Wednesday, June 8, 2022

What does ending the COVID-19 pandemic mean from a legal perspective?

By Lisa Larrimore Ouellette, Nicholson Price, Rachel Sachs, and Jacob S. Sherkow

The COVID-19 pandemic isn’t over. The United States is averaging around 100,000 new cases per day and recently marked 1 million total deaths, and global deaths associated with the pandemic are estimated at nearly 15 million. But the U.S. legal response to the pandemic appears to be winding down, with mask mandates disappearing, an uncertain congressional response, COVID relief money running out, the end of most emergency orders at the state level, and calls for an end to federal emergency declarations. In this post, we examine COVID-related public health emergency declarations, what ending those would mean from a legal perspective, and what impact that would have on pandemic innovation policy, including access to existing COVID innovations and incentives to develop new ones.

What are the major COVID-19 emergency declarations?

Broadly speaking, public health emergency declarations give governments the power to “activate funds, personnel, and material and change the legal landscape to aid in the response to a public health threat,” generally in a manner legally different from typical law- or rule-making processes. Because public health measures often are (and need to be) wide-ranging, federal, state, tribal, and local governments all have the power to issue such declarations. And even within a given government authority, individual agencies often possess complementary but different powers to issue their own public health emergency declarations. COVID-19 has consequently prompted a large number of distinct emergency declarations, each with different legal effects.

National emergency declaration. Section 201 of the National Emergencies Act authorizes the President to declare a national emergency—an act that implicates a wide variety of other federal laws, including those pertaining to the use of federal employees and property, as well as the responsibilities of military personnel. President Trump issued such a declaration for COVID-19 on March 13, 2020, with the most recent annual continuation signed by President Biden on February 23, 2022. Such a declaration can only be terminated by the President or by a joint resolution of Congress ending the emergency, something the Senate tried to do in March, but that has apparently since stalled in the House.

Public health emergency declaration. Separately, § 319 of the Public Health Service Act allows the Secretary of Health and Human Services (HHS) to declare “a public health emergency, including significant outbreaks of infectious diseases,” which Secretary Azar did on January 31, 2020. Generally, this allows HHS access to the Public Health Emergency Fund, a chronically underfunded fisc established for the purpose of short-term public health emergencies. Interestingly, this was not the fund used by Congress to bankroll COVID-19 relief. Instead, early in the pandemic, Congress passed the CARES Act, establishing a separate series of funds, including the Public Health and Social Services Emergency Fund (PHSSEF), “to support testing and contact tracing to effectively monitor and suppress COVID-19, as well as to reimburse for health care-related expenses or lost revenue attributable to the coronavirus.” Funds for some activities under the PHSSEF last until certain set deadlines; others until they are expended. But none, it seems, are directly tied to the expiration of a public health emergency. Nonetheless, the PHSSEF and § 319’s public health emergency declaration likely go in tandem; it is doubtful Congress will re-fund any portion of the PHSSEF once the § 319 declaration lapses. And HHS’s § 319 declaration must be renewed every 90 days—as it has been since the pandemic began. Its most recent iteration is set to expire on July 15, 2022, but HHS has committed to providing at least 60 days of notice before it ceases to renew it.

Together, the national emergency and public health emergency declarations trigger section 1135 of the Social Security Act, authorizing HHS to waive certain requirements during emergencies. This authorization includes 1135 waivers to certain Medicare, Medicaid, and Children’s Health Insurance Program (CHIP) requirements and numerous other COVID-19 related waivers, including waivers to reimburse more telehealth services. And under the 2022 omnibus appropriations bill, telehealth reimbursement rules will remain in place for 151 days after the end of the public health emergency, providing more time to transition. Section 1135 is also the trigger for increasing the Medicaid Federal Medical Assistance Percentage (FMAP), a rate used to match state funds allocated to certain medical services, by 6.2 percentage points under section 6008 of the Families First Coronavirus Response Act. States that want to take advantage of the increased FMAP must agree to a set of conditions, including continuous enrollment: they generally cannot disenroll anyone from their Medicaid programs while the declared emergency continues.

Emergency use authorization declaration. Beyond these declarations, there are others available to HHS, including those under section 564 of the Food, Drug, and Cosmetic Act, which allow FDA to use Emergency Use Authorizations (EUAs) as the basis to authorize not otherwise approved drugs, devices, and other therapies. This authority—used previously in other public health emergencies—remains in effect until terminated by HHS. For COVID-19, HHS has issued EUA declarations for diagnostics, PPE, medical devices, and drugs and biological products like vaccines.

Public Readiness and Emergency Preparedness Act declaration. Section 319F-3 of the Public Health Service Act is yet another emergency declaration statute under HHS, which provides for liability protection for government workers and contractors for pandemic-related countermeasures. The tenth amendment to this declaration was issued in January 2022 and has a current end date of October 1, 2024.

Tribal emergency declarations. Beyond the federal government, tribal authorities also have the power to issue their own public health emergency declarations. The Navajo Nation, for example, issued such a declaration on March 13, 2020, giving the tribe’s President and Vice President broad powers to promulgate executive orders related to the pandemic, including school closures, gathering limits, and masking requirements.

State emergency declarations. Similarly, every state has also invoked state law emergency powers during the COVID-19 pandemic, including those pertaining to proof of vaccination, masking, and a variety of other public health measures. As the Delta wave began to wane in the summer of 2021, however, many of these were revoked. As of May 27, 2022, only 14 states still had broad emergency orders in place, with many set to expire this summer unless otherwise renewed.

Local emergency declarations. On top of all of these, individual localities—such as Santa Clara County (population, 1.9 million people)—have yet their own power to proclaim a public health emergency. Santa Clara County initially declared a public health emergency in response to COVID-19 on February 3, 2020, over a month before the federal government’s national emergency declaration, kicking off a host of rules pertaining to the opening (and closing) or certain businesses, social distancing rules, and testing locations. While the County hasn’t rescinded its original emergency order, it has since terminated many of the original provisions from its original emergency declaration, including the use of masks indoors.

What will the end of the legal response to the pandemic mean for access to COVID-related medical care?

Because many of these legal authorities are formally independent of each other, they do not need to be (and have not been) wound down simultaneously. Many states, for example, have rescinded their emergency declarations while the federal government has continued to reauthorize its § 319 declaration. But as the ongoing emergency declarations are wound down, a range of outcomes related to access to medical care are worth considering. We examine just three here, though there are many others.

First, with the end of the § 319 declaration comes an end to the requirement that states maintain continuous enrollment in their Medicaid programs if they wish to retain the increased FMAP funding. A recent Kaiser Family Foundation (KFF) analysis estimated that Medicaid enrollment will have risen during the pandemic by 25%, to more than 110 million Americans, by the end of fiscal year 2022, attributing most of this growth to the continuous enrollment requirements. But KFF goes on to estimate that between 5.3 million and 14.2 million people are likely to lose Medicaid coverage when the pandemic ends, as states begin to conduct eligibility redeterminations. Because the redetermination process is complex and burdensome for patients, there is substantial concern that this process may lead to otherwise eligible beneficiaries losing their coverage, or beneficiaries losing their coverage without knowing it. This is likely to have an especially detrimental impact on women and people of color, and could particularly exacerbate an ongoing perinatal mortality crisis, as in many states people who have recently given birth can lose their Medicaid coverage just 60 days after giving birth. The significant racial disparities in perinatal mortality suggest that these problems are likely to be most acute for non-white patients.

A second implication of the end of the § 319 declaration would be significant rollbacks in the availability of telehealth, impacting patient access to care. Before the pandemic, telehealth usage among Medicare beneficiaries in particular was low, as reimbursement for telehealth services had been limited in a range of ways (e.g., it was primarily available for rural beneficiaries, it could only be used for a limited set of services, etc.). The CARES Act included new authority for telehealth flexibilities, which had the effect of significantly expanding both the set of services that can be reimbursed through telehealth and the set of patients and providers eligible for its use. These flexibilities are currently scheduled to end 151 days (approximately five months) after the end of the § 319 declaration, at which point reimbursement for telehealth services will return to a more limited form, making access more difficult for seniors and other Medicare beneficiaries, as well as Medicaid recipients.

Third, if PHSSEF and similar funding is not continued, Americans’ ability to receive vaccines, rapid tests, and N95 masks for free would be jeopardized. The federal government is planning for a “bare-bones vaccination program that would cover just older Americans and those with compromised immune systems,” and would not include federal funding for boosters or updated versions of vaccines to address new variants. To be sure, Americans with private insurance would likely still have the ability to receive vaccines for free through their health insurance, thanks to a provision of the Affordable Care Act which requires it. But Medicaid coverage isn’t required for adult vaccination. It would also be moving vaccination and testing from the world of federal procurement (where the federal government can leverage its purchasing power) to a more typical system of drug procurement, with the associated increased transaction costs. Ultimately, White House officials have acknowledged that it would likely become more difficult to access certain products and treatments if funding lapses, and could jeopardize U.S. efforts to engage in global aid and support.

What will the end of the legal response to the pandemic mean for existing and new COVID-related diagnostics, therapeutics, and vaccines?

The end of legal responses to the pandemic could also profoundly change the innovation landscape for COVID-related biomedical products in terms of both access and incentives.

Access faces the most obvious challenges. Most starkly, if and when HHS terminates its section 564 EUA declaration, the hundreds of COVID-related products subject to EUAs would no longer be available unless they are first granted full approval or clearance, the way the Pfizer and Moderna vaccines have been for adult patients. (We’ve previously explained the difference between vaccine approval and authorization.) To be sure, there are some benefits to requiring manufacturers to go through more robust premarket processes; there’s a reason EUAs are for emergencies and the FDA normally requires approval or clearance. But it’s a tricky balance to make sure firms undertake the costs of generating and demonstrating high-quality information on safety and efficacy (buttressed here, hopefully, by high-quality confirmatory evidence) while making sure there’s enough notice and enough incentive to keep marketing to avoid substantial access disruptions. This is not lost on the FDA. The agency has begun transition planning to account for this process; among other things, the agency intends to allow manufacturers currently under an EUA to continue distributing devices while their regulatory submissions are under review by the FDA. And recognizing the challenge of balancing quality and access in this context, the FDA recently sought comments on the transition plan. Terminating the EUA declarations is distinct from any termination of the public health emergency, including HHS’s § 319 declaration. Thus, despite the termination of other emergency declarations, the EUA authorization can—and almost certainly should—last longer than others. This has been true for EUAs for other diseases, such as Zika, Ebola, and Anthrax, long after the acute phase of their respective public health emergencies ended.

The availability of payment under emergency declarations also shapes both access and incentives for COVID-related products. As described above, government payments for COVID products are likely to be sharply curtailed, decreasing access for many. And that decreased access will substantially decrease the incentives to develop new products in response to the evolving pandemic, like vaccines for variants or new therapeutics. Manufacturers, of course, respond to these incentives and to the size of potential markets. If fewer people are likely to be able to afford a new vaccine or therapeutic—and if the federal government is not ready to step in as a major purchaser—manufacturers are likely to have lower incentives to develop new products. And even if they do develop them, they are less likely to take efforts to make them quickly at the scales we’ve previously seen. While we have focused on US incentives here, decreased US incentives also decrease incentives for development in general, given the scale of US purchasing—a bad result for global production and, indeed, global equity (already a deeply problematic area of pandemic response).

Finally, the hastening and seemingly premature efforts to end legal responses to the pandemic are a sign of decreased interest in both dealing with COVID-19 and, likely, future pandemics. The Biden administration released the American Pandemic Preparedness plan in fall of 2021. While that plan had a mixture of strengths and areas for improvement, it focused in part on creating better incentives for the development of products and research strategies for pandemics going forward. That plan may still be alive and kicking, but Congressional lassitude and resistance to COVID spending does not bode well for its robust implementation. The absence of strong policy incentives will likely dampen incentives for R&D related to other diseases with pandemic potential. New policy incentives may not be essential for every product—COVID vaccines are among the most lucrative drugs ever developed, in part due to strong and multi-faceted incentives—but, as we have seen, a focus purely on vaccines (especially for diseases that change as COVID does) has substantial limitations

The development of therapeutics and vaccines for COVID has been nothing short of miraculous; efforts to provide widespread access in the US have been remarkably impressive even if not flawless. It would be a shame if policymakers stepped back now. Here’s hoping they don’t.

This post is part of a series on COVID-19 innovation law and policy. Author order is rotated with each post.

No comments:

Post a Comment