On March 17, 2020, pursuant to the Public Readiness and Emergency Preparedness Act (PREP Act) and the Pandemic and All-Hazards Preparedness Reauthorization Act, HHS Secretary Alex M. Azar II issued a declaration (Declaration) under the Public Health Service Act to provide broad immunity from liability for certain persons and activities engaged in medical countermeasures against the new coronavirus. The Declaration provides immunity from liability against claims of loss arising from the manufacture, distribution, administration or use of medical countermeasures developed to fight COVID-19, except for claims involving willful misconduct. This broad-based immunity from tort liability offers significant protection for companies, governmental entities and individuals engaged in medical efforts to control the COVID-19 pandemic, as well as those involved in the administration of the countermeasures.

Background

In order to issue a declaration under the PREP Act, the HHS secretary is required to:

• Determine that a disease, health condition or health threat constitutes a public health emergency or that there is a credible risk that the disease, condition or threat may in the future constitute such an emergency.
• Consider the desirability of encouraging the “design, development, clinical testing or investigation, manufacture, labeling, distribution, formulation, packaging, marketing, promotion, sale, purchase, donation, prescribing, administration, licensing, and use of the countermeasure.
• Describe the activities for which immunity from liability is in effect.

See generally 42 U.S.C. § 247d-6d(b). The Declaration issued by Secretary Azar certifies that the spread of COVID-19 constitutes a public health emergency and that the secretary has considered the desirability of encouraging the listed aspects of the countermeasures. The Declaration also sets forth the activities for which immunity from liability is in effect. The persons entitled to immunity from liability and the activities for which immunity is available are discussed in detail below.

See generally 42 U.S.C. § 247d-6d(b). The Declaration issued by Secretary Azar certifies that the spread of COVID-19 constitutes a public health emergency and that the secretary has considered the desirability of encouraging the listed aspects of the countermeasures. The Declaration also sets forth the activities for which immunity from liability is in effect. The persons entitled to immunity from liability and the activities for which immunity is available are discussed in detail below.

Who Are Covered Persons?

Covered persons entitled to immunity from liability under the Declaration include manufacturers, distributors, program planners or other qualified persons, as defined in the PREP Act, and their respective officials, agents and employees. The United States is also a covered person.

A manufacturer includes “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 parents, subsidiaries, affiliates, successors, and assigns of a manufacturer.” 42 U.S.C. § 247d-6d(i)(4).

A distributor means “a person or entity engaged in the distribution of drugs, biologics, or devices, including but not limited to manufacturers; re-packers; 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.” 42 U.S.C. § 247d-6d(i)(3).

A program planner means a state or local government, including an Indian tribe, a person employed by a state or local government, or “other person who supervised or administered a program with respect to the administration, dispensing, distribution, provision, or use of a security countermeasure or a qualified pandemic or epidemic product, including a person who established requirements, provided policy guidance, or supplied technical or scientific advice or assistance or provides a facility to administer or use a covered countermeasure.” 42 U.S.C. § 247d-6d(i)(6).

“Other qualified person” means “a licensed health professional or other individual authorized to prescribe, administer, or dispense such countermeasures under the law of the State in which the covered countermeasure was prescribed, administered, or dispensed,” or other persons identified as qualified persons in the Declaration. 42 U.S.C. § 247d-6d(i)(8). Under the Declaration, other qualified persons include those authorized in accordance with the public health and medical emergency response of an appropriate jurisdictional authority “to prescribe, administer, deliver, distribute or dispense Covered Countermeasures” and their “officials, agents, employees, contractors and volunteers.” 85 Fed. Reg. at 15201. The term also includes any person “authorized to prescribe, administer, or dispense” the countermeasures or who is “authorized to perform an activity under an Emergency Use Authorization” under Sections 564 and 564A of the Food, Drug, and Cosmetic Act. 85 Fed. Reg. at 15201.

The term “person” includes “an individual, partnership, corporation, association, entity, or public or private corporation, including a federal, state, or local government agency or department.” 42 U.S.C. § 247d-6d(i)(5).

What Are the Covered Countermeasures?

Covered Countermeasures are “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.” 85 Fed. Reg. at 15202.

Covered countermeasures fall into one or more of the following categories: qualified pandemic or epidemic products; security countermeasures; or drugs, biologic products or devices authorized for investigational or emergency use as defined in the PREP Act; the Federal Food, Drug, and Cosmetic Act; and the Public Health Service Act. 85 Fed. Reg. at 15199.

A qualified pandemic or epidemic product means a drug or device as defined in the Federal Food, Drug, and Cosmetic Act, or a biological product as defined in the Public Health Service Act, that is:

• Manufactured, used, designed, developed, modified, licensed or procured to diagnose, mitigate, prevent, treat or cure a pandemic or epidemic; or to limit the harm such pandemic or epidemic might otherwise cause.
• Manufactured, used, designed, developed, modified, licensed or procured to diagnose, mitigate, prevent, treat or cure a serious or life-threatening disease or condition caused by a product described above.
• A product or technology intended to enhance the use or effect of a drug, biological product or device.

42 U.S.C. § 247d-6d(i)(7).

A security countermeasure is a drug or device as defined in the Federal Food, Drug, and Cosmetic Act, or a biological product as defined in the Public Health Service Act, that the secretary determines (1) to be a priority to “diagnose, mitigate, prevent, or treat harm from any biological, chemical, radiological, or nuclear agent identified as a material threat”; (2) to be a priority to “diagnose, mitigate, prevent, or treat harm from a condition that may result in adverse health consequences or death and may be caused by administering a drug, biological product, or device against such an agent”; or (3) to be a necessary countermeasure to protect public health. 42 U.S.C. § 247d-6b(c)(1).

What Is the Limited Immunity?

Now that the secretary has issued the Declaration pursuant to the PREP Act, a covered person is entitled to immunity “from suit and liability under Federal and State law with respect to all claims for loss caused by, arising out of, relating to, or resulting from the administration to or the use by an individual of a covered countermeasure.” 42 U.S.C. § 247d-6d(a)(1).

“Loss” means any type of loss, including death; physical, mental or emotional injury, illness, disability or condition; fear of physical, mental or emotional injury, illness, disability or condition, including any need for medical monitoring; and loss of or damage to property, including business interruption loss. 42 U.S.C. § 247d-6d(a)(2).

The immunity provided under the PREP Act applies to “any claim for loss that has a causal relationship with the administration to or use by an individual of a covered countermeasure, including a causal relationship with the design, development, clinical testing or investigation, manufacture, labeling, distribution, formulation, packaging, marketing, promotion, sale, purchase, donation, dispensing, prescribing, administration, licensing, or use of such countermeasure.” 42 U.S.C. § 247d-6d(a)(2)(B).

Although the PREP Act does not define the term “administration,” the Declaration does. “Administration of a covered countermeasure” means the “physical provision of the countermeasures to recipients, or activities and decisions directly relating to public and private delivery, distribution, and dispensing of the countermeasures to recipients; management and operation of countermeasure programs; or management and operation of locations for purpose[s] of distributing and dispensing countermeasures. The definition of ‘administration’ extends only to physical provision of a countermeasure to a recipient, such as vaccination or handing drugs to patients, and to activities related to management and operation of programs and locations for providing countermeasures to recipients, such as decisions and actions involving security and queuing, but only insofar as those activities directly relate to the countermeasure activities.” 85 Fed. Reg. at 15200. The Declaration clarifies that, with respect to administration, claims for liability are precluded if they “allege an injury caused by a countermeasure, or if the claims are due to manufacture, delivery, distribution, dispensing, or management and operation of countermeasure programs at distribution and dispensing sites.” 85 Fed. Reg. at 15200.

It is important to appreciate the broad scope of immunity from liability that now exists. Under the secretary’s interpretation, “liability claims alleging negligence by a manufacturer in creating a vaccine, or negligence by a health care provider in prescribing the wrong dose, absent willful misconduct,” are precluded. 85 Fed. Reg. at 15200. Further, during the effective period of the Declaration, the PREP Act precludes claims for liability “relating to the management and operation of a countermeasure distribution program or site, such as a slip-and-fall injury or vehicle collision by a recipient receiving a countermeasure at a retail store serving as an administration or dispensing location that alleges, for example, lax security or chaotic crowd control.” 85 Fed. Reg. at 15200. On the other hand, a claim for an injury occurring at the site that is not directly related to countermeasures, “such as a slip and fall with no direct connection to the countermeasure’s administration or use,” would not be barred. 85 Fed. Reg. at 15200. Determining whether immunity applies will depend on the particular facts and circumstances.

The PREP Act preempts state law to the contrary. During the effective period of the Declaration, or anytime conduct is undertaken thereunder, no state or political subdivision of a state may establish or enforce any law or legal requirement that is different from, or is in conflict with, the Act that “relates to the design, development, clinical testing or investigation, formulation, manufacture, distribution, sale, donation, purchase, marketing, promotion, packaging, labeling, licensing, use, any other aspect of safety or efficacy, or the prescribing, dispensing, or administration by qualified persons of the covered countermeasure, or to any matter included in a requirement applicable to the covered countermeasure under this section or any other provision of this chapter, or under the Federal Food, Drug, and Cosmetic Act.” 42 U.S.C. § 247d-6d(b)(8).

Certain conditions apply to the scope of immunity. The countermeasures must have been administered or used during the effective period of the Declaration, for the category or categories of diseases, health conditions or threats to health specified in the Declaration. 42 U.S.C. § 247d-6d(a)(3). The population of individuals for which liability immunity is in effect with respect to administration or use of the countermeasure includes any individual who uses or who is administered a countermeasure. 85 Fed. Reg. at 15202. Furthermore, under the PREP Act, immunity is also extended to manufacturers and distributors “without regard to whether the countermeasure is used by or administered to this population,” and to program planners and qualified persons “when the countermeasure is either used by or administered to this population or the program planner or qualified person reasonably could have believed the recipient was in this population.” 42 U.S.C. § 247d-6d(a)(4). The Declaration makes it clear that there are no limitations on immunity based on the geographic location where the countermeasure was administered or used. 85 Fed. Reg. at 15202.

There is a rebuttable presumption that any administration or use during the effective period of the Declaration of a covered countermeasure is for the category or categories of diseases, health conditions or threats to health with respect to which the Declaration was issued. 42 U.S.C. § 247d-6d(a)(6).

There are some limitations on the scope of immunity. First, under the PREP Act, the secretary may limit immunity to a particular means of distribution. Under the Declaration, immunity for distribution is limited to “present or future federal contracts, cooperative agreements, grants, other transactions, interagency agreements, memoranda of understanding, or other federal agreements; or activities authorized in accordance with the public health and medical response of an appropriate jurisdictional authority to prescribe, administer, deliver, distribute or dispense the covered Countermeasures following a Declaration of an emergency.” 85 Fed. Reg. at 15200.

Second, for governmental program planners, immunity from liability exists only to the extent the program planners obtain covered countermeasures through “voluntary means,” including donation, commercial sale, deployment of countermeasures from federal stockpiles, or deployment of voluntarily obtained countermeasures from state, local or private stockpiles. 85 Fed. Reg. at 15202.

Finally, as noted above, there is no immunity for willful misconduct. “Willful misconduct” means an act or omission that is taken “intentionally to achieve a wrongful purpose; knowingly without legal or factual justification, and 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.” 42 U.S.C. § 247d-6d(c). As a result, suits involving willful misconduct may be brought, although they are subject to mandatory jurisdiction, pleading and verification requirements; discovery limitations; accounting for collateral source benefits; and limits on non-economic damages. 42 U.S.C. § 247d-6d(e). The plaintiff bears the burden of proving willful misconduct by clear and convincing evidence. 42 U.S.C. § 247d-6d(c)(3).

What Is the Applicable Time Period?

The Declaration extends the effective period for different means of distribution of covered countermeasures through Oct. 1, 2024. 85 Fed. Reg. at 15202. Immunity from liability for covered countermeasures administered and used in accordance with the public health and medical response of an appropriate jurisdictional authority runs through (1) the final day the emergency Declaration is in effect or (2) Oct. 1, 2024, whichever occurs first. 85 Fed. Reg. at 15202. An additional 12 months of immunity from liability is also provided for manufacturers “to arrange for the disposition of covered countermeasures,” and for covered persons “to take such other actions as are appropriate to limit the administration or use of” the covered countermeasures. 85 Fed. Reg. at 15202.

Conclusion

By providing immunity from liability for covered persons engaging in covered medical countermeasures to combat the COVID-19 pandemic, the Declaration will likely have the intended effect of encouraging the design, development, testing, manufacture and administration of drugs and devices designed to diagnose, treat, prevent, mitigate or cure COVID-19. In addition to the protections afforded to manufacturers and distributors, the Declaration also provides protections to persons engaged in the administration of countermeasures, a potentially wider group. All persons engaged in these activities will benefit from carefully studying the Declaration and the PREP Act to determine whether and to what extent the Declaration protects their activities.