China: Adverse Event Compensation in China: A Growing Patchwork of Provincial Rules

Last Updated: 8 September 2010
Article by Jonathan Selvadoray and Nicolas Zhu

Success in campaigns of prevention and control of epidemics will in no way veil the significance of adverse events following immunization ("AEFIs"). AEFIs always raise vaccine manufacturers' serious concerns. Lack of detailed compensation rules, doubtful justice, local protectionism and administrative interference at times increase difficulty for vaccine manufacturers to settle AEFI disputes in China. Judges usually tend to tilt the balance of power largely toward victims and local inoculating entities, and compensation amount is often unpredictable. It was not until 2008 that the first regulation on the compensation of AEFIs was promulgated by inland west Qinghai province, and two years later in May 2010, Zhejiang province became the first east coastal region which promulgated similar regulation. On 16 August 2010, Fujian government also promulgated a local regulation in this regard, which is expected to be an impulse to push forward this evolution trend throughout the whole country.

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Success in campaigns of prevention and control of epidemics will in no way veil the significance of adverse events following immunization ("AEFIs"). AEFIs always raise vaccine manufacturers' serious concerns. Lack of detailed compensation rules, doubtful justice, local protectionism and administrative interference at times increase difficulty for vaccine manufacturers to settle AEFI disputes in China. Judges usually tend to tilt the balance of power largely toward victims and local inoculating entities, and compensation amount is often unpredictable. It was not until 2008 that the first regulation on the compensation of AEFIs was promulgated by inland west Qinghai province, and two years later in May 2010, Zhejiang province became the first east coastal region which promulgated similar regulation. On 16 August 2010, Fujian government also promulgated a local regulation in this regard, which is expected to be an impulse to push forward this evolution trend throughout the whole country.

Another local regulation related to the compensation of adverse events following immunization ("AEFIs") was promulgated by Fujian government on 16 August 2010, which becomes the fifth provincial government promulgating similar regulations following the governments of Qinghai, Hunan, Jiangxi and Zhejiang. Other provincial governments are also in the progress of elaborating similar rules and plan to issue them within this year, such as Hebei, Inner Mongolia, Anhui, Shandong, Gansu provinces.

According to the Regulations on the Administration of Circulation and Vaccination of Vaccines issued by the State Council and effective as from 1 June 2005 (the "Regulations"), any person seriously injured or deceased due to AEFIs should be compensated. While the government is responsible to compensate AEFIs for vaccines of Class I, vaccine manufacturers shall compensate AEFIs for vaccines of Class II. The Regulations do not provide any detailed rules on the procedure, method or calculation of compensation but grant the governments at provincial level full discretion to elaborate detailed compensation rules.

Nevertheless, the Chinese government pays more attention to handle immunization control related matters than compensation of AEFIs. Although the Chinese government has launched campaigns against infectious diseases and advocated vaccination as a key weapon of success, the regulations on the compensation of AEFIs do not appear to have improved. It was not until 2008 that the first regulation on the compensation of AEFIs was promulgated by an inland west province Qinghai province, and two years later in May 2010, Zhejiang province became the first east coastal region to promulgate such regulation.

The delay of related regulations on compensation has caused a lot of trouble to vaccine manufacturers, especially those who manufacture vaccines of Class II. In the absence of more operational procedures of compensation for AEFIs, the negotiation and settlement of dispute on AEFIs is often a headache for vaccine manufacturers, local centres for disease control ("CDCs") and even for victims. Courts often apply the Interpretation of Supreme People's Court on Some Issues concerning the Application of Law for the Trial of Personal Injury Compensation Case (effective as of 1 May 2004, the "Interpretation") to hear and judge AEFIs cases, whereas the Interpretation, even with higher liability than those under medical malpractice, is quite unfavorable to vaccine manufacturers, because the Interpretation was not elaborated at the outset for that purpose. Although vaccine manufacturers have contributed great energy for years on lobbying to push forward issue of regulations on compensation of AEFIs, the outcome does not seem to be satisfactory.

The regulation of Fujian province is expected to be an impulse to push forward this trend. We believe that more and more governments, especially those in east coastal region, will soon catch up.

This table shows a brief summary of major compensation amounts stipulated in these five provincial regulations for the most severe cases (death and the most severe disability). As some local statistic bureaus have not yet disclosed their statistics for year 2009 on their official website, the summary is based on the data of the year 2008 published by statistic bureaus. The summary is therefore only aimed for comparison purpose in application of these promulgated regulations (including those effective in 2010) and presents a view of cost related to AEFIs.

It is obvious that compensation amount is linked to the economic level of the respective province. The amount is higher in those more developed provinces. By comparing these new regulations with the Interpretation, we can highlight the following changes:

  • the compensation is calculated based on a per capita annual disposable income or per capital annual expenditure of urban residents no matter whether the victim is a rural or urban resident, whereas the Interpretation makes a distinction between rural and urban residents.
  • the compensation is calculated based on the average statistics of a province, whereas the Interpretation refers to the local rural area or city/town where the court hearing the case is located. According to the Interpretation, if the victim is from a rural area, the calculation is based on a per capita pure income of the rural area where the court hearing the case is located. If the victim is from a city or town, the calculation is based on a per capita disposable income of the city or town where the court hearing the case is located.

Though having given some guidance, the contents of these regulations do not seem to be optimistic. In the absence of a model regulation, these regulations vary greatly from one another and even contain some unclear or contradictory provisions. Vaccine manufacturers, local CDCs and victims will continue to struggle to settle, in a swift and transparent way, AEFIs disputes. These provincial regulations represent an honest attempt to provide some guidance, however.

This article was written for Law-Now, CMS Cameron McKenna's free online information service. To register for Law-Now, please go to www.law-now.com/law-now/mondaq

Law-Now information is for general purposes and guidance only. The information and opinions expressed in all Law-Now articles are not necessarily comprehensive and do not purport to give professional or legal advice. All Law-Now information relates to circumstances prevailing at the date of its original publication and may not have been updated to reflect subsequent developments.

The original publication date for this article was 07/09/2010.

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