Serum vaccine: Contract has non-liability clause

The Directorate General Health Services (DGHS) has administered 88,42,888 (88 lakh 42 thousand 888) doses of the Covid vaccine so far. Over 1.3 million (13 lakh) persons who have received the first dose are uncertain of when they can receive the second. This has caused grave concern. However, given the clauses of the tripartite contract signed to procure the vaccine from India, no one can be held liable for this situation.

According to the contract, if any party, indirectly or due to any special circumstances, faces damages, no one will be held liable. The three parties to the deal are the Bangladesh government, Beximco Pharma and India's Serum Institute.

The agreement between the three was signed on 13 December last year. This 27-page contract includes the price of the vaccine, supply system, liabilities, service fee, force majeure and so on. It states that India's Serum Institute will sell the Oxford-AstraZeneca vaccine to Bangladesh. Bangladesh's Beximco Pharma will be in charge of distribution.

Under the agreement, so far 58,19,719 (58 lakh 19 thousand 719) persons have received the first dose of the vaccine in Bangladesh. According to DGHS, after 15 May there will no vaccines left for the second dose. Officials of the Expanded Programme on Immunisation (EPI) have informed Prothom Alo, there is little possibility that they will be able to give the second dose to everyone who has received the first dose.

Many persons who have received the first dose are calling up the news media to inquire whether they will eventually get their second shot. They also want to know how they will be affected if they don't get the second dose and if they can use the Chinese or Russian vaccine as the second dose, after taking the Indian vaccine for the first jab. They had been hoping to be immunised against Covid with two doses of the vaccine.

The tripartite agreement had been signed by the DGHS director general Abul Bashar Mohammad Khurshid Alam on behalf of the government, the Beximco Pharma Chief Operating Officer SM Rabbur Reza and Serum Institute's additional director (exports) Sandeep Mulay. Prothom Alo attempted to contact all three in writing and over mobile phone to inquire about the agreement and the next consignment of the vaccine. No one responded.

When contacted about the matter, spokesperson of DGHS Md Nazmul Islam told Prothom Alo, "I do not know the details of the contract. I never saw the contract."

The agreement states that within a month of the Bangladesh authorities giving their approval for the use of the vaccine in Bangladesh, Serum Institute will start export. Within six months of the start of the vaccine export, a total of 30 million (3 crore) vaccines will be sent to Bangladesh. The three parties will discuss the details of how many vaccines, maximum and minimum, will be sent per month. But the contract clearly stated that 30 million vaccines will be sent to Bangladesh within six months of the start of export.

The Directorate General Drug Administration gave approval in January for the emergency use of Serum's vaccine. The first consignment arrived on 25 January. This consignment had five million (50 lakh) doses of the vaccine. Beximco Pharma managing director Nazmul Hassan at the time told journalists that every month five million vaccines would arrive. Serum sent two million (20 lakh) in February, and none in March and April.

A senior official of the foreign ministry, on condition of anonymity, told this correspondent that the government at the moment is placing importance on getting the remaining doses of the vaccine rather than the details of the agreement. Foreign minister AK Abdul Momen last week sent a letter to the Indian foreign minister S Jaishankar, asking for three million (30 lakh) vaccines under the tripartite agreement to be delivered. He said that the experience with Serum Institute should be kept in mind when negotiating for the Russian vaccine.

The agreement states that Bangladesh will purchase 30 million (3 crore) vaccines at a cost of USD 120 million (USD 12 crore), that is, Tk 10.20 billion (Tk 1,020 crore). That means each vaccine costs 4 dollars. However, if Serum Institute supplies the vaccine to the Indian government at a lower price, then the price will be lowered for Bangladesh too. In keeping with the contract, Bangladesh paid USD 60 million (USD 6 crore) before the vaccines arrived.

Beximco is receiving 1 dollar per dose of the vaccine from the government for distribution. That means Beximco will receive Tk 1.74 billion (Tk 174 crore) from the government. This is referred to as 'service fee' in the contract.

Beximco has certain liabilities according to the contact. After receiving the vaccine from Serum, they must maintain the cold chain and deliver the vaccine to the government storage facilities within less than two weeks.

Until the vaccines reach the government storage facilities, Beximco will be held liable if there is a shortfall in the vaccine bought from Serum, if there are damages or if there is any sort of error. Beximco will provide training to the government officials and employees regarding preservation and transportation of the vaccine, according to the contract.

As a listed member of the stock market, Beximco Pharmaceuticals had to provide Dhaka Stock Exchange with information in this regard. According to the information provided by the company, it provided the government with 5 million Covid vaccines in January-March and, after covering all expenses, made a net profit of Tk 383.7 million (Tk 38 crore 37 lakh).

Speaking to Prothom Alo, Beximco Pharma managing director Nazmul Hassan said, "The vaccine supply now depends completely upon the Indian government. The demand for the March consignment has been deposited with Serum. Unless the government gives its nod, Serum cannot send the vaccines. We bring the vaccine from India and provide it to the government. If we don't get the vaccine from there, there is nothing we can do. Even Serum is unable to do anything. The matter must be resolved through negotiations at a governmental level."

He said that the contract mentions all sorts of risks which Beximco bears solely. Those matters are not being discussed.

Clause 12 of the contract mentions the liabilities of the various parties. It says that unless mentioned otherwise in the contract, no one will be held liable if any party faces damages due to any indirect or special circumstances that may arise.

Clause 13 mentions force majeure. Restrictions of the government are also included as force majeure. That means if the Indian government imposes restrictions, Serum will not be able to export the vaccine as per agreement.

The deal also mentions that in the case of such force majeure, if the implementation of the contract is hindered, all out efforts will be made to carry out the deal through alternative means. It also says that if any party cannot carry out its responsibility due to the force majeure, it must immediately inform the other party and also specify the long the delay will be.

Public health expert Jamil Faisal told Prothom Alo that everyone is responsible for this situation -- those who were involved in procuring the vaccines and those who planned the use of the vaccines. The biggest mistake was depending on one single source for the vaccine.

* This report appeared in the print and online edition of Prothom Alo and has been rewritten for the English edition by Ayesha Kabir.