed bill, the practice of granting future indemnities to vaccine manufacturers would come to a grinding halt.

Recent reports have shed light on “unquantifiable contingent liabilities” linked to vaccines in the 2023-24 federal budget. These liabilities are the result of indemnities granted for advanced purchasing agreements pertaining to COVID-19 vaccines, creating ambiguity over financial forecasts.

“Contracts known to include indemnity clauses with pharmaceutical companies have been requested by the Australian Senate as recently as 22 November, but unfortunately the government voted against public disclosure of these critical documents,” said Senator Ralph Babet.

He added “The process for the purchasing of the COVID-19 vaccines varied from the normal process for purchasing vaccines for distribution through the National Immunisation Program (NIP). While the Commonwealth government has previously provided indemnities for vaccine manufacturers [for smallpox, monkey pox and influenza vaccine], this only appears to have occurred in limited circumstances. Indemnities provided to vaccine manufacturers and sponsors became more commonplace during and post the COVID-19 pandemic, but very little is known by the general population about the specifics of said indemnities as the contracts between government and corporations have been protected as ‘commercial-in-confidence’.”

Yet, the proposal doesn’t come without its sceptics. Senator Watt, Queensland’s Minister for Agriculture, Fisheries and Forestry and Minister for Emergency Management, staunchly opposed the bill. Citing the invaluable role of indemnification during emergencies and pandemics, Senator Watt argued that timely and unhindered access to vaccines was only possible due to this mechanism. The Senator warned that the bill’s passage could jeopardise Australia’s ability to secure crucial vaccines in the throes of global crises.

The crux of the matter, as articulated by Senator Matt Canavan, lies in the distribution of power and responsibility. Advocating for the bill, Senator Canavan emphasised the need for a collective decision-making process when it comes to indemnifying pharmaceutical companies.

“If a future Australian government wants to provide an indemnity to a large pharmaceutical company – or, sometimes, even a small one like Moderna, one without any record at all – it can bring legislation to this Parliament and have the people’s representatives debate and inquire into whether such an indemnity should be given. An indemnity doesn’t remove the risk. It doesn’t take the liability away. All the indemnity does, through the stroke of a pen of a government minister, is transfer that risk and that liability – which should naturally be with the company selling a product – to the people. The people are the ones who are left picking up the bill,” he said.

With Australia’s COVID-19 vaccine agreements spanning Pfizer, AstraZeneca, Novavax, Moderna, and the COVAX facility, the stakes are high. While the bill would not tamper with existing indemnities, its has the potential to reshape future agreements.

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