In our 240+ year history as a country, we have endured numerous tribulations that have in some way, threatened our way of life. The COVID-19 outbreak has forced us to engage in new behaviors, including social distancing and the consistent use of face masks outside of our homes. Moreover, several companies are working tirelessly to develop potential treatments for a virus that has infected approximately 1.25 million Americans and killed approximately 75,670.[1] Among other efforts, entities are repurposing equipment and physicians are prescribing medication for “off-label use.” Surgeon General Jerome Adams has even gone so far as to compare the COVID-19 outbreak to national emergencies like Pearl Harbor and the September 11, 2001 attack on the World Trade Center.

Indispensable to facing these challenges are private-sector entities. World War II is an excellent example, during which President Franklin Roosevelt declared, “[p]owerful enemies must be out-fought and out-produced.” Shortly after the attack on Pearl Harbor, many manufacturers were repurposed to manufacture war items such as aircraft, aircraft engines, trucks, and tanks. Though a pandemic is certainly different than a war, several companies have altered their normal courses of business to help contribute towards the collective fight against COVID-19. Today, the businesses supporting efforts to curb COVID-19 include pharmaceutical companies, medical device companies, medical technology companies, and more. Despite their good faith contributions, which include activities such as repurposing equipment and medication for “off-label” use, these companies will almost certainly face litigation related to the products they have manufactured in an effort to combat the crisis we face today. Nonetheless, companies may be insulated from liability pursuant to the Public Readiness and Emergency Preparedness Act (“PREP”), if they meet certain criteria.

PREP, signed into law in 2005, authorizes the Department of Health and Human Services (“HHS”) to issue a declaration that provides immunity from liability for entities and/or individuals involved in the development of “countermeasures” meant to fight a public health emergency. On March 10, 2020, the HHS issued a declaration providing “liability immunity for activities related to medical countermeasures against COVID-19,” absent willful misconduct (“COVID-19 Declaration”). Entities/individuals covered under the COVID-19 Declaration (“Covered Persons”) include those involved in the following activities: manufacturing, testing, development, distribution, administration, prescription and/or use of “Covered Countermeasures.”[2]

“Covered Countermeasures” under the COVID-19 Declaration

Certain products fall under the “Covered Countermeasures” category. Covered Countermeasures include:

  1. Qualified pandemic or epidemic products;
  2. Security countermeasures[3]; or
  3. Drugs/products authorized for emergency use by the Food and Drug Administration (“FDA”).

Qualified Pandemic or Epidemic Products

To qualify as a qualified pandemic or epidemic product, the drug, device, or biological product must be approved or cleared by the FDA, licensed under Section 351 (42 U.S.C. § 262) of the Public Health Services Act (“PHS Act”) as a biological product, or authorized for emergency use by the FDA.

In addition to the one of the foregoing prerequisites, the drug, device, or biological product must be:

  1. 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;
  2. Manufactured, used, designed, developed, modified, licensed, or procured to diagnose, mitigate, prevent, treat, or cure a serious life-threatening disease or condition caused by such a drug, biological product, or device; or
  3. A product or technology intended to enhance the use or effect of such a drug, biological product, or device.

Under the PREP Act, drugs, devices, and biological products are defined as follows:

Drug: articles intended for use in the diagnosis, cure, mitigation, treatment or prevention of disease in man or other animals, and articles (other than food) intended to affect the structure or function of the body of man or other animals.

Biological product: virus, therapeutic serum, toxin, antitoxin, vaccine, blood, blood component or derivative, allergenic or analogous product, arsphenamine or its derivative (or any other trivalent arsenic compound) applicable to the prevention, treatment, or cure of a disease or condition of human beings.

Device: instrument, apparatus, implement, machine, contrivance, implant, in vitro agent, or other similar or related article intended for use in the diagnosis, cure mitigation, treatment or prevention of disease in man or other animals or intended to affect the structure or function of the body of man or other animals and which is not dependent upon being metabolized for the achievement of its primary intended purposes.

The COVID-19 Declaration further specifies what qualifies as a Covered Countermeasure as “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 products.”

A qualified pandemic or epidemic product may also be a Covered Countermeasure if the product is subject to an FDA exemption. The FDA requires products to meet certain criteria prior to interstate shipment and administration of the product. However, the FDA can approve applications for an Investigational New Drug (“IND”) or Investigational Device Exemption (“IDE”) which would allow the use of the unapproved product for purposes of collecting safety and effectiveness data. A commonly discussed investigational product is convalescent plasma, which the FDA is regulating as an unapproved investigational treatment for COVID-19.

Products authorized for emergency use by the FDA – Emergency Use Authorization (“EUA”)[4]

Pursuant to Section 564 of the Federal Food, Drug, and Cosmetic Act (FD&C Act), the FDA can authorize the use of unapproved products and/or unapproved use of products for purposes of mitigating diseases or conditions when there are no adequate alternatives.

As a result of the COVID-19 outbreak, the FDA has authorized numerous EUAs. The following products, among others, have been approved for emergency use:

  • In Vitro Diagnostic Products (testing kits)
  • High Complexity Molecular-Based Laboratory Developed Tests
  • Personal Protective Equipment (“PPE”)
  • Devices for decontamination of PPE
  • Ventilators
  • Products modified for use as ventilators
  • Extracorporeal Blood Purification Devices
  • Infusion Pump System
  • Diaphragm Pacing System
  • Chloroquine phosphate and Hydroxchloroquine sulfate supplied from the Strategic National Stockpile

The FDA will consider four criteria in its issuance for emergency use. These criteria include:

  1. SARS-CoV-2 (COVID-19) can cause a serious or life-threatening disease or condition;
  2. The product may be effective in its intended purpose;
  3. The benefits of the product outweigh the potential risks; and
  4. There is no adequate, approved, and available alternative to the emergency use of the product.

Limitations of PREP Act and the COVID-19 Declaration

A company/individual will not be insulated from liability for losses caused by willful misconduct. The PREP Act defines willful misconduct as “an act or failure to act that is taken:

  1. Intentionally to achieve a wrongful purpose;
  2. Knowingly without legal or factual justification; and
  3. 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.”

Furthermore, liability immunity is only available for activities involving Covered Countermeasures that are related to:

  1. “Present or future federal contracts, cooperative agreements, grants, other transactions, interagency agreements, or memoranda of understanding or other federal agreements; or
  2. “Activities authorized in accordance with the public health and medical response of” federal, state, local, and tribal authorities “acting on behalf of those governmental entities.”[5]

Additionally, liability immunity lapses in October 2024. However, the declaration provides an additional 12 months of protection “to allow for the manufacture(s) to arrange for disposition of Covered Countermeasure, including return of the Covered Countermeasures to the manufacturer…” Thus, entities/individuals should take measures now to ensure the timely return and disposition of Covered Countermeasures when they are no longer required.

Department of Health & Human Services Guidance on Coverage under the PREP Act

On April 14, 2020, the HHS issued an advisory opinion concerning the PREP Act and the COVID-19 Declaration that provides guidance on potential application and recommended steps individuals/entities may take to ensure compliance. Though the HHS advisory opinion may not be binding in Court in the event of resulting litigation, it is nonetheless instructive. The HHS states that immunity is broad under the PREP Act and it advises that an individual/entity may qualify for the protections under the Act and Declaration, even if it is not a Covered Person or its product is not a Covered Countermeasure so long as the individual/entity: 1) complies with all other requirements of the PREP Act; and 2) reasonably could have believed that the product was a Covered Countermeasure” or the entity was a Covered Person. The HHS’s advisory opinion is significant in that the PREP Act could provide immunity to entities/individuals that are not covered by the plain language of the PREP Act or the COVID-19 Declaration. In addition, to demonstrate that products are Covered Countermeasures and qualify for immunity under the PREP Act, the HHS advises that entities/individuals “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.”

Conclusion

The essential role of manufacturers and private-sector entities during World War II is irrefutable. COVID-19 presents an unprecedented crisis that requires not only the participation of individuals through measures such as social distancing, but also the participation of entities capable of producing drugs and devices vital to the urgent fight against COVID-19. Well-intentioned entities/individuals contributing to the fight should be protected and not punished for their work. The PREP Act exists to extend such safeguards, and individuals and entities engaged in covered activities should be aware of the parameters of the Act to ensure that their essential and necessary work is protected under the PREP Act.

 

[1] COVID-19 cases and deaths as of April 29, 2020 on COVID-19 Dashboard by the Center for Systems Science and Engineering (CSSE) at Johns Hopkins University (JHU); coronavirus.jhu.edu/map.html.

[2] The Department of Health & Human Services interprets “Covered Person” broadly in its April 14, 2020 Advisory Opinion on the PREP Act and the March 10, 2020 Declaration under the Act.

[3] This article does not discuss Security countermeasures as they are not relevant to COVID-19.

[4] A more comprehensive list of EUA’s can be found at the following links: (1) https://www.fda.gov/media/136832/download and (2) https://www.fda.gov/media/136702/download

[5] The HHS interpreted these conditions broadly stating that they 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. Such activities can be authorized through, among other things, guidance, requests for assistance, agreements, or other arrangements.”