Alerts and Updates

Department of Health & Human Services Clarifies Broad Scope of Immunity Protection Under the PREP Act

April 24, 2020

While the declaration defined “Covered Persons” and “Covered Countermeasures,” there were numerous requests for more clarity on the scope of the immunity.

The Department of Health & Human Services (HHS) has provided an omnibus advisory opinion in response to various requests for clarification of the scope of tort immunity provided by the declaration under the Public Readiness and Emergency Preparedness Act (PREP Act). The PREP Act declaration provides immunity from tort liability for various persons, products and activities in response to COVID-19, as explained in our March 17, 2020, Alert. The Coronavirus Aid, Relief and Economic Security Act (CARES Act) subsequently expanded these protections.

While the declaration defined “Covered Persons” and “Covered Countermeasures,” there were numerous requests for more clarity on the scope of the immunity, whether a medical product is a “covered countermeasure,” what the requirements are for a “covered person” and the standard for use and administration of these covered countermeasures by covered persons. In response to these inquiries, HHS issued the advisory opinion with the following clarifications as outlined below. Of note, the advisory opinion is not legally binding and does not have the force or effect of law; it is meant to offer guidance by setting forth the current views of the Office of the General Counsel.

What Is a “Covered Countermeasure”?

Under the PREP Act declaration, “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 any device used in the administration of any such product, and all components and constituent materials of these products. Additionally, the CARES Act amended the PREP Act to include certain respiratory devices. Overall, some sort of federal authorization for use is required.

Significantly, the advisory opinion provides an even broader extension of the PREP Act, noting that an entity or individual who complies with all other requirements of the PREP Act and the conditions of the declaration “will not lose PREP Act immunity—even if the medical product at issue is not a covered countermeasure, so long as that entity or “individual reasonably could have believed that the product was a covered countermeasure.” The advisory opinion provides the following hypothetical example:

FDA has issued [Emergency Use Acts] for certain COVID-19 tests and PPE [Personal Protective Equipment]. A covered person purchases 500,000 tests or respirators that appear to be authorized under an EUA. The covered person has taken reasonable steps—  under the current, emergent circumstance— to substantiate the authenticity of the products. But it turns out that some or all of the products are counterfeit. Under those circumstances, [the Office of General Counsel] believe[s] that the person would be immune against a claim arising out of the use of a counterfeit test or respirator.

What Is a “Covered Person”?

According to the  PREP Act declaration, “covered persons” are those who manufacture, test, develop, distribute, administer or use “covered countermeasures”―and include “qualified persons.” The advisory opinion highlights the definition of “qualified persons” under the PREP Act as “a licensed health professional or other individual who is authorized to prescribe, administer, or dispense such countermeasures,”

The advisory opinion provides the following hypothetical example of a “qualified person”:

In response to the COVID-19 emergency, the HHS Office of the Assistant Secretary for Health (OASH) issued guidance for licensed pharmacists to order and administer COVID-19 tests, including serology tests, that the FDA has authorized. Such tests are covered countermeasures under the declaration. [Therefore,] such pharmacists are covered persons. More specifically, they are qualified persons, as they are acting in accordance with guidance from HHS—an Authority Having Jurisdiction to respond—following a declared emergency by the Secretary. The pharmacists are covered as qualified persons (and hence as covered persons) even if they may not be licensed or authorized by the State to prescribe the tests … because they fit within the alternative definition of “qualified persons” as provided … in the declaration.

Additionally, the advisory opinion expands on the definition of “covered persons” to add a “reasonably-could-have-believed” standard. A person who complies with all other requirements of the PREP Act and the conditions of the declaration “will not lose PREP Act immunity—even if the person at issue is not a covered person” so long as that person or entity “reasonably could have believed” that they were a covered person. The advisory opinion provides the following hypothetical example:

[A] pharmacy allows its licensed pharmacists to order FDA-authorized, self-swab COVID-19 tests pursuant to the OASH guidance. Notwithstanding the pharmacy’s reasonable-compliance measures to ensure current licensure, it turns out that one of the pharmacists had inadvertently allowed his license to expire. Under those circumstances, [the Office of General Counsel believes that] the pharmacy would still be immune against a lawsuit relating to the COVID-19 test prescribed by the pharmacist.

Broad Scope of Immunity

Under the PREP Act, immunity applies to claims for loss sounding in tort or contract, as well as claims for loss relating to compliance with local, state or federal laws, regulations, or other legal requirements. Further, immunity applies when a covered person engages in activities related to an agreement or arrangement with the federal government, or when a covered person acts according to an Authority Having Jurisdiction to respond to a declared emergency.

Per the advisory opinion, these two conditions are to be interpreted broadly to include “(1) any arrangement with the federal government, or (2) any activity that is part of an authorized emergency response at the federal, regional, state, or local level.” These “activities” can be authorized through requests for assistance, agreements, or guidance in response to COVID-19 and are to be covered under the immunity granted by the PREP Act even if the state or local authorities have not declared states of emergency. Therefore, noncontractual arrangements with regional, state or local authorities may qualify for immunity.

Immunity Is Not Absolute

The advisory opinion reiterates that immunity under the PREP Act is not absolute. It states that there is no immunity against federal enforcement actions brought by the federal government, whether civil, criminal or administrative. Additionally, there is no immunity against suit and liability for claims for equitable relief under federal law. Rather, immunity (exempting preemption) is limited to claims for personal injury or damage to property. As noted above, while the PREP Act provides immunity from tort liability to certain individuals and entities for claims of loss caused, arising out of, relating to or resulting from the manufacture, distribution, administration or use of medical countermeasures in response to COVID-19, the immunity does not extend to death or serious physical injury caused by willful misconduct. Under the PREP Act, “willful misconduct” is defined as misconduct that is greater than any form of recklessness or negligence, it is 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.

Conclusion

As previously mentioned, while the advisory opinion provides helpful guidance of the current views of the Office of General Counsel, the information contained therein is not legally binding and does not have the force or effect of law. Manufacturers should still be cautious and continue to employ best practices for record keeping and recording justifications for decision making surrounding various drugs or products that may be used as countermeasures to combat COVID-19 and the reasonableness of those decisions. In fact, the advisory opinion stresses this point in that it is the HHS’s view that covered persons “should take, and document, reasonable precautions under the current emergent circumstances to facilitate the safe use or administration of covered countermeasures and to make those documents publicly and easily available.”

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