The Department of Health and Human Services (“HHS”) recently issued a declaration under the Public Readiness and Emergency Preparedness (“PREP Act”) to provide immunity to liability for activities related to medical countermeasures against COVID-19 (“the Declaration”). The Declaration is published in the Federal Register. It is effective retroactively to February 4, 2020 and remains in effect through October 1, 2024.
What is the PREP Act? The PREP Act authorizes the Secretary of HHS to issue a PREP Act declaration that provides immunity from liability for any loss caused, arising out of, relating to, or resulting from administration or use of countermeasures to diseases, threats, and conditions determined in the declaration to constitute a present or credible risk of a future public health emergency. In general, the liability immunity applies to entities and individuals involved in the development, manufacture, testing, distribution, administration, and use of medical countermeasures described in the declaration. A PREP Act declaration is specifically for the purpose of providing immunity from liability and is different from, and not dependent upon, other emergency declarations issued by HHS or other governmental agencies. Individuals who sustain a serious injury or die as a result of the administration or use of a covered countermeasure are eligible to receive benefits from the Countermeasures Injury Compensation Program (“CICP”). In order to receive benefits, the individual must show direct causation between the covered countermeasure and the serious physical injury or death with “compelling, reliable, valid, medical and scientific evidence”.
How does it apply to the COVID-19 crisis? Under the current Declaration, manufacturers, distributors, program planners, administering entities, and licensed health professionals (referred to in the declaration as “qualified persons”) engaged in facilitating COVID-19 countermeasures are protected from liability. This allows companies to proactively develop and distribute medical countermeasures and allows licensed health care professionals to prescribe, administer, and dispense the products while treating COVID-19 patients without the threat of potential claims and litigation. The Declaration applies to the categories of entities identified above as well as their officials, agents, and employees. The following definitions apply:
- A manufacturer means a contractor or subcontractor of a manufacturer; a supplier or licenser of any product, intellectual property, service, research tool or component or other article used in the design, development, clinical testing, investigation or manufacturing of a covered countermeasure; and any or all of the parent companies, subsidiaries, affiliates, successors, and assigns of a manufacturer.
- A distributor means a person or entity engaged in the distribution of drugs, biologics, or devices, including but not limited to: manufacturers; repackagers; common carriers; contract carriers; air carriers; own-label distributors; private-label distributors; jobbers; brokers; warehouses and wholesale drug warehouses; independent wholesale drug traders; and retail pharmacies.
- A program planner means a State or local government, including an Indian Tribe; a person employed by the State or local government; or other person (such as a private sector employer or community group) who supervises or administers a program with respect to the administration, dispensing, distribution, provision, or use of a countermeasure. This includes persons who establish requirements or provide policy guidance, or who supply technical or scientific advice or assistance or who provide a facility to administer or use a “covered countermeasure” in accordance with the Declaration.
- A qualified person means a licensed health professional or other individual who is authorized to prescribe, administer, or dispense covered countermeasures under the law of the State in which the countermeasure was prescribed, administered, or dispensed.
What actions are covered? The Declaration applies to and requires dismissal of 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 of use of a countermeasure.” The 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 the covered products referred to above.
Are there any limitations on the immunity to liability? Immunity is not available for willful misconduct causing death or serious physical injury. A serious physical injury is one that is life-threatening, or results in or requires medical or surgical intervention to preclude permanent impairment of body function or results in permanent damage to a body structure. Willful misconduct is misconduct that is greater than any form of recklessness or negligence. It is defined in the PREP Act as an act or failure to act that is taken: (1) intentionally to achieve a wrongful purpose; (2) knowingly without legal or factual justification; and (3) in disregard of a known or obvious risk that is so great as to make it highly probable that the harm will outweigh the benefit. All three of those conditions must be proven with clear and convincing evidence. Willful misconduct cannot be found against a manufacturer or distributor for actions regulated by HHS under the Public Health Service Act or the Federal Food, Drug and Cosmetic Act, if HHS chooses not to take an enforcement action against the manufacturer or distributor, or if HHS terminates or settles an enforcement action without imposing a criminal, civil, or administrative penalty. Willful misconduct also cannot be found against a program planner or qualified person, including a licensed health professional, who acts in accordance with applicable directions, guidelines, or recommendations issued by HHS regarding administration and use of a countermeasure as long as HHS or the State or local health authority is notified about the serious injury or death within seven days of its discovery. Entities also are not protected from claims that are unrelated to the countermeasure.
How does the PREP Act impact state law? The PREP Act expressly preempts any state law that is “different from, or is in conflict with, any requirement” established regarding the covered countermeasures.
For further information, contact any one of Drewry Simmons Vornehm, LLP’s healthcare attorneys.