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* EU ready to indemnify 'certain liabilities' - EU official
* In securing shots, EU lags U.S. which offers full shield
* EU has so far reached vaccine deal only with AstraZeneca
By Francesco Guarascio
BRUSSELS, Aug 26 (Reuters) - The European Union is offering
only partial protection to vaccine makers against legal risks
from side-effects of their potential COVID-19 shots, European
officials said, in a move that is hampering deals and contrasts
with U.S. policy.
With vaccines being developed at record speed during the
pandemic, there is potentially a greater risk they may have
unexpected consequences or may not be effective. The financial
coverage of these liabilities is a key feature of drugmakers'
talks with governments keen to secure vaccine shots in advance.
In these extraordinary circumstances, EU governments "are
ready to financially cover certain of the companies' risks", an
EU official told Reuters. The official added, however, that the
EU's strict rules on liability remained in place.
These rules consider vaccine makers and other manufacturers
liable for their products on sale in the EU, apart from rare
cases when, for instance, they did not put them into
circulation.
The EU's top court increased the burden on drugmakers in
2017 when it ruled vaccine users were entitled to compensations
if they could prove a shot caused a negative side-effect, even
when there was no scientific consensus on the matter.
Reducing the legal burden for vaccine makers has been an EU
priority during the pandemic, as this is considered crucial to
convincing drugmakers to invest in risky vaccines, an EU
internal document dated May 7 and seen by Reuters shows.
STUMBLING BLOCK
But offers made to vaccine makers have not always been in
line with their expectations.
EU officials involved in the confidential negotiations told
Reuters in July that liability issues were among the stumbling
blocks in talks with U.S. drugmakers Johnson & Johnson (J&J) and
Pfizer - which is developing a potential COVID-19
vaccine with German biotech firm BioNtech.
The EU later said negotiations with J&J were at an
advanced stage, although no deal has yet been reached.
An European Commission spokesman declined to comment on
whether liability issues have been a hurdle in talks with
vaccine makers.
The supply agreement the EU reached earlier in August on the
potential COVID-19 vaccine developed by AstraZeneca and
the University of Oxford - which is also the only deal struck so
far by Brussels - offers only partial liability
coverage.
"The contract foresees that liabilities and financial costs
are shared among the parties," the Belgian medicines agency said
in a statement about the deal the Commission reached with
AstraZeneca on behalf of all 27 EU states, including Belgium.
"Advance purchase agreements provide for member states to
indemnify the manufacturer for certain liabilities incurred," a
Commission official said when asked about the deal. The official
did not give further details.
The EU stance on liabilities could partly explain why,
despite having a bigger population than the United States, it is
lagging Washington in securing potential COVID-19 vaccines.
The U.S. system shifts liability for vaccines fully to the
government, and shields drugmakers, because widespread
inoculation against disease is considered a benefit to society.
Congress set aside $30 billion this year to fight COVID-19,
including funding vaccine development and possibly any necessary
compensation.
The EU's equivalent to that is an emergency fund which has
been tapped during the pandemic and which is expected to use
about 2 billion euros ($2.4 billion) to help vaccine makers
develop shots and cover their liabilities, EU officials said.
($1 = 0.8465 euros)
(Reporting by Francesco Guarascio @fraguarascio; Editing by
Mark Potter)
