[House Hearing, 108 Congress]
[From the U.S. Government Publishing Office]
HEARING ON BIOSHIELD: COUNTERING THE BIOTERRORIST THREAT
=======================================================================
HEARING
before the
SELECT COMMITTEE ON
HOMELAND SECURITY
HOUSE OF REPRESENTATIVES
ONE HUNDRED EIGHTH CONGRESS
FIRST SESSION
__________
MAY 15, 2003
__________
Serial No. 108-3
__________
Printed for the use of the Select Committee on Homeland Security
Available via the World Wide Web: http://www.access.gpo.gov/congress/
house
__________
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SELECT COMMITTEE ON HOMELAND SECURITY
Christopher Cox, California, Chairman
Jennifer Dunn, Washington Jim Turner, Texas, Ranking Member
C.W. Bill Young, Florida Bennie G. Thompson, Mississippi
Don Young, Alaska Loretta Sanchez, California
F. James Sensenbrenner, Jr., Edward J. Markey, Massachusetts
Wisconsin Norman D. Dicks, Washington
W.J. (Billy) Tauzin, Louisiana Barney Frank, Massachusetts
David Dreier, California Jane Harman, California
Duncan Hunter, California Benjamin L. Cardin, Maryland
Harold Rogers, Kentucky Louise McIntosh Slaughter, New
Sherwood Boehlert, New York York
Lamar S. Smith, Texas Peter A. DeFazio, Oregon
Curt Weldon, Pennsylvania Nita M. Lowey, New York
Christopher Shays, Connecticut Robert E. Andrews, New Jersey
Porter J. Goss, Florida Eleanor Holmes Norton, District of
Dave Camp, Michigan Columbia
Lincoln Diaz-Balart, Florida Zoe Lofgren, California
Bob Goodlatte, Virginia Karen McCarthy, Missouri
Ernest J. Istook, Jr., Oklahoma Sheila Jackson-Lee, Texas
Peter T. King, New York Bill Pascrell, Jr., New Jersey
John Linder, Georgia Donna M. Christensen, U.S. Virgin
John B. Shadegg, Arizona Islands
Mark E. Souder, Indiana Bob Etheridge, North Carolina
Mac Thornberry, Texas Charles Gonzalez, Texas
Jim Gibbons, Nevada Ken Lucas, Kentucky
Kay Granger, Texas James R. Langevin, Rhode Island
Pete Sessions, Texas Kendrick B. Meek, Florida
John E. Sweeney, New York
John Gannon, Chief of Staff
Uttam Dhillon, Chief Counsel and Deputy Staff Director
Steven Cash, Democrat Staff Director
Michael S. Twinchek, Chief Clerk
(II)
CONTENTS
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MEMBER STATEMENTS
The Honorable Robert E. Andrews, a Representative in Congress
From the State of New Jersey................................. 91
The Honorable Diaz-Balart, a Representative in Congress, From
the State of Florida, and Chairman of the Subcommittee on
Rules........................................................ 7
TheHonorable Donna M. Christensen, a Representative in Congress
From the U.S. Virgin Islands................................. 6
TheHonorable Christopher Cox, a Representative in Congress From
the State of California, and Chairman
Oral Statement................................................. 1
Prepared Statement............................................. 6
TheHonorable Norman D. Dicks, a Representative in Congress From
the State of Washington...................................... 7
The Honorable Jennifer Dunn, a Representative in Congress From
the State of Washington...................................... 31
TheHonorable Barney Frank, a Representative in Congress From
the State of Massachusetts................................... 40
TheHonorable Jane Harman, a Representative in Congress From the
State of California.......................................... 8
The Honorable James R. Langevin, a Representative in Congress
From the State of Rhode Island............................... 57
TheHonorable Sheila Jackson-Lee, a Representative in Congress
From the State of Texas
Oral Statement................................................. 5
Prepared Statement............................................. 9
TheHonorable Nita M. Lowey, a Representative in Congress From
the State of New York........................................ 46
The Honorable Edward J. Markey, a Representative in Congress
From the State of Massachusetts.............................. 48
TheHonorable Kendrick B. Meek, a Representative in Congress
From the State of Florida.................................... 58
TheHonorable Harold Rogers, a Representative in Congress From
the State of Kentucky........................................ 5
TheHonorable Loretta Sanchez, a Representative in Congress From
the State of California...................................... 33
TheHonorable Christopher Shays, a Representative in Congress
From the State of Connecticut................................ 44
TheHonorable W.J. Tauzin, a Representative in Congress From the
State of Louisiana........................................... 4
TheHonorable Jim Turner, a Representative in Congress From the
State of Texas, and Ranking Member........................... 1
WITNESSES
Mr. L. Garry Adams, DVM, PhD, DACVP, Associate Dean for Research,
Biodefense and Infectious Diseases College of Veterinary
Medicine, Texas A&M University
Oral Statement................................................. 14
Prepared Statement............................................. 16
Dr. Ronald Crystal, Professor and Chairman, Department of Genetic
Medicine, Weill Medical College of Cornell University
Oral Statement................................................. 23
Prepared Statement............................................. 24
Mr. Anthony S. Fauci, M.D., Director, National Institute of
Allergy and Infectious Diseases National Institutes of Health
Oral Statement................................................. 10
Prepared Statement............................................. 12
William A. Haseltine, PhD., Chairman and Chief Executive Officer
of Human Genome Sciences, Inc.
Oral Statement................................................. 61
Prepared Statement............................................. 63
Mr. Alan Pemberton, Pharmaceutical Research and Manufactures of
America
Oral Statement................................................. 67
Prepared Statement............................................. 68
Dr. Clarence James Peters, University of Texas Medical Branch,
Galveston, Texas
Oral Statement................................................. 18
Prepared Statement............................................. 19
Mr. Frank Rapoport, Esquire Partner, McKenna Long & Aldridge LLP
Oral Statement................................................. 70
Prepared Statement............................................. 72
Mr. Robert J. Sutcliffe, Director, President and Chief Executive
Officer, Digital Gene Technologies, Inc.
Oral Statement................................................. 76
Prepared Statement............................................. 77
APPENDIX
ADDITIONAL MATERIAL SUBMITTED FOR THE HEARING RECORD
Mr. P. Roy Vagelos, M.D., Retired Chairman and CEO Merck & Co.,
Inc., letter for the Record.................................. 28
Questions and Responses for the Record......................... 103
HEARING ON BIOSHIELD: COUNTERING THE BIOTERRORIST THREAT
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Thursday, May 15, 2003
House of Representatives,
Select Committee on Homeland Security,
Washington, DC.
The committee met, pursuant to call, at 1:15 p.m., in room
345, Cannon House Office Building, Honorable Christopher Cox
[Chairman of the Committee] presiding.
Present: Representatives Cox, Dunn, Tauzin, Rogers, Shays,
Camp, Linder Shaddegg, Thornberry, Gibbons, Sessions, Turner,
Sanchez, Markey, Dicks, Frank, Slaughter, DeFazio, Lowey,
Andrews, Lofgren, Jackson Lee, Pascrell, Christensen,
Etheridge, Gonzalez, Lucas, Langevin, and Meek.
Chairman Cox. Good afternoon. A quorum being present, the
Select Committee on Homeland Security will come to order. The
committee is meeting today to hear testimony on the
administration proposed Project BioShield.
As members know, our rules permit any member to make a 3-
minute opening statement. Alternatively, members who arrive
within 5 minutes of the fall of the gavel and who waive their
opening statement will at their election have that 3 minutes
added to their time for questioning of the witnesses.
I will yield first for an opening statement to the ranking
member of the full committee, Mr. Jim Turner of Texas.
You are recognized for 3 minutes.
Mr. Turner. Mr. Chairman, if the chairman will indulge me
for a minute, I want to speak to an issue unrelated to our
hearing but very much related to our committee, a disturbing
issue which has arisen concerning the Department of Homeland
Security, which we have the responsibility of overseeing.
Recent news reports have stated that an agency within the
Department of Homeland Security, the Air and Marine
Interdiction and Coordination Center based in Riverside,
California, has used its domestic intelligence gathering
capabilities for political purposes. It is reported by the
media that the Center diverted Federal resources from homeland
security purposes and used its intelligence gathering function
to monitor and track down a private plane flown by the former
Speaker of the Texas House of Representatives, Hon. Pete Laney.
Former Speaker Laney was in public service for some 30 years.
He is the gentleman who was asked by President Bush to
introduce him to America for a prime time speech after the
Supreme Court gave its verdict on the election of 2000.
Mr. Chairman, that domestic intelligence capabilities would
be used for partisan political purposes should be deeply
disturbing to this committee and to all Americans. We created
the Department of Homeland Security to track down terrorists,
not law abiding citizens. This new Department has been
entrusted with an important mission, to protect and defend the
American people. The Department must carry out its mission, and
maintaining the trust of the American people is essential in
carrying out this important task.
To those who suggest it is appropriate for Federal
resources to be used to locate and arrest State legislators who
have broken no law and have exercised a time-honored right to
break a quorum, a practice used by a young Illinois State
representative named Abraham Lincoln in 1840, reminds one of
the days of Watergate when Federal resources were used for
purely partisan political purposes, an act which brought a
government down.
I am formally requesting, by letter to the Secretary, that
an inquiry be conducted into this matter and that information
be produced as soon as possible regarding persons responsible
for this unacceptable action and the misuse of Department
resources.
Thank you, Mr. Chairman.
Mr. Chairman, today we gather to deal with a very critical
issue to this country, the threat of biological terror. The
Defense Science Board has identified 67 diagnostic vaccines and
therapeutic products which are priorities for defending against
a biological attack. Right now we have only two, vaccines for
anthrax and smallpox. Experts estimate it can take 8 to 10
years at a cost of as much as $800 million or more to develop a
new vaccine from scratch, to put it through clinical trials and
to bring it to market. These estimates assume that industry is
fully engaged in actively pursuing the products.
Regrettably, that is not the case today. Last year the
National Research Council reported that major pharmaceutical
companies over the past 3 to 5 years have decreased their
investment in drug discovery related to antibiotics, and few
are exploring antiviral agents. Last year's shortage of
numerous childhood vaccines revealed that a number of major
drug companies have simply gotten out of the vaccine business
altogether.
Against that troubling backdrop, today we are considering
the administration's proposal, Project BioShield. This
legislation is designed to stimulate private sector production
of vaccines and other countermeasures for biological, chemical,
radiological and nuclear attack. BioShield's purpose is to
accomplish this protection by guaranteeing in advance that the
government will purchase a large quantity of a drug or vaccine
if the manufacturer produces an effective product that
addresses a material national security threat. The
administration has proposed $5.6 billion for this project over
10 years. The key question that we must consider today is
whether Project BioShield is sufficiently bold in its response
to this daunting challenge which faces our Nation.
The witnesses before us today will confirm what we all know
to be true, and that is the threat to our Nation from
bioterrorism, not to mention the natural development of new
viruses like SARS and antibody resistant strains of disease,
are deadly serious. We know there was a very active biological
weapons program in the former Soviet Union where they developed
at least 30 deadly agents, but we do not know if the stockpiles
created are secure. We know that Saddam Hussein had a
biological warfare program that produced massive amounts of
biological agents. Thus far, we have not been able to find
them.
Moreover, we know that science may have progressed to such
an advanced state that terrorists can engineer pathogens so
that the drugs we develop will be ineffective. If that occurs,
efforts to find vaccines and cures might not be able to be
started until after we are attacked.
To address this grave concern to our Nation, we need to
take bold action. We need to cast off our old ways of thinking
and be open to new ideas and new ways of doing business. And we
need to harness all of the energy and brilliance of our
scientific community in a sustained, focused and massive
effort.
I have some serious doubts as to whether Project BioShield
meets this test. The most enthusiastic testimony provided by
industry to date is that BioShield is a good first step. But
many concerns have been expressed, both publicly and privately,
as to whether the incentives in BioShield are strong enough to
get the private sector to make the drugs we so badly need.
The former chief executive officer of Merck, Dr. Roy
Vagelos, wrote me today that although the BioShield legislation
should be tried, the proposals, and I quote from his letter,
``will not accomplish what is needed, a reliable stream of
bioterror measures.''
I ask, Mr. Chairman, that this letter and Dr. Vagelos'
biography be made a part of the record.
(See page 27.)
Mr. Turner. To have a former CEO of one of the largest drug
companies predict in essence that BioShield will not work is a
frightening prospect, for if we pass BioShield with the
expectation that drugs will be developed and they are not, we
will lose valuable time in our race against the terrorists. I
believe we will be making a mistake, and perhaps a tragic one,
if our only approach is to incentivize the private sector.
We should simultaneously be building a capacity through a
public-private partnership to develop these vaccines ourselves.
We need to put out an all-points bulletin to our scientific
community, and we need the best and brightest focusing on the
problem. We need to appeal to their spirit of duty and
citizenship to contribute their considerable skills toward the
endeavor, even if greater financial rewards lie elsewhere. And
we need our government to demonstrate leadership by developing
a plan to get us from our current state of vulnerability to a
level of protection that the American people expect as soon as
possible.
While I look forward to the presentations of our witnesses
today, I do not believe that Project BioShield is the complete
solution we are seeking. It may be a positive first step, but I
am confident that we will need to spend much more time and
energy on this very compelling subject.
Thank you, Mr. Chairman.
Chairman Cox. Thank you. I next recognize the gentlelady
from Washington, the vice chairwoman of the full committee,
Jennifer Dunn.
Ms. Dunn. Mr. Chairman, I am going to pass on my opening
statement with the hope that we can get to our wonderful panel
quickly, and add on to my question time.
Chairman Cox. The gentleman from Louisiana, the chairman of
the Committee on Energy and Commerce, Mr. Tauzin.
Mr. Tauzin. Thank you. First of all, to my friend from
Texas, I want to say that while we might have a legitimate
debate over whether or not lawmakers ought to be finding
another State to hide in at a Holiday Inn rather than doing
their duties in the State Capitol, and while we can argue about
the choice of venue where they landed, and I think the Holiday
Inn in New Orleans would have been much more interesting and
entertaining shelter for your legislators, none of us should
argue about the misuse of funds dedicated to homeland security.
I am anxious to learn those facts just as you are.
Let me just say that earlier today the Committee on Energy
and Commerce reported out BioShield legislation. This hearing
obviously is critical to further understand the issues as we
move to the floor, but I want to make one simple point. To
understand why this legislation is critical and why it does in
fact advance us in the fight against the potential of a
bioterrorism attack is a simple question of why would anybody
in the country be interested in producing a vaccine against the
black plague? Why would you invest money to do it unless you
incentivize to do it when there is no market for a vaccine
against the black plague, against diseases that we thought had
been eradicated long ago, and no longer a threat to mankind?
When you consider that some of the potential bioterrorism
attacks our country is beginning to receive might be possible,
are not just threats to Americans, they are threats to human
life on the planet, that is how critical and how immensely
serious this debate is all about and why it is critical that
the government assist in making sure that the companies that
are good at producing vaccines and good at discovering cures
and treatments, they be incentivized to do that.
The second question whether they ought to do it or
government ought to do it ought to be a simple answer. We ought
to incentivize and work with the companies that know how to do
it and are good at it, and are the best in the world at
producing health care treatments and vaccines and cures, and to
incentivize them in a way that this bill attempts to do.
No, this is not going to be a perfect solution. We have
worked carefully with the appropriators to make sure there is
10-year forward funding in the bill, and there is some
guarantee that this is more likely to happen than not. But is
it perfect yet? I guess not. I think we will be visiting it
from time to time as we see it implemented, but I suspect this
is a step, not just the right first step, it is a critical and
unfortunately a necessary step that we must take to follow up
on the great work of the bioterrorism bill that we passed in
the House and Senate.
Senator Kennedy called me to talk about this and other
matters. I complimented him once again on the extraordinary
bipartisanship in which the Senate and the House worked on the
bioterrorism bill last Congress. This is a complement to it,
and a critical one. The Vice President said to me last week
that this could mean life on the planet, life or death for the
whole human race on the planet. Thinking through what these
evil people might intend for us and what they might be willing
to do in their demented causes is an awful process, but one we
cannot escape. We have to be prepared for the worst. This is
not a perfect solution, I agree, but it is an essential step.
I commend the chairman and this committee for this hearing.
I think it is going to advance the cause of understanding this
process as we move forward. I thank the gentleman.
Ms. Dunn. [Presiding.] Mr. Chairman, we are going to
consider this a rolling vote, so if you wish to go and vote and
them come back, please do. We will continue the committee's
business.
Ms. Sanchez.
Ms. Sanchez. Madam Chair, I reserve my time for
questioning. Thank you.
Ms. Dunn. Mr. Rogers.
Mr. Rogers. I will be brief, Madam Chair. The need for this
kind of legislation is obvious and apparent, and we must deal
with this forthwith. The question of how we incentivize the
production of these antidotes while we also preserve the
integrity of the congressional oversight of the expenditure of
huge public sums is something we have to pay attention to. I
think we can do that. We have had conversations with the select
committee and the authorizing committee and myself on the
appropriations subcommittee, and we think there is a way to do
that and keep the integrity of the congressional oversight
intact.
That is a concern that I have especially. We think there is
a way to do that, much the same as we fund mass transit, FAA
construction of runways at airports and the like, where there
is a guaranteed stream of money but annually appropriated. We
think that we can do that, and give the proper incentives to
make production of these antidotes available to us. That is
something that we will be exploring as the weeks wear on.
Thank you, Madam Chair.
Ms. Dunn. Thank you, Mr. Rogers.
Ms. Jackson Lee.
Ms. Jackson Lee. Madam Chair, out of respect for the panel,
let me simply associate myself with the comments of Ranking
Member Turner on the issue of the use of Federal resources.
But I do want to say that I look forward to the hearing and
presentation, and would simply suggest that there is an answer
to the question of why the incentive process should not be the
underlying and only basis of creating the necessary, if you
will, bioprevention measures. It should be because it is the
right thing to do. After 9/11 we turned the page of history in
terms of responding to the threat against the United States,
whether it is bioterrorism, whether it is a threat to our
borders. I hope as we proceed in this hearing we will begin to
establish the kind of homeland security plan that just says we
should do it and we should do it no matter what it takes to get
it done.
With that, I yield back the balance of my time.
Ms. Dunn. Thank you, Ms. Jackson Lee.
Mrs. Christensen.
Mrs. Christensen. Thank you. Let me say at the outset that
today's committee hearing is reassuring and I welcome the
opportunity to get back to the many challenging issues that we
have responsibility for on this select committee. I thank the
chairman for calling us back to work to meet some of these
challenges.
This is our second hearing on Project BioShield, and
although the bill has undergone some slight changes, I still
have reservations and concerns about it. Recognizing the
importance of our universities and the pharmaceutical industry
to this process, let me say nevertheless that some of my
concerns remain very basic and relate to the open-ended funding
and what appears to be another attempt to bypass congressional
oversight. I have strong objections to both of those things.
The bill before us today is very important, not just
because of what it seeks to accomplish, but also because how we
deal with it will set the stage and be a precedent for
everything else that follows in this important committee. I am
going to listen very carefully to the testimony of all of our
witnesses, but I am disappointed that there is not a public
health expert on any of the panels. The burden as far as I am
concerned is on the administration and the private industry to
convince us that to be effective that competitive bidding has
to be bypassed, that good science as the basis of decisions
should be allowed to be compromised, the decision to obviate
testing should be vested essentially in one person, and I am
also concerned about how we are going to resolve the issues
around indemnification and liability. An overriding concern is
whether anyone can assure us if we pass this bill and Project
BioShield, people of this country would be better protected in
the case of bioterrrorist attacks, given all of the many, many
possibilities, including the unknown. Of course, what good does
all of this do if the public health infrastructure in so many
of our communities remain in a state of severe disrepair?
I look forward to the testimony. I thank the panelists for
coming to share their expertise with us this afternoon. I thank
you, Madam Chair, for convening the hearing.
PREPARED STATEMENT OF THE HONORABLE CHRISTOPHER COX
I would like to welcome the Members in attendance this morning, and
thank our witnesses for agreeing to appear before the Committee to
testify on such short notice. This initiative has been moving very
quickly. We have already had one hearing on BioShield; this is the
second. A version of BioShield was marked up this morning by the Energy
and Commerce Committee, and will be marked-up by this Committee in the
immediate future.
But I also want this hearing to take a step back, to examine the
unique nature of the bioterror threat, and the scientific and economic
challenges that will need to be overcome to defeat it.
Each of us here has an understanding of the grave potential of
bioterrorism. An attack on our population or our armed forces involving
one ofthe numerous biological agents for which there is currently no
effective treatment could be devastating.
This country is blessed to have the most vital and innovative
healthcare system in the world. Our free markets and strong patent
protections have led the American pharmaceutical and bio-tech
industries to spend more on research and development of new products
and treatments than all of Europe and Japan combined. This investment
has led to incredible advances in the treatment of a wide variety of
ailments.
At the same time, there have been few advances in the treatment of
many of the diseases that pose the greatest bioterror threat. Diseases
such as smallpox, Ebola, and plague currently affect few Americans, and
the reality is that manufacturers cannot afford to devote resources
when there is no natural market.
The BioShield Act recognizes the great asset the American bio-tech
and pharmaceutical industries represent. Rather than trying to create a
parallel government bio-industry from scratch, BioShield seeks to draw
on the expertise of the private sector by creating a ``homeland
security'' market for bioterror countermeasures. It also recognizes the
fact that we possess the strongest system of research unversities in
the world, and gives us greater flexibility in working with them.
The proposal has three main sections. First, it gives the Secretary
of Health and Human Services increased flexibility to conduct and
support basic bioterror research. Second, it provides a stable source
of funding for the purchase and stockpiling of bioterror
countermeasures. It also recognizes the fact that we have the strongest
academic research centers in the world, and gives us greater
flexibility in working with then.
I look forward to hearing the witnesses thoughts on the provisions
of BioShield. But more importantly, I look forward to hearing theft
expert scientific opinions on the challenges we face in confronting the
bioterror threat. We are privileged to live in a time that has been
marked by remarkable progress in the biological sciences, particularly
molecular biology and genetics.
Unfortunately, many of the same techniques that have allowed us to
eradicate infectious disease as a major cause of death can also be used
to manipulate infectious pathogens to create a bioweapon. As our world
shrinks due to increased and rapid travel, an epidemic caused by the
intentional use of a bioterror agent poses a threat of spreading world-
wide with unprecedented speed.
The scientists that are with us today are world renowned for their
work. They are experts in the treatment and diagnosis of infectious
diseases, in how viruses spread in a population, and how to rapidly
detect pathogenic organisms in the human population. They have been
instrumental in developing new vaccines and treatments. And they have
traveled the world, from the Ebola outbreak in Zaire to the
sophisticated bioweapons labs secretly set up inthe former Soviet
Union.
I hope the dialogue that will be generated today will help us to
answer some basic questions such as: What is the value of stockpiling
vaccines against pathogens that may naturally mutate or, more
troublingly, may be purposely altered by terrorists? How easy is it for
would terrorists to keep one step ahead in the race, and engineer
agents that can defeat any new countermeasures I hope the witnesses
will speak to these questions, and to the difficulties researchers and
businesses confront in developing bioterror countermeasures.
PREPARED STATEMENT OF THE HONORABLE LINCOLN DIAZ-BALART
Thank you Mr. Chairman. I would like to thank our distinguished
panelists forjoining us today, and for your testimonies.
As with any measure to protect our population if terrorist attack,
the key is preparation I applaud the Bush Administration for the
proposed Project BioShie1d
We have seen the impact of a biological attack on our open
society--and we have an idea of the price that it can bring. We have
already witnessed many steps taken by our Federal, State, and local
officials to protect our citizens I would like to particularly applaud
Governor Jeb Bush and the Florida Department of Health for its efforts
in carrying out Operation Vaccinate Florida.
I would also like to thank Director Fauci for his leadership at the
NIH For years the National Institutes ofHealth has served as our
Pentagon in the war against disease and Americans as well as people
around the world have benefited, Now we must call upon the NIH to
utilize the expertise and innovation of our scientists to guard against
the horrors that a serious biological attack would mean.
The threat of biological weapons is real.
I look forward to working with my fellow committee members to
ensure we take all steps possible to prepare for the possibility of
such a threat.
PREPARED STATEMENT OF THE HONORABLE NORM DICKS
Thank You, Mr. Chairman. This is a very important hearing this
afternoon, as this Committee considers the new and serious threats of
hioterrorism and our nation's ability to prevent and to respond to
those threats.
Clearly we are late in recognizing the need to protect our
population from the deadly biological agents that we know have been
developed by nation's that support terrorism. In the past, we have
worried about protecting our military personnel from the dangers of
chemical and biological weapons that might be used in the battlefield,
and thus the Defense Department has conducted its own research and
development on various vaccines and antidotes. But today the threat is
much more serious.. Since 9-11, and with the rise of terrorist actions
directed at U.S.. citizens and facilities worldwide, we have more
reason to believe that terrorists will attempt to use these new weapons
of mass exposure on our citizens here inside the United States. There
is no doubt there there is an urgency here.the urgent need to improve
this nation's protection and response mechanisms. The urgency of our
situation demands a bold response, and clearly Project BioShield as
proposed by the President was a bold response, Mr. Chairman. The
version of the BioShield legislation that has just been approved by the
House Energy and Commerce represents an improvement on this concept,
particularly with regard to the financing mechanism. But I know that
many serious questions remain, and today's hearing will explore the
implications of this particular bill as well as other concepts,
including whether there are better harnessing the power and
capabilities of the pharmaceutical industry to develop vaccines for the
most serious of biological agents as well as for a broad array of other
dangerous substances I have had some discussions with Mr. Rapoport, one
of today's witnesses, about another method of jump starting the vaccine
development process: namely, providing immediate incentives to
industry--using private funds--to accomplish these objectives. I look
forward to hearing from him today and from both of our panels of
experts who are bringing their perspective and their insight to our
committee Above all we must focus on actions that will be:
Timely--recognizing that the threat is here and now;
Complementary--avoiding unnecessary duplication of effort;
and
Cost-effective--because even though we will spend a
considerable amount of federal funding on this bio-defense effort,
there are still many other serious homeland security priorities to be
addressed this year and in coming years.
Thank you Mr. Chairman and Mr. Turner for working to schedule this
important hearing today and for keeping the Members of this Committee
involved in the process.
PREPARED STATEMENT OF THE HONORABLE JANE HARMAN
Thank you Mr. Chairman and Ranking Member Turner.
I'd like to put my remarks on Project BioShield in the context of
the threat and the homeland security partnership between government and
the private sector.
Threat
As the Ranking Member on the House Intelligence Committee, I am
convinced that the United States faces a real bioterrorism threat
TODAY. I made that statement at our subcommittee hearing on BioShield
in March. Two significant events that have happened since then:
SARS has killed at least 588 people worldwide, with more
than 7,500 infected. While there's no particular reason to believe that
this is a terrorist event, it shows the potential impact of an agent
released into the global environment.
Thousands of liters of enormously dangerous biological
weapons from Iraq are missing.
So the threat is very real, immediate, and one for which we are not
prepared.
While BioShield may be an important part of building our bio
defense, other parts are also important:
Identifying and safeguarding biological materials--from,
for example, Iraq and Russia;
Improving our intelligence on BW possession by other
countries or groups and their intentions for use or proliferation; and
Re-building the international taboo against use of
biological weapons.
Partnership
BioShield depends on the partnership of the public and private
sectors. There is a clear market failure to develop countermeasures for
rare diseases, chemical weapons, and nuclear or radiological devices.
At the same time, the government lacks the capacity and expertise to
produce the countermeasures itself.
The Administration is requesting new authorities to get the private
sector to do a fundamentally public sector job. It is for Congress to
decide whether new authorities are in fact needed, and to determine
what flexibilities are appropriate and in our best security interests.
I support, Mr. Chairman, doing what is necessary to produce the
biodefenses to weapons we know are out there. But our action must take
into account our dire budget situation, and the alternative possibility
that we might be able to stimulate private investment for new
breakthrough drugs without spending scarce federal dollars.
The private-public partnership in general is one of the most
difficult issues for the Department of Homeland Security. As the most
visible example of this partnership, it is especially important that we
do this right.
PREPARED STATEMENT OF THE HONORABLE SHEILA JACKSON-LEE
Mr. Chairman and Mr. Ranking Member, I thank you for convening this
vital hearing to hear testimony on the Project BioShield initiative.
The threat of bioterrorism must be one of our chief concerns as we
continue our work of protecting our homelands from terrorist attacks.
Biological weapons pose a particularly dangerous threat. Biological
weapons are highly portable and difficult to detect. Positive strides
have been made in securing our borders and preventing unwanted
materials from entering our country, but it is unrealistic to expect no
biological weapons to enter the United States. Last year alone 30
million tons of cocaine was smuggled into the United States. If we
can't stop 30 million tons of cocaine from crossing our borders, how
can we expect to stop a vile filled with anthrax, botulism, or small
pox? A vile that could kill hundreds or possibly thousands.
Bioterrorism attacks not only pose a danger to human lives, they
also have the ability to cripple the operation of our society and
severly harm our economy. We all recall the primary and secondary
impact of the anthrax attacks in 2001. The attacks involved a series of
letters mailed in pre-stamped envelopes to media outlets in Florida and
New York and to the offices of Senators Thomas Daschle and Patrick J.
Leahy (D-Vt.). The anthrax attacks killed five Americans and left 13
others severely ill. The five people who died from inhalation anthrax
included two postal workers at the Brentwood postal facility in
Washington, a Florida photojournalist, a New York hospital worker and a
94-year-old woman in Connecticut. Thousands more were exposed to the
lethal bacteria. The letters passed through various post offices and
postal distribution centers along the East Coast leaving a trail of
contamination. Buildings from the Brentwood mail facility, to the
Congressional office buildings, to NBC headquarters had to cease
operations.
The threat of bioterrorism did not end in September of 2001. As
recently as April 22nd of this year in Tacoma, Washington we had a
bioterrorism scare. a white powder was found in two envelopes, and 94
people had to be evacuated from a mail distribution facility. Initial
tests of the powder tested positive for biotoxins that cause bubonic
plague or botulism. Four people at the facility had to be
decontaminated. The same day, a suspicious powder was found in a
Federal Express cargo area at Southwest Florida International Airport,
in Fort Myers, Florida. Six people were taken to a hospital for
possible decontamination, including one who suffered burning eyes and
nose.
We are presently faced with the threat of a worldwide SARS
outbreak. The inability of many foreign countries to adequately deal
with that outbreak raises questions about our own preparedness. What
about other infectious diseases like tuberculosis? There are many
ailments that our medical professionals are struggling to control. We
must do better in the area of biological weapons.
The ease with which biological weapons can be manufactured is also
a danger. The equipment and ingredients needed to manufacture many
biological agents can be purchased over the Internet. Additionally, as
our failure to apprehend those responsible for the 2001 anthrax attacks
illustrates, biological terrorists can operate with more secrecy than
traditional terrorists.
These are but a few concerns we face as we consider Project
BioShield. The provisions of Project BioShield provide a good start to
protecting Americans from a bioterrorist attack but work remains.
Presently Project BioShield's provisions grant the National Institute
of Health new powers, through grants and contract awards, to speed
effective research and development efforts on bioterrorism
countermeasures. Project BioShield also creates a long-term funding
mechanism for the development of medical counter measures, and empowers
the government to purchase safe and effective vaccines. Finally,
Project BioShield authorizes the Food and Drug Administration to use
promising, yet uncertified, biological treatments in the case of
emergencies.
Mr. Chairman and Ranking Member, I believe these are good first
steps in protecting Americans from biological attacks. However, I feel
that many questions remain. I look forward to the testimony of our
witnesses today, and I hope that there guidance can help us make all
Americans less vulnerable to bioterrorism.
Ms. Dunn. We are expecting members to vote and return to
our committee, but I think it is important to begin testimony
in the time we have available since the last vote is going to
be around 2:00 p.m., and we want to maintain as much membership
here as possible. So we may interrupt you, depending on what
the chairman wishes to do.
There being currently no further opening statements, I want
to recognize the first panel of witnesses. Our first panel is a
distinguished group of scientists who should all be able to
speak directly to the challenges of conducting bioterror
research.
We have Dr. Garry Adams, Associate Dean for Research from
Texas A&M University; Dr. Ronald Crystal, Chairman of the
Department of Genetic Medicine at Cornell University; Dr. C.J.
Peters, Director for Biodefense and Emerging Infectious
Diseases at the University of Texas Medical Branch. We also are
very fortunate to have Dr. Anthony Fauci, Director of the
National Institute of Allergy and Infectious Diseases.
Normally as a senior administration official, Dr. fauci
would appear on a separate panel. Due to time constraints and
scheduling issues, we have asked him to testify as part of our
first panel, and he has accepted our invitation to do so. We
are very interested in hearing his own research and scientific
experience with bioterrorism.
In addition to being an administration official, Dr. Fauci
is one of the world's most eminent research scientists. In
fact, a recent survey found that in the period 1981 to 1994, of
the more than 1 million scientists worldwide who published
during that period, Dr. Fauci was the fifth most cited. So we
are particularly appreciative for his willingness to provide
his expert testimony alongside our other distinguished
panelists.
We have your written testimony, and we would ask that each
of you simply summarize in the 5 minutes you have your
testimony. Dr. Fauci, we will begin with your opening
statement, and work our way down the line.
STATEMENT OF DR. ANTHONY FAUCI, DIRECTOR, NATIONAL INSTITUTE OF
ALLERGY AND INFECTIOUS DISEASES
Dr. Fauci. Thank you, Madam Chairman, and members of the
committee. I want to thank you for calling this hearing and
express my gratitude to Chairman Cox and other members of the
committee for taking such an intense interest in this important
subject.
September 11, 2001 changed forever the way we look upon the
defense of our homeland, particularly followed soon thereafter
with the anthrax attacks. Bioterrorism, be it microbes,
chemicals, nuclear, or radiologic, are a clear and present
danger, as articulated by Mr. Turner just a few minutes ago. So
I need not spend more time on that.
What we can do to protect our citizens is developing and
making available effective countermeasures against these agents
of bioterror that are truly essential to protect the homeland.
It is critical that we expedite and accelerate the development
of countermeasures, for what we have been doing over decades,
particularly in the arena of emerging and reemerging diseases,
has positioned us quite well to accept the challenges of HIV/
AIDS, West Nile virus and what have you, but we are now in a
wartime mode of operation and we must adjust accordingly if we
are to properly protect our citizens.
If you look here on this particular poster, that is the
commonly used pathway of going from concept and basic research
concerning a pathogen all of the way up to the development of a
new product. This need not be a pathogen, it could be a concept
for the development of any product that is for the health of
individuals. It is a complicated process that involves basic
research and then identification of targets, preclinical
development and clinical evaluation. There is a heavy
dependence on industry and academia when one needs to come up
with a product. We need to accelerate this and we need to do it
rapidly. The reason is the incentives, for example, of industry
to get involved in getting us to these products, particularly
under exigent circumstances, must be considered.
If a product has great commercial value, it is easy. There
are two parts to this. There is the push with the basic
research and the pull or the incentive to industry. Let me give
an example of that on this poster. If one looks at the
situation with vaccines and why vaccines fail to compete with
other agents because of the market appreciation of the need for
it and the profit margin and incentives for industry to get
involved, this particular poster shows the dollars in billions
for all vaccines compared to a single drug like Lipitor, which
is a lipid-lowering agent, and PRILOSEC, which is an acid
blocker.
As you can see, the incentive of the marketplace puts
vaccines at a great disadvantage. Vaccines are just one
category of countermeasures that we need to develop, and so the
problem is compounded in the arena of bioterrorism and
biodefense research.
I would like to put these issues now into perspective in
light of the President's proposal for Project BioShield as he
has articulated in his January 28 State of the Union Address.
The purpose of BioShield in the context of what I have just
told you is to accelerate the process of research, development,
purchase and ultimately availability of effective
countermeasures against agents of bioterror.
It is a three-pronged program. It includes the push of
research, and that includes making more flexible our
capabilities to expedite the research and development process,
which we do fundamentally at the NIH. When I say expedite, I
mean very clearly not to compromise the tried-and-true
mechanisms of peer review. I am talking about doing things on a
much faster track while preserving the scientific integrity of
what we do.
The second and an important component is related to the
incentives associated with industry's involvement in the areas
that I just mentioned, and that is to establish a secure
funding source for the purchase of critical biomedical
countermeasures and a funding source for deliverable products.
It is very clear from our dealings with industry that they take
risks when they get involved in developing any product. Most of
them have no problem with taking the risk of failure when
developing a product.
When you have great commercial value, the risk is certainly
worth it. When you have a situation where there is no guarantee
or at least at the present time no guarantee that there will be
a market for the product and it might only go, for example,
into a stockpile, we need to create incentives that make them
feel secure and that is the secure funding capability which
according to the BioShield proposal is a mandatory authority to
allow money to be available when the companies, be they biotech
or pharmaceutical companies, deliver a product that is useful
for the protection of the Nation.
Finally, the establishment of an FDA emergency use
authorization for critical biomedical countermeasures, which
means when there is a product which is absolutely needed to
protect the Nation and the benefit clearly outweighs that risk,
when a product that is on its way to being licensed or might be
on a track showing it to be safe and effective but isn't
licensed at this time, that under exigent circumstances the
Secretary of the Department of Health and Human Services could
allow the FDA to make that product available.
So in closing, Mr. Chairman and members of the committee,
these are extraordinary times and we have extraordinary
responsibilities. These responsibilities in turn call for
extraordinary means to meet the challenge of protecting our
Nation from the threats of terrorism, either by biological,
chemical, radiological or nuclear weapons, and we can do this
by developing and procuring and ultimately making available
countermeasures to the citizens of our Nation that would be
effective against such threats.
We believe that Project BioShield is a very important step
in that direction.
Thank you, Mr. Chairman.
PREPARED STATEMENT OF DR. ANTHONY S. FAUCI, M.D.
Mr. Chairman and Members of the Committee, I appreciate the
opportunity to discuss the Administration's proposal, Project
BioShield, with you today. The events of September 11, 2001, and the
subsequent anthrax attacks, have changed forever how the biomedical
research community responds to the emerging threat of terrorism. While
the National Institutes of Health (NIH) and other Department of Health
and Human Services (DHHS) agencies, including the Centers for Disease
Control and Prevention (CDC) and the Food and Drug Administration
(FDA), have been preparing to address the threat of bioterrorism for
several years, we have been called to accelerate our efforts vastly
since the attacks of 2001.
Overview
Today, we know that there is a real threat to our nation, and one
of the most important ways that we can respond to this threat is
through the development of medical countermeasures to address potential
agents of terrorism. We are now in a ``wartime'' mode and must modify
the way we do business, while protecting the elements of our system
that have made us so successful.
For decades, the NIH has led the biomedical research effort to
improve the Nation's public health. The NIH research enterprise,
fortified by a rigorous system for ensuring that only the best science
is supported by Federal dollars, has served our country extraordinarily
well. Through the traditional funding mechanisms of grants, contracts,
cooperative agreements, and other partnerships, as well as time-tested
personnel practices, this system has resulted in numerous major
scientific advances that have improved the health of people around the
globe, such as the development of interventions for emerging and re-
emerging infectious diseases, including HIV/AIDS and Ebola.
With the unprecedented budget increases provided by Congress for
biodefense research, NIH has hit the ground running with a
comprehensive research agenda to address bioterrorism. However, there
is an important issue that must be addressed: we must expedite and
greatly accelerate the research, development, purchase, and
availability of effective medical countermeasures against biological,
chemical, radiologic, and nuclear terrorism. There is no time to wait.
When all Americans must confront the realities of terrorism
directed at the United States, it is imperative that the Federal
Government be prepared to protect its citizens from the scourge of
terrorism. We are particularly challenged by the biological threats
that are known to us or could be modified, as well as those that are
unknown. To address these threats, we must build not only a strong
biomedical research base, but we must create incentives for the
companies upon whom we are reliant to produce the needed medical
countermeasures to defend us.
NIH stands ready to push forward its biodefense research agenda to
support the development of ``proof of concept'' for diagnostics,
therapeutics, and vaccines to address agents of potential bioterror.
However, without the expertise, resources, and proven capabilities of
the pharmaceutical companies who develop these products and bring them
to the market so efficiently and safely, we will not be able to meet
the challenges set forth to us. Project BioShield would provide this
needed incentive to industry, by giving it the necessary assurances
that we will be reliable partners with them in meeting the challenge to
develop the critical medical countermeasures to protect our citizens
from acts of terror.
Project BioShield
Project BioShield would use the resources of NIH, FDA, and the DHHS
Secretary to work together to accelerate the research, development,
purchase and availability of effective medical countermeasures against
chemical, biological, radiologic and nuclear terrorism. It takes a
three-pronged approach. First, Project BioShield would increase
authorities and flexibility for NIH, particularly the National
Institute of Allergy and Infectious Diseases, to expedite research
towards the development of critical medical countermeasures for
biodefense, such as vaccines and therapeutics. Second, it would
establish a secure funding source, via a mandatory authority, for the
purchase of such countermeasures. And third, it would establish an FDA
Emergency Use Authorization for critical countermeasures.
With regard to the first component of Project BioShield, the
legislation would provide NIH with additional authorities to expedite
the conduct of research and development in promising areas of medical
countermeasures against potential agents of bioterrorism. This
authority would provide NIH additional flexibility in awarding
contracts, cooperative agreements, and grants for research and
development of medical countermeasures including vaccines, drugs,
biologics, and diagnostics. It also would streamline procurement
authority, bolster authorities for acquisition and renovation of
facilities, expedite personal services contracts and provide
flexibility for certain personnel decisions to hire the necessary
technical experts for biodefense research. Funding awards would remain
subject to rigorous scientific peer review, but expedited peer review
procedures could be used, when appropriate, without compromising
scientific, technical, and programmatic standards. These new
authorities would give NIH the tools it needs to expedite and push
forward the pathway from basic research to effective biodefense
countermeasures.
With regard to the second component of Project BioShield, the
secure funding authority for procurement of countermeasures, it is
worth noting that, historically, pharmaceutical research and
development has focused on the development of products likely to
attract significant commercial interest and a long-run market. We have
found with experience, particularly in our numerous efforts to develop
vaccines against some of the world's most devastating diseases, that
uncertainties in the marketplace can create barriers to industry's
willingness to invest resources and make long-term commitments to
manufacture the needed products to prevent and treat disease. The
recent shortages of vaccines for common and naturally occurring
diseases are evidence of this problem. This lack of industry incentive
is compounded with regard to the development of medical countermeasures
to address bioterrorism, where the probability of a bioterrorist attack
and the actual threats themselves remain unknown.
Our colleagues in the pharmaceutical industry--from small biotech
firms to ``Big Pharma,''--particularly those in the vaccine industry,
have stressed that, they are willing and eager to help in the
development of biodefense countermeasures. However, these companies are
businesses, not non-profit organizations, and they need a tangible
incentive to get involved in the critical effort to ensure adequate
defense against bioterrorism.
When it is evident that a given pharmaceutical product has a
potential to make a profit, no incentives are needed to engage
industry. However, with the development of a product for which there is
no guarantee of a return, or for which the market is uncertain,
industry prefers some assurance that there would ultimately be a return
on its investment. Without such assurances, companies likely will
pursue the development of other products.
When NIH meets with industry, we hear that, first, companies
already may be involved in the early stages of development of
biodefense countermeasures at their own initiative and are willing to
assume a degree of risk of failure. However, they would like assurances
that a market would exist for their product if indeed they are
successful in its development. Also, many state quite frankly that they
do not want to be vulnerable to the vicissitudes of the cyclical
appropriations process.
In the other case, when NIH tries to engage reluctant companies to
get involved in biodefense research, we try to ``push'' them into
action using discretionary research dollars. However, in many cases,
this does not seem to be enough to convince them to become engaged.
With Project BioShield, we would be able to tell these companies that
if they partner with us, meet certain milestones, and devise a
licensable countermeasure, they will have our assurances that there
will be money available to them for the purchase of that product. These
are examples of the ``pull'' in the process: to the extent that the
Federal Government can define its requirements and assure up-front that
funds will be available to purchase critical countermeasures,
regardless of the level of appropriations for the year in question,
then industry will have a real incentive to meet the biodefense
research challenge. We feel that such assurances can only be given by a
mandatory funding authority.
With regard to the third component of Project BioShield, the FDA
Emergency Use Authorization, it is worth noting that the FDA approval
process for drugs, devices, and biological products is the gold
standard for the world. The FDA's policies and regulations help ensure
that products that get to market are safe and effective. In addition to
animal studies, sponsors of new drugs and vaccines typically conduct
three phases of clinical trials in humans to demonstrate the safety and
efficacy of a product. This process, however, can take years.
In preparing for the challenges we face today, we may not always
have a desirable amount of time to address the threat presented by
agents of bioterrorism. While the FDA has several mechanisms in place
to get products to market faster, these alone are not sufficient in an
emergency.
Project BioShield would permit the Federal Government to make new
and promising treatments that are still under development available
quickly, if needed, for use in emergency situations where no effective
approved or licensed products are available, potentially saving many
lives. Specifically, Project BioShield would authorize the DHHS
Secretary to grant an emergency authorization for the use of unapproved
products in the event that the Secretary determines that there is no
adequate and approved alternative available. This authorization would
require the Secretary to determine that the benefits associated with
using the countermeasure would outweigh the potential risks. Project
BioShield would provide authority to the Secretary to apply conditions
on the authorization, including limitations on distribution of the
product, requirements to convey specific information to health care
providers and patients, and requirements for recordkeeping, records
access, and adverse event reporting. This authorization could be
revoked by the Secretary and would be be limited in duration to the
period of the emergency or not later than 1 year, unless renewed. It is
important to note that the critical countermeasures would be tested for
safety to the extent that the situation permits.
Conclusion
In summary, the need for medical countermeasures for biodefense is
exigent and real, and we have a responsibility to the American people
to make these products available now. The accelerated development of
effective countermeasures against terrorism requires a new biomedical
research paradigm, new ways to engage our industrial partners, and an
ability to make promising products available for use during an
emergency more quickly. Project BioShield would help us meet the
challenges of terrorism effectively and expeditiously, improving our
Nation's preparedness for and capability to respond to the threat of
bioterrorism.
Thank you again for the opportunity to testify today about this
important initiative to improve our homeland security. I would be
pleased to answer your questions.
Chairman Cox. [Presiding.] Thank you, Dr. Fauci. Since I
was voting when you began, I didn't have the opportunity to
welcome you personally and thank you for the outstanding
leadership that you provide at NIH and the assistance you have
provided to this committee in developing this legislative
initiative.
Next is Dr. Garry Adams. We have copies of your testimony,
and invite you to summarize your testimony in 5 minutes. I
welcome you as well.
STATMENT OF DR. L. GARRY ADAMS, ASSOCIATE DEAN FOR RESEARCH,
BIODEFENSE AND INFECTIOUS DISEASES, COLLEGE OF VETERINARY
MEDICINE, COLLEGE OF VETERINARY MEDICINE, TEXAS A&M UNIVERSITY
Dr. Adams. Thank you, Chairman Cox, and members of the
committee. Thank you for an opportunity to give perhaps a
different perspective from the veterinary profession and, as a
member of the public health community, to present what I hope
is an informed and experienced perspective for the enthusiastic
support for Project BioShield.
My name is Garry Adams. I am a veterinarian. I am a
veterinary pathologist. I am also the Associate Dean for
Research and Graduate Studies and I have my own research
laboratory.
I have been actively engaged in these diseases, including
category A, B and C diseases, for about 30 years. I have lived
in foreign countries on four continents for 7 of those years
and have worked with several of those pathogens. What is
important on these pathogens is about 70 percent of them are
transmitted from animals to man and vice versa, so the
veterinary profession plays an important role in working with
the entire medical community and a one medicine approach from a
public health point of view to control these diseases, whether
it is in man or animals.
Much of the work that I have done has been involved with
several countries in South America, Africa, Europe, and Canada.
I have also had personal experience in inspecting and now
collaborating with former Soviet weapons bioscientists,
particularly on the development and production of a vaccine
against brucellosis, a pathogen that had been weaponized not
just in the Soviet Union but also here in former years.
Thank goodness the U.S. government has invested in
transforming former bioweapons laboratories into laboratories
where they can now manufacture and produce vaccines and
products for domestic and international consumption, but the
point here is that I was able to see the mass scale production
of manufacturing, distributing and arming missiles for
deployment and what could be done and what was being done by
some 60,000 scientists in some 14 laboratories. But that is
hopefully now changing, and many of us are involved in that
transformation.
So the other point that I would like to make is the
relative ease of obtaining several of these pathogens, and for
some of them the relative ease of transforming them into
bioweapons. Right now in Texas we are probably having anthrax
outbreaks in wildlife, or we will have in the very immediate
future. The same can be said for a whole spectrum of pathogens
on a worldwide basis. Or they are obtainable. While we close
the cupboard here on much, and in fact all of the laboratories
through the PATRIOT Act, those organisms are still available to
those who would make them into weapons and use them against us.
I am convinced that they do pose a profound and real threat
to the health of not just the U.S. human population but to
livestock populations. In fact, I have heard it stated from a
scientist, a political scientist from Lawrence Livermore,
saying that should we be attacked by multiple pathogens of both
man and animals, several different pathogens simultaneously in
100 different sites, some of those pathogens would cause
disease, death, and loss of our economic viability as well as
eroding the confidence of the people in the Federal Government,
State government and local government to control these diseases
to a point that we might not recover economically.
Also, I base part of my testimony on working with the foot
and mouth disease in Yorkshire, England in 2001. As a
veterinarian, I worked there as a diagnostician under field
conditions. And what I saw was a devastating impact, a
psychologic epidemic among the people, much less the 11 million
animals that were lost and the billions of English pounds that
were lost. It was a psychological impact that I saw among the
farmers, but not just the farmers, the postman, the person who
delivered the milk, the person who ran the shop in the village,
to the bed and breakfast where I stayed, a huge impact on the
morale and on the future of that country. Plus the loss of
breeding animals that have been bred for the last 500 years.
One farm that I visited where the animals were destroyed, they
had been bred since 1526, and all animals were destroyed by
that night. That is what occurred in the animal population.
What could have been done was to have prevented this by
preemptive diagnosis, preemptive vaccination, and preemptive
therapeutics, perhaps not in the case of foot and mouth
disease, but the concept embodied in Project BioShield is the
sort of preemptive moves that this country needs to make for
protection of human, animal and even plant viability because of
our economy.
So the threat is real. I have seen it personally. Perhaps
one could say at the animal level that biological systems are
biological systems, whether it is animal, plant or man.
And as I have mentioned, many of those pathogens are
transmitted. Up to 70 percent in category A, B and C pathogens,
animals serve as a reservoir, so we need to think in terms of
protecting the human and the animal population.
One other point is the ability to manipulate the organisms
genetically and transform them from an organism that might be
susceptible to current therapy to one that is not. The Brusella
bacterium is one that I am familiar with where some of that
work has, unfortunately, been done. However, there are
strategies, and strategies that are proposed in BioShield, and
strategies that are being proposed by federally funded projects
now in several agencies to move in an anticipatory thinking and
strategy to avoid that.
So the threats are real for inflicting loss on man and
animals and eroding the national economy. I cannot
overemphasize the economy and the impact it would have on our
Nation, and the massive epidemiologic outbreak that we would
see among the citizenry. What we saw in England in the foot and
mouth was overwhelming the diagnostic capacity, the regulatory
capacity. There were 25 diagnostic tests done in the first
week, a thousand the second week, and the third week 10,000.
In summary, I am highly supportive of the Project BioShield
and welcome the opportunity to speak to you today.
PREPARED STATEMENT OF L. GARRY ADAMS, DVM, PhD, DACVP ASSOCIATE DEAN
FOR RESEARCH, BIODEFENSE & INFECTIOUS DISEASES, COLLEGE OF VETERINARY
MEDICINE, TEXAS A&M UNIVERSITY
Chairman Cox and Members of the Committee, thank you for inviting
me as a representative of the veterinary profession and as a member of
the public health community to present an experienced and informed
perspective for enthusiastic support for the concept, principles and
implementation of the ``Project BioShield'' initiative. I am Dr. Garry
Adams, associate dean for research and graduate studies, professor of
veterinary pathology and a member of the faculty of the College of
Veterinary Medicine, Texas A&M University, College Station, TX. I am
and have been actively engaged in biodefense and infectious disease
research for over three decades, funded by the United States Department
of Agriculture, National Institutes of Health, United States Agency for
International Development and the Rockefeller Foundation. I am
testifying based upon:
My personal experience as a research scientist developing
diagnostic tests, therapeutics and vaccines to detect and prevent
important high priority (NIH Category A, B and C pathogens) infectious
disease pathogens transmitted from animals to man and vice versa (so
called zoonotic diseases) either insect-borne or not while working for
a total of 7 years on four continents and several other countries
(Mexico, Colombia, Argentina, Ecuador, Peru, Brazil, Kenya, Republic of
South Africa, Israel, Egypt, Germany, Canada).
On my personal inspection of former Soviet bio-weapons experimental
production and aersol laboratories, and my current collaboration with
former Soviet bio-weapons scientists that are now being transformed
into civilian scientists and facilities for vaccine development and
production for domestic and international markets, thanks to the US
Government.
On my recent experience working as a veterinary inspector in
Yorkshire, England with the Ministry of Agriculture, Fisheries and
Forestry under the auspices of the Royal College of Veterinary Surgeons
during the deadly, economically and psychologically devastating Foot-
and-Mouth Disease outbreaks in the United Kingdom where pre-emptive
diagnostic surveillance and tactical use of effective vaccines may have
saved the lives of millions of animals, billions of English pounds, and
loss of some of the world's best breeding livestock.
On my personal knowledge of the ease of obtaining and relative ease
of weaponizing NIH Category A, B and C pathogens as well as public
information that several of these pathogens have already been
weaponized by nation states, rogue groups and defiant individuals with
the malicious intent to use them as weapons of mass destruction, thus
representing profound real threats to the health of US human and
livestock populations, food safety, food security, national economy,
and psychological well-being of our nation. Knowledgeable sources have
stated that frequent serial or multiple simultaneous bioterrorist
events with multiple pathogens in both human and animal populations
could be so deadly and so economically devastating that our nation
might never recover to the state of health or economy that we currently
enjoy. While our system of transportation facilitates the rapid
development of markets and accumulation of wealth, it also greatly
enhances the spread of diseases in human and animal populations.
On the fact that approximately 70% of the NIH Category A, B and C
pathogens are diseases transmitted from animals to man to contaminate
our food supplies by entering our domestic livestock populations and
food chains and even worse by spreading into our massive wildlife
populations where eradication of certain of these diseases may be
impossible.
On the basis that should these pathogens be genetically manipulated
by bioterrorists for enhanced for infection and mortality, the
magnitude of the threat and impact on US human and animal populations
and could amplified exponentially.
Thus, as stated above from my personal experience and knowledge of
these pathogens and their associated risks and threats to our nation, I
am fully convinced of their real potential for use as Bioterroist
Threat weapons of mass destruction for 1) inflicting loss of life of
man and animals, 2) eroding the national economy, 3) creating a massive
psychological epidemic among US citizens, and 4) overwhelming
regulatory and control capacities at local, state and national levels
as well as 5) undermining the confidence of American citizens in
government organizations whose responsibility to prevent, control,
contain and eradicate these diseases.
The old axiom of an (ounce of prevention is worth a pound of cure(
does not apply in the case of intentional, well planned Bioterrorism,
because the short and long term effects on the US society could well be
hundreds or even thousands of times greater unless prevented, thus
concerted, pre-emptive and fully functional programs, e.g. Project
BioShield, are essential especially for prevention as well as for
mitigation and recovery from small and large bioterrorist attacks. US
scientists are especially well poised to address virtually all facets
of malicious bioterrorism to produce 1) high quality, mass scale
diagnostics, 2) large quantities of protective vaccines that avoid
confusing diagnostic tests, and 3) new rationales of chemotherapies for
treatment of these pathogens. Investment in US health-related research
has paid great dividends to the US citizens in the form of improved
health and longevity, safer food and water supplies, and prevention of
many diseases causing high morbidity and mortality in other nations.
Development of safe, effective countermeasures is obligatory for the
prevention and recovery from bioterrorist attacks, but this will
require large infusions of major resources, such as requested by
Project BioShield, coupled with effective, transparent collaborations
between and within academia, the biomedical industries and Federal
agencies, under rigorous scientific review and scrutiny to develop and
produce the diagnostics, vaccines and treatments required to protect
our citizenry and food resources. Importantly in the absence of
bioterrorist attacks, the investment in Project BioShield will have the
greatest benefit that will be realized every day in the physician's and
veterinarian's offices as well as in our super markets with improved
health, safer foods, and confidence in the security, public health and
well-being of our nation.
In summary, I sincerely thank the Chairman and all members of the
Select Committee on Homeland Security for this opportunity to very
enthusiastically encourage the appropriations essential for Project
BioShield to protect the future of our nation's citizenry, livestock,
public health, and economic viability as well applying the benefits of
the Project BioShield in global populations. I strongly support the
concept, principles and implementation of the ``Project BioShield''
initiative and urge that the necessary resources be made available soon
to protect against not only the potentiality of bioterrorist attacks
but also against new emerging diseases occurring globally, such as
SARS, and mad cow disease (bovine spongioform encephalopathy). My
profession has decades of experience with many of these diseases, and
we look forward to becoming a full scientific partner in the
development of improved diagnostics, vaccines and treatments as
countermeasures for these devastating pathogens.
Chairman Cox. Thank you very much for your testimony. Out
next witness is Dr. Clarence Peters.
STATEMENT OF DR. CLARENCE JAMES PETERS, UNIVERSITY OF TEXAS
MEDICAL BRANCH, GALVESTON, TEXAS
Dr. Peters. Thank you for the opportunity to share some of
the observations that I have made over the past 30 years with
you. That is about how long I have spent working in the field
of biodiseases, including both public health and biodefense. I
have worked in the U.S., Africa, Latin America and Asia. In
fact, I started my career in Panama where I was a NIH research
associate. Most germane to this discussion, I was at USAMRIID,
the DOD lead laboratory for biodefense for 13 years, including
the time of the first Gulf War.
I then went to CDC, where I was head of the Special
Pathogens Branch for 10 years. This is the branch which was
charged with dealing with high hazard pathogens, and maintained
the biosafety level for a laboratory there. During this time,
we discovered the hantavirus pulmonary syndrome, we dealt with
Ebola in Africa and Nipah virus in Asia.
Every single year we found examples of a virus that was
new, that is new to science, previously unsuspected and
undiscovered, or a virus doing something it was not supposed to
be able to do, or a virus in a place it had never been known to
occupy before.
I would like to leave the committee with one central idea
about emerging infections and one about bioterrorism. First of
all for bioterrorism, there are a limited number of different
organisms that can truly cause mass casualties, but their
threat is indeed quite real. During the Gulf War I had the
occasion to examine the old classified data from our defensive
program in depth and to consult with some of the experts who
produced these weapons. This method of killing people can be
successful, literally measured in the tens of thousands of
casualties. The delivery is by an airborne aerosol, so it is
stealthy and will go unnoticed initially, but later declares
itself when humans sicken and die.
Now let us talk for a second about emerging infections. Why
would I bring them up with bioterrorism? First of all, the
organisms are often exactly the same as with bioterrorism only
they occur naturally. I would like to emphasize the central
theme that I see in emerging infections. These microbes are on
the move. The factors underlying emergence were put forth in an
Institute of Medicine report 10 years ago. I had the privilege
to be on an IOM committee and have a preliminary report from
that committee that looked back over the revisited lessons.
These conclusions set forth in Microbial Threats to Health were
basically the news is not good. The factors in emergence are
all working against us and these factors are interactive.
I believe the only way we will be able to deal with the
full spectrum of these encroaching microbes is through an
active program of vaccines and anti-infectives, just as we need
to protect ourselves against bioterrorism. We can develop
vaccines and therapeutics against these agents. Indeed, there
have been some successes in the past. Unfortunately, these
successes have not been carried forward for policy and funding
reasons, but they do give us a road map and they can be
surpassed with the fine technical base which has been built by
NIH in the intervening years.
Let me share briefly an oversimplified model of how I think
about dealing with diseases in the past. The physician
recognizes the disease, the public health authorities count the
disease, tell us how important it is, NIH research then builds
a technical base and finally the private sector brings forth
drugs and vaccines that we use to deal with these.
Well, neither an emerging infectious disease when it is on
the march or a bioterrorism event when it has already been
perpetrated will lend themselves to that model. They will come
swiftly, and each element has to be in an accelerated mode. NIH
training for the physicians who will be our infectious disease
specialists must not be ignored by purchase of these other
remedies. The public health infrastructure still could use some
strengthening. NIH's current research agenda and their movement
toward translational extension is going to be extremely
important still, but Project BioShield may be what we need to
give us the essential weapons that are going to be needed in
this fight.
The fight will not work just with public health or
physicians. We have to have vaccines and anti-infectives. We
have already heard multiple times that there is insufficient
incentive in the commercial sector.
I would just close by saying that I certainly support the
goals of BioShield. I am not a sufficiently well-versed health
economist to be able to help you with some of the other
deliberations about the funding.
PREPARED STATEMENT OF DR. CLARENCE JAMES PETERS
Chairman Cox and distinguished members of the Committee, thank you
very much for the opportunity to express the lessons that I have drawn
from my experience in this area as they relate to the issue of Project
BioShield. I was educated as a physician at Johns Hopkins Medical
School in Baltimore, trained in Internal Medicine at the University of
Texas Southwestern Medical School in Dallas, and did additional work in
immunology at Scripps Foundation in La Jolla. My first introduction to
research in infectious diseases was in Panama where I lived and worked
for 5 years as a research scientist in an intramural NIH laboratory.
Subsequently I spent 13 years at USAMRIID, the principal DoD laboratory
in biodefense research; I began as a laboratory scientist and
eventually became deputy commander, serving this role during Desert
Storm. I then spent 10 years at CDC as head of their BSL-4 laboratory,
dealing with emerging infections including hantavirus pulmonary
syndrome, Ebola, Marburg, Nipah, and other viruses. For the last two
years I have been at the University of Texas Medical Branch at
Galveston, TX where I am the John Sealy Distinguished University Chair
in Tropical and Emerging Virology, the Director for Biodefense, Center
for Biodefense and Emerging Infectious Diseases, and the director of
the BSL-4 laboratory. This laboratory is the only such high containment
laboratory in the US within an academic institution.
I would like to share with you reasoned conclusions drawn from that
experience. I further believe that my impressions reflect those of a
large number of my colleagues who are working in public health,
infectious diseases, and epidemiology.
Bioterrorism is a real threat to our country and to our way of
life. We have, of course seen the deep impact of 22 cases of inhalation
anthrax with 5 deaths on our social and governmental fabric in 2001.
During my work at USAMRIID I was deeply involved in biowarfare defense
and as a part of our defensive posture had an opportunity to examine
the offensive program that existed in the US prior to 1968. This
convinced me beyond any shadow of a doubt of the practicality of
biological attacks that could be small and focused with extreme
disruptive effect or broad and lethal to tens to hundreds of thousands
of citizens. The most dangerous of these attacks could be achieved with
only a handful of agents, but defenses were woefully inadequate. The
major route of dissemination for all except smallpox virus would be by
small particle aerosols; smallpox virus could be spread initially by
this route, but uniquely among the lethal agents of mass casualties
would then be able to propagate itself by interhuman transmission.
USAMRIID, DoD's lead agency for biodefense, and related agencies
worked intensively on medical countermeasures with considerable success
given their resource limitations. When I became associated with the
effort in 1977, a licensed anthrax vaccine existed but was not procured
because of larger issues of DoD doctrine for its use and procurement;
this is the same vaccine was used in the two Gulf wars. The licensed
smallpox vaccine was given to troops explicitly for its importance as a
deterrent for biological use of the smallpox virus; this was
discontinued for a variety of reasons; incidentally, this coincides
temporally with the increased efforts of the Soviet weaponization of
smallpox described in Ken Alibek's book ``Biohazard''. USAMRIID had
developed a number of prototype vaccines against other agents and
before I departed in 1990 developed several more, including those
against NIH/CDC category A agents Argentine hemorrhagic fever and Rift
Valley fever. All these vaccines remained in investigational status
even though they were used to protect investigators working with the
agents in the laboratory as well as persons involved in epidemic
disease control. There was simply no doctrine to drive their licensure
and deployment nor was there a budget to support this. The antiviral
drug ribavirin was also shown to have preclinical efficacy against
several category A agents; and through contract CDC tested the drug in
humans naturally infected with Lassa fever in West Africa to confirm
this efficacy. Other potential products came out of this program,
including botulinum antitoxins, a humanized monoclonal antibody to the
virus of Argentine hemorrhagic fever, and other prototype vaccines that
only now are being tested in humans. I thought it was important to
bring these products to the committee's attention to show that these
threats can be countered and to emphasize that the research base is not
sufficient to actually bring products that have great promise to
practical utility. I am not certain of the exact budget of USAMRIID
during that period, but I would estimate $10-20 million annually as a
reasonable figure; the results included the above-mentioned vaccines
and drugs as well as a considerable knowledge base on expected behavior
of agents and diagnostics.
We are facing an ever-increasing threat from emerging infections,
as well. This is not irrelevant to the present discussion. Emerging
infections arrive unexpectedly and can be equally or more lethal than
bioterrorist events. In fact, in some ways they are even harder to
prepare for. I would be willing to predict that we will suffer both
bioterrorist attacks and significant depredations from emerging
infections in the next decade. I can further predict that anthrax is
the highest threat for a significant bioterrorist attack, followed by
other agents in the category A and B lists developed by NIH and CDC.
However, I have no idea what the next emerging infection will be, a
problem exemplified by the recent surprising appearance of the SARS
coronavirus as a serious threat to global health. Parenthetically, I
would emphasize that among the emerging disease unknowns there is one
established threat: the recurrence of pandemic influenza is virtually
certain and should be a part of our planning.
Biothreats and emerging infections converge in two important ways:
the agents are often the same and the remedies usually share
significant elements, including the importance of vaccines and anti-
infectives. I had the opportunity to observe emerging infections first-
hand between 1991 and 2000 when I was head of the Special Pathogens
Branch at CDC. We were responsible for infectious diseases that
required special containment for safe laboratory work and for field
work. Our BSL-4 laboratory was the focus of the global struggle against
high-hazard pathogens around the world. In that decade we dealt with
new (new to science) viruses, returning viruses that had been thought
to no longer pose a threat, and known viruses exhibiting behaviors not
previously thought to be a feature of their behavior. The assessment
and control of these agents was due to the dedicated and very capable
staff of the branch as well as others at CDC, the strong scientific
base laid by NIH, the work from USAMRIID, and the contributions of
persons in the endemic areas. It is important for the committee to
understand that we were not out looking for these agents: they came to
us in the form of destructive and challenging epidemics.
Were these epidemics a phenomenon of the internet communications
and the 24/7 news atmosphere? Emphatically, no! The Institute of
Medicine in 1992 published a thoughtful analysis of the importance of
infectious disease in the U.S.: Emerging Infections. Microbial Threats
to Health in the United States, National Academy Press. This volume
showed the importance of emerging infectious disease and antimicrobial
resistance in the increasing role of lethal infectious diseases in our
country, as well as the threat from microbes outside the US to our
population. I was privileged to participate in a 10 year review of this
report published in 2003: Microbial Threats to Health: Emergence,
Detection, and Response, National Academy Press. Unfortunately, the
findings of the committee were pessimistic. The factors originally
identified as driving the emergence of infectious disease threats were
correct and continued to operate, but at an ever-increasing force. The
belief of the committee was that these factors plus the intrinsic
adaptability of the microbes were driving us toward some very
unpleasant consequences. Our major defenses against the adverse
outcomes were in disarray. The initial investment in woefully under-
supported basic public health deriving from our bioterrorism response
was somewhat helpful in a general sense, but the modest new capacity
was largely (and appropriately) utilized in bioterrorism planning and
response enhancement. A particular national vulnerability to emerging
infections was the lack of new industrial developmental efforts toward
anti-infectives, vaccines, and pesticides.
Thus, the proposed BioShield initiative is particularly timely. It
has the potential to improve our defensive posture toward bioterrorist
threats utilizing weapons of mass destruction and to also enhance the
ability to deal with major emerging infectious menaces. To explain
this, I will use a greatly oversimplified model of how we have dealt
with some past problems. This imaginary sequence goes something as
follows:
1. Medical practitioners recognize the disease and make diagnoses
2. Public health authorities see the aggregate picture and analyze
the importance of the infection in the community and the nation.
3. 1NIH sponsors research to understand the underlying scientific
issues
4. 1Industry picks up on the above to produce a remedy, often a
vaccine or perhaps an anti-infective
A novel infection, whether from a bioterrorist attack or from an
emerging infection, will likely follow a similar sequence:
1. A medical practitioner recognized the 2001 anthrax attack and
this has been the case for most of the emerging infections I have dealt
with. I would urge the committee to recognize the needs for training of
physicians and infectious disease practitioners as part of our front
line defenses; this appears to be threatened by reduction of NIH
infectious disease research grants to procure anthrax vaccine and
initiatives such as BioShield would offset this cannibalism of
resources.
2.Public health will be the first responders. Public health
capabilities have been strengthened, but the over-all vigor of the
public health establishment remains in doubt. We must be sure our
quotidian public health needs are well-met with trained professionals
who have the depth of staffing, organization, and resilience to
recognize and deal with bioterrorist and emerging infectious disease
emergencies.
3.We also have a great deficit in basic research on the important
bioterrorist agents; NIH has recognized this and has launched excellent
programs to remedy our gaps. These remedies inevitably are in the
nature of ``catch-up'', but we are now on an accelerated track. Money
for the research programs is not a sufficient response and NIH has
recognized this. They have initiated programs for construction of the
specialized laboratories that will be needed for the work in these
diseases. I urge the committee to assure that these laboratories are
constructed and supported. NIH has also recognized requirements for
training in the diseases involved as well as in performing research in
these highly specialized containment laboratories, and I would urge the
continuing support of the committee for this aspect of biodefense.
4.The actual development of anti-infectives and vaccines for
prevention and treatment of biothreat and emerging infectious diseases.
This is a complicated and important area. It does little good to
achieve 1-3 without having these remedies available.
Virtually every recent advance in drug and vaccine development has
been due to the far-sighted and broadly supported research base
evolving from NIH with its strong Congressional support. However, we
also recognize that NIH has not usually been the actual product
developer. The private sector has shouldered the initiative and
responsibility of translating this research into a safe and effective
armamentarium to protect our nation's health. I am convinced that this
traditional model will not work in the case of biodefense and emerging
infections. The financial incentive is not sufficient to draw the large
pharmaceutical houses into the fray. This is not, in my opinion,
inappropriate; they have responsibilities to their shareholders. The
basic facts are fairly simple: I have worked with DoD and in the area
of emerging infections for more than 30 years and have seen no movement
or interest of the international pharmaceutical industry in the
available markets. We must, however, overcome this lack of vaccines and
anti-infectives, which is a major obstacle to the security of the
Nation and its citizens.
Even more alarmingly, the DoD has suffered serious decrements in
its capability to develop and produce vaccines. Although their programs
were appropriately directed toward military problems, the severe cut-
backs of in-house DoD vaccine development programs, the loss of the
vaccine production capability at the Swiftwater facility, and the
narrow approach taken by the Joint Vaccine Acquisitions Program
documented in the ``Top report'' (Protecting Our Forces: Improving
Vaccine Acquisition and Availability in the U.S. Military (2002),
Medical Follow-Up Agency, Institute of Medicine) represent a
significant national loss. This has changed our readiness landscape
markedly. The ability to rapidly develop prototype vaccines, prepare
modest-sized lots under suitable conditions for human use, and to test
these in humans is vital to a flexible and forward looking biodefense
and emerging infectious disease policy.
BioShield seems to provide an incentive to bring new initiatives
into the arena of developing protective measures. The availability of
targeted monies for actual procurement of the drugs and vaccines we
need should draw entrepreneurs into the field and encourage the
flowering of those already involved. This would be expected to
synergize with the research that NIH has already shifted into the
direction of diagnostics, therapeutics, and vaccines to lead to actual
practical solutions to the problems we face. I see this as an important
departure from what Dr. Fauci has described as ``business as usual''
and potentially a boon to humanity.
I believe that the significance of BioShield can only be realized
if it is truly directed into the area intended. It must be used to
insightfully develop the drugs we need in biodefense. There are some
other considerations that I would list in closing:
1. It must take into account the dividends accruing from testing
these drugs in populations that are at-risk for the different diseases
that are simultaneously biodefense and emerging disease threats. This
can provide proof or at least an indication of efficacy and may result
in extensive local use that can enlarge the safety data base.
2. One of the areas that should be considered is the importance of
anti-infectives over vaccines in the civilian population. Vaccines are
supremely important for the military, but the difficulties of employing
multiple vaccines in the face of uncertain threats are exemplified by
the simple application of smallpox vaccine to hospital workers in the
US. Thus, antiviral drugs for the category A threat agents become of
particular interest.
3.Some of the vaccines and drugs that are in an investigational
status would be of tremendous advantage for the researchers involved in
these important studies of national defense importance. These
protective measures should be made readily available to researchers.
Vaccines formerly available for use under ``Investigational New Drug
Exemption'' are increasingly difficult to obtain. Their use would
decrease the risks of laboratory scientists, in some cases decrease the
needs for expensive containment, and accelerate the development of
definitive countermeasures for the agents.
4.The thrust of this effort must be protection of the civilian
population from biothreats and from emerging infectious diseases.
Military and civilian priorities will differ. However, the
contributions of the military should not be forgotten and DoD
biodefense work should be supported and the many complementary findings
should be incorporated into the civilian effort.
Thank you very much for the opportunity to make these comments.
Chairman Cox. Thank you, Dr. Peters.
Dr. Ronald Crystal.
STATEMENT OF DR. RONALD CRYSTAL, PROFESSOR AND CHAIRMAN,
DEPARTMENT OF GENETIC MEDICINE, WEILL MEDICAL COLLEGE OF
CORNELL UNIVERSITY
Dr. Crystal. Thank you, Mr. Chairman. In addition to my
role at Cornell Medical College as Chairman of the Department
of Genetic Medicine, I am also a practicing physician and Chief
of the Division of Pulmonary Critical Care Medicine, and I
would like to give you the view of the academic/physician/
scientist in regard to bioterrorism.
First, there is no question that these organisms are
available. We, all of us on this panel, have trained many
people over the years. There are thousands of people who know
how to deal with these kinds of organisms, and the amount of
resources that one needs to grow them up and reproduce are
trivial. You can do them in 100 square feet with equipment that
is readily available and not very expensive.
With regard to our care of patients who may be infected
with these kinds of agents, despite the fact that my intensive
care unit is as high tech as there is and our physicians are
well-trained, we have a disaster plan and they know how to deal
with these agents, if we had 10 to 100 individuals in New York
City come to our hospital we would be overwhelmed, and so we
have no choice as a Nation other than to protect ourselves, and
clearly that is the goal of BioShield.
But the academic world cannot do it by itself, if we are
going to produce these new therapies and vaccines. The academic
community is capable of moving very quickly. We are capable of
doing basic research, of doing experimental animal studies, and
to a limited extent to do human studies. In our institution I
have a facility available to me to produce vaccines that we can
try on humans, but we cannot scale up to be able to treat and
protect the Nation. We need the pharmaceutical industry and the
biotech industry to be able to be part of that.
So there are several points I think that are critical. We
as a Nation have to be very quick acting. We have to be able to
move quickly in terms of response to these threats. Our
defenses, our therapies in themselves have to be quick acting,
particularly if we use a stockpile kind of strategy.
Second, the methodology and the technology to genetically
modify these organisms is not very difficult. Our scientists
who are training graduate students are capable of that kind of
work. It is not that high tech. So we have to develop therapies
that are versatile that can meet that change so that if an
organism such as anthrax which has been modified so that it is
resistant to antibiotics, that we can provide vaccines and
therapies to meet that challenge.
In the context of the academic community not being able to
do it itself, we need the industrial partnership, and clearly
it has to be attractive as a commercial opportunity. Otherwise
it seems to me that we are not going to be able to develop as a
Nation these kinds of therapies.
Finally, as you have heard, we have to be able to get
approval of these kind of therapies. You may have seen in the
paper today there are new recommendations for the treatment of
hypertension. If I was developing an anti-hypertensive drug, I
would take the group of people who had hypertension, treat them
and another group, not treat them. You cannot do that with
bioterrorism agents. You cannot try out your vaccine and then
administer these organisms to human. We need other paradigms to
be able to approve these drugs, and when we need them we have
to do it quickly.
Thank you. I would be happy to answer questions.
PREPARED STATEMENT OF DR. RONALD CRYSTAL
Testimony of Dr. Ronald Crystal to the House Select Committee on
Homeland Security
Chairman Cox, Ranking Member Turner and Members of the Committee,
thank you for inviting me to present to the Committee a scientific
assessment relating to ``Project BioShield''. I am Dr. Ronald Crystal,
Professor of Medicine, Chairman of the Department of Genetic Medicine,
and Chief of the Division of Pulmonary and Critical Care Medicine at
Weill Medical College of Cornell University--New York-Presbyterian
Hospitals in New York City. I will focus my remarks on the scientific
aspects posed by the threat of the use of infectious agents for
bioterrorism, the feasibility of preventing the spread of disease
caused by these agents, and how the academic community can contribute
to this effort.
We believe the threat is very real. While control of access to
these agents will help, we cannot lower the risk to zero. If a group
wanted to spread a bioterrorism agent in a populated area, it would not
be difficult, particularly in the context where the perpetrators are
willing to give up their lives to carry out an attack. As you know,
there is a long list of bacteria, viruses, and other pathogens that, if
introduced into a populated area, could quickly spread undetected
through the population, with resulting morbidity and death and
consequent social and economic disruption. These organisms are readily
available and many are found in nature. Even most of the so-called
class A select agents are not difficult to obtain.
The 2002 Public Health Security and Bioterrorism Preparedness and
Response Act requires Federal registration for possession and transfer
of select agents. All laboratories possessing and working with these
agents are required to resister these pathogens, to identify the
individuals that have access to these organisms, and to have in place a
Select Agent Safety Plan for handling and accounting for all select
agents. This is a positive step and will reduce the risk of these
agents being available to potential bioterrorists. Even so, keep in
mind that biologic agents by their very nature reproduce themselves. It
is relatively easy, in a laboratory as small as 100 sq. ft. with
equipment and reagents that are readily available and technology that
is known to thousands of individuals in our country and around the
world, to reproduce sufficient amounts of bioterrorism agents that, if
released into the environment of a populated area, could result in
massive disruption to society.
One of my responsibilities is to run the Medical Intensive Care
Unit at the Weill Cornell Medical Center of New York-Presbyterian
Hospitals. Our Intensive Care Unit is as modern and as high tech as any
in the world, our physicians are trained to deal with the diseases that
can be caused by the biologic agents of bioterror, and we have specific
disaster plans in place to deal with a bioterrorist attack. Even so,
the facilities of our hospital, and those of any of the medical
facilities in our country, would be quickly overwhelmed if hundreds of
patients with a highly infectious disease were to come to the hospital
over a short period of time.
In the context of these realities, we have no choice other than to
invest our resources to protect ourselves from the potential of
bioterrorism in our country. This Committee's consideration of
BioShield is central to that effort.
How can the resources of our country be mobilized to meet the
challenge of BioShield? Between the academic community, guided by the
efforts of Tony Fauci and the National Institute of Allergy and
Infectious Disease and the pharmaceutical and biotech industries, we
can get it done. Collectively we have the expertise and the
infrastructure to create new generations of vaccines, monoclonal
antibodies, and small molecule drugs to prevent and treat diseases
caused by bioterror pathogens.
What should our strategy be? The list of potential bioterror agents
is large, and it simply is not rational to believe that we could
immunize everyone in our country against every possible agent. Not only
is the list of possible agents too large, but inherent in any
prophylactic therapy is the risk of adverse effects. While these risks
may be small, when put in the context of the entire population, the
risk-benefit analysis suggests the risk and cost for immunizing
everyone against everything argues against this approach. I believe the
strategy should be to leverage the exploding knowledge of the genetic
revolution to develop new generations of vaccines and therapies against
the most probable agents, and then stockpile the effective vaccines and
therapies to be used in response to an attack.
The biomedical academic community in the US is unequaled in the
world in regard to expertise, depth and infrastructure. It can be
rapidly mobilized to focus on this challenge, and should be able to
develop strategies to protect against and treat these disorders. With
the information provided by the genetic revolution, the academic
community can move quickly to develop safe, effective, and versatile
platform technologies in which to provide the BioShield relevant to
protect our population. In addition to being safe and effective, there
are several features of new generations of vaccines and therapies that
are specific to the bioterror threat.
First, if our defenses are going to be stockpiled and used in
response to an attack, they must be rapidly acting.
Second, we must be cognizant that the technology is widely
available to genetically modify potential bioterror agents to
circumvent existing vaccines and therapies. For some agents, this has
already been done, such as the creation of strains of anthrax that are
resistant to conventional antibiotics. Thus, we have to develop
``platform'' vaccines and therapies that are sufficiently versatile to
meet this potential threat.
Third, while our universities, institutes, and hospitals can
develop the strategies for these vaccines and therapies and carry out
proof-of-principle studies in experimental animals and in small human
trials, the academic community does not have the infrastructure,
expertise, or resources to turn these new generations of vaccines and
therapies into large amounts of final products that would meet the
necessary safety criteria for large scale human use. This final step is
critical to the overall effort and will require a partnership of the
academic community and the pharmaceutical and biotech industries. In
this context, it will be important that strategies be developed to make
working in this area attractive as a commercial opportunity for the
pharmaceutical and biotech community.
Finally, because of the very nature of the threat, it is not
possible to test the efficacy of these new bio-defenses in humans in
terms of protecting against the actual bioterror pathogens. In this
regard, the Food and Drug Administration will need to work with
Congress to develop new paradigms for approval of BioShield products
based on surrogate measures of efficacy, rather than the classic
demonstration of efficacy in humans against the specific pathogen per
se.
In closing, I thank the Chairman and the Members of the Committee
for the opportunity to help you in your deliberations regarding
BioShield, a national strategy that I and my colleagues in the academic
biomedical community strongly support.
Chairman Cox. Dr. Crystal, I will advise members because we
moved forward with this hearing during the vote, that for all
members under the rule who were here within 5 minutes of the
fall of the gavel, if you have second thoughts about an opening
statement you will have an opportunity to make one for 3
minutes at the beginning of the time during which you are
recognized. Alternatively, you may take the full 8 minutes for
questioning.
I will now recognize myself for 8 minutes.
I want to emphasize as I did a moment ago how grateful we
are, first, Dr. Fauci, to you for the continuing work you have
been doing on Project BioShield with the President for some
months beginning when you and I and the President, Secretary
Ridge and Secretary Thompson kicked it off on your campus; and
next, to the other distinguished members of our panel, thank
you so much for taking the time to be here with us and to help
advise us. We have some scientific questions as well as
economic questions that we cannot answer without your help.
I would like to begin with a very straightforward question
that Dr. Fauci might answer in one way because of the
classified information that rests behind part of the answer,
but the rest of the panel can also address, and that is we have
heard that biological organisms exist or can be manufactured
which will not only wipe out tens of thousands of people if
administered as a weapon, but that conceivably could wipe out
life on the planet. I want to know if that is an exaggeration
or whether that is a real prospect, and I will begin with Dr.
Fauci.
Dr. Fauci. Mr. Chairman, I would not characterize the
capability of literally wiping out life on the planet through
biologics as something that is feasible. But within the same
breath as I say that, I say clearly that engineered microbes in
a number of categories could wreak destruction on our
civilization measured in the millions and millions of people if
you have a microbe that spreads from one person to another, and
we know there are multiple different categories. We know the
prototype for one that can be easily disseminated but does not
spread from person to person: anthrax spores. The other type
would be one that could be spread from person to person like
smallpox.
When you have a situation where you can disseminate one or
the other of those, I would have to say as a scientist it would
be extraordinarily unlikely that you could wipe out
civilization on the planet--but that is quite draconian,--but
you could still do enough damage to make it a very, very
horrible situation.
Chairman Cox. Thank you. I would put the question to each
member of our panel in turn.
Dr. Adams. Generally in challenge situations, there are
always individuals who survive those challenges. I can use foot
and mouth, anthrax, tuberculosis, and several others where
there are natural resistance mechanisms which are yet unknown
in engineering that pathogen to completely destroy all life on
the face of the Earth. I have a lot of reservations about that
statement.
On the other hand, the lateral impact, maybe not the direct
impact, would have a huge impact on life as we know it. And so
while wiping out all populations on the face of the Earth is I
think an untenable statement, the impact on everyone else would
be tremendous.
Dr. Peters. I think we have one example of the movement of
the Conquistadors to the New World. They brought measles,
smallpox and a variety of other diseases with them. They did
not wipe out the Indians, but they destroyed their civilization
and were instrumental in the Spaniards being able to conquer
the New World with relatively few people.
I think we have something going on right now with SARS that
we do not know exactly what the end of it is going to be, but
we already know that Asian economies are suffering
tremendously. My prediction is they will not be able to control
it in China. If that is true, we will be dealing with repeated
introductions in this country for the indefinite future, so we
may see a change in our way of life where we are taking
temperatures in airports, in addition to taking our shoes off
and putting them through the x-ray machines. And we may see
emergency rooms rebuilt so if you have a cough, you go into one
entrance. You would go into a negative pressure cubicle until
your SARS test comes back.
So while I think wiping out human life is extremely
unlikely, we have unengineered examples of bugs that have made
great impacts on civilizations.
Chairman Cox. Dr. Crystal.
Dr. Crystal. The natural examples of what you suggest were,
of course, hundreds of years ago with smallpox and the plague,
which wiped out one-third of the population. We now have
treatments for organisms like the plague, but if they were
engineered to be resistant, but if they infected a number of
people and had the capability of being spread rapidly from
individual to individual, it would cause enormous havoc. I
agree with the panel, I don't think it would wipe out
civilization, but the consequences to our society would be
enormous.
Chairman Cox. Dr. Crystal, that leads to my next question.
Given that engineered mutations represent a special threat,
Project BioShield is designed to stockpile vaccines but
obviously it can stockpile a vaccine only against something we
already have in hand. What then of natural mutations that occur
in organisms? The common cold changes from year to year, and
what also of the fact that these stockpiled vaccines themselves
will have a shelf-life? The prescription that I get has a date
label on it which tells me it is good only for so long. There
is a decomposition of any cure or antidote. Do we run the risk
of investing billions of dollars in cures for the wrong thing
because it is only what we now have in hand?
Dr. Crystal. I don't think we have a choice because of the
risk, but we have an example of that in influenza which changes
from year to year and we effectively deal with that by
developing new vaccines. What we have to do is a two-pronged
approach. One is to develop the therapies and vaccines against
what is out there, and then have versatile platforms, the
development of these vaccines and therapies, so we can move
very quickly, and the moving very quickly is a very important
aspect of it, to develop the therapy if they are engineered to
be different.
Chairman Cox. Before a biological weapon is used, ought we
to stockpile a vaccine for it; and if so, how do we know when
to stop with the different possible threats against diseases?
Dr. Crystal. You can prioritize the organisms, not only in
terms of which ones are more deadly, but ones which can spread
more. We can prioritize in terms of the vaccines and therapies
that we already have, the ones that are getting close to
development, and the ones further out. So I think one can make
a rational plan about how to go about that problem without
wasting resources.
Chairman Cox. Do others on the panel wish to address either
of those questions?
Dr. Fauci. Mr. Chairman, just a brief comment about a word
used by Dr. Crystal about what we call universal platforms, and
by platform we mean if you can have a matrix vaccine to which
you can insert the genes of whatever relevant microbe you are
dealing with, even if it is a microbe that we do not have much
experience with that we will ultimately identify.
A good example of doing this outside of the context of
biodefense is what we are working on in our emerging diseases
program where you can make a West Nile virus vaccine by taking
a vaccine that we already have developed against dengue or
yellow fever, and since it is the same class of virus as the
West Nile virus, to essentially create what we call a chimera
or a mixing of the vaccines where we insert the genes of the
West Nile into the yellow fever backbone so you can have
vaccines that allow you to then interchange these cassettes of
genes. That is one of the things that we very much want to
provide industry with incentives to get involved in because
they can do that better than anyone else.
Chairman Cox. My time for questioning is finished, but I
would be happy to recognize Dr. Peters for further comment.
Dr. Peters. In addition to the other comments, there are
some parts of the microbe that are essential for its
functioning, and in some cases you can develop vaccines against
the essential part of the microbe which can't be circumvented.
Chairman Cox. That is encouraging. Thank you.
I recognize Mr. Turner for 5 minutes of questioning.
Mr. Turner. Mr. Chairman, I have no doubt that everyone of
us on this committee and I am sure all of our witnesses agree
that we face a very serious threat and we need to be very
aggressive about dealing with it. The only question that I
think is really open and perhaps unresolved regarding our
legislative approach is will this get the job done?
I have been looking for someone with expertise who will
tell me that if our goal is to find answers to five, 10, 12,
whatever biological threats we want to address first, that
within some period of time I can know that we will have
addressed them.
Now Project BioShield and the administration's proposal
attempted to accomplish that by basically providing a funding
mechanism which says that the administration could just write a
check to get some pharmaceutical company to proceed to try to
develop a vaccine. Congress was very reluctant, and in the bill
that was marked up today by the Committee on Energy and
Commerce that blank check section of the proposal was
eliminated.
I have a letter here and I want to read it into the record
because I want some comment from anybody who feels this is an
area that you have an expertise in. I know it is a specialty to
know the economics of the pharmaceutical industry, but this is
a letter from retired chairman and CEO of Merck & Company. I
had the opportunity to talk to him on the telephone. I asked
him to be here today but he had a conflict and could not
appear. I understand that Dr. Fauci knows Dr. Roy Vagelos well,
who is currently a resident of Bedminster, New Jersey. Here is
his letter:
Dear Congressman Turner: I have reviewed Project BioShield as
you have requested. These are all good proposals and they
should be tried. But I am afraid they will not accomplish what
is needed: a reliable stream of bioterror countermeasures. The
risk of failure with any R&D project aimed at a specific
project is very high. That is true for products in the
commercial marketplace as well as those that are aimed at the
defined and limited market for a bioterror countermeasure.
Although it would be useful to have many of the measures
targeted by Project BioShield, these would help research
organizations only if they succeed in discovering and
developing a countermeasure. But most research aimed at
specific product discovery and development fails. Long-term
investments are required with great patience, waiting for the
occasional success.
Bioterrorism countermeasures will not be important targets for
either large pharmaceutical companies or small biotech
companies. Their priorities must be large commercial targets if
they are to survive and prosper. For patriotic reasons some
large pharmaceutical companies may take on a some of the
bioterror targets. Small biotechs will rarely venture into this
field unless they are motivated purely on patriotic grounds.
In order to assure the Nation that significant bioterror
countermeasure R&D aimed at product development will be
undertaken, I believe an organization must be built that will
dedicate its work to this field. The organization must be
contain top research and development people who know and
practice state of the art research and development. To start
such an organization, people experienced in drug vaccine
research and development should be recruited from industry as
well as inexperienced younger scientists who want to dedicate
part of their careers to such work.
A fully equipped facility should be built, preferably close to
the National Institutes of Health, so as to share the
intellectual climate. People who work in this bioterror
countermeasure laboratory could do this as a career, or they
could spend several years in this environment either to gain
experience in drug/vaccine R&D or to satisfy patriotic
ambitions. The most important thing for succeeding in such an
unusual venture is the identification and recruitment of an
outstanding leader who understands the science and is willing
to dedicated his career to the cause. I see no reason that
people of similar quality as those working at NIH, Department
of Defense, or the Center for Disease Control could not be
recruited to such an important cause.
P. Roy Vagelos
Retired Chairman of the Board and Chief Executive Officer
Merck & Co., Inc.
Dr. Vagelos is Chairman of the Board of Trustees of the University
of Pennsylvania, a post he accepted in October, 1994, having served as
a trustee since 1988.
Dr. Vagelos served as Chief Executive Officer of Merck & Co., Inc.,
for nine years, from July 1985 to June 1994. He was first elected to
the Board of Trustees in 1984 and served as its Chairman from April
1986 to November 1994. He was previously Executive Vice President of
the worldwide health products company and, before that, President of
its Research Division, which he joined in 1975.
Earlier, he served as Chairman of the Department of Biological
Chemistry of the School of Medicine at Washington University in St.
Louis and as Founding Director of the University's Division of Biology
and Biomedical Sciences. He had previously held senior positions in
cellular physiology and biochemistry at the National Heart Institute,
after internship and residency at Massachusetts General Hospital.
The author of more than 100 scientific papers, Dr. Vagelos received
the Enzyme Chemistry Award of the American Chemical Society in 1967. He
is a member of the National Academy of Sciences, the American Academy
of Arts and Sciences and the American Philosophical Society. He has
received honorary Doctor of Science degrees from Washington University,
Brown University, the University of Medicine and Dentistry of New
Jersey, New York University, Columbia University, the New Jersey
Institute of Technology, Mount Sinai Medical Center and the University
of British Columbia; an honorary Doctor of Laws degree from Princeton
University; and an honorary Doctor of Humane Letters from Rutgers
University. He has received the Thomas Alva Edison from Thomas Kean,
the Lawrence A. Wein Prize from Columbia University, the C. Walter
Nichols Award from New York University's Stern School of Business and
the National Academy of Science Award for Chemistry in Service to
Society. Dr. Vagelos was awarded the Prince Mahidol Award in January
1998 by His Majesty the King in Bangkok, Thailand.
Dr. Vagelos is a Director of The Prudential Insurance Company of
America, PepsiCo, Inc., and The Estee Lauder Companies, Inc. He is
Chairman of the Board of Regeneron Pharmaceuticals, Inc. He is Co-
Chairman of the New Jersey Performing Arts Center, a Trustee of the
Danforth Foundation and Director of the Donald Danforth Plant Science
Center.
Mr. Turner. I would like to invite any of you to comment on
Dr. Vagelos' recommendations who feel your expertise would
allow you to make an assessment of whether or not we can be
assured that the approach we are taking will get the job done.
Dr. Fauci. Thank you, Mr. Turner, for reading that letter.
Certainly. Dr. Vagelos has put up an opposition that has
been seriously discussed, not only with regard to biodefense
but in the involvement of vaccines for things that are not
related to biodefense. There are some good points that he
makes. The problem I have with that is that I--what he is
suggesting is essentially having a vaccine authority that is a
megavaccine institute, where we, and I think he is talking
about the Federal Government, fund an entity that would be
responsible for the developing of all countermeasures.
I don't reject that out-of-hand at all. But, what it misses
is the fact that it doesn't allow us to call upon the
extraordinary creativity and expertise of multiple, multiple
biotech companies and ``big Pharma'' that can be enticed into
using their capabilities to address problems that are imminent,
or problems that might actually arise.
So it is not that it is a bad proposal at all, but the
thing that BioShield does, and no program is perfect, Mr.
Turner, but one of things that BioShield tries to do is embrace
the extraordinary capabilities of something that this country
has that is better than any country in the world, and that is a
major, absolutely unparalleled pharmaceutical industry.
Mr. Dicks. Will the gentleman yield for a quick point?
Chairman Cox. The gentleman's time has expired, but with
unanimous consent the gentleman can have an additional minute
to yield.
Mr. Dicks. You can take it out of my time. What if you had
grants to the private sector and then grants to the
universities like we do now, and you would have basically the
kind of system that we operate today? Wouldn't that work around
the model that has just been suggested?
Dr. Fauci. Yes, Mr. Dicks. Actually, that is part of the
underlying strategy of BioShield, as I mentioned. I don't think
you were here because the vote was on. But, there are two major
components to the development of countermeasures. One is what
we call the push, namely the development of the proof of
concepts at the research level. This is what the NIH and other
Federal agencies that have research responsibilities are doing.
Trying to get the best of the minds to create the proof of
concept, and to push the process through the early
developmental stage. And then on the other side of the spectrum
is what we call the pull, or the incentive to the industry
which does this so well to get involved, to take risks, and
perhaps even share risks with us, to the ultimate development
of a product that they can do better than any other entity in
the world.
So the point that you make is entirely compatible with the
entire spectrum from proof of concept in basic research, up
through and including the product, which is what we tried to do
when we put BioShield together.
Mr. Dicks. Thank you.
Chairman Cox. Mr. Turner.
Mr. Turner. Dr. Fauci, I know you are well acquainted with
Dr. Vagelos. I want to be sure the record is clear. I noticed
in your response, in disagreeing with some of what he said, you
left the implication that he did not approve of the things that
were in the legislation. And the letter, and I am going to ask
the chairman to make it part of our record. In the opening
paragraph that I read, he said that these are good proposals,
and they should be tried. But I am afraid they will not
accomplish what is needed.
So it is not that he didn't approve of trying to utilize
the private sector, after all he was Chairman/CEO of Merck, and
I am sure that he's more than willing to suggest that the
private sector can be involved, it should.
The issue that he raises, and the one that I have concern
about, is whether or not the goal is going to be accomplished.
And I would suggest that perhaps utilizing what we have
proposed, and also utilizing the establishment of a
bioterrorism research laboratory along the lines suggested by
Dr. Vagelos, may be our best insurance to be sure that this
country is protected against biological attack.
Dr. Fauci. Yes, sir. There are many good points that Dr.
Vagelos has made. I hope I made it clear that I don't reject,
at all, what he is saying. And I do recognize that he is saying
that there are parts of BioShield that he feels are very
important.
So I think it is just a question of the emphasis upon which
you place your major thrust. I might also bring to your
attention that Dr. Vagelos was also a colleague at the NIH
before he went in to academia and became the Chair of Merck.
Mr. Turner. Thank you. Mr. Chairman, I would like to offer
the letter as part of the record from Dr. Vagelos.
Chairman Cox. Without objection.
The gentlelady from Washington, Ms. Dunn, the vice-chair of
the full committee is recognized for 8 minutes.
Ms. Dunn. Thank you. Welcome, gentlemen. This week Homeland
Security Department is performing exercises in my hometown of
Seattle, and also in Chicago, to evaluate our response to
radiological or biological attacks.
We have learned certainly from the briefings we received in
the Seattle exercise, and from your comments today also, about
the rapid ability of these agents to spread throughout
communities and throughout potentially nations and the world.
Assuming the existence of a national stockpile, do you
believe that we have the rapid response team in place that we
need to address such threats, any one of you?
Dr. Fauci. We are getting better at it. TOPOFF II is an
example of trying to get us on the road to being better than we
are. We certainly are not at the peak of where we need to be.
But, considerable resources have been put in, are being put
in, and will continue to be put in to revitalize a public
health, local and State infrastructure that because of the
successes of what we have been able to do with commonly
occurring diseases, that infrastructure has, in fact, been
neglected. And what Secretary Thompson is trying to do in the
Department, and which last year he put $1.1 billion, this year
$1.4 billion and we plan to put more in, is to try and
revitalize what is somewhat decaying, but hopefully--being able
to counter that and get it back to where it should be, a State
and local health capability that would meet the needs of what
we see as a threat to the health of the Nation.
Ms. Dunn. What I experienced in Seattle was very
educational. And I think one of the points of this exercise,
although it has been criticized for being expensive, is that
what you practice, is what you produce in an emergency. And the
ability to figure out the coordination and the decisionmaking
ladders, I think, certainly made it apparent to me that this is
an important sort of exercise.
You have indicated, all of you, in your testimony that
there is a long list of bacteria, viruses, and other pathogens
that, if introduced into a populated area, could quickly spread
undetected through our population.
Considering the large number of potential diseases that
could be inflicted, and we talked earlier, other folks have
asked the question about prioritizing dollars, do you think
that Project BioShield at $6 billion is an effective use of our
resources? Do you believe that this is going to help to prepare
for the prevention, or at least the response if it does happen,
of this problem, or is it your general, perhaps intuitive,
sense that we ought to be using these dollars in some other
way, focusing on prevention a little bit more, for example?
Dr. Crystal. If I may. Keep in mind that we have there, for
the bioterrorism agents, we have other than the antibiotics, we
have very limited vaccines. We have basically smallpox that we
can vaccinate against, and the others we can't do anything
about.
Even the anthrax vaccine, which is used for our military,
takes 18 months to reach full immunity and protection. And so
essentially we are starting from almost scratch in terms of our
response. And so I would suggest that any resource that is put
into this is a start. It is something that we critically have
to do.
Ms. Dunn. Dr. Peters.
Dr. Peters. You know, I would agree wholeheartedly with Dr.
Crystal. I would also point out that we can prioritize the
agents. We do have some like anthrax and smallpox where anthrax
will be back again and again. It is going to be like the
nuclear threat in the Cold War. We will have to deal with
anthrax for the foreseeable future. The next time it could be
antibiotic-resistant to multiple antibiotics.
That is just a simple fact of life. The other issue about
engineered organisms is that, certainly, there will come
problems in the future. But, my guess is, for the next decade
or perhaps longer, we will be dealing primarily with engineered
antibiotic resistance in bacteria and not with super bugs.
So that we would be well-served, I think, to take care of
the antipasto before we move on to the more complicated main
dishes.
Dr. Fauci. Could I make a brief comment on that?
Coming to the $5.6 to $6 billion number was based on the
best estimate that we had of countermeasures that we could
identify would either be imminent, in the process, or at least
within reach. That is a number, when the President put that
forth in the State of the Union Address, was a number that was
based on material that was given vis-a-vis the background that
I just mentioned to you of what kind of countermeasures could
we project over a 10-year period. It was always felt that that
number could be less than that, depending on the success, or
more than that, which is one of the bases for the concept of a
mandatory approach as opposed to a discretionary, so that you
could have the flexibility of moving.
And I understand, as mentioned by Mr. Rogers, that this was
marked up, and we respect and appreciate that. But, that was
one of the reasons why the original proposal was brought forth
as being a mandatory proposal to be able to have the
flexibility of knowing that if indeed something came up, that
the industry would know that there would be the secure funding
source for something that we may not have accounted for in the
original estimate.
Ms. Dunn. Thank you very much. The real goal of--
Yes. Go ahead.
Dr. Adams. Can I respond just a little bit to the TOPOFF II
Exercise? Having been in three exercises now for Foot-and-Mouth
and Rinderpest occurring in our State of Texas exercises, I
want to emphasize that, what I think the real benefit there is
the interaction of agencies, and who is in charge of the
mission.
In the exercises that we have had, we have had up to 34
agencies working together. And the first one didn't go so well.
But, as the agencies began to understand an incident command
structure, and I think that is what they are testing.
Resources, yes, you must have resources. And that is what I saw
in UK, but it was the command structure that makes it work at
the local level because all control starts locally and then
goes nationally.
And so I think that these exercises are absolutely
essential. Without those you won't know your deficiencies, and
they have to be graded to find out where those deficiencies
are.
And as far as supporting--BioShield supporting vaccine
development, the limited numbers of vaccines available as tools
is so few that this step must be taken to generate a spectrum
of vaccines prioritized by risk assessment, which should be
done first, second and third. Without that investment, I would
say we would be derelict in our duties not to tell you that
that needs to be done to protect the human population.
Ms. Dunn. Thank you very much, gentlemen. Thank you, Mr.
Chairman.
Chairman Cox. The gentlelady's timing is impeccable. You
ran your time to precisely zero seconds.
The gentlelady from California, my colleague from Orange
County, Ms. Sanchez.
Ms. Sanchez. Thank you, Mr. Chairman. It is nice to sit on
a committee where the chairman is from Orange County.
Chairman Cox. They should all be that way.
Ms. Sanchez. Well, if we turn to Congress around, I would
get a chance. But, gentlemen, first of all, thank you for
coming before us. And, you know, I am not--I will tell you--I'm
am not an expert on this. Thank God you are scientists and I am
not, but that is why we have you here. I guess I have a couple
of directions of question that I have for you. And please feel
free, any of you, to answer once I get through it.
You know, sitting on this committee our job, I think, is
really to take a look at all of the threats to the American
people here on our homeland, let's say, to try to figure out
what is the tactical approach, what is it we need to take care
of first? What is the long-term approach? What is it that will
make us safer in the long run as an American public? It all
comes down to, everybody comes to our door. Everybody wants
money. Everybody has got an idea. Everybody has got something
to protect.
Aside from the biological, we have all sorts of things
happening, our borders, our ports, our airports, shoulder-to-
air missiles to shoot down aircraft, what are we going to do
with our nuclear power plants, our water, what about health
crises, what about SARS in the United States? I mean, the list
can go on and on and on.
My question is, first of all, the type of money that we are
talking about to invest in these five known biological threats,
is that really prudent in the sense that if I understand it,
not only do they naturally change over time, sometimes short
time, sometimes longer, but also couldn't terrorists
genetically be changing them, all of the time with us, and
how--how does trying to find a vaccination or antibiotic or
whatever we would toward this, could we ever really keep up
with what is going on?
And what about--I mean, why those five? Why are we taking a
look at how they can affect our food, and you know why just
people? I mean, I guess I am trying to ask you, is this really
where we should be starting with these five?
Dr. Fauci. These five are five of the six of the original,
what we called, Category A Agents as determined by the CDC,
which very closely mimics the high priority agents of the
Department of Defense. And they are based on a number of
criteria, with some degree of flexibility because it is
empiric. And it has to do with known threat, known intelligence
of nations such as the Soviet Union early on and Iraq and Iran
and others that had the capability and were, in many respects,
proven to have the capability to do that, as well as the
ultimate impact, something that is easily made and easily
disseminated like anthrax or something that is contagious and
has a track record throughout civilization of wreaking havoc
like smallpox, something that would strike terror in the
population even if it were not efficiently spread, just the
threat of having Ebola or the hemorrhagic fevers showing on CNN
in our living rooms at night could disrupt our society greatly.
So it was a combination of known or suspected threat,
efficiency of delivery and ultimate impact on the public health
that brought things into the Category A Agents category.
Ms. Sanchez. But, Doctor, if we are telling the world that
these are the five that we are researching and trying to find
something for, wouldn't our opponents, whoever they may be, go
off and start on something else that we are not taking a
looking at?
Dr. Fauci. Sure. You can never touch every base of the
threat. But, there are some good bets that it makes sense to
address for the reasons that I just gave you. To say that we
are not going to cover every single option, therefore, we
should not do our most likely, I don't think would be prudent.
I think we should do the most likely, but be flexible enough to
move for agents that could be genetically modified to
circumvent the defenses that we already have. That is part of
the program, is the degree of flexibility that would allow us
to do that.
Ms. Sanchez. Yes, Doctor.
Dr. Peters. A brief comment. These agents have sort of
intrinsic properties that--the way they can become aerosol
infectious or the way they spread and so on. When these
properties are weighed, some of these are bad actors. And
anthrax is a bad actor. And others are just not as bad. They
are not as lethal, they have a higher dose, they are harder to
grow, they are more difficult to work with and so on.
So I think the prioritization has been a very important
issue. If we can take these off the table, I think we will be
way ahead in terms of protecting against large numbers of
casualties.
Ms. Sanchez. My second question is about, again comes back
to these--I am actually thinking of these private companies, I
guess they would be pharmaceutical companies. I am trying to
think of where the profit incentive is. I mean if I am a
company, I am a pharmaceutical company making the largest
profits of any companies in the Nation by the way, and you know
I am developing, and I am researching and developing, and we
are actually giving them money to do this, which by the way, we
do anyway because we give tax breaks and stuff for research and
development, especially for pharmaceuticals, but the real
payoff for these companies is to find a broad audience, and to
actually be selling whatever it is that they come up with, that
is the way that they make their profit.
Why would I taking my best and brightest and put them in a
situation where they would be looking for the answers that you
are looking for, only to not really have manufacturing base or
to really have a base by which to sell it across, because
hopefully we never use these. So where is the payoff to a
pharmaceutical company to actually, even if we are paying for
research and development to some extent, to actually put their
best and brightest on this piece of work?
Dr. Fauci. You have just articulated the rationale for
Project BioShield, which is to create the incentives that they
would not necessarily pursue because of the lack of the
initiatives and the lack of the incentives that you just very
well said.
Ms. Sanchez. So you have essentially articulated the
fundamental rationale for why we need an incentive, a Project
BioShield incentive, to get the industry to know that if they
get involved, there will be a secure funding source to purchase
their product, even if it is put in a stockpile. And the
interactions, and you will hear from industry shortly, but in
the interactions that I have had, a very common refrain or
interaction would be, that they want to get involved, or they
already are involved.
But, for them to go to the next step of the risk of
investment on the part of the permission that they would need
from their board of directors or from their stockholders to
invest a considerable amount of money, they need assurances
that if they are successful in developing a product, that their
success would not be met with a lack of a commitment to buy
that product.
So, in essence, that is the reason why Project BioShield
was put forth.
Chairman Cox. The gentlelady's time has expired. The
gentleman from Kentucky, the Chairman of the Homeland Security
Subcommittee on the Committee on Appropriations, Mr. Rogers.
Mr. Rogers. Thank you, Mr. Chairman.
Dr. Fauci, let me address the last answer you just gave.
How did we come up with this dollar figure of the amount of
incentivization that the companies would need? I think it is
what, $5 or $6 billion. How did we come up with that figure?
Dr. Fauci. That was an estimate based on what we knew was
already beginning to come into the pipeline, as well as our
best scientific projection of what might be able to be pursued,
either because a concept has already been established and
proven, or we felt that the proof of concept was something that
was imminently doable. All of those things, that is the point
that I was trying to make before, Mr. Rogers, that the number
is a number that can be justified, based on the accounting of
these five agents. But, depending upon the success or failure
of these, as well as things that might, without our being able
to predict, ultimately come up. And by predict, I mean either
predict as a new threat, or predict as a scientific
breakthrough, that that was the reason for the flexibility in
saying that it could be less than that, or it could be more
than that. But that was our best guesstimate based on our
scientific information.
Mr. Rogers. It would amount to about $900 million a year,
if I am not incorrect?
Dr. Fauci. The first year we estimated about $890 million
in 2004.
Mr. Rogers. Now, what is the size of the pharmaceutical
industry in the country, in terms of annual sales?
Dr. Fauci. Well, I don't think that I am qualified to give
you an exact number. But you will soon hear from the
pharmaceutical industry, who could give you a much more
accurate number. But it is in billions and billions and
billions.
Mr. Rogers. It is hundreds of billions, is it not?
Dr. Fauci. Yes.
Mr. Rogers. So $800, $900 million a year is chicken feed,
frankly, to this industry, is it not?
Dr. Fauci. Well, I don't know if I would characterize it as
chicken feed. I am not qualified to do economic cost
accounting.
Mr. Rogers. Isn't that a scientific term? But,
nevertheless, the point I wanted to make was, the amount of
money we are talking about here is not a huge amount of money
in terms of the size of that industry.
Number two, you say in your statement with Project
BioShield, quote, on Page 6, we would be able to tell these
companies that if they partner with us, meet certain
milestones, and devise a licensable countermeasure, they will
have our assurances that there will be money available to them
for the purchase of that product, end of quote.
That is not unlike the commitments that we make in any
number of other governmental purchases, For example, or
financing, for example, when we finance mass transit projects
around the country, hundreds of billions of dollars worth. We
do that by what is called full-funding grant agreements, where
we sign, the Federal Government signs a contract with a local
community on the funding amounts and process and procedures and
the like. And then annually, we appropriate the funds to
fulfill the commitments that we make under that multiyear
commitment. Say it is 6 years, that full-funding grant
agreement lasts for the full 6 years. We appropriate each year
the annual installment for that contract.
What is different here? Why could that not work in this
kind of a situation?
Dr. Fauci. Well, sir, I certainly respect the analysis that
you made about that. The experiences that we have had with what
we would call the viscidities of the appropriation process, we
feel, and this has been I think confirmed in discussions with
the pharmaceutical companies, that although the intention of
appropriating on a yearly basis might be there, there are many
things that account for the difference between an authorization
and an actual appropriation.
The other issue is, that when funds are appropriated, there
is, in some respects when the money is appropriated up there,
as opposed to being available, that things can get earmarked--
money might be spent for things that might not necessarily be
the very, very best, whereas in this particular program that
has been proposed, the company would get money for something
that would ultimately be a deliverable product.
And the incentive, the incentive for them and again, sir, I
say this with a great deal of respect for the process that you
have gone through, the incentives to the company to rely on an
appropriation process that we know from experience does not
always proceed in a manner such that there are guarantees, that
they will not necessarily be incentivized. And the whole
rationale for the program is to get them involved in something
that they may not otherwise be involved with.
Mr. Rogers. I understand that. However, we have never
failed to pass annual appropriations bills. And we have a
Constitution that requires no moneys to be spent other than by
an appropriation of the Congress. We frown very strongly on
advance appropriations beyond our term of office.
We have too many programs now that are mandatory. It is
slowly taking over the whole Federal budget. We only
appropriate a third of the Federal budget now. So we have got
to put some sort of a brake on the appropriations process which
the Constitution guarantees.
Number two, those mass transit projects I talked to you
about where we issue a full-funding grant agreement from the
executive branch to the community to finance let's say a 6-year
project, the community then goes out and sells bonds to finance
the upfront money to build the project.
We pay off those bonds over the 6 years of that period with
annual appropriations. We do the same thing with the FAA in
building airports. They issue bonds to build the project. We
pay off the bonds with appropriated moneys annually over the
term of the contract. We are now doing the same thing with the
modifications of airports to accommodate the new x-ray
machines, it is hundreds of millions of dollars.
And the local authority will be selling bonds based on that
commitment. I don't understand why if bonding companies and
people that buy bonds on the market can't be--if they trust us
to do what we say we will do by a written agreement, I don't
understand why anybody else would want to question that. Have
you got an answer for that one?
Dr. Fauci. Well, I don't think there is a totally
satisfactory answer to that. I might say, Mr. Rogers, again
that we respect the rationale that you are putting forth on
this. But, we realize, and the Administration realized that
this is something extraordinary that we are asking for. But we
believe that the circumstances within which we are asking this
are extraordinary.
We often get asked a somewhat similar question of why not
do it the way we do it when we make an authorization and
ultimately an appropriation for things like battleships or
different types of bombers or what have you. And one of the--I
wouldn't say arguments--but one of the rationales to counter
that, is that people who make battleships and people who make
airplanes don't really have any other arena to operate in than
having the Federal Government be their customer.
We are trying to incentivize companies who really do not
need us. We need them. That is the reason why we put that
forth.
Mr. Rogers. Well, I don't know whether Boeing would agree
with you or not. Mr. Dicks might want to chime in on that one.
But, Boeing I think sells commercial products other than to the
U.S. Government as well as to the government. And yet, they are
very anxious to get government contracts with no real assurance
that the money is going to be there except by annual
appropriations. Is that not correct?
Dr. Fauci. I think the proportional relationship of the
dependency of a company that makes aircraft carriers, their
dependance on the Federal Government compared to an analogous
situation of drug companies dependent upon vaccines or
countermeasures that might not be used, I believe, sir, is a
different story. They could just as easily go, and that is the
reason why I put the slide up. Unfortunately, you all were out
for a vote. When you look at all of the money that is made in
vaccines, it equals one individual product that one drug
company makes.
So that is getting back to the point that I was making with
respect, sir, that they don't really need to make
countermeasures for us. They can do just fine doing other
things.
Mr. Rogers. Perhaps we could, and I am finishing, Mr.
Chairman, perhaps we could, as we do in the projects that I
mentioned, issue bonds, sell them and get your money up front.
Dr. Fauci. Thank you, sir.
Mr. Rogers. Thank you, Mr. Chairman.
Chairman Cox. Thank you.
I think it is very helpful to this process of the
development of this legislation that the Homeland Security
Chairman from the Appropriations Committee is also a member of
this committee, and this discussion obviously needs to
continue.
I next recognize the distinguished gentleman from the State
of Washington, where TOPOFF II is still underway, Mr. Dicks.
Mr. Dicks. Well, thank you very much.
I appreciate your testimony. We are all trying to learn
more about this subject. Chairman Rogers, of course, has the
responsibility for the Homeland Security Subcommittee, newly
created on the Appropriations Committee, and is the former
Chairman of the Transportation Subcommittee.
Is it your understanding that--and the budget request that
the President asked for, he wanted this--this would be an
entitlement? In other words, he would have an open-ended source
of funding that he can draw upon in order to pay for the work
that is being done by the companies? Is that your understanding
of it, Dr. Fauci?
Dr. Fauci. Sir, I wouldn't call it an entitlement, because
there are a lot of checks in that. First of all, money is not
given for anything other than, essentially, a deliverable
product, namely something that is ultimately licensed.
So it is not an entitlement for money to go somewhere
without essentially knowing that you will get something for
that. Also--
Mr. Dicks. But Medicare, and they are getting something for
Medicare. They are getting something for Medicaid. Those are
entitlements. We have to appropriate the amount that is
actually utilized. And that makes it an entitlement. There are
restrictions on all of those programs as well.
All I am trying to get to here, maybe this is the one of
those situations where we may have to do that. I am waiting to
hear all of the companies testify about their requirements.
And the idea is, that that is a better way to go than
having the NIH, do these vaccines. And the reason for that is
because you want to involve these private sector companies--you
can't get there without having their expertise and their
talent. It is just like the Defense Department. They can't
build weapons systems. They have to go to the private sector to
do that, because that is where the capability resides. Is that
what you are basically saying?
Dr. Fauci. What I am saying, sir, is that the NIH and other
of the agencies of the government who do research, have an
important role in feeding the basic concepts and the proof of
concept that would allow you to ultimately make that transition
into the advanced development of a product.
So there is clearly an important role of discretionary
funding in that research arena that we already do now and have
done since the beginning of the funding streams.
The point that I was trying to make is that we, for
example, have a vaccine research center at the NIH that was
originally developed for HIV/AIDS but now is getting involved
in other arenas, which was part of the original mandate
including biodefense.
What I am saying is that, that this is just one small
component of the enormous capabilities that our pharmaceutical
and biotech industry has. So we feel strongly that we need to
embrace them and incentivize them, as opposed to trying to do
it, essentially, all by ourselves. We want to be partners in
it, but we don't want to exclude the enormous capabilities that
these pharmaceutical companies have us to get us where we want
to go.
Mr. Dicks. So the question is, how do you involve them? And
how do you make it attractive for them to be involved?
Dr. Fauci. Right. Well, I know you will get some good
solid, well-thought-out answers from them.
But the way that we see it, sir, is that we show them that
we have a secure funding source to be able to purchase their
successes with them, and to share some of the risks, but make
sure that they also take a risk.
We will pay for deliverable products if they do not have a
true assurance that if they are successful, that someone will
buy it. I have had CEOs tell me, we are not afraid of the risk
of failure. What we are afraid of is the risk of succeeding and
having no one assure us that they will buy the product.
Mr. Dicks. Let me ask you this hypothetical. Let's say you
have got two companies doing something like a cure for anthrax.
They are both incredibly positive ideas. They look good when
they use animals for testing. And both of them are very
attractive. At the end of the whole effort, one turns out to be
just a whole lot better than the other one. Are you going to
pay for both of them? Are you going to compensate both of them,
because both of them looked attractive enough to have entered
into a contract, and then the one that is really good, you use
that for a stockpile? How would you do that?
Dr. Fauci. Well, again there are different scenarios. The
one you gave, I am sure, could be modified defending upon the
circumstances. But you would really pay essentially for the
success, except if you contract for a certain amount of
knowledge or even material that would get you here, the
secondary and tertiary contract might ultimately get to one
company, but you would pay the company for what it is they
contributed to you.
Mr. Dicks. We do that in Defense a lot of times. We have
two different companies do the R&D, and we get down and make a
decision and procure one of the two products. But the company
that did all of the work gets compensated. Would that help make
this a better way of doing it? Or can that be done under the
proposal?
Dr. Fauci. That can be done under the proposal, if you look
at it from a comprehensive standpoint of the fact that there
are contracts for the actual procurement, which is what the
specific issue that we are talking about. And there are
research and development contracts that we get involved with
now.
I can give you a real-life example of what we are trying to
do right now with the recombinant protective antigen, anthrax,
the second generation anthrax that we have R&D and ultimately
some preadvanced and development contracts with a couple of
companies. We are going to recompete the next RFP that would
push us totally closer to procurement.
It is likely that one of those companies will be able to
take it totally to procurement. But that doesn't mean that we
are not, in our predevelopment contracts, paying the company to
get us to the state of knowledge where we can then go to
advanced development. But BioShield, as it is strictly laid
out, will pay ultimately for the delivery of a product that can
be used or put in our stockpile.
Mr. Dicks. Some people have looked at this proposal and say
it is too timid. How do you react to that concern?
Dr. Fauci. Well, I think it is an excellent start. If you
don't take the ball guaranteed over the goal line, you can say
it is too timid. You have to ask the question. There are
constraints. We know that we need to live within a budget
resolution. We have worked with members of this committee
discussing that, although you would like to have X amount of
money, the realties of a budget resolution would say that, in
fact, you may not be able to spend over a certain amount in
year 1 or year 5 or 10 year. So there are the realties of
budget resolutions.
So if you were to say that you have an absolute, give me
$20 billion and try and bring everyone in to do that, you
probably can get some very good science and some good products.
So, my answer to the people who say that this falls short is
that we believe it is a very good start.
Mr. Dicks. Thank you.
Chairman Cox. Thank you. The gentleman from Massachusetts
for 8 minutes.
Mr. Frank. Thank you, Mr. Chairman.
Let me just begin right there. I take it, Dr. Fauci, what
you were telling Mr. Dicks is that if it weren't for budget
constraints, you could spent more money usefully?
Dr. Fauci. Well, yes and no, Mr. Frank.
Mr. Frank. Yes, I understand. Explain no, please.
Dr. Fauci. The reason, and it gets back to the question of
mandatory versus discretionary appropriation, we feel that the
incentive that we are talking about is the concept that if they
come up with something that would work--
Mr. Frank. So you have got enough as a starting point. The
question is, you might need more later?
Dr. Fauci. Right.
Mr. Frank. By the way, on this little debate that you were
having with the gentleman from Washington about whether
entitlement means that you get something for nothing, that is
really only true in agriculture. I just want to say that. That
is where people are entitled to get something for nothing.
Chairman Cox. Would the gentleman yield on my time?
Mr. Frank. Yes.
Chairman Cox. As you know, the Energy and Commerce
Committee has marked up this bill. Both the Energy and Commerce
Committee and this committee have an agreement with the White
House now that we are not going to go the mandatory route.
So notwithstanding the importance of this discussion--
Mr. Frank. I thank the gentleman. But can I ask you, you
said this committee has an agreement. As a member of this
committee, did I agree to that agreement? I am just wondering.
What was the process by which this committee of which several
of us are members agreed to the agreement?
Chairman Cox. The leadership on both sides of the aisle
were part of these discussions. But, of course, the member will
have his opportunity during markup to--
Mr. Frank. You mean--well, I mention that because that is
the second question that I had. I was told that the
representative from the Department of Homeland Security is not
going to be here today. Is that accurate, Mr. Chairman?
Chairman Cox. We have another panel next of industry,
private industry.
Mr. Frank. But there is nobody from the Department? We had
someone listed from the Department of Homeland Security for
that panel.
Chairman Cox. That is correct.
Mr. Frank. But he is not going to be here?
Chairman Cox. These are science panels and commercial.
Mr. Frank. Well, at least, maybe you weren't in on the
agreement, because the listing, and, in fact, we have a
statement from someone from what used to be FEMA, now Homeland
Security, and I am told that he is not coming. I guess--here is
the problem. I mean, we were talking about what happens if
things get wiped out, et cetera.
At this point, I have got to be honest with you, I think if
this committee got wiped out, nobody would notice. We are the
Committee on Homeland Security. We are talking about
legislation which affects the Department of Homeland Security.
We have a hearing with nobody from the Department of Homeland
Security.
Chairman Cox. If the gentleman would yield, this committee
has already had such a hearing at which, I believe, the
gentleman was not present, with the Department here.
Mr. Frank. We had today--when was that hearing? I was at a
hearing when we had a technical corrections hearing?
Chairman Cox. No, this was a hearing on BioShield.
Mr. Frank. When was that hearing?
Chairman Cox. A couple of weeks ago.
Mr. Frank. Was there a public hearing on BioShield? A
subcommittee. Not being a member--that is why I wasn't at the
hearing. But I do have--we were--I saw a statement in here from
someone from the Department of Homeland Security. Maybe that
directorate out in California ought to try to find him. Listen,
the reason I say that is I had some questions, because the
things that I am most concerned about, frankly, I am not a
technical expert here, and I am not going to debate which
paradigm is better for organizing the research. I am concerned
about some of the local impacts.
And we have a statement from a Mr. Tolbert dated May 15th,
2003, which is today, and he isn't going to deliver that
statement and can't be questioned about it. He is from the
Department, about responsibility for a system that assists
State and local governments.
I think we are doing a terrible job as the Federal
Government in providing help to the State and local
governments. I would have liked to have been able to talk about
that.
Second, I do have a question about the legislation. I
noticed that the Energy and Commerce Committee has already
marked it up. Is there going to be a markup? Has it been
recovered to this committee? Are we getting a sequential
markup? What kind of markup?
I yield to Chairman.
Chairman Cox. The markup will occur either next week or if
we see the need for additional hearings after the break.
Mr. Frank. So we are going to have a markup on this bill?
Chairman Cox. Yes.
Mr. Frank. Well, that is reassuring, because we had
previously not--I was told by our staff--heard that.
Chairman Cox. No, that is not correct. This committee has
always intended to mark it up.
Mr. Frank. Well, Mr. Chairman.
Chairman Cox. That goes back to the very first--
Mr. Frank. Excuse me, Mr. Chairman. I haven't yielded. You
are supposed to enforce the rules. The fact is that we were
told it hadn't been referred to us yet. And we inquired at the
Parliamentarian's office, and we were told it hadn't been
referred yet.
I am glad to know that, but I don't think we ought to be in
the position of mind reading. I am glad to be reassured, but we
had asked.
Chairman Cox. The gentleman will suspend. The Chair will
take the prerogative of--
Mr. Frank. No. Under--point of order, Mr. Chairman. I don't
recognize any right for you to order me to suspend on my time.
Under what rule of the House is that appropriate?
Chairman Cox. The gentleman will suspend. I am going to
address the committee for a moment not on the gentleman's time.
This committee was asked, and both Mr. Turner and I were
invited to the White House on Day 1 to discuss this legislation
with the President, with the Secretary of Homeland Security,
and with the Secretary of Health and Human Services.
The President and those Secretaries asked this committee to
move this legislation on an urgent basis. We are doing
everything that we can to accommodate that request.
But that has been in prospect since Day 1, and there has
never been any question about that on either side of the aisle.
I am sorry the gentleman had any mistake about it. And I yield
back.
Mr. Frank. Well, I disagree very sharply with that. I don't
know when Day 1 was. I don't know what the holdup was. We have
been in committee for several months and haven't done as much
as we should. But I requested, today, information from the
staff, was the--was the markup--was this going to come before
us? Was it referred? I was told that the Parliamentarian said
that it hadn't been referred to the committee yet. It wasn't
clear that the Speaker was going to do that.
Now, the gentleman tells me, yes. But I can only go on the
information that we were then given. If there was, in fact, a
determination that it was going to be sent to us, apparently
that information wasn't shared with the staff that asked about
that.
I would also say, if we are going to mark it up, I am
particularly troubled by the inability to get questions to Mr.
Tolbert, because much of what we have here are problems about
the adequacy of our interaction with State and local
governments.
He says in the statement that he won't deliver, this system
assists State and local governments by providing primary care,
et cetera. It is to supplement State and local medical
resources. I would be very interested as to what is involved
with that. I don't know if, Dr. Fauci, is it something that you
would know about? It doesn't come within your jurisdiction.
Dr. Fauci. No, it doesn't. I am sorry, Mr. Frank.
Mr. Frank. That seems to me a real hole in our ability to
legislate on the subject. Let me just ask the other three
witnesses then, because, obviously we have heard from Dr. Fauci
representing the Administration's approach here, and I know
there are alternative proposals. The ranking member read from
Dr. Vagelos an alternative way to go about it. But within the
framework that has been selected within this legislation, are
there improvements, tweaks, changes you would make within this
framework? I guess there is a broader question about a whole
different framework, but within the framework that we are
talking of here, I would ask any of the other three witnesses
whether there are any specific proposals for changing in any
way the financial system, the terms, the incentives, anybody
have any proposals in that regard?
Dr. Peters. I certainly don't have a proposal, but one of
the things that Dr. Fauci has said that is implicit, but
perhaps he has not made it explicit, is that vaccines making is
not a guy in a white coat who goes in a room and makes a
vaccine. There are starts, failures. You make preliminary lots,
you do testing. And the flexibility in this seems to me to be
very advantageous. And being able to allow academia, small
industry, NIH itself, to be able to make these starts and stops
and have these failures and see the light at the end of the
tunnel to go on.
Mr. Frank. All right. I thank you for that.
Chairman Cox. The gentleman's time has expired. I think the
witnesses are free, however, to address the questions.
Dr. Adams. A point on scientific rigor in the process. And
Dr. Fauci has implied that over and over is absolutely
essential to produce the highest quality product possible.
And so the scientific rigor, while you might be building
mass transit there is engineering rigor and we understand, but
it is a bit more predictable than the biological systems that
we are working in. And so the stop-start that Dr. Peters just
mentioned, and the testing, coming back to animal testing,
testing in test tubes and then in animals, that rigor has to be
met to have a safe, effective product that can be used in mass
populations.
And so, I think that scienctific rigor is a part that has
to be upheld, and that is an absolute essential part of the
BioShield Project.
Chairman Cox. Thank you. The gentleman's time has expired.
The gentleman from Connecticut, Mr. Shays.
Mr. Shays. Thank you, Mr. Chairman. And I thank our
panelists.
I have a sense that BioShield is basically to incentivize
and accelerate research and development for vaccines and
therapies, that is kind of what the--and I am--I would like the
panel to tell me, how do we decide what vaccines and therapies
we need? I would like to ask our three scientists not working
for the government to walk us through that.
Dr. Crystal. Well, Mr. Shays, one can prioritize based on
two aspects. One is, what are the organisms, the pathogens that
appear to be the most dangerous. That is the first. And the
second are, what are the opportunities that we think that we
have strategies that we can solve the problem.
And you can use those two priorities to make the list as to
what you go after. So there may be a pathogen that is bad, but
we have no idea, right now, how to go about it. And so it would
not make sense to do anything other than basic research.
On the other hand, if you have a pathogen that is bad, but
you have a strategy, you have to leverage the infrastructure of
the pharmaceutical industry to be able to produce it so the
public can access it.
Mr. Shays. Anyone else want to disagree with that or add to
it or subtract from it? Dr. Peters.
Dr. Peters. I think one of the important things is that
this program be slanted towards civilian priorities. And I
think in our current status of uncertainty as to what the
threat is, this dictates that we not only look at vaccines, but
we give an important look at drugs.
If you take, for example, the smallpox vaccine situation--
Mr. Shays. I think of drugs as being the therapies?
Dr. Peters. Being therapies, especially anti-infectives,
but possibly other ways to treat the condition that are not
strictly anti-infectives.
Mr. Shays. Since this isn't a traditional marketplace, how
do we know how much to order?
Dr. Peters. We will have to make an estimate of the size of
the event and the amount that we will need to treat, or at
least to initiate treatment.
Mr. Shays. So we are basically having--it is basically--it
is basically the concern of a human inducement of a disease,
not a natural cause, primarily?
Dr. Peters. Primarily.
Mr. Shays. So we have to understand the intent of the
terrorist and the capability of the terrorist, and we also have
to throw into that mix which things are--where we are most
vulnerable, what can be the most fearsome and so on?
Dr. Peters. Yes, sir.
Mr. Shays. How certain can we be of the shelf life of
whatever vaccines we develop or therapies we develop?
Dr. Peters. That will depend entirely on the chemical
nature of the therapy or on the nature of the vaccines. We are
still using smallpox vaccine that was made in the late 1970's.
Mr. Shays. How do we know what vaccines or therapies need
financial inducement and which ones could technically be out
there without needing to, you know, have the motivation of a
profit margin in them? Are we saying there is none?
Dr. Peters. Well, I think that the experience with emerging
infections, is there is not a market that is big enough to
drive any drug that is being developed for an emerging
infection, up to and including Dengue Hemorrhagic Fever, in
which there are hundreds of thousands cases every year in the
third world.
So I think that almost all of this will have to be driven,
it is my opinion, almost all of this will have to be driven by
some other mode.
Mr. Shays. It doesn't just have to be Dr. Peters, but what
I would love to understand is, will we--in my work in the
National Security Subcommittee, I wrestle with this issue.
Do we publicize what we are going to be making, and let the
world know that we have so much of this, or so much of that?
And I think you can gather where I am going.
Dr. Peters. Yes, sir. I think the exact nature of the
stockpiles should be quiet. But, I think the nature of our
society is that we have to publicize where we are going. That
is the way science works, that is the way we get there, and we
need the consent of the people to proceed in that direction.
Mr. Shays. The reason is, as you said, we would be
prioritizing, because how many would we need if we needed
everything?
Dr. Peters. I am--
Mr. Shays. That is my point. The number would be large. So
then we would prioritize. And then we have a list. And then the
bottom line, and my time is up, but the bottom line is, they
just do the one thing we don't have if they have any brains
whatsoever.
Dr. Peters. But I think, sir, that the--these bugs are of
differential badness. They have different capabilities to kill
large numbers of people.
Mr. Shays. Fair enough. So we do all of the bad ones, and
we don't have to prioritize within that bad list. We do all the
bad lists, and the terrorists know, so they have a choice of
doing the bad list where we will have antedates, or they can do
the not so bad list which we don't have an antidote.
Dr. Peters. Yes, sir. To use an analogy. We are trying to
get them down from a nuclear capability with anthrax, to
cluster bombs with plague, and finally down to a car bomb.
Mr. Shays. Thank you.
Thank you, Mr. Chairman.
Chairman Cox. Thank you very much.
The gentleman's time has expired. The gentlelady from New
York.
Mrs. Lowey. Thank you, Mr. Chairman.
Dr. Fauci, I would like to pursue an issue that was
discussed previously, and you and I and Dr. Thompson, Secretary
Thompson, have discussed this as well.
If BioShield is successful and new countermeasures are
developed, the success of these projects will depend on a
public health system's ability to distribute and deliver the
serums to the general public in a timely, safe and orderly
fashion.
Mrs. Lowey. In the case of smallpox, the cost of
vaccinating--roughly $200 per vaccination because of screening,
testing, post-vaccination surveillance and treatment of adverse
reaction--has been a significant impediment to the program.
Thus, it seems to me the key to effective countermeasures
depends on a lot of factors and costs other than buying these
products and putting them in the strategic stockpile.
You mentioned before Secretary's Thompson commitment to
putting--I think you mentioned $1.3 billion--and it happens to
come from the Labor, Health, Human Services, Education
Committee, but you and I know that basic health programs are
really starved for cash for their core public health missions.
In fact, there are a whole lot of reasons--the decrease in the
reimbursement rate. So here we are asking them to take on
greater responsibility in the terrorism preparedness area.
It seems from my perspective that we should seriously
consider funding for our hospitals, for our public health
network as part of our Project BioShield. I can remember a
hearing we had in the committee with one of my colleagues sent
a strong message to Secretary Thompson--I am not sure if you
were there at the time--saying, now, remember, the money for
homeland security cannot be taking the place of basic needs of
hospitals, it seems to me, unless we have got to fund the basic
needs of hospitals.
If someone is coming in--one of you gentlemen referred to
cough. If someone is coming in, until they discern that it is
SARS or it is something minor, they have to be prepared. In
fact, the first tranche of money to the hospitals in New York
State amounted to about $10,000 a hospital. Since then, more
has come. As one hospital said to me in a meeting with all my
chief financial officers, pay for a shower and my
decontamination unit. They all have to expand their emergency
rooms. They are all cutting back on staffs. They are not
prepared to handle this.
So my question is, do you believe this is an issue that
should be seriously addressed in Project BioShield and not
depend upon Secretary Thompson or anyone else pleading for an
additional appropriation, or should we continue to fight about
reimbursement rates for Medicare, or should we deal with this
in Project BioShield?
Chairman Cox. Would the gentlelady yield?
Mrs. Lowey. I would be delighted.
Chairman Cox. While you are all contemplating the best
answer to that question, Dr. Crystal, I understand, needs to
make an airplane. He alerted us early on that he needed to
leave at 3:15. That time having approached, I wanted to excuse
him and also give you the opportunity to leave us with final
words if they are top of the mind. Either way, we are very
pleased that you could join us today.
Dr. Crystal. Thank you. I guess you are the closest
congresswoman to where I live--
Mrs. Lowey. And I am very grateful that you are here.
Dr. Crystal. In response to your question, working in one
of the large urban hospitals, I would love to see that, but
that is response to these infections, and if we don't do
something about preventing the patients from coming in, we will
never solve it at the hospital level per se. We have to do
both, but we have to do something in terms of preventing these
kinds of attacks, and that is vaccines and therapies.
Mrs. Lowey. Oh, I understand that. But is it realistic,
given the knowledge that your hospital and others have shared
with me--and I have met with many, many CFOs, CEOs of the
hospitals. They are absolutely not prepared to deal with
emergencies; and many of what may not seem like an emergency,
if not handled correctly at their hospitals, could be an
emergency.
If I remember correctly in talking to Sam Nunn of WTI and
Peggy Hamburger, whom you know very well, the number that they
gave me just this morning was, in World War I, 50 million
people died of flu, more than any others dying of any other
combat-related death.
So my question is, isn't this part of any solution? And if
we are really going to fund BioShield at the rate that is
requested to do the job, don't we have an obligation to
consider delivery of services as part of that effort?
Dr. Crystal. I can't comment as to what is best, but I
agree absolutely with you that our hospitals are markedly
underprepared for these kinds of problems.
Mrs. Lowey. Thank you. Have a good flight.
Dr. Crystal. Thank you.
Mrs. Lowey. Dr. Fauci or any of the other gentlemen, one
other question. We are living in a global world. I am not sure
of the number, maybe a hundred million people enter somewhere
between--I think I read 100, 200 million people enter the
United States every year. People are travelling all over the
world. Can this money--has this money or the prospect of this
money served as an incentive? Are you in touch with others?
This is an international issue, an international crisis. Do
you think that if we appropriate this money in an effective way
the President could be encouraging other nations who certainly
will benefit--we are all in it together--to match the money or
provide some important, significant dollars as well?
Dr. Fauci. You asked two questions, Mrs. Lowey. The first
one was, do I believe that the ability to shore up our
capability of responding is important? It indeed is a very
important issue. As you know, Project BioShield was formulated
to expedite the process of the research concept development to
the ultimate development and delivery of a product. That was
the rationale for BioShield.
The addressing of the problem of our public health and
hospital infrastructure is certainly a critical issue. Where
that gets addressed, that is not for me to say, except to say
that you put your finger on an important issue, our capacity to
respond, which in fact is not what BioShield is about.
BioShield is about getting the countermeasures that we need,
which is part of the big picture of how we respond. One of them
is the point that you made.
The other question that you mentioned is the international
nature of it. I think if we incentivize the industry in this
country, the pharmaceutical industry is also a global
phenomenon, so there is no reason to believe that that won't,
in fact, entice companies that are not just domestic companies
but that have international interests. So we feel we will tap,
if successful, the best of the pharmaceutical companies in a
global fashion.
Mrs. Lowey. Well, my time is probably up, but--
Chairman Cox. It has indeed expired.
Mrs. Lowey. Pardon me?
Chairman Cox. It has indeed expired.
Mrs. Lowey. I was thinking of other nations, not just of
the pharmaceutical companies.
Dr. Fauci. Well, I would hope so. I mean, we face the same
issue in so many things where we take the initiative, because
we have administrations--and the Congress have always been so
supportive. We don't generally see that kind of support that we
get from our own Congress from other countries; and,
unfortunately, we have seen that with HIV/AIDS, where the vast
majority of the burden of the funding, of the research, of the
things that go into vaccine development are due to the
generosity of our committees and our administrations who
support it.
Mrs. Lowey. To be continued, and thank you for your very
important leadership.
Chairman Cox. The gentleman from Massachusetts, Mr. Markey.
I would--before recognizing Mr. Markey, I would point out
to all members we do have a second panel, and I leave it to you
how you want to accumulate the time. It is entirely up to each
member.
Mr. Markey is recognized for 8 minutes.
Mr. Markey. So if he wanted to, I could save it all for the
second panel and then question Haseltine for 16 minutes.
Chairman Cox. Thirteen minutes.
Mr. Markey. All right, 13 minutes for Bill Haseltine. No, I
don't think I will do that.
How are you feeling down there, Dr. Peters?
Dr. Peters. I am OK.
Mr. Markey. You can take a break, you know. If you want to
go outside and--you know, you can come back in for a couple
minutes.
Dr. Peters. I think that would be helpful for--
Mr. Markey. Yeah. We can see that.
I am not going to ask Dr. Fauci all the questions, anyway.
So, first of all, we did mark up in the Energy and Commerce
Committee today the bill; and, amongst other things, we changed
it from an appropriations for an indefinite period of time, 5
years or 10 years--we don't do that even for the CIA or the
FBI--to an authorization, so that it would have to compete for
money each year and justify itself each year as a program,
which I think is a good idea, and I am glad we were able to
make that change.
Second, I was able to add in language that has a GAO
evaluation of the various aspects of BioShield's effectiveness
and to evaluate whether or not the money was spent well, which
I think is important.
And, third, the committee did adopt my language, which
instead of having no limit on what any outside expert could be
paid and having an exemption to the Federal employee pay
standards for anyone who would come in and consult and help us,
I finally was able to, I think, persuade people that we should
at least establish the limit as to salary of the President of
the United States--although I would have preferred it to be
your salary, Dr. Fauci, because there is no one who is going to
consult with the government who is going to know more than you
do. So for them to be paid two or three times as much as you
get paid I think is in itself absurd, given the national
importance, but nonetheless at least capping it at the
President's salary is something that is a good start in terms
of the overall legislation, but I do think we have to work on
that even more.
The bill places no limits, however, Doctor, on what the
companies can do with the countermeasures that they do develop
with taxpayer money. So, for example, during this whole
conflict with Iraq, we were afraid that they had developed a
potent nerve gas vaccine which they could then immunize their
troops so that they could use it against American troops.
So one of my concerns would be that we develop this series
of vaccines at government expense and then the companies have
no restrictions on which countries they can sell it to, which
could then be used as a countermeasure against American forces.
Do you think it makes sense that no company should be allowed
to sell any of these vaccines to any country in the world that
is on a terrorist list or any list that could endanger America
without the express written consent of the U.S. Government?
Dr. Fauci. Well, Mr. Markey, as a government witness, I
don't think that I can speak authoritatively to represent the
administration on this, but--except to say that it makes some
common sense that if there is a countermeasure that is
developed that might potentially ultimately lead to the harm of
American citizens that you need to seriously consider how you
can somehow put a process in place that would address that. So
I essentially agree with the concept, but I am a little bit
reluctant to make an official declaration of what
administration policy would be on that.
Mr. Markey. Dr. Adams, does that make sense to you?
Dr. Adams. Well, it would make sense to me that any weapon
that could be used against us shouldn't be given to our
enemies, yes.
Mr. Markey. OK. Great. So North Korea, Iraq, Iran, do you
agree a pharmaceutical company shouldn't in and of itself be
able to make the decision to sell this vaccine then to those
countries? I mean, in the absence of a smallpox breakout in
their civilian population, which, of course, you know, would
change the scenario, but, in the absence of that, you do agree
that we shouldn't be selling this, that we shouldn't allow the
pharmaceuticals to sell this stuff that can be used to protect
their populations--
Dr. Fauci. It makes sense.
Mr. Markey. Do you agree, Dr. Adams?
Dr. Adams. Yes, it makes sense. However, the products
coming out of this will have global application for human
health and well-being.
Mr. Markey. I appreciate all that, but I understand that in
the hands of sociopathic leaders of countries that they
actually view it a different way. I mean, a nuclear power plant
that generates electricity in our country is viewed as a
nuclear bomb factory in North Korea or Iran. So I don't know if
we want to be selling nuclear power plants to North Korea or
Iran. So that is my point. I do understand that.
Now, with regard to what the accountability should be--you
know, when we engage a defense manufacturer in the process of
making weapons we have very tight control over their books,
access to their records to ensure that there is accountability.
Now, do you believe that the same should now be true for
pharmaceutical companies who are going to be enlisted in this
effort in terms of our ability to have access to their books
and records to guarantee the accountability so that we are not
overpaying? Dr. Fauci.
Dr. Fauci. Again, I hadn't seen that proposal before, since
I was not--I didn't get the results of the markup this morning.
Mr. Markey. Oh, no, it is not in the bill. I am asking you,
does that make sense to you that, given the fact that we are
going to have this unprecedented government subsidy of an
industry, that in all other industries, we do have--you know,
we mandate access to the books and records so we can make sure
that the government is not overpaying so that we get the best
result for our dollar? Do you think that makes sense, that we
ensure that the pharmaceutical companies give us the access to
their books so that we can guarantee that there is no
overpayment?
Dr. Fauci. I think the fundamental principle of
accountability for what the government pays for is something
that I certainly would be in favor of. I hesitate to agree to
issues in which I don't know the exact, specific details of
access to books, because often I would say something, yes, you
should, and then there is some technical issue that I did not
consider because of my own lack of expertise.
But I would like to be able to be on the record to say that
we certainly--if the Federal Government funds certain projects,
that they should certainly be able to have the people who are
the beneficiaries of the funding show responsibility and
accountability to them.
Mr. Markey. Well, the pharmaceutical industry says that, on
average, it costs about $800 million to develop a new drug. Is
that what the U.S. Government should expect to spend for each
one of the new antidotes that might be developed?
Dr. Fauci. Approximately. But, again, Mr. Markey, when you
talk about $500 million to $800 million, it sometimes is--the
number is as high as that, is that that is the whole process
from the proof of concept up through and including the advanced
development and the production and the manufacture of it.
There will be other funding streams that will go into the
process of the development of a countermeasure. For example, a
lot of the discretionary money that we put into the research
for the development of countermeasures will feed into what
ultimately will be that. I am not so sure that the actual
procurement of a particular product would be that $500 million.
We feel when we calculated it that $500 million is a reasonable
calculation on the part of the company. So if you are trying to
figure out how much each would cost, that is not an
unreasonable number to hold on to.
Mr. Markey. All right. You know, except for Jeff Skilling
at Enron, most people think that $500 million is a lot of money
to keep track of. That is why my question in terms of
accountability and looking at the books are important, because,
obviously, we are running huge deficits, maybe $500 billion
this year in the U.S. Government. So we are going to have less
and less flexibility as each year goes by, given the perhaps
trillion dollar deficit we will have within another 5 to 8
years in the country here per year. So we have to get the
maximum return, and as a result I think this accountability
will be necessary.
Dr. Fauci. When we let contracts typically, Mr. Markey, we
build in accountability into that contract that we make.
Mr. Markey. Yeah. I--
Chairman Cox. The gentleman's time has expired.
Mr. Markey. I thank you.
I just hope that the people who we bring in from the
outside are as qualified as you are, Dr. Fauci; and I hope that
would be the standard that we would establish if we are going
to pay them twice what you get paid. Thank you.
Chairman Cox. The gentlelady from Texas, Ms. Jackson-Lee,
is recognized for 5 minutes.
Ms. Jackson-Lee. Thank you very much, Mr. Chairman.
Out of a sense of humor, I thought I had heard 8 minutes,
but I imagine--
Chairman Cox. I was just checking to see if you made an
opening statement, and I take it that you have.
Ms. Jackson Lee. Next time I won't use those 30 seconds,
but I thank you, Mr. Chairman, very much for the time, and the
ranking member as well.
It is, I think, important to restate--this panel is
obviously aware that this committee was appointed by the
speaker and the leader of the House as an all-encompassing
committee that includes expertise for many different of our
jurisdictional committees, and I would expect and hope that in
the course of our questioning that we do rise above--not just
regard but do rise above some of the jurisdictional issues and
really respond to what I hear often when I travel around the
Nation is the urgency that many Americans express in terms of
their concern about what is transpiring, what is going on, what
are we doing.
This hearing is particularly interesting in the backdrop of
the 48-hour-ago tragedy in Saudi Arabia where we lost a number
of Americans. I think we are fully aware of the fact that
terrorism still very much exists, and it is very much alive. So
I think this hearing couldn't be more timely, but I also am
concerned about whether or not we are moving fast enough with
the kind of respectful attention to detail that we should have.
I do want to acknowledge, if I might, two fellow Texans.
Dr. Peters, we welcome you; and, Dr. Adams, we welcome you and
are gratified that you are here; and, Dr. Fauci, we thank you
very much for being here.
Let me just restate for the record what I understand the
BioShield program to be--and that is that we can give NIH
authorities to move quickly on research and development, on
medical countermeasures. We know how thorough the NIH has
typically been, and so that is to sort of jump-start and leap
ahead to move us quickly.
The other is spending authority for the delivery of next-
generation medical countermeasures, and that is, of course, the
whole question of incentivizing or giving incentives to move
people on quickly.
Then the other one is, of course, the FDA utilizing some
form of emergency use authorization.
Might I just throw in a comment that everyone always
remembers? I would be cautious on how we use fast-tracking,
inasmuch as all of us either remember or have heard the history
about the babies and the severe deformities that came about
during the use of something that had not been so reviewed
before the time that we were doing such, and so I know that we
want to be cautious on that.
As I ask these questions, I am going to read them all off
so that I can be mindful of the time. I want us to think not
only of this mysterious concept of bioterrorism and mysterious
diseases, and I want us to think of the impact of someone that
is infected with tuberculosis going into a crowded school,
someone who has SARS and going from one crowded place to
another, as I understand the transmission there. These are
familiar infectious diseases, SARS now becoming a household
word, the ability of someone to take infected mosquitos and
take them into an area and thereby putting in an epidemic of
the West Nile.
So I would like us to realize that all of what may be
dangerous or may be part of bioterrorism--and I may be
reaching--may not be all of the unthought-of elements.
We have certainly begun immunizing on smallpox. We have
heard that word over the centuries, but that has been
considered one of the dangerous elements.
So let me quickly say to the panelists, the worst thing
that could happen would be if we promised a billion dollars for
a new vaccine and then find out in 5 years, for example, that
nothing had happened. The whole idea of accountability when you
go--and you talk about going into the private sector, how will
we have that?
Also, if we implement the BioShield plan tomorrow, 6 months
from now, how many companies do we predict would start new
programs to develop such vaccines or drugs to combat
bioterrorism? Where is the attractiveness, and why do we have
to provide these incentives? As I started my opening remarks,
why isn't it good to do just the right thing? And how many
companies have already done--are involved in this business and
already in the business will boost their programs?
Lastly, quickly, considering the relative lack of
transparency in the private sector, how long will it take to
realize that the mobilized industry is or is not getting the
job done? Again, accountability. And considering that many
pharmaceutical companies are publicly traded, do you expect
them to be forthcoming about progress or the lack of progress?
I simply want to know, does it work or will it work? And I
think that is our responsibility in this committee, is to look
globally, not how many people we make happy but how many people
we will help and whether or not it will work.
If you could begin, Dr. Fauci; and I would appreciate it
very much.
Mr. Chairman, I ask your indulgence now for them to be able
to answer that--
Chairman Cox. By all means. The gentlelady's time has
expired, but the panel may take as much time as you wish to
answer those questions.
Ms. Jackson Lee. Mr. Chairman, I am sorry. I may have been
out of the room. Did you say we were going to mark this
legislation up?
Chairman Cox. Yes. We will have a markup on the
legislation. The bill has not yet been introduced, which is one
of the reasons that people--
Ms. Jackson Lee. Thank you for enlightening me. I guess I
was listening to someone saying that there had been a markup in
another committee.
Chairman Cox. There has been a markup in another committee;
and, as I serve on that committee, I can report to you
firsthand that even that bill had not been introduced at the
time of the markup. It may well be introduced today.
Ms. Jackson Lee. I thank you very much, Mr. Chairman. That
shows how creative and forward-thinking we are in this body,
and I hope that we will look forward to seeing that bill as it
comes forward. Thank you.
Chairman Cox. Would the gentlewoman yield?
Ms. Jackson Lee. I would be happy to yield.
Chairman Cox. In fact, yield to the time you don't have.
The legislative language is available to all Members. It has
been for some time.
Ms. Jackson Lee. That would be helpful. Is it on our Web
or--
Chairman Cox. It is available by committee e-mail, yes.
Ms. Jackson Lee. Great. We will make that happen. Thank you
very much.
Dr. Fauci, if you would, and to the other two gentlemen, it
is all about how it works and will it work.
Dr. Fauci. You asked--and I will briefly answer three
categories of questions.
What about other common diseases? We have a major emerging
diseases program--a research program at the NIH that addresses
things like tuberculosis, things like West Nile fever and
things--ultimately, now we have a program that we are
developing on SARS. We would consider these if, in fact, they
fell under the category of being a threat to be used as
bioterror agent and would have impact on our national security.
They do not fall under the high categories for the reasons that
were articulated by a number of us on the panel, particularly
Dr. Peters. So although we are aware of them, they are not on
our high priority, but we do address them in our emerging
diseases program.
Second, how many companies? It is very difficult to tell.
Right now, for example, there are four companies involved in
vaccine research, just four entirely for the whole vaccine
research--not research but vaccine development arena. We would
like to get several more companies involved.
I can't give you the number. I would imagine it is not
going to be a hundred, it is not going to be 50, but I think 15
to 20 companies involved, including Biotech and others, I would
feel would be a very important step forward.
Also, the idea about accountability, the way the program
has been proposed is that there will be some risk on the part
of the companies, and I think you will hear some more about
that when you discuss this with the pharmaceutical company
panel, but Project BioShield as it now has been put forth would
pay for a deliverable product. So there will be funds expended
when the material of the product that has been contracted for
is delivered.
Ms. Jackson Lee. And not before?
Dr. Fauci. There will likely be some modifications of some
advances perhaps to get them going, but it is not going to be
paid for something that would ultimately be an undeliverable
product.
Ms. Jackson Lee. Gentlemen, I am trying to get--if the two
doctors could at least comment on how they think it might work
in collaboration with the private sector and if you have one
comment on using the less dangerous SARS in a dangerous way. I
mean, someone could be infected and use it in a dangerous way.
Dr. Peters. Well, I am not sure about the possibility of
the SARS scenario, but one thing is important to recognize, is
strengthening the public health infrastructure for bioterrorism
strengthens it for SARS, for TB across the board, even though
some of those resources will not be used on a daily basis for
nonbioterror events.
Some of the issues that would revolve around a smallpox
case introduced into this country would revolve around a SARS
case introduced into this country. Isolation of the patient,
quarantine, search for contacts, these types of things work
with both of these agents. Hopefully, someday we will have a
SARS vaccine and a smallpox vaccine, strategies which would
then give us a basis for SARS vaccination strategies.
So I think that it is very important issues that we are not
just working in isolation. Many of the agents that are
bioterrorist agents are also natural threat agents. Smallpox,
of course, is the exception, not existing as a natural disease.
But we--to the extent that we develop anti-infective vaccines
and other treatments for these, they can be used in the Third
World.
As a matter of fact, it is my contention that many of these
will have to be tested overseas to assure safety and indeed, if
they can find them, to assure efficacy, and indeed, if they can
find a market, the usual market forces will dictate their use
and determine their safety in an extended group of people who
are actually at risk and who are not just chosen as
experimental subjects. Thank you.
Chairman Cox. I thank the panel. I thank the gentlelady. I
am sorry.
Dr. Adams. No comment. These are both outside my area of
expertise.
Chairman Cox. The gentlelady from the Virgin Islands.
Mrs. Christensen. Thank you, Mr. Chairman. I will try to be
brief because several of my questions have been answered.
I want to say that, at the outset, I share the concern that
was voiced by Congresswoman Lowey. Because what happened is we
began the process not at the beginning, so we don't even have
an overview of where the whole health piece is. We came in with
BioShield. So a lot of the questions you are getting is because
we don't have the whole picture, we don't know where our public
health system is, the overall picture, so we are at a handicap.
I want to kind of follow up briefly, hopefully, on the
issue, just using SARS as an example. We realize that we have
been very lucky over in the United States, but had the Toronto
experience happened here, if we had enacted Project BioShield,
how would it have helped us to deal with a new disease coming
in like SARS?
Dr. Fauci. If you look at BioShield today--let's say we
have an agreeable legislation that launches BioShield today and
SARS came tomorrow. The impact of BioShield on how we handle
SARS next week, the week after, the month after would be
negligible, if not at all.
Mrs. Christensen. And if it had been enacted 5 years
before, say, and this was a new thing that we had never seen or
heard of before.
Dr. Fauci. Right. What Project BioShield does is the three
things that Ms. Jackson had actually mentioned: expedite the
research, develop secure funding capability and to make it
available through, where appropriate, an emergency use.
That is to develop countermeasures against perceived or
real threats. If something hits now, we are not going to be
able to implement the BioShield mechanism to help us today, but
what BioShield will do is it will create the incentives to get
pharmaceutical companies involved in certain areas of
development so that if we have an unknown attack on us that is
delivered, it could be a SARS-like phenomenon, that we will be
much better prepared to have countermeasures to hit the ground
running.
The SARS--the response to SARS that you mentioned goes
directly to our public health capability, and I think that is
the point--
Mrs. Christensen. That is the point--
Dr. Fauci. That is exactly right, and that is the point
that you are making, that we in this country did well for two
reasons: One, we rapidly implemented infection control and
public health measures; and I can tell you that we are much
better off at it today because of the intensity of the effort
that has been put in over the past year and a half following
the anthrax attack on our awareness and ability to move rapidly
to public health emergencies.
Mrs. Christensen. But the disease doesn't really start
here--
Dr. Fauci. That is the point.
Mrs. Christensen. It never got here. We--
Dr. Fauci. Exactly.
My second point--if you will allow me, the second point is
that we were pretty lucky, because we were a few days ahead of
the curve. We knew what we needed to do with this new disease
before it actually came here. Unfortunately, the people in Hong
Kong and Vietnam did not know they were dealing with a disease
that was transmissible the way it was and that--their health
workers were vulnerable to it. So it was a combination of our
rapidly moving but also being somewhat lucky.
Mrs. Christensen. Can I just ask for clarification? At what
point in that arrow do we start to pay the private sector out
of that permanent, open-ended and definite authority?
Dr. Fauci. Right from the advanced development till the
actual procurement.
Mrs. Christensen. Somewhere around the middle of that?
Dr. Fauci. No, it is probably closer to the product.
Because the concept to the preclinical, to the preadvance and
then advanced development is probably closer to the advanced
development and the actual procurement of the product.
Mrs. Christensen. OK. Because just looking at one of the
testimonies from PhRMA of 5,000 compound screen, 250 into
preclinical testing. Will we be paying at the 5,000 or the 250?
Dr. Fauci. No.
Mrs. Christensen. Because out of that 250, maybe only one
drug gets approved, and I realize we are talking about
expedited approval, but--
Dr. Fauci. Yeah. As I mentioned, essentially, on that, the
monies that would come through for BioShield would be for the
procurement of the product. Now, obviously--
Mrs. Christensen. But there is some money to incentivize
early on to even do the research, isn't there?
Dr. Fauci. The research part of it on the far left of the
slide, is what we do in discretionary research must be to prove
the concept and get something into preclinical development.
BioShield is talking about the far right-hand side, which is
advanced development and procurement.
Mrs. Christensen. One of the concerns, obviously, and I
said it earlier, was this independent permanent contract
authority and how do you actually price a fair contract without
bidding? How do you decide--with not having bidding, this is
going to be just going to a company that--the homeland security
or--
Dr. Fauci. No, there will be bidding.
Mrs. Christensen. There will be bidding.
Dr. Fauci. There will be bidding. For example, we will say
that--or companies would come to us. It goes both ways. If we
feel that we need to have a product, for example, to develop a
monoclonal antibody for botulism toxin or, as you will hear
from our industry partners, other countermeasures, that we
would put a request for a proposal to develop and deliver this
product, and we would expect that hopefully we would have more
than one company come in, because that would make the chances
of getting to that goal line much greater.
Chairman Cox. The gentlelady's time has expired.
Mrs. Christensen. Thank you, Mr. Chairman.
Chairman Cox. The gentleman from Rhode Island, Mr.
Langevin.
Mr. Langevin. Thank you, Mr. Chairman; and I will probably
have some additional questions that I would like to submit for
the record, if that would be possible.
What I would like to ask are questions that might be a
little more broad-based, and that is what do we as policymakers
and perhaps even the executive branch need to know, what steps
could be taken to better protect the population from either a
bioattack or emerging pathogens that we are going to see come
on the scene in the near future? Are there things that we
should be more aware of, that we should be doing to better
prepare ourselves and protect the population?
Dr. Fauci. Well, yes, sir. As you know, some of these we
have already discussed, but I will capsulize it very briefly.
It is a multi-facetted phenomenon. It is going to be one
thing to do to cover all the bases, and it goes from
everything--all we mentioned just a while ago to building up
our public health infrastructure and capability to respond.
That is one thing that we can do.
The other is a robust fundamental research base to feed
into the concepts. As you know, the increase in biomedical
research allocation to the NIH for biodefense in fiscal 2003
and continued into 2004 was the largest single increase in
research endeavors in the history of the NIH in 1 year. So a
robust research base. And now what we are trying to do with
BioShield is to expedite the process, A, and, B, strongly
create incentives for industry to partner with us so that we
can use their considerable capabilities to ultimately develop
the countermeasures. So it is public health, fundamental
research and procurement.
Dr. Peters. Dr. Fauci certainly reflects my views. I will
leave these with you if you want to read more detail about the
Institute of Medicine going into some of the factors of
emergence.
Many of these are beyond my control. We can't control
climate, development. Many of them are very contentious. Do we
dam this river or not? And so I think it is a very complicated
issue. If I may, I will leave these with you later.
Mr. Langevin. Also, a second question, and my final one.
About a year and a half ago, I held a forum back in my district
on West Nile virus, and we had several experts come and testify
as to what type of impact this was having on an area, what we
could do to better protect our residents. And Dr. Bandy, who
works in our Department of Health, suggested that we are going
to see more and more of these types of pathogens coming on the
scene that we need to protect ourselves from in the near
future. And I just ask you if you could speculate about the
types of things we need to be concerned about in the next ten
years or so, where will we be, what type of timeline are we
facing in terms of these various pathogens coming on the scene
that we need to be concerned about? How much time do we have,
in other words, to prepare ourselves, as a best guess?
Dr. Fauci. It is a continual dynamic, an infinite process.
The relationship of emerging and reemerging microbes with the
human species has been going on from the evolution of the human
species and will be with us throughout the duration of the
human species. We have the continuing emergence and re-
emergence of microbes. Historically some of those have shaped
civilization, like smallpox and measles. Some of them are
little blips on the radar screen where they are interesting
curiosities in their natural occurrence, but they don't have
global health impact. Some of them do.
In the last century, in the 20th century, there were two
major ones. One was the 1918 flu pandemic and the other was the
HIV/AIDS epidemic. Right now in the 21st century, we have had
some interesting forays into emerging and reemerging diseases.
We have had the reemergence of West Nile Virus, because it was
with us before, but it reemerged in an unusual location, namely
the United States of America. And then we have had the
emergence of a new disease that didn't exist before, namely
SARS.
So the answer to your question, sir, is that this is a
process that will continue. The best that we can do is to
prepare ourselves by keeping our public health infrastructure
able to respond at a public health level, and also create a
robust research and development program that allows us to
rapidly respond to these emerging diseases as, in fact, they do
emerge.
Dr. Peters. As a footnote to that very eloquent and
complete statement, it is not just in the U.S. It is overseas.
To the extent that we can deal with some of these issues
overseas, enhanced surveillance and response overseas, then we
are protected here.
Dr. Adams. I would like to also add on the point of
surveillance and intelligence, modern diagnostics with large
platforms to detect these before they become an issue is
preemptive in nature, and that is something we need to be on
the front end of as well as the vaccines and therapeutics, but
the intelligence of what is going on in many places with modern
diagnostic techniques will be essential for protecting
ourselves.
Mr. Langevin. Gentlemen, thank you for your time.
Chairman Cox. I thank the panel. The gentleman's time has
expired.
The gentleman from Florida Mr. Meek. I thank the gentleman
from Florida and the gentleman from Rhode Island for your
patience as well.
Mr. Meek. Thank you, Mr. Chairman, and I want to thank all
of our witnesses that are here today. I, too--I am from Miami,
Florida, and I had a forum in my district and local health
providers, first responders--I would like to--many of you are
involved in front-line delivery or have some experience in it
from reading your biographical information. A lot of our first
responders are saying, especially with these exercises that we
are having throughout the country--many of them are saying,
well, that is fine what they are seeing on C-SPAN or the
national news, but it is not necessarily reality if we were to
see a full-scale bioexperience in our community.
As it relates to SARS and as it relates to other viruses
that are moving around in our community, and as you know,
terrorists, they look to economically cripple an economy, if
they can, tourism, which is important to Florida and many other
destinations in our country.
How do you feel as it relates to not only the vaccine
movement but the communications with some of the front-line
people that are not necessarily getting the message or the work
that you are doing here or in your perspective locations
towards bringing not only comfort but equipment, know-how,
knowledge to them on the front line as it relates to health
care workers?
Dr. Fauci. As a Nation, we certainly have a ways to go to
do that, and that is part of the multi-factorial and multi-
facetted issue that I mentioned a little while ago with regard
to emerging diseases there. The public health in the trenches
infrastructure, the ability to be able to communicate with the
citizens of this Nation in the case of an emergency, be it a
naturally occurring or a deliberately perpetrated emergency is
something that is a critical part of what we do, and we need to
pay attention to that. That has been addressed and will
continue to be addressed, because we are not where we want to
be yet in part of the response to the biodefense initiative,
which included the shoring up of the State and local health
public capabilities as well as our communication capabilities.
So the point you make is right on.
Mr. Meek. Well, let me just--furthermore, if I can--and
maybe some--all of you want to chime in on this. They are very
concerned not only in this field but also in the general
application of homeland security. We have taken precautions in
our water plants. Homeland Security has asked us to beef up
security or buy a new filter or what have you, surveillance
equipment, and as it relates to front line health providers,
need it be in the hospital, need it be setting up an emergency
triage situation in a bioterrorism situation, they feel that
even though they are drilling, even though they are hearing a
good game over television, they are not necessarily seeing it
there. You say, yes we recollect do have a long way to go. I am
asking you realistically, how long do you think it will take
for us to get there, especially when it comes down to the
training and--the training for those responders?
Dr. Fauci. Again, if there is to be perfection, I don't
think we will ever get there, but if there is getting better
and better as opposed to staying static or getting worse, I
think we are getting better and better. And I understand,
because I too vat the local level have spoken to people who
still feel that there is a lot of uncertainty. That is one of
the reasons to have a TOPOFF II-like exercise as well as what
the CDC is trying to do and is doing well, I think, over the
past year and a half: partnering with the public health
officials at the local and State level.
So we can't give total comfort and assurance that
everything is going to get to where we want it to be very soon,
but what we can say is that we are going in the right
direction, and I think we can say that with some confidence.
Dr. Adams. I think the response in the--the exercises under
way right now are where one really finds out where the
deficiencies are, and communication and education are certainly
a big part of that. Within the organization, at the local
level, all the way up to this level.
So I think education to the public may be one of the--the
public itself may be one of the best weapons we have for the
initial detection and initial reporting to public health
authorities for the response.
I don't know how you find that out. In the first exercise
we have done on foot and mouth in Brownsville, Texas, right on
the tip, it was in Canada within the next day. The next
exercise, much better, because of communications. And the next
exercise even better than that. So there is hope for it, but
will it ever be reduced to zero risk? No. But we can reduce it
to a level where we can live with it and contain it and control
it.
Mr. Meek. Mr. Chairman, if I may, I understand that--I know
what that is like in the perfect world, and I think we all know
that, in all aspects, it is a reach to get there. The first
responders, those individuals that will be--we know
communications, communications as it relates to an incident,
sometimes quarantine, sometimes paying attention to what you
are doing so you don't want to spread, whatever the situation
may be. That kind of training at the home front is very, very
important. As we learn in these exercises that we are doing
throughout the country and the one that is going on right now,
the discussion amongst the first responders, they are saying
when can we as a local community have that kind of exercise
outside of what the sheriff is doing, what the police chief is
doing, who may not have a great understanding as do all of you
do on this panel of the--what needs to happen in a bioterrorism
kind of situation.
So I will leave it at that in the interest of time. If any
of you feel propelled that, the reason why I am glad that we
are having this hearing here today, and I have rebooked my
flight so that not only I would have a chance to be here to
pose a question, but also hear the second panel.
Thank you, Mr. Chairman.
Chairman Cox. The gentleman's time has expired.
Does anyone on the panel wish to address themselves to
this?
Dr. Peters. I hate to take up another minute, but let me
just say there is such a dearth of microbiological
understanding in the public and the press, that we I think are
finding a real uphill battle. If we could get some kind of
thorough briefing of reporters--and I work with this all the
time--to get them up to a level where I can communicate to them
in a relatively straightforward fashion, because when the
balloon goes up, we are going to need a lot of help, and it
will come mainly through the media.
Chairman Cox. Well, I want to thank each of the members of
the panel for contributing to a solution to that particular
problem in your way today. You have shown both extraordinary
patience and exceptional wisdom and good judgment. We
appreciate your expertise that you shared with us today.
As you know in Congressional hearings we have essentially
the opportunity for all members to ask questions. I think the
reason that you have endured several hours here and the panel
behind you as well, is that there is such member interest in
this. This is a very vital subject for our country, and so we
appreciate very much your contribution.
I would like to dismiss this panel and welcome the next
program. While our next panel is getting seated, I would like
to thank my colleague Mr. Meek for rebooking his flight so that
he could be here. Certainly, you are doing everything you can
as a member of this committee to contribute, and we appreciate
it.
Our second panel consists of representatives from the
private sector, pharmaceutical and biotech industry experts who
will be able to testify from the private sector point of view
about some of the subjects that we have had under discussion
this afternoon. I hope that this panel will be able to help us
understand some of the factors that companies will consider
when determining a line of research to pursue.
We have with us next Dr. William A. Haseltine, Chief
Executive Officer of Human Genome Sciences; Alan A. Pemberton
on behalf of the Pharmaceutical Research and Manufacturers of
America, PhRMA; Robert J. Sutcliffe, Director, President and
Chief Executive Officer of Digital Gene Technologies; and Frank
M. Rapoport, a partner at McKenna, Long & Aldridge, who is an
expert in public health procurement.
I very much appreciate the contribution that each of you
have made in providing us your prepared testimony for today,
the contribution that you have made in terms of your time and
indeed the contribution that you have made by observing the
first panel and being here with us here such a significant
portion of the afternoon already.
Chairman Cox. Without further delay, we will proceed from
left to right, my left to right, with this panel.
Dr. Haseltine, your testimony, of course, has already been
submitted for the record, and you have 5 minutes to summarize.
STATEMENT OF WILLIAM A. HASELTINE, PHD, CHAIRMAN AND CHIEF
EXECUTIVE OFFICER, HUMAN GENOME SCIENCES, INC.
Mr. Haseltine. Thank you, Mr. Chairman.
Members of the Select Committee, thank you for the
invitation to appear before you today on behalf of Human Genome
Sciences.
My name is William A. Haseltine, and I am Chairman and
Chief Executive Officer of Human Genome Sciences, the company I
founded in 1992. Prior to that, I was a professor at the Dana-
Farber Cancer Institute at Harvard Medical School and at the
Harvard School of Public Health.
Human Genome Sciences is a biopharmaceutical company
located in Rockville, Maryland that discovers, develops, and
manufactures gene-based drugs to treat and cure disease.
Currently we have eight drugs in human trials. The primary
focus of Human Genome Sciences has not been the development of
drugs to protect against attack by biological and chemical
weapons. Nevertheless, just over 17 months ago, we realized
that our company had the technology and capability to develop
an effective near-term countermeasure against one of the
Nation's most immediate and serious bioterrorism threats,
anthrax.
As a company headquartered just outside Washington, D.C.,
we witnessed firsthand the potential devastating effects of the
use of anthrax as a terrorist weapon in 2001. Thus, while using
private funds, Human Genome Sciences developed a fully human
monoclonal antibody drug we call ABthrax that specifically
binds a key anthrax toxin, thereby preventing or treating the
lethal effects of the bacteria. The drug fills a gap that
exists in our existing defenses against an anthrax attack and
can be used alone or in conjunction with current vaccines and
therapies.
In contrast to the anthrax vaccine, a single dose of
ABthrax confers protection immediately. In contrast to
antibiotics, the drug is effective against the lethal toxins
released by the anthrax bacteria and may prevent and treat
infections by antibiotic-resistant strains of anthrax, a
subject you heard about earlier from the previous panel.
Moreover, the drug can be used both to prevent as well as
to treat those exposed to anthrax. For example, ABthrax may be
used to protect rescuers entering a contaminated building,
soldiers in an infected environment or exposed individuals
after an attack.
We have shown in animals that ABthrax is highly effective
against many times the lethal dose of anthrax spores, and we
are now ready to initiate human safety trials and to begin
large-scale manufacture of the drug.
However, to move forward, we need commitment from the
Federal Government to purchase the drug. With the necessary
funding, ABthrax could be available for emergency use as early
as the end of next year. A properly designed and implemented
BioShield would provide the mechanism for this to happen.
Many companies have the capability and may be willing to
develop new products to protect against attack by biological
and chemical weapons. However, only a few firms such as Human
Genome Sciences have actually already done so. The primary
challenge we all face is the absence of a commercial market for
such drugs. In most cases, the only viable market is the
Federal Government and, potentially, the governments of our
foreign allies.
Project BioShield, which aims to harness public and private
resources, is an innovative effort to develop defenses against
bioterror. It could create such a market.
While HES currently has--while HHS currently has the
authority to purchase and stockpile drugs such as ABthrax, this
specific framework created by Project BioShield would clarify
and enhance that authority. A defined and transparent process
with a clear path between threat evaluation, scientific
validation and product procurement will go a long way toward
giving companies the assurance they need to develop innovative
new products to protect the public from chemical or biological
attacks.
With respect to BioShield, I would like to urge the Select
Committee to consider three broad points. First, in order to be
as effective as possible, the program must be flexible. The
vast differences between biological pathogens is mirrored by
the diversity of potential treatments.
For example, small molecule drugs, such as Cipro, are
manufactured by simple building blocks. In contrast,
biologicals, such as ABthrax, are manufactured in genetically-
engineered living organisms and require a process that is
expensive, complex and time-consuming.
Thus, a one-size-fits-all procurement model will ultimately
discourage the development of certain countermeasures. Project
BioShield should provide not only for procurement of products
that have already been developed, but also for late-stage
development of promising drugs.
Second, Project BioShield should be an equal partnership
between the Federal Government and those companies willing to
commit their expertise and resources to defeat weapons of
bioterror. A critical element of such partnership is the mutual
willingness to take and share measured risks. Thus, provisions
in BioShield legislation that allocate contract risk in an
unbalanced manner could have a chilling effect on
collaboration.
In particular, BioShield should provide for early funding
of products in order to fairly allocate the risk between the
parties.
Similarly, in the absence of a commercial market for drugs
such as ABthrax, a permanent and secure source of funding is
vital to encourage private investment. Pharmaceuticals and
biological drugs in particular have enormous development costs
that can only be recouped well into their procurement phase.
Without guaranteed funding, companies will face substantial
risks in development of these products and will likely choose
instead to pursue other products.
The President's proposal for the creation of the funding
authority will stimulate innovation, spur private investment
and enable the government to purchase novel therapies without
delay.
This brings me to my final point. Timing is critical.
Agencies responsible for administering Project BioShield should
take a proactive approach to identifying, evaluating and
procuring effective drugs. Near-term delays in evaluating and
securing the production of viable countermeasures can
disproportionately prolong the procurement of such drugs.
In the case of ABthrax, Human Genome Sciences is ready to
move the drug into production now, which will require
significant investment to secure manufacturing facilities and
to perfect the manufacturing process. Due to the demand for
such specialized facilities, a delay of months now could
postpone the delivery of a drug by over a year.
I thank you for this opportunity to testify and look
forward to addressing your questions.
PREPARED STATEMENT OF WILLIAM A. HASELTINE, PHD
Mr. Chairman, members of the Select Committee, thank you for the
invitation to appear before you today on behalf of Human Genome
Sciences, Inc. My name is Dr. William Haseltine, and I am Chairman and
Chief Executive Officer of Human Genome Sciences, which I founded in
1992. Prior to that, I was a professor at Dana-Farber Cancer Institute,
Harvard Medical School and Harvard School of Public Health from 1976 to
1993.
Human Genome Sciences is a biopharmaceutical company located in
Rockville, Maryland, that discovers, develops and manufactures gene-
based drugs to treat and cure disease. Currently, we have eight drugs
in clinical trials and a broad pipeline of preclinical compounds. These
include novel human protein and antibody drugs discovered through our
genomics-based research, as well as new, improved, long-acting versions
of existing proteins created using our albumin fusion technology.
ABthrax
The primary focus of Human Genome Sciences has not been the
development of drugs to protect against attack by biological and
chemical weapons. Nevertheless, just over seventeen months ago, we
realized that our company had the technology and capability to develop
an effective, near-term countermeasure against one of the nation's most
immediate and serious bioterrorism threats--anthrax. As a company
headquartered just outside Washington D.C., we witnessed first-hand the
potentially devastating effects of the use of anthrax as a terrorist
weapon in late 2001. Thus, using private funds, Human Genome Sciences
developed a fully human monoclonal antibody drug--called ABthrax--that
specifically binds to a key anthrax toxin, thereby preventing or
treating the lethal effects of the bacteria.
The drug can be given prior to or after exposure; and it could be
used alone or in conjunction with the current vaccine and antibiotics.
We have shown, in animals, that ABthrax is effective against high doses
of anthrax, and are now ready to begin manufacturing of this product
and to initiate human safety trials. In order to move forward, however,
we need a commitment from the Federal Government to purchase the drug.
With proper funding, this product could be available for emergency use
as early as the end of next year. A properly designed and implemented
BioShield would provide the mechanism for this to happen.
Anthrax infection is caused by a spore-forming bacterium, Bacillus
anthracis, which multiplies in the body and produces lethal toxins.
Most anthrax fatalities are caused by the irreversible effects of the
anthrax toxins. Research has shown that protective antigen is the key
facilitator in the progression of anthrax infection at the cellular
level.\1\ After protective antigen and the other anthrax toxins are
produced by the bacteria, protective antigen binds to the anthrax toxin
receptor on cell surfaces and forms a protein-receptor complex that
makes it possible for the anthrax toxins to enter the cells. ABthrax
blocks the binding of protective antigen to cell surfaces and prevents
the anthrax toxins from entering and killing the cells.
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\1\ Inglesby TV, O'Toole T, Henderson DA, et al. Anthrax as a
Biological Weapon, 2002: Updated recommendations for Management. JAMA
May, 2002. 287(17): 2236-2252
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Currently, two options are available for the prevention or
treatment of anthrax infections--a vaccine and antibiotics. Both are
essential to dealing with anthrax, but both have limitations. The
anthrax vaccine takes several weeks following the first doses before
immunity is initially established. The vaccine also requires multiple
injections over a period of eighteen months, in addition to annual
boosters, to maintain its protective effect.\2\ Antibiotics are
effective in killing anthrax bacteria, but are not effective against
the anthrax toxins once those toxins have been released into the blood.
Antibiotics also may not be effective against antibiotic-resistant
strains of anthrax.\3\
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\2\ The FDA-approved anthrax vaccine, known as Anthrax Vaccine
Absorbed (AVA), is only administered to persons at high risk of
exposure, like U.S. military personnel, but it is not recommended for
the general population. BioPort, Inc. Anthrax Vaccine Adsorbed
(BIOTHRAX??) Product Insert. Jan. 31, 2002. An improved version of the
vaccine is currently under development, but its efficacy and
suitability for civilian use are unknown, and it is not projected to be
available until 2005 at the earliest.
\3\ Bioengineered strains of anthrax that are resistant to multiple
antibiotics, including Ciprofloxacin, have already been produced both
domestically and overseas, and can be readily made using ordinary
laboratory procedures. Friedlander A.M. Anthrax: clinical features,
pathogenesis, and potential biological warfare threat. In: Remington
J.S., Schwartz M.N., eds. Current clinical topics infections diseases.
Vol. 20. Malden, Mass.: Blackwell Science, 2000:335-49. Brook et al. In
vitro resistance of Bacillus anthracis Sterne to doxycycline,
macrolides, and quinolones. Intl. J. Antimicrob. Agents. 2001; 18:559-
562.
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In ABthrax, Human Genome Sciences has discovered a third defense
against anthrax infections. In contrast to the anthrax vaccine, a
single dose of ABthrax confers protection immediately following the
rapid achievement of appropriate blood levels of the antibody. In
contrast to antibiotics, ABthrax is effective against the lethal toxins
released by anthrax bacteria. It may also prevent and treat infections
by antibiotic-resistant strains of anthrax.
Results from preclinical studies conducted to date demonstrate that
a single dose of ABthrax administered prophylactically increases
survival significantly in both rabbits and nonhuman primates exposed by
inhaling many times the lethal dose of anthrax spores. In both models,
we observed an absence of bacteria in the blood of all ABthrax-treated
animals that survived. The rabbit and nonhuman primate models of
inhalation anthrax are regarded as sufficient to demonstrate the
efficacy of therapeutic and prophylactic agents in treating or
preventing anthrax infection. A single dose of ABthrax also fully
protected rats against a lethal challenge with the anthrax toxins. Full
results of these studies will be disclosed in upcoming scientific
meetings and publications as appropriate; they have already been shared
with key government scientists.
Based on our preclinical results to date, we believe that ABthrax
has the potential to be used both prophylactically and therapeutically.
For example, ABthrax may be used to protect rescuers entering a
contaminated building, soldiers in an infected environment, or exposed
individuals after an attack. In addition, post-exposure treatment may
lessen the natural progression of anthrax infection and increase
survival. Human Genome Sciences plans to file an Investigational New
Drug application in the near future, seeking clearance from the U.S.
Food and Drug Administration (FDA) to begin clinical trials to evaluate
the safety, tolerability, and pharmacology of ABthrax in healthy
adults.
Project BioShield
Many companies have the capability and are willing to develop new
products to protect against attack by biological and chemical weapons
or other dangerous pathogens. A few firms, such as Human Genome
Sciences, have already done so. The primary challenge we all face is
the absence of a commercial market for such drugs. In most cases, the
only viable market is the Federal Government and, potentially, our
foreign allies.
Project BioShield, which aims to harness public and private
resources in an innovative effort to develop defenses against
bioterror, could potentially create such a market. While the Department
of Health and Human Services currently has the authority to purchase
and stockpile drugs such as ABthrax, the specific framework created by
Project BioShield would clarify and enhance that authority. Indeed,
overlapping jurisdictions between HHS and the Department of Homeland
Security have complicated the picture, at least temporarily. A defined
and transparent process--with a clear path between threat evaluation,
scientific validation and product procurement--will go a long way
toward giving companies the assurance they need to develop innovative
new products to protect the public from chemical or biological attacks.
With respect to Project BioShield, I would urge to Select Committee
to consider three broad points:
First, in order to be as effective as possible, the program must be
flexible. President Bush recently stated that, ``Project BioShield will
give our scientific leaders greater authority and flexibility in
decisions that may affect our security.'' \4\ The vast differences
between biological pathogens is mirrored by the diversity of potential
treatments. For example, traditional small-molecule drugs, such as
Ciprofloxacin, are manufactured from simple chemical building blocks or
extracted from natural sources. In contrast, biologics such as ABthrax
are manufactured in genetically engineered living organisms (bacteria
or mammalian cells) and require a process that is more expensive,
complex, and time consuming. The process of transitioning from an
early-stage process to large-scale manufacture often can take anywhere
from 12 to 16 months to complete. Thus, a (one size fits all(
procurement model will ultimately discourage the development of certain
countermeasures.\5\ Project BioShield should provide not only for
procurement of products that have already been developed, but also for
late-stage development of promising drugs.
---------------------------------------------------------------------------
\4\ Remarks by President George W. Bush on the BioShield Initiaitve
(Feb. 3, 2003), at http://www.whitehouse.gov/news/releses/2003/02/
20030203-13.html.
\5\ Current versions of the Project BioShield authorizing
legislation do not grant the Department of Health and Human Services
the authority to engage in ``other transactions'' for R&D and prototype
development, thereby limiting the agency's ability to engage in
collaborative R&D arrangements. In contrast, the Department of Defense
has such ``other transactions'' authority to make acquisitions through
transactions other than contracts, grants or cooperative agreements,
allowing the military to reap the benefits of research and development
being done by non-defense contractors for commercial applications. The
Department of Homeland Security was recently granted similar authority
through the Homeland Security Act of 2002. See Pub. L. No. 107-296, 116
Stat. 2135, Sec. 831 (2002)
---------------------------------------------------------------------------
Second, Project BioShield should be an equal partnership between
the Federal Government and those companies willing to commit their
expertise and resources to defeat weapons of bioterror. As Secretary
Tommy Thompson stated before the Select Committee's Subcommittee on
Emergency Preparedness and Response:
``[Project BioShield] must be a public and private partnership. The
pathway from idea to final product is complex. The best scientific
approach to identifying the best drug and vaccine candidates must be
based on laboratory studies. Testing must be performed in appropriate
animal models to document safety and appropriate protective or
treatment response, and to help determine dosing. Human studies must be
carefully initiated to assure the basic safety of the product, and then
appropriate dosing and response must be determined based on
measurements of levels of drug or antibody predicted to have a
protective effect. Steps must be taken to assure that the materials
used to make the product and the final product itself can be
manufactured safely, free of contaminants, and with reproducible and
predictable purity, potency, and composition. Careful trials in humans,
or where not possible, animal models, must be performed to show that
the product is safe and effective for the types of populations who
might receive it and against the methods of infection or exposure that
could be encountered. All of these steps require careful planning,
experience, and ongoing management and scientific evaluation. Costs to
develop and manufacture high quality biological products and perform
and evaluate the needed animal and human studies are high. Grants and
contract mechanisms may not always be sufficient or attract the most
experienced manufacturers. Manufacturing capacity for biological
products, particularly for vaccines, is not substantial. For all these
reasons, the best possible support and public-private partnerships and
teamwork are essential.'' \6\
---------------------------------------------------------------------------
\6\ Statement by HHS Secretary Tommy G. Thompson on Project
BioShield before the Committee on Energy and Commerce Subcommittee on
Health and Committee on Homeland Security Subcommittee on Emergency
Preparedness and Response (Mar. 27, 2003), at http://www.hhs.gov/asl/
testify/t030327.html.
---------------------------------------------------------------------------
A critical element of such a partnership is the mutual willingness
to take and share measured risks. Thus, provisions in the BioShield
legislation that allocate unfairly contract risk in a manner
inconsistent with current Federal procurement policy and practice could
have a chilling effect on collaboration with the private sector.\7\ In
particular, BioShield should provide for early funding of products in
order to fairly allocate the risk between the parties.
---------------------------------------------------------------------------
\7\ Current versions of the Project BioShield authorizing
legislation would preclude payment under a contract until delivery is
made of a ``substantial portion'' of the product. In contrast, existing
procurement laws and regulations provide for a variety of payment
procedures that are negotiated by the parties based on the unique
reqirements and risks of each contract. Similarly, the BioShield
legislation permits the termination of a contract if a reasonable
quantity of the product is not delivered within 3 years. In such a
case, the contractor is not entitled to any payment.
---------------------------------------------------------------------------
Similarly, in the absence of a commercial market for drugs such as
ABthrax, a permanent and secure source of funding is vital to encourage
private investment in the development of medical countermeasures.
Pharmaceuticals--and biologic drugs in particular--have enormous
development costs that can only be recouped well into the procurement
phase. Without guaranteed funding, companies will face substantial risk
in developing these products and will likely choose instead to pursue
more commercially viable projects. The President's proposal for the
creation of a permanent indefinite funding authority will stimulate
innovation, spur private investment, and enable the government to
purchase novel therapies without delay.
This brings me to my final point: Timing is critical. Agencies
responsible for administering Project BioShield should take a proactive
approach to identifying, evaluating and procuring effective drugs. I
applaud the Select Committee for acting expeditiously in considering
the BioShield legislation and the Administration for making its
enactment and implementation a priority. Near-term delays in evaluating
and securing the production of viable countermeasures can
disproportionately prolong the procurement such drugs. In the case of
ABthrax, Human Genome Sciences is ready to move the drug into
production, which will require significant investment to secure a
manufacturing facility and perfect the manufacturing process. Due to
the demand for such specialized facilities, a delay of months now could
postpone delivery of the drug by over a year. We are also ready to
begin clinical safety trials in humans, having already demonstrated the
drug's efficacy.\8\ To date, ABthrax has been developed entirely with
private funds, but in order to move forward the company needs a
commitment from the Federal Government to develop, manufacture and
purchase the drug. With sufficient government support, Human Genome
Sciences can begin producing significant quantities of ABthrax by the
end of next year.
---------------------------------------------------------------------------
\8\ Under the Bioterrorism Act of 2002, the FDA specified the
evidence required to demonstrate the efficacy of new drug and
biological products used to counter biological agents, when traditional
efficacy studies in humans are not feasible. Public Health Security And
Bioterrorism Preparedness And Response Act Of 2002: Section 123. http:/
/www.fda.gov/oc/bioterrorism/PL107-188.html. According to the
guidelines set forth in the Act, successful studies in relevant animal
models will be considered sufficient to establish efficacy for
licensure and marketing approval. ABthrax is effective in preventing
anthrax infection in two relevant models, rabbits and nonhuman
primates. According to the guidelines, human clinical trials will be
required to establish safety, tolerability, and pharmacology, but not
efficacy.
Thank you again for this opportunity to testify and I look
forward to answering your questions.
Chairman Cox. Thank you.
Mr. Pemberton, you are recognized for 5 minutes.
STATEMENT OF MR. ALAN PEMBERTON, PHARMACEUTICAL RESEARCH AND
MANUFACTURES OF AMERICA
Mr. Pemberton. Thank you, Mr. Chairman. Good afternoon
members of the committee.
I am Alan Pemberton representing the Pharmaceutical
Research and Manufacturers of America, PhRMA. I am a lawyer at
the firm of Covington & Burling here in Washington, and I have
been practicing government contracts law at the firm for 20
years. I head our firm's government contracts practice.
PhRMA appreciates the opportunity to share with this
committee the views of the research-based pharmaceutical
industry on the Project BioShield Initiative. We understand the
seriousness of the threat of biological agents if used as
weapons of war. At last count, PhRMA members were developing
256 new medicines for infectious diseases. The potential
delivered use of infectious agents against targeted populations
raises grave concerns. Numerous government reports make clear
that a large number of countermeasures to bioterror agents must
be developed.
PhRMA and its members are already working closely with
Federal agencies and with academia on research about potential
bioterror pathogens. A biosurveillance work group involving
PhRMA, private companies, Federal agencies and the WHO is
working to establish a global infectious disease surveillance
network.
The President's BioShield Initiative is an important step
to promote the timely and efficient development of modern
effective countermeasures. We generally support the three main
components of the President's proposal. One, permanent
indefinite funding authority for purchase of countermeasures.
Two, new authority for NIH to speed promising R&D through
streamlined hiring and procurement mechanisms. And three, new
FDA emergency use authorization for promising treatments still
under development.
Any legislation to implement the President's initiative
must take into account the significant technical and economic
risks that will face companies that develop and produce
bioterror countermeasures.
In addition to the normal uncertainties with commercial R&D
and production, biothreat countermeasure research involves
additional challenges, working with dangerous pathogens without
a full picture of the risk of disease and without being able to
test for efficacy in the normal manner because there may be no
patients who currently have the disease.
Moreover, manufacturers that develop countermeasures may be
exposed to potentially devastating product-liability suits.
Private insurance could be unavailable or prohibitively
expensive for such products.
In light of the special risks and obstacles of bioterrorism
research and production, PhRMA has developed several
legislative recommendations.
First, meaningful liability protection is essential.
Provisions in current law, namely the SAFETY Act and the
indemnification in Public Law 85-804, have too many
uncertainties and may discourage participation by the industry.
PhRMA supports liability protection modeled on either the Swine
Flu legislation or the Homeland Security Act protections for
smallpox vaccine manufacturers.
Second, the procurement process should be flexible and
reliable and more like the private market. We have a number of
suggestions in this regard. One, the Secretary of HHS should be
given flexible ``other transactions authority'' similar to that
given to the Department of Defense. The Homeland Security Act
already gives such authority to DHS for other R&D, but not to
countermeasure R&D through HHS.
Too, the legislation should recognize that contract pricing
may take into account the actual cost of development, including
costs incurred after contract execution.
Three, the Secretary should be permitted to enter into
single contracts for both R&D and production.
Four, the Secretary should be able to purchase antibiotics
and antiviral agents that have potential uses other than as
countermeasures.
Five, the Secretary should be authorized to include
performance based or milestone payments in procurement
contracts.
Six, contracts should not be subject to termination for
convenience or nondelivery within a fixed statutory period.
Seven, contracts should not be limited to countermeasures
that can be developed within a fixed period of 5 years. We have
been discussing these provisions with members of the
administration and Congress, and we are hopeful they will be
included in the final legislation.
Finally, within the model of competitive R&D, there may be
instances where a narrowly tailored antitrust exemption would
be appropriate in order to permit sharing of information among
companies with careful government safeguards. America's
pharmaceutical companies look forward to doing their part to
protect the country against bioterror threats.
Thank you for your time, and I look forward to answering
your questions.
PREPARED STATEMENT OF MR. ALAN PEMBERTON
The Pharmaceutical Research and Manufacturers of America (PhRMA)
appreciates the opportunity to share with this Committee the views of
the research-based pharmaceutical industry on countering the
bioterrorism threat and on the Project BioShield initiative.
PhRMA represents the country's leading research-based
pharmaceutical and biotechnology companies, which invested an estimated
$32 billion in 2002 in developing new medicines to help and heal
patients. PhRMA member companies join others who are convinced that
biological weapons present a serious and increasing danger to people
around the world. The pharmaceutical industry is dedicated to the
development of innovative therapies and vaccines to counter unmet
medical needs. Because a substantial proportion of the unmet medical
need in the United States and worldwide is both directly and indirectly
related to infectious diseases, we understand the seriousness of the
threat of biological agents if used as weapons of war.
The complexity of the problem of biological weapons is amply
demonstrated by science's continuing difficulty in dealing with
infectious agents as the cause of natural disease. The threat
represented by infectious diseases--such as HIV, malaria, and
tuberculosis--is real and all too well demonstrated by the deaths of
over 5 million people annually from these three diseases alone. All
together, infectious diseases claim more than 100,000 American lives
each year and cost more than $30 billion annually in direct treatment
expenses alone. At last count, PhRMA member companies were developing
256 new medicines to treat or prevent infectious diseases--medicines
which include brand new classes of antibiotics, new vaccines (including
edible vaccines), antifungals, antivirals, and immune enhancers.
Particularly in light of continuing difficulties in infectious
agent research, the potential use of these agents in intentional
concentrated exposures of targeted populations raises grave concerns.
Reports from the National Academy of Sciences, the NIH Blue Ribbon
Panel for Biodefense Research, and the US Defense Science Board make
clear that a large number of countermeasures to biothreats must be
developed. Indeed, existing medicines are not sufficient to combat the
biological weapons already developed. Needed countermeasures will
include vaccines, therapeutics, and diagnostics.
The basic science research required for countermeasure development
has already been stimulated by funds appropriated to various Federal
agencies including the Department of Health and Human Services and the
Department of Defense. It is widely recognized, however, that a
cooperative and collaborative research and development effort, which
engages industry, government, and academia, will be essential to the
development of a complete arsenal of countermeasures against
bioterrorism agents.
PhRMA and its member companies are already working closely with
Federal agencies and academia to move forward with this research. For
example, PhRMA is working with CDC, DoD, NIH, FDA, and academia to
support in vitro studies of five pathogens--B. anthracis (anthrax), Y.
pestis (plague), Brucella spp. (brucellosis), F. tularensis
(tularemia), and Burkholderia Spp. (Glanders)--for testing of existing
antibiotics. Several companies are working with the National Institute
of Allergy and Infectious Diseases (NIAID), the Department of Defense,
and the FDA to test existing antibiotics against plague, and PhRMA will
cosponsor a workshop with interested parties to determine how best to
expand labeling of other existing antibiotics that may be effective
against the top biothreat agents. PhRMA committees continue to work
with FDA to clarify and improve existing regulations that pertain to
biothreat countermeasure research, such as the ``Spore Formers Rule,''
21 C.F.R. Part 610, which imposes requirements on use of facilities or
equipment that have been used with spore forming organisms, and the
``Animal Rule,'' 21 C.F.R. Sec. 314.610, which allows efficacy testing
in animals where testing in humans would be impossible or unethical. We
have prepared educational materials for the public on anthrax,
smallpox, and vaccinia, and we are working on materials addressing
tularemia and plague. Dr. Gail Cassell, PhRMA's Chief Scientific
Officer for Emergency Preparedness and Vice President, Scientific
Affairs at Eli Lilly & Co., sits on Secretary Thompson's Advisory
Council on Public Health Preparedness. A Biosurveillance workgroup
involving PhRMA, other private sector companies (TIGR, IBM, and Roche
Diagnostics), Federal agencies (CDC, DoD, and NIH), and the World
Health Organization is working to establish a global infectious disease
electronic surveillance network.
Project BioShield, announced by President Bush in his 2003 State of
the Union address, is an important step forward in the effort to ensure
the development of modern, effective countermeasures and to ensure that
these products become available in a timely and efficient manner. PhRMA
generally supports the three main components of the President's
proposal: first, the creation of a permanent indefinite funding
authority to spur the development of medicines and vaccines by the
private sector; second, new authority for NIH to speed promising R&D
through streamlined hiring and procurement mechanisms and increased
flexibility to award contracts and grants; and third, new FDA emergency
use authorization for promising treatments still under development.
Any legislation to implement the President's initiative must--if it
is to be successful--take into account the significant scientific,
legal, and economic impediments to the research and development of
biodefense products.
Research and development into new medicines is itself a lengthy,
risky, and expensive endeavor. Bringing a drug from concept to market
takes 10 to 15 years. The average cost to develop a new drug has grown
from $138 million in 1975 to $802 million in 2000. The risks involved
in the new drug development and approval process are substantial. Of
every 5000 compounds screened, only 250 enter preclinical testing, and
of every 250 drugs that enter preclinical testing, only one is approved
by FDA. Only 3 of 10 marketed drugs produce revenues that match or
exceed average R&D costs.
Moreover, research into biothreat countermeasures involves many
challenges above and beyond those encountered in non-biodefense R&D.
For example, biodefense R&D requires working with dangerous pathogens
in highly specialized facilities, and developing countermeasures
without a full picture of the risk of disease (because we cannot see
into the mind of the terrorist) or the benefit of the treatment
(because there are often no patients with the disease, which prevents
clinical testing for efficacy).
The decision to divert resources from the research and development
of medicines for serious illnesses like heart disease also can be
financially risky, especially when a countermeasure may never be
purchased or used, and especially for companies with few products in
the pipeline. (Diverting resources from research and development of
these other medicines will also affect the future availability of
treatments and cures for patients with other serious health
conditions--especially since less than ten percent of all drugs that
enter testing ever demonstrate sufficient safety and acceptable
efficacy.)
Finally, manufacturers that develop countermeasures may be exposed
to devastating product-liability suits. Some of these would arise out
of adverse events that are unavoidable given the nature of the
products, and some could arise simply because the products were made
available without the usual battery of clinical trials required for
FDA-approved products. Private insurance could be unavailable or
prohibitively expensive for such products.
In light of the special obstacles to research and development in
the bioterrorism context, PhRMA has developed recommendations for any
legislation that would implement Project BioShield.
First, PhRMA believes that meaningful liability protection is an
essential component of any legislation to encourage the development of
bioterrorism countermeasures. Provisions in current law--namely the
SAFETY Act, 6 U.S.C. Sec. Sec. 441-444, and the indemnification
available under Public Law 85-804--are associated with too many
uncertainties, limitations, and conditions to make them effective in
this unique context. Accordingly, PhRMA supports liability protection
modeled on either the Swine Flu legislation or section 304 of the
Homeland Security Act.
Second, in order to engage the private sector most efficiently and
effectively in this research, the procurement process must be more
flexible and reliable, and it must more closely resemble the private
market. We have a number of suggestions in this regard, the most
significant of which follow: (1) the Secretary of Health and Human
Services should be given flexible ``other transactions authority''
similar to that given to the Department of Defense, particularly the
Defense Advanced Research Projects Agency, under 10 U.S.C. Sec. 2371;
(2) the legislation should provide that procurement contracts may
recognize that pricing should take into account the actual cost of
development including costs incurred after contract execution; (3) it
should expressly provide that the Secretary may enter into single
contracts for both R&D and production; (4) it should permit the
Secretary to purchase antibiotics and antiviral agents that have
potential uses other than as countermeasures; (5) the Secretary should
be authorized to include performance-based (milestone) payments in
procurement contracts--rather than limited to repayable ``advance
payments'' and payment conditioned on ``substantial delivery''; (6)
contracts should not be subject to termination at the convenience of
the government or for non-delivery within a fixed statutory period; and
(7) contracts should not be limited to countermeasures that can be
developed within five years. We have been discussing these provisions
with members of the Administration and members of Congress, and we look
forward to continuing these discussions so as to work toward the
inclusion of these provisions in the legislation.
Finally, although the overall model of bioterrorism countermeasure
research and development should build on competition among private
companies, the need for urgent development of medicines may require the
sharing of information and cooperation among companies, which can raise
antitrust concerns PhRMA therefore believes that it would be
appropriate to provide a narrowly tailored antitrust exemption to
facilitate certain meetings and activities, under careful governmental
safeguards.
A strong commitment from all parties will be necessary in the
months and years to come, as our nation seeks to protect itself against
the terrible threats of biowarfare and bioterrorism. America's
pharmaceutical companies look forward to doing our part.
We thank you for your time and look forward to answering your
questions.
Chairman Cox. Thank you very much. Mr. Rapoport, you have 5
minutes.
STATEMENT OF MR. FRANK M. RAPOPORT, ESQUIRE PARTNER, McKENNA
LONG & ALDRIDGE LLP
Mr. Rapoport. Mr. Chairman and members of the committee, it
is an honor for me to testify with regard to Project BioShield,
which we think is a superb start. We want to, however, offer
four ideas if you are truly serious about jump-starting the
creation of a new industry in America called the biodefense
industry.
I appear before you today having represented 35
pharmaceutical companies in their dealings with the VA and the
DOD, the largest hospital system in the world. I have also had
the privilege of working on both the smallpox vaccine
procurement out of CDC pre-9/11 based on Ken Alibek's
information that we had pre-9/11, and more recently on NIH's
anthrax procurement.
I am not going to be critical of NIH, but I want to point
out that you must give procurement officials additional
flexibility in trying to build this Department of Defense and
Homeland Security biodefense industry. My four ideas that I
offer are similar to my colleague next door who just gave you
two or three of them, but I will just run through them quickly.
I am the president of a drug company. I am not interested
in accepting R&D work from the Federal Government. I am not
Lockheed, I am not Boeing. I don't want my books audited. I
would rather do research to come up with the next Viagra or an
antidepressant. Yes, I am patriotic, but I have shareholders. I
will do business with you as the president of a large
pharmaceutical company if you promise me if we build it, they
come. If I am successful on the R&D under the same contract,
and that is not what is crystal clear under BioShield, I want
to be the one who does the production. I don't want to go
through with what just happened in Dr. Fauci's anthrax
procurement where you had the winning bidders were two very
fine companies, but are not the companies that are one of the
four large vaccine manufacturers. Why? Because the R&D was all
that was offered in that contract. There was no production
contract. In fact, any minute now the bid will come out of NIH
for the production contract. It is going to be massive chaos
and confusion about who owns the intellectual property under
the original contract, whether the two contractors working on
their own nickel get the R&D work and the proprietary data.
Second, in the same contract, you must allow the Secretary
to make clear that corporate America has the worldwide
intellectual property rights. I am going to share with you a
story you have probably not heard elsewhere.
In Secretary Thompson's smallpox procurement, it was won by
Acambis. Up to 250 million doses were allowed to be produced.
There was an option clause for another 250 million doses. We
asked the Secretary's people who is that for because there are
only 300 million people in America and the answer we thought we
got back was that the President wants to give away the vaccine
that is developed under this contract to Tony Blair and his
friends.
That may be a policy decision, but I am the president of
the drug company, and I say, you have just destroyed my
worldwide rights. I want to do business with you, I am willing
to share my R&D costs, I don't want you to fund it all, as long
as you give me the production contract, but don't negate my
worldwide markets. I want to sell this same vaccine to the
Japanese, the French and to the Brits.
We need to have a clear statement from Congress that the
intellectual property rights will be respected. I don't have
time to go through each, but that does not do it because right
now the government could take the intellectual property rights
of any of the contractors working under the cost contracts at
NIH and give them to Dr. Haseltine's company. I would argue
that should not be done, but there must be clarity.
My second point, and I will echo the term ``other
transactions,'' which Mr. Pemberton referred to is a fancy way
of saying don't make me adhere to all of the Federal
acquisition regulations. Do a commercial deal with me, and then
I will come forward and work on your behalf.
The Predator, which is an unmanned vehicle used in
Afghanistan, was done on ``other transactions.''
Third, the Safety Act must be amended so that it applies to
anything under BioShield. The protection the contractors get
under the Safety Act is only triggered some say in the event of
a terrorist attack. Dr. Haseltine is working on anthrax now. He
should be able to have the protection of the Safety Act before
that time.
Finally, I will leave with you one idea if you are clearly
serious about jump-starting this industry. There is a law
called the Defense Production Act. It is a very unusual law but
allows the Secretary of the DOD to convene a meeting and put
all of the bidders in one room, forget antitrust issues, and it
can make allocations of market share and discussions between
Merck and Human Genome. You can dispense with the bidding
process and you jump-start the industry by using the Defense
Production Act.
I will leave with you, if you care to have it in the
record, an article which spells out how that is done.
[A copy of the article ``Smallpox as a Biological Weapon'',
JAMA. June 9, 1999: Vol. 281. No. 22:, and the article ``Plague
as a Biological Wapon'', JAMA, May 3, 2000, Vol. 283, No. 17,
2281, are maintained in the Committee files.]
Mr. Rapoport. Mr. Chairman, thank you very much for your
time.
PREPARED STATEMENT OF MR. FRANK M. RAPOPORT
Mr. Chairman and members of the Committee, it is an honor for me to
testify before you today regarding Project BioShield and how to jump-
start the creation of a sustainable biodefense industry. Mr. Chairman,
I applaud your immediate consideration of the steps necessary to
incentivize the pharmaceutical and biotech industries to join as
partners with the Department of Health and Human Services, the
Department of Homeland Security and the Department of Defense to combat
the evolving nature of agents of bioterrorism.
I appear before you today as a private attorney who has represented
over thirty pharmaceuticals and biotechs in their contracting with the
Department of Veterans Affairs, the Department of Defense, the Public
Health Service, as well as directly representing companies in their
individual bids to create a smallpox vaccine pre-9/11 from the CDC, a
post-9/11 smallpox procurement by the Center for Disease Control and a
recombinant protective antigen for anthrax issued by the National
Institutes of Health.
Based on my view of how government agencies have operated in these
procurements, as well as my intimate knowledge of what it will take to
incentivize those to participate in a biodefense industry, I offer,
with supporting analysis, four ideas for your immediate consideration.
1. Agency procurement officials should create for each needed drug
and diagnostic a Master Agreement between a successful bidder(s) and
HHS which identifies clearly who will pay or share in the research
development phase of the agreement, clarify there is a linkage between
successful R&D and a guaranteed production contract within the same
Master Agreement, set forth the allocation of intellectual property
rights including a private company's unfettered right to commercialize
the product for worldwide sales, and that the Master Agreement will
recognize payments sufficient to amortize investment, which would
include return on capital and return of capital, particularly in the
event of early termination should the needs of the agency be directed
elsewhere due to changes in bioterror threats.
2. The procurement vehicle identified above as the Master Agreement
should allow a Secretary to depart from the very stiff and burdensome
Federal Acquisition Regulations which govern contracts, grants and
cooperative agreements, and instead embrace ``Other Transactions''
which provide for commercial-like terms and conditions which are more
likely to attract private industry, yet can also provide for protection
of the Federal Treasury.
3. Provide a clear statement that participating industry will be
protected from product liability law suits by invocation of Public Law
85-804 or direct statutory immunization. Since it appears that the
Safety Act--which embraces the Government Contractor Defense--may be
interpreted to apply on in the event of a terrorist attack--there
should be a clarification that it, as well as Public Law 85-804,
applies during the development and production phase of any counter
measure under the Master Agreement.
4. Consider jump-starting the biodefense industry by seizing upon
the express authority under the Defense Production Act (``DPA'') of
1950, as amended to convene a meeting of all relevant companies
competing for government contracts requesting the development and
production of certain vaccines and counter measures for national
defense purposes. Under such authority, the government may provide
immunity from potential anti-trust liability to a company that
participates in a process, the objective of which is to address issues
of common concern to industry and the government. The government may,
in exercising this authority, require a competitor to act in
collaboration or share information that otherwise that could not be
shared due to anti-trust laws and regulations.
I expand upon these four points below:
I. Provide for Express Authority to Enter into a Single Agreement
for Research, Development and Production, A/K/A, The Master Agreement
We support strongly the need to provide for the possibility of the
Federal Government entering into agreements (including contracts,
grants, cooperative agreements, and ``Other Transactions,'') that
permit a biodefense contractor to engage in research and development
with the assurance of production under a single agreement. While this
appears to be the intention of the BioShield legislation, the proposed
legislation does not make this authority crystal clear. It is essential
there exists a certainty that satisfactory completion of research and
development will lead to a manufacturing agreement.
It is also my experience in order to stimulate private investment
and biodefense counter measure research, development and production,
private investors must be assured that they have the potential to
receive a return on their investment, both in the price of the end
product and in the event the government elects to terminate the
agreement for its convenience. The proposed BioShield legislation does
not account for the implications of using private investment to finance
research, development, and production of biomedical counter measures.
I suggest language be included in the proposed legislation that
permits the Secretary of Health and Human Services to enter into
agreements that allow the end price of any biomedical counter measure
to reflect the cost of private financing, including cost of capital and
return on equity.
In addition, under the current Federal Acquisition Regulations
(``FAR'') when a contract is terminated for the convenience of the
government, contractors may recover the cost of performance through the
date of termination plus a reasonable profit on those costs in addition
to settlement expenses associated with ceasing performance, negotiating
termination liability, and disposing of equipment and materials. The
terms vary slightly depending upon the specific language of the
(Termination for Convenience( Clause used in the contract. However, one
of the costs the FAR expressly prohibits--and one which very likely
will apply to Project BioShield's contract--is capital financial cost.
Specifically, the program envisioned by the proposed BioShield
legislation likely will be awarded via competitive negotiations. In
such instances, the agency, here, HHS, negotiates proposals with one or
more contractors. In such cases, the FAR expressly prohibits
contractors from recovering as part of their contract price interest on
borrowings (however represented) as well as cost of financing and
refinance capital. See, FAR 31.205-20. Therefore, to recover return on
equity costs and other capital financing arrangements, the existing
regulations must be overridden.
In order to facilitate this change, I suggest language be included
in the proposed legislation that requires the Secretary of Health and
Human Services to include within an agreement a termination clause that
requires costs of capital and return on equity to be included in any
settlement in any event the government terminates the agreement for
convenience.
Additionally, I propose that any Master Agreement \1\ entered into
between the government and the industry allocate clearly intellectual
property rights. There is currently a problem, as discussed below, by
reconciling the Bayh-Dole law with how the agencies have conducted
their procurements for smallpox and anthrax.
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\1\ There is precedent for the term Master Agreement as by federal
law pharmaceuticals which manufacture branded drugs enter into a Master
Agreement with the Secretary of the VA to be eligible to participate in
Medicaid and sales to the VA. 38 U.S.C. 8126.
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In particular, the Bayh-Dole Act, in general, permits election by
contractors to title of intellectual property made in performing
federally funded R&D contracts. The government gets at a minimum a
royalty free use called ``government purpose license rights.'' The
contractor's elections must include notification to the government of
the invention, pursuant of the patent rights, or else the government
has the right to march in and take over those rights or give them to a
third-party. In a nutshell, the problem is that even in the event of a
timely and successful election, the government's retention of
government purpose license rights arguably allows the government to use
these rights to meet ``certain health and safety needs.'' It is unclear
under this standard whether the intellectual property developed by one
contract or could be given by the government to another for future R&D
and production purposes in the event of a so-called health emergency.
An example of this confusion is found in both the recent smallpox
and anthrax procurements. In the smallpox procurement for one hundred
and fifty million doses, the successful bidder was to develop a new
vaccine on a fixed-price per dose \2\ It is unclear who will own the
intellectual property rights for the newly developed vaccine.
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\2\ I note that fixed price development contracting has long been
prohibited by Congress for DOD weapon system contacting and it appears
the lesson has not been learned here.
---------------------------------------------------------------------------
Likewise, the anthrax procurement recently awarded by NIH was only
for R&D (in two phases) and not production. Indeed, the solicitation
issued April 22, 2002 provided that in the first phase (Phase One) (up
to twelve months), the successful contractor was to develop a pilot lot
and two thousand doses, as well as protocols for Phase One and Phase
Two clinical trials. The contractor was also to produce a plan to
produce twenty-five million doses. The contractors were to be notified
that on or before the twelve-month period, HHS would convene a blue
ribbon panel to select one or more of the Phase One contractors to be
permitted to complete with government money clinical studies over the
next six months, i.e., Phase Two. This was then to be an overall
eighteen month development contract finishing in March 2004, eighteen
months from the award date of September 2002.
Most interestingly, the RFP also stated that the production
contract--not related to the R&D contract--would be assembled and put
out for a bid by May 2003. It is certainly unclear how any intellectual
property being developed over the eighteen month period from the award
date of September 2002 through March 2004 will be allocated between the
R&D contractor and those bidders interested in a production contract
under a solicitation issued May 2003.
Based on the foregoing, the various Secretary should have the
authority to ``link'' R&D with production so that there is certainty
through this process. I am not suggesting--as discussed below under
``Other Transactions''--that the government be the sole financier of
the R&D phase, but instead announce clearly that the development of a
successful counter measure will vest the contractor a long-term
production contract (absent a change in ``threat'' ``when a termination
for convenience is appropriate). Indeed, the actual price of the items
to be manufactured can be determined at the end of the R&D phase by
negotiation in accordance with established government contracts
procedures and other guidance negotiated in the initial contract award.
II. OTHER TRANSACTIONS
The term ``other transactions'' comes from legislation at 10 U.S.C.
2371 where Congress authorized DOD to enter into to ``transactions...
other than contracts, cooperative agreements and grants'' to fund
research and development efforts. It also covers efforts to develop
``prototype'' weapon systems under more recent legislation, namely
Section 845 of the 1994 DOD authorization Act. Other transactions are
viewed as being enormously helpful in expanding the field of companies
that are willing to perform government contracts, specifically those
companies that are predominately commercial like pharmaceuticals and
biotech companies which are otherwise not willing to sign-up to the
government's requirements regarding intellectual property, cost
accounting, pricing and other circumstances which they consider
unacceptable to the conduct for their business.
Under 10 U.S.C. 2371, the Department of Defense will pay no more
than fifty percent of the total R&D costs, and this guideline could be
used to allocate the responsibility for R&D costs under the first phase
of the Master Agreement. As stated previously, after the R&D phase, the
government and industry can enter into a price determination for the
cost of each production unit.
The added benefits of ``other transactions'' are that they depart
from the very stiff Federal acquisition regulations which afford the
government with almost unfettered discretion to terminate contracts,
audit costs, eliminate foreign places of production, gain strong IP
rights, and provide no indemnification. Under other transactions,
several of these authorities could be minimized yet still give the
government over the procurement. In particular, rather than terminating
a contractor for default should it miss one deadline or determine the
scope of the work is commercially impossible, the parties can agree to
a termination at will that would allocate responsibility for costs
incurred to date; also, the government can under other transactions
minimize the amount of audit requiring review of contractors books and
records; likewise, there could be a more clear allocation of
intellectual property and patent rights than as provided under the
Bayh-Dole Act now; and finally, Public Law 85-804 indemnification and
coverage is clearly permitted under other transactions.
III. PROVIDE FOR THE AUTHORITY TO INDEMNIFY AND/OR LIMIT THE EXTENT
OF LIABILITY FOR ANY CONTRACTOR ENGAGING IN RESEARCH, DEVELOPMENT AND
PRODUCTION IN BIO-DEFENSE COUNTERMEASURES
The issue of the potential liability for any entity that provides,
or performs research and development related to, biodefense
countermeasures absolutely must be addressed in order to stimulate
private sector interest in entering into agreements for such
countermeasures. My experience was that the absence of liability
protection was a major obstacle in the recent procurement for NIH for
the development for the next generation anthrax vaccine, was a major
obstacle in the pre-9/11 first CDC procurement for forty million doses
of smallpox vaccine where the winning contractor was required to carry
its own insurance, and continues to be a major hurdle today.
Contractors will try to obtain commercial insurance, but the practical
reality today is that it is unlikely to be available for these projects
given their nature. The proposed legislation is silent with respect to
addressing liability.
Both the Secretary of Health and Human Services and the Secretary
of Homeland Security currently have the authority to provide for
Federal indemnity to private entities engaging in research,
development, and production of biomedical countermeasures under Public
Law 85-804. However, use of such authorities are extremely rare. It is
important to note that President Bush recently revised Executive Order
10, 789 governing use of the authority to provide for indemnity under
Public Law 85-804. These revisions add two additional levels of
coordination and approval for all agencies other than DOD before
indemnification may be given to a contractor. I am also concerned that
the use of the government contractor defense under the Safety Act only
applies in the event of a terrorist act, and could be read to not apply
to the development of vaccines and counter measures after 9/11 or until
there is another similar incident.
Finally, while HHS is currently exercising its authority under
Public Law 85-804 in very limited circumstances, it is my understanding
the agency is not providing indemnity until a contract is awarded--and
will not guarantee that the indemnity is forth coming as a part of the
award process.
IV. USE THE DEFENSE PRODUCTION ACT OF 1950 TO CONVENE A MEETING OF
INTERESTED BIDDERS TO CONSIDER COLLABORATION AND ALLOCATION OF
PROCUREMENT DOLLARS
The DPA provides the government with authority to permit companies
to enter into certain agreements that could include potential
competitors and would have the effect of altering competitive behavior
for the development of vaccines and countermeasures--activities which
would otherwise violate anti-trust laws. Under the DPA, the government
may convene a meeting with or some of the nation's vaccine and
countermeasure manufacturers to discuss the government's procurement
requirements. If the DPA statutory prescriptions are satisfied, the
government's valid exercise of its DPA authority would provide complete
protection against the operation of anti-trust laws for the private--
entity participants in this process. Given the fifty or more
bioterrorist agents identified by the Defense Science Board, it seems
reasonable to consider using the Defense Production Act to stimulate
and accelerate interest and investment by the new biodefense
contractor.
Mr. Chairman, thank you for the opportunity to testify on this
tremendously important issue. I will be pleased to respond to any
questions from members of the Committee.
Chairman Cox. Thank you. Mr. Sutcliffe, thank you for your
written testimony. You have 5 minutes to summarize it.
STATEMENT OF MR. ROBERT J. SUTCLIFFE, DIRECTOR, PRESIDENT AND
CHIEF EXECUTIVE OFFICER, DIGITAL GENE TECHNOLOGIES, INC.
Mr. Sutcliffe. Mr. Chairman, it is an honor for Digital
Gene Technologies to be included on the panel, and to represent
the hundreds of small, intensely science-driven biotech
companies that are exploring the lessons which have been taught
by the human genome.
It is also great to be on a panel with my friend Bill
Haseltine, who has made a success of such a company but, more
than that, was actually present at the creation of an entire
scientific era that we now call genomics. And I think his
insights from what it took to get from here to there are useful
in trying to craft something that will take us through the next
phase.
I have submitted my testimony and I come to this issue with
a somewhat different background than most CEOs of biotech
companies. I was a venture capital and corporate lawyer. Under
the umbrella of no good deed going unpunished, I ended up
running a client, and I think I have had an opportunity to look
at the science from both ends.
I think the previous panel made some excellent points about
the breadth and diversity of the risk that we face. They also
made a point about the need for speed in responding. I think a
number of the questions from the committee made it clear that
the speed we are talking about on the customer side is a lot
quicker than the speed we are talking about in developing
particular antidotes to particular threats.
I think it also was clear from that discussion that a
problem exists in the discussion about the customer and the
market. It is clear that in connection with a number of these
potential countermeasures the government is the customer in the
future. But I don't think that means that there is any reason
to suppose the government would not be a good customer. Our
military may well be the user of some of these antidotes, and
in the public health context a lot of them will only be used in
situations that we would hope to prepare for but not need.
At the same time the market for some of the technologies
that can answer this need can be very great, and I think it
would be creating a perverse incentive for BioShield to
immediately disqualify technologies that might actually have
commercial promise as well as an answer for the government's
own need.
In my submitted testimony, I actually make observations
about three standards that we would hope the committee would
apply in looking at something like BioShield and in biodefense
generally.
The first relates to scientific merit. I think that you
have heard an example today from Dr. Haseltine of a product
that may well be both excellent science and an answer to
something we have long needed. He and I have both, however,
read a number of reports about failed biotech projects that are
now being recast as bioterrorism defense projects, and as much
as the need is great, we need to maintain the high scientific
standards to make sure that we get an answer the public will
accept.
Second, flexibility on two levels is important: Flexibility
in the science that is pursued, and flexibility in the funding.
Dr. Fauci talked about the idea that the research element of
biodefense is being taken care of as part of BioShield, but
also as part of NIH's typical assignment.
Both Dr. Haseltine's solution and some of the research we
have done at DGT to find new molecules that may more quickly
and more accurately deliver pathogens and antigens to the
immune system for response will come from basic research
approaches rather than the development of specific antidotes to
the known threats.
If we are going to get a handle on the threats that we
can't predict exactly, it is going to have to be through the
application of the science that particularly the biotech
industry and the pharmaceutical industry have invested in over
time.
I would suggest that the flexibility that is needed is
flexibility in the kinds of solutions. Because we can only talk
about five major known threats out of several hundred, it may
well make greater sense, or at least equal sense, to look
closely at the issue of delivery, absorption, how immunity is
actually conferred on the recipient of a threat, and work on
that angle such that our solutions and the results of the very
considerable expenditure you are considering is something that
can be used again and again to protect the patient rather than
necessarily launch another development program.
Finally, accountability. I think that the original version
of the BioShield proposal that was submitted suggests an
opportunity to buy into a threat that we know, and yet what
most of us are concerned about are the threats that we can't
predict and can't know. There has been some good testimony
about the potential for modification and mutation of the very
agents we are worried about. So whatever program is adopted
ought to continually reassess both the threat that we face as
citizens and the response that industry is providing. I think
the government stepping up to take its share of the market
responsibility as customer will create any number of
opportunities for the venture industry and our normal free
capital markets to fund solutions as long as we are flexible
and insist on scientific merit and keep both sides accountable.
Thank you, Mr. Chairman.
PREPARED STATEMENT OF MR. ROBERT J. SUTCLIFFE
It is an honor for Digital Gene Technologies to be included on the
panel today and in so doing to represent the hundreds of small,
intensely science-driven biotechnology companies that are pursuing the
newly-revealed lessons of the human genome in search of solutions to
unmet medical needs.
It is also a pleasure to be in the distinguished company
represented by my colleagues on this panel, including Dr. Bill
Haseltine of Human Genome Sciences, who made a success of just such a
science-driven company but also brings the insights of a researcher who
was as they say (present at the creation(, and for whom the genomic
science we take for granted today was just and truly a (vision(; I
suspect his reflections on the blinding lights and blind alleys of that
30 year journey will be helpful to this committee's inquiry and to the
proper structuring of a BioShield initiative.
The proposed BioShield program is an important and timely
initiative, and I know each ofus on the panel approaches your inquiry
as fellow Americans who share your alarm at the range of risks posed by
the biological component of modern terrorism. As citizens it is our
obligation to acknowledge those risks and also our much-less-than-
perfect capacity to know their true dimension--let alone to answer
them.
Only second do we approach your inquiry as industry participants
and then--I believe--only to help determine which answers our industry
can provide or contribute to, not which initiatives or decisions will
benefit or burden some or all of us.
Indeed, our company, Digital Gene Technologies, approaches the
issue of the BioShield much like other Americans do: asking what we can
do to help, based on what we know and do best. We are not a
``biodefense'' company nor do we focus our research specifically on
``countermeasures''. Our research platform has been developed and
deployed over the past seven years to identify and characterize
particular genes and groups of genes that explain the source and
progress of human disease and suggest target points and pathways for
medical intervention and cure. Our TOGA technology is unique in its
capacity to simultaneously track all genes active in a cell and assess
even the most subtle changes in their expression that might mark the
onset of an affliction or a promising point for protective
intervention.
In the course of our research, we have identified a number of
previously unrecognized genes whose special function appears to be the
constant surveillance of the human gut, lungs and nose for novel
antigens--and the rapid delivery of those antigens to the immune
systems for assessment and response.
These molecules, central to the human immune response mechanism,
now may offer promising roles as direct transporters of new vaccines
directly to the immune system, offering potential for more more robust
and more reliable protections. As such, they may offer one--but only
one of our future lines of defense to biological assault.
Interestingly, while these discoveries derive from research funded
exclusively by a commercial partner with a commercial motive: the
development of better delivery systems for oral and nasally
administrable vaccines, the technology that made these discoveries
possible--DGT's TOGA--Platform invented at The Scripps Research
Institute in La Jolla--is the product of academic research funded by
grants from the NIH, with additional basic research support from
industry. Without both sources of funding, the technology--and these
promising discoveries--might not exist.
Today, as you consider components of a national effort to combat
bioterror, I'd like to suggest that three standards be scrupulously
applied to scientific and monetary components alike regardless of the
pressure, the fear, and the uncertainty that surround this threat.
Those three standards are MERIT, FLEXIBILITY, and ACCOUNTABILITY
Merit
The imperative of our defense must require merit in the science you
fund and merit for the dollars delivered. It is axiomatic that medical
need invites unworthy science parading as greater commitment.
Since September 11 we've seen too many failed projects retooled as
``biodefense''. Unworthy science wastes valuable resources and raises
unrealistic and counterproductive hopes. The increase in funding
contemplated for biodefense should not be an excuse for lowering of the
threshold for peer review and peer respect. The prospect for this in a
time of strained financing resources in the biotech industry should not
be underestimated. Indeed the risk seems even greater if, as suggested,
the absence of commercial viability becomes a positive qualification.
However, if the government--on behalf of its own use and the
demands of the public--can speak for the existence of a market, the
traditional combinationof peer-reviewed science and entrepreneurial
financing represented in the venture markets ( should have no trouble
promoting creative and prompt contributions whose scientific merit will
insure their success.
Flexibility
The inherent unpredictability of the biological threats we face
argues for maximum flexibility in the science we pursue and for
flexibility in the funding mechanisms for biodefense you establish.
The potential for modification and mutation of threatening agents
suggests we place emphasis on countermeasures that are adaptable and
exchangeable. For example, focus on the mechanisms of absorption,
resistance and immunity may provide us with a broader arsenal of useful
protectants than would slavish pursuit of antidotes to individual
agents whose creative modification or mutation could render our
warehoused arsenal instantly obsolete. Similarly, research progress on
speed and coverage of delivery of countermeasures may be a force
multiplier for previously marginal defenses.
To support this flexibility of approach to the relevant science, an
equally flexible allocation of biodefense dollars between basic
research and product development may buy us more defense sooner.
Accountability
Finally, a word should be said about accountability.
For those of us who experience the scientific world as observers,
its marvels include its constant reinvention, creativity and
unscrupulous honesty about results. These marvels will also be our
greatest assets in addressing the unknowable risks of tomorrow.
In structuring our national approach to biodefense, care should be
taken to avoid creation of perverse incentives, absorption of an undue
share of precious resources, or the diversion of creative scientific
talent from its noble calling. Maintaining such a delicate balance will
require supervision, continued reassessment of the threat as well as
the effectiveness of the response, and a fair dose of candor, from
scientists, government and industry alike.
As with any great effort, continued oversight of its goals and
means will protect and preserve it.
With these observations in mind, I'd like to assure you that the
people and the science of the biotechnology industry are ready for and
capable of major contributions to the successful combat of bioterror:
in articulating the range of risks, identifying the vulnerable targets,
and generating an arsenal of countermeasures creatively broad and
flexible enough to respond to the range of misapplied genius we will no
doubt face in the years ahead.
Thirty years ago, the War on Cancer gave us a model of government
stimulated science that has permitted measurable success against that
scourge--but of even greater importance, that war trained a generation
of research soldiers in new technologies and ways of thinking that are
directly responsible for the leadership position U.S. science holds in
the world and the capacity we've had to sustain and respond creatively
to each new and horribly different health scourge of the intervening
years.
Thoughtfully structured, funded and overseen, the BioShield
initiative could again provide both immediate answers to a current
threat and a new model for government stimulation of scientific
progress that will insure our pursuit and perfection of technologies
capable of meeting threats we can't yet know.
Thank you.
Chairman Cox. Thank you, and I thank the entire panel. This
panel has the benefit of having heard the first panel and the
discussion that took place with members. As we write this
BioShield legislation, we are concerned with the mechanisms for
engaging the private sector. One of the ways that this might be
accomplished, as Dr. Fauci outlined, is a contract relatively
early in the process that anticipates work being done towards
the achievement of a solution and then a commitment to purchase
all that is necessary for the defense of the country in the
event that a cure or an antidote is developed.
There are really two ways to go about this in principle.
One is explicit contracts up front, the other is the reward
model in which the government stands ready to buy what anyone
successfully produces in answer to a generalized call to
action. We send out the alarm, we need this, you provide it.
Because we are going to be offering for this purpose, albeit in
the billions a fixed amount of money, which direction you
choose here matters significantly.
I wonder if I can ask each member of the panel to react to
that point and help us with your suggestions about how to
design this legislation.
First, Dr. Haseltine.
Mr. Haseltine. Thank you. This is a very real issue for us
because we are at that point where I as CEO have to make a
decision as to whether to put a program on hold or to go
forward with it based on our perception of what the reality is
for government funding or potential funding. It is a very real
issue. It is not a hypothetical for us.
I think it would be helpful if I gave the outlines for what
that means. We did all of the R&D on our own based on years of
research of understanding the anthrax vaccine organism to come
up with a specific drug. As far as we can tell from discussions
with HHS and DOD and others, this is a needed solution. This
drug is a very powerful addition to what already exists, and I
think there is consensus that that is the case.
We are prepared to manufacture it for the first of two
clinical trials. That is what is called the pharmacology phase.
When it comes to finding a dedicated manufacturer for the
second of the clinical trials and for the production phase, we
cannot make that commitment absent a government commitment
because it is simply too big. We have to go outside, find an
outside manufacturer, compete on commercial terms for a long-
term, multi-year contract to produce the material that will be
needed to validate the safety of this particular drug. We are
talking a minimum of $30 million the first year, 50 or $60
million the second year. Those are the numbers that we are
talking about just to secure the facilities for the
manufacturer. So it is vital how this legislation gets written.
It should support both the advance development and the
procurement of that material because the material that is used
for the advance development would actually be material that
could also be stockpiled, in addition to the stockpile. It is
very, very important to us how that decision gets made by your
committee.
Chairman Cox. Mr. Pemberton.
Mr. Pemberton. Mr. Chairman, I think it is important that
the legislation as it develops be flexible because there are
many different kinds of solutions and many different kinds of
problems that are going to be addressed, and it is important
that the Departments that are going to be actually applying and
implementing this law will have as much flexibility as possible
to see what works and to make sure that they have procurement
mechanisms that they can respond to different sorts of industry
needs and different sorts of industry problems.
That is why I think you want as the current bill has, it
has an R&D portion, which I think is good. It also has a
procurement portion. We believe it is important to tie the two
together and to have a provision for the R&D to be linked to
the ultimate procurement so that those who develop the original
solution will naturally transition into production if that is
desirable.
That will provide an additional incentive there to the R&D
effort. It will be kind of both push and pull, as Dr. Fauci was
saying.
It is important whatever mechanism is selected to maintain
the maximum flexibility, but also maximum certainty for
contractors in this area. It is extremely important to members
of industry to know that the money will indeed be there when
the process is done.
Chairman Cox. Mr. Rapoport.
Mr. Rapoport. Mr. Chairman, I think we are very close. We
just need to tweak the back portion of the BioShield bill to
allow the Secretary to have authority not just to do
procurement, but also have R&D money in there at the same time.
We are very close. We have offered some language to a couple of
other committees, and I have not seen the new draft that came
out today from one of the committees, but we are very, very
close.
The only other thing that I would also offer is Mr. Turner
read a letter, and probably because I don't represent a
pharmaceutical company I can be more candid and share what I
have heard. Mr. Vagelos is one of the most respected people in
the field. I can share with you, though, that I think his views
are not shared by the industry. They want a go at this as your
partner. They do not want to have a government-owned,
contractor-operated facility named a GOCO. They do not want to
have a government think tank. They already have NIH, which is
fantastic.
I think they are ready to come to the table with a little
tweaking of the legislation, but they do not want some
humongous government facility that is going to compete against
them. Mr. Vagelos is so respected, but I am hearing that is not
really right on message with the rest of the pharmaceutical
industry.
Mr. Sutcliffe. Mr. Chairman, I think the issue that Dr.
Haseltine raises about the initial production is a valid one
and it is worth further investigation to ask whether it would
be possible to finance that kind of risk in the private market
on the reward basis, that there is a high reward left, and that
will assume that the reward is still going to be high.
At the same time it would be disappointing I think to other
companies attempting to solve the same problem to learn that
the market actually had been foreclosed even for a better
product. So the separation of the two, which was addressed in
an earlier panel about what happens if the second best answer
has the government contract, do we not get the first answer, do
we get both or neither, I think the answer is we probably get
the second because we have already identified that the major
market is one that is controlled.
So I would think that the preservation of the reward
opportunity would do a lot to spur private capital to invest in
these kinds of projects.
At the same time, Dr. Haseltine is focused on an issue that
is really pharmaceutical companies versus biotech companies. It
is difficult for most biotech companies to imagine undertaking
the kind of project that Dr. Haseltine has in mind, and his is
not a small biotech company. He has been very successful at it.
But still, I think, the pharmaceutical companies would have the
resources to undertake that. So it would be worth investigating
whether or not the reward model could in fact encourage private
investment in the phase that Dr. Haseltine currently faces
purely on a pot of gold at the end of the rainbow.
Chairman Cox. I thank the panel for your help on that
question. You have stimulated several more questions, but I
will hold back and yield to the ranking member, Mr. Turner.
Mr. Turner. Thank you, Mr. Chairman.
I think we all have the same objective here, and that is to
figure out how to get the vaccines that we believe we need to
address the threats that are there and get it quickly. I am not
sure I have heard anybody say anything about the ability to
accomplish this task in any given period of time.
Obviously the risks that we face in this endeavor is the
same risk that the pharmaceutical industry faces in trying to
develop product. Those risks, from what I understand, are
greater in this field than any other. I think the reason we all
have to be cautious about how we structure this is, number one,
we want to be sure that we can assure the American people that
the goal that we are after is going to be achieved. Number two,
if we do it wrong, we obviously have the potential of wasting
literally millions of taxpayer money because we could, as I
understand it, go down a lot of rabbit trails, spend a lot of
money and get nothing.
I guess I was interested in the comment that was made a
moment ago about the letter that I read because I think Dr.
Vagelos had really not made any comment on this subject to my
knowledge until we asked him to review the bill, which he did
yesterday, and forwarded this letter to us today.
My fundamental question is, if we really are serious about
getting this job done, what is wrong with trying to do it all?
What is wrong with trying to do an incentive program in the
form in which we have proposed, along with trying to mobilize a
government research center, which we have plenty of examples of
success with from our nuclear labs to our National Institutes
of Health and others where we have successfully achieved some
objectives by trying to mobilize the collective power of the
Federal Government, to address the task? So explain to me why
the two would be inconsistent with one another.
Dr. Haseltine?
Mr. Haseltine. First of all, they are not inconsistent with
one another. second, I don't think a special biodefense effort
is required. I will give you two reasons for that. The first is
you have generously funded NIH to do almost precisely what that
government, super-government agency would propose to do; i.e.
the broad scale research into new and emerging diseases. NIH
has been very generously funded over the past 2 years, and it
looks like it will continue to be funded. That research takes
place at NIH and draws upon the very fine expertise in our best
universities all over the country.
We are creating new generations of people who have the
requisite expertise, and we are funding our current experts in
that field. So many of the goals, and very laudable goals, are
being met through the current biodefense initiatives.
I should say something we have not talked about is the
admirable biodefense legislation that has already been enacted
that does a number of very positive things for the creation of
new biodefense agents, including allowing new pathways for
rapid approval, speeding the time from concept to realization.
Let me give another example in a different field which I
was deeply involved with as a university professor, and that
was in the very early days of the AIDS epidemic trying to
mobilize our government's efforts, as well as the private
sector effort, to fight the problem of AIDS. That was done in a
two-part program.
First, by generous funding from Congress of the NIH.
Beginning in 1985, there was a steady ramp-up of funds. That
money flowed first to NIH and then around the country and built
a very powerful research organization. second, direct
involvement of industry through transfer technology programs,
not as big as the programs we are talking about here, but very
definite transfer programs that led to the creation of the
current generation of AIDS drugs.
Now there was one thing that allowed that to work which we
don't have for many of these kinds of drugs, and that is there
was a natural market for the AIDS drugs so we didn't need
special government incentives.
Here we need that. But if you take the power of what exists
at NIH, which you have already generously funded, and couple
that to the power of industry, which is what BioShield can do,
I think you will have achieved almost all if not all of the
objectives that have been laid out.
Mr. Turner. With regard to where you are in your efforts
with anthrax, Dr. Haseltine, and to put it in context for me, I
was reading Dr. Pemberton's statement about the risks involved
in new drug development, and he said for every 5,000 compounds
screened only 250 enter preclinical testing, and of every 250
drugs that enter preclinical testing, only one is approved by
the FDA. Where are you in that chain with your anthrax product?
Mr. Haseltine. We are down to 1 in 10. Probably even
higher.
One of the things that biodefense did for us is it set a
clear definition of what was required for approval. You have to
demonstrate efficacy in two animal models of human disease. Our
drug has already met that. You then have to test it for safety
in human volunteers. That is what we are about to do. We are
about to submit our drug to the FDA for safety testing. We
presume, because we have done it many times before, that we
will meet all of the government criteria, all of the FDA
criteria, to allow us to do the safety testing.
Let me give one additional concern which has not yet been
raised, but it is very important at an early stage. When you
submit a drug for testing, it not only is reviewed by the FDA,
it is reviewed by institutional review boards for ethical
considerations. We are talking about exposing healthy people to
a drug. Is it ethical to expose people to a drug for which
there will never be a market? That is a question we are
wrestling with today. Can we in all conscience go ahead with
our phase 1 clinical trials before we get a green light from
the government saying if you make it, we will buy it. That is
an issue that has not been addressed, and it is why for some
drugs it is really important to link the two, the advanced
development and the procurement. I think my colleague to my
left said it very well when he said what we need is
flexibility.
Mr. Turner. You gave us some numbers a minute ago. You
mentioned to proceed from where you are you would need $30
million this year and $50 million next year. When you give
those numbers, are you saying that is what you need from the
Federal Government?
Mr. Haseltine. That is what we need from the Federal
Government. I would estimate in direct dollars we have invested
about $15 million, and if you add in our facilities another $15
million, so a total of about $30 million we have already
invested in this.
Mr. Turner. At the end of that 2-year period, where are we
then with regard to this project?
Mr. Haseltine. You have approximately 150,000 doses or more
stockpiled, perhaps more. I would have to check the numbers;
but you already have a stockpile.
Mr. Turner. So as part of that investment in the second
year in production facilities, is that what--
Mr. Haseltine. Even in the first year you are making
materials that could be stockpiled. Both first and second year,
the material you make could be stockpiled.
Mr. Turner. So a large portion of the $80 million relates
to production?
Mr. Haseltine. Absolutely. It all relates to production.
Some is technology transfer so it can be produced, and the rest
is for production itself.
Mr. Turner. When we are talking about production, are we
talking about building a plant or facility?
Mr. Haseltine. We are talking about contracting an existing
plant that is already approved so we can get this product
moving forward quickly. Eventually we would talk about building
our own plant.
Mr. Turner. That is after the $80 million?
Mr. Haseltine. Yes. This would be a multi-year stockpile,
and over time since the drug is relatively stable, we would
build up a larger and larger stockpile over time.
Mr. Turner. At what point in the expenditure of $80
millionSec. In other words, we could spend the $80 million and
end up not achieving anything, or would you know that sooner?
Mr. Haseltine. You would know it sooner. We have two
efficacy trials, and the next trial is a safety trial. You will
know after the safety trial whether you have something that is
suitable for stockpile.
Mr. Turner. How many million would that cost to get us to
the point where we know whether we have a winner or not?
Mr. Haseltine. About $30 million.
Mr. Turner. If our intent is to have a program to develop,
and the initial number I heard was 5 vaccines for various
biological agents, then we might move to 10 or 12 and I heard
somebody say there may be a hundred out there we need to be
prepared for, is there any way the government can achieve some
cost savings if we are going to make this investment in
production facilities? You are going to lease a facility
initially, but eventually you would want to build one, and
since the bulk of these dollars are in production facilities,
is there any way the government can say OK, we will do this and
build such a facility, but then we want it to be able to be
used for the next pharmaceutical company that we enter into an
agreement with to produce something else?
Mr. Haseltine. I would imagine that for most of these
products you will have an ongoing stockpile requirement, and
although these drugs may have a long shelf-life, it will not be
indefinite so there would be a requirement for renewal. So at
some point you will need dedicated facilities for manufacture
of that drug for continual stockpile. There are such programs
that currently exist for stockpile of certain materials today.
The simple answer is that I don't think that is a model
that will work particularly well.
Mr. Turner. In other words, you are thinking that for these
vaccines that we hope over time to stockpile, that we would
need for each vaccine to have a separate manufacturing
production facility in order to accomplish that?
Mr. Haseltine. I think the answer is more complicated than
that, but to the first approximation, that is the answer.
Mr. Turner. Maybe you can educate me a little more on that,
but I am not sure I quite understand the logic of why a
production facility which in the private sector apparently is
used for multiple production runs--I guess because you are
initially going to lease one from somebody else--why that kind
of facility could not be used for the production of more than
one vaccine.
Mr. Haseltine. It really depends on the size of the
facility, it depends upon the materials that you are producing.
For biologicals, it is very different from chemicals. A
biological, which is a protein or antibody, which many of these
products will be, you have dedicated manufacturing facilities
for them, especially once you have an ongoing, recurrent need.
Let me just emphasize the dollars that I mentioned do not
buy hardware. They are solely production costs. That is what
these dollars are. They are not to buy and build factories.
Mr. Turner. Mr. Rapoport, I think your comment earlier in
response to Dr. Vagelos' suggestion was that you did not want
the government to be in the business of having another agency
to try to help solve this problem. Dr. Haseltine said those two
approaches are not inconsistent. Do you believe they are
inconsistent?
Mr. Rapoport. What I think the industry is concerned about
is engaging down a slippery slope which ends up with the
government taking over this business.
Again, these are not companies that have ever taken a cent
of government R&D money. They are not Lockheed or Boeing. I
think they want to keep a separateness working as partnerships,
but they do not want to see their resources be drained off into
a time and period down the road, and maybe we are getting ahead
of ourselves, where the government says I can take over that
business, you know. How about hepatitis A, hepatitis B, we have
a platform now to take it all over. That was the only caution I
was making. So perhaps they are not totally inconsistent that
you would add to NIH's already sensational capabilities.
But I also wanted to share what happens if we go down this
route and there is failure. I worked for the Reagan Justice
Department, and I was assigned to represent the NIH. They are
very skilled at handling contractors and terminating contracts
that are not going anywhere. In this industry, you probably
have to be a little more gentle than you would with a Boeing or
Lockheed who does not perform and they are used to getting
terminated for default. Here the government could terminate for
convenience a contract where they have promised production
contracts where the company simply wasn't getting there, or
that solution wasn't the right solution any more.
But the point I want to leave with you is if you terminate
those contracts for convenience, you have to recognize
additional costs that are now unallowable such as financing
costs and equity, costs of equity. So BioShield, one of the
pieces we are trying to suggest is give the government the
contracting officers' discretion. They are going to protect
your purse, but make sure if they have to stop the deal in the
middle of the procurement, they reimburse companies, not just
for the widget to date or how far they have gone, but for a lot
of their investor costs that traditionally would not be
allowable under the FAR.
I have heard that the venture capitalists who obviously,
look at the stock of biotechs now, it is very low. But the
venture capitalists, and Leighton Read, who was the founder of
Aviron testified before other committees that they are ready to
participate and help co-fund the development, so this is not a
handout. I don't think the pharmaceutical industry is looking
for a handout. At least what I am hearing from the board rooms
is we will share in the R&D, just as Dr. Haseltine's company
has shared, but I need to know that there is a guaranteed
market for some period of time.
Mr. Turner. I have no doubt that what you are saying in
that regard is true because every bit of information I have
ever collected says it is going to be very hard to get the
pharmaceutical industry to participate in this.
When we first had this presentation to the chairman and I,
the big piece of this proposal was to have this unlimited power
in the administration to write a check for whatever it cost
without even going through the usual appropriations process. It
seems pretty clear as this proposal has been vetted through the
Congress that Congress is not likely to give up its power of
the purse. If that was such a big part of this, I guess the
question I would have for each of you, if that is not in the
final bill that passes, is that a deal killer? In other words,
are we wasting our time here talking about all of these other
details like liability protection and other things, that if you
don't eliminate the uncertainty of what has been described at
least by Dr. Fauci as the ``vicissitudes of the appropriations
process,'' that this is all not going to work anyway? So can
you live with the Congress still exercising its role in the
appropriations process?
Chairman Cox. If the gentleman would yield, this is a very
important question. What is being proposed and what was in the
bill as marked up by the Committee on Energy and Commerce today
does not leave you subject to the vicissitudes of the
appropriations process. It does, however, cap the total amount
and it puts an end date on it of 10 years so that Congress
would have to become involved at some point in increasing the
amount beyond $5.6 billion or extending the program beyond 10
years. But within that period of time, the government would
have complete flexibility and authority to disburse the entire
amount of $5.6 billion and you would not need to come back to
Congress between year 1 and year 10. The question is still the
same question: How does that affect the real world?
Mr. Turner. Mr. Chairman, I want to be sure that I
understand the question. My impression is that there still
would have to be an annual appropriation. They authorized in
the bill, but the annual appropriation would still have to take
place in the appropriations process. I see somebody shaking
their head out there.
Chairman Cox. The discussions we have had with Chairman
Rogers, who was with us earlier, as well as the Committee on
Energy and Commerce contemplates that we would make directed
appropriations over a period of years. This is akin to no year
money, the sort of thing we did after 9/11 with New York City
with all of those billions, and there would be of course
ongoing oversight, retained jurisdiction and so on by the
Committee on Appropriations but the full amount of $5.6 billion
would be appropriated up front in year 1.
Mr. Turner. I may have misunderstood.
Mr. Shays. Would the gentleman yield? I am just curious
when other members will be able to question witnesses.
Chairman Cox. I appreciate the gentleman's comment.
Mr. Shays. They are very important questions, but there
needs to be some framework.
Chairman Cox. The gentleman's time has expired, and the
other members are being very tolerant. The point is well taken.
Mr. Turner. And I apologize if I overextended my time. I
hadn't noticed.
Chairman Cox. The bill passed today is styled as an
authorizing bill, and so further action by the Committee on
Appropriations needs to be taken. So you will not know from
reading the four corners of the legislation what I have
described to you, but that is the understanding that we have as
of this moment.
Mr. Turner. Let them answer as they see fit and then we
will yield.
Mr. Haseltine. Certainly permanent and definite funding
authority would be desirable. But if we cannot have it, what we
would like are multiyear contracts with firm commitments. That
is extremely important, multi-year contracts with firm
commitments.
Mr. Pemberton. The permanent and definite appropriation was
a very important part of the bill to PhRMA, but that is not to
say it is the only solution, and the multi-year money is
certainly one that we will study and work with.
Mr. Rapoport. I will pass on that question.
Mr. Sutcliffe. My impression is the same as Mr. Turner
indicated, and that is that the venture community is interested
in this, and what they really wanted was a sign that the
government recognized the problem and was prepared to
stimulate, or assist in stimulating, both the science and the
width that is required to get it moving. I think most companies
that have an angle on a solution would find a government
indication of a willingness to participate--or to be the
customer and to step up to being the customer when the product
is available--as a tremendous assistance to finding private
capital to do the interim work.
Chairman Cox. Next is the gentleman from Connecticut who is
being rewarded for extraordinary patience by God, if not this
committee.
Mr. Shays. I sense that this bill is incentivize and
accelerated research and development for vaccines and
therapies, and I am wrestling with a whole host of questions.
I, for one, do not know the ethics of how you qualify a vaccine
for a disease that does not really exist. I mean with polio,
you got to try it on real people. How do we do that?
Mr. Haseltine. The way the biodefense legislation handles
that is to use two animal models of human disease followed by a
safety study in humans of the drug, but these are humans that
are obviously healthy.
Mr. Shays. So technically we do not know the efficacy of
the drug on humans?
Mr. Haseltine. That is true, and you cannot know it.
Mr. Shays. Fair enough. We are going to have to be making
some tough choices. The legislation is basically going to speed
up research and development for countermeasures. It is going to
speed up delivery for these countermeasures, and it is going to
basically overrule FDA emergency authorization. It is going to
provide for emergency authorization to bring out a drug that
may not be fully tested. That is the world we are kind of
living in.
Mr. Haseltine. Already the Biodefense Act allows drugs to
be registered which meet the two animals plus human safety.
That is already existing.
What this would allow to happen is if a drug were in the
process of being tested in humans but hadn't been finished and
hadn't been registered, the FDA could decide.
Mr. Shays. I get that. I understand.
Mr. Rapoport, you are the most vocal on this end, and all
of you are very effective in your presentation. I want to
basically have a sense if we eliminate the risk and provide a
promised revenue stream, what will we get beyond the product?
Let me put it this way, would we get the product below at what
would be a typical cost of a company that hopes to recoup
research and investment?
Mr. Rapoport. The DOD and HHS are very sophisticated at
price negotiations with government contractors. Obviously the
more R&D money you take from the government, the less should be
the price of the product. What we are suggesting is if you
enter into one contract that has R&D in it and a commitment for
production, at a certain point in time you enter into price
negotiations and then the contractor and the government can
decide what is a reasonable price.
Mr. Shays. And you recognize that?
Mr. Rapoport. I do. I don't think that Congress needs to go
down into those details. I think the government is very good at
this. I spend half my day fending off the government doing
audits on contractors. I think there are many guidelines within
the FAR that could be useful under other transactions to guide
what is a reasonable price for the product.
Mr. Shays. Would any of you respond to what this world is
going to look like, and first off when we do these top-off
experiences and we see smallpox run amuck and we think how are
we going to catch up, and we look at the plague and question
how we are going to deal with that, the plague has been in both
top-off 1 and top-off 2, and in both cases we don't have an
antidote to the plague right now. Tell me, when will we?
Mr. Haseltine. I think it could be available within several
years, 2, 3. You asked a question, and the answer to your
plague question actually is part of the answer to your previous
question: What else do you get if you support these early
programs? What you get is full involvement of the biotechnology
and pharmaceutical industry to address a broad range of
questions.
Many people, including ourselves for follow-up programs,
are waiting to see what happens with these programs, because if
these programs don't go very well, then other programs don't
get developed. It could happen really quickly. There are plenty
of technologies around that would allow relatively rapid
development of ways to contain plague, for example.
Mr. Shays. It seems to me like it is a crapshoot. In my
hearings, I have had 40-plus hearings in my National Security
Committee, and the list is a long list of potential pathogens
that we might want to defend against. I realize the first panel
said you are going to look at those that could be the most
catastrophic and so on; but admittedly, this is a big list,
true?
Mr. Haseltine. The answer is yes and no. I think the first
panel tried to address that question.
There are some big threats that are obvious that we know
are major threats. Those include plague, anthrax, and smallpox.
Mr. Shays. The ones that tend to be the most contagious?
Mr. Haseltine. Or already known to be weaponized.
Mr. Shays. Are we talking about five big ones?
Mr. Haseltine. No more than 10.
Chairman Cox. Mr. Dicks.
Mr. Dicks. Thank you, Mr. Chairman.
Mr. Haseltine, I wanted to ask you, what do you need to get
this deal done? In other words, what is it that you would like
to have to accelerate getting your product purchased by the
government?
Mr. Haseltine. Enactment of BioShield.
Mr. Dicks. All you need is BioShield?
Mr. Haseltine. Then we are happy to compete. The money does
not exist in any easy form. BioShield would allow us to move
forward, and allow the government to move forward, because we
have talked to every agency that we can talk to in government,
and they all tell us the same thing. I hope it is true. If
Project BioShield is passed, we can help you. Without Project
BioShield, it is very difficult for us to help you.
Mr. Dicks. So we have to get the bill through and then we
have to appropriate. I am on the Committee on Appropriations.
Then we have to appropriate the money?
Mr. Haseltine. That is right.
Mr. Dicks. If that is the way we are going to go?
Mr. Haseltine. That is right.
Mr. Dicks. I hate to use the defense system because if it
takes us 15 years to build a weapons system and it is not
always a great one. But what about the idea of a situation
where you would be reimbursed like they do in R&D where instead
of you putting up $30 million, which is what you are doing
here, you would be contracted by the government if they thought
your idea was good enough, to pay for the R&D? What about that
concept? You just don't think that is viable?
Mr. Haseltine. I think that would buy you a lot more
research from a lot more smaller companies. I think it would be
very welcomed by certain segments of the biotechnology
industry. I think it is a very interesting concept.
Mr. Dicks. That is basically what we do in defense. They
use some of their money, companies do, and they obviously raise
resources to do it, but then they get a contract to do the R&D
if they have an idea that people think is worth doing. I bring
that up so as we consider this legislation that is an
alternative.
Mr. Haseltine. Flexibility is the word. Part of that could
be done through existing NIH mechanisms. Part of it could be
done through other mechanisms as well. I think flexibility in
the way this language is crafted is very important.
Mr. Dicks. How do you read the language on partnership as
it is now? How do you decide who pays how much? Or what the
shares are going to be? Is that defined in the legislation?
Dr. Haseltine. I don't think it is defined. And I think it
should be flexible.
Mr. Dicks. So they can enter a deal. So in other words,
between the NIH, whoever is going to do the contracting, and
your company, you can negotiate an agreement about how much is
going to be done as a partnership.
We do that in some other areas too, so that concept is
interesting. I kind of like the other idea, because I think you
get more done sooner.
Let me ask Mr. Rapport about--Did you want to say
something, Mr. Sutcliffe?
Mr. Sutcliffe. Yes. I think you are on the right track. In
fact, what will happen under this legislation, except in the
case of companies like Dr. Haseltine's, is that the large
pharmaceutical companies will subcontract this work to biotech.
Most of the large pharmaceutical companies can't solve
these problems the way that they will need to be solved with
their existing research. They will subcontract the work by
supporting theSec. esearch, and will take the guaranteed
contract.
The problem it presents is that the market will be tied up,
and so it will--we really are using, in this case the
government is using the large pharmaceutical companies to solve
this problem by doing the subcontracting that you are
suggesting could be done directly. I think you are right, under
your approach, more answers would come forward without the
government having made a commitment to any of them.
It would perhaps spend more in terms of initial R&D
funding, but at much smaller dollars than we are talking about
committing.
The numbers Dr. Haseltine is talking about in $30 and $50
million don't add up to $800 million a year. The number $800
million a year comes from the number of the total amount spent
on research in the pharmaceutical industry divided by the
number of successful profit-making drugs. That is what the
average of what it costs to get a drug to market is.
But that is not actually what it costs to develop any
particular answer. Some are obviously expensive and lose, some
may be less expensive and win. So the more--the flexibility
that we are talking about is, the more answers are sought out,
the better the chances that the public will have the protection
that they want at the end, which is not that we have made a
good investment and got a pretty good antidote, but that we
actually got something that works at the end.
Mr. Dicks. I appreciate your answer.
Mr. Rapport, let me ask you this, you talked about the
Defense Production Act. Give me a little more on that. How
would you see that operating? You could have a situation where
we can say, if the President declares an emergency, you can use
the Defense Production Act. That can be a paragraph in a this
bill. So if we did get into a crisis like you are suggesting,
and we really had to move, we would have this on the books.
Mr. Rapoport. I think what I would offer is that you can
put in BioShield that the Secretary has authority to engage in
a prototype plan, where they could--he could within his
discretion use the Defense Production Act in a limited
circumstance to see how it works. It has recently been used
involving shipping lines in the Middle East, after the First
World--after the First War, in that part of the world.
But it has not been used often. But it certainly could be
helpful to jumpstart the industry. I wanted also to just
address, I am trying to be as plain speaking as I can, because
you are a leader on the defense issues, you understand this.
Lockheed and Boeing are used to having auditors roam their
plants. I assure you that my clients, the thought of having
government auditors audit the costs of an R&D contract, all of
a sudden brings nightmares to them of toilet seats and
overpriced widgets. And so I think at least from a big
pharmaceutical company, they would be more inclined to at least
try to go it on their own and not accept the R&D money, because
they don't want to become part of that, you know, government
contractor audit establishment that the FBI and prosecutors
somehow get the money back at the end of the deal, in over
zealous prosecutions. Some of them are obviously merit-based.
But that is what I am hearing, that I am the President of a
multi-billion dollar vaccine company. The last thing I want to
take is a hundred million dollars in government money, because
then I have got to pay Ernst & Young and McKenna, Long and
Aldridge and everyone else to come in and set up these cost
accounting systems that your constituents have had for years.
Mr. Dicks. Thank you, Mr. Chairman.
Chairman Cox. Thank you. Mr. Andrews.
Mr. Andrews. Thank you, Mr. Chairman. I wanted to thank the
witnesses for their testimony. I regret not being able to hear
it, but I read it.
I share with the author of the BioShield Act the basic
premise that the way to prepare our country to deal with this
problem is a combination of money, markets and immunity. I
think the concept is exactly right.
I think there are--the question Mr. Turner was pursuing
about the proper means of government oversight is one we have
to explore. I would like to explore another one, which has to
do with my amateur understanding of the future of scientific
inquiry.
Some of the most impressive breakthroughs in the areas of
biology and chemistry have occurred by accident, where there is
a task that is different than the task that eventually winds up
serving, where someone is involved in pursuing project A and
they make some discoveries that are collateral to project A
that lead to a new project B, which leads to a new project C
and so forth. We do not want to foreclose that scientific
dynamic.
My question to you is, how can we be sure that the umbrella
of immunity and the financial reach of the subsidies that
BioShield suggests, and the benefit of the guaranteed market
that it suggests, would reach beyond the original stovepipe
competitors in this field?
In other words, that is a bit theoretical. What I really
mean is, if someone working in one of the outstanding
pharmaceutical companies, all of which are in New Jersey I
might add, is working on a cure for SARS, and in the process of
that, makes some findings which are quite relevant to dealing
with inhaled anthrax, I am not sure if that is an apt technical
example, but you understand my point.
Does the BioShield legislation set up a sufficient
mechanism so that that scientist's SARS-related discoveries can
be sold, conveyed, shared, joint ventured with someone who is
working on anthrax? If not, how do we do that?
Dr. Haseltine. Thank you for the question.
It is a very interesting question about research and cross-
fertilization. I think that that can happen. And the way it
happens is, first of all you first create a market for these
drugs. A market is extremely important in motivating
researchers at all levels.
Once a market for a potential product exists, it is in
people's minds that if I make a discovery, I have an outlet for
it. If you don't have a market, they may never make that
connection. I have been involved in creation of seven
biotechnology companies myself, and overseen the creation of
another 20 through involvement in venture capital advising, et
cetera.
And that is a process that is fascinating to watch. The
companies that I have started haven't come out directly of the
research that I have done. They have come out of collateral
ideas realizing that there might be a market. You create a
market and people will come.
Mr. Andrews. Here is my follow-on question. Let's assume
that because there is consciousness in the scientific
community, that there is an effort to create an antidote to
smallpox, that the scientists who comes across something on the
SARS project says, my this has cross-applicability. He or she
calls the person working on anthrax.
As a legal and policy proposition, let's assert for the
moment that we want the ordinary drug laws and antitrust laws
and intellectual property laws to apply to the pursuit of the
SARS problems. But we want these special rules to apply to the
production of antidotes to these national security problems.
How do we sort the two out? How does a legal relationship get
constructed that serves the public purpose of expediting and
defending this defense venture, but does not create the
unintended consequence of setting up a whole new set of rules
and a special commercial marketplace that is not our intention?
How do we do that?
Mr. Pemberton. The limited antitrust exemption with
government supervision would permit technical collaboration
among companies in ways that might currently be problematic.
And creating a kind of opportunity for companies to collaborate
on perhaps those kinds of cross-fertilization ideas would be
one reason why you would want to have that.
Mr. Andrews. Let me say this. My own prejudice, I would
rather err on the side of achieving the antidote for national
security faster. If the cost of that is a perversion in the
civilian market, much as I would not want that to occur, the
cost of the attack on the country is a lot greater, so I would
want to err on the side of getting the antidote to the market.
Mr. Sutcliffe. Mr. Andrews, I am not sure that the cross-
fertilization won't take care of most of the problem. I think
that communication will take place. I mean, in the scientific
world that information will cross.
The immunity problem comes in terms of doing the follow-on
experiment, and that is a situation where it is the limitation
of most institutions that would keep a researcher from
performing the research, and you can be sure that you or the
people who have the immunity under BioShield will get that
call.
Mr. Andrews. Thank you. I see my time has expired. Thank
you, Mr. Chairman.
Chairman Cox. Thank you. Ms. Jackson-Lee. Thank you all
also for your patience.
Ms. Jackson Lee. Thank you very much, Mr. Chairman. And
thank you, the ranking member.
And I would like to also associate myself with the remarks
of Congressman Andrews with respect to having perused your
remarks. I was in another meeting outside of the room, but I do
appreciate your testimony.
Just for clarification, because it is a little difficult to
see the names, and I wasn't sure whether Eric Tolbert was here.
Mr. Chairman, I just--let me just make a comment, and not
specifically about Mr. Tolbert. But I do think it is crucial
that we have a hearing that includes, or that we are able to
cover the question of the threat assessment, which I assume
might have been discussed from the perspective of this Director
of the Response Division. And I hope that we will be able to,
one of the--one, be able to secure that.
One of the points that we have been consistently making,
some of us, is that a threat assessment is crucial. I know that
one of our colleagues has been speaking eloquently about that,
Ms. Harman from California.
So I hope that we can have that response. I am not sure why
she was not here, Mr. Chairman.
Mr. Chairman, I would like to yield to you for a moment. I
am not sure why the Director of the Response Division was not
able to make it. I am concerned about the threat assessment
issue, that hopefully we are going to address that.
Chairman Cox. We are going to pursue that.
Ms. Jackson Lee. Is it likely then that we will have
witnesses that will be able to respond to some of those
concerns in hearings to come?
Chairman Cox. I will ensure that members of the minority
and the majority have the opportunity to put questions to the
Department, either at a subsequent hearing or in writing, and
have them answered before we mark up.
Ms. Jackson Lee. Thank you very much. Certainly it is not
the fault of the panel that is here. But, in any event, I
wanted to make that point.
I also want to associate myself with the remarks in a
previous panel of Congresswoman Lowey, in terms of how all of
this impacts the unpreparedness for the needs of our hospitals
and emergency rooms, and may have a question to you gentlemen
along those lines. Because, as I said, if you have any thought
on that, I would appreciate the oversaturation.
I had the opportunity to read some of the works of
Professor Calabresi, formerly of Yale Law School, now on the
Second Circuit. He makes a--I think a long-standing theory, he
made it some many, many years ago about choices and cost. And
that we ultimately wind up making choices on how many--what the
loss will be, and if we lose one or two in the course of our
research and work, we consider those lives expendable.
It is not his proposition that they are expendable, but he
gives us sort of a model for how many decisions are made. I
believe that a lot of his work was geared toward how insurance
companies make determinations.
We know that we are in a crisis. We know that the last 2
days, that terror exists, by the tragedy in Saudi Arabia. I
said that earlier, but I also asked the question in the earlier
panel about accountability, and the answer was given that--it
is paid only or moneys would be given only to the
pharmaceutical companies and other research institutions on the
basis of the deliverable.
So I would like to ask Dr. Haseltine and Alan Pemberton on
the--how assured are we of that process working? And I would
also like to pose the question, because as I said, we all bring
a different perspective to this committee, of what kind of
immunity from liability would you be looking for? So, would you
be encountering the same problem with the first responders not
being able to be protected by liability coverage out of this
type of legislation?
I think that would be extremely important. And any of the
gentlemen who would care to answer that, I would encourage you
to do so.
Let me start with Dr. Haseltine on some of the questions
that I posed.
Dr. Haseltine. There are actually three questions that I
can address briefly. The first is, certainly preparedness of
our health care services is very important, part of our
response. However, for many diseases, if there is no adequate
drug, no matter how prepared you are, you can do little.
One of the key aspects for preparedness of health care
systems is the appropriate drug for the appropriate threat. And
I think we have seen, to some extent, that in SARS. There are
some things you can do, but for some people you can
unfortunately, at this point, do very little.
The second issue that you raised was the issue of
guarantees, that if we had a product it would work. Is that
your question?
Ms. Jackson Lee. The question is--the answer was given to
me before about accountability. And the answer I was seeing,
give pharmaceuticals and other research institutions a billion
dollars, how do you know they ever come back with anything? The
answer was, you do it based upon what is delivered.
My question to you is, does that work?
Dr. Haseltine. Yes.
Ms. Jackson Lee. How does that guarantee that we will get a
product?
Dr. Haseltine. You give the money in relatively small
chunks and based on very specific performance criteria, and if
you don't meet these performances, you don't get the next
installment. And if the quality of the product that you are
delivering isn't up to the specified standards, then you don't
get it renewed.
Ms. Jackson Lee. You have the hammer--the nail by a hammer
on the head. That is the quality of the product. And that is
what I would be concerned about, is the quality of the product.
That is what I would be concerned about as we move this
legislation and look at what we are doing, quality of the
product. Because I can always hand you a bowl of cherries; that
may not be the answer, and that would be what I would be
concerned about.
Dr. Haseltine. The third issue you touched on was
liability. I would say that liability should be looked at on a
case-by-case basis. Many of the drugs that we will be
developing may be FDA approved, and FDA approval provides you
some measure of protection, as well as explicit legal
liability. So I think that there should be case-by-case,
perhaps not blanket liability protection.
Ms. Jackson Lee. Before you answer, may I just throw this
sort of curve in there, so that this could be included, and if
anyone wanted to conclude on that, since I notice that the
light is on.
The follow-up to all of that, where I am leading with this
is, I sort of want to ensure that whatever we do is evenly
distributed to all who are in need. And if we stockpile
vaccines, the question becomes, how they will be distributed.
We now know that we made a determination, we are doing first
responders for smallpox. But what about the 40 million people
in the United States that have no health insurance? Does that
make them less able to secure access to protection from terror?
And I believe that the BioShield approach is good, but we
may need to look at those aspects as well, because we know that
we are a Nation with a huge amount of working individuals who
are uninsured. If I can add that to the thought processes for
anyone who wants to finally answer that. Yes, thank you.
Mr. Pemberton. The payment provisions in the current
legislation, we believe, would be improved by adding
flexibilities so that the payment, we agree that payment should
be based on achievement of definite criteria. But whether those
criteria, in all cases, are delivery of finished doses of
medicine, should be left to the case-by-case determination.
There may be specific kinds of very long-range production
projects or development projects that might warrant some other
kind of milestone payments. And, in our view, it would be
unwise to have the BioShield legislation tie the hands of the
Administration in designing a system of payments for special
cases.
As far as liability, liability from the point of view of
the PhRMA members is an extremely important issue. And, if
liability protection for potentially catastrophic tort suits is
not provided, it will be a very significant disincentive to
participation by many of the members of the industry.
We recommended that it be done along the model of the Swine
Flu or the current--what is currently being done with the
smallpox production contract.
Ms. Jackson Lee. Yes, sir.
Mr. Rapoport. I think the issue is liability protection.
During the anthrax solicitation, HHS took the position that
when you were involved in Clinical 1 studies, you didn't need
the government to give you liability protection. The industry,
I think, probably feels differently.
What I have tried to suggest in my testimony is the Safety
Act, which, I believe, Mr. Armey and others wrote, does give
protection across-the-board to companies who are willing to
participate in homeland security. That was the reason they
wrote it, because a lot of companies were even talking about a
mail-handling machine that could detect anthrax.
A defense contractor might not do this work if it could be
found liable. What the Safety Act says very clearly, some say,
is that it applies only in the event of a terrorist attack. So
that if you fail, if your machine fails, we know that it was
only used during a terrorist attack. But when I am developing a
new drug, there is no terrorist attack.
So the Safety Act, we respectfully submit, ought to be
amended slightly to say that it applies to any procurement
under BioShield.
Chairman Cox. The gentlelady's time has expired.
Ms. Jackson Lee. Mr. Chairman, and I am not going to pursue
it, but I would like to get in writing my question about the
uninsured Americans access to such care. That was a question
that I had asked, what happens if you don't have money,
insurance and otherwise, are they going to be left out of the
coverage against terrorism?
Chairman Cox. I thank the gentlelady.
The gentleman from Florida, Mr. Meek.
Mr. Meek. Thank you, Mr. Chairman.
I would definitely like to thank all of you for spending,
not only your time here on this late Thursday evening with us,
I know that there is no better place that you could be right
now, but I definitely want to--I think this is very not only
informative for me as a member of the committee, but as it
relates to everyday Americans, because we are definitely out in
the cold as it relates to having vaccines or preventative
medicines to be able to protect many Americans and those
friends abroad of bioterrorism.
Mr. Rapport, I hope I am pronouncing your name correctly, I
can tell you that your testimony was just as good as the other
panelists, but you define--it was kind of like a contract kind
of thing, just cut and dry, let's don't sugarcoat it or put any
icing on the cake as it relates to things that will prevent us
from being able to achieve what we want to achieve through this
piece of legislation.
And I think that when we start looking into intellectual
property rights and cost of accounting and pricing and the
government's nose being in the middle of R&D and things of that
nature, that is something that would be--when we talked earlier
with the first panel, about the ideal perfect world, unlike
DOD, which I am on the Armed Services Committee, we meet here
in this room. There are things that, historically that have
taken place in the Department of Defense that people just kind
of said, well, it is the defense of the country. Homeland
Security new department, lot of attention, lot of concern about
Americans, especially when it comes down to bioterrorism, or
what have you.
You mentioned that you had language that you presented to
the last committee for them to include in their markup. And I
haven't seen their markup yet. I am pretty sure I will see it.
I understand that they just passed it this morning. So, what
are some of the things as relates to the cost accounting? I am
sorry I stepped out for a minute myself.
Can you define further what could hinder, but also give us
comfort as on Oversight Committee and as the Congress that
through the Peer Review that I hear, see a lot in the
literature of the R&D process of the--of making sure that we
don't have cost overruns, things of that nature?
How does that work and how do we give Americans comfort in
allowing that flexibility, because we do want all of you and
your peers to participate in this process? Because this is
something that we have to not only have an answer but a result.
Mr. Rapoport. Sure. Those are excellent questions. I think
what Mr. Pemberton and I were suggesting is we deal with this
world, as you do, of defense contractors who have regulations
on top of regulations which Coopers and Lybrand, I think once
did a study and said, for every dollar we spend there is 20
cents of it just to deal with the regulations.
What we have proposed is to give the authority to the
Secretary to enter into transactions that don't come with
stacks of regulations. And again, it has got a weird name, just
other transactions. Came out of DARPA. It was a way to get a
company like 3M who had never done business, but has a
fantastic research capability, they wouldn't do business with
the government, hypothetically. I think that it was perhaps 3M.
But they entered into a commercial-like deal. And I think
what I am suggesting to you is, the contracting people at NIH
are not going to allow the store to be given away. They are not
going to enter into a one-page commercial deal, because even
commercial contracts do have terms and conditions. But I think
we can eliminate some of the ability to look at, you know, cost
records down to the fine-toothed comb with months of auditing
on every purchase order by saying in this commercial-like
document that it is within the discretion of the contracting
officials to go ahead and do some selective auditing, but they
don't have to follow the Federal Acquisition Regulations.
Mr. Meek. Quick question. What do you think would be--you
have identified the Defense--I can't remember.
Mr. Rapoport. Production Act.
Mr. Meek. Are you recommending that being the course
outline as it relates to accounting and auditing? Because I am
seeing in the backdrop the fact that you are pharmaceutical
companies, and it is like some Members of Congress, you know,
some people feel negative about that whole experience. I pay
too much for my prescription drugs. So they are automatically
thinking that there is some sort of deal that is going on
somewhere, and we are not really getting the big bang for our
buck, in that it is a blank check, even though as it relates to
research and development.
And on the last panel, one of our panelists was really
heavily into the AIDS/HIV research, and knowing that you have
to spend millions of dollars, now a billion dollars almost to
really get into good research. How do you--I am trying to
figure out, how do we get a level of comfort? Because this is
not--this is something that all of the news stations, all of
the writers are going to be focused on.
You start talking about individuals, appointees and
pharmaceutical companies, kind of going off to the corner and
saying, OK, we have the deal. I am not saying that that is a
bad thing, because we have to move, and we have to move
expeditiously. We don't have time, like you said, to be topping
at every point because someone has to check the No. 2 pencil
you bought last week.
Could you define more about a good example that is existing
that we haven't had abuse? Because when we look at regulation,
it is the reason why we have it, just like we have a stoplight
in some intersections, a certain amount of casualties took
place there.
Mr. Rapoport. Sure. I am certainly not the one to defend
the pharmaceutical industry. I think they can do that on their
own.
Mr. Meek. Don't get me wrong. I am just saying, because we
have to explain this.
Mr. Rapoport. Sure. I was just simply trying to build on
what Dr. Fauci says, is that he needs this industry to bring
their creativity.
All I was suggesting with the Defense Production Act, it in
no way is a relaxation of any audit rights. It is simply a
framework that allows you to avoid--the anthrax bid took 6
months before they even selected somebody who has got now 2
years to come up with R&D.
You could collapse that timeframe, and you could put,
again, companies like Human Genome or Merck, they are not
allowed to get in the same room now. But, under this Act,
subject to supervision by the Defense Department, they cannot
talk, absent someone from DOD or one of the other agencies in
there, they can actually divide up the deck and decide, gee,
you are going to take plague, you are going to take tularemia.
Is it going to work perfectly? No. But I am just suggesting
if you want to get past all of the bidding stages that, you
know, quite frankly the Mercks and the Human Genomes and the
Glaxos, they are all very competent. They could all help. You
don't necessarily need to decide and spend a year which one is
going to get A and which is going to get B. Let's make that
decision now and see their proposals and then hunker down and
have a negotiation that protects the taxpayer, which I know
that you are worried about.
Mr. Meek. Thank you so very much.
Mr. Chairman, I just definitely want to state for the
record that I appreciate all of the witnesses here and the work
that you are doing.
And the work that you do want to do, not only on behalf of
our companies but also on behalf of Americans, in making sure
that we are safe in the effort against terrorism. Simply, you
summed it up better than I could. On behalf of the taxpayers, I
don't think there is anyone in this Congress that wants to
abuse their trust that they put into us. And we appreciate all
of you coming today.
Thank you, Mr. Chairman.
Chairman Cox. Thank you, Mr. Meek.
I want to be as humane as possible with our panel. You have
devoted many hours of your day here today. I am sure you can
use a stretch if nothing else.
And so I have just one question I would like to put to you
before, with the consent of the other members, we will
certainly relieve you. It is the fulcrum of the discussion that
we have been having thus far about what incentives are
necessary in order to get this jump-started in the private
sector, and what flexibility the Department should have.
I have reviewed, as carefully as I can, the legislation in
its current forms. There are a couple of them extant. And I
don't believe we have clearly stated in the bill as written, an
authority for the Secretary of HHS or for the United States to
make a public bonding commitment to purchase what we have
defined as qualified countermeasures on such terms and
conditions as the Secretary might specify in advance at the
time of the publication of this binding commitment.
This is the reward model. And the question is, whether or
not providing such authority as a supplement to what is already
here, and Congress not tying the hands of the executive branch
in their choice of which pitch to throw would be something that
would make BioShield better or would compromise the effort in
any way? And I would put it to the panel to help me with that.
Mr. Pemberton. I think if you can make the commitment
binding and make it earlier, it would certainly encourage
participation and would encourage more research earlier in the
process.
Dr. Haseltine. I am in concurrence with that.
Mr. Rapoport. As well.
Mr. Sutcliffe. It would increase the number of participants
in the project, certainly from the biotech side and add them to
the pharmaceutical companies that were already attracted to it.
Chairman Cox. Well, given that unanimous view of this
panel, what would you like to see in such a public call? What
would resound most loudly in the private sector and get people
spurred to action most successfully? Any essential elements to
such a call, or to put it obversely, anything that the Federal
Government could say or do in this model that would cause
people to dismiss it?
Mr. Pemberton. I think the essentials are estimated within
Minimum quantities of doses or other volumes be purchased and a
guaranteed minimum price are going to be the two big items. Of
course, you have to have standards of performance, you have to
have some sort of measure of efficacy and safety.
Chairman Cox. If the legislation were to leave those
metrics up to the Secretary of HHS, would that be a flaw in the
legislation or would that be admirable flexibility?
Mr. Pemberton. I think it has to be left to administrative
discretion.
Dr. Haseltine. I agree.
Chairman Cox. What I mean is not the price and not the
amount, but rather the legislation could say, for example, the
Secretary shall, at the time that he makes the public building
commitment, specify such details as will be necessary for
people to qualify, which shall include the price, the quantity,
what have you, and some means that everybody could agree upon,
in determining the efficacy of the countermeasure that is being
purchased.
Mr. Rapoport. What I would add to the language is that the
Secretary, in his discretion, shall negotiate a reasonable
price which shall include recognition for the costs of capital
and return on equity.
That is a piece that is not in BioShield that would
announce clearly that there is a willingness on the
government's part to reimburse the companies for their own
sweat-equity costs that they have to go out and bring to the
company, to the project, again on a reasonable basis.
Chairman Cox. Let me just put a fine point on this. If we
were to include such authority, and if we were to leave
essentially all details of what would be in a public call, up
to the discretion of the Secretary, would that be acceptable
from your standpoint for the legislation, and would it be a
good thing, or should we strive for some more specification,
some more specificity such as, should we say things we ought to
include--is your last comment, Mr. Rapoport rather advice for
the Secretary, if and when he were to use this authority?
Mr. Rapoport. I think what I am suggesting is that you give
him some parameters of issues that he should consider, that if
you didn't say so, he wouldn't consider, because it would be
Defense Department business as usual contracting, which is
pretty much the way they did the smallpox and anthrax
procurements, because they didn't have BioShield and not enough
money.
Mr. Sutcliffe. I would also hope that such language would
avoid predetermination that it is doses per dollar that is the
solution, rather than, for example, some other form of
protection that would allow him to encourage other solutions on
the response side rather than on the drug side.
Chairman Cox. All right. Mr. Turner.
Mr. Turner. Just one question. I know the hour is late.
When, Mr. Rapport, you described the way you would like to
see the process work, you talked about getting everybody in the
room, all of the manufacturers and you decide who gets to work
on plague, who gets to work on anthrax, that kind of thing. And
earlier when Mr. Dicks was asking questions to the panel, I
think Mr. Sutcliffe made a response to him that indicated that
you thought, Mr. Sutcliffe, that it would be better to have
more than one hook in the water. And I want to get clear,
between the two of you, these two approaches and why each of
you feel the way you do, and so that we completely have an
understanding, because I think this is a critical issue.
I will tell you where I have been on this. I thought that
the objective here ought to be to get more companies involved
in this research and this effort. And that we would be best
served in terms of achieving the goal of getting these vaccines
out there in the shortest period of time if we did that. So the
concept of simply sitting in the room and divide up the pie
seems to me to be the wrong approach.
But if you disagree with that, let me know. But I want to
hear the contrasting approaches that I think I heard from each
of you two.
Mr. Rapoport. Mr. Turner, I think you rightly took my
comments to the extreme. I am a big fan of something called
dual sourcing or triple sourcing. And when I suggested that we
make an award of one drug to one company, I was giving the
example.
Again, this would be up to the Department of Defense and
Homeland Security who actually would administer this. What we
saw in the smallpox procurement that Secretary Thompson issued
right after 9/11, they made an award to one company. In the
years that I have been practicing government contract law on
critical problems, critical programs, they never just source to
one. They always have two or three, so hopefully at the end,
somebody comes up with the answer.
But, Secretary Thompson had no money. He had to go with a
very fine company, I think it is called Acambis. But, quite
frankly, they were the low bidder. You didn't see Merck, you
didn't Glaxo, you didn't Wyeth, or the fourth company in Mr.
Andrew's District. The four big manufacturers have yet to
participate. It is as if you fight the war in Iraq without
Northrup Grumman, Boeing, you have a bunch of very qualified
subcontractors.
But what I am suggesting is the Defense Production Act, I
think can be a useful tool. A useful tool in areas where the
President and his team feel we could get an edge in where maybe
one company is raring to go and one isn't, that you consider
that in the legislation.
Mr. Sutcliffe. I think you are correct to have perceived a
difference in the point of view. My impression of the BioShield
Initiative, as written, is that it is an assignment to a
handful of companies to provide an already determined product.
The problem that has been brought out in this committee is
we don't know what this product is, we are not sure how broad
the threat is, and we would really like to have some answers to
the threats we are going to find out about next week. There is
no evidence that these particular companies have anything to
offer in terms of the discovery side of answering those
problems.
What we really ought to be doing is making sure that we get
the best answer, more players certainly, and I think, different
players. The production issue of the ultimate solution is
probably the easiest part. There are many people who believe
that the future of this combined industry is that the discovery
side will be the biotech industry as we know it today, and the
production and marketing element will be the pharmaceutical
companies.
I think it makes a lot of sense to use the resources of the
pharmaceuticals companies to deliver products when they are
determined.
But, the BioShield Initiative is to find the products in
the first place, or to find the countermeasures, I think that
is the correct statement. The countermeasures may end up being
things that are not drugs, that are not vaccines. And the way
BioShield is written, it is really a one-off approach to each
disease.
I think it was Mr. Dicks who asked, what will we get at the
end? The answer is we are going to get, ultimately, a hundred
individual vaccines produced under the same approach, as
opposed to any chance at a global, ``macro'' solution to
avoiding contact in the first place or moderating response to
antigens and pathogens in a way that draws upon the kind of
science that Dr. Haseltine was working on 30 years ago, and now
we think of as what we know about individual patient response.
So we can learn about that in the context of BioShield. I
don't think that the existing NIH authority and approach is
enough, because the urgency is not there. Indeed, in just
talking with scientists in our company and elsewhere, the
impression of BioShield is a lot of people are going to go into
the vaccine production business for major pharmaceutical
companies, because there will be jobs to do that.
I am not sure that gives us an answer. It will give us
warehoused vaccines. Whether they will answer the need and
anticipate the next threat is a bigger question. I believe they
probably won't.
So if we can tweak the BioShield idea, use the urgency that
is reflected in it and the government attention to bring as
many solutions into play, we will get the right ones, and it
may well be that that means not paying for them up front, not
agreeing to pay for them up front, but agreeing to pay for them
when they are delivered, then allowing private industry and the
private capital markets to compete to give you a number of
different solutions.
If we all get in one room and divide up the diseases, we
will get a hundred thousand left shoes. I think that that is
the giant risk of the way the structure is currently
anticipated.
Dr. Haseltine. I have a comment on your question. I think
the notion of a priority of dividing up who gets what disease
is a very bad idea. You don't know who is going to come up with
the valid solution. On the other hand, at the other extreme,
you can't have multiple people making products for the same
purpose. We can't have say three or four vaccines for anthrax.
That may work in the private sector where there is an open
market, but it is very unlikely to work where you have the
government.
So there should be something that allows diversity, a
priority to come up with products that meet certain criteria,
at which point there is a selection for which company does the
production.
But, I think it would be an extremely bad idea to divide
the world up before you had proof of efficacy.
Mr. Turner. Thank you.
Mr. Pemberton. I think the basic model under the existing
language is competitive R&D, and we are certainly comfortable
with that. But there may be instances where there could be
needless duplication of effort that could be discovered through
a very limited process of meeting, where you would need an
antitrust exemption to have those kinds of meetings, to
discover where you are wasting effort, where two people are
doing the same thing, that is not necessary.
Chairman Cox. Well, I think you have surpassed yourselves
in your contribution here this evening. I am sure that every
one of our panelists is here beyond the hour that you expected
depart. So you are very, very much appreciated we want you to
know. You have helped this committee immensely in our task as
we go forward.
We are very, very close to marking up this legislation. So
your comments are both very timely and very consequential, I
think, and we appreciate your help a great deal. Thank you for
traveling here, for being with us.
And with that the hearing is adjourned.
[Whereupon, at 6 p.m., the committee was adjourned.]
APPENDIX
ADDITIONAL MATERIAL SUBMITTED FOR THE HEARING RECORD
Questions and Responses for the Record from Mr. Alan Pemberton
Thank you for the opportunity to address further questions from
Representative Jackson-Lee following the oversight hearing entitled
``BioShield: Countering the Bioterrorist Threat'' on Thursday, May 15,
2003.
Representative Jackson-Lee's first set of questions were as
follows:
I am concerned that we could promise about 1 billion dollars
for creation of a new vaccine, sit back and think that we have
taken care of the problem, and find out in five years that
nothing has been accomplished. How will we monitor whether this
Act is having the desired effect? How many companies do you
think will start new programs to develop vaccines or drugs to
combat bioterrorism? How many corn panics in the business will
expand their programs? Is there some threshold level of new
activity that you could see that might indicate that the
industry is dedicating the appropriate resources?
She also inquired:
Considering the relative lack of transparency in the private
sector, and the fact that many pharmaceutical companies are publicly
traded--do you expect them to be forthcoming about their progress, or
lack of progress, on this front? How long will it take us to figure out
if the industry is not getting the job done, and that perhaps a federal
effort is necessary.
On behalf of the Pharmaceutical Research and Manufacturers of
America (``PhRMA'') on whose behalf I testified at your Committee's
recent hearing, I am pleased to respond as follows:
First, while it is impossible to predict the specific research
initiatives that will be undertaken if BioShield legislation is
adopted, if the government does not remove significant disincentives to
the development of such a market (including meaningful protections
against liability exposure), the pharmaceutical industry is not likely
to reallocate existing resources to developing countermeasures to
bioterrorism. To stimulate private industry participation, it is
imperative that Congress create a guaranteed market and address
disincentives such as the liability exposure of participants. PhRImIA
favors a liability protection system similar to that enacted currently
for smallpox vaccine manufacture.
The transparency of research efforts will not be an issue. There
will be (as there currently are) many ways to learn what research PhRMA
member companies are performing. Information about the nature of the
ongoing research and development is generally public. Public documents
such as the PhRMA annual report, company press releases, and SEC
filings provide such information. Additionally, government entities
often are aware and involved in the research process--the NIH and CDC,
particularly where infectious agents are concerned, and the FDA, once
clinical trials are underway.
PhRMA would welcome the opportunity to work with Congress to
construct a countermeasure contracting and procurement process that
operates more like the commercial contracting process, which we believe
will enhance its appeal to private companies. Pharmaceutical companies
are accustomed to commercial contracting rather than government
contracting and structure their research and development efforts
differently from traditional defense contractors. For instance,
authorization of ``other transactions authority'' would provide greater
flexibility than is typically the case under federal acquisition
regulations and would permit agreements that more closely resemble
commercial transactions, thereby increasing the likelihood of research
and development initiatives and product introductions in this area.
Questions for the Record Submitted for Dr. Fauci
Questions from Rep. Shelia Jackson-Lee
Once vaccines or drugs are developed and we have them stockpiled,
how will they be distributed? My concern is that we have about 40
million people in the United States who have no health insurance. Those
without health insurance are less likely to go to see their physicians
on a regular basis. Many do not even have a doctor of record, but
instead only go to emergency rooms when extreme circumstances arise. If
a situation arises where millions of people in an area need to go in
for consultation, then inoculation, then follow up--and there are so
many people without a good working relationship with a physician or
clinic--we could have mass confusion.
What facilities will be in charge of distribution? Will people
visit their own physicians or public health clinics? How will they know
where to go? Do these facilities have the infrastructure to take the
deluge of patients we expect? Do they have enough people to give
appropriate education and advice? Will they be able to treat some of
the side-effects or allergic reactions that may arise? We have a
disparity in health and healthcare in the U.S. between the haves and
the have-nots. I would hate to see a disparity in survival after a
terrorist attack.
I am concerned that we could promise about 1 billion dollars for
creation of a new vaccine, sit back and think that we have taken care
of the problem, and find out in five years that nothing has been
accomplished. How will we monitor whether this Act is having the
desired effect? How many companies do you think will start new programs
to develop vaccines or drugs to combat bioterrorism? How many companies
in the business will expand their programs? Is there some threshold
level of new activity that you could see that might indicate that the
industry is dedicating the appropriate resources? Considering the
relative lack of transparency in the private sector, and the fact that
many pharmaceutical companies are publicly traded-- do you expect them
to be forthcoming about their progress, or lack of progress, on this
front? How long will it take us to figure out if the industry is not
getting the job done, and that perhaps a federal effort is necessary?
No Response received by the Committee
Questions Submitted for the Record From The Honorable Peter DeFazio
1. With single-source procurement contracts for countermeasures,
are the profit margin and rate of return pre-established in the
contract?
2. As is customary in conventional government procurement, couldn't
HHS simply expedite the RFP and awarding processes for developing
countermeasures? Wouldn't a competitive bidding process serve the
public interest and public health goals better?
3. Better still, why shouldn't DHS start contracting immediately to
develop countermeasures for National Institute of Allergy and
Infectious Disease High Threat List (``A List'') toxins?
4. Much of the debate on preparedness revolves around biological
toxins. Is there anything specifically that's being done to develop
countermeasures for chemical agents?
No Response received by the Committee
Responses for the Record from William A. Haseltine, Ph.D.
Thank you for the opportunity to testify last week before the
Select Committee on Homeland Security. As I said in my statement and in
response to questions from members of the Select Committee, Human
Genome Sciences strongly supports the President's Project BioShield
initiative. The program will go a long way toward giving companies the
assurance they need to develop innovative new products to protect the
public from chemical or biological attacks.
I also want to share with you some suggestions for improving the
BioShield legislation that was approved last week by the House Energy
and Commerce Committee. In some respects, the bill as currently drafted
would offer less flexibility than under existing government procurement
regulations. In order to be truly effective, the BioShield program must
give Department of Health and Human Services the flexibility to craft
development and procurement contracts that more closely resemble those
in the private market and reflect a partnership between the federal
government and companies willing to commit their expertise and
resources to defeat weapons of bioterror.
I have attached three draft amendments, which I am hopeful you will
consider as the Select Committee marks-up the BioShield legislation. In
particular:
Amendment 1 would (1) authorize the Secretary of HHS to
include performance-based (milestone) payments in procurement
contracts--rather than limit contracts to repayable ``advance
payments'' and payment conditioned on ``substantial delivery''; (2)
provide that the Secretary may enter into single contracts for
research, development and production; and (3) ensure that procurement
contracts may reflect the actual cost of development, including costs
incurred before or after contract execution.
Amendment 2 would further ensure that contracts may
provide for both development and procurement.
Amendment 3 would provide necessary liability protections
identical to those included in the Homeland Security Act of 2002.
I believe that all three provisions would be strongly endorsed by
the pharmaceutical and biotechnology industries and would be happy to
discuss them further with you and your staff.
Thank you again, and I look forward to working with you and the
administration to ensure that Project BioShield is a success.
Sincerely,
William A. Haseltine, Ph.D.Chairman and Chief Executive
OfficerEnclosures
AMENDMENT 1
In section 31 9F-2 of part B of title III of the Public Health
Service Act (as proposed to be added by section 3 of the bill), strike
subclause (I) of subsection (c)(7)(C)(ii) and insert the following (and
redesignate succeeding subclauses and references thereto accordingly):
``(I) PAYMENT CONDITIONED ON SUBSTANTIAL DELIVERY.--The contract
may provide that no payment may be made until delivery has been made of
a substantial portion (as determined by the Secretary) of the total
number of units contracted for, unless the Secretary determines (in the
Secretary's discretion) that advance, partial, progress or other
payments consistent with section 305 of the Federal Property and
Administrative Services Act of 1949 (41 U.S.C. 255) are necessary to
ensure the success of a project.
``(II) SECURITY COUNTERMEASURE DEVELOPMENT.--Notwithstanding any
other provision of law, the contract may include the procurement of
research, development, and production, and may reflect, in its terms
and price, the actual cost of developing the security countermeasure,
including any cost incurred either before or after the execution of the
contract.''.
AMENDMENT 2
In section 319F-2 of part B of title III of the Public Health
Service Act (as proposed to be added by section 3 of the bill), insert
``, including procurement of research, development, and production
under a single agreement, as necessary,'' after ``Secretary for
procurement'' in clause (i) of subsection (c)(7)(B).
AMENDMENT 3
In section 31 9F-2 of part B of title III of the Public Health
Service Act (as proposed to be added by section 3 of the bill), at the
end of subsection (c)(7)(C)(vii) add the following new clause: ``(viii)
LIABILITY.--Any product or service resulting from any agreement under
this section for procurement, including research, development, and
production, shall be designated as a ``qualified anti-terrorism
technology'' as defined in section 865 of the Homeland Security Act of
2002 and, notwithstanding any other provision of law, shall be afforded
any and all protections provided under subtitle G of Title VII of the
Homeland Security Act of 2002 without regard to whether an ``act of
terrorism'' as defined in Section 865 has occurred.''.
Questions and Responses submitted for the Record from L. Garry Adams,
DVM, PhD, DACVP
As requested in your letter of July 1, 2003 pertaining to my
testimony before the Full Committee oversight hearing on ``BioShield:
Countering the Bioterrorist Threat,'' the following statements are my
responses to the specific questions of U.S. Representative Shelia
Jackson-Lee. I have responded from the context of my background over
the last three decades as a veterinary medical research scientist
participating in the development and implementation of new vaccines and
diagnostic tests for two successful multi-billion dollar federal animal
health regulatory programs, bovine brucellosis and bovine tuberculosis.
For purposes of convenience, I have restated each of Representative
Jackson-Lee's questions below.
Questions from Rep. Shelia Jackson-Lee: I am concerned that we
could promise about 1 billion dollars for creation of a new vaccine,
sit back and think that we have taken care of the problem, and find out
in five years that nothing has been accomplished.
Question: How will we monitor whether this Act is having the
desired effect?
Response: First, the specific federal-private enterprise
contractual agreements must have clearly written time lines and due
diligence clauses for completion of deliverables. Second, the
contractual agreement between the federal government and private
enterprise for vaccines, diagnostic tests and/or therapeutics must be
written to have progressive milestones with due dates with demonstrable
proof of deliverables meeting specific definitions of quantity and
quality of products. Third, the US House Select Committee on Homeland
Security will be expected to maintain rigid oversight of the entire
process and the timeliness for the quality and quantity of
deliverables, possibly functioning through single or multiple major
federal agencies, e.g. Department of Homeland Security, Department of
Health and Human Services, and/or Department of Defense.
An example from a national animal health perspective: For the last
60 years or more, the United States Department of Agriculture has been
responsible for the implementation and oversight of contractual
agreements with private enterprise for the timely production of the
quality and quantity of vaccines and diagnostic tests required for the
hundreds of millions of cattle involved in the successful federal
brucellosis and tuberculosis regulatory programs.
Question: How many companies do you think will start new programs
to develop vaccines or drugs to combat bioterrorism?
Response: This question is beyond my experience and background,
however my impression is that current minor and major biologics and
pharmaceutical companies would be responsive to the demand for
vaccines, diagnostic test and therapeutics related to bioterrorism as
long as the profit incentive remained viable for the firms.
Another example from a national animal health perspective: When the
new bovine brucellosis vaccine was introduced in the mid-90s, the same
USDA approved biologics manufacturer continued to produce the former
vaccine and quickly expanded new manufacturing lines to produce the
millions of doses of the new brucellosis vaccine required for the
federal regulatory program.
Question: How many companies in the business will expand their
programs?
Response: Again this question is beyond my experience and
background, but as long as the profit incentive was viable for the
biologics and pharmaceutical companies for several years, and the
companies were able to meet the quality requirements for the products
and had the capacity to expand production, U.S. enterprise would be
expected to respond accordingly.
Question: Is there some threshold level of new activity that you
could see that might indicate that the industry is dedicating the
appropriate resources?
Response: The federal-private enterprise contractual agreements
would need to be written with clear indicators that appropriate human
resources and fiscal resources were invested to comply with the due
diligence clauses for completion of deliverables.
Question: Considering the relative lack of transparency in the
private sector, and the fact that many pharmaceutical companies are
publicly traded--do you expect them to be forthcoming about their
progress, or lack of progress, on this front?
Response: The federal government-biologics and pharmaceutical
company contracts would need to be written such that timely milestone
inspections and reports are obligatory in order to comply with the due
diligence clauses for completion of deliverables.
Question: How long will it take us to figure out if the industry is
not getting the job done, and that perhaps a federal effort is
necessary?
Response: The frequency of the mandated milestone inspections and
reports will be the determining factor for how quickly lack of
compliance with due diligence might occur, i.e. the frequency of these
inspections and reports would be expected to be no more than each six
months throughout the contractual agreement.
Thank you, Chairman Cox, for the opportunity to respond to specific
questions from the U.S. House of Representatives? Select Committee on
Homeland Security hearing on ``BioShield: Countering the Bioterrorist
Threat.'' Should you require clarification for any of my responses,
please contact me at your convenience.