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Healthcare Update

HHS Issues Advisory Opinion and Amendment to Public Readiness and Emergency Preparedness Act Declaration

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On April 14, 2020, the Secretary of the U.S. Department of Health and Human Services (HHS) issued an omnibus advisory opinion to address frequent questions about the scope of Public Readiness and Emergency Preparedness Act (PREP Act) immunity during the COVID-19 pandemic. The opinion advises that “given the broad scope of PREP Act immunity, Congress did not intend to impose a strict-liability standard on covered persons for determining whether a product is a covered countermeasure.” Instead, the opinion advises “that 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.” For instance, the opinion states that a person who accidentally purchases unapproved counterfeit products, despite taking reasonable steps to substantiate their authenticity, would still be entitled to immunity. Similarly, the opinion states that an entity that is not a “covered person” will not lose the immunity if it “reasonably could have believed, under the current, emergent circumstances” that it was a “covered person,” giving the example of an entity that inadvertently allows a license to expire despite reasonable compliance measures.

The opinion “encourages all covered persons using or administering covered countermeasures to document the reasonable precautions they have taken to safely use the covered countermeasures,” including providing information to purchasers about the provenance and quality control for products. The advisory opinion also clarifies that the Secretary interprets the “limitations on distribution” condition for immunity set forth in the declaration “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.” Activities can be part of an authorized emergency response “through, among other things, guidance, requests for assistance, agreements, or other arrangements.” While it does not change the substantive scope of PREP Act immunity, the opinion provides helpful clarity and shows that the Secretary takes, in many respects, a broad interpretation of both the act and his declaration under the act. The opinion also stresses the importance of taking reasonable measures to ensure compliance with PREP Act requirements and of documenting those reasonable precautions.

In another development, the Coronavirus Aid, Relief and Economic Security Act, Public Law 116-136, amended the PREP Act to add a new category of covered countermeasure eligible for liability immunity — respiratory protective devices approved by the National Institute for Occupational Safety and Health (NIOSH) — that the Secretary determines to be a priority for use during a public health emergency. On April 10, the Secretary amended the prior PREP Act declaration to make a determination that NIOSH respirators are a priority for use to aid in the medical response to COVID-19. This confirms that NIOSH respirators constitute covered countermeasures for PREP Act immunity.

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