When the race was on in earnest to develop and deploy an effective COVID-19 vaccination, much was made about the fact that pharmaceutical manufacturers would enjoy immunity against any liability related to the COVID-19 vaccine. Actually, the immunity that the pharmaceutical manufacturers enjoy is broader than that. It’s an immunity that extends to all levels of healthcare, and it’s not something new with COVID-19.
The PREP Act of 2005
In 2005, the H5N1 bird flu virus was spreading around the world. It mostly infected birds, but there were cases when people were infected. The Public Readiness and Emergency Preparedness Act was written, presented to Congress, and eventually was rolled into a defense department emergency supplemental appropriations bill.
The PREP Act created a layer of protection against liability for losses related to the use of “covered countermeasures” in the event of a declaration of a public health emergency by the Secretary of Health and Human Services. In short, the Act created very broad immunity for any “covered person” for all claims for loss related to the administration of “covered countermeasures.”
What are the risks?
The pharmaceutical company is just another manufacturer. It is true that they manufacture products that have a very low tolerance for design and manufacturing errors, but they are manufacturers. Their major exposures come from defective design for a medication or vaccine and defective manufacturing processes. The defective design could include those side effects that the company didn’t discover in its testing process.
They also have the exposure of failing to properly inform intermediate users (the healthcare community) on how to properly care for and administer the vaccine. This might include letting storage facilities know that it needs to be stored at or below a certain temperature, or that it cannot exceed a certain temperature. It also includes giving guidance on how it is best administered, to whom, and how often. Failing to provide this guidance could expose the manufacturer to liability.
Who is covered under the PREP Act of 2005?
Most of the information available centers on the liability immunity enjoyed by the manufacturers. It is fair to note that they have the most to lose if they are found liable for losses related to the deployment of vaccines, but they aren’t the only people covered by this Act. Take note that person (or people) as used in the context of the law doesn’t necessarily mean a human. A person can be a legal entity, other than a human or natural person. Here’s who qualifies as a “covered person,” according to the PREP Act.
The term “covered person,” when used with respect to the administration or use of a covered countermeasure, means – (A) the United States; or (B) a person or entity that is – (i) a manufacturer of such countermeasure; (ii) a distributor of such countermeasure; (iii) a program planner of such countermeasure; (iv) a qualified person who prescribed, administered, or dispensed such countermeasure; or (v) an official, agent, or employee of a person or entity described in clause (i), (iii), (iii), or (iv).
This definition then makes every person (including the United States) that is involved in the production, approval, prescribing, offering, or use of the products covered by this Act. This generally makes sense because if we are going to provide immunity at the top of the production chain, the rest of the chain should enjoy similar immunity. If the manufacturer cannot be held liable for the product, but those who are asked to dispense the product could be, that creates a huge exposure that communicates down to the end of the chain — the nurse, doctor, pharmacist, or anyone else who administers the product. That is not good risk management.
How broad is the immunity? Going back to the Act, we find this short sentence.
Subject to the other provisions of this section, a covered person shall be immune 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 the use by an individual of a covered countermeasure if a declaration under subsection (b) has been issued with respect to such countermeasure.
It starts with all claims for loss caused by the covered countermeasure. That encompasses the direct use of the countermeasure (vaccine). These are claims that come out of someone receiving the vaccine. It includes any known or unknown side effects that the individual experiences. It also includes any losses that might be related to errors made in administering the shot. That ranges from improper storage to improper training of the person on how much to administer.
The next phrase is arising out of. This is a bit more troubling because arising out of can mean any sort of causal connection to the event. If something happens that can be remotely tied back to the vaccine, there is immunity. That tells us that if someone has an adverse reaction to the vaccine in six months and that adverse reaction can be potentially tied back to the vaccine, there is full immunity to all of the involved parties.
The next two phrases are relating to and resulting from. These phrases bring us back around to the idea that if someone suffers a loss (as defined in the Act) that could possibly, in any way, at any time, through any possibility of something bad happening to anyone at all, ever. You get the point. This is supposed to be as close to absolute immunity as anyone could enjoy related to the production of a medical product.
‘Consider the risk management implications of this immunity. For the medical community, they finally have one part of their lives that is safe from a medical malpractice suit.’
Why are we bringing it up?
Consider the risk management implications of this immunity. For the medical community, they finally have one part of their lives that is safe from a medical malpractice suit. With this immunity in place, doctors can feel free to recommend vaccines and hospitals can feel free to administer them. This is one place in medicine where you can count on the doctor to give you their most honest opinion without the fear associated with offering a medical opinion that could possibly be wrong — and then they would have to call their medical malpractice carrier.
From a personal standpoint, information always helps in our personal risk management.
This is intended to provide some additional information to inform risk management decisions for businesses and individuals.
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