Key Points

  • HHS Declaration Provides Immunity: During a public health emergency, the Secretary of HHS can issue a Declaration providing broad tort immunity for “Covered Persons” engaging in “Recommended Activities” with “Covered Countermeasures.”
  • Covered Persons: The entities covered include, among others, manufacturers and distributors.
  • Recommended Activities: Under the Declaration, the activities covered include “the manufacture, testing, development, distribution, administration, and use of the Covered Countermeasures.”
  • Covered Countermeasures: This will include diagnostics, treatment, vaccines and other prevention modalities, masks and other medical equipment that are FDA-approved or cleared, licensed under the PHS Act, or authorized for emergency use by the FDA. Note that NIOSH-approved masks are now included.
  • Willful Misconduct: This is not protected by the Act.
  • FDA Loosens EUA Requirements: Given the shortage of materials, especially masks, the FDA has indicated that it wants to help applicants through their EUA process, even if they are new to medical device manufacturing. In other words, if you want to make a mask and want immunity, you must obtain an EUA from the FDA.
  • Compensation for Injured Parties: Under the Declaration, certain individuals that are seriously injured or die “as a direct result of the administration or use of a Covered Countermeasure” may be able to obtain benefits through the government’s Countermeasures Injury Compensation Program.
  • Timeline: The immunity currently lasts from February 4th, 2020 until October 1st, 2024.

The PREP Act & HHS Declaration

Given the rapid spread of SARS-CoV-2, the novel coronavirus responsible for the coronavirus disease, COVID-19, a broad range of medical countermeasures will be needed to control the pandemic. The federal government has a number of tools it can deploy during a public health emergency, including providing immunity from suit under federal and state law for select drugs and devices. This is currently done through a Declaration by the Secretary of the Department of Health and Human Services (HHS) pursuant to the 2005 Public Readiness and Emergency Preparedness, or PREP, Act. 42 U.S.C. § 247d-6d. A declaration was published in the Federal Register at 85 FR 15198 on March 17th, 2020, but has been in effect retroactively since February 4th, 2020 and currently lasts until October 1st, 2024.

As the Declaration explains, the goal of providing the immunity is to incentivize drug and device manufacturers, distributers, etc. to increase production or develop new tools for treatment and prevention. It should also incentive the involvement of entities that are not traditionally involved in drug and device manufacturing.

The Scope of Immunity—Covered Persons, Recommended Activities, & Covered Countermeasures

Under the Declaration, certain drugs and devices that are intended to be countermeasures against the COVID-19 virus are immune from suit and liability under federal and state law, including state tort law, when the claim relates to or results from the use or administration of these defined and approved countermeasures. While the law does provide immunity from suit, entities are not immune from enforcement actions by the FDA or other federal agencies. 42 U.S.C. § 247d-6d(f). The Declaration essentially applies to “Covered Persons” engaging in “Recommended Activities” with “Covered Countermeasures.”

A Covered Person includes manufacturers, distributors, program planners, and qualified persons, and their officials, agents, and employees, and the United States. Manufacturers include contractors, subcontractors, and suppliers of any product or component used in the development or manufacturing of a Covered Countermeasure.

Recommended Activities, according to the Declaration, include “the manufacture, testing, development, distribution, administration, and use of the Covered Countermeasures.”

The Declaration states that eligible 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 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 product.” The Families First Coronavirus Response Act broadened the scope of the immunity here also to include masks that are approved by the CDC’s NIOSH—the National Institute for Occupational Safety and Health. Families First Coronavirus Response Act (PL 116-127).

However, not all of these eligible countermeasures are Covered Countermeasures under the Act and subject to immunity.  To obtain immunity, a product also must meet the definition of a “qualified pandemic or epidemic product,” a “security countermeasure,” or a drug, biological product, or devices authorized for investigational or emergency use, as those terms are defined in the PREP Act, the FD&C Act, and the Public Health Service (PHS) Act. Qualified pandemic or epidemic products and security countermeasures must also be approved or cleared by the FDA, licensed under the PHS Act, or authorized for emergency use by the FDA. In other words, the product must both: (1) be an eligible type of product; and (2) obtain the appropriate type of pre-approval from the government.

The FDA Wants to Work With You

Importantly, the FDA just posted a guidance on face masks encouraging “manufacturers who have not previously been engaged in medical device manufacturing” to contact the FDA and work collaboratively with them through their EUA process. Interested parties should email the FDA at CDRH-COVID19-SurgicalMasks@fda.hhs.gov and describe their proposal.

Consider these additional FDA resources:

Compensation for Injured Parties

Even though an injured party might not be able to file suit, they may be able to recover under the Countermeasures Injury Compensation Program (CICP). 42 U.S.C. § 247d-6e. According to the Declaration, individuals or their survivors/estate that are seriously injured or die “as a direct result of the administration or use of a Covered Countermeasure” may be able to obtain benefits from the program. According to a Fact Sheet on the program, “the CICP is the payer of last resort. This means that it only covers expenses or provides benefits that other third-party payers, such as health insurance, the Department of Veterans Affairs, or Workers’ Compensation programs, don’t have an obligation to pay.”

The Declaration Does Not Cover Willful Misconduct

Finally, the law does NOT protect willful misconduct from liability. 42 U.S.C. § 247d-6d(c)­­-(d). This includes intentionally or knowingly engaging in wrongful conduct, but the statute clarifies that willful misconduct does not include negligent or even reckless conduct. Suits are brought under a federal cause of action for death or serious physical injury caused by willful misconduct, and courts are to use the substantive law of the state where the alleged conduct occurred.

Note: BCLP has assembled a COVID-19 Premises, Products, Environmental Safety and Liability taskforce to assist clients with products liability issues across various jurisdictions. You can contact the taskforce at: COVID-19PremisesProds&Env@bclplaw.com. You can also view other thought leadership, guidance, and helpful information on our dedicated COVID-19 / Coronavirus resources page at https://www.bclplaw.com/en-GB/topics/covid-19/coronavirus-covid-19-resources.html.