America’s response to the COVID-19 pandemic will require widespread coordination between the public and private sectors. There is a pressing need for more testing kits and test sites, new treatment and isolation facilities, additional ventilators, new drugs, and a further supply of personal protective gear. Public officials are already asking the private sector to assist with manufacturing, administering and distributing vital medical products. Companies and medical professionals are looking to do their part to stop the spread of COVID-19 and assist those affected by it. But there are real concerns about the potential liability that could arise, particularly where governments solicit voluntary assistance and donations, and where companies agree to venture outside their core areas of expertise to address the crisis. In these circumstances, one important consideration is whether the Public Readiness and Emergency Preparedness Act (the PREP Act) provides immunity for the activities in question.
The PREP Act
The PREP Act (42 U.S.C. § 247d-6d) was designed to address circumstances like those we are currently facing. It provides broad immunity to those who manufacture, distribute, administer, use, or coordinate the provision of certain drugs and medical devices that diagnose, mitigate, prevent, treat or cure a pandemic disease if the Secretary of Health & Human Services (HHS) has declared a public health emergency. Secretary Azar determined on January 31, 2020, that COVID-19 constituted a public health emergency.1 He issued the requisite declaration on March 10, 2020, and it was published in the Federal Register on March 17, 2020, though it states that it is effective as of February 4, 2020.2 The PREP Act thus provides immunity for certain activities relating to combating COVID-19.
Scope of Immunity
The scope of the immunity provided in the PREP Act is set forth in Section 247d-6d(a)(1). That section specifies that if a relevant declaration from the Secretary has been issued, a “covered person” (defined below) “shall be immune 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” (defined below).3 Secretary Azar’s PREP Act Declaration for the COVID-19 Pandemic (the Declaration) explains that liability claims are precluded if they allege an injury caused by a countermeasure, or if the claims are due to the manufacture, delivery, distribution, dispensing, or management and operation of countermeasure programs at distribution and dispensing sites.4
Immunity under the PREP Act is broad but not unlimited. Immunity does not extend to willful misconduct.5 In addition, the Declaration explains that immunity would extend to injury claims brought by the recipients of countermeasures who allege, for example, inadequate security or crowd control at a facility where countermeasures are being administered, distributed or dispensed.6 But immunity would not extend to liability arising from an injury “not directly related to the countermeasure activities.”7 In each case, whether immunity is applicable will depend on the particular facts and circumstances.8
The PREP Act defines a covered countermeasure9 to include “qualified pandemic or epidemic product[s]”; security countermeasures;10 and drugs,11 biologics12 or devices13 that are cleared by the Food and Drug Administration (FDA) or authorized for emergency use.14 It was also amended just last week to cover certain protective masks.
“Qualified pandemic products” are drugs, biologics or devices that satisfy two conditions: (1) they address a pandemic disease in one of a number of specified ways; and (2) the FDA has approved or cleared the drug, biologic, or device or authorized it for emergency use.
Condition 1: A Product Used in a Specified Manner With Respect to the Pandemic
A qualified pandemic product must fall into one of the following categories:
- A product 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;
- A product 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 in the above bullet; or
- A product or technology intended to enhance the use or effect of a drug, biological product or device.15
Condition 2: FDA Approval or Clearance, Research, or Emergency Use Authorization
If Condition 1 is met, the product must fall also into one of these categories:
- A product “approved or cleared” under chapter V of the Federal Food, Drug, and Cosmetic Act (FDCA) or licensed under 42 U.S.C. § 262;
- The object of research for possible use described above under Condition 1 and the subject of an exemption under section 505(i) or 520(g) of the FDCA; or
- Authorized for emergency use in accordance with section 564, 564A or 564B of the FDCA.16
The FDA may provide an emergency use authorization (EUA) for a product that is not approved, licensed or cleared if there is a public health emergency.17 As of March 27, 2020, the FDA has issued EUAs for personal protective equipment, ventilators and in vitro diagnostics related to COVID-19.18 The FDA also recently issued guidance outlining its enforcement policy with respect to face masks and modified ventilators.19
The Secretary’s Declaration confirms the general statutory definition of covered countermeasures and notes that the definition also includes all components and constituent materials of any drug or device used to treat, diagnose, cure, prevent or mitigate COVID-19.20
Finally, the PREP Act was amended on March 18, 2020, to expand the definition of covered countermeasures to include “personal respiratory protective device(s)”—i.e., masks—that are (a) approved by the National Institute for Occupational Safety and Health under 42 C.F.R. pt. 84 (or successor regulations); (b) subject to an emergency use authorization; and (c) used between January 27, 2020, and October 1, 2024, in response to COVID-19.21
Immunity under the PREP Act extends to a “covered person.” The Act defines covered persons as including manufacturers, distributors, “program planners,” licensed health professionals, or “qualified persons” authorized to prescribe, administer or dispense covered countermeasures.22
The PREP Act further defines “manufacturers” as including, among other things, suppliers or licensers of any product, intellectual property, service, research tool or component used in the design, development, clinical testing, investigation or manufacturing of a covered countermeasure.23
It defines a “program planner” as any person, including state or local governments (and their employees), who supervised or administered a program with respect to the administration, dispensing, provision, or use of a qualified pandemic or epidemic product.24 The definition of a “program planner” includes a person who “provides a facility to administer or use a covered countermeasure in accordance with” a declaration from the Secretary.25
“Qualified persons” are defined as licensed healthcare professionals or other individuals who are authorized to prescribe, administer or dispense countermeasures under the relevant state law(s).26 The Secretary of HHS may designate qualified persons as well,27 and he has done so in this case. The Declaration adds any person authorized by specified authorities to administer, deliver, distribute, or prescribe the covered countermeasures and their employees, contractors, agents and volunteers.28
Because Secretary Azar has issued a PREP Act Declaration, the immunity provided by the PREP Act can apply to the private sector efforts to help combat COVID-19. But companies called on to provide assistance will need to evaluate the following questions:
- Does the activity you are being asked to conduct involve a covered countermeasure and a use that falls within the PREP Act?
- Are you or your employees covered persons?
Determining the answers to these questions will require companies to review both the text of the PREP Act and the Secretary’s Declaration.
Similarly, more specific questions will arise as companies determine how they can meet current needs, including:
- Is a device that has not been cleared or approved under the FDCA, but which is the subject of non-enforcement policy guidance, eligible for PREP Act immunity?
- Is a product that is shipped or used before the issuance of a relevant EUA eligible for immunity during the period prior to issuance of the EUA?
Companies should not presume that they are immune and should carefully consider how the PREP Act applies to their circumstances and whether the government can provide any additional assurances of protection.Companies should also consider whether to include disclaimer and indemnification provisions in any new agreements relating to the provision of potentially covered products, services or facilities.