HHS Expands PREP Act Liability Immunity

December 08, 2020

With coronavirus (COVID-19) vaccines on the horizon amid the surging pandemic, critical extensions expand the scope of liability immunity under the PREP Act.

The COVID-19 pandemic has made essential the development and use of drug and device products to diagnose, treat, or prevent COVID-19. Companies and healthcare providers that develop, manufacture, distribute, or use COVID-19 countermeasures, such as diagnostic tests, ventilators, and personal protective equipment, have had the benefit of potential broad liability protection under the federal Public Readiness and Emergency Preparedness (PREP) Act. Early on in the pandemic, the US Department of Health and Human Services (HHS) issued a declaration to provide liability protection for COVID-19 countermeasures. For background on and an overview of the liability protections provided by the PREP Act, see our July 28 LawFlash, The PREP Act: Critical Liability Immunity for Critical Products.

Now with the promise of COVID-19 vaccines on the horizon, and the United States experiencing a fall surge of cases placing increasing demands on healthcare providers, HHS has acted to expand the scope of PREP Act liability protections. On December 3, 2020, HHS issued its Fourth Amendment (Amendment) to the PREP Act declaration. The Amendment expands PREP Act liability protections to the following:

  • Telehealth providers
  • Private distribution
  • Prioritization decisions
  • Vaccine administration and distribution

These important expansions of the PREP Act address the additional channels of healthcare and distribution necessitated by the pandemic, as well as issues with scarcity of countermeasures and the need for wide-scale distribution and administration of vaccines, requiring healthcare providers and program planners to prioritize distribution and use to those patients with the greatest need.

While Congress continues to debate these issues, HHS’s Fourth Amendment addresses important liability concerns associated with moving vaccines throughout the country for rapid deployment and administration in the most effective and efficient manner.

Telehealth Providers

In the Fourth Amendment, HHS expands the definition of “Covered Persons” to include “Healthcare personnel using telehealth to order or administer Covered Countermeasures for patients in a state other than the state where the healthcare personnel are licensed or otherwise permitted to practice.” HHS explains that this expansion is intended to “help maximize the utility of telehealth.”

HHS cites the Centers for Disease Control and Prevention’s (CDC’s) recognition that telehealth services “can facilitate public health mitigation strategies during this pandemic by increasing social distancing,” providing a “safer option” for healthcare personnel, and reducing the strain on healthcare systems “by minimizing the surge of patient demand on facilities.”

The Amendment specifies that any state law that prohibits or effectively prohibits a qualified healthcare provider from ordering and administering Covered Countermeasures through telehealth is preempted. Presumably, given the Amendment’s focus on practitioners providing services via telehealth in states where they are unlicensed, the Amendment likely would obviate the need to evaluate individual state emergency orders related to COVID-19 and permit practitioners engaging in COVID-19-specific treatments (i.e., Covered Countermeasures) to provide services anywhere in the country so long as they are licensed in good standing in at least one jurisdiction.

Private Distribution

The initial HHS declaration limited the broad liability protections of the PREP Act to activities related to contracts or understandings with either the federal government or a state or local “Authority Having Jurisdiction.” This limitation on distribution effectively restricted the PREP Act liability protection to programs coordinated with federal, state, or local government.

HHS now acknowledges in the Fourth Amendment that responding adequately to the challenges of COVID-19 requires the use of private distribution channels as well as those offered through governmental entities. PREP Act coverage is now provided for private distribution of Covered Countermeasures pursuant to FDA licensure, approval, clearance, or authorization or NIOSH approval. This expansion provides PREP Act coverage for private distribution of, for example, COVID-19 tests or personal protective equipment. The expansion to cover private distribution, however, is only effective prospectively, beginning on December 3, 2020.

Prioritization Decisions

The prospect of multiple COVID-19 vaccines becoming available provides hope that the pandemic will be brought under control in the near future, but demand will outstrip availability for at least several months. Decisions will have to be made on allocation of these scarce resources. HHS recognizes this reality in the Fourth Amendment, expanding the liability protection of the PREP Act to “not administering a Covered Countermeasure to one individual in order to administer it to another individual.”

HHS provides the example of only one dose of a COVID-19 vaccine being available, and a healthcare professional “administers the one dose to the person who is more vulnerable to COVID-19.” HHS explains that “prioritization or purposeful allocation of a Covered Countermeasure, particularly if done in accordance with a public health authority’s directive, can fall within the PREP Act and this Declaration’s liability protections.”

The Amendment’s extension of liability protection to decisions not to provide a vaccine to individuals, particularly if done in connection with public health prioritization guidelines, appears intended to address a prior state court case that found that the PREP Act did not prevent a medical malpractice claim against a healthcare provider for failure to vaccinate the plaintiff following CDC prioritization guidelines. Casabianca v. Mount Sinai Med. Ctr., Inc., 2014 N.Y. slip op. 33583(U), 2014 WL 10413521 (N.Y. Sup. Dec. 12, 2014).

Expansion of Disease Category and Timing

The Fourth Amendment also extends liability protection beyond COVID-19, to not only COVID-19 caused by SARS-CoV-2 or a virus mutating therefrom, but also to other diseases, health conditions, or threats that may have been caused by COVID-19, SARS-CoV-2, or a virus mutating therefrom, including the decrease in the rate of childhood immunizations, which will lead to an increase in the rate of childhood infectious diseases.

These are important protections given the growing concern about the uptake of vaccination rates and the vaccine hesitancy movement in this country.

Additional expansion occurs in the effective time period for applicability of the liability protection, extending to October 1, 2024, with the original effective date beginning on February 4, 2020.

Clarification of Authority

The HHS Office of General Counsel (OGC) has issued four advisory opinions over the last several months, providing helpful guidance concerning the PREP Act’s potential application to COVID-19 tests, treatments, and preventive equipment. HHS OGC was careful to clarify that, when issued, these advisory opinions were only guidance and were not legally binding. In the Fourth Amendment, however, HHS clarifies that the PREP Act declaration must be construed in accordance with these advisory opinions, specifically incorporating them for that purpose.

How We Can Help

Morgan Lewis helps companies and healthcare providers determine the scope of their eligibility, consider documentation that may assist in securing immunity, and draft and negotiate EUAs, government contracts, and other similar documents that are critical to coverage under the PREP Act. We also provide legal and regulatory strategy and counsel on product liability risks and ongoing HHS/FDA/CLIA and related regulatory and legal compliance obligations for COVID-19-related medical products, as well as draft and negotiate collaboration and other commercial agreements between companies partnering on COVID-19-related medical products.

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If you have any questions or would like more information on the issues discussed in this LawFlash, please contact any of the following Morgan Lewis lawyers:

Washington, DC
Michele Buenafe
Dennis Gucciardo
Kathy Sanzo
Jacob Harper

Greg Etzel

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