Liability Protection for Businesses Assisting COVID-19 Health Crisis

On March 19, 2020—in the midst of the nation’s COVID-19 health emergency—New York City mayor Bill de Blasio took to Twitter to ask Tesla CEO Elon Musk to manufacture ventilators for area hospitals “ASAP.” From a humanitarian and even from a publicity perspective, the incentive for Musk to help is likely appealing. However, manufacturers who have not previously been engaged in medical device manufacturing who may desire to manufacture ventilators or other medical devices on short notice to assist in the care and treatment of COVID-19 patients need to be conscious of the regulatory and liability implications.

To address some legal concerns that businesses face as they step in to assist with the current health crisis, this article provides an overview of significant actions already taken by the federal government to encourage companies that have the resources to serve the public good in this time of need and to limit their potential liabilities arising from such activities.

The Public Readiness and Emergency Preparedness Act

In 2005, Congress passed the Public Readiness and Emergency Preparedness Act (PREP Act).¹  With the intention of incentivizing the rapid development of new vaccines and the manufacture of emergency devices during periods of health crisis, the PREP Act authorizes the Department of Health and Human Services (HHS) to immunize from civil liability certain vaccine developers and other persons assisting governments during such crisis.

The PREP Act specifically authorizes the secretary of the HHS to issue declarations granting immunity to certain entities and individuals who are involved in the development, manufacture, testing, distribution, administration and use of “countermeasures” for the treatment, identification or prevention of diseases, threats or other conditions constituting a present, or credible risk of a future, public health
emergency.²

The potential grants of immunity authorized by the PREP Act can be extensive. Through a PREP Act declaration, the HHS secretary may absolve select persons from “any claim for loss [under federal and state law] that has a causal relationship with the administration to or use by an individual of a covered countermeasure.”³ There are notable exceptions to this grant of immunity, including that the PREP Act does not immunize an act of “willful conduct,” but such exceptions are limited.

PREP Act Declaration Resulting From COVID-19 Pandemic

On March 17, 2020, the secretary of the HHS invoked the PREP Act by publishing a PREP Act declaration (the Declaration) specifically addressing the COVID-19 pandemic.⁴ In the Declaration, the HHS declared that COVID-19 constitutes a health emergency and, through the authority of the PREP Act, provided liability immunity to all manufacturers, distributors and other qualified persons engaged in the manufacture, testing, development, distribution, administration and use of any “Covered Countermeasures.”⁵

“Covered Countermeasures” include “any antiviral, any other drug, any biologic, any diagnostic, any other device, or any vaccine, used to treat, diagnose, cure, prevent, or mitigate COVID-19, or the transmission of SARS-CoV-2 or a virus mutating therefrom, or any device used in the administration of any such product, and all components and constituent materials of any such product” and that qualify as “qualified pandemic or epidemic products,” or “security countermeasures,” or “drugs, biological products, or devices authorized for investigational or emergency use.”⁶

Collectively, by its terms and under the authority of the PREP Act, the Declaration indicates that certain emergency manufacturers, distributors and other authorized persons acting at the behest of federal, state and local governments will receive liability immunity during the present COVID-19 crisis.

March 2020 Guidance From the United States Food & Drug Administration

The Food & Drug Administration (FDA) has also taken steps to promote the development and manufacture of ventilators and other respiratory devices. On March 22, 2020, the FDA issued nonbinding guidance setting forth a new, temporary policy to help expand the availability of ventilators and other respiratory devices during the COVID-19 crisis.⁷

Ordinarily, a medical device manufacturer that desires to modify a legally marketed Class II medical device must submit the proposed modified device to the FDA for premarket review, pursuant to the 510(k) clearance process. In the case of ventilators, which are typically marketed as Class II devices, the time required for FDA review could significantly delay the manufacture and marketing of the modified ventilator and its availability to hospitals and other health care providers. To prevent these delays, the FDA declared its intent to forego the ordinary premarket review by not objecting to limited modifications to FDA-cleared hardware, software and materials used to manufacture ventilators that will not create an undue risk to the public. The guidance document identifies a number of such modifications that the FDA currently believes will satisfy those criteria.

In its new guidance, the FDA further proposes a new policy to allow hospitals and health care professionals to use additional ventilators for long-term hospital use, even if the ventilators had originally been designed for limited-service use (such as transporting patients to hospitals). The FDA indicates that, for the duration of the COVID-19 crisis, health care facilities will also be allowed to use ventilators beyond their indicated shelf life.

Finally, the FDA’s guidance encourages foreign manufacturers and companies that have not previously manufactured medical devices to utilize the FDA’s Emergency Use Authorization (EUA) process to start manufacturing and distributing ventilators in the United States. The FDA will expeditiously review information provided by such foreign and domestic manufacturers to determine if an EUA can be issued to them for the manufacture of ventilators and other medical devices.

Conclusion

Federal law and new agency declarations and guidance provide assistance and protections for certain developers, manufacturers, distributors and other persons assisting in the fight against the COVID-19 pandemic. Among other things, the federal government has demonstrated a willingness to promote the rapid development and manufacture of new hospital ventilators and other emergency devices, including in certain circumstances foregoing or expediting regulatory review and immunizing the persons involved from potential liability. Any individual or entity currently involved in activities to help curb the current health crisis should take notice of these existing laws and agency declarations and guidance, and evaluate whether they can take advantage of the legal protections provided.

1. See Public Readiness and Emergency Preparedness Act of 2005. Pub. L. No. 109-417, 120 Stat. 2831 (codified at 42 U.S.C. §§ 247d-6d, 247d-6e as part of the Public Health Service Act).

2. 42 U.S.C. §§ 247d-6d(a)–(b). A qualifying “countermeasure” under the PREP Act may include, among other things, a device manufactured, used, designed, developed, modified, licensed or produced to diagnose, mitigate, prevent, treat or cure a pandemic or epidemic, or that otherwise may be used to limit the harm caused by the pandemic or epidemic. § 247d-6d(i)(1),(7). Section 3103 of the new Coronavirus Aid, Relief and Economic Security Act amended the PREP Act to add “respiratory protective device[s]” approved by the National Institute for Occupational Safety and Health under 42 CFR Part 84 and determined by the Secretary of HHS to be a priority for use during a public health emergency.

3. § 247d-6d(a)(2)(B).

4. Declaration Under the Public Readiness and Emergency Preparedness Act for Medical Countermeasures Against COVID-19, 85 Fed. Reg. 15198 (Feb. 4, 2020).

5. Id. §§ I, III, IV and V.

6. Id. §§ VI, VII; see also 42 U.S.C. § 247d-6d(i) (defining the terms “qualified pandemic or epidemic product”—including sub-definitions for the terms “drug,” “biological product” and “device”—and “security countermeasure”).

7. US Food and Drug Administration, Enforcement Policy for Ventilators and Accessories and Other Respiratory Devices During the Coronavirus Disease 2019 (COVID-19) Public Health Emergency (Mar. 2020).