The Public Readiness and Emergency Preparedness Act (PREP Act) (codified at 42 U.S.C. § 247d-6d)

Immunity Declaration. On March 10, 2020, the Health and Human Services Department issued a Declaration under the Public Readiness and Emergency Preparedness Act (PREP Act), effective February 4, 2020, that provides liability immunity to certain qualified individuals and entities (“covered persons”) against any claim of “loss” (except for claims involving “willful misconduct”) caused by, arising out of, relating to, or resulting from the manufacture, distribution, administration, or use of a “covered countermeasure” against COVID-19.

Who Is A Covered Person? The Declaration affords liability immunity to the United States and manufacturers, distributors, program planners, qualified persons, and their officials, agents, and employees, as those terms are defined in the PREP Act.[1]

As defined in the PREP Act, the term “manufacturer” includes: 
 

1. a contractor or subcontractor of a manufacturer;
2. a supplier or licenser of any product, intellectual property, service, research tool, or component or other article used in the design, development, clinical testing, investigation, or manufacturing of a covered countermeasure; and
3. any or all of the parents, subsidiaries, affiliates, successors, and assigns of a manufacturer.

The term “distributor” means a person or entity engaged in the distribution of drugs, biologics, or devices, including but not limited to manufacturers, repackers, common carriers, contract carriers, air carriers, own-label distributors, private-label distributors, jobbers, brokers, warehouses and wholesale drug warehouses, independent wholesale drug traders, and retail pharmacies.

The terms manufacturer and distributor are not limited to entities that are domiciled in the United States and, therefore, presumably can apply to manufacturers and distributors domiciled outside of the United States.

What Is A Covered Countermeasure?

Under the March 10, 2020 Declaration, a covered countermeasure is any antiviral, drug, biologic (i.e., produced from living organisms or containing components of living organisms), diagnostic, device, or vaccine used to treat, diagnose, cure, prevent, or mitigate COVID-19. A covered countermeasure also includes any device used in the administration of any such product and all components and constituent materials of any such product.

As defined in the PREP Act, the term “covered countermeasure” means: 
 

1. a qualified pandemic or epidemic product;
2. a security countermeasure;
3. a drug, biological product, or device that is authorized for emergency use in accordance with section 564, 564A, or 564B of the Federal Food, Drug, and Cosmetic Act; or
4. a respiratory protective device that is approved by the National Institute for Occupational Safety and Health, and that the Secretary determines to be a priority for use during a public health emergency.

A “qualified pandemic or epidemic product” means a drug or device, as those terms are defined in the Federal Food, Drug, and Cosmetic Act,[2] that is:
 

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 or life-threatening disease or condition caused by a qualified pandemic or epidemic product; or
3. a product or technology intended to enhance the use or effect of a qualified pandemic or epidemic product.

A “security countermeasure” is a drug or device, as those terms are defined in the Federal Food, Drug, and Cosmetic Act, that:
 

1. the Secretary of HHS determines to be a priority to diagnose, mitigate, prevent, or treat harm from any biological, chemical, radiological, or nuclear agent identified as a material threat by the Secretary of Homeland Security, or to diagnose, mitigate, prevent, or treat harm from a condition that may result in adverse health consequences or death and may be caused by administering a drug, biological product, or device against such an agent; and
2. the Secretary of HHS determines to be a necessary countermeasure to protect public health.

A qualified pandemic or epidemic product or a security countermeasure must also be: (1) approved, licensed or cleared by FDA; (2) in the process of being researched under certain investigational provisions (i.e., IND, IDE) to treat COVID-19; or (3) authorized for emergency use with respect to COVID-19 under an Emergency Use Authorization (EUA).

In a May 19, 2020 Advisory Opinion issued by the General Counsel of the Health and Human Services Department, the Department indicated it did not believe Congress intended to impose a strict liability standard on “covered persons” for determining whether a product is a “covered countermeasure.” Rather, per the May 19, 2020 Advisory Opinion, “a person or entity that otherwise meets the requirements for PREP Act immunity will not lose that immunity—even if the product is not a covered countermeasure—if that person or entity reasonably could have believed that the product was a covered countermeasure.”

When Does Liability Immunity Apply? PREP Act immunity covers any claims for “loss” (except for claims involving “willful misconduct”) and 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 May 19, 2020 Advisory Opinion issued by the General Counsel of the Health and Human Services Department, the Department interprets these two conditions 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.

PREP Act immunity is not absolute. The term “loss” is limited to claims of personal injury and property damage. Further, the PREP Act does not provide immunity against federal enforcement actions brought by the federal government—whether civil, criminal, or administrative. In addition, for liability immunity to apply under the Declaration, the alleged loss must be caused by or otherwise arise out of, relate to, or result from the administration or use of covered countermeasures against COVID-19. So, for example, a liability claim for a slip-and-fall injury at a countermeasure distribution program or site that is not directly related to the countermeasure activities would probably not be precluded. 

How Long Does Liability Immunity Extend? Currently, liability immunity under the Declaration extends through October 1, 2024—over 4½ years—and maybe even longer if any given product is “obtained for the Strategic National Stockpile.”

Note that Senate Republicans have recently proposed the Safe to Work Bill, which would impose additional and significant hurdles for workers, customers, and patients who want to sue businesses and health care providers over coronavirus-related injuries. These protections might extend beyond the applicability of the PREP Act. The Safe to Work Bill is currently under discussion, but it is not anticipated to pass the House in its current form.

This publication is intended for general information purposes only and does not and is not intended to constitute legal advice. The reader should consult with legal counsel to determine how laws or decisions discussed herein apply to the reader's specific circumstances.