PREP Act Declaration Amended to Clarify Coverage of Products Used to "Limit the Harm" From COVID-19

To help our clients navigate the coronavirus (COVID-19) crisis, Arnold & Porter has established a Coronavirus Task Force covering a wide range of issues and challenges.Subscribe to our "Coronavirus (COVID-19)" mailing list to receive our latest client Advisories and register for upcoming webinars.

*          *          *          *          *

On June 4, 2020, the Secretary for the Department of Health and Human Services (HHS) issued a Notice of Amendment (June Amendment) to the March 10, 2020 Public Readiness and Emergency Preparedness Act (PREP Act) Declaration for medical countermeasures against COVID-19 (COVID-19 Declaration).¹ The COVID-19 Declaration provided liability immunity to "Covered Persons" who engage in "Recommended Activities" related to medical "Covered Countermeasures" against COVID-19.² The COVID-19 Declaration was initially amended on April 10, 2020. The June Amendment expanded the COVID-19 Declaration to include qualified pandemic and epidemic products that limit the harm COVID-19 might otherwise cause. This Advisory updates our First Advisory on the PREP Act and the COVID-19 Declaration and our Second Advisory regarding the April 14, 2020 Amendment and HHS Advisory Opinion on PREP Act immunity, to provide guidance regarding the June Amendment.

Liability protection under the PREP Act is limited to certain claims caused by, arising out of, relating to, or resulting from the manufacturer, distribution, administration or the use of a "Covered Countermeasure."³ Section VI of the COVID-19 Declaration (as first amended in April 2020) further defined Covered Countermeasure as follows:

Covered Countermeasures are any antiviral, any other drug, any biologic, any diagnostic, any other device, any respiratory protective 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.

Covered Countermeasures must be ''qualified pandemic or epidemic products,'' or ''security countermeasures,'' or drugs, biological products, 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 Act, or any respiratory protective device approved by NIOSH under 42 CFR part 84, or any successor regulations.⁴

The June Amendment explains that the language in section VI of the COVID-19 Declaration omitted language from the statutory definition that qualified pandemic and epidemic products may also include products that "limit the harm such a pandemic or epidemic might otherwise cause." This language is included in the description of qualified pandemic and epidemic product in section VI of the preamble to the COVID-19 Declaration,⁵ but not in the definition of Covered Countermeasure in section VI itself. Therefore, the June Amendment amends the beginning of section VI of the COVID-19 Declaration as follows:

Covered Countermeasures are

(1) any antiviral, any other drug, any biologic, any diagnostic, any other device, any respiratory protective device, or any vaccine, used

a. to treat, diagnose, cure, prevent, mitigate or limit the harm from COVID-19, or the transmission of SARS-CoV-2 or a virus mutating therefrom, or

b. to limit the harm that COVID-19, or the transmission of SARS-CoV-2 or a virus mutating therefrom, might otherwise cause; or

(2) any device used in the administration of any such product, and all components and constituent materials of any such product.⁶

According to the HHS, "qualified pandemic and epidemic products that limit the harm that COVID-19 might otherwise cause are those that would not have been manufactured, administered, used, designed, developed, modified, licensed, or procured but for the COVID-19 pandemic, even when the products are manufactured, administered, used, designed, developed, modified, licensed, or procured to diagnose, mitigate, prevent, treat, or cure health threats or conditions other than COVID-19."⁷ HHS provided the following example to further explain this revision:

The COVID-19 pandemic has resulted in shortages of certain drugs and devices that the FDA has authorized. These drugs and devices may be used for COVID-19 and other health conditions. Those shortages are 'harm[s] [COVID-19] might otherwise cause.' Filling those shortages caused by COVID-19 reduces the strain on the American healthcare system by mitigating the escalation of adverse health conditions from COVID-19 and non-COVID-19 causes. And mitigating that escalation conserves limited healthcare resources—from personal protective equipment to healthcare providers—which are essential in the whole-of-Nation response to the COVID-19 pandemic.⁸

Whether the courts will agree with HHS's interpretation remains to be seen. While this provision would certainly cover products that provide SARS-CoV-2 infection prophylaxis and products that prevent, mitigate, or treat comorbidities of COVID-19, whether it would provide immunity for harm caused by products more tangential to COVID-19 or the transmission of SARS-CoV-2, such as replacing a treatment or testing resource utilized for non-COVID-19 patients that has been depleted due to the COVID-19 pandemic, has not been tested in the courts.

Finally, although HHS did not specifically note whether or not the June Amendment would apply retroactively, HHS's explanation in the June Amendment that "[t]he Secretary intended section VI of the March 10, 2020 Declaration to include all qualified pandemic and epidemic products defined under the PREP Act and described in the preamble to the Declaration,"⁹ combined with the fact that the new language added to section VI was included in the preamble, indicates that it is likely the amendment is intended to apply retroactively to the Declaration effective date.

© Arnold & Porter Kaye Scholer LLP 2020 All Rights Reserved. This Advisory is intended to be a general summary of the law and does not constitute legal advice. You should consult with counsel to determine applicable legal requirements in a specific fact situation.