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03.25.2020 | Legal Advisory

Federal and state government agencies have taken a series of unprecedented steps in recent days to fast-track the availability of coronavirus (COVID-19) diagnostic testing and spur innovation in the design and development of countermeasures against the spread of the virus.  

FDA and HHS Orders

On March 16, 2020, the U.S. Food and Drug Administration (FDA) issued guidance “to help accelerate the availability of coronavirus tests.” Policy for Diagnostic Tests for Coronavirus Disease-2019 during the Public Health Emergency. The policy permits device makers to distribute their diagnostic tests to laboratories for specimen testing after validation, but without waiting for an Emergency Use Authorization (EUA) from the FDA. The guidance also allows states to “set up a system in which they take responsibility for authorizing such tests.” As a result, states are now permitted to unilaterally authorize these lab tests, as the labs “will not engage with the FDA.” This policy expands on the deference first afforded to New York on March 12, giving the state flexibility to begin patient testing after validating their tests and notifying the New York State Department of Health (NYSDOH). The guidance also provides leeway for the distribution of serological tests, which “are less complex and are solely used to detect antibodies to the virus,” without FDA approval.

Following the FDA’s guidance, on March 17, 2020, the U.S. Department of Health and Human Services published a Notice of Declaration in the Federal Register providing tort immunity for those engaging in “activities related to medical countermeasures against COVID-19.” Declaration Under the Public Readiness and Emergency Preparedness Act for Medical Countermeasures Against COVID-19. Countermeasures are defined to include “any antiviral, any other drug, any biologic, any diagnostic, or any vaccine, used to treat, diagnose, cure, prevent or mitigate COVID-19.” The Declaration applies not only to drugs used to combat COVID-19, but also to “products or technologies intended to enhance the use or effect of a drug, biological product, or device used against the pandemic.” Immunity is accompanied by a compensation program to “provide benefits to eligible individuals who sustain serious injuries or die as a result of the administration or use of a Covered Countermeasure.”

Immunity extends to “any loss caused by, arising out of, relating to, or resulting from the manufacture, distribution, administration, or use of medical countermeasures, except for claims involving willful misconduct.” It reaches claims brought by anyone “who should be vaccinated or take another drug or countermeasure.” The protection even reaches claims by persons not eligible for the compensation program. Immunity extends through October 1, 2024, and could extend even longer if a product is “obtained for the strategic stockpile.”

Global Containment Efforts

In the wake of these and other global orders relating to combat COVID-19, the FDA and others are also making exceptions to prior regulatory action, to allow the distribution of potentially lifesaving medicines. For example, the FDA recently made an exception to its import ban on an Indian pharmaceutical company. In 2015, the FDA banned products from three manufacturing facilities of the Indian company due to what it called a “cascade of failure” at its plant. Now, due to shortages of certain drugs, the FDA has lifted the ban to allow the company to ship untested treatments for COVID-19 to the United States.

Similarly, Israel’s attorney general has invoked a 1967 patent law to permit the importation of generic versions of an HIV drug to treat coronavirus, even though the drug is still under patent protection. The law allows for production of generics even if the branded version is still patent-protected. The patent-holder has recognized the importance of the public health crisis and is committed to helping “remove any potential barriers” by sharing its intellectual property with generic manufacturers. 

Massachusetts Containment Efforts

As a hub of innovation, local efforts in Boston are also underway to develop diagnostics and potentially a cure for COVID-19. On March 23, 2020, the Governor of Massachusetts issued a two-week “stay at home” order for the Commonwealth. In his announcement, Governor Baker specifically stated that pharmaceutical companies and device manufacturers developing treatments for COVID-19 are essential businesses and are therefore exempt from the order.  

To that end, the Boston Globe reported on March 25 that a controversial Boston University laboratory is the only laboratory in New England working with live strains of COVID-19. According to the report, “[s]cientists at the lab plan to begin testing thousands of approved and unapproved drugs next week on human cell lines they have intentionally infected with COVID-19 in an attempt to come up with the first potential medicine for the disease.” 

Similarly, MassMEDIC, MassBio, and the Massachusetts hospital organizations have recently partnered to establish an Emergency Supply Chain Hub to donate and distribute much-needed medical supplies to Massachusetts hospitals that are testing and treating patients with COVID-19. 

Key Takeaways

The clear takeaway of all of these government actions—both federally and here in the Commonwealth—is that COVID-19 has affected the world in extraordinary ways; thus, engaging in the ordinary regulatory pathways to develop much-needed diagnostics and vaccines is insufficient to deal with this public health crisis. To that end, while the public is engaged in social distancing and other efforts to “flatten the curve,” scientists, health care companies, and others are in a race against the clock to develop the “countermeasures” that will hopefully save lives in the short term. The public interest in encouraging the development of these countermeasures and getting them into the hands of medical providers unquestionably outweighs the potential liability resulting from possible unknown side effects, false positives, or other unexpected consequences resulting from the use of these tools and medicines. 

It is for these reasons that HHS’s Notice of Declaration expressly preempts the usual federal and state law claims against manufacturers and others engaged in the chain of distribution of countermeasures to COVID-19. In short, companies developing lifesaving technologies to combat the virus (such as the local Massachusetts laboratories, health care companies, and biotechnology organizations mentioned above) should not be subject, years from now, to juries second-guessing the time-sensitive decisions that need to be made by those on the front lines in the short term to fight the virus.

We are monitoring the evolving situation and will keep you updated on future developments.

This advisory was prepared by Nutter’s Product Liability and Litigation Practice groups. For more information, please contact David Ferrera, Sarah Kelly or your Nutter attorney at 617.439.2000.

This update is for information purposes only and should not be construed as legal advice on any specific facts or circumstances. Under the rules of the Supreme Judicial Court of Massachusetts, this material may be considered as advertising.