In addition to expanding the definition of covered countermeasures, the CARES Act also limits liability for volunteer healthcare professionals.
As discussed in our March 18 Alert, the Secretary of Health and Human Services has issued a declaration authorizing drugs, devices and biologics used to treat or mitigate COVID-19 as covered countermeasures under the Public Readiness and Emergency Preparedness (PREP) Act. Following Secretary Azar’s declaration of a public health emergency, covered persons may obtain immunity under federal law for all claims arising from manufacturing, distributing or administering covered countermeasures, subject to the conditions laid out at 42 U.S.C. § 247d-6d, the declaration and other applicable regulations.
Subsequent to our previous Alert, President Trump signed into law the Coronavirus Aid, Relief and Economic Security Act (CARES Act), which expanded the covered countermeasure protections offered by the PREP Act.
Most notably, the CARES Act amends the PREP Act to authorize respiratory protective devices as covered countermeasures if they are approved pursuant to 42 CFR Part 84, which governs the occupational respirator approval process by the National Institute for Occupational Safety and Health (NIOSH). If NIOSH approves a respiratory protective device, the device in question must still be subject to an emergency use authorization (EUA) issued by Food & Drug Administration (FDA). The FDA has a current list of EUAs related to COVID-19. While protecting manufacturers of covered countermeasures, the CARES Act also devotes millions of dollars in federal aid to assist manufacturers in the testing, development and manufacturing of countermeasures related to the current pandemic.
In addition to expanding the definition of covered countermeasures, the CARES Act also limits liability for volunteer healthcare professionals—whether or not they have administered a covered countermeasure. Under the CARES Act, qualified healthcare volunteers are not liable for the provision of healthcare services during the present public health emergency with respect to COVID-19. Immunity is subject to certain limitations, including that healthcare professionals act within the scope of their state license or registration, administer services in a volunteer capacity and do not act in bad faith or engage in willful misconduct.
Restrictions on Immunity
Persons seeking to take advantage of the protections offered by the PREP and CARES Acts should keep the following restrictions in mind.
As noted previously, immunity for covered countermeasures remains limited to the scope of authorized distribution under the declaration. Therefore, drugs and devices must relate to (1) present or future federal contracts or other federal agreements or programs, or (2) conduct authorized by certain state and local agencies (such as state or local boards of health). In other words, immunity may only apply where at least some of the drugs or devices manufactured will be distributed to publicly funded hospitals or where federal healthcare programs, such as Medicare or Medicaid, will cover the drugs or devices. Manufacturers who only distribute their products to privately funded hospitals or patients covered by private insurance should be wary that immunity may not extend to such activities.
In addition to these restrictions, manufacturers should also keep in mind that immunity for COVID-19-related covered countermeasures extends until the final day of the emergency period or October 1, 2024, whichever occurs first.
About Duane Morris
Duane Morris has created a COVID-19 Strategy Team to help organizations plan, respond to and address this fast-moving situation. Contact your Duane Morris attorney for more information. Prior Alerts on the topic are available on the team’s webpage.
For More Information
If you have any questions about this Alert, please contact Patrick C. Gallagher, Ph.D., Frederick R. Ball, Justin M. L. Stern, Nathan B. Reeder, any of the attorneys in our Life Sciences and Medical Technologies Industry Group, any members of the COVID-19 Strategy Team or the attorney in the firm with whom you are regularly in contact.
Disclaimer: This Alert has been prepared and published for informational purposes only and is not offered, nor should be construed, as legal advice. For more information, please see the firm's full disclaimer.