Covid vaccines – Challenge

As the world grapples with the Covid-19 pandemic and the second wave in Europe is stated to be more dangerous than the first, it appears Covid-21 is a reality i.e. the pandemic effect will certainly spill over to a good part of 2021 too if not longer. In India, certain pockets show a rise in positive cases & with the advent of winter smog, there is the possibility of a further spike in cases.

The silver lining is that a vaccine seems to be in sight. Scientists the world over have worked at break-neck speed to develop a vaccine for this dreaded disease and now it appears that out of the eight separate experiments, at least three are in advanced stages of trials. The results too are said to be highly encouraging. A vaccine is a reality now. Then why the apprehension that Covid may stretch into 2021 and beyond, one may ask. First, the efficacy of the vaccines across different demographic groups need to be seen. Second, will there be any long-term side-effects for certain sections of the population or certain age-groups? The fear is that, the search for a vaccine being a race against time,some of the protocols may not have been strictly followed. Will it be a false dawn after all?

Assuming for a moment that all the above fears are addressed and the vaccines are effective all over and with no side-effects too, there is the mammoth problem staring us in the face — Logistics! The creation of Ultra cold-chains. Most of these Covid vaccines need to be transported and stored right from the place of manufacture till the place of administering at temperatures ranging between -70 degrees Celsius & -90 degrees Celsius. There has to be an unbroken ultra-cold chain comprising cold storages, aircrafts, trucks and specialised deep freezers at the places where vaccination actually is to take place. Vaccines by themselves are extremely susceptible to temperature fluctuations and often become totally unusable or lose their potency. IATA’s Center of Excellence for Independent Validators for Pharmaceutical Logistics estimates that for all vaccines transported, 25% lose potency on reaching the destination & losses due to temperature errors are around US $ 34 billion every year. The problem becomes more complex when one compares the ultra-cold chain temperatures to be maintained for Covid vaccines in relation to other vaccines. BCG vaccines require temperatures between 2 to 8 degrees Celsius while MMRV vaccines require temperatures between -50 and -15 Celsius.

Even in advanced countries these sort of massive ultra-cold chains are not readily available. Leading logistics providers are already in a race to build freezer farms and are also upgrading the cooling capabilities in aircraft and trucks/trailers. Movements by ships is out of question given the need for speed. This being the case with advanced nations, one can imagine the challenges in ultra-cold chain creation in developing and under-developed countries of the world. The people in these countries may have a longer wait for the Covid vaccine. What about India? Ultra-cold chains have to be built rapidly but the advantage is that at least three Indian companies are going to produce the vaccines with collaboration/ on behalf of overseas partners. So a reasonable number of doses of the vaccines may be made available here.

The challenge to a Marine Cargo underwriter –How does he cover Covid 19 vaccines in transit knowing fully well that ultra-cold chains are in their infancy and the chances of losses due to temperature fluctuations is high? As is the case with most pharma products and more so in case of critical vaccines like the Covid one, there can only be Total losses. A high rate of premium or a huge deductible may not serve the purpose. How does one make sure that the ultra-cold chain is indeed in place and is fully functional? Study the technical requirements which the manufacturer spells out for transportation of the vaccines & confirm that the insured has strictly broken this down into processes in a SOP and ensures that it is strictly followed. Independent third-party supervisions at every stage may be required. Possibly there may be the need to look at insured’s own developed ultra-cold transportation facilities too. If third-party logistics operators are used, it may have to be ensured that no waiver of subrogation is given to them. The Indian manufacturers of these vaccines may well have in place their regular cargo policies covering among other products, vaccines requiring controlled temperature. Care may be taken by insureds to declare that Covid vaccines too will be transported so that the insurers may come out with differential terms and conditions for the same, given the ultra-cold chain requirements. The insureds should not presume that the current policies will hold this covered too. Insurers, on their part should be asking probing questions at the underwriting stage and even in case of existing policies, it will be a good idea to specify the temperature range in which cargo is to be transported, instead of merely saying ‘ temperature controlled cargo covered’ as is seen in many cases.

In a lighter vain, if a consignment carrying Covid 19 vaccines is covered under a cargo policy which has the LMA 5391 & LMA 5395 exclusions and if there be a loss, will the claim be admissible or not?