HHS Broadly Interprets PREP Act Immunity: Reasonable Belief is Good Enough

Under the Public Readiness and Emergency Preparedness Act (“PREP Act”), manufacturers, distributors, and health care providers acting to address the COVID-19 crisis can be protected from products liability suits related to the use of certain products.  The Act provides immunity “from suit and liability under federal and state law with respect to all claims for loss caused by, arising out of, relating to, or resulting from the administration to or use by an individual of a covered countermeasure if a Declaration has been issued with respect to such countermeasure.”   In light of questions surrounding the scope of liability protections, the Department of Health and Human Services (HHS) issued an “omnibus” Advisory Opinion to address “most questions and concerns about the scope of PREP Act immunity.”  (This supplements the Advisory Opinion HHS issued specific to PREP Act immunity for licensed pharmacists who order and administer COVID-19 serology tests.)

It is evident throughout the 9-page Advisory Opinion that HHS views PREP Act immunity as broad.  Importantly, HHS reinforces that a “reasonable belief” standard confers immunity even if all the requirements are not met:

[A]n entity or individual who complies with all other requirements of the PREP Act and the conditions of the Secretary’s declaration will not lose PREP Act immunity – even if the medical product at issue is not a covered countermeasure – if that entity or individual reasonably could have believed that the product was a covered countermeasure.

Advisory Opinion, at 2 (emphasis added); see also id. at 4.  The opinion similarly advises that immunity results even if a person does not meet the definition of “covered person” as long as the person “reasonably could have believed” that she was a covered person.  This good faith/reasonable belief standard is extremely helpful given the constantly evolving requirements in the Emergency Use Authorizations FDA is issuing to address COVID-19.

Also helpful are the hypotheticals contained in the Advisory Opinion, many of which are only borderline hypothetical:

• If a covered person purchases 500,000 tests or respirators “that appear to be authorized under an EUA” and has taken reasonable steps to substantiate the authenticity of the products, but it turns out that the products are in fact counterfeit, PREP Act immunity still applies for losses arising out of the use of the counterfeit product.
• If a pharmacy allows its licensed pharmacists to order FDA-authorized COVID-19 tests and has taken reasonable compliance measures to ensure current licensure, but it turns out that one of the pharmacists is not currently licensed, the pharmacy would still be immune against a lawsuit relating to that pharmacist’s use of the COVID-19 test.
• If a distributor of Personal Protective Equipment (PPE) sources product from a new supplier in a “good-faith attempt” to deliver PPE, and the distributor takes “reasonable precautions” to assess the new supplier’s facility and compliance with quality control processes, HHS states that there can be no “willful misconduct” by the distributor.

To benefit from this broad coverage (and as a matter of best practices during this pandemic), it is important to have good documentation to support the reasonableness of a company’s decisions.  HHs also recommends that key information be made available to purchasers of these products so that they can make more informed decisions with better transparency.