The South African government's compensation fund to cover potential injuries from COVID-19 vaccines could cost around 250 million rand ($17.5 million) in the first year, the health minister said in response to questions in parliament.
The African country hardest-hit by the coronavirus pandemic in terms of infections and deaths told vaccine manufacturers Johnson & Johnson and Pfizer it would set up the fund during negotiations to buy shots.
"A contingent liability of approximately R250 million for the first year would be provided for compensation of vaccine injury in a COVID-19 Vaccine NFC (no-fault compensation) Fund," Health Minister Zweli Mkhize said in written replies to a lawmaker.
Mkhize said the potential cost was based on an estimate of between 800 and 2,000 successful claims and included the administrative costs of the fund. He said a committee of experts would develop a vaccine injury table to assess compensation applications.
The minister said last week that the government had agreed to fully indemnify J&J and Pfizer against third-party claims and that vaccine manufacturers had made "difficult and sometimes unreasonable" demands during negotiations including non-refundable downpayments.
A J&J spokeswoman said on Monday that the company was still in talks with the South African government and was committed to making its vaccine available at a not-for-profit price.
Pfizer did not immediately respond to a request for comment on Monday but told Reuters last week it sought indemnity and liability protections in all its agreements, consistent with local laws.
J&J and Pfizer will supply South Africa with a combined 61 million vaccine doses, helping to ramp up immunisations after a slow start.
To date, South Africa has vaccinated roughly 290,000 health workers with J&J's one-dose vaccine in a research study, but last week it paused the study while regulators interrogate a possible link between J&J's vaccine and rare cases of blood clots.
The government expects the first commercial batch of J&J doses later this month and doses of Pfizer's two-shot vaccine next month.
Between the J&J and Pfizer deals, South Africa has secured enough vaccines for 46 million of its roughly 60 million people.
In the 2021 budget presented in February, the government said it could spend up to 19.3 billion rand over three fiscal years on its vaccination programme.