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HHS Shelters Drug, Device Makers From Liability Combating Virus

March 12, 2020, 5:08 PM

Drug and device manufacturers will be protected from the threat of legal liability as they work to combat the new coronavirus through vaccines and testing, the health agency said in a declaration.

The document waives liability for manufacturers working on ways to combat Covid-19, including diagnostics, therapies, and vaccines. The legal safeguard, which doesn’t include willful misconduct, is intended to create incentives for additional work on the pandemic and protect companies who took an early gamble in working to produce lab tests and vaccines.

The Department of Health and Human Services is waiving all liability for “the manufacture, testing, development, distribution, administration, or use of” drugs or devices that are used to “diagnose, mitigate, prevent, treat, or cure a pandemic or epidemic or limit the harm such a pandemic or epidemic might otherwise cause,” according to the document. The protections also apply to distributors, state and local governments, and health professionals.

The protection for liability is backdated to Feb. 4, 2020, and will continue to Oct. 1, 2024.

The document was submitted March 10 for publication in the Federal Register.

The Public Readiness and Emergency Preparedness (PREP) Act of 2005 authorizes the secretary of health and human services to issue a declaration that provides immunity from liability for claims of loss relating to the administration or use of “medical countermeasures” in responding to a public health emergency. Countermeasures can be used to diagnose, prevent, protect, or treat conditions associated with the public health emergency.

This declaration doesn’t affect most N-95 respirator masks, which health-care workers need to wear to protect from Covid-19, the disease caused by the new coronavirus. That’s because the HHS’s authority only applies to drugs and devices regulated by the Food and Drug Administration, and most of those masks are regulated by the National Institute for Occupational Safety and Health.

There’s already a shortage of the respirator masks, which are made primarily in China.

Smaller and medium-sized mask manufacturers in the U.S. are able to make N-95 respirator masks but can’t afford the liability and need protection, a manufacturing industry source said.

A bill introduced by House Democrats Wednesday would treat all N-95 masks as covered countermeasures. That change is needed, HHS Assistant Secretary for Preparedness and Response Robert Kadlec told the House Oversight Committee Thursday.

—With assistance by Alex Ruoff

To contact the reporter on this story: Shira Stein in Washington at sstein@bloomberglaw.com

To contact the editors responsible for this story: Fawn Johnson at fjohnson@bloomberglaw.com; Brent Bierman at bbierman@bloomberglaw.com

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