As discussed in our March 25 article below on liability immunity and the PREP Act, the March 17, 2020 Declaration by the Secretary of the Department of Health and Human Services (HHS) energizing the Public Readiness and Emergency Preparedness Act (PREP Act (“Declaration”)), provided certain important protections to encourage innovation and expedience in responding to COVID-19. The Declaration also included qualifying criteria and exceptions that govern whether protection is likely to exist. Although the Declaration gave a significant green light to those working to help in the fight against Coronavirus, it also left many questions unanswered. With many individuals and businesses rushing to defend against the Coronavirus, the Office of the General Counsel for HHS has been inundated with requests for advisory opinions. Although the Office of the General Counsel will attempt to respond to each request, it also recently issued an omnibus advisory opinion that addresses common questions and concerns about the scope of PREP Act immunity in relation to the Coronavirus pandemic.
The Advisory Opinion on the Public Readiness and Emergency Preparedness Act and the March 10, 2020 Declaration Under the Act (“Advisory Opinion”) was published on April 14, 2020. The Advisory Opinion seeks to offer some clarity to industry and individuals regarding: (1) what constitutes a Covered Countermeasure; (2) who/what qualifies as a Covered Person; and (3) the liability protections offered to Covered Countermeasures and Covered Persons. Perhaps most importantly, the Advisory Opinion sets forth the General Counsel’s view that immunity under the PREP Act might apply to persons/entities engaged in COVID-19 countermeasures even though they are technically not covered by the PREP Act, if one could have reasonably believed the persons/entities or countermeasures were covered.
The Advisory Opinion states that HHS would be considered an Authority Having Jurisdiction, but that HHS is not the only Authority Having Jurisdiction, and that public agencies with the legal responsibility or authority to respond to the COVID-19 pandemic may authorize a person or entity to act as a Covered Person. The Advisory Opinion makes sure to stress that this Covered Person, using Covered Countermeasures, should “take reasonable precautions” to ensure safe use of products and make information available to end users to “provide greater transparency” when possible in order to increase the likelihood of immunity under the PREP Act.
The Advisory Opinion states that it would be “too numerous to list” every product that might be considered a Covered Countermeasure, but it does include a list of products including therapeutics, diagnostic tests, medical devices, and personal protective equipment (PPE) that are covered. Additionally, any drug, device, or biological production authorized for emergency use with respect to COVID-19 under an Emergency Use Authorization (“EUA”), described in Emergency Use Instructions (EUI) issued by the CDC, or being researched under certain investigational provisions to treat COVID-19 is also a covered countermeasure. See 21 C.F.R. pts. 312 and 812. In addition, the Coronavirus Aid, Relief and Economic Security (CARES) Act amended the PREP Act to include some respiratory protective devices.
While the Advisory Opinion goes into greater detail regarding who/what qualifies as a Covered Person and Covered Countermeasure, it is quick to limit immunity to those with reasonable beliefs about qualifying as a Covered Person or Covered Countermeasure. The Advisory Opinion does state that Congress did not intend to impose strict liability standards on individuals or entities when concluding who is a Covered Person or what is a Covered Countermeasure. In fact, the Advisory Opinion plainly states that “a person or entity that otherwise meets the requirements for PREP Act immunity will not lose that immunity—even if the product is not a covered countermeasure —if that person or entity reasonably could have believed that the product was a covered countermeasure.” See, e.g., 42 U.S.C. § 247d-6d(a)(4)(B). The same is true for a Covered Person. Id.
The Advisory Opinion makes clear that PREP Act immunity is not absolute. PREP Act immunity does not provide immunity against federal enforcement actions brought by the federal government. The immunity also replaces certain damages claims that would normally be brought in court with a no fault compensation system. However, the Advisory Opinion does highlight that “PREP Act immunity must be read in light of the PREP Act’s broad, express-preemption provision.” The Advisory Opinion seeks but does not entirely succeed in adding clarity to the Declaration’s language relating to limitations on distribution. Those limitations seemingly provide immunity only to Covered Persons who provide Recommended Activities related to, most commonly, “present or future medical contracts” or “activities authorized in accordance with the public health and medical response of the Authority Having Jurisdiction to prescribe, administer, deliver, distribute or dispense the Covered Countermeasures….” The Advisory Opinion seeks to clarify, and likely expand, the scope of this language by advising that “activities in accordance with the public health response” are immune if authorized through, “among other things, guidance, requests for assistance, agreements or other arrangements.” This language suggests that express authorization from an Authority Having Jurisdiction may not be required to comply with the Act, particularly if the “covered person” “reasonably believed” its conduct/product constituted a “covered countermeasure.” The Advisory Opinion also clarifies that immunity granted by the PREP Act may apply regardless of whether a state or local authority has declared a state of emergency.
The Advisory Opinion offers insight into how the PREP Act may apply, however, it continues to remind potentially “covered persons” seeking PREP Act immunity are the ones responsible for determining if they qualify as a Covered Person and whether their products are Covered Countermeasures. Thus, the PREP Act’s application to you or your business remains a case-by-case determination. Foley is deeply steeped in advising individuals and businesses about potential PREP Act immunity. We are here for you if you have questions or concerns about PREP Act immunity.
On March 17, 2020, the Secretary of the Department of Health and Human Services (HHS) issued a Declaration energizing the PREP Act, which provides legal immunity for manufacturers, distributors, suppliers and administrators of qualified products and processes used to fight COVID-19. As discussed below, this Declaration provides certain important protections to encourage innovation and expedience, but it also includes qualifying criteria and exceptions that must be considered and evaluated on a case-by-case basis to determine whether protection is likely to exist. Like many such protections, its applicability in any given situation may be subject to litigation for many years to come.
The Public Readiness and Emergency Preparedness Act (PREP Act) provides immunity from tort liability claims (except willful misconduct) to individuals or organizations involved in the manufacture, distribution, or dispensing of medical countermeasures. Activation of the Act requires a declaration by the Secretary of HHS after a determination that a disease constitutes a public health emergency.
Secretary Alex Azar issued his Declaration on March 17, 2020, but the Declaration was backdated to be effective as of February 4, 2020. The Declaration’s protections will be in place until October 1, 2024. The Declaration, pursuant to section 319F-3 of the Public Health Service Act (42 U.S.C. § 247d-6d), immunizes manufacturing and distribution of certain products and the provision of certain services related to medical countermeasures against COVID-19. More specifically, the Declaration provides:
liability immunity to certain individuals and entities (Covered Persons) against any claim of loss caused by, arising out of, relating to, or resulting from the manufacture, distribution, administration, or use of medical countermeasures (Covered Countermeasures), except for claims involving ‘willful misconduct’ as defined in the PREP Act. This Declaration is subject to amendment as circumstances warrant.
The term “Covered Persons” is defined in the PREP Act to include manufacturers, distributors, program planners, and qualified persons, and their officials, agents, and employees, and the United States. The PREP Act defines “manufacturers” and “distributors” broadly:
Finally, the Declaration expands the PREP Act’s standard definition of “qualified person” to include: (a) any person authorized in accordance with the public health and medical emergency response of the Authority Having Jurisdiction to prescribe, administer, deliver, distribute or dispense the Covered Countermeasures, and their officials, agents, employees, contractors and volunteers, following a Declaration of an emergency; (b) any person authorized to prescribe, administer, or dispense the Covered Countermeasures or who is otherwise authorized to perform an activity under an Emergency Use Authorization in accordance with Section 564 of the FD&C Act; and (c) any person authorized to prescribe, administer, or dispense Covered countermeasures in accordance with Section 564A of the FD&C Act.
The goal of this expanded definition was to provide avenues for groups who might not otherwise be covered by the PREP Act or considered within the typical population of health care providers to participate in and support the
development of treatment and prevention models.
These are any antiviral, any other drug or biologic, any diagnostic, any other device or any vaccine used to treat, diagnose, cure, prevent or mitigate COVID-19 or a virus mutating therefrom, including any device or component part or its constituent materials of any such product. This protection is limited to “qualified pandemic or epidemic products,” “security countermeasures,” or drugs, devices or biological products for emergency or investigational use as determined on a case-by-case basis.
Immunity under the PREP Act includes “any claim [under Federal or State law] for loss that has a causal relationship with the administration to or use by an individual of a covered countermeasure.” A “loss” is defined to include death, personal injury, emotional injury, property damage, business interruption and fear of personal injury. The protection is very broad and applies “without regard to the date of the occurrence, presentation or discovery of the loss.”
The Declaration includes an important limitation to immunity as it only applies to activities conducted pursuant to “(a) Present or future federal contracts, cooperative agreements, grants, other transactions…or other federal agreements; or (b) Activities authorized in accordance with … the Authority Having Jurisdiction to prescribe, administer, deliver, distribute or dispense the Covered Countermeasures….” Again, whether conduct qualifies for immunity should be determined on a case-by-case basis.
Importantly, there is a rebuttable presumption that the administration or use of a covered countermeasure was for the threat covered by the Declaration and thus to succeed a plaintiff will have to produce evidence to overcome the presumption that the “covered person” is not entitled to immunity.
The Declaration supports innovation by health care, pharmaceutical, medical device and public health professionals to combat COVID-19 by providing immunity now and in the future. The underlying purpose is to recognize that conduct determined to be reasonable in a crisis can be viewed differently after time has passed and calm has returned. This protection allows important work to be done without fear of perfect hindsight calling that work into question. Still, the protection comes with important qualifying criteria and technical limitations that must be considered before assuming immunity applies.
For more information, please contact your Foley relationship partner or the Foley colleagues listed below. For additional web-based resources available to assist you in monitoring the spread of the coronavirus on a global basis, you may wish to visit the websites of the CDC and the World Health Organization.
Foley has created a multi-disciplinary and multi-jurisdictional team to respond to COVID 19, which has prepared a wealth of topical client resources and is prepared to help our clients meet the legal and business challenges that the coronavirus outbreak is creating for stakeholders across a range of industries. Click here for Foley’s Coronavirus Resource Center to stay apprised of relevant developments, insights and resources to support your business during this challenging time. To receive this content directly in your inbox, click here and submit the form.