[House Hearing, 108 Congress]
[From the U.S. Government Printing Office]

                           A SHOT IN THE ARM?



                               before the

                              COMMITTEE ON
                           GOVERNMENT REFORM

                        HOUSE OF REPRESENTATIVES

                      ONE HUNDRED EIGHTH CONGRESS

                             SECOND SESSION


                           FEBRUARY 12, 2004


                           Serial No. 108-143


       Printed for the use of the Committee on Government Reform

  Available via the World Wide Web: http://www.gpo.gov/congress/house


                            WASHINGTON : 2003
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                     TOM DAVIS, Virginia, Chairman
DAN BURTON, Indiana                  HENRY A. WAXMAN, California
CHRISTOPHER SHAYS, Connecticut       TOM LANTOS, California
JOHN M. McHUGH, New York             EDOLPHUS TOWNS, New York
JOHN L. MICA, Florida                PAUL E. KANJORSKI, Pennsylvania
MARK E. SOUDER, Indiana              CAROLYN B. MALONEY, New York
DOUG OSE, California                 DENNIS J. KUCINICH, Ohio
RON LEWIS, Kentucky                  DANNY K. DAVIS, Illinois
JO ANN DAVIS, Virginia               JOHN F. TIERNEY, Massachusetts
TODD RUSSELL PLATTS, Pennsylvania    WM. LACY CLAY, Missouri
CHRIS CANNON, Utah                   DIANE E. WATSON, California
ADAM H. PUTNAM, Florida              STEPHEN F. LYNCH, Massachusetts
EDWARD L. SCHROCK, Virginia          CHRIS VAN HOLLEN, Maryland
JOHN J. DUNCAN, Jr., Tennessee       LINDA T. SANCHEZ, California
NATHAN DEAL, Georgia                 C.A. ``DUTCH'' RUPPERSBERGER, 
CANDICE S. MILLER, Michigan              Maryland
TIM MURPHY, Pennsylvania             ELEANOR HOLMES NORTON, District of 
MICHAEL R. TURNER, Ohio                  Columbia
JOHN R. CARTER, Texas                JIM COOPER, Tennessee
MARSHA BLACKBURN, Tennessee          ------ ------
------ ------                                    ------
------ ------                        BERNARD SANDERS, Vermont 

                    Melissa Wojciak, Staff Director
       David Marin, Deputy Staff Director/Communications Director
                      Rob Borden, Parliamentarian
                       Teresa Austin, Chief Clerk
          Phil Barnett, Minority Chief of Staff/Chief Counsel

                            C O N T E N T S

Hearing held on February 12, 2004................................     1
Statement of:
    Gerberding, Dr. Julie, Director, Centers for Disease Control 
      and Prevention; Dr. Anthony S. Fauci, Director, National 
      Institute of Allergy and Infectious Diseases; and Dr. Janet 
      Heinrich, Director, Public Health Issues, General 
      Accounting Office..........................................    12
    Stroube, Dr. Robert, Virginia State health commissioner, 
      Association of State and Territorial Health Officials; 
      Karen N. Miller, president, National Association of 
      Counties, commissioner, Boone County, MO, accompanied by 
      Dr. Susan Allan, health director, Arlington County Public 
      Health Division, Department of Human Services; Howard Pien, 
      president and chief executive officer, Chiron Corp.; Dr. 
      James Young, president, research and development, 
      MedImmune, Inc.; and Dr. Shelley A. Hearne, executive 
      director, Trust for America's Health.......................    87
Letters, statements, etc., submitted for the record by:
    Cummings, Hon. Elijah E., a Representative in Congress from 
      the State of Maryland, prepared statement of...............   157
    Davis, Chairman Tom, a Representative in Congress from the 
      State of Virginia, prepared statement of...................     3
    Deal, Hon. Nathan, a Representative in Congress from the 
      State of Georgia, prepared statement of....................   160
    Fauci, Dr. Anthony S., Director, National Institute of 
      Allergy and Infectious Diseases, prepared statement of.....    42
    Gerberding, Dr. Julie, Director, Centers for Disease Control 
      and Prevention, prepared statement of......................    15
    Hearne, Dr. Shelley A., executive director, Trust for 
      America's Health, prepared statement of....................   141
    Heinrich, Dr. Janet, Director, Public Health Issues, General 
      Accounting Office, prepared statement of...................    62
    Miller, Karen N., president, National Association of 
      Counties, commissioner, Boone County, MO, prepared 
      statement of...............................................   109
    Pien, Howard, president and chief executive officer, Chiron 
      Corp., prepared statement of...............................   115
    Stroube, Dr. Robert, Virginia State health commissioner, 
      Association of State and Territorial Health Officials, 
      prepared statement of......................................    90
    Waxman, Hon. Henry A., a Representative in Congress from the 
      State of California, prepared statement of.................     7
    Young, Dr. James, president, research and development, 
      MedImmune, Inc., prepared statement of.....................   133

                           A SHOT IN THE ARM?


                      THURSDAY, FEBRUARY 12, 2004

                          House of Representatives,
                            Committee on Government Reform,
                                                    Washington, DC.
    The committee met, pursuant to notice, at 10:19 a.m., in 
room 2154, Rayburn House Office Building, Hon. Tom Davis 
(chairman of the committee) presiding.
    Present: Representatives Tom Davis, Duncan, Miller, Waxman, 
Tierney, Van Hollen, and Norton.
    Staff present: Melissa Wojciak, staff director; David 
Marin, deputy staff director/communications director; Ellen 
Brown, legislative director and senior policy counsel; Drew 
Crockett, deputy director of communications; Susie Schulte, 
professional staff member; Teresa Austin, chief clerk; Brien 
Beattie, deputy clerk; Phil Barnett, minority staff director; 
Anna Laitin, minority communications & policy assistant; Sarah 
Despres, minority counsel; Josh Sharfstein, minority 
professional staff member; Earley Green, minority chief clerk; 
Jean Gosa, minority assistant clerk; and Cecelia Morton, 
minority office manager.
    Chairman Tom Davis. Good morning. A quorum being present, 
the committee will come to order. I want to welcome everybody 
to today's oversight hearing on our public health system's 
response capabilities to manage a pandemic of contagious 
    This year's flu season has raised the urgent question of 
whether our country is prepared to deal with a pandemic, be it 
a naturally occurring pandemic or one that results from a 
bioterrorist attack. Today we will examine what actions and 
planning procedures have been taken by Federal, State and local 
health officials to handle this year's flu season and other 
communicable disease outbreaks. Only then can we determine the 
potential needs of government and health officials to respond 
effectively to all types of contagious disease threats.
    Although this year's flu season was not a large-scale 
epidemic, several thousand people have died from complications 
of the flu. Additionally, several thousand people were unable 
to be vaccinated due to limitations of the vaccine supply. 
While the flu virus is airborne and spreads easily, vaccination 
significantly decreases the risk of illness and helps prevent 
the spread of the flu virus.
    Preparing for the annual flu season highlights the 
importance of strong cooperation between different health 
agencies and private sector companies at all levels. We need to 
ensure that adequate production capacities for flu vaccine 
manufacturers exist in order to avoid a vaccine shortage next 
year. Once a flu pandemic is identified, it is important to 
determine what the public and private sector capabilities are 
to produce, distribute and administer diagnostics, vaccines, 
and drugs for this problem. This year's vaccine shortage begs 
the question: ``Are new mechanisms and incentives needed to 
guarantee that effective and safe drugs, vaccines, and 
diagnostics can be produced as quickly as possible?''
    The current influenza season has challenged our public 
health system's capabilities and provides us with a chance to 
evaluate existing procedures and safeguards. The Public Health 
Security and Bioterrorism Preparedness in Response Act of 2001 
provided substantial new fundings for States, localities, and 
hospitals to boost preparedness to respond to a highly 
contagious disease, including influenza. The legislation 
included new grant programs, educational efforts, State 
planning requirements, expansion of Federal disaster teams, 
pandemic preparedness resources, and new authority to deal with 
public health emergencies. We will take a look at how these 
programs are being implemented and if funds are being allocated 
    I understand some of our witnesses this morning will 
express concerns about the actual preparedness levels and 
Federal funding for States and localities. I look forward to a 
constructive dialog on those concerns. I know we all share the 
same goal at the end of the day: a public health system 
prepared to deal with an outbreak of a deadly and contagious 
    The threat of a public health disaster emphasizes the need 
for planning and practice. The quicker the health community 
responds, the quicker a prevention and control strategy can be 
developed, and appropriate treatments can be identified. This 
hearing will recognize if any deficiencies in coordination, 
communication, and capacities exist and will facilitate 
discussions of how to work toward improvements necessary for 
more effective preparedness. In order to be adequately 
prepared, we should always be expecting the unexpected.
    We have a great selection of witnesses today. I want to 
thank all of them for appearing with us, and I look forward to 
their testimony.
    [The prepared statement of Chairman Tom Davis follows:]

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    Chairman Tom Davis. I will now yield to Mr. Waxman for an 
opening statement.
    But let me say before Mr. Waxman, we have the D.C. Young 
Suffragists here to watch the hearing today, over here to our 
side, and let me thank all of our young people here today. 
Thank you for being with us.
    Mr. Waxman. Thank you, Mr. Chairman. Let me start by 
thanking you for calling this hearing today. I especially 
appreciate your interest in public health at this relatively 
quiet moment--before the next crisis comes.
    Public health issues either dominate the news--think of 
SARS and anthrax and monkeypox--or it is woefully ignored. 
Hearings like this one provide an important opportunity to take 
a step back and assess how far we have come in supporting our 
public health system and what more needs to be done.
    We know that there will be another public health crisis, 
and many experts believe that this next crisis could be a 
global flu pandemic. In a regular flu season, about 36,000 
Americans die from the flu. A pandemic could be far worse. The 
flu pandemic of 1918 cost millions of lives around the world, 
including about 500,000 in the United States. The next flu 
pandemic could be right around the corner. If the ``bird flu'' 
virus in Asia acquires the capacity to spread rapidly from 
human to human, we could be facing a pandemic.
    This year's flu season exposed some of the weaknesses in 
our public health system. As reports of deaths among children 
mounted, demand for flu shots spiked. Because the demand 
exceeded supply, the country faced a potentially very dangerous 
vaccine shortage. This frightening situation led many to ask 
why the supply was inadequate to meet the demand.
    The answer is revealing. Public health authorities 
recommend that about 185 million Americans get the flu vaccine 
every year. However, vaccine manufacturers make only about half 
this amount because they estimate, correctly, that only a 
fraction of those who should get the vaccine will actually do 
    The implications of this situation are sobering. Without an 
increase in demand, companies may not develop and sustain the 
capacity to produce sufficient quantities of a life-saving 
vaccine against a pandemic strain.
    The solution is not to wait for a pandemic to hit. We need 
to increase the use of the flu vaccine each year and to enhance 
the role of the Federal Government in assuring manufacturers 
that there will be a growing market for their vaccines.
    I am concerned, however, that the President's fiscal year 
2005 budget undercuts flu vaccination efforts. Today, the State 
health commissioner in Virginia will testify that the 
President's budget does not include adequate funding to cover 
flu shots for children. His testimony is that, if adopted, this 
budget ``will damage immunization efforts.''
    Today is also an opportunity to take stock of our overall 
public health readiness. In the wake of the attacks of 
September 11, 2001, and the increased concern about the threat 
of bioterrorism, Congress has appropriated several billion 
dollars to State and local public health efforts. This funding 
led to some improvements, such as in the area of emergency 
communication. However, there continue to be major gaps.
    For example, there are gaps in planning. The nonpartisan 
Trust for America's Health reported in December 2003 that only 
a quarter of the States have flu pandemic plans. The General 
Accounting Office will testify today that not a single State 
has a plan for hospital response to an epidemic involving at 
least 500 patients--only 500 patients.
    There are also gaps in lab preparedness. In June 2003, the 
Trust for America's Health released a report finding that 
public health laboratories are ``dangerously unprepared for an 
attack using chemicals as weapons.'' We will hear additional 
testimony today about gaps in training, education and emergency 
    At this key moment, the Federal Government's commitment to 
public health is essential. Investing in public health protects 
not only against a flu pandemic, but also against a new 
infectious disease and potential bioterrorist threats.
    Unfortunately, the President's budget is again a major 
disappointment. While it extends tax cuts for the richest 
Americans, this budget cuts CDC funding 3 percent and reduces 
the amount of money going to State and local governments for 
public health readiness by over $100 million.
    The President has assured the American people that he is 
doing everything possible to protect them. His public health 
budget indicates otherwise. This is a budget that does not take 
advantage of this brief respite between public health crises to 
prepare adequately for the next one.
    Congress needs to be sure that the budget it passes does 
not make the same mistakes.
    I thank the witnesses for appearing today. I look forward 
to their testimony.
    I thank you again, Mr. Chairman, for convening this 
important hearing.
    [The prepared statement of Hon. Henry A. Waxman follows:]

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    Chairman Tom Davis. Thank you.
    Are there any other Members that wish to make opening 
statements? Hearing and seeing none, we now move to our first 
panel of witnesses.
    We have Dr. Julie Gerberding and Dr. Anthony Fauci, who 
will discuss efforts being taken at the Federal level to 
respond to the influenza virus. They will also describe 
preparedness coordination efforts with State and local 
authorities. Dr. Janet Heinrich, the Director of Public Health 
Issues for GAO, will discuss the GAO report that was released 
this week regarding State and local preparedness in the event 
of a bioterrorism attack.
    It is the policy of the committee that all witnesses be 
sworn, so if you would rise with me and raise your right hands.
    [Witnesses sworn.]
    Chairman Tom Davis. Be seated. I think we have been through 
the rules. We have a light in front of you. It turns orange 
after 4 minutes, red after 5 minutes. Try to sum up in that 
time. Your total statement is already in the record, and 
questions will be based on the total statement.
    Dr. Gerberding, we will start with you and move down the 
way, and thank you very much for being with us.

                       ACCOUNTING OFFICE

    Dr. Gerberding. Thank you, Mr. Chairman, members of the 
committee, for allowing me to be here today. What I would like 
to do is to frame the discussion about preparedness and why we 
need to be prepared for influenza by pointing out the picture 
of this year's outbreak investigation status.
    [Slide shown.]
    Dr. Gerberding. You can see in the first graphic here what 
the United States looked like in October when a single State, 
Texas, was reporting significant localized influenza activity. 
In just a few weeks, all of the red States were showing 
widespread activity. And by the end of December, almost the 
entire United States was involved in a very large-scale flu 
outbreak. Fortunately, as of the end of January, most of the 
States now are just showing sporadic or very localized 
    But this was a flu season that started much earlier than we 
have ever seen, spread faster, and in no time in our history of 
surveillance have we ever seen that much widespread activity 
across the United States at a single point in time. So it was a 
wake-up call. Fortunately, it turned out to be not the worst 
epidemic we have had, but a warning sign that further 
preparedness efforts clearly are necessary. And I certainly 
appreciate Mr. Waxman's remarks about the impending possibility 
of a pandemic.
    [Slide shown.]
    Dr. Gerberding. On the next graphic I have depicted the 
1918 flu outbreak and its impact on mortality in the United 
States at the beginning of the last century, just to point out 
what an extraordinary capability flu does have. This is a 
deadly virus, and it is a tricky virus, because it is 
constantly undergoing evolution, and that is why we need to get 
a new flu shot every year. Usually the evolution is in minor 
steps, so the vaccine in 1 year looks pretty much like the 
vaccine in the past year. But occasionally we see very large-
scale changes in the virus, and that is really what 
traditionally has set off a pandemic.
    [Slide shown.]
    Dr. Gerberding. On the next graphic I have mapped out over 
time how viruses move from animals to humans and create these 
pandemic strains. There are 15 types of flu virus. They are all 
present in migratory birds like ducks. These avian viruses are 
present in nature in ducks; they usually don't cause disease. 
Occasionally they move to other species like chickens, and some 
of them cause very severe bird flu disease in chickens like we 
are seeing in Asia right now.
    Human viruses and bird viruses can mix up in pigs, because 
pigs are vulnerable to both infections. And sometimes when this 
happens their genes get mixed up so a brand new, very novel flu 
strain evolves. This is called a re-assorted virus, and when 
that virus enters the human population, we have never seen it 
before, none of us have immunity to it, and a pandemic can 
occur. This has been our concern all along, because this 
happens periodically, as I will show you in a moment.
    But recently we have also begun to be very concerned about 
the possibility of these avian viruses directly moving to 
people and then evolving in people to become much more 
efficient in their transmission from person to person. That has 
never happened, but biologically it is plausible, given how 
these viruses evolve.
    So we have two mechanisms where we could end up with a 
novel strain of a virus that could set off a pandemic.
    [Slide shown.]
    Dr. Gerberding. On the next graphic I have mapped out over 
the past century how pandemics in the United States occurred. 
The 1918 virus was an H1 virus, and that caused the very large 
spike in mortality that I demonstrated. In 1957 a brand new 
virus appeared, an H2 virus, that set off the Asian flu 
pandemic. In 1968 the Hong Kong H3 virus first appeared and set 
off that pandemic. H1 came back a few years later, it did not 
cause a pandemic in people over age 20 because they had some 
immunity from the old outbreak, but it did cause a very large 
outbreak among people under age 20.
    Today we generally have circulating H1 virus, H3 virus, and 
influenza B virus in the human population. That is why our 
vaccine has to contain three different strains of virus in 
order to protect us from what is currently common in our 
    But up here at the top of the graph I have shown also the 
little clusters of bird flu that have emerged and been 
transmitted to people over the last several years. This has 
happened sporadically before, but since 1997 it has been 
happening with a regular frequency. And it is these bird flu 
strains that, of course, have our attention right now as their 
potential for evolving and becoming more efficiently 
transmitted in humans.
    [Slide shown.]
    Dr. Gerberding. On the next graphic I have just provided a 
brief overview of the timeline for vaccine development, because 
it is really this timeline that has caused the biggest 
challenge in preparation for pandemic flu. As you pointed out, 
there are 185 million people in this country who need flu 
vaccine. What CDC does in conjunction with WHO and 
investigators around the world is constantly sample viruses, 
genetically characterize them in our research labs, and 
anticipate what might be the next strain.
    When we see a new virus pop up, we work with it in the 
laboratory with our colleagues in St. Jude's in Tennessee and 
in a laboratory in the United Kingdom to try to create the best 
possible virus for vaccine. But that takes time, and we have to 
get a virus that is safe enough to work with and is able to be 
propagated well in eggs, since that is the methodology we are 
using. The best possible timeframe from getting the virus and 
getting it into a form for vaccination is about 4 months, and 
that is a best case scenario.
    So we are constantly operating under this very narrow 
window of opportunity to get the right virus, manipulate it 
genetically to be suitable for vaccination, and then produce 
the vaccine that we need. And we are doing this right now in an 
egg base culture system, which is a very old fashioned way of 
making vaccine, and I think it speaks to the other challenge in 
all of this, which is basically the capacity of our 
manufacturers to utilize this technology in a fast enough 
timeframe to get what we need done.
    So the three challenges that Secretary Thompson has asked 
us to address at NIH, CDC, FDA, and the other departmental 
agencies as we prepare the Department's pandemic planning are: 
No. 1, how are we going to get those 185 million people 
vaccinated; No. 2, how are we doing to get enough vaccine to 
assure that we have the supply we need when we need it; and, 
third, how are we going to modernize our vaccine production so 
that we can get the job done.
    Thank you.
    [The prepared statement of Dr. Gerberding follows:]

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    Chairman Tom Davis. Thank you very much.
    Dr. Fauci.
    Dr. Fauci. Thank you very much, Mr. Chairman, members of 
the committee. It is a pleasure to be here with you today, and 
thank you for giving me the opportunity to testify before this 
    I am going to talk to you for a couple of minutes from the 
perspective of the biomedical research endeavor to meet the 
threat of emerging and re-emerging diseases in general, but 
specifically, for today's purposes, influenza.
    [Slide shown.]
    Dr. Fauci. This particular map of the world shows just over 
the last 20 or so years the number of emerging and re-emerging 
diseases with which we have been confronted both in the United 
States and worldwide. When we talk about emerging diseases, we 
talk about brand new diseases. Some examples are HIV and SARS. 
A re-emerging disease is a disease that is an old disease but 
that reappears in a different form, in a different geographic 
location. We have experienced West Nile virus since 1999, which 
is a re-emerging disease; it has been around for a long time.
    But perhaps the epitome of the continually re-emerging 
infection is influenza, particularly influenza A, because it 
has the capability of slightly changing from year to year, 
which necessitates our having essentially new vaccines each 
year, as well as the possibility and potential to do what Dr. 
Gerberding mentioned, about changing so dramatically that it is 
essentially a new virus.
    [Slide shown.]
    Dr. Fauci. And the molecular reason for that is really 
rather simple. The influenza virus has a number of genes and 
proteins. The two that are used for designation are the 
hemagglutinin, which refers to the H, where we get the H3, H1, 
H2; and the neuraminidase, which is the N. We have an example 
this year of both a shift and a potential drift. A drift is a 
very slight change. Our vaccine this year had the H3N2 Panama 
strain. What we were confronted with was an H3N2 Fujian strain, 
a slight difference, not dramatic, but enough to obviate a bit 
the efficacy of the vaccine.
    What we are facing now is the potential for a shift where 
that antigenicity changes so much that we are really naive to 
this, as Dr. Gerberding just mentioned a moment ago. One of the 
clear ways of doing that is when a virus jumps species from an 
animal to a human, and this is what we are seeing with the H5N1 
right now in Asia, jumping from chicken to human in Thailand 
and Vietnam, with the potential of going from human to human.
    [Slide shown.]
    Dr. Fauci. This is a chart of the different countries that 
now have clear-cut bird flu, two of which have transmission to 
humans, as I mentioned. What is wrong with this picture that is 
different from years ago is that it is getting worse and worse 
each year. We usually see a chicken virus that jumps to humans 
in a very confined location, as we saw last year and a few 
years ago. We rarely, if ever, see the extent that we see now 
with nine countries. The reason this is important is that the 
more chickens that jump to humans, the more humans get 
infected, and the more humans get infected, the greater the 
probability of the virus changing enough to develop the 
capability of going from human to human.
    [Slide shown.]
    Dr. Fauci. And when that happens, you have the possibility 
of a pandemic, as we saw in 1918-1919; whereas, you yourself 
said, Mr. Waxman, and Dr. Gerberding also, there were tens of 
millions of deaths for the simple reason that the population of 
the world was naive to this type of flu. You didn't have the 
years, if not decades, of memory of similar viruses that you 
were exposed to.
    [Slide shown.]
    Dr. Fauci. So what are we going to do about it? As part of 
the departmental plan for confronting both pandemic and 
interpandemic flu, we do the research associated with 
understanding the pathogenesis and ultimately the basic 
research that will allow us to develop countermeasures in the 
form of diagnostics, therapeutics, and vaccines. That is 
schematically diagramed on this poster here. I want to point 
out one component of it which is really very important, and 
that is the revolution over the last decade in genomic 
research, which allows us not only to very rapidly sequence the 
microbes to give us a good handle on what we are dealing with, 
but now an example of what we are calling reverse genetics, 
where you have the capability of essentially recreating at the 
genomic level a virus of your choice that clips out the 
virulence components, but allows the virus to grow very well in 
whatever media you choose, be it eggs or a cell culture media. 
And that is what we are doing now with the H5N1 to get a seed 
virus that could be used for a pilot vaccine.
    [Slide shown.]
    Dr. Fauci. And on this last poster, this really summarizes 
the flowchart of the development of influenza vaccine. It 
starts off with isolation of the virus in question. The one we 
are concerned with now, as I mentioned, is the H5N1 that has 
jumped from chickens to humans. To understand the pathogenesis, 
to get the proper sequence, to do the molecular manipulation, 
to get it in a seed form to do a vaccine, and then to make 
pilot lots and to test those pilot lots in the NIH's network of 
vaccine trials unit. All of that synergizes with the public 
health aspects of what the CDC continues to do, as well as 
other agencies of the Federal Government.
    So in summary, the process of preparing for both 
interpandemic and pandemic flu is complex and is heterogeneous; 
there is research and there is public health. All of these need 
to work together to meet these inevitable threats.
    Thank you, Mr. Chairman.
    [The prepared statement of Dr. Fauci follows:]

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    Chairman Tom Davis. Thank you very much.
    Dr. Heinrich.
    Dr. Heinrich. Mr. Chairman, members of the committee, I too 
am very pleased to have the opportunity to be here today to 
discuss our Nation's preparedness for managing public health 
threats such as these large-scale outbreaks of infectious 
diseases. Certainly with the SARS outbreak in 2003, this 
highlighted the challenges in responding to new and emerging 
infectious diseases, and the recent incidents involving Ricin 
have raised additional concerns about responding to toxic 
    To assist the committee in its consideration of our 
Nation's ability to respond to major public health threats, my 
remarks will focus on the State and local preparedness, and 
Federal and State efforts to prepare for an influenza pandemic, 
and my testimony is largely based on the report that we issued 
this week.
    For the report, we reviewed each State's progress report on 
the use of approximately $1 billion of bioterrorism 
preparedness funding that was distributed by CDC and the Health 
Resources and Services Administration in 2002. The progress 
reports covered the period through August 2003.
    For our report, we also interviewed State and local 
officials in 10 States and several local jurisdictions. In 
addition, we updated our prior work on the status of the 
national and State plans for responding to an influenza 
    We found that as of the summer of 2003, all States had made 
improvements in their ability to respond to major public health 
threats, but no aspect of preparedness was fully addressed. In 
the area of disease surveillance, about half of the States 
reported having the capacity of receiving and evaluating urgent 
disease reports on a 24 hour a day, 7 day a week basis. 
However, only a few States reported having the ability to 
rapidly detect an outbreak of an influenza-like illness in 
their State. Similarly, few States reported making efforts to 
strengthen links between their public health and animal 
surveillance systems in the veterinary community in order to 
monitor diseases in animals that may spread to humans, such as 
the West Nile virus.
    All States participate in CDC's laboratory response 
network, a network of local, State, Federal, and international 
laboratories that are equipped to respond to emerging threats. 
However, only about half of the States reported they have the 
capacity to conduct advanced tests for some of the potential 
bioterrorist agents.
    Most States reported that funding from CDC allowed them to 
appoint an executive director for their bioterrorism program, 
designate a full-time person as response coordinator, and hire 
at least one epidemiologist for each metropolitan area with a 
population of 500,000 or more. Having dedicated leadership and 
critical expertise is important; however, the ability to hire 
and retain personnel is still a major concern for State and 
local health officials who identify work force shortages as a 
long-term challenge.
    Most States reported that hospitals lack surge capacity to 
evaluate, diagnose, and treat a large influx of patients with 
an infectious disease. Furthermore, no State reported having 
protocols in place for augmenting personnel in response to such 
an influx of patients. Another concern is that few States have 
regional plans in place that would coordinate the response 
across State borders during a public health emergency.
    As we reported previously, Federal officials have drafted, 
but not finalized, the Federal Influenza Pandemic Plan. In 2000 
we recommended that HHS complete this plan, but HHS recently 
reported that the plan is still under review. States are 
currently developing their influenza pandemic response plans, 
but they have had to make assumptions about what the Federal 
role during a pandemic will be. It is still unclear, for 
instance, whether the private sector, public sector, or both 
will have responsibility for purchasing and distributing 
vaccines and antiviral drugs during a pandemic. These 
assumptions they are making may prove to be incorrect and cause 
confusion and disruption of supplies at a critical time if we 
actually face a pandemic.
    In conclusion, while we wish to acknowledge the many 
positive changes since we last appeared before the committee, 
and we have documented where States have taken actions to 
improve their ability to respond to a major public health 
threat, we see that much remains to be accomplished.
    I will be happy to answer any questions.
    [The prepared statement of Dr. Heinrich follows:]

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    Chairman Tom Davis. Thank you very much.
    Let me thank all of you. I think it was excellent 
    Dr. Gerberding, let me start with you. I noticed the 
President's budget submission includes, as Mr. Waxman noted, a 
cut of $105 million for State and local preparedness, but there 
is a new public health tool called the Bio-Surveillance 
Initiative. Does that balance off? Can you explain how that 
works? Are we going to be better prepared or would we be better 
off restoring the $100 million in addition, or do you have any 
thoughts on that? Not to put you on the spot.
    Dr. Gerberding. I am used to it.
    As we just heard from the GAO, the States still lack the 
capacity in all jurisdictions to rapidly detect an emerging 
threat, to alert people 24/7 out to the distal nodes of the 
response system, and what the President's initiative is 
designed to do is to accelerate our capacity to detect events 
at the Federal, State, and local level. So what we are doing 
with that investment is creating systems that allow us to get 
real-time data from a variety of sources and to identify the 
emergence of a health threat and immediately communicate that 
back. Already we are receiving about 350,000 lab reports a day, 
we are getting information from nurse call lines around the 
country, we are receiving clinical data from the DOD and the 
VA, and we are synthesizing all that information and creating 
systems to work with the State and local jurisdictions to 
accomplish this detection and response mode much more quickly. 
So while there is a reduction in the State-to-State allocation 
for these activities, we do have this new investment and this 
new tool that we think will organize and orchestrate this on a 
much faster timeline than doing it 50 times.
    Chairman Tom Davis. OK. Let me ask you, and maybe Dr. Fauci 
as well, how effective are vaccines? If you are vaccinated, 
does that give you a 99.9 percent immunity? Why do some people 
get the flu and others don't when they have the same exposure? 
Just kind of a primer. I was a political science major.
    Dr. Fauci. Well, that is actually an excellent question 
that frequently gets asked. In a year in which the vaccine 
matches the circulating strain of flu, in a healthly young 
person it ranges from 70 to 90 percent effective. As you get 
into elderly individuals, the capability of the vaccine to 
protect against the strain in question diminishes considerably, 
sometimes as low as 50 percent. And when there is a mismatch, 
even though it was only a slight to modest mismatch, as we saw 
this year, it sometimes can go down to 30 to 50 percent of 
    It really varies rather considerably on the health status 
of the individual who is vaccinated, and that is why you see it 
diminish with age and in people who are immunosuppressed, 
people who are on immunosuppressive drugs, people with HIV 
infection, people like that; the capability of their immune 
system to appropriately respond to a vaccine gets less and 
less. But in an otherwise healthy, young individual it ranges 
between 70 and 90 percent.
    Chairman Tom Davis. And I guess even if you don't have the 
vaccine, some people get exposed and don't have many symptoms.
    Dr. Fauci. Oh, without a doubt.
    Chairman Tom Davis. Because their immune systems are just 
    Dr. Fauci. Yes. And there is a range of responses to a wild 
type or confrontation with a circulating virus, such that 
somebody might get infected and have such a subclinical illness 
that they don't even know they are infected. And there is a 
whole range of people who have mild illness, moderate illness, 
and then there is a very small percentage of people who do 
very, very poorly; they get very sick and sometimes life-
threateningly so, and that is usually less than 1 percent.
    Chairman Tom Davis. But you can walk around vaccinated, and 
there are still other flu strains out there that can nail you.
    Dr. Fauci. Oh, absolutely. There is no question about that, 
    Dr. Gerberding. If I could just add one thing, though.
    Chairman Tom Davis. Sure. Please.
    Dr. Gerberding. Because the vaccine really does save lives. 
So we don't want to give people the impression that there is no 
advantage to vaccination. It is clearly a life-saving 
    Chairman Tom Davis. There are other members who brought 
this up, that vaccinations can cause the flu itself, where you 
get people reacting that get it and otherwise wouldn't because 
their systems respond.
    Dr. Gerberding. This is a common misunderstanding, because 
sometimes the flu vaccine itself causes an inflammation or a 
small reaction. But flu vaccine absolutely does not give you 
flu if you are using the inactivated vaccine, because all the 
virus particles are dead. The new flu vaccine that came out 
this year, that you put in your nose, is an attenuated strain 
of virus; it is still alive, and so it causes a very mild 
infection that is limited to your nasal tissues. That vaccine 
sometimes is associated with fever and some very minor cold-
like symptoms. But none of the virus vaccines actually cause 
    Chairman Tom Davis. So there is agreement on that.
    Dr. Fauci. There is no question about it. In fact, you 
often hear we, as physicians, sometimes hear, I know Dr. 
Gerberding and I both have people say, ``No, I got the flu shot 
and the next day I got the flu, so the flu shot must have given 
me the flu.'' It is physically impossible for that to happen 
with a killed virus.
    Chairman Tom Davis. And on the nasal side, there was 
something on a Web site this year. Was it misleading? I know 
there has been some talk that it can cause flu.
    Dr. Gerberding. As I said, the virus in the vaccine, the 
nasal vaccine, is a very weak virus, and it is temperature 
sensitive, so it doesn't grow well at normal temperatures. And 
it does not actually cause disease, but the hypothetical 
concern is that if you passed even this weak virus on to 
someone with a very depressed immune system, as Dr. Fauci was 
saying, that it could theoretically cause infection in that 
individual. So as a precaution we recommend that people who 
receive this very effective FluMist vaccine don't have direct 
contact with others who are very immunosuppressed.
    Chairman Tom Davis. OK, thank you. I may followup on that, 
but it is Mr. Waxman's turn.
    Mr. Waxman. Thank you, Mr. Chairman.
    Dr. Gerberding, all of us in the Congress appreciate your 
hard work and the hard work and dedication of the scientists at 
CDC. They are dedicated people, and we commend them for the job 
they are doing. I said in my opening statement that I am 
concerned that the President's budget does not provide adequate 
support for public health. You testified that the new 
recommendation to vaccinate children between the ages of 6 and 
23 months against flu is an important step in saving lives, yet 
the Virginia State health commissioner is going to testify that 
the President's budget does not provide adequate funding to 
assure States will include the flu vaccine in their childhood 
immunization programs.
    Are you concerned that the President's budget does not 
provide enough funding for the Federal Vaccines for Children 
program and for the State grants for vaccination efforts to 
assure that children have access to all recommended vaccines, 
including the flu vaccine?
    Dr. Gerberding. There has been a change in the way the 
allocation for vaccines is proposed in the President's 2005 
budget. One of the changes is to provide an additional $40 
million to stockpile influenza vaccines for children so that we 
have an additional supply. And in the Vaccines for Children 
line, these pediatric doses would then be available to amplify 
the amount of vaccine that we have had in the past. In 
addition, that change in allocation ensures that additional 
children will be eligible for childhood immunizations who 
currently don't qualify under the voluntary program. By putting 
more money in the mandatory vaccination program, we actually 
will end up with a net increase in the number of children who 
can receive vaccines and, in addition, negotiated a much better 
price for the diphtheria tetanus vaccine that was too expensive 
for many children to receive in the past.
    Mr. Waxman. That $40 million flu vaccine stockpile is a 
reserve supply, it doesn't really address the issue of routine 
vaccination programs. We are going to hear from others, 
especially the States, who are going to tell us they feel they 
are being short-changed. Are you concerned they might have a 
    Dr. Gerberding. I am always concerned if the States have a 
perspective. One of the things that we are doing in the 
department right now is looking at how we can predict what the 
utilization will be. We are also going back to the ACIP, the 
immunization advisory board, and evaluating this year's flu 
situation in children to make sure that our recommendations for 
limiting the vaccine to that age group still apply, given the 
concerns about an additional burden of illness in children. So 
we have to look upon this as a work in progress, and if there 
are unmet needs, we will do our best to identify them.
    Mr. Waxman. The GAO is going to report that not a single 
State has a plan for hospitals to handle an epidemic of at 
least 500 patients. We are also going to hear from the Trust 
for America's Health that most States and HHS have not 
finalized their flu plans, and that only two States have the 
capacity to receive and distribute emergency medications.
    When will State and HHS pandemic flu plans be finalized, 
and how can we close critical public health gaps as quickly as 
    Dr. Gerberding. Thank you. As you know, a plan is one 
aspect of preparedness, and the formalized big, thick flu plan 
is not yet finalized in the department, although I think we do 
have the final document together. But there is much more 
important work besides a written plan, and we saw with SARS how 
rapidly we were able to scale up and develop plans for 
containing SARS, and actually, as you will see on the CDC Web 
site, the steps that need to be taken at the local level for 
managing SARS are the same steps that we would recommend for 
    Mr. Waxman. Well, we are going to hear testimony that 
additional funding is going to be critical for this to all 
happen, and the President's budget cuts over $100 million from 
State and local public health preparedness grants. And in his 
written testimony today, the Virginia State health commissioner 
states these cuts could jeopardize our ability to respond to a 
terrorist event, outbreak of an infectious disease, or other 
public health threat or emergency.
    So it seems to me the States are telling us, even though 
you answered Mr. Davis' question by saying that there is money 
because of the biosurveillance program, they are saying they 
see this all as a cut. If there is a biosurveillance program, 
that could increase demand for their funds because there can be 
some sensor that will pick up something, they will have to 
divert resources to deal with it, and yet we are faced with 
these public health emergencies as well.
    So do you see that the States vigorously disputing this 
point, that the States are wrong?
    Dr. Gerberding. As you know, we put about $3 billion into 
the States through the various preparedness activities, and we 
are constantly looking at the evolution of preparedness 
building from a pretty dilapidated public health system, and so 
we have to be able to sustain these investments for the long 
term to catch up with where we should have been all along.
    Having said that, I think that our goal is to achieve a 
level of preparedness that would be adequate to protect against 
terrorism as well as emerging health threats, and we have seen 
some very encouraging examples this year where the investments 
really have paid off, with the meningitis outbreak in Chicago, 
the hepatitis A outbreak in Pennsylvania.
    Mr. Waxman. Well, I am sure the investments are improving, 
but if we are not making the full investment we need, we are 
not going to get to the point where we must be if we are going 
to face a crisis.
    I do want to ask one question of Dr. Fauci before we move 
on. Experts have said that a bird flu vaccine is urgently 
needed. What is the progress on such a vaccine? Should vaccine 
companies be producing bird flu vaccine right now?
    Dr. Fauci. The process of developing a vaccine for bird flu 
that might infect humans has already been launched, namely, the 
seed viruses are now in hand to a number of groups, including 
the CDC and the NIH. They are being produced and we are 
negotiating now for the development of pilot lots that will be 
used in phase 1 studies to determine not only the safety, but 
what the dosage would be. That whole process of getting a seed 
usually takes from weeks to a month, of getting a pilot lot 
usually takes a couple of months, and then an additional 6 
months to have the vaccine available. So we are already going 
in that direction.
    We must caution that it is a work in progress, because if 
there is a virus that goes from chicken to human, which is what 
we are all concerned about, and if it then assumes the 
capability of going from human to human, it might change such 
that it is a bit different from the original virus that went 
from the chicken to the human. So you have to move ahead, 
because you can't wait, but you have to keep your eye on what 
is evolving out there in the field.
    Mr. Waxman. Thank you.
    Thank you, Mr. Chairman.
    Chairman Tom Davis. Thank you very much.
    The gentleman from Tennessee.
    Mr. Duncan. Thank you, Mr. Chairman.
    I understand from some of the briefing materials that about 
87 million people, or about 30 percent of our population, got 
vaccinated this past flu season. Is that roughly correct?
    Dr. Gerberding. We don't have the final information yet, 
but our best estimate is about 87 million, and that is the 
largest number of people we probably have ever vaccinated.
    Mr. Duncan. And then we are also told that ordinarily 10 to 
20 percent of Americans get contagious respiratory illness 
annually. We have said 30 percent got vaccinated, but of the 
total population, of the 285 million people we have in this 
country, how many people contracted this flu this season?
    Dr. Gerberding. It is too early for us to give you the 
absolute answer to that, but in general, on an average year it 
is between 10 and 20 percent of all people get influenza; 
obviously, most of them very mild disease.
    Mr. Duncan. And I am not sure exactly how this works. I 
understand there were three companies that came up with the 
vaccine this season?
    Dr. Gerberding. In the United States there are three 
vaccine manufacturers that contributed to our supply. There are 
other manufacturers around the globe, including companies that 
make vaccine for the Southern Hemisphere, which usually has a 
little bit of a different influenza profile than the Northern 
Hemisphere; and the timing in the Southern Hemisphere is out of 
sequence with ours.
    Mr. Duncan. And how is this paid for? Because I have seen 
programs where they give out free flu shots and then other 
places where they charge. Are these companies totally 
compensated by the Federal Government or is it part Federal and 
part private, or how is it done?
    Dr. Gerberding. For influenza immunization, the vast 
majority of the program is in the private sector, so it is 
administered through health plans and private clinician offices 
and so forth. A small proportion is in the public sector. For 
those of us in public health, that is the part of the 
vaccination program that is the easiest for us to monitor and 
to keep track of, but we are developing new systems so that we 
will be able to have a much bigger picture of the whole vaccine 
supply; where it is, how it is being distributed, who has it 
and who doesn't.
    Mr. Duncan. And you just said that you sent $3 billion to 
the States?
    Dr. Gerberding. Over the last 3 years the terrorism 
preparedness funds. That is an approximate figure based on what 
CDC puts out and what HRSA puts out to the hospital 
preparedness component.
    Mr. Duncan. But you said that wasn't just for vaccines, 
that was for education and all kinds of things.
    Dr. Gerberding. That money is for six things: for 
surveillance, for planning, for laboratory capacity, for 
information technology, for communication, and training.
    Mr. Duncan. Well, rough guess, what percentage of that $3 
billion would have been spent on the vaccines themselves?
    Dr. Gerberding. Very little of that money would be spent on 
purchase of vaccines, because that is not what the money is 
specifically for.
    Mr. Duncan. And the gentleman doctor, I am not sure how you 
pronounce your last name.
    Dr. Fauci. Fauci.
    Mr. Duncan. Fauci? You said that these vaccines were 70 or 
80 percent effective in younger people and in older people it 
was 50 percent or maybe even less?
    Dr. Fauci. That is correct, yes. It varies. The older 
anyone gets, even if they are a relatively healthy older 
person, as you get older, beyond 60 or so, your immune system 
does not respond as robustly as the immune system of a 20 or 
30-year-old. So the efficacy diminishes proportionately, 
although it varies. There may be older people who have a very 
good response and are really quite well protected.
    Mr. Duncan. And I read that each year the health 
authorities try to pick three strains of the virus?
    Dr. Fauci. Yes.
    Mr. Duncan. In advance?
    Dr. Fauci. Yes. What happens is that, as Dr. Gerberding 
mentioned, toward the end of the winter, the CDC, WHO, and FDA 
get involved in doing a surveillance of the strains that are 
out there, and in the influenza vaccine shot that you and I 
get, it contains two As and a B. For example, this year had an 
H3N2, which was the Panama strain; it had an H1N1; and it had 
an influenza B.
    Mr. Duncan. Well, let me ask you this, since my time is so 
short. How many strains are there out there that you choose 
from to get these three?
    Dr. Gerberding. Overall, there are 15 main types of H1s, 
three of which are in humans. But the subtypes of those are 
infinite. So each little point mutation in the virus can create 
a new strain, and we just can't predict.
    Mr. Duncan. Because that is what I had heard somebody say 
at another time, that there were so many possibilities, it is 
almost unbelievable.
    Dr. Gerberding. That is absolutely right.
    Mr. Duncan. And it says the effectiveness of the vaccine is 
dependent on whether the strains picked will be the same 
strains to circulate during the following flu season.
    Dr. Fauci. There will always be minor strains, but what we 
try to do is to make the best guesstimate of what the 
predominant strain that will circulate the following season is. 
And generally we are right about 9 out of 10 times, 8 or 9 out 
of 10 times.
    Mr. Duncan. Well, I have some more questions, but my time 
has run out.
    Chairman Tom Davis. We may do another round, but thank you 
very much.
    Gentleman from Maryland, Mr. Van Hollen.
    Mr. Van Hollen. Thank you, Mr. Chairman.
    Thank all of you for your testimony.
    Dr. Gerberding, I just want to take this opportunity to 
followup on a hearing we had in this committee last October 
regarding the future of the Commissioned Corps of the Public 
Health Service and the reorganization plan. And I know you 
weren't here at that hearing, but at the time we had a survey 
from some of the commissioned officers at the CDC which made it 
clear that they were not happy with the direction that the 
reorganization was taking and, in response to questions, many 
of them said that if it was implemented as proposed by HHS, 
that they would seriously consider leaving the CDC, because it 
had a number of requirements that seemed to be not appropriate 
for some of the scientists at CDC, for example, emergency 
deployments in areas outside their area of expertise, certain 
physical fitness requirements which might not have really been 
applicable. And, in fact, Dr. Carmona, the Surgeon General, 
said sending officers such as epidemiologists from CDC to 
achieve mission objectives that are not consistent with their 
specific training and physical capabilities makes no sense.
    My understanding is, however, HHS has gone ahead and 
implemented the reorganization plan without the changes the 
Surgeon General said he wanted to make in that plan, in his 
testimony before this committee last October. So my question to 
you is, is that in fact the case and what impact is it having 
on the Commissioned Corps officers of the CDC? Have you gotten 
any feedback from them? And what actions, if any, do you intend 
to take?
    Dr. Gerberding. I was very concerned about the results of 
the survey that you described. We met with Secretary Thompson 
immediately thereafter, and he was very adamant that his 
intention is to improve the corps and to strengthen the corps 
and expand the corps, and in no way does he want to interfere 
with the capacity of the CDC Commissioned Corps officers to 
function as effective disease detectives. So since that time we 
have set up a series of interventions, better ways to 
communicate what the Commissioned Corps needs are, and we have 
proposed to the department a special track in the Commissioned 
Corps for public health officers that is under review right now 
that would accommodate the needs of the Commissioned Corps and 
still allow the Secretary to fulfill his mission of having a 
much stronger and a much more robust Commissioned Corps. So we 
would be happy to talk with you about those proposals, and just 
to say that there is a lot of dialog going on right now to try 
to make this go in the best possible way to achieve the 
    Mr. Van Hollen. OK, so HHS hasn't made any final decisions 
with respect to the provisions I referred to.
    Dr. Gerberding. The last communication we had was the next 
round of the draft proposals, and to my knowledge there has 
been no formal decision about the overall transformation.
    Chairman Tom Davis. If I might intervene. Not to take your 
time, but Mr. Waxman and I both sent a letter to HHS expressing 
our concerns, and we are waiting for a reply as well.
    Mr. Van Hollen. I believe you sent a January letter, and I 
just want to make sure that the committee's concerns are being 
heard, and I understand your concerns as well. I just want to 
make sure they are being heard, and if you can keep us informed 
about it.
    Dr. Gerberding. Thank you.
    Mr. Van Hollen. Because it seemed to have a potentially 
very large impact on CDC based on that survey.
    Dr. Gerberding. Thank you. I will make sure that the 
Secretary hears your comments today. But I will just tell you 
right now that I am absolutely confident that he wants this to 
work, and he wants this to work right, so his door is open to 
us and we are going to work this out.
    Mr. Van Hollen. Thank you.
    And, Dr. Fauci, it is wonderful to have you at NIH and my 
congressional district, so welcome again.
    Chairman Tom Davis. OK. Let me go with a few other 
    Dr. Heinrich, the best initial defense against public 
health threats continues to be, from what I judge from 
everybody's testimony, accurate, timely recognition and 
reporting of problems. People out there in the field, when 
something happens, are letting us know about it. How well 
developed are information sharing networks between States and 
the Federal Government at this point, and do these networks 
protect privacy while seamlessly connecting government at all 
    Dr. Heinrich. Actually, in the area of the communication 
electronic network, that is one of the areas where I think 
there has been the most progress from our reviews. We have 
heard from some of the State officials that information seems 
to flow best from the Federal level down, as opposed to the 
local county through the State up, but those information 
systems do seem to be working.
    Chairman Tom Davis. OK.
    Let me ask Dr. Gerberding, how effectively did CDC 
coordinate work with the State and local public health 
officials to respond to this year's flu season? Were these 
efforts reflective of how you and State and local officials 
respond to a greater public health threat?
    Dr. Gerberding. Thank you. On December 5th I activated the 
CDC's emergency operation center to coordinate our response to 
influenza because we recognized with this fast propagation of 
the outbreak we needed to have the best possible logistic 
support. So we implemented our emergency communication system, 
we provided regular updates, we had routine conference calls 
with State and local health officers. We did our very best to 
provide the ongoing information and then worked with the bi-
directional communications system to try to track vaccine 
shortages and redistribute vaccine as indicated. We also 
fielded information about the need for pediatric vaccine and 
anti-retroviral drugs. Secretary Thompson was able to authorize 
some emergency purchases of both vaccine as well as anti-
retroviral drugs for the stockpile, and I think overall we 
built on our experience with SARS, monkeypox, and West Nile 
virus and continued to scale up and speed up our integration at 
those levels.
    Chairman Tom Davis. OK.
    Dr. Fauci, the purpose of Project Bioshield is to stimulate 
companies to develop modern and effective vaccines, drugs, and 
devices to protect Americans in the event of a bioterrorist 
attack or a public health emergency. Do you think we need 
similar incentives to increase production capacities for flu 
vaccine manufacturers?
    Dr. Fauci. I think we need to appreciate and recognize 
that, in general, transcending biodefense, we have a very 
tenuous situation vis-a-vis vaccine development because there 
are too few companies involved, and the incentives for 
companies to make the risky investment in the development of a 
vaccine are such that we really are walking on thin ice when it 
comes to vaccines in general; and that would apply even to 
influenza. In general, I think Bioshield was a very important 
step in trying to shore that up and prevent any potential 
serious problems in going forward with vaccines and other 
countermeasures in biodefense.
    That doesn't alleviate the problems that we have in 
general, and what we have been having to do is work more 
closely with the companies to push even further in advance 
development to take away some of the risk that they take, 
because if you look at the incentive of developing a product in 
which the risk benefit vis-a-vis profit is considerably less 
than a drug, for example, that is very widely used, the numbers 
speak for themselves. I mean, there is the classic story that 
the amount of money made on a single lipid-lowering drug 
essentially eclipses all of the vaccines put together. So we 
really do have a problem with vaccine development in that 
    Chairman Tom Davis. Is there a flu season where it tends to 
peak and we talk about a flu season getting ready, and why is 
it a certain time? I mean, it is with us all the time, the 
virus is present at all times. Is there a particular season, 
and why is that?
    Dr. Fauci. Well, in our hemisphere, the season generally 
goes in the winter.
    Chairman Tom Davis. Are you on? See if your mic is on.
    Dr. Fauci. Oh, I am sorry. The season in our hemisphere, in 
the United States, Canada, etc., generally starts in the early 
winter, December, and generally peaks in January, and then 
tapers off as you get to February, and usually is gone by 
March. That is not necessarily the case in other regions where 
the temperature is essentially constant or practically constant 
throughout the year. That is the point that Dr. Gerberding made 
just a few minutes ago. With this year, the cases that we were 
seeing were unusually early, which triggered the response of 
people wanting to get vaccinated.
    Chairman Tom Davis. Why is it at that time? I mean, is it 
the cold weather that brings it on?
    Dr. Fauci. It is a combination of things. The most obvious 
that we say, and yet there is some scientific softness about 
this, but the generally appreciated explanation is that in the 
winter months you have people crowded together and indoors 
without a lot of good ventilation, so that when you have a 
respiratory-born virus, be it influenza or several others, the 
possibility of their transmitting from person to person by 
aerosolization or droplets increases as more people spend more 
time in situations indoors. That is one of the possibilities.
    There are also some studies showing temperature and 
moisture and other considerations that allow a respiratory-born 
pathogen to be able to be transmitted better or not, depending 
upon the humidity and depending upon the temperature.
    Dr. Gerberding. I would just add one perspective. In this 
world of globalization and connectivity and speed, while we 
have a flu season here in the winter months, it is flu season 
in the summer months in the Southern Hemisphere. So if you 
looked at the globe, at any given time of the year there is flu 
virus circulating, and that is something that we have to come 
to grips with as we see now how these viruses can move so 
quickly throughout the world.
    Chairman Tom Davis. That is what prompted the question. Why 
here do we seem to have a peak season, although I guess people 
get it all the time? And we try to see when a strain is 
developing, why information is so important is we see something 
new developing somewhere; we want to stay ahead of it before it 
becomes a much more massive problem.
    Mr. Waxman, you had some additional questions.
    Mr. Waxman. Dr. Gerberding, CDC and the Health Resources 
Service Administration developed critical benchmarks to measure 
progress by the States. This is a very important process, but 
for it to work the benchmarks have to be meaningful. In 
hospital preparedness, one of the critical benchmarks is that 
each State must be able to provide initial evaluation and 
treatment to 10 adult and pediatric patients at a time in the 
entire State. Certainly this is not a meaningful standard for 
California, and maybe not for any State.
    I am concerned that some of these standards have been set 
to correspond to what is achievable under current levels of 
funding, not what is needed for true public health 
preparedness. This puts the cart before the horse. Is CDC or 
HRSA under any pressure to alter critical benchmarks to match 
the funding?
    Dr. Gerberding. Actually, what we are doing right now is 
moving beyond the kinds of generic benchmarks that were 
included in the original guidelines, and we are moving to 
performance-based benchmarking, where we actually define the 
capacities. And specifically with respect to flu, in the 2003 
budget allocation we have much more targeted benchmarks that 
deal specifically with influenza. But what we would like to do 
at this point in time, now that we have had a chance to build 
some basic infrastructure capabilities, is to really hone in on 
what exactly does it mean to be prepared and how will we 
realistically know that. We are working with the State and 
local health departments to define those new benchmarks.
    Mr. Waxman. Well, Dr. Heinrich, maybe you can comment on 
this. Have they thrown out these old benchmarks? Are they no 
longer meaningful and, therefore, they are meeting certain 
performance standards that match the needs for public health?
    Dr. Heinrich. In our review and in our discussions with 
State and local officials, overall, people found the benchmarks 
quite helpful in giving them guidance as to how to set 
priorities, and, of course, each area varies considerably State 
by State, and even within State. We did hear many times that 
when there were specific numbers attached to benchmarks, it was 
not always meaningful. For example, what you just said, for a 
State to say that they could manage an influx of 500 people in 
a State as large as California.
    Mr. Waxman. Well, it is even less than that. Each State 
must be able to provide initial evaluation and treatment to 10 
adult and pediatric patients to respiratory isolation rooms in 
the entire State. Now, my question is, is this a benchmark that 
is meaningful health or is it, one, being driven by the 
pressure for CDC or HRSA to match the funding and to set the 
target so low, the benchmark so low that it is based on the 
funding amounts?
    Dr. Heinrich. And I don't know what the rationale is for 
those particular numbers. When we asked officials at the 
Federal level and others, we didn't really get any good 
    Mr. Waxman. Well, let us see if maybe Dr. Gerberding can 
give us a good answer.
    Dr. Gerberding. The benchmark you are referring to is part 
of the HRSA grant, and so I am not prepared to explain it to 
you in detail, but I would be happy to make sure that you get 
the explanation that you are asking for.
    Mr. Waxman. In your professional judgment, is that a 
reasonable benchmark for HRSA?
    Dr. Gerberding. In my professional judgment, the benchmark 
should be based on what is necessary to get the preparedness 
level accomplished that we have set out to accomplish. We are 
staging preparedness, because you can scale up to any level of 
threat imaginable, and it is not realistic to expect people to 
be prepared for the worst case scenario the first time out, but 
we are moving up the scale every single time we put money out.
    Mr. Waxman. We can also scale down to something that sounds 
absurd simply because the money might not be there. So that is 
a concern I raise.
    There are concerns that the bird flu that is affecting both 
chickens and people in Asia could be a flu pandemic and my 
question for you, Dr. Gerberding, is how many doses of vaccine 
for bird flu or another pandemic strain could FDA license 
manufacturers produce quickly in case of a flu pandemic? And is 
this capacity sufficient to meet the public health needs of the 
United States?
    Dr. Gerberding. Well, that is a complicated question. I 
will try to give you a short answer. With the preparation of a 
bird flu vaccine, where we are starting a new manufacturing 
process with a new product, we are already using reverse 
genetics for this and in an emergency would probably be able to 
use a tissue-based culture system and only make a single, as 
opposed to a trivalent, product. Our manufacturers right now, 
based on their current production, could make 270 million doses 
of a monovalent vaccine in the same amount of time that we make 
the trivalent vaccine.
    So 270 million doses is pretty close to the U.S. 
population, and that would be an optimistic projection. That 
all assumes that timing goes well and that we have the egg 
capacity and the other things that we would need to be able to 
do this, or that we can quickly get a safe licensable tissue 
culture system.
    Mr. Waxman. One of the three FDA licensed vaccine 
manufacturers produces vaccine for the U.S. market in the 
United Kingdom, and this company will testify that in the event 
of a pandemic, the United Kingdom may prevent them from 
exporting vaccine to the United States. In the case of a flu 
pandemic, how can we be sure that this company will be allowed 
to export vaccine to the United States? And if not, what impact 
would that have on the flu vaccine supply? And what has HHS 
done to encourage vaccine manufacturers to produce vaccine in 
the United States?
    Dr. Gerberding. Well, that is another area of importance. 
We recognize that over the years there have been fewer and 
fewer manufacturers engaged in vaccine production, and that 
creates vulnerabilities. Some years it creates a vulnerability 
in terms of the timing of the availability of the vaccine; 
other years, like this year, there was a problem with the total 
amount of vaccine produced. I think, as I mentioned, the 
Secretary has told us that we need to include steps now to 
expand the production capability of vaccine in the immediate 
sense, but also in the longer-term sense, to really look at 
what needs to happen to incentivize manufacturers to be in this 
business. And we are assembling, through the National Vaccine 
Advisory Committee, this spring a summary, comprehensive, top-
to-bottom review of what needs to be done about this problem at 
the Secretary's request. So we will be able to come back to you 
with some specifics on that very soon.
    Mr. Waxman. Have you looked at the possibility that we 
might be barred from exporting from that factory in Great 
    Dr. Gerberding. That is a vulnerability that we are aware 
of. We have similar problems with antibiotics at times, and so 
that is one of the things that has to be addressed in this 
    Mr. Waxman. And just one last question for Dr. Fauci. We 
are looking at a prospect for a vaccine that would be cell-
based as opposed to egg-based, and it could be then produced in 
a shorter time. What is your view of the future of cell-based 
vaccine? And if the cell-based vaccine is the wave of the 
future, are you concerned that vaccine manufacturers are going 
to be less willing to get into the egg-based flu vaccine 
market, since the sense is that the technology may become 
obsolete? Would this create a problem during the transition?
    Dr. Fauci. I believe that it is essential to pursue 
alternative methods of producing vaccines. The egg-based method 
has been tried and true, and has served us very well. There are 
some potential difficulties with that, particularly in a 
situation in which a virus may not grow well in the egg or 
might actually destroy the egg, particularly if it has 
virulence factors for eggs being a bird flu. We can get around 
that partially, or attempt to, by reverse genetics, which 
essentially clips out those virulence factors that would be 
detrimental to the eggs.
    But notwithstanding that, we need to do both in parallel, 
and that is exactly what we are doing. We are doing research 
right now with several of our grantees to try and develop a 
cell-based tissue culture approach toward the development of 
vaccines. Some of the drug companies are even doing it on their 
    What I detect in my discussions with the pharmaceutical 
corporations is that they are aware that we need to do those in 
parallel, and I hope, but I think there will be an easy 
transition so that we will have both going and we will be able 
to go to one or the other, depending upon the situation.
    Mr. Waxman. Thank you, Mr. Chairman.
    Chairman Tom Davis. Thank you very much. Is there anything 
else anybody wants to say that maybe you didn't get in or 
respond to some other question? If not, great panel. We 
appreciate everybody's time, your testimony, and answering the 
questions from the members, too.
    We will take about a 2-minute recess while we change the 
name tags and get our next panel up. Thank you.
    Chairman Tom Davis. I am going to start. I have to swear 
everybody in on our next panel. I want to thank our witnesses 
for appearing today. We have Dr. Robert Stroube, the Virginia 
State health commissioner. Dr. Stroube and I go back many 
years. In fact, your late father George helped me launch my 
political career back in 1979, when I ran for the board of 
supervisors, and then we worked together in Fairfax when I was 
chairman of the county board. And we are just very pleased to 
have you here today, and very proud of the job you are doing 
for the Commonwealth. You will be testifying on behalf of the 
Association of State and Territorial Health Officials to 
provide an assessment of State and local public health 
departments' ability to respond adequately to a public health 
    We have Ms. Karen Miller from the National Association of 
Counties [NACo], who will provide the perspective from county 
and local health officials on preparedness.
    We also invited three flu vaccine manufacturers to discuss 
vaccine production capacities and pandemic planning. Mr. Howard 
Pien, who is the president and CEO of Chiron Corp.; Dr. James 
Young, president of research and development at MedImmune will 
be joining us. Unfortunately, a representative from Aventis 
Pasteur was unable to attend, but the company has submitted 
written testimony for the hearing record. And, finally, Dr. 
Shelley Hearne, the executive director of the Trust for 
America's Health, produced a noteworthy report that provides an 
assessment of improvements to the public health system and 
remaining vulnerabilities.
    We welcome all of you today. We are just really excited to 
have you.
    It is the policy of the committee that all witnesses be 
sworn in, so if you would stand with me and raise your right 
    [Witnesses sworn.]
    Chairman Tom Davis. Ms. Miller, do you have somebody behind 
you who may answer questions?
    Ms. Miller. Dr. Susan Allan, who is the health director for 
Arlington County, VA.
    Chairman Tom Davis. Oh, great, Susan. I am an old 
Arlingtonian of Cherrydale. That is where I went to elementary 
    Ms. Miller. It is still Arlington.
    Chairman Tom Davis. I know. Not in my district, but 
probably for the better, looking at their voting patterns.
    Let the record show that you are here and sworn in as well.
    Dr. Stroube, why don't I start with you, and I will move 
straight on down the line? And, again, thanks for being with 


    Dr. Stroube. Thank you, Mr. Chairman. Mr. Chairman and 
distinguished members of the House Government Reform Committee, 
I am the State health commissioner for the Virginia Department 
of Health and I will be testifying before you today on behalf 
of ASTHO, the Association of State and Territorial Health 
Officials. I would like to thank the Chair and the committee 
members for convening this hearing on a very important public 
health topic: emergency preparedness and our current capacity 
to respond to an influenza pandemic.
    Substantial congressional investment in preparedness for 
public health has significantly aided our ability to rebuild 
Virginia's public health system. The Health Department in 
Virginia has become a 24/7 response agency and is now a key 
part of the State's homeland security infrastructure. This 
funding is being used to help prepare Virginia's public health 
and hospital system for a rapid and effective response to any 
event, whether it is bioterrorism, a naturally emerging 
infectious disease such as SARS, a new strain of flu, or a 
natural disaster such as hurricane. In order for Virginia to 
continue with the ongoing critical enhancement of its response 
capabilities, sustained funding from Federal grants is 
    This funding has enabled Virginia to enhance and improve 
public health preparedness and planning, infectious disease 
surveillance and investigation, the State's public health lab, 
its communication technology, education and training, and 
health information dissemination. In addition, it has enhanced 
our ability to develop our State's smallpox preparedness 
programs and our ability to distribute the Strategic National 
    The President's 2005 budget proposal includes a $105 
million cut from the CDC preparedness State grant funding. 
ASTHO opposes this proposal. Because no State or community is 
yet fully prepared, direct funding to the States for 
preparedness activities must be maintained at the current level 
provided in fiscal 2004 funding. The current proposed cut in 
funding would result in significant cuts in both State and 
local preparedness activities. The proposed cuts could 
jeopardize our ability to respond to a terrorist event, an 
outbreak of infectious disease, or other public health threats 
or emergencies. At a time when States are being asked to expand 
their role in disease surveillance and emergency preparedness, 
such a cut will jeopardize their ability to protect the public 
we serve.
    In Virginia, such a cut in funding will reduce our current 
progress toward upgrading and enhancing our communication and 
information technologies. Public health technology 
infrastructure has faced serious neglect for many years due to 
lack of funding. The Federal grant funding has enabled us to 
begin to rebuild our vital information technology system, which 
is a process that cannot be completed within just the 2 years 
that we have had grant funding. Our recent response to 
Hurricane Isabel, to SARS, the recent anthrax scare, and the 
early flu outbreak have demonstrated the importance of reliable 
and redundant communication systems. Once the information 
systems are established, they must be continuously maintained 
and upgraded as technology evolves. Such a funding cut also 
would impact our State laboratory, which still is in the midst 
of upgrading equipment to provide the most sophisticated 
methods available for rapid detection of biological and 
chemical agents. A Federal funding cut could also impact 
Virginia's ability to provide the best and most comprehensive 
training available for health care providers and emergency 
responders on biological, radiological, and chemical agents. 
For a State the size of Virginia, new training technologies, 
such as distance learning, are essential. Funding cuts could 
impact the health department's ability to provide education and 
training programs, which are necessary to ensure our response 
work force is always knowledgeable about the latest science.
    With regard to unspent grant funds, it is important to know 
that any delays in spending of grant funding are due to the 
difficulties of hiring such a large quantity of highly 
qualified staff in such a short period of time. In addition, 
large expenditures have now been obligated for upgrades in 
highly sophisticated technology equipment. Virginia went to 
great lengths to properly research available systems prior to 
making decisions about what to procure. We also worked closely 
with other State and local emergency responders to ensure that 
we made wise purchases. Virginia is ensuring that its funding 
is being utilized to purchase technology that will effectively 
serve multiple purposes and correspond with its local emergency 
response partners' communication systems.
    The current influenza season has certainly been a challenge 
for Virginia. The Governor, last summer, ordered an aggressive 
campaign to encourage flu vaccination in the State. We provided 
more than double the number of flu shots that we typically 
provide through our local health departments. This year we 
administered more than 160,000 doses of flu to members of the 
public. During a more typical year, the health department 
provides about 70,000 doses of flu vaccine.
    While the Advisory Committee on Immunization Practices 
recommended that over 185 million people be vaccinated, only 
87.1 million doses of vaccine were produced. However, this 
season we had an aggressive flu campaign and an early outbreak 
of flu. The situation was enhanced by extensive media coverage 
and heightened public awareness and demand for flu vaccine. The 
result was the available supply was unable to meet the demand. 
Public health worked to promote vaccination. Our efforts were 
undermined when the supply was inadequate.
    In Virginia, many high-risk patients went without vaccine, 
parents could not get young children vaccinated, and health 
care providers could not vaccinate their staff. Attempting to 
prioritize vaccine to high-risk patients was a local health 
department nightmare. In some cases security was needed to 
maintain crowd control with demanding patients.
    The present system of vaccine production and distribution 
was incapable of effectively responding to demands placed on it 
during the past flu season. While CDC, Virginia, and other 
States struggled to redirect vaccine supply, the reality was 
that people went unvaccinated.
    Today, only three companies produce flu vaccine for the 
United States. Two of these companies produce inactivated, 
injectable flu vaccine and the third company produces nasal flu 
vaccine, which cannot be used for high-risk patients currently. 
Congress needs to support the development of a more reliable 
vaccine production process. The current system is incapable of 
meeting increasing vaccine demands or timely adjustment to the 
vaccine formulation. A review of the Nation's influenza program 
must include a comprehensive and critical look at all aspects 
of the system, including the production and distribution of 
    Last, I would like to commend the leadership we receive 
daily from CDC. Whenever we have any kind of infectious disease 
outbreak, CDC provides rapid, clear, and concise communications 
and guidance. This communication is provided to the State 
through conference calls, through their continuously updated 
Web site, and publications such as the MMWR. CDC guides public 
health policy and provides critical guidance documents needed 
by both State and local health departments. In addition, CDC 
provides routine and accessible updates on information during 
public events as it becomes available and is a ready resource 
to the States through their emergency operation center.
    In closing, I wish to thank Congress for the preparedness 
funding it has provided over the last 2 years. It has been 
essential for rebuilding the public health infrastructure in 
this country, but this cannot be seen as a short-term 
investment. Decades of neglect of our Nation's public health 
infrastructure make continued Federal investments necessary. We 
are eager and ready to address any public health emergency that 
may emerge in the coming years, but we are looking to you to 
ensure that we have the resources we need to protect the health 
of our citizens.
    Thank you for the opportunity, and I would be glad to 
answer questions.
    [The prepared statement of Dr. Stroube follows:]

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    Chairman Tom Davis. Thank you.
    Ms. Miller.
    Ms. Miller. Good morning, Mr. Chairman. My name is Karen 
Miller. I am a commissioner in Boone County, MO, and also 
president of the National Association of Counties; and, as you 
know, NACo is the only organization that represents county 
governments at the national level. Additionally, I would 
especially like to thank the National Association of County and 
City Health Officials, whose expertise I use today in preparing 
this testimony.
    America's 3,066 counties vary in geographic shape, size, 
population, and services they provide, but one common thread is 
that they all have an integral role to play in protecting our 
communities. Counties are the Nation's ``first responders,'' 
responding to virtually every emergency situation, whether it 
is a flood, an act of terrorism, or an outbreak of disease.
    Mr. Chairman, I have one overall message for you today. We 
have made much progress in public health preparedness, but we 
have along way to go. At the local level, the people who work 
diligently on influenza immunization are the same people who 
are working every day to improve public health preparedness for 
any type of emergency. As the public health threats to which 
they must respond increase, we are asking the same people to do 
much, much more with resources that still are very limited. 
Today, on behalf of the Nation's counties, I urge two actions: 
sustained and increased Federal funding for public health 
preparedness, and greater systematic attention by Federal 
policymakers to the realities of local public health emergency 
planning and response.
    As this committee has recognized, our communities must be 
prepared for any disease outbreak, whether it results from an 
act of nature or an act of terror. We have all been concerned 
about the potential for widespread influenza, because we have 
seen how it can take the lives of our children. We remember the 
scares caused by the anthrax attacks of 2001, and we want to be 
sure we know what our communities will do if the unthinkable 
    The good news is that our Nation's counties are better 
prepared now than they were 2 years ago. The infusion of 
Federal funds for building State and local public health 
capacities has helped a great deal. The plans that are in place 
will serve us well, whether we face an outbreak of influenza or 
    We have already benefited from improved public health 
preparedness, even though there has been no truly catastrophic 
event. For instance, although we hope we will never see a case 
of smallpox, we have made great progress in planning for mass 
    In my own county, the work we did last year on developing a 
local health alert network, which was aided in part by public 
health preparedness grant funding, improved our response to 
influenza this year. It enabled us to share current local data 
about flu cases and State and CDC recommendations with our 
local medical providers. Our new grant-funded regional 
epidemiologist created weekly influenza summaries that we sent 
out to the medical community via the local Health Alert 
Network. This has improved physician reporting of influenza, 
which is essential to help us identify any large outbreak. A 
regional public health information officer, also hired with 
public health preparedness grant funds, serves us and 16 other 
counties. This has enabled us to help be more proactive in 
educating the general public about flu vaccination and how to 
prevent the spread of flu.
    However, when my health department, or other local health 
departments, need to respond to influenza, or to a requirement 
to vaccinate medical personnel against smallpox as we did last 
year, we are still using the same staff that carries out 
routine public health activities. The number of hours required 
to plan and carry out vaccination clinics pulls many people 
away from routine duties and those come to a halt. We just 
don't have the resources or the staff to compensate for these 
demands. Of the approximately 3,000 public health departments 
in the country, nearly all are understaffed and underfunded. 
What we want you to understand is that we have drawn upon far 
more local resources than Federal funds to move forward in the 
public health preparedness.
    We still have a long way to go. We know that large-scale 
influenza or SARS might resurface in any community at any time. 
However, we have never had to implement large-scale isolation 
and quarantine. In addition, many communities are concerned 
that they lack adequate arrangements for what we call ``surge 
capacity,'' that is, extra doctors, nurses, epidemiologic 
investigators, and others who are not needed all the time, but 
would need to be called into service to contain an outbreak and 
care for patients in an emergency.
    It is essential that the Federal Government remember that 
public health preparedness is not a destination that some day 
we will reach and then be able to stop. Rather, it is a journey 
during which we will improve little by little, day by day and 
year by year. We must always be using exercises to test our 
abilities and we must always be training new people, adapting 
to new technologies, and preparing to address new threats.
    Most local health departments had plans for identifying 
stocks of available vaccine and reallocating vaccine among 
providers in their community. The unexpected demand for flu 
vaccine and its subsequent unavailability concerned us because 
it required us to change our strategies and our public message 
midstream. It pained us greatly when we found ourselves unable 
to offer vaccination to all who asked, particularly because the 
FluMist vaccine that remained available is unsuitable for 
children and high-risk groups on whom we focus our service. 
There were approximately 70 counties in my State alone that 
experienced a flu vaccine shortage this year. Overstocking, 
though, is way too costly.
    Public health requires good collaboration between Federal, 
State and local governments because each has an important, 
unique role to play. The fact remains, though, that disease 
outbreaks don't occur in States; they occur in communities. It 
is our counties and cities that bear the greatest burden for 
response. In addition, it is essential to understand that 
public health preparedness at the local level does not involve 
only our public health departments, it is an overall emergency 
management system with all the public and private partners.
    In closing, I would like to reemphasize the need for 
sustained and increased Federal funding for public health 
preparedness and greater systematic attention by Federal 
policymakers to the realities of local public health emergency 
planning and response. You know, the best vaccine and 
surveillance in the world won't save any lives if there is no 
one at the local level to give the vaccine to the people.
    Again, Mr. Chairman, I thank you for the opportunity to 
testify before you today. I would be pleased to answer any 
questions you may have.
    [The prepared statement of Ms. Miller follows:]

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    Chairman Tom Davis. All right.
    Dr. Pien from Chiron. Thank you very much for being here.
    Mr. Pien. Thank you, Chairman Davis and Mr. Waxman, for the 
opportunity to appear today.
    Drs. Gerberding and Fauci have provided the committee with 
an excellent characterization of this past flu season. I would 
just like to emphasize one point. Over 80 million Americans 
were vaccinated this past season, probably the highest ever. 
This is a significant public health milestone, for which the 
men and women working for public health should be recognized.
    I would like to convey three key messages to this 
committee: one, Chiron is committed to meeting demand for flu 
vaccines in the United States; two, raising demand is key to 
increasing supply in both the normal and the pandemic flu 
seasons; and three, public-private partnerships are fundamental 
to increasing the country's preparedness for the normal and the 
pandemic flu seasons.
    To my first point, our commitment. Chiron invested $878 
million this past July to acquire the English company 
PowderJect, and the principal driver was the Fluviron and our 
flu vaccine business, of which 90 percent is in the United 
States. Over the last 4 years, we have tripled our capacity to 
38 million doses for the U.S. market in 2003, and in 2004 
Chiron plans to produce 50 million doses, a 30 percent increase 
over the prior year. We will shortly break ground on a $100 
million new bulk manufacturing facility. Chiron is investing in 
bringing innovation to the U.S. market. This month we plan to 
file an IND application for our cell culture flu vaccine. Cell 
culture, as you heard, is viewed by many as one of the best 
ways to defend against a possible future pandemic.
    To my second point, demand and supply being intertwined. 
Demand for vaccines drives increased supply and, therefore, 
steadily increasing demand in normal or interpandemic seasons 
is key to the preparedness for a pandemic. Put another way, 
reliable vaccine supply in a pandemic situation is dependent 
upon steadily increasing vaccine demand in the interpandemic 
    In the short-term, a government guarantee to create a 
strategic reserve may increase consistency of supply, but only 
if it does not undermine the current private sector 
distribution system and the public health distribution system 
at the different levels of the government and, more 
importantly, does not undermine the motivation of the private 
sector to invest in product and technology innovation. Public 
health interest is therefore best served by achieving the 
Healthy People 2010 goal of vaccinating 150 million people 
every year. This will reduce the need for the reserve over 
    And this brings me to my third point, the public-private 
partnership. Public-private partnership is key to raising 
demand and increasing pandemic preparedness. The Health and 
Human Services agencies must be fully funded to continue their 
leadership role in these activities. Strengthening our public 
health infrastructure to increase immunization rates in the 
interpandemic years is the single most important initiative 
today to prepare for tomorrow's pandemic.
    To maximize the country's preparedness for a pandemic, 
Chiron believes that the Congress, the administration, and the 
private sector must work together on three things: one, 
expediting the already existing scientific collaborations 
between the private sector and the scientists at the NIH to 
develop new vaccines; two, defining a pathway for speedy 
regulatory approval of a vaccine for the pandemic season; and 
three, clarifying the financing and the indemnification 
mechanisms now to ensure rapid initiation of production before 
the pandemic arrives.
    A pandemic flu is a menacing threat to the Nation's health. 
Chiron pledges to be part of the solution. In the event of a 
pandemic, Chiron will cease production of our trivalent vaccine 
for the normal season and transition to a year-round production 
for a monovalent vaccine. Chiron will aim to triple the number 
of doses produced, subject to egg availability. Fifty percent 
of our output would be from our FDA licensed facility in 
Liverpool. Once Chiron's cell culture flu vaccine is approved, 
capacity will be expanded even further. Cell culture will 
eliminate egg supply as a bottleneck to speedy production.
    My conclusions are therefore threefold: Chiron has invested 
heavily in the flu arena and in the public health interest of 
our Nation; Chiron is committed to bringing cutting-edge 
technologies to the United States to alleviate the threat of a 
pandemic over time; Chiron has been and shall continue to be 
part of the vibrant public-private partnership in vaccinology, 
which is essential to the Nation's long-term health.
    On behalf of Chiron, thank you very much for the 
opportunity to express these views.
    [The prepared statement of Mr. Pien follows:]

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    Chairman Tom Davis. Dr. Pien, thank you very much.
    Dr. Young.
    Dr. Young. I am really happy to address the committee.
    Chairman Tom Davis. Well, we are happy to hear you.
    Dr. Young. As you know, I am president of research and 
development at MedImmune, which is a biotech company located 
just north of here in Gaithersburg, MD. Today's topic is of 
particular interest to me, not only because of my relationship 
with MedImmune, but because I am actually a flu virologist by 
    As you may know, MedImmune manufacturers the new intranasal 
flu vaccine FluMist, which was licensed by the FDA in June 
2003. FluMist, in addition to being the first intranasal 
influenza vaccine available in the United States, is a live 
attenuated vaccine that provides immunity both systemically, 
throughout the body, as well as in the nasal passages, where 
the virus actually enters the body.
    Today I would like to share with you our opinion on what 
the most recent flu season has taught us about the United 
States' ability to protect its citizens against flu and, most 
importantly, about the country's ability to be prepared in a 
pandemic situation. Our thoughts are based upon our experience 
with FluMist in its first year of commercial availability.
    After 30 years of development, costing approximately $1 
billion, and three FDA Advisory Committee meetings, FluMist was 
finally licensed for the very limited population of healthy 
individuals aged 5 to 49 years. Because FluMist licensure 
occurred late in the influenza manufacturing cycle, we planned 
for a limited launch and manufactured at risk about a quarter 
of our total production capacity of 20 million doses of 
vaccine. Our manufacturing for the current influenza virus 
season was virtually flawless, making approximately 5 million 
doses of FluMist available to the consumer as early as 
September, well ahead of this year's early influenza season. Of 
these 5 million doses, about 65,000 doses were donated by our 
business partner, Wyeth, to college campus vaccination 
programs. Further, up to 3 million doses were made available 
for purchase by CDC at a discounted price of $20 a dose, a 
price at which, I might add, would require us to sell more than 
8 million doses just to break even financially.
    Unfortunately, close to 4 million of the 5 million doses 
remain unused to date, and will be destroyed at the end of this 
year's influenza season. Thus, in spite of MedImmune's best 
efforts to work proactively and cooperatively with public 
health authorities to bring to the market the first innovation 
in influenza prevention in more than 50 years, there were 4 
million lost vaccination opportunities in this year's influenza 
season, which hit early and hard, and challenged the U.S. 
vaccine supply and distribution systems.
    As such, as we analyze our initial ``very disappointing'' 
experience as a flu manufacturer, one of the options we are 
considering is whether we should remain in the vaccine business 
or whether we should ``cut our losses and get out now'' rather 
than face the overwhelmingly difficult regulatory landscape of 
bringing new and more effective vaccines to the marketplace. On 
our part, to simply achieve parity with the approved labeling 
of the old-line, inactivated vaccines, we must spend at least 
an additional $200 million to achieve safety and efficacy 
standards the other vaccines were never required to achieve, or 
have ever independently proven for that matter. This double 
standard is more than enough reason to cause new manufacturers 
pause before entering the vaccine business, and our very public 
experience this season will most certainly have a chilling 
effect on others who are considering entry into this business.
    What were some of the factors that contributed to the lost 
opportunities for vaccination? First, demand for the influenza 
vaccine is strongly influenced by policies set by the Federal 
health authorities. Currently, influenza vaccine 
recommendations primarily target persons who are less than 2 
years of age or more than 50 years of age, or who have 
underlying medical conditions that put them at high risk for 
complications due to flu. However, the burden of influenza 
illness is significant in healthy persons who fall outside 
these targeted age groups, and in otherwise healthy 
unvaccinated school-age children who serve as vectors for 
transmission of the influenza to their families and to high-
risk individuals with whom they are in contact. In fact, if you 
look at the flu season thus far, from October 2003 through 
February 2004, 121 influenza-associated deaths among children 
less than 18 years of age were reported by the CDC; 49, or 40 
percent, were 5 to 17 years of age, and 95 of the children, or 
79 percent, had no underlying medical conditions.
    Therefore, MedImmune believes that the existing narrowly 
targeted influenza vaccine recommendations are woefully 
inadequate and must be expanded, and that influenza vaccine 
should be universally recommended for all Americans. This would 
further the objectives of influenza prevention, ensure 
continued development of new, innovative vaccines, and ensure 
availability of adequate supplies for annual and pandemic 
influenza seasons. Specifically, a universal recommendation 
would drive the demand for routine annual vaccination, which in 
turn will provide the impetus on the part of vaccine 
manufacturers to increase their production capacity to meet 
routine demand. This increased capacity will enable 
manufacturers to better respond to influenza not only on an 
annual basis but also in the event of a pandemic which would 
severely challenge existing vaccine capacity and the vaccine 
delivery infrastructure.
    Recommendations by the public health authorities are 
necessary, but not sufficient, to ensure adequate vaccination 
of the American public. Federal authorities need to make the 
public aware of the significant burden of influenza in all 
populations, both healthy and high-risk, and must 
enthusiastically endorse new, innovative vaccines as they 
become licensed and available.
    Another factor that contributed to lost opportunities for 
vaccination in the current influenza season was the 
misperception that FluMist could cause influenza, rather than 
prevent it, as it had just been approved by the FDA to do so, 
driven in part by erroneous information provided by public 
health authorities in public statements and on government Web 
sites that clearly stated, ``that FluMist can cause the flu.'' 
While the statement on the Web site was ultimately changed, it 
was not changed until after the media ran with the erroneous 
information. These statements created damaging misperceptions 
of FluMist and its benefits, and most certainly reduced the 
number of people protected against this year's flu epidemic 
that included the virulent mismatched Fujian strain. 
``Accurate'' educational materials from our public health 
officials are paramount to successfully sharing the benefits of 
vaccination to the general public and achieving broad 
immunization against the flu.
    How is MedImmune contributing to the efforts to prepare for 
a pandemic threat? First and foremost, we have already made a 
considerable investment, to the tune of $1 billion, to overcome 
the extraordinarily high regulatory hurdles facing new vaccines 
in order to make available an important new option for flu 
vaccination. Second, should we ultimately choose to remain in 
the flu vaccine manufacturing business, we will undertake the 
financial burden of spending hundreds of millions of additional 
dollars to hopefully expand our indication to include persons 
younger than 5 and older than 49 years which, if we succeed in 
doing, will in turn hopefully increase the demand for FluMist 
that will then justify increasing our manufacturing output to 
full capacity. Third, we are working proactively with Federal 
authorities to develop and test a FluMist vaccine for use in a 
pandemic situation. And, fourth, we have worked closely with 
the World Health Organization to make MedImmune's intellectual 
property in the area of reverse genetic engineering available 
for development and testing of inactivated pandemic vaccines.
    So in conclusion, the core of my message to you today is 
that in 2004, in the wealthiest and most powerful country on 
Earth with the world's best health care system, it should be 
unacceptable to all of us that more than 100 American children 
and countless elderly have recently died from a completely 
preventable disease. Importantly, this year is not unique. 
Every year 36,000 Americans die from influenza. The best way 
for us to be prepared to prevent this from happening in the 
future, as well as to help make sure we are prepared to deal 
with a pandemic situation, is to have the current flu 
vaccination recommendations expanded to include all Americans, 
especially expanded to include that all healthy children be 
vaccinated against the flu.
    Thank you very much for the opportunity to present today.
    [The prepared statement of Dr. Young follows:]

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    Chairman Tom Davis. Thank you very much.
    Dr. Hearne.
    Dr. Hearne. Good morning. I am Shelley Hearne with the 
Trust for America's Health, which is an independent 
organization working to prevent epidemics and protect people. 
And thank you, Chairman Davis and Mr. Waxman, for holding this 
important hearing. It is certainly a timely one. Just last week 
we were reminded, with the ricin scare on Capitol Hill, as to 
how vulnerable we are for many health threats. Fortunately, no 
one was killed in this incident, at least this time, but it 
could have been worse.
    One of the things that happened in the anthrax event of 
2001 was the rampant scare around the country, which 
overwhelmed our public health system. That could have happened 
here with ricin, and if it had we would have been in worse 
shape. In part, public health is not prepared for a variety of 
health threats. Just take a look at the public health 
laboratories. Most labs cannot test for ricin, and the majority 
of them do not have a chemical weapon response plan.
    So I know we are at an influenza hearing, and you may ask 
me what has this got to do with the flu. It is actually 
everything. One of the things we certainly know is that mother 
nature can rival the best of terrorists out there. We have had 
35,000 people routinely die from the flu, and if a pandemic 
came along, we certainly learned this in 1918, it can kill 
hundreds and thousands of more people.
    So is it possible to prepare for the threat of bioterrorism 
and at the same time to effectively prevent, contain, and 
reduce an influenza pandemic? Unfortunately, it is not the kind 
of public health system that we currently have today, but I 
would argue is just the defense system that we need. However, 
America is very far away from reaching that goal.
    In December, our organization released a report, ``Ready or 
Not? Protecting the Public's Health in the Age of 
Bioterrorism.'' We found that 2 years after the September 11th 
attacks, and almost $2 billion in new Federal funds, we have 
made a lot of progress in preparing for public health, and that 
has been echoed certainly with the panels today, but there is 
much more that needs to be done.
    For example, we found that CDC and the majority of States 
do not have pandemic flu plans. This, coupled with minimal 
oversight of Federal and State strategies, shows a failure to 
translate our concern about bioterrorism into a comprehensive 
strategy for public health preparedness. Another major finding 
is that only two States were prepared to distribute and 
administer emergency vaccination or antidotes from the 
strategic national stockpile. And while significant 
improvements have been made in the labs, only six States report 
that they have sufficient facilities should a major public 
health emergency occur.
    Finally, our report revealed that since the September 11 
attacks, two-thirds of the States have cut their State public 
health budgets. And now the President's 2005 proposed budget 
threatens to compound the impact of those cuts by slashing 
support for State programs. As has been noted before, this 
includes cutting the State and local bioterrorism preparedness 
by $105 million. Overall, CDC is facing a 3 percent budget 
reduction, just at a time when we need this agency to be even 
    To stop the hemorrhaging of the Nation's public health 
infrastructure, we are recommending a series of ``fixes'' to 
move us toward that modern system with the capacity to fight a 
multitude of hazards. Rather than concentrating solely on 
bioterrorism or responding to each ``disease du jour'' crisis, 
public health preparedness efforts must be focused on all 
hazards. We need to simultaneously address the potential for 
biological, chemical, radiologic, and natural disease 
outbreaks. TFAH is recommending that the CDC authorize States 
to use Federal preparedness funds to support an all-hazards 
approach. CDC must work with the State and local health 
officials to define measurable and mandatory preparedness 
standards. State or local governments must demonstrate to CDC 
that core public health funding levels are met, thereby 
ensuring the maintenance of effort. We believe that Congress 
should make a long-term investment toward biosecurity and 
authorize an independent review to determine whether current 
expenditures are sufficient.
    Let me add that the Trust for America's Health conceptually 
does support the President's Bio-Surveillance system and also 
upgrading the Bio-Watch Program, but we do not believe it 
should come at the expense of funding for State preparedness 
initiatives, which have been cut by 11 percent. We also endorse 
increasing the discretionary programs in the public health 
service by 12 percent. At a time when U.S. health care spending 
averages about $1.7 trillion, we believe that public health 
programs that prevent, control, and treat disease are essential 
to reducing America's health care bill.
    Last, we recommend that Congress, in consultation with the 
President, convene a summit to develop a cohesive national 
approach to public health protection. We need a blueprint for 
the 21st century, and the summit should address all threats to 
our Nation's health, including chronic diseases, infectious and 
animal-born illnesses, food safety, and terrorism. Whether it 
is anthrax or the avian flu, public health defenses must be 
fortified, not forfeited. To do otherwise would guarantee only 
chaos and a staggering loss of life should a public health 
emergency occur.
    Thank you for the time and for being part of this public 
policy debate.
    [The prepared statement of Dr. Hearne follows:]

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    Chairman Tom Davis. Thank you all. Thank you all very much.
    Let me start, Dr. Young, with you. Four million doses were 
destroyed last year. Was that the effect of the fact that the 
target population, those under 5 and over 50, that your doses 
were not recommended for them, or do you think it was the 
misinformation that was put out on some Web sites, or a 
combination? I mean, clearly those doses could have been used 
by people between 5 and 50, instead of some of the other doses 
that were used from other areas, and the reallocation we would 
have had, in theory, I would think, 4 million more doses 
available to people and might have saved some lives.
    Dr. Young. Absolutely. I think there were a number of 
factors that contributed to that. But it wasn't without our 
trying to get the vaccine out. We actually had discussions with 
the CDC in December about giving them a million doses, take 
them free; we are going to throw them out anyway. Take it free, 
you can have it. They said, we can't use that many doses; maybe 
we could take 250,000 doses. They never came back and took 
those doses from us. But we tried our best.
    Chairman Tom Davis. I bet you, Dr. Stroube, and Mrs. Miller 
can use them in your areas, right? I mean, I think you hit the 
problem in terms of the distribution of this. Maybe we didn't 
see the problem at that point, either, developing the way it 
    Dr. Young. It was actually the day before Christmas, well 
into the epidemic.
    Chairman Tom Davis. Keep going, I didn't mean to interrupt.
    Dr. Young. No, I think there are other issues about 
misperceptions, misconceptions, the public health authorities 
not getting behind this new innovative vaccine. You even heard 
today talk about how the inactivated vaccine, it was your 
question, is only about 70 to 90 percent effective when the 
strains are matched, only about 30 to 50 percent effective when 
the strains are mismatched. We have data in our package insert 
from a clinical trial we did in children that the first year of 
the vaccine, when tested in those kids, was 95 percent 
effective. That was when the strain was matched. And the second 
year, when it was not matched, 87 percent efficacy.
    Chairman Tom Davis. Do you think the nasal is more 
    Dr. Young. It is an afterthought of the public officials to 
talk about that vaccine. It is a great vaccine, yet it is sort 
of in the category of hand washing.
    Chairman Tom Davis. Just to give you your day here, do you 
think the nasal is better than the ordinary vaccine, more 
effective for the target populations that you are looking at?
    Dr. Young. We haven't done head-to-head trials. In fact, 
those trials are underway right now. We actually expect to 
unblind a couple of trials in a couple of weeks, and we plan on 
doing another head-to-head trial. All I can tell you is we have 
the data in children that shows that it is between 80 and 96 
percent effective. I don't know that such data exists to show 
that kind of efficacy with the inactivated vaccines.
    Chairman Tom Davis. The only thing I can say is we have 
three producers of flu vaccines, and if you go out, it makes it 
a lot tougher.
    Dr. Young. Well, it is hard to justify staying in the 
business and hemorrhaging money left and right.
    Chairman Tom Davis. Oh, I understand. Let us continue to 
    Dr. Pien, let me ask you. Of course, you are in the 
business as well. The one thing that concerns us is not 
anything that you are responsible for, but that is if there is 
a pandemic around the globe, the fact that your manufacturing 
sites are in Britain. Is there any way that you have to serve 
Great Britain or Europe first, and not America, that would 
limit your ability to disburse those?
    Go ahead and answer that, and then I have another followup.
    Mr. Pien. Mr. Chairman, I would say that this is really a 
subject of some speculation. We have no knowledge that the 
government of Great Britain would actually restrict the flow of 
the products. And all we can do, of course, knowing that this 
is something outside of our control, if it should arise, is to 
do our best to increase the total production capacity and make 
the investment to enable it, and that is both in terms of the 
conventional egg-based technology as well as flu cell culture 
flu, as I mentioned before in my testimony.
    Chairman Tom Davis. I think it is to our advantage to keep 
everybody in business.
    How much does it cost to put a dose together in each case, 
once the basic research is done, then to develop the dose and 
decide how much you are going to do? You get some economies of 
scale there, but this year we fell behind because it takes a 
period of time, I guess, to work a batch up. Is that the 
correct understanding?
    Dr. Young. Yes, that is correct. By the time you actually 
get the strains, optimize the growth of the strains in the 
eggs, and then produce, test, have the FDA review and release 
the product, it is many months, upwards of 6 months or more.
    Chairman Tom Davis. But once you have gotten one batch 
done, isn't it cheaper and faster to do the second? You don't 
have to go back and do basic research.
    Dr. Young. No, you don't have to go back and do basic 
research, but the timeline for production, testing, and release 
is the same for every batch. Now, in terms of the cost, I can 
tell you that the cost per vaccine is driven in large part by 
the level of manufacturing you are doing. For us to just turn 
on the lights in our plant costs $60 million, if we don't even 
make a single dose of vaccine. And until we actually get up to 
the point where we are above 4 or 5 million doses at the 
current retail price, we don't make a single dime on the 
product until we are above that; and you don't get down into 
really reasonable margins until you are up in the range of 15 
to 20 million doses of production. So there is a certain fixed 
amount of cost that we have no matter how many doses we 
    Chairman Tom Davis. But the economies of scale mean the 
more you produce, the cheaper, basically.
    Dr. Young. The more you produce, the cheaper it is.
    Chairman Tom Davis. Is that the same?
    Mr. Pien. I would generally concur with Dr. Young's 
comment, except to amplify a few points. First of all, you have 
to make ongoing capital investments to keep up with the ever-
rising standards of quality control which the FDA insists on, 
and has the right to insist on. One of the reasons that we are 
making this $100 million investment is precisely for the reason 
of wanting to bring state-of-the-art capacity to the buildings 
and the machinery and so on, such that as the standards rise 
for quality control and quality assurance, we make the products 
that meet those standards.
    I would also say that there is a general perception that 
the vaccines are probably less profitable than pharmaceutical 
products. I think the real reason for this is because every 
year you have to make new products, and every vaccinee, as it 
were, is a new patient; there is no refill as you would have 
for any hypertensive, for example. So these are issues that do 
contribute to profitability.
    I think most of us who are in the vaccine business, and are 
remaining in the vaccine business, understand that it is part 
of our social covenant that if we have the technology, we have 
the know-how, vaccinology is one of the most important ways 
that medicine can make a contribution to human health care and 
to the country's overall protection.
    Chairman Tom Davis. What is the shelf life of an average 
dose? Dr. Young, you talk about destroying maybe 4 million 
doses. Is that because they are not usable in the next year?
    Dr. Young. Yes. Actually, the shelf life is mandated by the 
FDA that it expires on June 30th, after the season, so that 
there is no misuse of the wrong vaccine the following season 
after the strains have changed.
    Chairman Tom Davis. OK, that is the FDA's ruling.
    Dr. Young. That is correct.
    Chairman Tom Davis. But as a practical matter, if you were 
to put this in a refrigerator and store it, would it still have 
potency 5 years later if that strain came back?
    Dr. Young. You would need to store it, in our case, because 
of a live vaccine, you would need to store it frozen at very 
cold temperatures, and it has a very long shelf life. But the 
problem is, as you heard from Dr. Fauci, the strains must be 
updated every year for the ones which are in circulation, so 
this year's vaccine probably isn't going to be very effective 
next year.
    Chairman Tom Davis. No, it wouldn't be, but 5 years from 
now it could come back, couldn't it?
    Dr. Young. Usually that doesn't happen. It is very rare 
that the same strain will actually reemerge back into the 
population, because everyone is immune to it. They have already 
seen it, so the virus is tricky enough to figure out that the 
only way it can continue to circulate in the population is it 
has to change to the point where no one's prior immunity can 
protect them against that strain.
    Chairman Tom Davis. Even if you have a regional outbreak 
here, that is just the way it works.
    Dr. Young. That is just the way it works.
    Chairman Tom Davis. OK. I understand that.
    Dr. Hearne, in your testimony you said States are 
experiencing a shortage of trained public health specialists 
and epidemiologists. How serious is this crisis?
    Dr. Hearne. Well, it is actually getting worse because we 
are finding that the pipeline doesn't exist for many of the 
epidemiologists or technical staffers, particularly in Virginia 
which has built one of the top labs in the country, but is 
seeing problems with work force and the ability to pay highly 
skilled, highly trained people. That is just one area of the 
gaps that we are seeing. Certainly there have been improvements 
in communications in some of the other areas, but there are 
still also gaps in making those labs even better, doing some of 
the better disease surveillance; number of holes that continue 
to need to be filled.
    Chairman Tom Davis. OK.
    Dr. Stroube, do you have any thoughts on that?
    Dr. Stroube. Well, we have been fairly lucky. The lab is a 
little bit harder to do because you are looking usually for 
Ph.D.s that are really state-of-the-art, and there is a demand 
for those. In finding epidemiologists, we actually created 140 
new positions in the health department using the Federal money 
on it, and we put an epidemiologist in every health district in 
the State, we have 35 of them, and planners. And we had some 
difficulty recruiting, but we have been fairly successful in 
doing that. Part of it, we are close to a lot of public health 
schools and we have a fairly attractive place to recruit people 
in, so we have done pretty well in trying to recruit people. 
But that is a long-term consideration we have been thinking 
about, and we have been working with public health schools and 
trying to get more people trained in the way we need them.
    Chairman Tom Davis. You also mentioned in your testimony 
that not all of the Virginia health care workers were immunized 
this year with the flu vaccine. I guess we ran out of it 
through the process?
    Dr. Stroube. We ran out in December, just suddenly. We were 
going great guns. Like I said, we put a lot of emphasis on flu 
this year, and part of it was to be prepared for SARS. It is 
hard to distinguish flu from SARS, so the more people we have 
immune to flu, the easier the job dealing with SARS, we thought 
it would be. So we really put a lot of effort into that and we 
started immunizing everybody in the health department, nursing 
homes, hospitals, and really pushed hard on that.
    Chairman Tom Davis. Well, let me ask you and I will ask Ms. 
Miller and also Dr. Hearne. We really are not ready for prime 
time if you get a pandemic at this point, is what I gather from 
the first panel and this. Obviously we are making strides, we 
are getting better each year we get a test, but is that fair to 
    Dr. Stroube. Well, I think the biggest problem is vaccine 
availability on it. For 3 out of the last 4 years we have not 
had adequate flu vaccine supplies; it has either been late due 
to manufacturers dropping out, and we just haven't had the 
material that we need to be able to enact a pandemic flu plan 
to get people to do that. Until we have the flu vaccine, plans 
aren't really effective.
    Chairman Tom Davis. Did you use any of the nasal vaccine?
    Dr. Stroube. We used some of the nasal.
    Chairman Tom Davis. For part of the population?
    Dr. Stroube. For part of the population. It started 
becoming available to us at the discounted price later in the 
game on it. Part of the problem we have with that, we have 
health departments all across the State, and as Dr. Young said, 
you have to maintain that at a very low temperature, which is a 
little hard for us to do in distribution systems.
    Chairman Tom Davis. But we have to get better at it, 
obviously, the way you are going.
    Ms. Miller, do you have any comment on that?
    Ms. Miller. I would just comment that local governments 
have a limited amount of dollars to buy vaccine with, and so I 
don't know what the cost is between the two differences, but I 
would like to ask Dr. Allan if she could just comment on that, 
if that had an effect on why the FluMist was not used 
    Chairman Tom Davis. Sure. We have sworn her in. Let us hear 
from her.
    That will be my last question, then I will yield to Mr. 
    Dr. Allan. At the local level, the implementation of an 
expanded influenza vaccine program this year was a real 
challenge. The vaccine supply issue has been a concern for 
several years, as Dr. Stroube mentioned. Beyond that, though, 
we ended up putting twice as much staff time into doing the flu 
vaccine program this year as we normally do, and I can't 
frankly tell you whether that was a success or not from a 
public health perspective, because those staff were doing 
influenza vaccines which needed to be done, instead of doing 
care to pregnant women or routine other vaccines to children or 
investigating hepatitis, which also needed to be done, because 
we do not have any cushion, any expansion in our staffing. So 
to hit a surge like something like influenza means that we are 
stopping other things that are also affecting the health of the 
communities in maybe less dramatic, but probably just as 
important a way.
    So I think our program, for example, declined the FluMist 
vaccine because we had already made an extra outreach to the 
high-risk populations, which we do consider our primary 
responsibility, and we had no more staff time just to give the 
lower-risk people the vaccine. We tried to let the private 
doctors know it was available. We couldn't have done any more 
than we did, having already doubled the staff commitment to 
this program at a cost to others.
    Chairman Tom Davis. OK. Thank you very much.
    Mr. Waxman.
    Mr. Waxman. Dr. Stroube, in your written testimony you 
stated Virginia does not include the pneumococcal vaccine in 
its childhood immunization program. Is this vaccine important 
and is it recommended, and what are the implications of 
Virginia not including this vaccine in its immunization 
    Dr. Stroube. The Prevnar vaccine, which is pneumococcal for 
children, has been recommended by the Federal authorities for 
several years now, but it is an expensive vaccine and we have 
been unable to afford to give it to all the children that need 
it, and so that makes them at risk of pneumococcal diseases 
such as pneumonia and ear infections.
    Mr. Waxman. What are the lessons of this experience for the 
new recommendation to provide flu vaccine to young infants?
    Dr. Stroube. I think any time there is a recommendation to 
expand or bring in a new vaccine, it has to come with money, 
because there just isn't any money available. We are looking at 
the vaccine purchase appropriations increasing by 50 percent 
since 1999, but yet the cost of giving a child all the 
recommended vaccines has increased by over 125 percent. So we 
are falling behind, particularly every time we get a new 
    Mr. Waxman. Well, it is troubling to realize that the 
President is proposing to make permanent tax cuts for the 
richest Americans, but his budget can't fund the childhood 
immunizations adequately.
    Are you going to find yourself making progress under this 
proposed budget or are you going to fall backward?
    Dr. Stroube. Well, we will do the best we can under what we 
have and prioritize what we do and try to use all the funding 
we can both from the State and Federal Government to meet the 
needs as we see them.
    Mr. Waxman. I wonder if I can direct some questions to Dr. 
Susan Allan, if you would.
    Dr. Allan. Absolutely.
    Mr. Waxman. The General Accounting Office is reporting 
today that the smallpox vaccine program has diverted resources 
from core public health activities. Do you agree this diversion 
has been a concern at the local level? And if so, can you give 
us any examples?
    Dr. Allan. The smallpox vaccine program took a tremendous 
amount of concentrated effort. I am actually speaking at a 
conference next week on this, and the title of my presentation 
is, ``Making Lemonade From A Box of Lemons.'' Dr. Stroube 
already mentioned I am in the State of Virginia here, and we 
have two staff with all of the Federal money, with the 
commitments required at the State level for the labs and 
technologies and other things. At the local level we had 
enhancement by two staff in our health department. It took 22 
people the equivalent of a week's time just over the first 
couple months of the smallpox program, plus 3 of us essentially 
full-time for 4 months just for the startup implementation of 
this. So the cost in terms of redirecting our resources was 
    Now, we tried. We are good public health people. We tried 
to turn this into general principles of infection: education, 
disease control, certainly enhancement with our relationship 
with the doctors and hospitals. So there were some benefits to 
this, but the cost to our system was a major disruption for a 
full 6 months.
    Mr. Waxman. That is interesting, because Secretary Thompson 
assured us there would be adequate Federal funding for the 
smallpox program, and what we are hearing is that this program 
may have actually undermined some core public health 
    Dr. Allan. If I may add a point, the Federal money came to 
the States with, in effect, a contract. It is a grant process, 
so the States had pre-committed, as we did in our role with the 
States, to what would be done with the money that came. So we 
already had a full workload agenda that used all of the 
resources provided, and then the smallpox program was dropped 
on top of that. Compensation was provided after the fact, but 
we don't run the local budget by going in the hole. So we 
didn't create extra expenses for that, we cut other 
commitments. So by the time, at least for many of us, that the 
Federal money came, it was too late to do any good, whereas if 
it had come with the commitment, there might have been some 
    Mr. Waxman. Well, obviously this was, I would think, an 
unintended consequence, and I am interested in your view. The 
administration's budget is investing heavily in bio-
surveillance technologies. Are there any potential unintended 
consequences to Federal efforts to detect bioterrorist agents 
in the environment? And in the event of false positive results, 
could these efforts generate more work and divert State and 
local officials from core public health activities?
    Dr. Allan. A number of our communities have already had 
experience. A lot of the military establishments and some post 
offices have had this. Here in the National Capital region, the 
Anacostia Post Office had a false positive on an anthrax test 
just a couple months ago, in November. Arlington had three post 
offices that were shut down until we knew for sure that was not 
a true positive, that it was in fact a bad test result.
    Meanwhile, there were 10 of us who spent the equivalent of 
almost a day and-a-half full time on this, and we put together 
a treatment clinic for the postal workers because we didn't 
know whether they had been exposed or not. We had 90 staff we 
brought in on overtime and set up a clinic to treat them, for 
one false positive. Rough estimate of the cost to us was about 
$10,000 for that one false positive test. And these 
technologies are untested and unproven; they generate a lot of 
errors that, every time there is a hit on these systems, we are 
going to have to drop whatever we are doing and investigate 
them. So, you know, it is like having a smoke detector. If you 
don't have a fire department to respond and see if it is a real 
fire or not, what is the point of the smoke detector?
    Mr. Waxman. Dr. Hearne, I understand Trust for America's 
Health is a nonpartisan and nonprofit organization that focuses 
on the need for a robust public health system in this country. 
From your perspective, what, if anything, concerns you about 
the President's fiscal year 2005 budget?
    Dr. Hearne. Part of our concern has been just at a time 
when we have had a series of wake-up calls--the flu outbreak 
was just the beginning, we have had, since then, the avian flu, 
certainly SARS before, anthrax and ricin last week. We are 
getting bombarded with a number of very strong wake-up calls 
that our public health system is a critical part of our 
homeland security. But in fact what we have found in our 
investigation is that it probably is the weakest link in 
homeland security. What concerns us is there are a number of 
gaps that we have identified and now is the last time that you 
should be considering cuts to this budget, when in fact there 
are very specific initiatives that need to be advanced, 
particularly to protect us from all flanks. And so just the 
fact the word ``cut'' is being used in the same sentence as CDC 
is troubling.
    Mr. Waxman. I understand you have a score card of State 
preparedness, and the scorecard revealed that even as the 
Federal Government was increasing resources for public health, 
many States have cut their public health funding. How important 
is it to track actual spending on public health by States and 
localities? And as far as you know, is the CDC tracking actual 
spending by States and localities? And is it troubling that 
even at the same time the administration is proposing to cut 
public health funding for States, it is failing to closely 
track actual spending on necessary activities?
    Dr. Hearne. Let me try to break that down in a few ways. 
One, our report did find that approximately two-thirds of the 
States were opening up the back door, they were removing funds 
from their critical public health programs just at the time 
when Federal funds were coming in, which risked diluting the 
important investments that the Federal Government was making. 
That is disturbing. The even more troubling point in this, as 
you were raising concerns about accountability, we were not 
able to get this information on State expenditures and 
investments on the public health side from CDC. In fact, we 
have received a number of calls from CDC to have our data 
because they would like to know. It is important that they are 
asking to know, but they should have known this for a long time 
because certainly as one is looking to purchase better 
protection and safety for the American citizens, you need to 
know where your money is going; you need to know what you have 
bought. And the fact that there has not been that 
accountability measure, one, you can't track what is happening 
in the States, you can't compare one State's activities to 
    We actually had to contract with the National Conference of 
State Legislators to get this data, which we are happy to 
provide to CDC, but it should be a routine matter of tracking 
and accountability. Just as we should be tracking diseases in 
this country, we should also track where the money is going.
    Mr. Waxman. Thank you.
    Mr. Pien, from your perspective, what can the Federal 
Government do to support the quickest possible development of 
pandemic flu vaccine?
    Mr. Pien. Mr. Waxman, as I testified before, I think that 
one of the most important aspects of the private-public 
partnership has been that of the advancement of technology and 
sciences. In this regard, if we are going to be able to advance 
the funding level with the National Institutes of Health, or at 
least keep it at a level that can perpetuate these kinds of 
partnerships, it would go a long way.
    Second, I think that the considerations of how we 
appropriate resources such that we can enhance the level of 
natural growth in demand will go also a long way to the ability 
for manufacturers in toto to be able to steadily increase their 
investment and increase their capacity.
    So the collaboration between the private sector in thinking 
about how they can propagate the messages about the seriousness 
of the disease that flu represents, along with the funding that 
the CDC and all of the States and municipal and county agencies 
that preside over infrastructure that will get the vaccines 
into the arms of the people who need it, I think that will go a 
long way to prepare the country's readiness for pandemic.
    Mr. Waxman. I want to thank all the panelists for their 
    Mr. Chairman, I wonder if we could keep the record open for 
a short time to see if we can elicit further responses in 
writing from some of the witnesses.
    Chairman Tom Davis. Well, some offered to do that. We will 
keep the record open for that. And in addition to that, we had 
some witnesses who couldn't come who submitted written 
testimony, and that will be put in the record.
    I want to thank our witnesses today. It has been very 
helpful to us. I want to thank you for your testimony.
    I want to thank the committee staff that worked on this 
hearing, and we are adjourned.
    [Whereupon, at 12:31 p.m., the committee was adjourned, to 
reconvene at the call of the Chair.]
    [The prepared statement of Hon. Congressman Elijah E. 
Cummings and additional information submitted for the record