COVID-19 Countermeasures: Liability Immunity Under The PREP Act

On March 17, 2020, the U.S. Department of Health and Human Services (“HHS”) published an administrative Declaration providing broad legal immunity for manufacturers, suppliers, and administrators of certain countermeasures used against COVID-19¹. Negligence cases regarding covered countermeasures will be barred, limiting an injured party’s possible redress to the Countermeasures Injury Compensation Program (“CICP”).

The authority to issue such declaration arises out of the Public Readiness and Emergency Preparedness Act (the “PREP Act”).² Congress enacted the PREP Act in 2005 as a response to fears about an avian influenza (H5N1) pandemic.³ Through the issuance of such PREP Act declaration, the Secretary makes a determination that a disease, condition, or other threat to health constitutes a public health emergency and specifies, among others, the category of diseases, health conditions, or threats to health for which the Secretary recommends the administration or use of the covered countermeasure, and the period during which the liability protections are in effect.⁴

The PREP Act defines “covered countermeasure” by outlining three categories.⁵ The first consists of “qualified pandemic or epidemic products” and includes products (drugs, biological products, and devices) manufactured, used, designed, developed, modified, licensed, or procured to diagnose, mitigate, prevent, treat, or cure a pandemic or epidemic or to limit the harm such pandemic or epidemic might otherwise cause.⁶ The second category describes “security countermeasures,” and the final category consists of products subject to emergency use authorizations.⁷ The PREP Act’s liability protections are extremely broad, essentially covering most manufacture, testing, development, distribution, dispensing, administration, or use of designated covered countermeasures absent willful misconduct.

The PREP Act authorizes the Secretary to establish a program to provide compensation to individuals who have suffered serious physical injuries or death as the direct result of the administration or use of a covered countermeasure, called the Countermeasures Injury Compensation Program (“CICP”).⁸ Eligible requesters include injured countermeasure recipients, survivors of deceased injured countermeasure recipients who died as a direct result of the administration or use of a covered countermeasure, and executors or administrators on behalf of the estates of deceased injured countermeasure recipients (regardless of their cause of death).⁹ Requesters will need to prove causation pursuant to CICP’s standard: proof that is based on “compelling, reliable, valid, medical, and scientific evidence.”¹⁰ A temporal association between receipt of the countermeasure and onset of the injury is insufficient.

Requesters who successfully demonstrate causation can recover reimbursement for reasonable and necessary medical services and items to diagnose or treat a covered injury or its health complications; lost wages; and death benefit for certain survivors.¹¹ Benefits under CICP will only be paid after the requester has in good faith attempted to obtain available coverage from all third-party payers with an obligation to pay for or provide such benefits, and the requester must provide the information of such payers.¹² If a request is denied, the requester can motion the Secretary of HHS to review the determination, but there is a broad statutory prohibition against any further review.¹³

It is too early to predict the effectiveness of CICP as a route toward remedy for parties injured by covered countermeasures of COVID-19, but compared to traditional tort procedure, it is seemingly unfriendly to requesters. The lack of judicial oversight is cause for concern, with no further appeals available beyond internal review. While traditional tort procedure allows an injured party his day in court, decisions under the CICP are made on an administrative basis. The process for attorneys evaluating a potential case will be to determine the presence of a covered countermeasure and whether the individual or entity that administered it is shielded from tort liability under the Declaration, and to meet the Declaration’s standard for showing causation.

There is a clear need for the development and distribution of life-saving measures to combat the COVID-19 pandemic, and the Declaration helps encourage such innovation. In the pursuit of this goal, is important to consider potential risks and employ reasonable care in the production of such countermeasures.