Navigating limits on product liability under the PREP Act for COVID-19 clinical trial activities

While numerous entities are responding with impressive speed and diligence in working to develop and deploy various COVID-19 countermeasures, some from the Plaintiffs bar are already putting up online advertisements offering legal services to pursue product liability and other civil liability claims relating to Coronavirus care and treatments.1  One of the most critical and immediate needs at this time is expedited clinical trial testing to support potential COVID-19 prophylactics and treatments, but conducting a clinical trial on an accelerated timetable is not without risks and no company engaging in these potentially life-saving clinical activities wants to become the subject of a product liability lawsuit down the road.

To address liability considerations, on March 10, 2020, the Secretary of the Department of Health and Human Services (HHS) issued a declaration pursuant to the Public Readiness and Emergency Preparedness (PREP) Act (hereinafter the "COVID-19 Declaration" or the Declaration) granting tort immunity to entities involved in creating and distributing "countermeasures" to the COVID-19 virus. The Declaration is intended to foster the expeditious development of drugs and devices designed to prevent and treat COVID-19. Historically, HHS has issued similar orders to address the Zika virus, Ebola virus, and various influenza epidemics.

If your company is engaged or considering in engaging in activities relating to clinical trial testing for COVID-19 countermeasures, here’s what you need to know about the scope of the protections provided by the COVID-19 Declaration:

  • General Application. Under the Declaration, "covered persons" who manufacture, test, develop, distribute, administer, or use "covered countermeasures" cannot be sued under federal or state law for "any claim of loss caused by, arising out of, relating to, or resulting from" these activities. Indeed, "any individual who uses or who is administered" a covered countermeasure is precluded from filing suit.
  • Entities Eligible for Immunity. "Covered persons" eligible for immunity include manufacturers, distributors, program planners, qualified persons, and their officials, agents and employees, as well as certain additional persons connected to the administration of the covered countermeasures. These terms are defined broadly,2  and manufacturers and distributors are afforded immunity "without regard" for the end user.
  • Products (Countermeasures) Eligible for Immunity. "Covered countermeasures" include any drug, biologic, or device used to treat, diagnose, cure, prevent, or mitigate COVID-19; any device used to administer these products; and "all components or constituent materials" of these products. It also includes products intended to prevent adverse events caused by a COVID-19 countermeasure as well as technologies and products "intended to enhance" the effects of a COVID-19 countermeasure.
  • Covered Activities Relating to COVID-19 Countermeasures. Covered activities include the manufacture, testing, development, distribution, administration and use of the covered countermeasures, subject to certain limitations (see Limitations outlined below).
  • Population and Geographic Area. There are no population or geographic-based limitations imposed under the Declaration.
  • Duration. The COVID-19 Declaration has a retroactive effective date, meaning it extends back to February 4, 2020, and for now it is set to last through October 1, 2024, though further extension is possible. Manufacturers are also granted an additional "12 months of liability protection" to assist with the collection and disposition of countermeasures after the Declaration expires.
  • Limitations. While the scope of the immunity afforded under the Declaration is certainly far-reaching, it is not without limits. The following is a list of the key qualifications and limitations set out in the Declaration:
    • Importantly, to be covered, the countermeasures must be approved or cleared under the Food, Drug, and Cosmetic Act "FDCA"; licensed under the Public Health Service Act; or authorized for emergency use under applicable provisions on the FDCA. In other words, some form of pre-market approval is required.
    • Covered countermeasures must also be qualified pandemic or epidemic products, security countermeasures, or drugs, biological products, or devices authorized for emergency (or in some cases) investigational use.
    • The Declaration limits immunity to recommended activities involving covered countermeasures related to present or future federal contracts or other federal transactions or agreements, or activities authorized by authorities with jurisdiction to prescribe, administer, deliver, distribute, or dispense covered countermeasures following an emergency declaration.
    • The immunity does not apply to death or serious physical injury proximately caused by "willful misconduct," i.e., intentional torts.
    • Immunity is not available for foreign claims where the U.S. has no jurisdiction, though it may be available for administration or use of a countermeasure outside of the United States if the claim is based on events that take place in U.S. territory or there is another link to the U.S. that makes it reasonable to apply U.S. law to the claim.3
    • Finally, if a claim arises from conduct that is not directly related to the development or distribution of a countermeasure, "such as a slip and fall [injury] with no direct connection to [a] countermeasure’s administration or use," the immunity will not apply.
Overall, under the COVID-19 Declaration, the scope of the protections provided for clinical trial activities during the operative period is far-reaching. In order to make sure your company’s COVID-19 clinical trial activities remain covered under the full scope of the Declaration’s immunity, here are some steps you can and should take going forward:
  • Carefully draft all documentation and materials created for any COVID-19 clinical trial and ensure that the language used tracks that of the protective language and requirements outlined in the Declaration.
  • All clinical trial documents, including any informed consents, should clearly and fully set out the purpose of the clinical trial consistent with the requirements for qualification as a "Covered Countermeasure" and related activities as defined under the Declaration.
  • As with any clinical trial, the informed consent document should outline all of the potential risks, both known and unknown, of the study. The unique risks posed by the current environment, including but not limited to the possibility that onsite monitoring may no longer be available and other potential study disruptions. The informed consent document should also state clearly that the clinical study can be terminated at the sponsor’s discretion at any time for any reason. This is particularly important given the reality that supply chain or other issues may prevent the trial from being conducted at all or as designed.
  • Relatedly, the informed document should state clearly that the study drug will be available to the study participant only while the participant is enrolled in the study to protect the sponsor against claims for expanded access.
  • As with any clinical trial, safety and efficacy data in the informed consent document should be continually updated as information becomes available to avoid potential liability for intentional torts.
  • The "compensation provision" of the informed consent document should state clearly that compensation will be limited to the compensation available, if any, under and consistent with the COVID-19 Declaration.

1. See, e.g., https://www.newlandlaw.com/personal-injury-lawyer/coronavirus-covid-19-injury-death-lawyer.

2. A “manufacturer,” for example, includes affiliated entities such as a contractor/subcontractor, supplier/licenser, and parent/subsidiary. See 85 Fed. Reg. 15198, 15199 (March 17, 2020). Similarly, a “distributor” means “a person or entity engaged in the distribution of drugs, biologics, or devices,” which includes, among others, manufacturers, re-packers, warehouses, independent wholesale drug traders, and retail pharmacies. Id.

3. See https://www.phe.gov/Preparedness/legal/prepact/Pages/prepqa.aspx#q3


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