Immunity for Private Entities Under State and County Contracts Administering Hydroxychloroquine Under the Prep Act

As many as 4,000 seriously ill coronavirus patients in New York are being treated with the anti-malarial drug hydroxychloroquine, state health officials say. President Trump has touted hydroxychloroquine as a potential life-saver, although there is no widespread scientific evidence to date showing it helps battle COVID-19. However, in March 2020, New York Governor Andrew Cuomo stated that health care providers in the state would be using the drug in combination with the antibiotic Zithromax, or Azithromycin, for some last-ditch cases, based on potentially promising research.

The issue is whether private entities under contracts with states and/or counties are protected by the PREP Act when administering this drug in state and county jails.

A.The PREP Act
The Public Readiness and Emergency Preparedness Act (“PREP Act”) added new legal authorities to the Public Health Service Act to provide liability immunity related to the manufacture, testing, development, distribution, administration and use of medical countermeasures against chemical, biological, radiological and nuclear agents of terrorism, epidemics, and pandemics.  It also added authority to establish a program to compensate eligible individuals who suffer injuries from administration or use of products covered by the PREP Act’s immunity provisions. 

A program planner is defined under the PREP Act as a State or local government, including an Indian Tribe; a person employed by the State or local government; or other person (such as a private sector employer or community group) who supervises or administers a program with respect to the administration, dispensing, distribution, provision, or use of a countermeasure. This includes persons who establish requirements or provide policy guidance, or who supply technical or scientific advice or assistance or who provide a facility to administer or use a “covered countermeasure” in accordance with a Declaration.Further, a qualified person is defined under the PREP Act as:

• a licensed health professional or other individual who is authorized to prescribe, administer, or dispense covered countermeasures under the law of the State in which the countermeasure was prescribed, administered, or dispensed; or
• a person within a category identified as “qualified” in a Declaration, such as volunteers.
• Additionally, a security countermeasure is defined under the PREP Act as a drug, biological product, or device that the Health and Human Services (“HHS”) Secretary determines to be a priority:
• To treat, identify, or prevent harm from any biological, chemical, radiological, or nuclear agent identified as a material threat by the Secretary of Homeland Security, or to treat, identify, or prevent harm from a condition that may result in adverse health consequences or death and may be caused by administering a drug, biological product, or device against such an agent;
• Is determined by the HHS to be a necessary countermeasure to protect public health; and is
• Approved or cleared by FDA;
• Licensed by FDA;
• May reasonably be determined to qualify for approval or licensing within eight years after HHS decides to purchase the countermeasure; or
• Authorized for emergency use by FDA.

On March 10, 2020, U.S. HHS Secretary Alex M. Azar II (“Azar”) issued the following Declaration for Public Readiness and Emergency Preparedness Act Coverage for medical countermeasures against COVID-19, which provides as follows:I. Determination of Public Health Emergency – 42 U.S.C. 247d-6d(b)(1)

Azar has determined that the spread of SARS-CoV-2 or a virus mutating therefrom and the resulting disease COVID -19 constitutes a public health emergency.

II. Factors Considered – 42 U.S.C. 247d-6d(b)(6)
Azar has considered the desirability of encouraging the design, development, clinical testing, or investigation, manufacture, labeling, distribution, formulation, packaging, marketing, promotion, sale, purchase, donation, dispensing, prescribing, administration, licensing, and use of the Covered Countermeasures.

III. Recommended Activities – 42 U.S.C. 247d-6d(b)(1)
Azar recommended, under the conditions stated in this Declaration, the manufacture, testing, development, distribution, administration, and use of the Covered Countermeasures.

IV. Liability Immunity – 42 U.S.C. 247d-6d(a), 247d-6d(b)(1)
Liability immunity as prescribed in the PREP Act and conditions stated in this Declaration are in effect for the Recommended Activities described in Section III.

V. Covered Persons – 42 U.S.C. 247d-6d(i)(2), (3), (4), (6), (8)(A) and (B)
Covered Persons who are afforded liability immunity under this Declaration are “manufacturers,” “distributors,” “program planners,” “qualified persons,” and their officials, agents, and employees, as those terms are defined in the PREP Act, and the United States. In addition, Azar has determined that the following additional persons are qualified persons: (a) Any person authorized in accordance with the public health and medical emergency response of the Authority Having Jurisdiction, as described in Section VII below, to prescribe, administer, deliver, distribute or dispense the Covered Countermeasures, and their officials, agents, employees, contractors and volunteers, following a Declaration of an emergency; (b) any person authorized to prescribe, administer, or dispense the Covered Countermeasures or who is otherwise authorized to perform an activity under an Emergency Use Authorization in accordance with Section 564 of the FD&C Act; and (c) any person authorized to prescribe, administer, or dispense Covered Countermeasures in accordance with Section 564A of the FD&C Act.

VI. Covered Countermeasures – 42 U.S.C. 247d-6b(c)(1)(B), 42 U.S.C. 247d-6d(i)(1) and (7)
Covered Countermeasures are 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. Covered Countermeasures must be “qualified pandemic or epidemic products,” or “security countermeasures,” or drugs, biological products, or devices authorized for investigational or emergency use, as those terms are defined in the PREP Act, the FD&C Act, and the Public Health Service Act.

VII. Limitations on Distribution – 42 U.S.C. 247d-6d(a)(5) and (b)(2)(E)
Azar has determined that 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.

As used in this Declaration, the terms Authority Having Jurisdiction and Declaration of Emergency have the following meanings:

i. The Authority Having Jurisdiction means the public agency or its delegate that has legal responsibility and authority for responding to an incident, based on political or geographical (e.g., city, county, tribal, state, or federal boundary lines) or functional (e.g., law enforcement, public health) range or sphere of authority.

ii. A Declaration of Emergency means 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 Section 564 of the FD&C Act unless such Declaration specifies otherwise;

Azar has also determined that, for governmental program planners only, liability immunity is afforded only to the extent such program planners obtain Covered Countermeasures through voluntary means, such as (1) donation; (2) commercial sale; (3) deployment of Covered Countermeasures from federal stockpiles; or (4) deployment of donated, purchased, or otherwise voluntarily obtained Covered Countermeasures from state, local, or private stockpiles.

VIII. Category of Disease, Health Condition, or Threat – 42 U.S.C. 247d-6d(b)(2)(A)
The category of disease, health condition, or threat for which Azar recommended the administration or use of the Covered Countermeasures is COVID-19 caused by SARS-CoV-2 or a virus mutating therefrom. IX. Administration of Covered Countermeasures – 42 U.S.C. 247d-6d(a)(2)(B)

Administration of the Covered Countermeasure means physical provision of the countermeasures to recipients, or activities and decisions directly relating to public and private delivery, distribution and dispensing of the countermeasures to recipients, management and operation of countermeasure programs, or management and operation of locations for purpose of distributing and dispensing countermeasures.

X. Population – 42 U.S.C. 247d-6d(a)(4), 247d-6d(b)(2)(C)
The populations of individuals include any individual who uses or is administered the Covered Countermeasures in accordance with this Declaration. Liability immunity is afforded to manufacturers and distributors without regard to whether the countermeasure is used by or administered to this population; liability immunity is afforded to program planners and qualified persons when the countermeasure is used by or administered to this population, or the program planner or qualified person reasonably could have believed the recipient was in this population.

XI. Geographic Area – 42 U.S.C. 247d-6d(a)(4), 247d-6d(b)(2)(D)
Liability immunity is afforded for the administration or use of a Covered Countermeasure without geographic limitation. Liability immunity is afforded to manufacturers and distributors without regard to whether the countermeasure is used by or administered in any designated geographic area; liability immunity is afforded to program planners and qualified persons when the countermeasure is used by or administered in any designated geographic area, or the program planner or qualified person reasonably could have believed the recipient was in that geographic area.

XII. Effective Time Period – 42 U.S.C. 247d-6d(b)(2)(B)
Liability immunity for Covered Countermeasures through means of distribution, as identified in Section VII(a) of this Declaration, other than in accordance with the public health and medical response of the Authority Having Jurisdiction extends through October 1, 2024. Liability immunity for Covered Countermeasures administered and used in accordance with the public health and medical response of the Authority Having Jurisdiction begins with a Declaration and lasts through (1) the final day the emergency Declaration is in effect, or (2) October 1, 2024, whichever occurs first.

XIII. Additional Time Period of Coverage – 42 U.S.C. 247d-6d(b)(3)(B) and (C)
Azar has determined that an additional 12 months of liability protection is reasonable to allow for the manufacturer(s) to arrange for disposition of the Covered Countermeasure, including return of the Covered Countermeasures to the manufacturer, and for Covered Persons to take such other actions as are appropriate to limit the administration or use of the Covered Countermeasures.

Covered Countermeasures obtained for the SNS during the effective period of this Declaration are covered through the date of administration or use pursuant to a distribution or release from the SNS.

XIV. Countermeasures Injury Compensation Program – 42 U.S.C 247d-6e
The PREP Act authorizes the Countermeasures Injury Compensation Program (“CICP”) to provide benefits to certain individuals or estates of individuals who sustain a covered serious physical injury as the direct result of the administration or use of the Covered Countermeasures, and benefits to certain survivors of individuals who die as a direct result of the administration or use of the Covered Countermeasures. The causal connection between the countermeasure and the serious physical injury must be supported by compelling, reliable, valid, medical and scientific evidence in order for the individual to be considered for compensation. 

XV. Amendments – 42 U.S.C. 247d-6d(b)(4)
Amendments to this Declaration will be published in the Federal Register, as warranted.

B. Hydroxychloroquine
On March 28, 2020, the U.S. Food and Drug Administration (“FDA”) issued an Emergency Use Authorization (“EUA”) for emergency use of oral formulations of chloroquine phosphate and hydroxychloroquine sulfate for the treatment of COVID-19. In particular, the authorized chloroquine phosphate and hydroxychloroquine sulfate are limited to product supplied from the Strategic National Stockpile to public health authorities, pursuant to Section 564 of the Federal Food, Drug and Cosmetic Act (21 U.S.C. 360bbb-3) and must be administered by a healthcare provider pursuant to a valid prescription of a licensed practitioner and may only be used to treat adult and adolescent patients who weigh 50 kg or more hospitalized with COVID-19 for whom a clinical trial is not available, or participation is not feasible.

C.Case Law
On November 21, 2012, the Appellate Division of the New York Supreme Court in Parker v. St. Lawrence County Public Health Department, 102 A.D.3d 140 (3d Dept 2012) upheld PREP Act protections for a county that conducted a school based vaccination clinic in response to the H1N1 outbreak.

During the clinic, a nurse employed by St. Lawrence County inadvertently vaccinated a kindergartener in the absence of parental informed consent. The child’s mother filed suit, arguing that the county had committed negligence and battery. The county moved to dismiss the complaint on the basis that the claim was preempted under the PREP Act. The lower court denied the defendant’s motion to dismiss, asserting that the PREP Act was not intended by Congress to protect against claims arising from failure to obtain informed consent. The county appealed and the United States submitted an amicus brief supporting the county.

The appellate court dismissed the plaintiff’s claims, finding that the federal PREP Act preempted the claims under state law and that the breadth of liability immunity provided under the PREP Act precluded the plaintiff’s claims of negligence and battery. The court noted the alternative remedy provided by the countermeasure injury compensation program and the possibility of a federal cause of action for willful misconduct claims.

In Casabianca v. Mount Sinai Medical Center, 2014 W.L. 10413521 (Sup. Ct. N.Y. Co. Dec. 2, 2014), discussing Parker, the trial court denied the defendants hospital and doctors’ motion to dismiss state medical malpractice and wrongful death claims because they never administered the H1N1 influenza vaccine, and the vaccine must be administered for there to be coverage and, thus, immunity under the PREP Act.

In another case, Kehler v. Hood, 2012 W.L. 1945952 (E.D. Mo. May 30, 2012), plaintiffs alleged that the private physician and her employing private hospital were negligent in failing to obtain the adult patient’s informed consent and a consult from a specialist prior to the administration of the vaccination, which resulted in a severe case of transverse myelitis to the patient, and loss of consortium to the spouse. Defendants then brought third party product liability/failure to warn claims against the manufacturer.

The parties did not dispute that the manufacturer, was protected by the PREP Act, nor did they allege that it engaged in willful misconduct. As a result, the federal District Court for the Eastern District Court of Missouri dismissed the claim against the manufacturer. Finding that it had no jurisdiction over plaintiffs’ remaining claims, the federal court remanded the case to state court for further consideration of the plaintiffs’ claims.

C. Analysis
It appears that, like the county defendants in Parker and the private defendants in Kehler, private entities under contracts with states and/or counties are immune from liability under the PREP Act when dispensing, prescribing and/or administering hydroxychoroquine in state and county jails for claims for damages, including death; physical, mental, or emotional injury, illness, disability, or condition or fear of any such injury,[1] illness, disability, or condition; or any need for medical monitoring. These entities are likely covered persons under the PREP Act as program planners, qualified persons and/or officials, agents, and employees of any of these entities or persons. Also, hydroxychloroquine is a covered countermeasure authorized by the EAU and the State of New York (and likely other states) as long as it is dispensed, prescribed and/or administered in accordance with the EAU or state or local law. However, there would be no immunity for claims of willful misconduct.[2]

[1] A serious physical injury is defined in the PREP Act as one that is life-threatening, or results in or requires medical or surgical intervention to preclude permanent impairment of a body function or results in permanent damage to a body structure.

[2] Willful misconduct cannot be found against a program planner or qualified person who acts in accordance with applicable directions, guidelines, or recommendations issued by the HHS regarding administration and use of a countermeasure as long as HHS or the State or local health authority is notified about the serious injury or death within seven days of its discovery.