COVID-19 Vaccine Cross-Border Liability and Compensation

Transcript

Lloyd Dixon

All right. Good morning, everybody, this is Lloyd Dixon from RAND. I think we’ll wait another minute or two just to allow some more people to join. So, just hold on for another minute or two. Okay, I think we got a good number of people who joined, so I think we can get started here. So, I’ll just start by saying good morning, afternoon, or evening, as the case may be, and welcome to today’s webinar on COVID-19 vaccine cross-border liability and compensation. My name is Lloyd Dixon, and I’m director of RAND’s Feinberg Center for Catastrophic Risk Management and Compensation.

Lloyd Dixon

Today’s webinar will address issues regarding liability and compensation for potential side effects from COVID-19 vaccines. How these issues are addressed will affect the availability of the vaccine, fairness to those who happen to suffer adverse outcomes, and—possibly—the vaccine uptake rate. Today’s webinar will focus on liability and compensation issues outside the United States. A second webinar early next year will address the liability and compensation regime in the United States. Today’s webinar is sponsored by the Feinberg Center and RAND’s Institute for Civil Justice.

Lloyd Dixon

The Feinberg Center focuses on the design and performance of compensation systems and the role of insurance markets in providing coverage for events causing widespread loss. The ICJ, Institute for Civil Justice, is dedicated to making the civil justice system more efficient and equitable through objective analytic research. And both these centers operate at RAND, which is a nonprofit institution that helps improve policy and decisionmaking through research and analysis. Let me begin by introducing the moderator and the panelists.

Lloyd Dixon

Nick Pace will moderate the discussion today. He’s a lawyer and senior social scientist at RAND and based in Southern California. Over his 30 plus years at RAND, he has contributed to a wide range of studies on the civil justice system, often involving large-scale, groundbreaking data collection. In the Feinberg Center, he has led studies on alternatives for assigning liability after disaster and on issues involved in the provision of early assistance after disaster by potentially responsible parties.

Lloyd Dixon

Anthony Brown is a senior legal counsel at Gavi, the Vaccine Alliance, and is based in Geneva. Welcome, Anthony. Anthony is directly involved with Gavi’s current efforts to build a global collaboration to accelerate the development, production, and equitable access to COVID-19 vaccines. He has been instrumental in the setup and operation of Gavi’s innovative financing mechanisms that have helped Gavi mobilize and channel funding to immunization programs in lower-income countries.

Deedee Litvin is a director in Merck Pharmaceuticals’ Office of General Counsel and is based near Philadelphia. Deedee manages product-liability cases, including vaccine cases, in the U.S., Europe, Asia, and Latin America. Since the pandemic emerged, Deedee has been supporting advocacy for pandemic preparedness, including liability and compensation for COVID-19 vaccines, for countries in which these solutions do not yet exist. Welcome, and thank you for taking the time today.

Peter Todd is a partner at Hodge Jones & Allen Solicitors in London.

Lloyd Dixon

Peter is a solicitor who specializes in civil litigation in the UK and elsewhere, representing plaintiffs in pharmaceutical cases, particularly vaccine cases. He has secured awards with respect to numerous different vaccines under the UK statutory vaccine-injury scheme. He is currently leading a major multiparty action relating to the adverse side effects from the 2009 pandemic swine flu vaccine.

Welcome to all the panelists, and thank you very much for taking the time today. We really have an excellent set of people.

So, Nick will kick this off with an overview of the relevant issues in international vaccine liability and compensation and possible proposals to address them. Then he’ll moderate a discussion with the panel members, followed by questions from the audience. The audience can use Zoom’s Q&A feature to submit questions, which you can submit any time during the webinar—you don’t have to wait until the Q&A session. One final point before we get started: We are recording the webinar, and we’ll post it on the RAND website. Nick, over to you, and the other panelists should turn off their audio and video for now.

Nick Pace

Thank you very much, Lloyd. I’m going to delve into the world of the technical file and actually share my screen. So, about half the time it works, and half the time it doesn’t work for me, so let’s see what happens here. Oh, that’s lovely. Okay.

So, good day to all of you, and, by 2020 standards, in fact, I believe this is indeed a very good day. It’s a day when at least some people are actually being injected with what appears to be effective and safe vaccines against a virus that has killed an estimated 1.7 million people across the planet, turned the way that we interact with others socially and our families upside down, and has put the global economy into a tailspin. The fact that we now have a number of vaccines that are government-approved already, we’ve got other vaccines that are undergoing promising trials and even more vaccines that are being developed in labs around the world, is a reason enough, I think, for us to consider that December 22 is actually a pretty special day.

Now, despite that kind of optimism, there’s still much to be done, as you all know. Obviously, we need to produce unprecedented amounts of these vaccines. We need to move them to where they are needed, and we’re going to need to get to just about everyone on the planet with a pulse to roll up their sleeves for the jab. One potential roadblock, however, on the path towards global control of COVID-19 involves one of the subjects of today’s webinar. That’s the assessment of fault. I’m sorry. Let me whip these things around here and . . . okay.

Nick Pace

This is the assessment of fault on the part of those that are involved in the vaccine supply chain for harms caused by the side effects of those inoculations. Now, keep in mind that the vaccines generally constitute a very relatively small proportion of a pharmaceutical company’s portfolio, if the company makes them at all. Investment in drugs, even those administered to only a relatively small number of people, can be far more profitable than vaccines. And, though vaccines are very safe, they are not risk-free. Serious adverse reactions do occur, and some result in long-term disabling consequences or even death. Though that risk is quite small, at least the liability side of risk to a company is magnified in the aggregate by the extremely wide distribution of a vaccine. For example, last year, the tuberculosis vaccine was administered to 90 percent of all infants on the planet.

Nick Pace

And, as a result, even though they are safe, vaccine distribution can expose a pharmaceutical company to the threat of litigation, or the lack of liability insurance coverage, which can cause withdrawal from the market or declining to invest in future research against biological threats. And we’ve seen this happen at a number of points in the United States over the last half-century, notably involved with childhood vaccines, with the 1976 swine flu, to some extent with the smallpox vaccine in 2002. And I believe that it’s happened in other countries as well. So, in order to support vaccine research, development, and production, some governments have given manufacturers and others special protections against liability for vaccine side effects that they may not give other parts of the pharmaceutical industry separately. They can do so in a number of ways. One would be to provide them with complete immunity from litigation or liability, or by having the government step in their shoes and take over the defense and the responsibility for paying, for instance, settlements.

Nick Pace

They can indemnify them. In other words, agree to pay any settlements or verdicts the companies would have to pay. Now, indemnification agreements typically place the responsibility for paying the legal fees and costs on the companies, though that can be negotiated, and some contracts have the indemnifying party cover that as well. Governments can also make it more difficult for someone to proceed in the country’s courts on these claims, or make a higher burden of proof to prove the claim. Or they can do some combination of all three of these basic approaches.

Nick Pace

It’s important to keep in mind that such protections are by no means universal. And, in fact, the vast majority of the nations on earth, as far as we can determine, treat vaccine claims as they would any other pharmaceutical in terms of tort liability. Often, the quid pro quo for instituting special protections for any kind of tort liability is the implementation of some sort of streamlined, theoretically user-friendly or more-generous alternative compensation program from victims. The term no fault is used a lot because, unlike in traditional tort liability, the claimant does not always have to provide compelling scientific evidence to prove some kind of link between doing the vaccination and/or whatever the problem was and the resulting medical condition.

Nick Pace

As we do in the United States, we have an official table in the U.S. no-fault compensation program where you list the types of injuries and illnesses that are associated with a particular vaccine. And, if the onset of that condition that’s being complained of, or some sort of severe reaction happens within a particular timeframe, the vaccine is being legally presumed to have triggered the problem, which greatly relieves the burden on the claimant to bring in all kinds of experts and the like. One reason for creating these programs is to offset the fact that liability protections, or even just the need to produce complex evidence at trial, make it very difficult sometimes to recover any compensation at all for serious adverse events through the normal legal process. Funding for these programs, and for paying any special awards, usually comes from government appropriations or perhaps by paying, everyone pays, a special tax on each dose of the vaccine.

Nick Pace

This kind of funding, I think, is an acknowledgment that vaccines are different than most drugs. Because society is being asked to put people—healthy people, essentially—asking them to put a foreign substance in their bodies not so much because it’s going to cure them of any disease—in fact, not at all—but instead because we want to move to a point where the virus or bacteria can no longer spread like wildfire. But, again, like the liability protections that we were just talking about, it’s by no means a universal approach. Just 25 countries have some kind, in varying degrees, of a vaccine no-fault system, and 23 of those countries are what we consider to be living in the high-income district. They are countries that can afford the expensive, and they have the wherewithal to create these kinds of systems for injured victims. The costs to fund these things are not trivial, and, to some people, it runs counter to the notion that you want the proximate cause of the harm. Here, it would be something to do with the vaccine or the way it was administered to really bear the risk, not the average taxpayer.

Nick Pace

Now, it’s going to be a surprise to some of you who criticize the American legal system for being the most litigious on the planet. But, in fact, for the last 15 years, we’ve really been the only country in the world where the pandemic supply chain has always had few concerns over liability and where there’s a no-fault compensation system already in place. The Public Readiness and Emergency Preparedness Act of 2005, or PREP, as it is commonly known, provides nearly complete immunity for the manufacture, administration, and distribution of what are known as countermeasures against disease outbreaks or bioterrorism events. It also provides a compensation system that’s intended to be an alternative to litigation. It basically neutralizes any attempt to bring a suit in a state or federal court in this country, even if the inoculation occurred somewhere else, or the . . . that’s here is a foreign entity. That said, PREP only offers these protections in the context of lawsuits filed here, while a suit filed in a court in Afghanistan or Zimbabwe would proceed unaffected.

Nick Pace

So, what does all this mean in the context of COVID-19 vaccines? Well, manufacturers have—certainly, media reports are suggesting that the current set of developers and manufacturers are really keen to get some sort of liability protections in place before proceeding, before moving on here. It’s no surprise, I think, that the two big rollouts so far are in countries where such shields are up and running. As I’ve just indicated, the United States has a PREP Act, and, earlier this month, the UK issued emergency Regulation 345 to prohibit civil liability against Pfizer or others for damages that arise from the use of that specific vaccine. Further distribution is probably going to be enhanced if receiving countries agree to some sort of protections for the supply chain.

Nick Pace

That’s not to say that the rollout is going to stop if this is encouraged. I don’t think I am in a position to say that. But it is something that manufacturers are concerned about. Now, immunity, which is essentially granting companies a complete get-out-of-jail-free card, to use a Monopoly game analogy, and absolve them of all responsibilities for harms is . . . it means that, if you don’t take any other steps whatsoever, those that are injured are really going to have to shoulder completely by themselves the cost of medical care and lost income and the like, if they are “lucky” enough to be one of the few people that would have a serious adverse reaction. The alternative approach of indemnification, if you take no other steps, means that the receiving government is going to have to pick up the tab for paying compensation to the injured.

Nick Pace

But one can argue that all society needs to bear that responsibility. The CDC in the United States, for example, is asking everybody to get the injection, and the benefit is a societal benefit. But for countries that are struggling to provide basic services, the lower-income countries of the world, and the ones in the lower-middle as well, this sort of additional burden of relieving the supply chain of risk or paying out compensation to some unknown percentage, currently unknown percent of the population that’s going to incur adverse side effects—it may be too much for them to handle.

Nick Pace

So, what I want to do now is to talk a little bit about what are some ideas that have been floated around in the past decade or so about dealing with vaccine compensation and liability on the global stage. I’m going to talk about five different proposals you hear about again and again, but the first three I think are ones that have sort of taken a back seat so far to the approaches that we’re going to see here in 2021 and forward. One approach that has been suggested involves having NGOs and lobbyists reach out to legislative bodies around the world. This approach is where they would present the body with a model act for its consideration. It would have some sort of liability protections and could include provisions for a no-fault system. The problem here is it takes a long time for these things to be done on a piecemeal basis, country by country.

Nick Pace

And, as you know from the U.S. experience, it can take many years before we pass any kind of significant change to our legal regime. Another one that’s been kicked around is the idea of using what the World Health Organization did in 2009, these letters of agreement involving the H1N1 virus pandemic. If a country wanted donations [of] the vaccine from the WHO and its allies, it would have to execute agreements that don’t indemnify the donator or discharge them for liability. I just quickly note that here again, indemnification means the donors—if that’s what the indemnification agreement made, and I believe that was the case here, and we have folks on the panel who can tell me if I’m wrong here—that meant that the donors themselves still shoulder the cost of defense, something that may be difficult in a developing country.

Nick Pace

And, importantly, these didn’t address the compensation issues. If, in fact, somehow the injured person couldn’t proceed or may not be able to proceed in the country’s courts of law . . . [they] would wind up essentially having to deal with it on their own.

A third option you hear about a lot is to come up with some kind of a treaty where we would negotiate it, similar to what the world has done in the past [in] other liability situations, like the Montreal Convention. You can put in a nice global vaccine court to deal with compensation, but, again, this takes a long, long time. Sometimes these can take 20 years before a country actually ratifies, as United States has done. And a number of agreements take 20 years to get to the point where Congress signs off on it.

Nick Pace

These next two are ones that I think are more in play at the moment. Up to this point, I think, the predominant approach that you read about in the papers is the form of bilateral agreements. And these are instances where there is a direct sale of the vaccine to the government by the manufacturer or some other entity, and the parties in the agreement work out the liability issues contractually. In the contracts that have been reported of late in the mass media, at least some of them . . . they all have had indemnification of the manufacturer or someone who signed the agreement appears to be included as clauses. Now, this approach actually has the advantage of avoiding the need to change the existing legal regime. Indemnification, as you may know, is a very common component of many ordinary business contracts.

Nick Pace

And, essentially, this is what this would be. One issue one can pick at here is that the victim-compensation issues, at least the ones I’ve read about in the papers, are not being addressed in these agreements. And, now, that might be okay for countries that can afford the cost of compensation, which is why these agreements appear to be the prevailing approach in middle- and high-income countries. But, for others, those costs may be difficult to bear. There’s also an issue here that, depending on the indemnification agreement, the host country, the contracting country, may have to cover the cost of defense and the like.

The other major player at the moment involves the COVAX Facility. And this effort is being led by Gavi, the Vaccine Alliance, the Coalition for Economic Preparedness Innovations, and the WHO. The idea, and I’m sure Anthony Brown and our panel can explain it more succinctly, is to create a shared pool of vaccines in which all participating countries would be given equitable access. These countries can be divided into essentially two groups. You’ve got the self-financed ones that could go it alone, contract directly in bilateral agreements with manufacturers that they want in addition to participating in the vaccine pool, the Gavi pool. And those would be, obviously, high- and upper-middle-income countries. And then there are the 92 countries that are participating in an advanced market commitment—hence the shorthand term here, the AMC 92. These are low-income and lower-middle-income countries whose access to vaccine and related support will be funded through philanthropic or NGO assistance. In order to access the COVAX, participating countries are required to indemnify the supply chain up through the manufacturer. And I think Anthony can indicate to us whether this indemnification requires them to pick up the legal costs as well. There are exceptions to that indemnification, as you can see here.

Nick Pace

In addition, the AMC 92 countries are required to participate in a group no-fault compensation system, essentially the makings of the global pandemic vaccine-compensation process that the folks that have advocated for treaty approach have talked about. Victims that are successful in navigating that system would receive a lump-sum award, which would be based on the seriousness of the injury and adjusted to the local economy using a GDP per-capita formula of some type. In instances where the country is unwilling or unable to pay the award for any reason to a successful claimant, the COVAX plan would create some sort of financial backstop to make sure that the victim is compensated, and, later, that backstop could proceed against the country to recover the award. And as you notice here, self-financed countries don’t have to join with this comp system. COVAX apparently assumes that such countries have the financial wherewithal to create such a comp system if the political will exist in that country.

Nick Pace

I do want to mention the fact that the world is not of one mind here. There are a lot of folks who have a very different view of these sorts of schemes for giving the supply chain immunity, or for creating a no-fault system to replace the existing tort process in any country. I’m going to . . . these are some things that you . . . some points people have raised. One is that they say that liability shields remove the incentives for the vaccine supply chain to produce the safest products possible, to distribute them in the most safe way, and to administer them in the most safe way possible. Another point that’s an argument that is brought up is that liability expenses for something like vaccine side effects, which are admittedly rare, could easily be reflected in the price of the dose.

Nick Pace

And that increase, according to this view, is likely to be a minor one. No-fault approaches that are created as sort of the quid pro quo for the liability protections, in fact, as this argument goes, can be just as slow and as expensive as traditional litigation. And they lack some of the features, the protections we use often. For example, the ones that—our system here in the U.S. for compensating those from COVAX 19 vaccine problems, there’s no right of appeal to the courts if you don’t like the decision of the administrator.

Nick Pace

And another argument that is brought up often is that the benefits available in these no-fault compensation systems are almost always inferior. It’s a compromise to those that you could get through litigation. For example, one thing is that pain, suffering, emotional stress damages are often prohibited, or there’s some cap off, for example, on the amount of income claims.

Nick Pace

So, the question that I want to end with here is, “If you don’t bother to do anything before these COVID vaccines are continued to be rolled out, what happens?” Well, we do know that these products are going to be rapidly distributed around the world. That manufacturers and distributors may be able to depend on the one-on-one indemnity agreement—I mean bilateral agreements—but, eventually, these products are going to be around the world. The footprint of each vaccine is going to be, and rightfully so, pretty extensive. And it’s possible that we might see a negative effect on that supply chain for some reason, when it comes to cross-border distribution.

Nick Pace

The worst-case scenario is that you might find a situation where it’s not necessarily limited to countries where reliability protections are in place, or where there’s the liability exposures predictable enough to shoulder the risk, or where the countries have the ability to write the biggest, fattest check.

Nick Pace

If it isn’t limited to there, would there be some impact here where fewer vaccines get out to countries that are not in that category or that the rollout is slower? And, if that happens, that wouldn’t be optimal for any one of us, even in the United States, no matter how quickly we get our vaccine, because that sort of siloing of what is supposed to be a global public good is going to exacerbate the already profound intercountry health disparities that existed long before COVID-19.

Nick Pace

So, I’m going to ask my fellow panelists to turn on their video cameras, as I will as well, and to turn on their mics. Let me get my video going too, because I want to be part of this party.

Nick Pace

So, what we’re going to do now is I’m going to ask the panel some questions. Those of you in the audience who have questions you want to raise, use the Zoom Q&A feature, and we’ll bring them up at the end of our time period here. I’m going to ask Deedee to tell me what makes vaccines special. Why is there such an interest in giving the supply chain immunity, or at least indemnifying the supply chain as we begin the rollout of COVID-19 vaccines? Now, we don’t do the same thing for chemotherapy treatments; certainly the side effects are much worse. You’re almost guaranteed to have side effects. Here’s a low-risk product. What’s the difference?

Deedee Litvin

Thanks, Nick. I’m really happy to be part of this webinar and appreciate you organizing this to address these important issues. Vaccines are very different from therapeutics. As you mentioned earlier, they’re given to healthy people who don’t already have the disease we’re seeking to prevent. So, the risk–benefit considerations that go into the decision to be vaccinated are very different. And vaccines are an amazing achievement of science and public-health initiatives. And we’ve seen many infectious diseases become uncommon or be completely eradicated. And that’s an amazing achievement. And we hope that we can add COVID-19 to that list soon. But I think what industry is concerned about as we take on this unprecedented task of seeking to immunize so many people with COVID-19 vaccines is what’s going to happen as we start seeing millions of people being vaccinated. What kind of concerns are going to emerge, and how might that affect the public’s perception of the safety of these vaccines and their willingness to be vaccinated?

Deedee Litvin

As you mentioned, governments are hoping that everyone will roll up their sleeves so we can achieve herd immunity and get back to normal. But we know that a lot of people have concerns about vaccine safety, and those concerns existed before coronavirus existed. And, so, how we think about rolling out these programs can have a real impact on the uptake of these vaccines. So, manufacturers are concerned not just about protecting themselves from liability but about looking ahead to the kinds of concerns that are going to be raised and thinking about how we can work together with governments to create holistic solutions to enable people who are injured by vaccines—or who believe they’ve been injured by vaccines, or aren’t sure whether the injuries they’ve suffered are related to vaccines—allow them to come forward in an easy and accessible way and have those concerns addressed.

Deedee Litvin

And, if their injuries are related to vaccines, to be compensated in a thorough and full way. So, we can, on the other side, take these measures to limit liability, limit litigation, and that will diminish the need for governments to provide those indemnity obligations that you mentioned earlier. It will eliminate the need for people who are injured to hire lawyers and go through years of litigation to get compensated. It’s just, in our view, a more—it’s really about proactively planning for this important stage and doing it in a way that serves the interests of not just the pharmaceutical industry but injured people and governments and our whole society.

Nick Pace

Anthony, can you expand on that slide we had up there that spoke to liability and compensation issues in the COVAX Facility, and would you just tell us what the heck this thing is about?

Anthony Brown

Sure. Maybe it might be helpful if I back up and just say a little bit about Gavi and how we got to the COVAX Facility. So, Gavi’s mission is to save lives and protect people’s health by increasing equitable and sustainable use of vaccines. We operate in the countries with the lowest incomes in the world, countries that, for the most part, do not have in place a no-fault compensation program and do not provide immunity protection for manufacturers. Many of these countries do not have strong health care systems, some barely functioning health care systems at all. The vaccine-safety surveillance systems are weak. The governance systems are weak in some countries.

Anthony Brown

In many Gavi-eligible countries, there are significant numbers of zero-dose children. These are children that haven’t received even one dose of the most-basic lifesaving vaccine. And, yet, when COVID-19 hit, the majority of these countries were at risk of not receiving any vaccine at all until populations in higher-income countries were vaccinated, potentially in 2020 or later.

Anthony Brown

Gavi, along with COVAX partners CEPI and WHO, were tasked in April earlier this year by the EU to lead the vaccine pillar of the ACT accelerator. The goal was to enable global procurement and ensure equitable access to vaccine, hence the word equitable. It was quickly all hands on deck across the three agencies to set up the COVAX Facility and the COVAX AMC. It was immediately apparent that one of the major barriers to access was going to be liability and compensation—addressing how will liability issues be addressed in the AMC 92 countries, countries with all of the problems that I articulated earlier, along with very limited health care budgets.

Anthony Brown

So, Gavi immediately expanded its portfolio of eligible countries for the purpose of COVID-19, or for the purpose of the COVAX program. As I said earlier, we normally support the lowest-income countries in the world. We expanded it to support the low-income countries and the lower-middle-income countries. It was thought that, obviously, high-income countries and upper-middle-income countries would be able to support themselves.

Anthony Brown

However, to make COVAX as successful as we could, we wanted to make the procurement for COVID-19 vaccines global in that all countries could come together. And I’m very happy to say that most countries have joined COVAX, could come together for global procurement, could put resources together, and could decide to allocate the vaccine equitably. What we’ve also seen at the same time is that, even though all countries have come together, a large number of countries have still gone on and done bilateral deals. It’s probably inevitable. Maybe the next—this is an iteration to something even better. Maybe the next time we see a pandemic, we can all come together faster and deal with these issues as one. And I think some of the lessons that we’re learning can help to do that.

Anthony Brown

So, immediately, we realized that high-income countries often have social systems in place to take care of citizens that are injured from vaccines, or anything else for that matter: They can basically afford to take care of their citizens. In many Gavi-income countries, there are no social systems in place, and, as I said, they have very challenged health care systems. So, we looked at concepts of fairness and equity, and we decided that, look, there needs to be a compensation system in place for the poorest countries. And it does work alongside indemnification. It doesn’t have to, the two things are not hand in hand, but it is fair to say that one benefits the other.

Anthony Brown

Of course, manufacturers like to see a compensation system because evidence shows that a no-fault compensation system reduces the number of claims significantly that are brought in the national court system. So it reduces, as Deedee was saying earlier, it reduces the sort of “noise” out there around the causation: What caused the injury? Is there something wrong with the vaccine? Is something going to happen to me?

Anthony Brown

So, it just reduces that type of noise by driving everyone towards a compensation system where you don’t have to prove fault. So, the discussion isn’t around whether someone did something that caused some injury; the discussion is more so around, there’s an injury—was it caused by the vaccine or not? And, if so, the person should be compensated, and for how much? So, while one doesn’t necessitate the other, certainly having a compensation system in place benefits the country’s requirement even, and exposure to, indemnify. So, it’s also a benefit.

Anthony Brown

I noted earlier the manufacturers like to see it, but it’s certainly a benefit for the countries that we serve because it’ll ultimately limit their exposure to having to indemnify the manufacturer because, obviously, fewer claims will be brought in the national court system.

Nick Pace

So, this COVAX thing sounds like a pretty simple thing. Are there any large countries in the world that aren’t a member of it?

Anthony Brown

Oh, you know what, there’s one very large country in the world that is not a member of COVAX. And it’s the U.S. The U.S. and Russia actually are two of the largest countries that are not members of COVAX. But, for the most part, I think more than 190 countries are either going to be supported through COVAX, [or] are self-financing countries through COVAX. Hopefully—I’m very hopeful that, in the coming weeks, we might hear some announcement, at least from one of the two countries that I just mentioned, that there’ll be a contribution, an ODA contribution, to COVAX to support lower-income countries.

Nick Pace

ODA is?

Anthony Brown

Overseas development aid. So, high-income countries have a target set of reaching 7 percent of GDP for overseas development aid, and very few countries reach that. But the aid that they provide to lower-income countries for certain development activities counts towards that 7 percent.

Nick Pace

Thanks. Peter, you’re an experienced advocate for people that have been injured by drugs and other modalities. And we’ve been talking a lot about no-fault compensation systems, and I know that you wind up navigating to those too. It is really true that they are a better means for getting compensation to victims than traditional litigation, in your experience?

Peter Todd

Yeah. Firstly, Nick, thanks very much to the RAND Corporation for inviting me to take part. I’m a lawyer who, for the past 20 years, has done cases about vaccines for people who believe that they’ve been injured by them. And I do believe vaccines are really important, and the COVID pandemic, more than anything, has illustrated just how important they are.

I think that most developed countries, you said about 26, but certainly the top 26 developed countries have put in place vaccine-injury compensation schemes. And I think that those schemes go a long way to reducing the burden of litigation associated with national vaccine programs, and also it removes the burden on the individual trying to fight multinational corporations or governments.

Peter Todd

To me, the question is, “Who should bear the liability risk of vaccines?” Should it be the individual, should it fall on the individual? Should it fall on the manufacturers? Or should it fall on the government? And my strong view is that, actually, the risk of vaccines should be borne by the whole of society. And that it’s not fair, particularly in the situation of a pandemic, where manufacturers have very quickly developed vaccines, it’s not fair that the manufacturer bears those risks—the risks may not be fully known or ascertained in an emergency situation.

Peter Todd

It’s particularly unfair that one individual or one individual family has to bear the risk. It’s much better because the instance of serious permanent disablement as a result of vaccines are incredibly rare. It’s a really kind of one in-a-million, in-10-million–type event that you see serious permanent disablement. I would say that it’s very well affordable for the whole of society to actually bear the risk. And then it’s a negligible cost when everything is taken into account.

Peter Todd

And the correct thing for people to do is for everybody just to indemnify each other in society. That way, in those very rare instances, people can be given proper, full compensation. And I think it helps build trust in vaccines and vaccine programs if there is an effective safety net. I think, some of the time, unfortunately, some of the safety nets are not fully effective, but that’s why I’m an advocate, really, of a system whereby full compensation and a fair process, or maybe even giving the benefit of the doubt in close cases to patients, is put in place—because it’s all part of reducing vaccine hesitancy, which, overall, is in the interest of society.

Nick Pace

You were talking about serious effects. Aren’t some of these compensation programs—the floor is relatively high? I would say a serious effect for me would be that I lost a week of work. But I see that some of these no-fault programs I’ve looked at around the world require, okay, if we hospitalize, you have to have a serious and permanent injury of some type. What about that group: It’s more than just a sore arm, but not that I’ve lost the arm? What do we do for those people?

Peter Todd

Yeah. Well, for me, the cases that I do, they’re all about serious permanent disablement, because our compensation scheme only compensates these people who are able to get over a threshold. So, these are all life-changing instances. So, for example, they might involve conditions such as transverse myelitis, where you might be paralyzed, maybe, from your neck down. So, that happens very, very rarely. It’s an autoimmune condition. That would qualify.

Peter Todd

But if it’s something that, maybe, you were to, say, lose three of your fingers of your dominant hand, that would probably not be an injury that would actually be awarded compensation under our scheme. I think it’s probably reasonable that there’s some kind of cutoff somewhere as to what is a sufficiently serious life-changing event as to justify compensation. But, in some countries, at the moment, even developed countries, such as Ireland, there is no statutory compensation program at all, although they are looking at having that. So, there are still some countries that need to kind of get their act together. But most of the top 20 or 30 developed countries have already put in place some statutory scheme.

Nick Pace

And I think New Zealand would be one where you already have some injury, accidental injury, or whatever you want to call it, program anyway, that would cover everything.

Peter Todd

Yeah. That’s a lot wider than just vaccines as well. I think that covers all cases of clinical incidents in all clinical settings. But I think vaccines are a different clinical category, because they’re given to completely healthy individuals prophylactically, and not only for the benefit of those individuals but for others. And there is a very low threshold of risk acceptance in that situation where you’re completely healthy. And I think it justifies special provision for, in the event that you suffer serious, permanent disablement, that there is some kind of support there beyond mere social security benefits.

Peter Todd

That there is actually—that society will stand behind you. Because I really think it’s the wrong thing for society to do to just say, “Well, if you have an adverse reaction, it’s too bad, you’re on your own.” Actually, it’s not very expensive, because, fortunately, these instances are incredibly rare. It’s not very expensive as a society to be able to be actually reasonably generous with people who, unfortunately, have suffered significant disablement.

Nick Pace

Deedee, the COVAX process seems [like] a lot of balls in the air. I mean, just from my unsophisticated understanding. Why wouldn’t a company like yours, or other companies like you, just negotiate directly with every country in the world? There’s only 160 of them. You could probably negotiate 160 contracts in a weekend and set up bilateral agreements. Is there an advantage to something like the COVAX process, where you’ve got a lot of countries that are going to be with a relatively common scheme, a common approach to the extent that they had signed on? Is it good for you, or should you just go with bilateral agreements until all this is over?

Deedee Litvin

I think, as Anthony mentioned, that a lot of companies and countries are entering those bilateral agreements, but I also agree with his comment that, hopefully, next time, we’ll be able to mobilize more quickly and get behind some centralized process, like what he’s leading with COVAX, because it does make more sense, I think, to have that unified position.

As we’ve said, many companies are having those bilateral agreements, it’s certainly possible. But I think Anthony will back me up on this: It’s really an administrative nightmare for a company to have all the separate negotiations and then, going forward, to keep track of all the little differences between those agreements and the terms. And, then, doing all that follow-up with 195 different countries on how they’re going to indemnify this, or that. And, just the administrative burden of that is greatly overwhelming. [Crosstalk] I think there are more benefits—

Nick Pace

Correct me if I’m wrong here. It’s one thing for a large pharmaceutical to negotiate this contract with this clause with the purchasing country. You also have administrators, you have distributors, you have people that put the needle in the arm, you’ve got the FedEx flights or DHL International. Do they have to have a similar agreement, or does your—?

Deedee Litvin

Well, that’s the other thing: The bilateral agreements only protect the manufacturer. They don’t provide any indemnification protections for the distributors and the people actually doing the shots, and, as you said, the whole supply chain. And that’s really an issue here with the cold-chain storage that’s required for these vaccines that we’re seeing. It doesn’t provide any mechanism for people who are injured to be compensated. I mean, as Peter was saying, it just leaves them—if you don’t have a compensation system, you’re left with litigation. That probably means you need to get a lawyer, you probably need to get an expert, and it’s going to take many years to have a resolution to your case. I couldn’t agree more: That’s really not what we want people facing as we ask everyone in the world to volunteer to take these vaccines.

Nick Pace

Anthony?

Anthony Brown

Nick, if I can maybe just come in also and add to that. As someone who is engaging with a lot of countries in the world actively, I can say that I can see, even more so, the benefit of what we’ve been able to do with COVAX in the last few weeks. In particular, as we started to engage with the AMC 92, the countries that have less information—there’s asymmetry of information there for sure. They also have less resources. And, you are right: A manufacturer could engage with the 190-something countries. It would take years to do, years. Some of the larger manufacturers may be able to do it within a year and a half, but they don’t even have relationships in some of the poorest countries in the world. Gavi does. These countries trust Gavi, and WHO even more so.

Anthony Brown

We have those relationships to be able to call a meeting within one week and have 500–600 people on that meeting. We have the ability to do the meeting in six or seven languages. We have the ability to translate these documents into six or seven languages. Just imagine the wasted resources that we have with, let’s just say, 15 manufacturers. I don’t know how many vaccines there are in production right now, 190 something, but let’s just choose 15 manufacturers going out and trying to negotiate bilateral deals with 192 countries. I know my lawyer friends are going to be mad at me right now, but the legal fees that they’ll have to rack up, trying to negotiate a deal—at one point, the economies of scale, it’s just not worth it. They’re just not going to do a deal with Tuvalu.

Anthony Brown

You know, they’ll do one with Mexico and Brazil, but once you get to a country with 30,000 people, they’re just not going to do it. Another thing that I’ve seen is just the level of questions that we’re getting show that countries are suspicious. But they also, I mentioned earlier—there’s definitely a lack of understanding. Some of the big European countries, obviously, some of the high-income countries—they’ve been approached by so many manufacturers, they’ve done enough of these deals, they understand: Look, so, the way that this is going to work is we’re going to have to indemnify the manufacturer. If you haven’t had any conversation with the manufacturers, and you’re having them come to you bilateral, the manufacturers don’t even know who to talk to. It just wouldn’t work. You need a COVAX to filter and operate and, in a sense, work as a mediator, in a sense, between the AMC 92 and the manufacturers and the self-financing countries. It’s not easy work, to be sure, but it’s something that someone had to step in and do.

Anthony Brown

And I think we’ve been able to do that and are still trying to do it.

Nick Pace

From what I’ve read online, I know that the COVAX proposal is a work in progress. I know that’s already in place, but the details sometimes get fine-tuned as we move along. The last thing I saw was that it would provide benefits for unexpected and expected adverse side effects. Let me ask first about unexpected. Does that mean conditions that have never been experienced before? What do you mean by unexpected in that context?

Anthony Brown

I think Peter may have mentioned earlier that, with some programs, like the U.S. program, there’s a list of expected injuries associated with a given vaccine. So, once a manufacturer—and I’m sure Deedee can explain this much better than I could—but once a manufacturer has rolled out a vaccine, and enough patients are given a number of shots over a certain amount of time, they understand the safety profile of the vaccine. They have a sense of how many injuries could happen and exactly what injuries they are. So, these are the expected injuries. And we’re seeing that now with the rollout of the Pfizer vaccine. We’re seeing that there’s certain people that are having, I’m not going to pronounce this, but anaphylactic shock after receiving the vaccine. The more they roll that out, statistically, they’ll have a sense of just how many people this should happen to.

Anthony Brown

Now, things could change once you go from one population to another. And I think they’re even seeing that between the UK and the U.S. It’s not perfect rolling out something in a high-income country, as opposed to trying to do it in a low-income setting. There’s all types of considerations you have to consider, but those are expected.

The unexpected are more challenging because if something happens to someone after they’ve received a vaccine—and it hasn’t happened to anyone else—it’s not necessarily related to the vaccine. It just could be something that was happening because of something else that they did earlier in the day, or because of something completely unrelated. And that’s where causation comes in. That’s a really important element in these no-fault compensation schemes—all of them have some level of causation. Most people who are nonlawyers are familiar with the concept of, “what’s the proof, what’s the burden of proof?”

Anthony Brown

Most of us are familiar with “beyond a shadow of a doubt” or “beyond a reasonable doubt,” right? From criminal law. But I think most no-fault compensation systems choose something much, much lower, such as a balance of probabilities that basically means that the vaccine, more likely than not, caused the injury, because that’s thought to be fair to the person receiving it. There could be an injury that isn’t known that is caused to this eggshell person, as we call them in legal class, in law-school class. Those are the unexpected events, those that are even more rare than the expected ones, which are already rare.

Nick Pace

What would be the process in place in the compensation system that COVAX is proposing for dealing with the unexpected? [Inaudible]

Anthony Brown

The process will be the same. I guess you can decide to have a table, or you can go a different route. For both, they’ll have to prove causation. The elements of proving causation will be the same as they would be with any injury associated with a medical product. You have to show that you’ve actually taken it. You have to show that there is some association in time. And then there has to be some sort of—you have to provide some type of medical evidence. And there’ll be a panel of experts looking at the evidence. And, of course, there’ll also be an appeals process to go through. And the evidence will be updated from time to time. All of this only works to the extent that you have a good safety-monitoring system in place.

Anthony Brown

That goes back to what I said earlier, in terms of the GAVI countries. Many of them don’t have a well-functioning safety-monitoring system in place. Of course, the WHO does help and play that role in a number of places. Gavi finances safety monitoring in some countries with certain vaccines. And the world will benefit from the fact that the U.S. and the UK both have strong safety-monitoring systems. But we need to see also the rollout in lower-income countries, where there may not be the same sort of emergency systems in place when someone receives a vaccination.

Nick Pace

Peter, you deal with these unexpected adverse events, don’t you, with the UK’s vaccine-damage payment scheme? What challenges do you face moving through no-fault comp program for these kinds of things?

Peter Todd

In the UK, there is basically two different forms of redress. The first form is under the statutory scheme. And then the second form is actually bringing a claim against the manufacturer, who may or may not have an indemnity. But that’s just a civil product-liability claim in the court. As far as the statutory scheme is concerned, it’s a lot more straightforward, and there’s no downside cost risks if you lose. Generally speaking, we don’t need to get epidemiologists involved. So, if you’re going to court, I’m afraid the realistic cost of actually getting to trial in a vaccine case is probably a minimum of about $10 million in England. So, you need to have a substantial group, and you’re going to need to have a really strong case if you’re going to be able to get that much investment, to actually get a case to trial.

Peter Todd

As a result of that, trials involving vaccines in court in England is extremely rare. It’s much less difficult to receive a claim under the statutory scheme here. It’s the same as the vaccine-compensation scheme in the States, where generally you don’t need epidemiology evidence. There is a table beyond the table, then you just have to call medical evidence to establish causation on the balance of probabilities so that the no-fault scheme does make the medical issues and the costs a lot less of a burden and more realistic, particularly in the borderline cases. I think the borderline cases can be very difficult to afford to get to court, but it’s something that you could run under a no-fault statutory scheme.

Nick Pace

Most vaccine injuries, serious vaccine injuries, though, when they move into this particular no-fault system, they’re addressed at that stage. They tend, most would, you’d say—be addressed and some outcome comes to the point where they don’t move on to the courts—most of the claims that come in. Let me just ask first: You’re required to go through the statutory stream before you move forward into a litigation, or can you avoid that?

Peter Todd

No, actually you can do either. Recently, with the cases of narcolepsy after the 2009–2010 swine flu vaccine, we actually took a decision that we weren’t going to pursue the statutory claims.

Nick Pace

That, I think, is different than what the COVAX one, when you would be required to go through this first, and even in the States it was similar.

Peter Todd

One of the difficulties that we found is that, even though the manufacturer had obtained an indemnity from the government, both in the UK and in Ireland, the governments did not immediately honor that indemnity. That was actually a difficulty. They had agreed in the supply contract with the manufacturer to bear the risk, but, actually, when it came to us putting forward a claim, they then sought to rely on the fine print of the indemnity where there was some obligations to manufacture the vaccine in accordance with good manufacturing practice. And they said, “Oh, well, if there was an adverse event, it must be due to poor manufacturing.” That was then rather difficult, because I was in the situation, I was going to the manufacturer and saying, “Well, could you deal with this claim?”

Peter Todd

They were saying, “Oh, well, no, we’ve invaded the indemnity. So, it’s the government that’s got to deal with it.” And the government was then saying to me, “Oh, well, it’s nothing to do with us because we’re not indemnifying actually.” That was a pretty difficult situation.

Peter Todd

Eventually, we managed to get them all to sit in a room together and deal with the situation. But I don’t imagine that that’s very satisfactory for manufacturers—that they enter an agreement to supply vaccine in good faith to governments, only to find the governments then resile on their agreements.

Peter Todd

I really think that that is bad conduct on the part of states, and, really, the government should be stepping up and saying, “Okay, we as a society, we’re going to bear the risk. It’s not right that it falls on the manufacturer in this situation. It’s not right that it falls on the individual. If there are valid claims, bring them forward, and we will deal with them under a proper civil justice system.” I think there are some problems with the way things work which actually still need to be addressed and that it shouldn’t really be a situation where litigation should break out over these arrangements.

Nick Pace

Deedee, I guess to follow up, I think you could address this to some extent. What is a pharmaceutical manufacturer’s interest in making sure that there’s some sort of no-fault system in place if you’ve been indemnified or even immunized from litigation by a host country? I mean, other than your interest in making sure that the world is a better place. But, you know, ultimately, it’s the government that’s going to foot the bill, for example, in an indemnification thing, or if they put in a no-fault compensation system. It’s not going to be you. Why does Merck have an interest in seeing that something gets put into place in some of the, if nothing else, in the AMC 92?

Deedee Litvin

Well, I think Peter just spoke to it, right? I mean, the indemnity agreements are only useful to manufacturers if they’re followed. We have seen in prior situations, such as what Peter was just talking about, sometimes disputes arise about the indemnity agreements, and there’s litigation about that. And when you just envision the magnitude of this pandemic and how many people we hope to be vaccinated, and you think about all the different types of disputes and questions that could arise, and all the resources that could be sunk into litigation over those things—I’m a litigator, but that’s just such a waste of resources. It’s just not the best way to plan and allocate scarce resources in this time to address all of our needs. I think that’s why manufacturers are really advocating for a holistic solution, where there is an easy—you know, no barriers.

Deedee Litvin

You don’t need a lawyer, you don’t need an expert, you can bring your claim forward. It’s really important, this issue of unexpected events, and what Anthony was alluding to with, you know, people are going to experience events that aren’t related to the vaccine, but they’re not going to know if they’re related to the vaccine or not. They’re going to have questions. Most vaccines, there are a few vaccines, pre-COVID, that are for adults, but most vaccines are given to children. Now we’re going to be hoping to vaccinate people of all ages all over the world. There are people who have a lot of underlying health conditions and other disease processes going on, and they’re going to be experiencing bad health outcomes in close proximity to vaccination, and they and their loved ones are going to wonder if they’re related.

Deedee Litvin

And if the only way to bring that question forward and get an answer is through a lawsuit, that’s just not acceptable. We’re afraid that that’s going to cast even more doubt on the safety of vaccines overall and really impact in a negative way people’s willingness to be vaccinated. It’s really important that people who are actually injured by vaccines can get compensation and get it quickly. It’s equally important that people who are injured in close proximity to vaccination [who] have a question about whether it’s related can get that question answered by experts in a timely way. So these questions about safety aren’t just out there lingering.

Nick Pace

Both the COVAX Facility and also the direct indemnification of the bilateral agreements, they require the countries—this is for anybody in the panel—they require the countries to have some sort of level of stability that you don’t find that, down the line, they just do this once, to whatever agreement you’ve signed, for example, and the indemnification side of things. You present them with a bill for all the things that you’ve done, and they say, “No, thank you. We’re not going to pay it.” Or there’s a backstop, I know with COVID, if they don’t.

Nick Pace

There’s a backstop of some type for the no-fault compensation process if they don’t pay the successful claimant. What about living up to the rest of these agreements? We’re talking about a lot of countries in play, we’re talking about a lot of years, these vaccines and some of these side effects could take a long time—a year, two years to develop, maybe, who knows? Are you confident that the agreements that have been entered in today are the ones that are going to be honored two years from now? Anyone? Or apparently you’re confident.

Deedee Litvin

I think that’s a real question. There’s been a lot of conversation about, as you mentioned, a backstop, and I don’t think that there’s really a good answer to that, frankly. That is a concern, not only for the AMC 92 countries, but even high-income countries, as Peter was mentioning. You know, if you just envision—the global economy has been wrecked by COVID, and governments all over the world are in a resource-deprived environment. If a lot of litigation emerges over these vaccines, and governments are devoting those precious resources—

Deedee Litvin

to reimbursing pharmaceutical manufacturers, that’s not going to be very popular with anybody. And, again, we’re advocating for partnering with governments to look ahead at what could come down the pike, and let’s be proactive and plan accordingly. Let’s take those scarce resources and develop a program where you’re getting those resources into the hands of injured people and you’re answering questions about safety in a timely way, instead of just doing nothing and, in most parts of the world, leaving it to litigation, which is going to take a long time and cost a lot of money and leave a lot of open safety questions pending for years.

Anthony Brown

Nick, I think you’re also leading towards maybe what I’ve been calling the “golden goose” or the “goose that lays the golden egg” for manufacturers, which is the U.S. style, which is immunity from legislation, which does shield manufacturers from claims being brought years down the line. Even there, however, a country can change its laws. It’s a little bit more rare for a country to do that retroactively, however. But I think Deedee is right. And Peter gave us an excellent example of how a high-income country can argue against certain terms in an agreement, and this can always be done, right? And, so, every time you do something like this, we’re all learning, and then people think, “Ah, this is what happened last time, so let’s guard against that.” And that probably made negotiations more complicated this time, knowing that people had this 2009 example in mind.

Anthony Brown

And also they have in mind exactly what you’re saying, which is, “Well, what’s going to guard against things changing in a particular country?” And that’s more likely to happen in a low-income country. That’s one of the reasons and one of the benefits of putting the no-fault compensation system in place. Because if you do have that in place, you are capturing hopefully a large percentage, up to 90 percent, hopefully, of the cases that would normally go through a litigation system. So, you’re diminishing significantly the exposure of everyone and these wasted resources that Deedee is talking about by going through a litigation system. Sorry, everyone, it’s going to get a little noisy in a minute—

Nick Pace

This is 2020 [crosstalk].

Anthony Brown

This is 2020. I hear the door changing, so just a warning. But, yeah, I think that, in terms of whether there should be a backstop in place, that’s a complicated question. Because if manufacturers don’t require a backstop in high-income countries, should they require something that’s a belt-and-braces approach in low-income countries, where the likelihood of a claim, one, is already going to be less anyway, where there will be a no-fault compensation system in place (which would decrease the likelihood even more), and where, if there is a claim, the payout, a high payout in some of these countries, a $200,000 payout, is considered enormous? And that’s nothing like what we would see in the U.S. So, the same type of protections for a low-income country, it just may not make sense that we try to have a belt-and-braces approach.

Nick Pace

In the COVAX Facility approach, the indemnification that you were asking countries to agree to, does that cover the cost of litigating if it does go through the compensation system? Well, I guess some of the middle-income, upper-middle-income countries, you don’t necessarily have a comp system. But any cases that wind up getting to court, whether they’ve gone through a no-fault system or not, would the country cover the cost of defense, or would that still be on the supply chain to have their lawyers show up in the courthouse and defend? In other words, is this an indemnification agreement where the host country is going to indemnify not just the payouts for the settlements and verdicts but also cover the costs, the legal costs, as well?

Anthony Brown

Was that question for me, Nick?

Nick Pace

Yes, it was. I can repeat it.

Anthony Brown

Well, without talking about any specifics of the agreement, I just think that indemnification normally covers all costs associated with whomever you’re indemnifying. So, generally the indemnifying party covers all the costs associated with a loss or a claim that’s being brought by a third party against the party that’s being indemnified. So, I would assume—I don’t think it would be—I think it would be quite normal that all the costs associated with the claim. From what I understand, Deedee certainly would know more, the litigation costs are the major cost. I think if they just had to pay the payout, the settlement, they might say, “Okay, well, I can guess what that’s going to be.” And they may be able to add it into the price or something else. But it’s the litigation costs, and that can run years. And, I don’t know, Peter may have an example of something in the UK that, recently, I think was 15 years. That just cannot be guessed. You just can’t guess at that. So, I think that’s the cost they’re more worried about.

Nick Pace

When I say legal costs, I’m talking about the transaction costs, including the cost to pay the attorneys and not just the court filing fee or whatever else. Deedee, are you—?

Anthony Brown

No, I think, in negotiating the agreement, each party would pay its own legal costs, its own attorney fees, translation fees, and those. Anything pre-agreement, I would imagine would be paid by each party. Anything that comes out of a claim where someone was injured would probably be paid by—[sounds of a child talking]

Nick Pace

It’s required to show the child so that we know that it isn’t [crosstalk]. That’s okay.

Anthony Brown

I think he can hear.

Nick Pace

Deedee, is that what you’re seeing as well? Is that your understanding of the approach here?

Deedee Litvin

I think Anthony is right. I mean, manufacturers are concerned about the legal-defense fees, and those are typically going to well exceed what you would expect to pay out in settlements and judgments. And in part it’s because, as we were talking about, there are going to be—or there could be—a lot of claims where the vaccine really didn’t cause the injury, but claims are brought because people just don’t know and they’re not sure, and they want to find out. And those cases can take ten years, and that’s a lot of legal-defense fees for a case that a manufacturer expects to win, but they’re going to spend a lot of money defending it along the way.

Nick Pace

Is this a reason why a manufacturer would prefer to be immunized rather than simply indemnified—that there is a difference in terms of how it affects you, even though the government hosts—

Deedee Litvin

Absolutely. Even if you’re being indemnified, it’s just a tremendous disruption to the company. I mean, you have to involve the people who are involved in developing vaccines, divert their attention to help defend the case, answer questions, sometimes there’s discovery. All those things are very disruptive to a business. And then there’s the reputational harm of being involved in litigation, and, again, the questions that are cast out over your product in terms of its safety the whole time the litigation is pending. So, there are a lot of softer negative impacts associated with litigation that aren’t covered by the indemnity. So, they’re absolutely part of the reason why immunization or some form of immunity is preferred.

Anthony Brown

And, Nick, what I’ve heard, to add to that, is that, for larger companies, like Merck and Pfizer, they can withstand defending a claim over a five-year period. But, for a smaller company, it’s really a disincentive and potentially bankrupt. It could lead to bankruptcy in terms of trying to defend the claim over a ten-year period.

Nick Pace

Peter, I want to ask you a question that, if I understand from the COVAX Facility, the war that they’re contemplating at this time involves adjusting a lump sum amount, but adjusted to the GDP per capita of a country. Is it fair to have a different standard for somebody in Denmark and somebody in Zimbabwe in terms of their compensation, or is it justifiable to think about the—the same injury would get something different in two different countries, in terms of compensation?

Peter Todd

Is that a question for me, Nick?

Nick Pace

Yes, it is. I’m asking you as an advocate for the victim.

Peter Todd

Well, that’s quite an interesting question. And it became very apparent to me through some of the cases that I’ve done that have been across borders that, actually, particularly in Europe, there is a huge, wide range of levels of compensation for exactly the same injuries. And that’s just because each nation’s civil justice system is just very, very different. And even though there are quite-common elements between, say, the English legal system and the American legal system, there are still massive differences to the level of damages. So, actually, I don’t think it’s that much of a problem if the levels of damages vary by jurisdiction. They vary hugely by jurisdiction as it is at the moment. So, I don’t really see that there’s any particular need to try and create some kind of clay-ball level playing field for vaccine injury. It would be nice just to have some sort of effective global safety net for—

Nick Pace

Of some kind, yeah.

Peter Todd

And it would be acceptable, I think, for there to be variations. Because if you were involved in a road-traffic collision in different states, you would get very different levels of compensation. So, I don’t think that that’s the issue. But just coming back to the issue about indemnity and immunity—in a sense, I’m not so concerned about indemnity for manufacturers because actually they are very difficult people to sue. Manufacturers tend to have very smart, aggressive legal departments who make our lives an absolute misery.

Nick Pace

Thank you for the compliment.

Peter Todd

The prospect of suing a multinational pharmaceutical company is a bit like drilling yourself in the head, I think. But it is important that there must be some other solution. We can’t just turn around to people and say, “That’s it, you’re on your own.” There’s got to be some system, some, ideally, no-fault, fair, swift, efficient, transparent system for actually dealing with those claims. So, please don’t think there’s any kind of appetite on behalf of claimants to be suing manufacturers. I think that’s just not the case. But there does have to be some system in place. And where claims are being sued against manufacturers, that is just because there is no other suitable mechanism for resolving these cases, these claims, and it really is the absolute last resort. And it’s something that really we shouldn’t have to go down and get involved in, because, sometimes, I look across the other side of the courtroom at the hundred people in suits that are gathered on the other side, and I just think, “Oh, you know, I’m just absolutely terrified.” So, it’s not a fair fight at all.

Peter Todd

And if we could have an alternative system, some kind of process for determining cases swiftly, efficiently, cheaply, fairly, then that’s a much-preferred path for claimants.

Nick Pace

Especially in the context of vaccines, I think.

Peter Todd

Absolutely. Vaccines are some of the most complicated medical legal issues because of the need for sometimes very, very complicated, difficult scientific medical expertise. And if we could simplify as much as possible, then that would save a lot of costs and also mean that people could get compensation a lot quicker.

Nick Pace

Let me give everybody—if you want to take a minute—we have a few minutes left here. The questions and answers have come up, and the sole question here says “Test.” So, apparently you’ve answered all the questions that they could possibly come up with, but I want to give each one of you a minute just to see if you have any final thoughts you want to mention . . . . What is the best way to get vaccines distributed equitably, fairly, and that we address the needs of those who, of the very small number of people that will wind up with serious injuries. Do you want to take a minute, Anthony, first?

Anthony Brown

Yeah, sure. I think if we look at the contracts that have been put together by the likes of Canada, the U.S., the UK, and other high-income countries, I think each of those countries have procured enough vaccines to vaccinate their entire population three, four, and five times over. That’s not right. So, whatever we do in the future, that’s probably not the method we should use.

Anthony Brown

If we could look at something like COVAX and what we did immediately, and maybe instead of some of us being a little bit nervous and wanting to go at warp speed alone, is that we, all together, that we don’t leave anyone behind, that we look at ourselves as global citizens, as one community, and we operate as one. And that we all go at warp speed, or no one goes at warp speed. I think something like that for the future. And if we can think about it now, because we know for a fact that this is not the last epidemic—there are going to be more. If we can put in place the systems and tools, the processes, the legal structure to operate at warp speed as a global community the next time, I think that’s what we need for the future.

Nick Pace

Deedee?

Deedee Litvin

Yeah, I couldn’t agree more. I mean, we’re all flying this plane and building it at the same time, and it’s crazy. And, as you’ve said, there are a lot of bilateral agreements in place that have indemnities. So, sometimes, when we talk about having this kind of holistic solution, what we hear is, “Well, we don’t have time for that, we’re already going down this other path.” But we’re going to be in this place again, unfortunately. We know that there will be other pandemics, and so I think it makes sense to keep a focus on this issue. And another thing we hear sometimes is that just discussing these issues openly is a threat to vaccine confidence and will negatively impact the uptake of the vaccines. And I think the industry just doesn’t agree with that, overall, because it’s one thing to say [that] raising these issues before anybody’s getting vaccinated in large numbers can create an awareness of potential safety issues and cause questions.

Deedee Litvin

But once people are getting vaccinated in large numbers and we’re seeing reports of adverse events, whether they’re related to the vaccine or they’re not related to the vaccine, the preexisting level of concern about vaccine safety and vaccine hesitancy are really going to become major issues. And so I think it’s really important to stay focused on building a holistic solution that works for everybody. And we may not get it all completely right for this pandemic, but let’s keep the momentum going and try and build something that we can use now but also call upon in the future.

Nick Pace

Peter, a minute before we turn it back over to Lloyd here.

Peter Todd

Yeah. Well, I would say that vaccines are important. They’re one of the most important things for public health. And, in the context of this pandemic, it’s the one thing that’s giving us hope right now. And from the point of view of having equity in the society, having fairness, it’s really, I think for me, an important fundamental principle of social justice that, rather than saying, “Well, if you’re the one in a million that it happens to, it’s just too bad, suck it up, deal with it”—that’s totally the wrong attitude to have. Instead, what we should say is, “Actually, these events are incredibly rare; actually, vaccines are generally incredibly safe, and we can easily afford to indemnify each other.” And we can all be vaccinated with confidence that, if you get in the one-in-a-million chance that something goes wrong, that, actually, you’re going to have access to a fair, efficient compensation system.

Peter Todd

And I think, unfortunately, not enough care and attention has been put in place to actually make sure that those systems are in place. And that does have an effect on fueling vaccine hesitancy, which is a threat to achieving the herd immunity and actually getting our lives back to normal. So, I personally believe that having fair compensation systems are important to actually support people and give people confidence to be vaccinated. I see cases of grievous injury, but I’m still very keen to be vaccinated because I know that it’s a very, very rare event. And, unfortunately, we have hundreds or thousands of people dying every day, and we’ve got to actually make a sensible risk-management decision. But having fair compensation systems go with having a successful vaccine program, which is important to public health, and, therefore, it really is something that governments should be paying more attention to.

Nick Pace

Well, listen, I want to say that we did get one question that came up, and the sole thing was, says, “Thanks, great discussion.” And I couldn’t agree more with the questioner here. I thank you all for joining, all three, for joining us today and me, and I thought it was a great discussion. And good luck to all three of you in your respective roles, dealing with this—the hopes of a planet are resting on you. Lloyd?

Lloyd Dixon

Yeah. So, I’d like to, on behalf of the Feinberg Center and the Institute for Civil Justice at RAND, thank you all, Peter, and Deedee, and Nick, and Anthony, for just the terrific discussion that addressed both some of the concepts as the practical difficulties of doing this, to designing a system that will get the vaccine available around the world and deal with the compensation issues.

Lloyd Dixon

There’s many other issues. I’m sure we could discuss, for example, the practical implementation of that compensation fund—who’s going to run it? How’s the money going to get paid? So, there are many other things that remain to be worked out, but what a great discussion today.

That concludes this webinar. And, then, I just want to alert everybody that we’ll be having another one in the beginning of next year that drills down more on the U.S. situation and the particular system we have in the U.S. So, thank you again and have a great holiday season.

Nick Pace

Thank you all.

Deedee Litvin

Thanks, everyone.

Anthony Brown

Thank you.

Deedee Litvin

Happy holidays.