As the most ambitious inoculation initiative in history begins in an effort to combat the coronavirus pandemic, compensation for potential side-effects is a key issue as governments try to strike a balance between obtaining supplies of vaccines and protecting the public.

The dismay vented by Brazilian President Jair Bolsonaro over a vaccine maker’s refusal to be held responsible for potential side-effects revealed the tensions behind negotiations over nations’ vaccine procurement, with terms on indemnification being a significant battleground.

Many developed countries are willing to take on the risks and indemnify vaccine makers, to ensure they secure a share of the limited supply. The British and Australian governments have agreed to provide legal indemnity to Pfizer.

The European Union in September struck a deal with AstraZeneca, agreeing that its member states’ governments would be liable for claims above an agreed limit regarding side-effects from vaccines, in exchange for a cheaper price per dose. The vaccine maker initially asked for full indemnity, according to Reuters.

But there is far less room for compromise for poorer nations, potentially widening the gap between the global north and south in terms of vaccine accessibility.

Bolsonaro revealed last Thursday that Pfizer had demanded full indemnification in its procurement contract with Brazil. “In the Pfizer contract it’s very clear: ‘We’re not responsible for any side-effects,’” Agence France-Presse quoted the president as saying.

“If you turn into a crocodile [after taking the vaccine], it’s your problem,” he said. “If you become superhuman, if a woman starts to grow a beard or if a man starts to speak with an effeminate voice, they will not have anything to do with it.”

“The potential compensations to be paid are likely to be too much for any entity – either vaccine producers or poorer countries – to assume by themselves,” said Keiji Fukuda, a clinical professor at the University of Hong Kong who previously worked for the World Health Organization(WHO).

Countries’ regulators have repeatedly emphasised that serious adverse effects caused by vaccinations generally are rare – about one or two per million doses.

But the full picture on possible side-effects is not yet known, with Covid-19 vaccines having been developed at an unprecedented speed – developing a vaccine typically takes up to a decade. Some side-effects may be found only after large-scale vaccination.

At least eight people have reported serious allergic reactions after receiving the Pfizer and BioNTech mRNA vaccine in the past two weeks, according to Science magazine.

“On the one hand, the Covid-19 vaccines are urgently needed and could be used by billions of people,” Fukuda said. “On the other hand, there is little experience with them and the full risks for serious adverse events is not clear.”

Covax, a global initiative aimed at securing equitable access to Covid-19 vaccines for 92 low and middle-income countries, also seeks to indemnify suppliers with the aim of removing barriers to acquiring doses.

Co-led by the Coalition for Epidemic Preparedness Innovations, the vaccine alliance Gavi – backed by the Bill & Melinda Gates Foundation – and the WHO, the Covax programme published a briefing note in November addressing the issue.

The note said that “countries and territories will be required to indemnify the manufacturer” and that Covax was “exploring backstopping guarantees for these indemnification obligations”.

Under normal circumstances, vaccine manufacturers and distributors would get insurance to cover the risks, but such coverage may not be available for the current pandemic because of its unprecedented scale, the note added.

The decision was in line with that during the influenza H1N1 pandemic of 2009-10, when vaccine producers indicated to the WHO that it was not possible for them to assume all of the liability, Fukuda said. At that time, it was decided that manufacturers would remain liable for potential defects related to the quality of the vaccine, but that countries would have to assume liability for serious adverse effects.

Covax said it would establish a no-fault compensation mechanism for people suffering serious side-effects after receiving a vaccine from its programme. The level of compensation would depend on the severity of the effect and the GDP per capita of the country, it said, with payment funded by a levy on vaccines, involving contributions from manufacturers and participating countries.

No-fault compensation programmes for vaccine side-effects, first initiated in the 1960s, are designed to reduce the need to resort to legal action to access compensation, by not requiring the injured party to prove negligence or fault by a vaccine provider or manufacturer.

Of the WHO’s 194 member states, at least 25 – mostly high-income ones – have previously implemented such a mechanism, according to an analysis of no-fault compensation programmes published in the journal PLOS One in May.

Although the programmes in all of those countries require proof of the causal relationship between vaccination and side-effect, they vary when it comes to aspects such as the source of funding and who oversees it.

In the United States, vaccine manufacturers are protected from legal liability when providing products to combat public health emergencies such as a pandemic, under the 2005 Public Readiness and Emergency Preparedness Act. In 2010, the legislation established a compensation fund for people suffering adverse side-effects, which has since paid out on 29 of the 499 claims filed, with 10 cases still under medical review, according to the Health Resources & Services Administration.

Given the low approval rate for claims, legal experts have questioned the worth of the scheme, Reuters has reported.

China has no additional legal vehicles covering liability or compensation in pandemics. According to government officials, when administering Covid-19 vaccines it will follow the no-fault compensation stipulations of its existing law.

No-fault compensation in China was established in 2005 via a clause in an administrative regulation, but its implementation has long been marred by disputes and buck-passing between local governments and vaccine manufacturers. Parents of children suffering from serious side-effects have been forced to resort to marathon lawsuits and petitions.

Intended to address the problem, the Vaccines Administration Law was enacted last year to give no-fault compensation a legal basis.

The law states that provincial governments will bear the cost of compensation for side-effects caused by free vaccines offered by the government, while vaccine manufacturers will be liable where a claimant paid for the dose. The compensation amount is determined by the severity of the effect and local GDP.

Nationwide mass inoculation is beginning for groups including those working in health care, aviation, public transport, markets and where chilled and frozen foods are processed. A second phase is intended for the general public, to be priced on an at-cost basis.

Tao Lina, a vaccine expert and former official with the Shanghai Centre for Disease Control and Prevention, said some of those in the inoculated high-risk groups received doses for free, making provincial authorities liable for any effects they suffer.