The Department of Health and Human Services Issues Declaration under the Public Readiness and Emergency Preparedness (“PREP Act”)

Written by: Christopher Eads, Esq.

The Department of Health and Human Services (“HHS”) recently issued a declaration under the Public Readiness and Emergency Preparedness (“PREP Act”) Act to provide immunity to liability for activities related to medical countermeasures against the coronavirus(COVID-19). The declaration is effective retroactively to February 4, 2020.

Executive Summary

Under the declaration, makers, distributors, program planners, administering entities and licensed health professionals (referred to in the declaration as “qualified persons”) engaged in facilitating coronavirus countermeasures are protected from liability. HHS is encouraging companies to proactively develop and disseminate medical countermeasures undaunted by potential legal claims attendant to these products. Licensed health professionals are also being protected for their work in prescribing, administering or dispensing the products while treating COVID-19 patients. The immunity protects covered entities from liability, except for acts of willful misconduct, for losses relating to use of the countermeasures.

The HHS declaration was issued under the authority granted by the PREP Act. The PREP Act reflects the HHS Secretary’s determination that the development of countermeasures for coronavirus should be facilitated. The PREP Act was previously used to prevent liability for similar situations in response to Ebola, Zika and anthrax.

What Is the Duration of Coverage?

Legal immunity is retroactive from February 4, 2020 and extends through October 1, 2024. An additional 12 months of liability protection is granted for manufacturers and distributors to dispose of and collect the countermeasures or otherwise limit use of the countermeasures.

Who Is Covered?

Immunity is afforded to countermeasure “manufacturers,” “distributors,” “program planners” and other “qualified persons,” as well as their officials, agents and employees. These terms are interpreted broadly:

• • “Manufacturer” includes any supplier or licenser of a component or service rendered in the design, development, testing, investigation or manufacturing of a covered countermeasure.
  • “Distributor” includes any entity engaged in the distribution of a covered countermeasure, ranging from repackers to retail pharmacies.
  • “Program planners” include any entity that supervises or administers a countermeasure program, including any entity that “has established requirements, provided policy guidance, or supplied technical or scientific advice or assistance or provides a facility” to administer covered countermeasures.
  • “Qualified persons” include licensed health professionals and others authorized to prescribe, administer or dispense the countermeasure under the laws of the state where the countermeasure was prescribed, administered or dispensed.

What Actions Are Covered?

Courts must dismiss claims brought against covered entities for any loss relating to “any stage of design, development, testing, manufacture, labeling, distribution, formulation, labeling, packaging, marketing, promotion, sale, purchase, donation, dispensing, prescribing, administration, licensing or use of a countermeasure.” The relating to “any stage” language is a very broad bar to liability that should provide plenty of coverage to individuals and entities falling within the categories of covered terms as outlined above. The HHS declaration exempts liability for “any antiviral, any other drug, any biologic, any diagnostic, any other device, or any vaccine, used to treat, diagnose, cure, prevent, or mitigate COVID-19, or the transmission of SARS-CoV-2 or a virus mutating therefrom, or any device used in the administration of any such product, and all components and constituent materials of any such product.” The declaration also covers products and technology that increase the effectiveness or minimize adverse events associated with covered products as listed above. The declaration provides liability immunity for the administration of Covered Countermeasures “without geographic limitation.” That is, the liability protection includes claims related to the use of the countermeasure in the US and in countries outside the US that may, for example, be resolved under US law. The act also expressly preempts any state law that “is different from, or is in conflict with, any requirement” established regarding the covered countermeasures.

Limitations on Immunity

Immunity is not available for willful misconduct causing death or serious physical injury. These are actions that rise beyond recklessness or negligence.  Intentional action for a wrongful purpose, action known to be without legal or factual justification, and acts in disregard of risk that outweighs the benefits constitute willful misconduct. Immunity does not extend to foreign claims where the United States lacks jurisdiction. Entities are not protected from claims that are unrelated to the countermeasure; for example, a claim for a slip-and-fall on a health provider’s premises will not be dismissed.

Injuries as a result of a covered action

HHS notes that individuals who sustain a serious injury or die as a result of the administration of a Covered Countermeasure are eligible to receive benefits from the Countermeasures Injury Compensation Program (“CICP”). To do so, the individual must show “direct causation” between the Covered Countermeasure and a serious physical injury with “compelling, reliable, valid, medical and scientific evidence.”

We will continue to monitor this rapidly developing situation and provide you with updates regarding developments as they occur.  For further information, contact Hall Booth Smith, P.C‘s healthcare attorneys or any member of our COVID-19 Taskforce.