In times of epidemics and pandemics, like COVID-19, the federal Public Readiness and Emergency Preparedness (PREP) Act aims to expedite the manufacture, distribution, and use of medical devices and drugs by providing immunity from liability under federal and state law (with some exceptions and limitations).

The PREP Act preempts state law and provides immunity from suit to "covered persons" for "all claims for loss caused by, arising out of, relating to, or resulting from the administration to or the use by an individual of a covered countermeasure." 42 U.S.C. §247d-6d(a)(1). The statutory immunity is neither absolute nor automatic. PREP Act immunity arises only after the Secretary of U.S. Department of Health and Human Services (Secretary) has issued an emergency declaration, as the Secretary has done to address COVID-19 public health emergency (Declaration). See 85 Fed. Reg. 15198 (March 17, 2020). The Declaration, however, limits the scope of immunity provided by the PREP Act.

On April 14, 2020, HHS issued an "omnibus" advisory opinion to address questions about the scope of PREP Act immunity (HHS Advisory). The HHS Advisory expresses the view that the PREP Act immunity is to be interpreted broadly, but also states that it is not binding on HHS or federal courts and does not have the force or effect of law.

In this article, we address an ambiguity in the Declaration that leaves many questions about the scope of immunity. Specifically, the PREP Act permits the Secretary to identify "particular means of distribution" for which PREP Act immunity applies. 42 U.S.C. §247d-6d(b)(2)(E). Here, the Declaration limits immunity to two "means" of "distribution": (1) federal contracts/relationships, and (2) other activities authorized by an "authority having jurisdiction." The scope of these two categories determines whether immunity will apply and must be carefully assessed by companies whose products can be used to respond to and mitigate the COVID-19 pandemic.

Means of Distribution That May Be Subject to Immunity

Section VII of the Declaration defines the two means of "distribution" to which immunity applies as follows:

… liability immunity is afforded to Covered Persons only for Recommended Activities involving Covered Countermeasures that are related to:

(a) Present or future federal contracts, cooperative agreements, grants, other transactions, interagency agreements, memoranda of understanding, or other federal agreements; or

(b) Activities authorized in accordance with the public health and medical response of the Authority Having Jurisdiction to prescribe, administer, deliver, distribute or dispense the Covered Countermeasures following a Declaration of an emergency. …

Declaration §VII (emphasis added).

The "Recommended Activities" listed in the Declaration are "the manufacture, testing, development, distribution, administration, and use of Covered Countermeasures." Declaration §III. The terms "Covered Persons" and "Covered Countermeasures" are defined broadly in the Act and the Declaration. 42 U.S.C. §247d-6d(i); Declaration §§V and VI.

The HHS Advisory explained that HHS "interpret[s] 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."

Even in with the benefit of this guidance, the two "means of distribution"—especially in the other-than-federal context—limit the scope of immunity and require some analysis to understand their scope.

Federal Contracts and Other Federal Arrangements. The "distribution" means in subsection VII(a) broadly pertains to arrangements with the federal government. For example, PREP Act immunity from liability will likely apply to a sale of Covered Countermeasures through a federal contract. At least one appellate court decision in New York reached a similar conclusion. In Parker v. St. Lawrence County Pub. Health Dep't, 102 A.D.3d 140 (3d Dept. 2012), the court dismissed a claim against a county department of health that had administered a vaccine to a child without parental authorization. The court stated: "The immunity provisions of the PREP Act are triggered where, as here, the vaccines are purchased pursuant to a federal contract or agreement …." Id. at 144.

Other Than Federal Contracts. The "distribution means" in §VII(b) is not so clearly worded, and unpacking the meaning of the phrase is essential to assess the scope of immunity.

Clearly, a Declaration of Emergency is a prerequisite, and that criteria seemingly has been met. The Declaration defines "Declaration of Emergency" to mean "any Declaration by any authorized local, regional, state, or federal official of an emergency specific to events that indicate an immediate need to administer and use the Covered Countermeasures, with the exception of a federal Declaration in support of an Emergency Use Authorization under §564 of the FD&C Act unless such Declaration specifies otherwise …." (Declaration §VII(b)(ii) (emphasis added).) The Advisory Opinion indicates that HHS's Public Health Emergency Declaration (issued Jan. 31, 2020) satisfies the Declaration's definition of Declaration of Emergency and, therefore, triggered immunity, "regardless of whether state or local authorities have declared states of emergencies." In addition, the federal government and each state has issued declarations of emergency. E.g., 85 Fed. Reg. 15337 (March 18, 2020); NY Exec. Order 202 (March 7, 2020).

But what is meant by "Activities authorized in accordance with the public health and medical response of the Authority Having Jurisdiction"? Arguably, the phrase "to prescribe, administer, deliver, distribute or dispense the Covered Countermeasures" describes the types of "activities" that fall within this "means" of "distribution." Or else that phrase narrows the type of "Authority Having Jurisdiction" that can authorize the "activities." HHS's intent is not entirely clear. HHS presumably intended the wording to be broad and to provide flexibility to the relevant state or local authorities to authorize acts that would be immune under the PREP Act.

What Can State and Local Authorities Do?

State and local authorities can help to overcome the ambiguity in §VII(b) of the Declaration. For example, Governor Charlie Baker of the Commonwealth of Massachusetts recently issued a directive intended to remove any ambiguity with regard to PREP Act immunity in that state. His directive asserted that he is "the Authority Having Jurisdiction to direct the Commonwealth of Massachusetts's response to the COVID-19 outbreak." He designated activities that are authorized in accordance with the Commonwealth's public health and medical response to the COVID-19 outbreak, and explained: "The effect of these designations shall be to provide the covered persons and entities with civil immunity to the fullest extent provided in the PREP Act in their efforts to contribute to the Commonwealth's public health and medical response to the COVID-19 outbreak."

Governor Andrew Cuomo of New York has declared a state of emergency and issued executive orders, but he has not issued anything so clearly intended to invoke or provide for PREP Act immunity. There is an opportunity for him now to remove doubt.

A state's purchase or commandeering of covered countermeasures also would give rise to PREP Act immunity. For example, New Jersey's governor on April 2, 2020, issued Executive Order No. 113 in which he authorized the State Director of Emergency Management "to take or use personal services and/or real or personal property, including medical resources, for the purpose of protecting or promoting the public health, safety, or welfare."

In the absence of pertinent action by a governmental Authority Having Jurisdiction, or further clarification of the Declaration by HHS, ordinary course commercial manufacture and distribution of products to non-government customers (e.g., hospitals) probably would not be covered under the distribution means described in Declaration §VII.

Limitations on Immunity

Companies should also be aware that immunity is not limitless. PREP Act immunity with regard to medical devices applies only for a limited duration, as specified in the Declaration. (Declaration §XII).

Immunity applies only when devices are "administered or used" in connection with COVID-19. 42 U.S.C. § 247d-6d(a)(3)(B). The PREP Act also provides a "rebuttable presumption" in favor of the manufacturer: "[f]or purposes of paragraph (1), there shall be a rebuttable presumption that any administration or use, during the effective period of the emergency declaration by the Secretary under subsection (b), of a covered countermeasure shall have been for the category or categories of diseases, health conditions, or threats to health with respect to which such declaration was issued." 42 U.S.C. §247d-6d(a)(6) (emphasis added). The HHS Advisory also makes clear that the PREP Act does not provide immunity against federal criminal or civil enforcement actions.

Finally, the PREP Act immunity does not apply to acts of "willful misconduct," which is narrowly defined in the statute. Id. §247d-6d(c). A plaintiff asserting willful misconduct bears a heavy burden to prove, by clear and convincing evidence, both the alleged willful misconduct and causation. Id. §247d-6d(c)(3).

With companies as well as state and federal agencies acting quickly to respond to the Covid-19 pandemic, it is important to assess the applicability and scope of immunity for these activities.

Kevin N. Ainsworth and Brian P. Dunphy are members of Mintz, Levin, Cohn, Ferris, Glovsky and Popeo.