PREP Act: Liability Protection Is Available During COVID-19 Pandemic

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Highlights

  • Congress and the U.S. Department of Health and Human Services (HHS) previously have addressed issues related to liability for drug and device manufacturers as well as healthcare professionals during pandemics.
  • In addition to providing valuable guidance about how to proceed, it is important to note that these rules are currently in effect and applicable to the coronavirus (COVID-19) outbreak.
  • Broadly speaking, federal law currently provides liability immunity (except in cases of willful misconduct) to manufacturers, distributors, prescribers and dispensers, as well as other relevant parties, of products developed to treat, diagnose or prevent the onset of COVID-19.

Issues relating to liability for pharmaceutical, personal protective equipment (PPE) and diagnostic test businesses as well as for physicians and healthcare personnel in the coronavirus (COVID-19) context remains a salient issue. Congress and the U.S. Department of Health and Human Services (HHS) previously have addressed issues related to liability for drug and device manufacturers as well as healthcare professionals during pandemics. In addition to providing valuable guidance about how to proceed, it is important to note that these rules are currently in effect and applicable to COVID-19. Broadly speaking, federal law currently provides liability immunity (except in cases of willful misconduct) to manufacturers, distributors, prescribers and dispensers, as well as other relevant parties, of products developed to treat, diagnose or prevent the onset of COVID-19.

PREP Act and PAHPRA

Specifically, the Public Readiness and Emergency Preparedness Act (PREP Act), enacted in 2005, authorizes the Secretary of HHS to issue a declaration to provide liability immunity to certain individuals and entities (Covered Persons)1 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),2 including a qualified pandemic or epidemic product, except for claims involving "willful misconduct" as those terms are defined in the PREP Act.

In addition, the Pandemic and All-Hazards Preparedness Reauthorization Act (PAHPRA) was enacted in 2013. Among other things, PAHPRA added sections to the Federal Food, Drug, and Cosmetic Act (FD&C Act) to provide new authorities for the emergency use of approved products in emergencies and products held for emergency use. PAHPRA amended the PREP Act provisions that defined "Covered Countermeasures" and "qualified pandemic and epidemic products,"3 so that products made available under these new FD&C Act authorities could be covered under PREP Act declarations. PAHPRA also extended the definition of qualified pandemic and epidemic products to include products or technologies intended to enhance the use or effect of a drug, biological product or device used against the pandemic or epidemic or against adverse events from these products.

A PREP Act declaration applies to those countermeasures to address diseases, threats and conditions determined by the HHS Secretary to constitute a present, or credible risk of a future, public health emergency to entities and individuals involved in the development, manufacture, testing, distribution, administration and use of such countermeasures. A PREP Act declaration is specifically for the purpose of providing immunity from liability and is different from, and not dependent on, other emergency declarations.

A declaration lasts until the HHS Secretary declares that the public health emergency no longer exists or upon the expiration of the 90-day period beginning on the date that the HHS Secretary declared a public health emergency exists, whichever occurs first. The HHS Secretary may extend the public health emergency declaration for subsequent 90-day periods for as long as the public health emergency continues to exist and may terminate the declaration whenever he or she determines that the emergency has ceased to exist.

COVID-19 Pandemic

On March 17, 2020, HHS Secretary Alex Azar published a declaration that a public health emergency exists under the PREP Act in connection with COVID-19, effective Feb. 4, 2020. This triggered the relevant provisions of the PREP Act. In addition, on April 15, 2020, the HHS published an amendment to the declaration that extended liability immunity for activities related to medical countermeasures against COVID-19 to covered countermeasures authorized under the Coronavirus Aid, Relief, and Economic Security Act (CARES Act). This includes any antiviral, any other drug, biological product, diagnostic or other medical device, any respiratory protective 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.

The CARES Act also created a new category of covered countermeasures eligible for liability immunity under the PREP Act, namely, respiratory protective devices approved by the National Institute for Occupational Safety and Health (NIOSH) under 42 C.F.R. Part 84, or any successor regulations, that the HHS Secretary determines to be a priority for use during a public health emergency. According to the April declaration, liability immunity for any respiratory protective device approved by NIOSH under 42 CFR Part 84, or any successor regulations extends through Oct. 1, 2024.

Liability immunity for all other covered countermeasures began on Feb. 4, 2020, and extends through Oct. 1, 2024. Liability immunity for all Covered Countermeasures administered and used in accordance with the public health and medical response of the "Authority Having Jurisdiction"4 begins with an emergency declaration and lasts through 1) the final day that the emergency declaration is in effect, or 2) Oct. 1, 2024, whichever occurs first.

Conclusion

Drug and medical device businesses, as well as healthcare providers, retail pharmacies and other stakeholders should be aware of the liability protections currently available. Holland & Knight's Healthcare & Life Sciences attorneys have extensive experience in the manufacturing, distribution and importation of drugs, PPE and diagnostic tests, and are available to assist in answering any questions.

DISCLAIMER: Please note that the situation surrounding COVID-19 is evolving and that the subject matter discussed in these publications may change on a daily basis. Please contact your responsible Holland & Knight lawyer or the authors of this alert for timely advice.

Notes

1 "Covered Persons" may include:

  • manufacturers of countermeasures (including contractors and subcontractors, or suppliers)
  • distributors of countermeasures (including repackagers)
  • qualified persons (such as persons who prescribe, administer or dispense countermeasures such as healthcare and other providers or other categories of persons named in a declaration, or volunteers)

A "qualified person" includes:

  • 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, or
  • a person within a category identified as "qualified" in a declaration, such as volunteers.

2 A "Covered Countermeasure" may be:

  • an unapproved drug, biological product or medical device used under an Emergency Use Authorization (EUA) issued by the U.S. Food and Drug Administration (FDA)
  • an approved drug, biological product or medical device used pursuant to federal law in conditions that are consistent with its approval such as those authorized for use or that is authorized for investigational use, or
  • an unapproved drug, biological product or device, or an approved drug, biological product or device intended for an unapproved use, that is intended for emergency use and shipped and held by a government agency or someone working on that agency's behalf for use only when that use is authorized

3 A "qualified pandemic or epidemic product" includes a drug, biological product or device that is:

  • manufactured, used, designed, developed, modified, licensed or procured to diagnose, mitigate, prevent, treat or cure a pandemic or epidemic, or limit the harm such a 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 such a drug, biological product or device, or
  • intended to enhance the use or effect of these drugs, biological products or devices and
    • approved, licensed or cleared by FDA
    • authorized for emergency use by FDA
    • permitted to be used pursuant to federal law in conditions inconsistent with its approval, clearance or licensing, or
    • exempted by FDA for use as an investigational drug or device under research for possible use to diagnose, mitigate, prevent, treat, cure or limit harm of a pandemic or epidemic or life-threatening condition caused by such a drug or device

4 Authority Having Jurisdiction means the public agency or its delegate that has legal responsibility and authority for responding to an incident, based on political or geographical or functional

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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