[House Hearing, 109 Congress]
[From the U.S. Government Printing Office]



 
                PROJECT BIOSHIELD: LINKING BIOTERRORISM
                 THREATS AND COUNTERMEASURE PROCUREMENT
                   TO ENHANCE TERRORISM PREPAREDNESS
=======================================================================



                                HEARING

                               before the

                       SUBCOMMITTEE ON EMERGENCY
                         PREPAREDNESS, SCIENCE,
                             AND TECHNOLOGY

                                 of the

                     COMMITTEE ON HOMELAND SECURITY
                        HOUSE OF REPRESENTATIVES

                       ONE HUNDRED NINTH CONGRESS

                             FIRST SESSION

                               __________

                             JULY 12, 2005

                               __________

                           Serial No. 109-29

                               __________

       Printed for the use of the Committee on Homeland Security
                                     
[GRAPHIC] [TIFF OMITTED] TONGRESS.#13

                                     

  Available via the World Wide Web: http://www.gpoaccess.gov/congress/
                               index.html

                               __________




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                     COMMITTEE ON HOMELAND SECURITY

                 Christopher Cox, California, Chairman

Don Young, Alaska                    Bennie G. Thompson, Mississippi
Lamar S. Smith, Texas                Loretta Sanchez, California
Curt Weldon, Pennsylvania            Edward J. Markey, Massachusetts
Christopher Shays, Connecticut       Norman D. Dicks, Washington
Peter T. King, New York              Jane Harman, California
John Linder, Georgia                 Peter A. DeFazio, Oregon
Mark E. Souder, Indiana              Nita M. Lowey, New York
Tom Davis, Virginia                  Eleanor Holmes Norton, District of 
Daniel E. Lungren, California        Columbia
Jim Gibbons, Nevada                  Zoe Lofgren, California
Rob Simmons, Connecticut             Sheila Jackson-Lee, Texas
Mike Rogers, Alabama                 Bill Pascrell, Jr., New Jersey
Stevan Pearce, New Mexico            Donna M. Christensen, U.S. Virgin 
Katherine Harris, Florida            Islands
Bobby Jindal, Louisiana              Bob Etheridge, North Carolina
Dave G. Reichert, Washington         James R. Langevin, Rhode Island
Michael McCaul, Texas                Kendrick B. Meek, Florida
Charlie Dent, Pennsylvania

                                 ______

     SUBCOMMITTE ON EMERGENCY PREPAREDNESS, SCIENCE, AND TECHNOLOGY

                    Peter T. King, New York Chairman

Lamar S. Smith, Texas                Bill Pascrell, Jr., New Jersey
Curt Weldon, Pennsylvania            Loretta Sanchez, California
Rob Simmons, Connecticut             Norman D. Dicks, Washington
Mike Rogers, Alabama                 Jane Harman, California
Stevan Pearce, New Mexico            Nita M. Lowey, New York
Katherine Harris, Florida            Eleanor Holmes Norton, District of 
Dave G. Reichert, Washington         Columbia
Michael McCaul, Texas                Donna M. Christensen, U.S. Virgin 
Charlie Dent, Pennsylvania           Islands
Christopher Cox, California (Ex      Bob Etheridge, North Carolina
Officio)                             Bennie G. Thompson, Mississippi 
                                     (Ex Officio)

                                  (II)


                            C O N T E N T S

                              ----------                              
                                                                   Page

                               STATEMENTS

The Honorable Peter T. King, a Representative in Congress From 
  the State of New York, and Chairman Subcommittee on Emergency 
  Preparedness, Science, and Technology..........................     1
The Honorable Bill Pascrell, Jr., a Representative in Congress 
  From the State of New Jersey, and Ranking Member, Subcommittee 
  on Emergency Preparedness, Science and Technology..............     3
The Honorable Christopher Cox, a Representative in Congress From 
  the State of California, and Chairman, Committee on Homeland 
  Security:
  Prepared Opening Statement.....................................    24
The Honorable Bennie G. Thompson, a Representative in Congress 
  From the State of Mississippi, and Ranking Member, Committee on 
  Homeland Security..............................................     4
The Honorable Donna M. Christensen, a Delegate From the U.S. 
  Virgin Islands.................................................    29
The Honorable Charlie Dent, a Representative in Congress From the 
  State of Pennsylvania..........................................    31
The Honorable Norman D. Dicks, a Representative in Congress From 
  the State of Washington........................................    42
The Honorable Bob Etheridge, a Representative in Congress From 
  the State of North Carolina....................................    26
The Honorable Jane Harman, a Representative in Congress From the 
  State of California............................................    32
The Honorable Nita M. Lowey, a Representative in Congress From 
  the State of New York..........................................    38
The Honorable Michael McCaul, a Representative in Congress From 
  the State of Texas.............................................    37
The Honorable Stevan Pearce, a Representative in Congress from 
  the State of New Mexico........................................    34
The Honorable Dave G. Reichert, a Representative in Congress From 
  the State of Washington........................................    41
The Honorable Rob Simmons, a Representative in Congress From the 
  State of Connecticut...........................................    35
The Honorable Curt Weldon, a Representative in Congress From the 
  State of Pennsylvania..........................................    27

                               WITNESSES
                                Panel I

Ms. Karen T. Morr, Acting Assistant Secretary, Office of 
  Information Analysis, Information Analysis and Infrastructure 
  Protection, Directorate, Department of Homeland Security:
  Oral Statement.................................................     5
  Prepared Statement.............................................     7
The Honorable Stewart Simonson, Assistant Secretary, Office of 
  Public Health Emergency Preparedness, Department of Health and 
  Human Services:
  Oral Statement.................................................    15
  Prepared Statement.............................................    17
Dr. John Vitko, Jr., Director, Biological Countermeasures 
  Portfolio, Directorate of Science and Technology, Department of 
  Homeland Security:
  Oral Statement.................................................    10
  Prepared Statement.............................................    12

                                Panel II

Dr. Marcus Eugene Carr, Jr., Executive Director, Clinical 
  Research-Hemostasis, Novo Nordisk, Inc.:
  Oral Statement.................................................    44
  Prepared Statement.............................................    45
Mr. Michael Greenberger, Director, Center for Health and Homeland 
  Security, University of Maryland School of Law:
  Oral Statement.................................................    49
  Prepared Statement.............................................    51
Mr. Richard Hollis, Chief Executive Officer, Hollis-Eden 
  Pharmaceuticals, Inc.:
  Oral Statement.................................................    54
  Prepared Statement.............................................    56
Mr. James A. Joyce, Chairman and Chief Executive Officer, Aethlon 
  Medical, Inc.:
  Oral Statement.................................................    64
  Prepared Statement.............................................    66
Mr. David P. Wright, President & Chief Executive Officer, 
  PharmAthene, Inc.:
  Oral Statement.................................................    72
  Prepared Statement.............................................    73
Ms. Nancy Wysenski, President, EMD Pharmaceuticals:
  Oral Statement.................................................    67
  Prepared Statement.............................................    69

                             FOR THE RECORD

Mr. John Vitko Responses to Questions From the Honorable Mike 
  Rogers.........................................................    86


                           PROJECT BIOSHIELD:



                    LINKING BIOTERRORISM THREATS AND



                     COUNTERMEASURE PROCUREMENT TO



                     ENHANCE TERRORISM PREPAREDNESS

                              ----------                              


                         Tuesday, July 12, 2005

                  House of Representatives,
                    Committee on Homeland Security,
                    Subcommittee on Emergency Preparedness,
                                   Science, and Technology,
                                                    Washington, DC.
    The subcommittee met, pursuant to call, at 9:33 a.m., in 
Room 2118, Rayburn House Office Building, Hon. Peter King 
[chairman of the subcommittee] presiding.
    Present: Representatives King, Weldon, Simmons, Pearce, 
Reichert, McCaul, Dent, Cox (ex officio), Pascrell, Dicks, 
Harman, Lowey, Norton, Christensen, Etheridge and Thompson (ex 
officio).
    Mr. King. The subcommittee will come to order.
    Good morning. Let me first welcome our distinguished 
witnesses and say how much we appreciate your appearance before 
us today.
    The purpose of today's hearing is to evaluate the 
Department of Homeland Security and Health and Human Services' 
implementation of the Project BioShield Act of 2004. Initially 
proposed by the President in his State of the Union address in 
2003 and enacted into law exactly 1 year ago, BioShield was 
designed to address the lack of a commercial market for 
countermeasures against CBRN weapons, creating incentives for 
biotechnology and pharmaceutical companies to invest and do 
research in the development of such products. This hearing is 
not the first on BioShield's implementation nor, I am afraid, 
will it be the last.
    Various House and Senate committees have held numerous 
committees examining the Department of Health and Human 
Services BioShield responsibilities, effectiveness of 
BioShield's market incentives and the need for new legislation 
to address the need for additional private sector concerns such 
as liability issues, intellectual property rights and the so-
called ``valley of death,'' which is the transition from basic 
research to countermeasure production. This hearing, however, 
is different. It will focus on the critical yet relatively 
unexamined responsibilities of the Department of Homeland 
Security under BioShield.
     Among other things, the Department of Homeland Security is 
responsible for assessing and determining which agents present 
material threats to our Nation's security. Such assessments and 
determinations are central to BioShield's success. They dictate 
which specific countermeasures may be eligible for procurement, 
the specific requirements and whether they are appropriate for 
inclusion in our Nation's strategic national stockpile, a 
national repository of countermeasures for use in the event of 
a public health emergency.
    The importance of medical countermeasures cannot be 
underestimated. The events of September and October, 2001, made 
it very clear that terrorism, indeed bioterrorism, is a serious 
threat to our Nation and the world. The anthrax mailings of 
2001 killed five people and required thousands to take post-
exposure prophylaxes. If there had not been effective 
countermeasures against that particular strain of anthrax, the 
death toll may have been higher.
    Effective countermeasures exist for few of the biological 
threats deemed the most dangerous by the Centers for Disease 
Control and Prevention. The paucity of such countermeasurers 
stems from the lack of a significant commercial market. Of 
course, diseases such as Marburg and Ebola occur so 
infrequently in nature biotechnology and pharmaceutical 
companies have little incentive to invest the millions of 
dollars required to bring preventive new treatments or vaccines 
to market.
    Experts generally agree that the consequences of a 
bioterror attack could be devastating. Such an attack could 
lead to incalculable fatalities and casualties and sow 
significant fear in the population, lead to a substantial 
reduction in interstate and probably international commerce, 
cause social disruption and severely impact our Nation's 
economy.
    Quite frankly, we cannot afford to fail in developing 
effective countermeasures against such attacks. Having an 
appropriate stockpile of countermeasures--for example, 
vaccines, therapeutics and devices--is critical to our Nation's 
medical preparedness. To that end, I look forward to testimony 
that may clarify many of my questions regarding BioShield 
implementation.
    One of the roles of the Directorate for Information 
Analysis and Infrastructure Protection and Science and 
Technology within DHS is conducting material threat assessments 
and determinations.
    What is the DHS process for prioritizing which agent 
besides those identified by the CDC as Category A agents 
warrant such assessments and determinations?
    What is the quality of the threat information used by the 
Department to fulfill its assessment and determination 
responsibilities, how the Department, given the diversity of 
potential agents and increasing ability to modify or predict 
them, will predict and or emerging threats, whether the 
Department's threat assessment and determination process 
permits adequate consideration, a board's determination or 
overemphasizes the so-called one-bug/one-drug approach.
    Whether the Department's assessment and determination 
process permits adequate consideration of medical devices.
    Whether the Department's assessment and determination 
process places an undue premium on vaccines at the expense of 
anti-infectives, such as post-exposure therapeutics such as 
antibiotics.
    So I want to thank all our witnesses for being here today. 
I look forward to your testimony.
    With that, I recognize the gentleman from New Jersey, the 
distinguished ranking member of the subcommittee, Mr. Pascrell.
    Mr. Pascrell. Thank you, Mr. Chairman; and thank you for 
holding what I consider to be a very critical oversight hearing 
on the implementation of Project BioShield.
    This program was designed to encourage the private sector 
to develop and produce medical countermeasures to combat the 
effects of potential chemical, biological as well as 
radiological or nuclear attacks on American soil. So this is a 
very vital undertaking and one that must be constantly 
monitored with aggressive vigilance. Indeed, we must insure 
that the Federal money dedicated to this program is being spent 
wisely and that Project BioShield is performing up to its 
intended capabilities. We must do this because the somber 
reality of our world today is there are a great many people who 
wish to do us harm and the threat of a WMD attack in the United 
States is very real.
    Remember, it has already happened. In October, 2001, 
anthrax attacks were launched from my home State of New Jersey. 
Two weeks ago, a group of 80 arms control and security experts 
released a survey commissioned by Senator Lugar of Indiana 
stating that they believe there is a 70 percent chance of a WMD 
attack in the next 10 years.
    While we all agree that we should focus our efforts on 
preventing any future attack, we must also insure that our 
citizens and our first responders are adequately protected 
should an attack take place. That is the goal behind the 
program.
    Congress created Project BioShield in 2004 to expedite 
terrorism-related procurement hiring and the awarding of 
research grants. Subsequently, Congress appropriated a great 
deal of money from 2004 to 2013, with a maximum of $890 million 
to be allotted in fiscal year 2004. In November of last year, 
the Department of Health and Human Services awarded the first 
contract of $877.5 million for 75 million doses of a new type 
of anthrax vaccine. Future possible directions for Project 
BioShield include smallpox vaccines, anti-radiation treatments, 
antitoxins and vaccine in the next generation of plague 
vaccine.
    While this pork is enormously important, we have some 
problems, and we must face them now. The private sector 
maintains continued reluctance to participate in the program. 
One reason for this is that vaccines for these diseases are 
inherently risky. Currently, there are no liability protections 
for companies who wish to participate in the program. This is 
an issue we need to discuss because, without robust private 
sector involvement, Project BioShield will fail.
    We also have to look at why many companies view the request 
for proposals aspect of the program so difficult to navigate, 
so unclear in direction.
    Likewise, I am interested in assessing whether the 
Department of Homeland Security and the Department of Health 
and Human Services work effectively together. How many times 
have we heard that question? That many Federal agencies don't 
even talk to each other as answer is an absolute disgrace, 
unacceptable to this chairman, unacceptable to this ranking 
member, unacceptable to everybody on this committee. There is 
no excuse if that is happening, and it is. So we want to know 
if they are working effectively in formulating a response 
strategy and in developing new countermeasures.
    Since DHS has the lead role in securing the homeland and 
its supporting role in Project BioShield, it is vital that this 
committee continues to conduct oversight into the program. We 
will do that. Homeland Security is a partnership. It is a 
partnership between the Federal Government, the State and local 
governments. It is a partnership between government and 
industry. If the current program does not provide adequate 
incentives for industry to participate, then we need to 
reevaluate the program to make sure we will meet all of our 
needs.
    Thank you, Chairman King, for holding this hearing; and I 
look forward to hearing from our distinguished panelists. Thank 
you.
    Mr. King. Thank you, Mr. Pascrell.
    The gentleman from Mississippi, the Ranking Member, Mr. 
Thompson.
    Mr. Thompson. Thank you very much, Mr. Chairman. I welcome 
the witnesses who are going to offer testimony at this very 
important hearing this morning.
    The very real threat of a chemical, radiological or nuclear 
attack is one that government must take seriously and act on 
quickly and effectively. It was in this spirit that Congress 
passed the BioShield Act of 2004. BioShield, though, is only 
the beginning of a continued effort to protect our citizens 
from this continued threat. The BioShield program has had one 
partial success. It is helping to meet the needs required to 
counter the threat of anthrax. Even in this area, we are not 
seeing the necessary development and stockpiling that BioShield 
was designed to produce.
    HHS awarded an $877 million contract for 75 million doses 
of an anthrax vaccine, yet it does not expect to receive any 
doses until 2006. In the meantime, HHS has paid $125 million 
for 5 million doses of a less effective anthrax countermeasure 
from another vendor. What does it take to get it right? We will 
talk a little bit more about that in some of the questions that 
I have for the witnesses.
    One major problem, as I have observed, is that the 
Department of Homeland Security has only completed four 
material threat assessments in the last year. The Center for 
Disease Control has identified 60 pathogens that they consider 
dangerous and could be used as weapons. Each pathogen requires 
a material threat assessment to begin the BioShield process. We 
have no chance of procuring countermeasures for these pathogens 
if the Department only does four assessments in a year.
    Mr. Chairman, I appreciate you calling this hearing today 
on this important topic. I hope the testimony we hear today 
will insure that BioShield fulfills the mission for which 
Congress intended. I yield back.
    Mr. King. Thank you, Mr. Thompson.
    I will introduce our first panel. We have three witnesses:
    Karen Morr, the Acting Assistant Secretary for Office of 
Information Analysis in DHS.
    Dr. John Vitko, the Director of Biological Countermeasures 
Portfolio, Directorate of Science and Technology of the 
Department of Homeland Security.
    The Honorable Stewart Simonson, Assistant Secretary, Office 
of Public Health Emergency Preparedness, Department of Health 
and Human Services.
    Mr. King. Our first witness will be Ms. Morr. You are 
recognized for 5 minutes.

                   STATEMENT OF KAREN T. MORR

    Ms. Morr. Good morning. Thank you, Chairman King, 
Representative Thompson, Representative Pascrell and 
distinguished members of the committee. I thank you for 
inviting me here today to talk with you about the Information 
Analysis Office and our expertise and our threat assessments 
and how we support units throughout DHS as well as our Federal, 
State and local partners.
    I have been with IA since its standup in March of 2003, and 
I am proud to serve with the men and women of IA who have 
worked hard to institutionalize an intelligence capability for 
the Department. We are well on our way to developing a 
Department that conducts operations and makes decisions 
informed by the full spectrum of information and intelligence 
available to DHS.
    I would like to start first by describing the general 
threat and then discuss our processes and products, 
particularly those dealing with bioterrorism.
    The Department takes seriously the threat of bioterrorism. 
Before we became all familiar with al-Qa'ida and the events of 
9/11, groups such as Aum Shinrikyo began employing biological 
agents in attacks. After 9/11, al-Qa'ida expressed its intent 
to pursue biological weapons. Bin Laden himself referenced WMD 
as a religious duty all the way back in 1998.
    Al-Qa'ida documents recovered from a training camp in 
Afghanistan show interest in a variety of biological agents and 
mentioned plague, anthrax, cholera and tularemia. Although our 
military operations in the region probably disrupted ongoing 
biological activity, it is unlikely that such a setback will 
deter the pursuit of these weapons. In fact, it is clear to the 
intelligence community that the intent is there. It is up to 
the intelligence community, including IA, to be constantly on 
guard for indicators of biological production, enhanced 
capabilities and operational planning.
    In order to fulfill our responsibility, IA regularly 
collaborates with the National Counterterrorism Center, CIA, 
FBI, on sharing all sorts of intelligence relating to 
biological and bioterrorist threats. As members of the 
intelligence community, we participate regularly in interagency 
threat assessments. Our analysts coordinate these homeland-
focused analyses on the current as well as the emerging 
biological threats, and we note our differences with the rest 
of the community when they occur.
    Our primary mission, however, is to provide as much 
relevant information as possible to our Federal, State and 
local partners so they understand the nature of this threat and 
can identify and report suspicious activities that could be 
considered preoperational indicators of a bioterrorist attack.
    IA has established a dedicated chemical, biological, 
radiological, nuclear and explosives analytical team in our 
Assessments Division; and they are explicitly devoted to the 
evaluation of all-source information on these threats and 
capabilities. Our analysis is tailored to the DHS customers, 
daily support to the Secretary, Homeland Security Operations 
Center, the Science and Technology Directorate, the Border and 
Transportation Security Directorate, State and local customers.
    Our team is staffed with analysts experienced in 
intelligence and tradecraft as well as the subject matter of 
their portfolio. We have complemented these analysts with 
biological, chemical and nuclear subject matter experts who are 
on detail from various Department of Energy National 
Laboratories through an arrangement with the Science and 
Technology Directorate.
    Generally our analysts are engaged in two categories of 
analytic products. This is what I would call our bread and 
butter.
    The first are typical threat assessments, which are written 
on known actors and are based on specific intelligence. To 
determine threat, we examine an actor's capability and intent. 
We assess capability based on factors such as the actor's level 
of skill or knowledge, their ability to acquire a biological 
agent, the materials necessary to grow the agent and their 
capacity to effectively disseminate a biological agent. For 
intent, in addition to the actor's desire to simply use 
biological weapons, we discern which agents they are more 
likely to pursue, their preferred method of deployment and 
which targets they intend to attack.
    We also perform feasibility assessments. Intelligence is 
never complete or all-knowing, and we cannot wait until 
intelligence is received in order to consider plausible 
scenarios or the impact of a particular technique or technology 
on a bioterrorist's capability. To move beyond this limitation, 
IA, in partnership with S&T, conducts assessments of biological 
processes, emerging technologies and techniques and determines 
their feasibility for use in a bioterrorism event. These 
assessments include indicators that will help to identify if a 
particular venue begins to unfold so we can prevent or disrupt 
the events before they occur.
    In conjunction with these classified feasibility 
assessments, we are producing unclassified excerpts with the 
indicators which are distributed widely to local, Federal, 
State officials, as well as to the private sector to enhance 
their awareness and to increase suspicious activity reporting 
and trigger investigations where necessary.
    We recently published Indicators of Terrorist Production of 
Anthrax in June, 2005, with the knowledge that it will be at 
the local level where these indicators of operational activity 
are most embedded.
    In terms of our tailored support, under the BioShield 
legislation DHS is charged with assessing current and emerging 
threats and determining which of such agents present a material 
threat against the United States population.
    The Science and Technology Directorate, supported by IA, 
has been conducting material threat assessments and material 
threat determinations in order to guide near-term BioShield 
requirements and acquisitions. These material threat 
assessments are intelligence informed. However, they are not 
based on specific intelligence or a known actor. Rather, they 
are speculative in the sense that they represent a best 
estimate of how--
    Mr. King. Ms. Morr, if you could try to wrap it up in the 
next minute or two, because we do have two panels of witnesses 
today.
    Ms. Morr. Okay, I am sorry.
    Mr. King. That is all right.
    Ms. Morr. Currently, the MTAs are drafted by S&T, and IA 
provides assessment before it is provided to HHS. We insure 
that the assessment reflects what IA assesses is the general 
capability of--terrorist capabilities--that are pursuing 
biological weapons. This is an important consideration because, 
if the MTA overestimates the capability, the projected 
casualties and medical countermeasures will be artificially 
inflated. On the other hand, if the adversary is 
underestimated, we could be unprepared. So we perform a 
contribution into the S&T MTA.
    In summary, I guess I will just conclude by saying that IA 
has a robust and complementary chemical and biological analytic 
effort. We are partnering across DHS units with our State and 
local partners; and we are providing actionable, accurate 
expert assessments across the board.
    Mr. King. Thank you. Sorry for the interruption, but we 
have--
    [The statement of Ms. Morr follows:]

                    Prepared Statement of Karen Morr

Introduction
    Good morning Chairman King, Representative Pascrell, and 
distinguished members. Thank you for the privilege to discuss the role 
of the Department of Homeland Security's (DHS) Office of Information 
Analysis (IA) in the threat assessment process and how these 
assessments are used to support our DHS operational components as well 
as our Federal, State, and local partners.
    The Department takes seriously the threat of bioterrorism. On a 
routine basis IA discusses with colleagues at the National 
Counterterrorism Center, CIA, and FBI, all-source intelligence on 
bioterrorist threats and potential operatives, their plans, and 
activities. Also, as members of the Intelligence Community we 
participate in interagency threat assessments. Our analysts coordinate 
their homeland-focused analysis on the current as well as the emerging 
biological threats, noting our differences with the rest of the 
Intelligence Community, when they occur.
    Our primary mission is to provide as much relevant information as 
possible to our Federal, State, and local partners so they understand 
the nature of this threat and can identify and report suspicious 
activities that could be considered pre-operational indicators of a 
bioterrorist attack. We also provide intelligence-derived threat 
information to Federal agencies so they can best tailor research, 
development, and program planning to the current threat streams.
    Today I have been asked to discuss the process by which we develop 
our threat assessments and analytical products, including those for 
BioShield. Last month one of our analysts provided some of the 
Committee members with a classified briefing on the specifics of the 
current bioterrorist threat to the Homeland. I will not be able to 
revisit this classified threat assessment in this open forum but we 
would be happy to provide this information to additional members in a 
closed session.

IA's Approach to Threat Assessment
    IA has established a dedicated chemical, biological, radiological, 
nuclear, and explosives (CBRNE) analytical team in our Assessments 
Division explicitly devoted to the evaluation of all-source information 
on these threats and terrorist capabilities. Our current analysis and 
more in depth strategic threat assessments are tailored to our DHS 
customers, including daily support to the Secretary, the Homeland 
Security Operations Center, and the Science and Technology and Border 
and Transportation Security Directorates. State and local customers 
receive threat assessments as credible information becomes available.
    Our CBRNE team is staffed with analysts experienced in intelligence 
analysis and tradecraft as well as the subject-matter of their 
portfolio. We have complemented these analysts with biological, 
chemical, and nuclear subject-matter experts on detail from various 
Department of Energy National Laboratories through an arrangement with 
the S&T Directorate. These scientists bring deep technical knowledge 
that IA analysts leverage daily in their work so we can provide timely 
and accurate analysis on current WMD-related intelligence and threat 
information.
    On occasion, we require quick access to information that does not 
reside within IA. In these cases, our analysts are supported to the 
Biodefense Knowledge Center (BKC)--a 24x7 support cell based at 
Lawrence Livermore National Laboratory and sponsored by the S&T 
Directorate. The BKC possesses vast repositories of biological 
technical information and is able to access SMEs from around the 
country, such as the U.S. Army Medical Research Institute of Infectious 
Diseases (USAMRIID), the U.S. Army Medical Research Institute for 
Chemical Defense (USAMRICD), and the Armed Forces Medical Intelligence 
Center (AFMIC), in support of a tasking from IA. The BKC compiles the 
appropriate information and relays it to our analysts who integrate the 
information into their finished intelligence analysis.
    Our analysts regularly collaborate with other intelligence 
agencies, particularly NCTC, DIA, FBI, and CIA. We also work with 
experts from government, academic, and private institutions and partner 
with scientists who keep us abreast of their potential areas of concern 
and the trends they see. Interaction with outside public and private 
sector institutions keeps us well-informed of new and emerging 
technology that may be exploited or misused by malicious actors. For 
example, IA recently hosted a workshop on emerging biotechnologies and 
the future biological threat. This provided a forum for non-
governmental experts to provide IA with information of which they 
believe we should monitor.
    Our analysts are broadly focused and access a wide array of 
information in gathering source material for our assessments. They use 
all-source intelligence, scientific and technical information, 
terrorist profiles, historical trends, and open source information such 
as media reports and scientific journal articles. We keep current on 
foreign State biological weapons program developments as these 
activities may have implications for future terrorist events. We look 
at the intent of the enemy, their capabilities, potential scenarios, 
and attack vectors. Working with counterterrorist experts in the 
Community, we develop link charts on potential associates here in the 
United States of operatives abroad who may have received training in 
WMD capabilities or have knowledge of WMD programs.

Bioterrorism Analytical Products
    IA has produced several bioterrorism-related products examining the 
threat posed by specific actors, the potential misuse of biotechnology, 
and to alert operators in the field of possible bioterrorism activity. 
For example, we assessed the implications of the H2N2 influenza 
shipment in which a U.S. contractor sent a highly virulent strain of 
influenza to hundreds of laboratories worldwide. We also recently 
published an Information Bulletin advising State and local law 
enforcement officials of indicators of covert anthrax production. 
Generally, our products fall into two categories: threat assessments 
and feasibility assessments.

Threat Assessments. Threat assessments are written on known actors and 
are based on specific intelligence. To determine threat, we examine an 
actor's capability and intent. We calculate capability based on factors 
such as a particular actor's level of skill or knowledge; their ability 
to acquire a biological agent and the materials necessary to grow the 
agent; and their capacity to effectively disseminate a biological 
agent. For intent, we consider more than just an actor's desire to use 
biological weapons. We attempt to discern which agents they are more 
likely to pursue, their preferred method of deployment, and which 
targets they intend to attack.

Feasibility Assessments. Intelligence is never complete or all-knowing 
and we cannot wait until intelligence is received in order to consider 
plausible scenarios or the impact of a particular technique or 
technology on a bioterrorist's capability. To move beyond this 
limitation, IA, in partnership with S&T, conducts assessments of 
biological processes, emerging technologies, and techniques and 
determines their feasibility for use in a bioterrorism event. These 
assessments include indicators that will help to identify if a 
particular scenario begins to unfold so we can prevent or disrupt 
events before they occur. In conjunction with the feasibility 
assessment, we are producing unclassified excerpts with the indicators 
which are distributed widely to local, State, Federal officials as well 
as the private sector to enhance awareness in the field and to increase 
suspicious activity reporting and trigger investigations where 
necessary.
    IA also has produced several bioterrorism-specific ``red team'' 
products, which explore issues from a terrorist's perspective using 
nongovernmental experts and creative thinkers. These topics have 
included terrorist use of genetically modified food and recombinant DNA 
technologies to damage the U.S. food supply; possible terrorist 
exploitation of a U.S. flu vaccine shortage; and the safety and 
security impacts of a pandemic influenza outbreak.

IA Support to BioShield
    Under the BioShield legislation, DHS is charged with assessing 
current and emerging threats of chemical, biological, radiological, and 
nuclear agents; and determining which of such agents present a material 
threat against the United States population. S&T, supported by IA, has 
been conducting Material Threat Assessments (MTAs) and Material Threat 
Determinations (MTDs) in order to guide near-term BioShield 
requirements and acquisitions.
    MTAs are intelligence-informed; however, they are not based on a 
specific intelligence or a known actor. Rather, they are speculative 
and represent a best estimate of how an adversary may create a high-
consequence event using the agent/weapon in question. Currently, MTAs 
are drafted by the S&T and IA provides comments on the assessment 
before it is provided to HHS. In our review, we ensure that the 
assessment reflects what IA assesses is the general capability of 
terrorist groups that are pursuing biological weapons. This is an 
important consideration; if the MTAs overestimate an adversary's 
capability, the projected casualties and medical countermeasure 
requirements will be artificially inflated. On the other hand, if the 
adversary is underestimated, we could be underprepared and leave a gap 
in our defenses.
    The MTAs result in an estimate of the number of exposed 
individuals, the geographical extent of the exposure, and other 
collateral effects. If these consequences are of such a magnitude to be 
of significant concern to our national security, the Secretary of DHS 
then issues a formal Material Threat Determination to the Secretary of 
HHS, which initiates the BioShield process.
    To date, one MTA has been completed for anthrax and MTAs for 
plague, botulinum toxin, tularemia, radiological devices and chemical 
nerve agents are underway and an MTA for viral hemorrhagic fevers will 
be initiated next month. MTDs have been approved for four agents: 
smallpox, anthrax, botulinum toxin, and radiological/nuclear devices. 
Dr. Vitko will provide more information on MTAs and MTDs and how they 
are used by HHS.

IA Bioterrorism Initiatives
    Now I would like to inform you of some of IA's initiatives to 
improve our bioterrorism threat knowledge and to pass on that knowledge 
to operators in the field.
    In March of this year we established a working group of twelve 
senior biological weapons analysts from various Intelligence Community 
agencies. This group, chaired by IA and vice-chaired by NCTC, was 
formed to provide intelligence support to the DHS National Biodefense 
Analysis and Countermeasures Center (NBACC), which is charged with 
conducting studies and laboratory experiments to fill in information 
gaps to better understand current and future biological threats.
    The working group is initially supporting the first National 
Biological Risk Assessment--a quantitative analysis of biological 
agents based on threat, vulnerabilities, and consequences that will 
enable the U.S. Government to prioritize research and development. 
After the risk assessment is completed later this year, the group will 
serve as the focal point for the Intelligence Community interaction 
with NBACC. The group will provide threat information to NBACC and will 
review their research conducted in support of the Intelligence 
Community.
    In order to get our information out to our largest user community--
local and State law enforcement and first responders, IA, in 
cooperation with NCTC and the FBI, is providing WMD outreach briefings 
around the country. These briefings outline the terrorist WMD threat, 
including descriptions of the types of weapons used and indicators and 
warnings aimed at increase awareness and reporting. In the near future, 
we hope to expand these briefings to other audiences such as academia 
and the private sector to further increase awareness and reporting.
    IA will be playing a key role in supplying current intelligence to 
the National Biosurveillance Integration System (NBIS) operations 
center once it begins operation later this summer. NBIS will fuse 
information on human, plant, and animal health with environmental 
monitoring of air, food, and water systems. This information will be 
integrated with threat and intelligence information to provide real-
time situational awareness and identify anomalies or trends of concern 
to the Homeland Security Operations Center.

Conclusion
    In sum, IA has developed a robust, but complementary, CBRNE 
analysis capability with other partners in the Intelligence Community. 
We remain focused on our unique Departmental niche which is to push as 
much information as possible to our State and local partners on a 
timely basis, to focus exclusively on the possibilities of, and 
potential for, a Homeland-focused attack, and to provide actionable, 
accurate expert assessments to DHS leadership and operational 
components.
    We are building a unique culture and rewarding experience for our 
analysts who are comfortable in their intelligence and operational 
roles and in applying the best scientific knowledge available to the 
U.S. government to combat the enduring CBRNE threat to the Homeland.

    Mr. King. Dr. Vitko, again, if you can try to keep it to 5 
minutes; and the balance of your statement will be made a part 
of the record.

      STATEMENT OF JOHN VITKO, JR., DIRECTOR, BIOLOGICAL 
     COUNTERMEASURES PORTFOLIO DIRECTORATE OF SCIENCE AND 
          TECHNOLOGY, DEPARTMENT OF HOMELAND SECURITY

    Mr. Vitko. I will comply.
    Good morning, Chairman King, Chairman Cox, Congressman 
Pascrell and Ranking Member Thompson and distinguished members 
of the subcommittee. I am pleased to appear before you today to 
discuss the role that the Department of Homeland Security's 
threat and risk assessments play in informing and prioritizing 
BioShield acquisitions and to discuss our close coordination 
with the Department of Health and Human Services throughout the 
process.
    As you know, the Project BioShield Act of 2004 charges the 
Secretary of Homeland Security with the responsibility to 
determine which biological, chemical, radiological and nuclear 
threats constitute a material threat to our Nation's security.
    To fulfill this responsibility, DHS S&T, in partnership 
with Information Analysis and Infrastructure Protection 
Directorate, IAIP, has been conducting formal threat risk 
assessments of the greatest concern to establish plausible 
high-consequence scenarios.
    In this process, IAIP, as you have already heard, in 
concert with other members of the intelligence community, 
provides information on the capabilities, plans and intentions 
of terrorists and other nonstate actors. However, since lack of 
intelligence on a threat does not mean lack of a threat, S&T, 
in concert with the appropriate members of the technical 
community, assesses the technical feasibility of the terrorists 
being able to obtain, disseminate and produce the agent in 
question and the resulting vulnerabilities and consequences. 
This information is used to establish a plausible high-
consequence scenario that provides an indication of the number 
of exposed individuals, the geographical extent of the exposure 
and other collateral effects. If these consequences are of such 
a magnitude to be of significant concern to our national 
security or public health, the Secretary of DHS issues a formal 
threat determination to the Secretary of HHS, which initiates 
the BioShield process.
    To date, the Secretary of DHS has issued material threat 
determinations for four agents: anthrax, smallpox, botulinum 
antitoxin and radiological/nuclear devices. In addition, threat 
and risk assessments are currently under way and will be 
completed this year for plague, tularemia, radiological devices 
and chemical nerve agents; and a threat assessment for viral 
hemorrhagic fevers will be issued next month in August.
    Once a material threat determination has been issued, HHS 
assesses the potential public health consequences of the 
identified agent, determines the needs for countermeasures, 
evaluates the availability of current countermeasures and the 
possibility of development of new countermeasures. They are 
assisted by the interagency Weapons of Mass Destruction 
Countermeasures Subcommittee. Any recommendations issued for 
the acquisition of a specific countermeasure are evaluated 
through the interagency process that forms the basis of U.S. 
government requirements. After approval of these requirements 
by the Office of Management and Budget, HHS issues a request 
for proposals and implements and manages the subsequent 
acquisition process through the delivery of countermeasures 
through the strategic national stockpile.
    Throughout this process DHS works very closely with HHS. 
HHS subject matter experts participate in threat assessments 
and risk assessments. HHS, DHS and Department of Defense co-
chair the WMD Medical Countermeasures Subcommittee; and HHS 
keeps DHS informed about the subsequent acquisition processes. 
These interactions occur at multiple levels, from formal 
interagency committees through bilateral management 
interactions to informal but important contact and 
collaborations amongst the working scientists.
    The threat assessments discussed above focus on those CBRN 
agents widely believed to be of the greatest concerns that 
guide near-term BioShield acquisition policies. In essence, we 
have jump-started the process.
    DHS S&T is also conducting three activities to guide future 
rounds of BioShield acquisition. As part of our 
responsibilities in the President's request for biodefense in 
the 21st century, we are conducting a formal risk assessment 
across a wide range of biological threats, including all 
Category A and B agents from the Centers for Disease Control 
and Prevention threat list, some Category C agents and a number 
of potential engineered threats. These risk assessments will be 
completed by January of 2006 and factor in the technical 
feasibility of producing and disseminating the threat, the 
vulnerability of different portions of our society to those 
threats and the resulting consequences of any such attacks.
    Looking still further into are the future, we have 
partnered with HHS and others in formulating and implementing 
the strategy for anticipating and responding to engineered 
threats. Together, we have developed and informed them of types 
of emerging threats that might be within the ability of a 
terrorist organization to develop the near, mid and longer 
terms and have laid out a strategy for addressing them.
    Realizing that there are still large uncertainties, 
sometimes factors of 10 to 100 and some of the key parameters 
underlying these threat and risk assessments, we have 
established a National Biodefense and Countermeasure Center to 
conduct the laboratory experiments needed to reduce these 
uncertainties. Pending the completion of construction and 
associated facilities on the four-teacher campus in 2008, 
interim capabilities have been established with other 
government and private laboratories to begin this vital work.
    In summary, the DHS Science and Technology Directorate's 
threat and risk assessments play a critical role in 
prioritizing BioShield acquisitions. Throughout the process we 
work closely with our colleagues at HHS to most effectively 
couple HHS expertise on threat and risk with HHS expertise on 
human health to better protect our Nation.
    This concludes my prepared statement. Mr. Chairman, 
Congressman Cox, Congressman Pascrell, Ranking Member and 
members of the subcommittee, I thank you for the opportunity to 
appear before you; and I would be happy to answer any questions 
you may have.
    Mr. King. Thank you, Dr. Vitko.
    [The statement of Mr. Vitko follows:]

        Prepared Statement for the Record of Dr. John Vitko, Jr.

    INTRODUCTION
    Good afternoon, Chairman King, Congressman Pascrell and 
distinguished members of the Subcommittee. I am pleased to appear 
before you today to discuss the role that the Department of Homeland 
Security's (DHS) threat and risk assessments play in informing and 
prioritizing BioShield acquisitions and to discuss our close 
coordination with the Department of Health and Human Services 
throughout that process.
    Before focusing on the Department's specific activities in support 
of Project Bioshield, I would like to put these activities in the 
broader context of the overall responsibilities and activities of the 
DHS Biological Countermeasures Portfolio (Bio Portfolio) which I 
direct. The mission of this Portfolio is to provide the understanding, 
technologies, and systems needed to anticipate, deter, protect against, 
detect, mitigate, and recover from possible biological attacks on this 
nation's population, agriculture or infrastructure.
    In addressing this mission, DHS has a leadership role in several 
key areas and partners with lead agencies in others. Those areas in 
which the Science and Technology (S&T) Directorate provides significant 
leadership are:
         Providing an overall end-to-end understanding of an 
        integrated biodefense strategy, so as to guide the Secretary 
        and the rest of the Department in its responsibility to 
        coordinate the nation's efforts to deter, detect, and respond 
        to acts of biological terrorism.
         Providing scientific support to better understand both 
        current and future biological threats and their potential 
        impacts so as to guide the research and development of 
        biodefense countermeasures such as vaccines, drugs, detection 
        systems and decontamination technologies.
         Developing early warning, detection and 
        characterization systems to permit timely response to mitigate 
        the consequence of a biological attack.
         Conducting technical forensics to analyze and 
        interpret materials recovered from an attack to support 
        attribution.
         Operation of the Plum Island Animal Disease Center to 
        support both research and development (R&D) and operational 
        response to foreign animal diseases such as foot and mouth 
        disease.
    DHS also supports our partnering departments and agencies with 
their leads in other key areas of an integrated biodefense: the 
Department of Health and Human Services (HHS) on medical 
countermeasures and mass casualty response; the Department of Defense 
(DoD) on broad range of homeland security/homeland defense issues; the 
U.S. Department of Agriculture (USDA) on agriculture biosecurity; USDA 
and HHS on food safety; the Environmental Protection Agency (EPA) on 
decontamination and on water security; the Department of Justice on 
bio-terrorism investigations; and the Intelligence Community on threat 
warnings.

THREAT AND RISK ASSESSMENTS
    As noted above, providing threat and risk assessments of both 
current and future threats and the scientific understanding to improve 
and refine these assessments is a major responsibility for DHS. These 
responsibilities are further defined in the BioShield Act of 2004, 
which charges the Secretary of DHS with the responsibility for 
determining which threats constitute a Material Threat to the national 
security or public health of the Nation and in the President's 
Biodefense for the 21st Century, which charges DHS with the lead in 
``conducting routine capabilities assessments to guide prioritization 
of our ongoing investments in biodefense-related research, development, 
planning and preparedness''.
    Today, I would like to focus on four major activities that we have 
undertaken to fulfill these responsibilities and that help guide both 
near and longer-term acquisitions of medical countermeasures:
        1. Material Threat Assessments and Determinations in support of 
        near-term Project BioShield procurements;
        2. Risk Assessments across a broader range of biological 
        threats;
        3. A Strategy for Addressing Emerging Threats (in partnership 
        with the Department of Health and Human Services (HHS) and 
        others);
        4. Scientific research to better inform these threat and risk 
        assessments.

Material Threat Assessments and Determinations In Support of Near-Term 
Project BioShield Procurements
    Working with the DHS Directorate for Information Analysis and 
Infrastructure Protection (IAIP), DHS S&T has been conducting 
assessments and determinations of biological, chemical, radiological 
and nuclear agents of greatest concern so as to guide near-term 
BioShield requirements and acquisitions. In this process, IAIP, in 
concert with other members of the intelligence community, provides 
information on the capabilities, plans and intentions of terrorists and 
other non-state actors. However, since lack of intelligence on a threat 
does not mean lack of a threat, S&T, in concert with appropriate 
members of the technical community, also assesses the technical 
feasibility of a terrorist being able to obtain, produce and 
disseminate the agent in question. This information is used to 
establish a plausible high consequence scenario that provides an 
indication of the number of exposed individuals, the geographical 
extent of the exposure, and other collateral effects. If these 
consequences are of such a magnitude to be of significant concern to 
our national security or public health, the Secretary of DHS then 
issues a formal Material Threat Determination to the Secretary of HHS, 
which initiates the BioShield process.
    To date, the Secretary of DHS has issued Material Threat 
Determinations for four ``agents'': anthrax, smallpox, botulinum toxin, 
and radiological/nuclear devices. Additional threat assessments are 
currently underway for plague, tularemia, radiological devices and 
chemical nerve agents and a threat assessment for viral hemorrhagic 
fevers will be initiated next month.
    Once a Material Threat Determination (MTD) has been issued, the HHS 
then assesses the potential public health consequences of the 
identified agent, determines the need for countermeasures, evaluates 
the availability of current countermeasures and the possibility of 
development of new countermeasures. They are assisted by the 
interagency Weapons of Mass Destruction Medical Countermeasures (WMD-
MC) subcommittee. Any recommendations issued for the acquisition of a 
specific countermeasure are evaluated through interagency processes and 
form the basis of the U.S. Government requirements. After approval of 
these requirements by the Office of Management and Budget, the HHS 
issues a Request for Proposals and implements and manages the 
subsequent acquisition process through delivery of the countermeasures 
to the Strategic National Stockpile.
    Throughout this process DHS works very closely with HHS. HHS 
subject matter experts participate in the threat assessments. HHS, DHS, 
and DoD co-chair the WMD-MC committee. And HHS keeps DHS informed about 
the subsequent acquisition process. These interactions occur at 
multiple levels from formal interagency committees (WMD-MC) through bi-
lateral management interactions to informal but important contact and 
collaborations amongst the working scientists.

Risk Assessments Across a Broader Range of Biological Threats
    The preceding discussion dealt with threat assessments of those 
CBRN agents widely agreed to be of greatest concern so as to guide 
near-term BioShield acquisition processes. As part of its 
responsibility in the President's National Biodefense Strategy, DHS is 
conducting a formal risk assessment of a much broader set of biological 
agents to help prioritize the nation's ongoing biodefense activities, 
including subsequent rounds of BioShield acquisitions. These risk 
assessments provide a systematic look at the technical feasibility of a 
broad range of biological threats, the vulnerability of different 
portions of our society to those threats, and the resulting 
consequences of any such attacks.
    The first such formal risk assessment is due in the winter of 2006, 
with subsequent assessments due every two years. The scope, process and 
timescale for this first assessment have been presented to and agreed 
to by the interagency Biodefense Policy Coordinating Committee co-
chaired by the Homeland Security Council and the National Security 
Council. This assessment is addressing:

         All six category A agents from the Centers for Disease 
        Control and Prevention (CDC) threat list;
         All 12 category B agents;
         Five representative category C agents; and
         A number of candidate drug-resistant and emerging 
        agents.

Key outputs will include:
         A list of bio-threats prioritized by risk;
         A prioritized list of critical knowledge gaps that if 
        closed should reduce risk assessment uncertainty and guide bio-
        defense research and development; and
         A list of biodefense vulnerabilities that could be 
        reduced by countermeasure development and acquisition.
    This risk assessment is being conducted in partnership with the 
Intelligence Community, the HHS, the Department of Defense, the U.S. 
Department of Agriculture, the Environmental Protection Agency and 
others. Two advisory boards, one a Government Stakeholders Advisory 
Board and the other an Independent Risk Assessment Expert Review Board 
(academia, industry and government) have been established to provide 
input and advice.
    This and subsequent risk assessments will play a critical role in 
informing future biodefense programs across all agencies, including 
BioShield acquisitions and the longer-term medical R&D leading up to 
such acquisitions.

A Strategy for Addressing Emerging Threats
    Much of the biodefense efforts to date have focused on protecting 
against attacks with bioterrorism agents that can be (or used to be) 
found in nature. However, rapid advances in biotechnology demand that 
we also consider the possibility and impact of emerging or engineered 
agents. e.g. modifications to organisms that increase their resistance 
to medical countermeasure or make them more difficult to detect. The 
President's Biodefense for the 21st Century assigns the HHS the lead in 
anticipating such future threats. We, DHS S&T, are partnering with HHS 
and others in formulating and implementing a strategy for anticipating 
and responding to such threats.
    Based on intelligence information, available literature and expert 
judgment, we have developed an informed estimate of the types of 
emerging threats that might be within the ability of a terrorist 
organization to develop over the near (1-3 years), mid (4-10 years), 
and longer-terms (10 yrs). We have also examined the impact of these 
threats on the four pillars of the National Biodefense Policy: Threat 
Awareness, Prevention and Protection, Surveillance and Detection, and 
Response and Recovery.
    In this analysis, four elements stand out as essential to an 
effective defense against emerging threats:
         Threat, vulnerability and risk assessments to 
        prioritize these threats in terms of the difficulty of their 
        development and deployment, as well as their potential 
        consequences;
         Surveillance and detection capabilities to rapidly 
        detect and characterize engineered agents in environmental and 
        clinical samples so as to provide timely guidance in the 
        selection of the appropriate medical countermeasure;
         An expanded range of safe and effective medical 
        countermeasures and an infrastructure to support rapid 
        research, development, test and evaluation (RDT&E) of new 
        medical countermeasures; and
         integrated concepts of operation (CONOPS) for the 
        identification and response to emerging threats. In addition to 
        conducting these assessments, DHS will continue to collaborate 
        with HHS as it leads efforts to anticipate agents and to 
        facilitate the availability of medical countermeasures.

Scientific research to better inform these threat and risk assessments
    The threat and risk assessments described above are performed with 
the best available information. However, there are large uncertainties, 
sometimes factors of ten to a hundred, in some of the key parameters 
and hence in the associated risks. One of the major functions of the 
threat and risk assessments is to identify these critical knowledge 
gaps, which can differ for different threat scenarios--in one case it 
can be the minimum amount of agent needed to infect a person; in 
another case it can be the time that such an agent remains viable 
(capable of causing an infection) in the air, food or water; and in a 
third it can be the effect of food processing or water treatment on the 
agent's viability. Conducting the laboratory experiments to close the 
critical knowledge gaps is a primary function of DHS's National 
Biodefense Analysis and Countermeasures Center (NBACC).
    Congress has appropriated a total of $128M for design and 
construction of NBACC with the necessary biocontainment laboratory 
space and support infrastructure to conduct these and other 
experiments. NBACC will be built on the National Interagency Biodefense 
Campus (NIBC) at Ft. Detrick MD, where its close physical proximity to 
the DoD's United States Army Medical Research Institute for Infectious 
Diseases (USAMRIID), the NIH's Integrated Research Facility and the 
USDA's Foreign Disease-Weed Science Research Unit. NBACC is also 
collaborating with the Centers for Disease Control and Prevention to 
further address the critical knowledge gaps. The Record of Decision for 
NBACC's Final Environmental Impact Statement was signed in January 
2005. Design of the facility began in March 2005, with construction 
scheduled to begin in FY 2006 and be complete by the fourth quarter of 
FY 2008.
    Currently, interim capabilities for both NBACC's biological threat 
awareness and bioforensic analysis functions have been established with 
other government and private laboratories to allow vital work in these 
areas to occur during the NBACC facility's construction.

CONCLUSION
    In summary, the DHS Science and Technology Directorate's programs 
in threat and risk assessment play a critical role in prioritizing both 
near and longer-term BioShield acquisitions and hence in furthering the 
Committee's goal of ``Linking Bioterrorism Threats and Countermeasure 
Procurement to Enhance Terrorism Preparedness''. Throughout this 
process we work closely with our colleagues at HHS through a variety of 
interagency, bi-lateral, and informal scientist-to-scientist 
interactions so as to most effectively couple DHS expertise on the 
threat with HHS expertise on human health to better protect our Nation.
    This concludes my prepared statement. With the Committee's 
permission, I request my formal statement be submitted for the record. 
Mr. Chairman, Congressman Pascrell, and Members of the Subcommittee, I 
thank you for the opportunity to appear before you and I will be happy 
to answer any questions that you may have.

    Mr. King. Now Secretary Simonson.

    STATEMENT OF THE HONORABLE STEWART SIMONSON, ASSISTANT 
  SECRETARY, OFFICE OF PUBLIC HEALTH EMERGENCY PREPAREDNESS, 
             DEPARTMENT OF HEALTH AND HUMAN SERVICE

    Mr. Simonson. Thank you.
    Good morning, Mr. Chairman, Chairman Cox, Mr. Pascrell, Mr. 
Thompson and other members of the committee. I am Stewart 
Simonson, Assistant HHS Secretary for Public Health and 
Emergency Preparedness. I appreciate the opportunity to share 
with you information on the Department's progress on 
implementing the Project BioShield Act of 2004 and specifically 
the linkage between acquisition programs and threat assessments 
provided by our colleagues at the Department of Homeland 
Security.
    The events of September and October of 2001 made it very 
clear that terrorism is a serious threat to our Nation and to 
the world. The Bush Administration and Congress responded 
forcefully to this threat by strengthening our medical and 
public health capacities to protect our citizens from future 
attacks. To encourage the development of new medical 
countermeasures against threat agents and to speed their 
delivery, President Bush in his 2003 State of the Union Address 
proposed--and Congress subsequently enacted--Project BioShield. 
The $5.6 billion 10-year Special Reserve Fund was created to 
assure developers of medical countermeasures that funds would 
be available for the government to purchase critical products. 
Since enactment, my office has moved aggressively to fill 
immediate gaps in our countermeasure armamentarium.
    A genuine sense of urgency influences all of our Homeland 
Security work at HHS, but it is important to note that the 
successful development and manufacture of safe and effective 
countermeasure requires an investment of both money and time. 
No matter how hard we try, some steps in the process cannot be 
rushed. There is a complex spectrum of effort needed along the 
research and development pipeline to produce a use able medical 
countermeasure. Defining specifications for a needed 
countermeasure often reveals few, if any, candidates in the 
pipeline. To date, we have been fortunate that some of our 
highest priority needs for medical countermeasures could be 
addressed using the available advanced development products 
already in the pipeline.
    In determining the requirements and evaluating options for 
medical countermeasure acquisition, the focal point for the 
U.S. government interagency efforts is the Weapons of Mass 
Destruction Medical Countermeasure Subcommittee. HHS, along 
with representatives from the Department of Homeland Security 
and the Department of Defense, chairs the WMD subcommittee; and 
stakeholders from throughout the U.S. government are 
represented on its working groups.
    In setting priorities for medical countermeasure 
acquisitions under Project BioShield, the WMD subcommittee 
considers a number of factors, the credibility and immediacy of 
specific threats or driving factors and are informed by 
material threat assessments conducted by our colleagues at DHS.
    Among biological threat agents, smallpox and anthrax are 
widely recognized as having the greatest potential to cause 
catastrophic harm. Material threat determinations for these 
agents were among the first ones made by the Secretary of 
Homeland Security, along with those for botulinum antitoxin and 
radiological and nuclear agents. We also can consider the 
current and projected availabilities of appropriate medical 
countermeasures as well as the target population for which the 
countermeasure would be used.
    In addition, logistical issues are considered, such as the 
feasibility of deployments in a medical public health 
emergency, shelf life, storage life and maintenance 
requirements.
    Project BioShield requires a number of findings by the 
Secretaries of Homeland Security and HHS prior to an 
acquisition commencing. These findings include three 
determinations: first, that there is a material threat against 
the U.S. population sufficient to affect national security; 
second, that medical countermeasures are necessary to protect 
the public health from that material threat; third, that 
acquiring a specific quantity of a particular medical 
countermeasure, using the Special Reserve Fund, is appropriate.
    These determinations are followed by a joint recommendation 
to the White House by the two Secretaries. If approved, 
Congress is notified and HHS executes the acquisition program.
    The process that I have outlined has been successfully 
implemented through contract award three times since the 
enactment of Project BioShield nearly a year ago. HHS has 
completed contract awards for acquisitions for next-generation 
recombinant protective antigen anthrax vaccine, the current-
generation licensed anthrax vaccine and the pediatric 
formulation of potassium iodide. Additionally, the acquisition 
process is in the final execution phases for several other 
needed medical countermeasures, including anthrax therapeutics, 
botulinum antitoxin and a next-generation smallpox vaccine. All 
of these acquisition programs have been threatened by material 
threat determinations by DHS.
    This robust interagency process mines the expertise in the 
scientific and intelligence communities to define requirements 
for medical countermeasures and enables policymakers to 
identify and evaluate acquisition options to address immediate 
and future needs.
    As we move forward with implementation of Project 
BioShield, the decisions about priority setting for how best to 
use the remaining funding will become more challenging and more 
dependent on guidance from DHS.
    I must emphasize that the number of threat agents from 
which we could guard ourselves is endless. New and emerging 
threats introduced by man or nature will present continuing 
challenges. Although we cannot be prepared for every potential 
threat, we are implementing a strategic approach for 
identifying and combatting the highest priority threats as 
assessed in large part by our colleagues at DHS.
    In closing, let me say that HHS has a clear mandate from 
President Bush and Congress to lead the charge in medical 
countermeasure development. We have already made important 
strides to address the public health needs of the Nation, but 
more needs to be done.
    Mr. Chairman, I look forward to working with you, 
Congressman Pascrell and the subcommittee to address the 
challenges of CBRN preparedness and its impact on public 
health. I would be happy to answer any questions.
    Mr. King. Thank you for your testimony, Mr. Simonson.
    [The statement of Mr. Simonson follows:]

              Prepared Statement of Hon. Stewart Simonson

    Good morning, Chairman King, Mr. Pascrell, and Subcommittee 
members. I am Stewart Simonson, Assistant Secretary for Public Health 
Emergency Preparedness, Department of Health and Human Services (HHS). 
I appreciate the opportunity to share with you information on the 
Department's progress in research, development and acquisition programs 
for medical countermeasures, particularly with regard to the 
implementation of the Project BioShield Act of 2004 (``Project 
BioShield''), and in particular, the linkage of our acquisition 
programs to threat assessment provided by our colleagues at the 
Department of Homeland Security (DHS). These programs are vital 
components of our strategy to protect the Nation from threats posed 
from chemical, biological, radiological and nuclear (CBRN) threats. 
Defending against such threats is a top priority for the Bush 
Administration and having an appropriate armamentarium of medical 
countermeasures is a critical element of the response and recovery 
component of the President's ``21st Century Strategy for Biodefense.'' 
The acquisition and ready availability of medical countermeasures, such 
as antibiotics, antivirals, monoclonal and polyclonal antibodies 
against infectious threats, therapies for chemical and radiation-
induced illnesses, and vaccines to protect against exposure from 
biological agents are essential to our Nation's preparedness and 
response capabilities.

Protecting Americans
    The events of September and October 2001 made it very clear that 
terrorism-indeed bioterrorism- is a serious threat to our Nation and 
the world. The Bush Administration and Congress responded forcefully to 
this threat by providing funding to strengthen our medical and public 
health capacities to protect our citizens from future attacks. 
Specifically, substantial increases in funding for research, 
development and acquisition of medical countermeasures against 
biological threats were directed to the National Institutes of Health 
(NIH) and the Centers for Disease Control and Prevention's Strategic 
National Stockpile (SNS or ``the Stockpile''). To further encourage the 
development of new medical countermeasures against chemical, 
biological, radiological and nuclear agents and to speed their delivery 
and use should there be an attack, President Bush, in his 2003 State of 
the Union address proposed and Congress subsequently enacted Project 
BioShield. The Special Reserve Fund, appropriated with $5.6 billion was 
created to assure developers of medical countermeasures that funds 
would be available to purchase these critical products for use to 
protect our citizens.

The Strategic National Stockpile Today
    The wake-up call that we received in the fall of 2001 highlighted 
the gaps in our medical countermeasure armamentarium and we immediately 
began working to address them. Although much remains to be done, we 
have made significant progress in building our Strategic National 
Stockpile from that time to what we have on-hand today. For example, 
our smallpox vaccine stockpile has grown from 90,000 ready-to-use doses 
in 2001 to enough vaccine to protect every man, woman, and child in 
America. Major strides have been made in building our medical 
countermeasure reserve against anthrax, plague, and tularemia. We are 
now able to protect and treat millions of Americans in the event of an 
attack with one of these agents. We have taken the botulinum antitoxin 
program started by the Department of Defense in the early 1990s to 
completion and we are now building our botulinum antitoxin stockpile 
further. We have also built our stockpile of countermeasures to address 
the effects of radiation exposure with products such as Prussian Blue 
and diethylenetriaminepentaacetate (DTPA). These countermeasures act to 
block uptake or remove radioactive elements such as cesium, thallium, 
or americium from the body after they are ingested or inhaled. 
Potassium iodide, a drug that can protect the thyroid from the harmful 
effects of radioactive iodine, is also in the Stockpile.

The Strategic Approach to Addressing Medical Countermeasure Gaps
    The initial focus of our efforts to protect the Nation was aimed 
largely at those threats that could do the greatest harm to the 
greatest number of our citizens. Among biological threat agents, 
smallpox and anthrax are widely recognized as having the greatest 
potential to cause catastrophic harm. These Material Threat 
Determinations were among the initial ones made by the Secretary of 
Homeland Security. A sense of urgency has pervaded our efforts and we 
have defined new ways of doing business. Our new national security 
environment demands accelerated product development timelines and new 
paradigms of interactions between industry and government with 
increased risk-sharing and enhanced intra-governmental collaboration.
    The focal point for USG interagency efforts to prioritize and 
coordinate medical countermeasures acquisition programs is the Weapons 
of Mass Destruction Medical Countermeasures (WMDMC) Subcommittee 
(``WMDMC Subcommittee''). HHS, along with representatives from the 
Department of Homeland Security (DHS) and the Department of Defense 
(DoD), co-chairs the WMDMC Subcommittee and stakeholders from 
throughout the USG are represented on it. Because HHS is the primary 
federal agency responsible for the development and acquisition of 
priority medical countermeasures, we have a major leadership role in 
the WMDMC Subcommittee.
    The cornerstone of any sound acquisition program is the 
determination and prioritization of requirements and this is a primary 
activity of the WMDMC Subcommittee. In setting priorities for medical 
countermeasure acquisition under Project BioShield, the WMDMC 
Subcommittee considers a number of factors. The credibility and 
immediacy of the specific threats are driving factors and are informed 
by Material Threat Assessments (MTAs) conducted by the DHS. Acting 
Assistant Secretary Morr and Dr. John Vitko, here today representing 
DHS, will provide insight into these efforts. Other factors include an 
evaluation of the availability of appropriate countermeasures, both 
current and projected, and the target population for which the medical 
countermeasure would be used. In addition, logistical issues are 
considered such as the feasibility of deployment in a public health 
emergency, shelf life, and the storage and maintenance requirements. 
Project BioShield also requires a number of findings by the Secretaries 
of Homeland Security and HHS prior to an acquisition commencing. These 
findings include:
        --Determination of material threat against the US population 
        sufficient to affect national security. This determination is 
        made by the Secretary of Homeland Security.
        --Determination that countermeasures are necessary to protect 
        public health. This determination is made by the Secretary of 
        HHS.
        --Determination of the appropriateness of funding acquisition 
        of the countermeasure with the Special Reserve Fund (SRF). This 
        determination is made by the Secretary of HHS.
    Once these determinations are made, a joint recommendation for the 
acquisition is presented to the White House by the two Secretaries. If 
approved, Congress is notified and HHS executes the acquisition 
program.
    The process that I have outlined for you has been successfully 
implemented three times since the enactment of Project BioShield less 
than one year ago. HHS has completed contract awards for acquisitions 
of the next-generation recombinant protective antigen (rPA) anthrax 
vaccine, the current-generation licensed anthrax vaccine (Anthrax 
Vaccine Adsorbed, AVA), and the pediatric formulation of potassium 
iodide. Additionally, the acquisition process is in the final execution 
phases for several other needed medical countermeasures including 
anthrax therapeutics, botulinum antitoxin, and a next-generation 
smallpox vaccine.
    This robust interagency process mines the expertise of subject 
matter experts in the scientific and intelligence communities to define 
requirements for medical countermeasures and enable policy makers to 
identify and evaluate acquisition options to address immediate and 
future needs.

Application of the Strategic Approach: Anthrax.
    The efficiency and effectiveness of the steps used to identify, 
prioritize, and acquire needed medical countermeasures is best 
exemplified by our efforts to protect the Nation in the event of an 
anthrax attack. It will also illustrate intra-agency and interagency 
processes.
    Although anthrax is not transmissible from person-to-person, an 
attack involving the aerosol dissemination of anthrax spores, 
particularly in an urban setting, is considered by public health 
experts to have the potential to cause catastrophic damage. The 
potential for large-scale population exposure following aerosol release 
of anthrax spores, the threat demonstrated by the anthrax letters, and 
our knowledge that anthrax had been weaponized by state-actors, 
highlighted the nature of the threat. The Secretary of Homeland 
Security determined that anthrax presented a material threat against 
the United States population sufficient to affect national security. 
Because untreated inhalation anthrax is usually fatal, the Secretary of 
HHS identified anthrax as a significant threat to public health.
    The approach to protect citizens against this threat demanded 
immediate, intermediate and long-term strategies and requirements. 
First, the existing stockpile of antibiotics in the Strategic National 
Stockpile was increased. Second, there is a need for a licensed vaccine 
to be used not only for pre-exposure protection for laboratory and 
other workers at known risk for anthrax, but for use along with 
antibiotics after an exposure, which could decrease the currently 
recommended 60-day course of antibiotic therapy.
    Anthrax spores are stable in the environment and would have a 
profound impact if released in an urban population. Therefore, 
availability of a vaccine may be a critical requirement for 
repopulation and restoration of the functionality of any exposed area.
    Due to limitations inherent in the currently available anthrax 
vaccine, there is consensus in the scientific community about the need 
to develop and acquire a next-generation anthrax vaccine using 21st 
century technologies An assessment of developing technologies was 
undertaken by HHS experts in the fall of 2001 and the decision was made 
that there was a sufficient scientific foundation, including a detailed 
understanding of the pathogenesis of anthrax and how anthrax vaccines 
provide protective immunity, to support the aggressive development of a 
next generation vaccine consisting of recombinant protective antigen 
(rPA). The research undertaken to develop this vaccine, spanning more 
than a decade, was conducted in large part by the United States Army 
Medical Research Institute of Infectious Diseases (USAMRIID) at Fort 
Detrick, Maryland.
    HHS defined a three-stage development and acquisition strategy with 
open competition for awards at each stage. The early and advanced 
development programs were supported by the NIH's National Institute of 
Allergy and Infectious Diseases (NIAID) with contract awards in 
September 2002 and 2003, respectively. These were milestone-driven 
contracts with well-defined deliverables, including the manufacture of 
clinical-grade vaccine, the conduct of Phase I and Phase II clinical 
trials, and consistency lot manufacturing of vaccine. Large-scale 
manufacturing capacity would be required to support the civilian 
requirement for this medical countermeasure, which was defined by the 
WMD Subcommittee to be the initial protection of up to 25 million 
persons. Senior officials from several Departments of the USG evaluated 
acquisition options to achieve this requirement and, in the fall of 
2003, approved the decision to pursue this acquisition of rPA anthrax 
vaccine.
    An evaluation of the NIAID rPA anthrax vaccine development program 
indicated that it was robust enough to suggest that the rPA vaccine 
could become a licensed product within the statutory requirements. In 
March 2004, the acquisition program for this vaccine, under the 
direction of my office, was launched using the Special Reserve Fund 
created in the FY 2004 DHS appropriations bill. Utilizing a robust 
technical and business evaluation process, we reviewed multiple 
proposals and negotiated a contract for the acquisition of 75 million 
doses of the vaccine (anticipating a three-dose regimen). Using a 
milestone and deliverables approach similar to the ACAM2000 smallpox 
vaccine development and acquisition program, and the rPA anthrax 
vaccine development contracts at NIAID, the rPA vaccine BioShield 
acquisition contract lays out an ambitious program for the production 
of this vaccine. In accordance with Project BioShield, a critical 
aspect of this acquisition contract is the fact that no payment for 
product is made until a usable product is delivered to the SNS. While 
awaiting delivery of the rPA anthrax vaccine to the SNS, my office 
awarded a contract last month for 5 million doses of the currently 
licensed AVA vaccine to support immediate requirements. Delivery of 
this product to the Stockpile began soon after contract award and over 
one million doses of the licensed anthrax vaccine are now in the SNS.

Application of the Strategic Approach: Other Medical Countermeasures
    In an effort to fill other medical countermeasure gaps, we have 
made progress in contracting for products that are or will soon be 
delivered to the SNS.

Potassium Iodide.
    In March 2005 a contract was awarded under Project BioShield for a 
pediatric liquid formulation of potassium iodide, a drug that helps 
limit risk of damage to the thyroid, from radioactive iodine. This 
formulation is aimed at young children who have difficulty taking pills 
and are at the highest risk of harmful effects from exposure to 
radioactive iodine. This acquisition will provide needed protection for 
at least 1.7 million children. Product delivery began in May and should 
be completed by the end of the fiscal year.

Ongoing Project BioShield activities.
    In addition to the acquisition contracts that have been awarded 
since enactment of Project BioShield, there are several other important 
BioShield procurement-related activities underway. We are engaged in 
contract negotiations for anthrax therapies, and we are continuing to 
move forward on the acquisition of an antitoxin treatment for botulism. 
Furthermore, HHS has moved forward with the initial stages of an 
acquisition program for a next generation smallpox vaccine to meet a 
requirement for this product that addresses the millions of U.S. 
citizens who have contraindications for existing smallpox vaccines. A 
synopsis has been announced indicating that the RFP would be released 
later this month. This follows the consideration of industry comments 
received in response to a draft RFP that was released in May. We have 
also sought information from industry by releasing an RFI to assess the 
state of development of therapeutics for acute radiation syndrome.
    Finally, in anticipation of yet to be determined requirements, we 
actively monitor the state of the medical countermeasure pipeline--both 
within and outside the government--by evaluating USG research and 
development portfolios and engaging industry through the publication of 
Requests for Information (RFIs). For example, we have recently released 
three RFIs to assess the timeline to maturity of medical 
countermeasures to treat nerve agent exposure, acute radiation 
syndrome, and additional products that might be available to treat 
anthrax. These requests are a key tool for HHS to dialogue with 
industry partners and to inform the development of sound USG 
acquisition strategies.

Priority Setting Beyond Smallpox and Anthrax
    The approach taken to rapidly expand our Nation's response capacity 
to meet the medical and public health impact of either a smallpox or 
anthrax attack demonstrate our national resolve to address these 
threats. However, in many ways, anthrax and smallpox represent the 
``low hanging fruit'' for medical countermeasure research, development 
and acquisition and was largely made possible by a substantial research 
base developed by USAMRIID and NIH. There was consensus that these were 
our highest priorities and we had countermeasures available or 
relatively far along in the development pipeline to permit acquisition. 
Given an almost endless list of potential threats with finite resources 
to address them, prioritization is essential to focus our efforts. We 
rely heavily upon our interagency partner, the Department of Homeland 
Security, to provide us with a prioritized list of threats along with 
material threat assessments that will include reasonable estimates of 
population exposure. This information is critical for future strategic 
decision making regarding how best to focus our National efforts in 
countermeasure development and acquisition, including whether in the 
short-term, the so-called ``one-bug, one-drug'' approach should 
continue while simultaneously investing in more broad-spectrum 
prevention and treatment approaches for the longer term.

Novel and Emerging Threats
    The initial efforts for medical countermeasure development and 
acquisition have been rightfully focused on those threat agents known 
to have the potential to inflict catastrophic harm on our Nation. In 
addition, HHS and NIH are investing in efforts to address threat agents 
that we might face in the future, including engineered threats.
    As is also the case for the known threat agents, we depend upon our 
colleagues at DHS to lead efforts to identify and prioritize these 
threats. One of the most recognized potential engineered threats is 
antibiotic-resistant anthrax, and the HHS, NIH and the U.S. Food and 
Drug Administration (FDA) accomplishments to date in facilitating the 
development and acquisition of anthrax vaccines and therapeutic 
antitoxins have made an important impact on reducing our 
vulnerabilities in this area. In addition, NIH has made a robust 
investment in the development of novel antimicrobial agents and in 
addressing all aspects of antibiotic resistance. For example, 
investments have been made in the development of antibacterial agents 
that could potentially be useful against a broad spectrum of species 
and a wide range of drug resistance mechanisms. Finally, NIH is working 
with DoD to leverage medical countermeasure programs and resources of 
mutual interest.

Challenges to Rapidly Expanding the Strategic National Stockpile
    Although defining priorities and quantifying the size of the threat 
to the population are the key steps in focusing our efforts, we must be 
mindful of the realities of the spectrum of efforts needed along the 
research and development pipeline to produce a useable medical 
countermeasure. The process of defining required specifications for a 
countermeasure often reveals few, if any, candidates in the pipeline. 
Basic research and early development efforts, even when robustly 
funded, often take years before a concept is mature enough for advanced 
development. The development of medical products--whether for cancer, 
influenza, or anthrax--is a complex, lengthy, and expensive process. 
Ultimate licensure, approval or clearance from FDA requires the 
rigorous accumulation of sufficient data in humans and animals to 
establish the safety and efficacy of the product for a specific use and 
the ability to consistently manufacture the product to meet the 
appropriate standards. It is important to note that a unique aspect of 
the pathway for medical countermeasures is the need to establish 
efficacy either using surrogate markers (such as the human immune 
response) or, using appropriate animal models, under the ``Animal 
Rule'' (Federal Register 67:37988-37998, 2002) because demonstration of 
efficacy against the actual diseases in humans is most often not 
feasible either because the disease does not occur naturally or for the 
obvious ethical reasons that prevent exposing humans to the threat 
agent. The USG is working to provide support for the developers of 
priority medical countermeasures through the research and development 
phases, and, when a product has reached the advanced development stage, 
Project BioShield provides an important incentive for manufacturers to 
take the product the rest of the way through the pipeline. And, as I 
have outlined here today, in the less than one year since Project 
BioShield was enacted, the incentive has expedited final development of 
several products for the Stockpile.

Conclusion
    In closing, I must emphasize that the number of threat agents 
against which we could guard ourselves is endless and new and emerging 
threats introduced by nature or man will present continuing challenges. 
Although we cannot be prepared for every threat, we are implementing a 
strategic approach for identifying and combating the highest priority 
threats as assessed, in large part, by our colleagues from DHS. HHS and 
its agencies including NIH, CDC, and FDA, have a clear mandate from 
President Bush and Congress to lead the charge in responding to threat 
assessments and implementing sound development acquisition programs for 
priority medical countermeasures. We have already made important 
strides and will continue to work to address the obstacles identified. 
Mr. Chairman, I look forward to working with you and members of the 
Subcommittee to address the challenges of bioterrorism preparedness and 
its impact on public health.
    I will be happy to answer any questions you may have.

    Mr. King. Ms. Morr, if IA information analysis has an 
assessment division with a staff of chemical, biological, 
radiological and nuclear experts, why is the S&T directorate 
the lead office for conducting BioShield assessments? Do you 
feel that IA is sufficiently involved in that process?
    Ms. Morr. Yes, I would distinguish the two processes as IA 
putting into the threat process as we know it--that is our 
bread and butter--every day; and the material threat 
assessments in our view are really better characterized as risk 
assessments because they take into account consequences and 
some vulnerabilities and are pushing the high end of the venue. 
So, yes, we are--we feel that we are involved.
    Mr. King. Let me ask this question for the entire panel. As 
far as organizational issues between DHS and HHS and, you know, 
whether or not there is impediments to getting the job done, 
wouldn't it be better for there to be only one process where 
DHS and HHS experts worked collaboratively to produce the best 
model assessment with respect to a given threat, rather than 
have it at two different junctures?
    Mr. Vitko. I will start. Maybe Stew wants to follow up.
    I think it could be done either way. I think the way it is 
structured now it falls into the natural domain. They are done 
collaboratively. HHS participates in the threat and risk 
assessments. We at DHS, in fact, participate in discussions 
around the medical countermeasure options and selections. It is 
just that we each have a natural expertise in an area and lead 
that portion. So by the assignment that is given it makes a 
clear responsibility for somebody to carry that action through 
and follow up on it.
    Mr. Simonson. I agree with what Dr. Vitko said. It is done 
in a collaborative manner right now. The statute assigns very 
specific responsibility, as you know, to DHS for preparing the 
material threat determination. But we have tried through the 
short life of this program to do things in a collaborative way.
    Mr. King. Let me ask a more general question.
    Based on the statement that Congressman Pascrell made at 
the opening of the hearing, that is a concern that we have 
generally, that we have Federal agencies now not talking to 
other departments, not talking to each other, not cooperating 
sufficiently. What can you tell us today here about the 
cooperation of HHS and DHS on this vital issue?
    Mr. Simonson. I think there is an enormous level of 
cooperation among us. I think as the bill was being put 
together--this is one of the objectives in creating a joint 
institution essentially. The money is at DHS, the intel 
expertise is at DHS, the scientific public health expertise is 
at our place. So I think from the beginning it was intended to 
be a collaborative effort, joint institution. I think it has 
been getting better, and I think it is pretty good right now, 
frankly.
    Mr. King. Anyone else wish to comment?
    Mr. Vitko. I would be happy to.
    Mr. King. This is an overriding issue overall, why I 
appreciate your comments on this.
    Mr. Vitko. I think in this case we may be dealing with an 
exemplary process. Assistant Secretary Simonson said the 
legislation puts the responsibilities for that collaboration, 
but what is much more important is that collaboration exists in 
practice.
    I cited the mechanisms that we talked about in my list of 
activities, both in our interagency bilateral and informal 
capacity. Those contacts actually occur several times per week. 
We know each other well. We exchange issues informally. We 
bring them up in formal ways. It doesn't mean we always agree. 
In fact, we sometimes bring different perspectives. But we 
interact regularly and work those through to a conclusion.
    Ms. Morr. I guess I would just add to that in this business 
of Homeland Security and performing risk assessments is a 
spectrum in which each of us is representing our expertise and 
our customers. When we come together to provide those 
perspectives and niches, we come up with a better overall 
process, provided we keep moving with the process and not get 
hung up with unexpected delays or inefficiencies. But when we 
each bring to the table our own constituents and our own 
expertise, we come out with a better full process along the 
whole risk assessment and response process.
    Mr. King. I yield.
    Congressman Pascrell.
    Mr. Pascrell. Thank you, Mr. Chairman.
    I just wanted you to clarify, Mr. Simonson, page 1 of your 
testimony at the bottom of the page and continuing on page 2, 
you say that we have taken the botulinum antitoxin program 
started by the Department of Defense in the 1990s and we are 
now building our botulinum antitoxin stockpile further. We have 
also booked our stockpile of countermeasures, et cetera. Could 
you clarify that?
    Mr. Simonson. Just, I think, as the first Gulf War was 
winding downSec. 
    Mr. Pascrell. I am sorry?
    Mr. Simonson. As the first Gulf War was winding down, the 
Defense Department undertook a program to build a reserve of 
botulinum antitoxin. They had 100 horses or more lined up for 
this. They were vaccinated against botulinum, and then the 
process requires botulinum antitoxin to actually be introduced 
into them, and then they are bled. Plasma is collected.
    They did all of that. But the next phase is to process it 
and turn it into a usable product. Well, they didn't do that. 
For a number of reasons that I am not familiar with, they 
decided to just put the stuff on ice, which they did.
    When we learned that they had it, after 9/11, we sought to 
get a hold of it, get it transferred over to us, and then to 
finish it. In the meantime, the expertise to do this had 
largely faded in the country, and so we had to go out and get a 
new contractor to do it. That is what that refers to.
    Mr. Pascrell. So would you define very briefly what the 
stockpile looks like today?
    Mr. Simonson. The numbers of doses?
    Mr. Pascrell. Give us an idea, relatively speaking, for 
those of us who aren't experts.
    Mr. Simonson. We would prefer not to talk about the exact 
numbers publicly. I am happy to talk to you about it privately. 
We haven't divulged those numbers in public forum, as far as I 
can tell.
    Mr. Pascrell. Then we need to talk.
    In fact, you know, my feeling is--I can only speak for 
myself--that the more not only we know but the more the public 
knows, they are put at ease. The less they know, the more 
difficult they have to come to grips with, God forbid, if 
something happens.
    I would like to ask this question, and anybody who wants to 
respond. Well, let me ask you, Mr. Simonson, this next 
question.
    Considering that DHS found that a pandemic influenza, if we 
ever had such an outbreak, can be as lethal or even more lethal 
than an anthrax attack, can you tell us where pandemic 
influenza ranks on your list of concerns in terms of 
preparations in the strategic national stockpile?
    Mr. Simonson. I would say it is at the very top of our list 
of concerns. There is a program outside of BioShield that is 
designed to develop countermeasures against influenza, and 
those programs are under way.
    Mr. Pascrell. Well, if we cannot combat the flu, how in 
God's name are we going to combat those other things that we 
associateSec. th threats, biological threats? How do you do 
that? Tell me how to do that. Explain to the public how to do 
that.
    Mr. Simonson. I am not sure I understand the question.
    Mr. Pascrell. We agree on my premise that this could be 
more dangerous--
    Mr. Simonson. Absolutely.
    Mr. Pascrell. What are we doing about it?
    Mr. Simonson. We have a program in--my office let a 
contract a while back to begin developing a new type of 
influenza vaccine, one that is not dependent on chicken eggs. 
That is how the current vaccine is made, in chicken eggs, not 
in biofermenters.
    We are also in the process of looking for novel forms of 
administering the vaccine. Right now, it is one-shot 15 
micrograms doses. The idea is to look and see if there are ways 
of conserving the antigen and using less material to produce an 
immunologic response. There is an enormous amount going on on 
this. I would be happy to give you a lot of details.
    Mr. Pascrell. We will be meeting, and you and I are going 
to be talking about anybody else who wants to be involved in 
the botulinum stockpile. That is a given, correct?
    Mr. Simonson. Yes.
    Mr. Pascrell. My final question is this: We possess no 
vaccine to combat a pandemic influenza. How much has the 
Federal Government invested in stockpiling anti-virals that 
could be effective against a pandemic influenza? How much are 
you investing in this? We investing?
    Mr. Simonson. Last year it was $88 million. I don't have 
this year's number, but it is on that order of magnitude.
    Mr. Pascrell. That is sufficient?
    Mr. Simonson. No, but the problem is that the industrial 
base supports only so much production. There is not a lot of 
this stuff out there.
    Mr. Pascrell. That is critical to what we are here about 
today--
    Mr. Simonson. Yes.
    Mr. Pascrell. --in terms of the private sector.
    Thank you, Mr. Chairman.
    Mr. King. Mr. Pascrell.
    The chairman of the full committee, Mr. Cox.
    Chairman Cox. Thank you, Mr. Chairman, and thank you to our 
panel.
    The BioShield statute requires that at the beginning of the 
process the Department of Homeland Security perform the role of 
determining what are the material threats, and they extend not 
only to biological but also to radiological and nuclear agents. 
As a result of the statutory procedure, the Department of 
Homeland Security has notified Congress of determinations made 
under the BioShield statute. I would ask, Dr. Vitko and Ms. 
Morr, how many times has that taken place?
    Mr. Vitko. It is occurred four times. The material threat 
determination is done for four agents. It probably occurred in 
two separate notifications. The first one was around anthrax, 
and then there was a subsequent one that made threat 
determinations around smallpox botulinum antitoxin and 
radiological nuclear devices.
    Chairman Cox. Once that determination is made, the 
Department of Health and Human Services takes over, if I am 
correct? Mr. Simonson, what then is the next step that you 
take, once that determination is sent to the Congress?
    Mr. Simonson. We evaluate the public health consequences 
that inform the material threat assessment, make a 
determination if countermeasures are needed to combat those 
consequences. We do some modeling of our own as to the public 
health impact of the threat agent; and then, working with our 
colleagues at DHS, a unified recommendation goes forth to the 
President.
    Chairman Cox. Is all of this prior to the issuance of an 
RFP?
    Mr. Simonson. Yes.
    Chairman Cox. What is necessary then for the RFP to be 
issued, finally?
    Mr. Simonson. Once we have the approval from OMB to 
proceed, the development of the RFP goes forward, although we 
sometimes lean a little forward and start developing ahead of 
time. We publish a draft RFP to get comment back from the 
industry to insure that we haven't missed something or sent 
something out that is not tenable.
    But it is a fairly elaborate process to produce an RFP that 
keeps open options to the proposer so that we don't get 
something back but then we have to throw out because there was 
some technical inconsistency with the RFP. So it takes some 
time, once the--
    Chairman Cox. To use an example, with anthrax, how long did 
it take from front to back from the assessment that was made at 
the Department of Homeland Security to the issuance of the 
BioShield RFP?
    Mr. Simonson. We had the material threat determination--
yes, we had the material threat determination in January of 
2004; and the RFP was issued in March.
    Chairman Cox. Am I correct that in the anthrax case, which 
may not be an illustrative example for this reason, the threat 
determination was made first and the assessment was made 
second?
    Mr. Vitko. Correct.
    Chairman Cox. That is not normal?
    Mr. Vitko. That is not normal. That was done to jump-start 
the process.
    Chairman Cox. So let us say smallpox, using that as an 
example. I would like to include in this timeline the DHS and 
HHS pieces, if we can get our arms around that total length of 
time.
    Mr. Vitko. A typical threat assessment takes 3 to 4 months 
to execute in its fullness, okay. That includes several 
sessions among interagency processes and to finalize the 
documentation.
    We certainly have the information to help guide us in the 
process and be deliberated on the Weapons of Mass Destruction 
Medical Subcommittee before final completion of that document. 
So finally 2 to 3 months into that process we are able to start 
to the next steps.
    Mr. Simonson. An RFP takes about 3 to 4 months from when we 
have the material threat determination to when we can launch 
the final RFP.
    Chairman Cox. Well, Mr. Chairman, I see my time has 
expired.
    We are talking about time here and how much time it takes 
to get us even to the RFP stage, which, after all, is a request 
for a proposal. That is an intermediate step in the process 
itself. It seems to me that Congress needs to reconsider how 
this process works. What we really want to do is get the 
request out to industries so they know what to respond to.
    What I am inferring from other comments that this committee 
has received is that, in many cases, people who might be 
interested in participating in these RFPs are complaining that 
the timeline for responding is so short that it seems to 
require that you have already got a product in the late stages 
of development in order to participate. What we really should 
be doing here is, in sending things that wouldn't otherwise be 
happening--I am not sure that the system that we have right now 
is serving that purpose.
    But my time has expired, and I will come back with the next 
panel. Thank you very much, Mr. Chairman.
    Mr. King. I thank the chairman; and the gentleman from 
North Carolina, Mr. Etheridge.
    Mr. Etheridge. Thank you, Mr. Chairman.
    Let me, Mr. Simonson, approach this a little different than 
the chairman did. From my understanding--and I would be 
interested in your comment on this--that the Nation's public 
health infrastructure, which is a place that we have if we are 
going to respond, is not ready to deliver the countermeasures 
even if they are successfully procured and stockpiled to HHS. 
What effort has the Department taken to prepare the public 
health infrastructure to respond?
    I think it is critical. We haven't talked about that this 
morning. I would be interested in hearing any comment.
    Mr. Simonson. There has been a fairly aggressive program 
since 2002 to build infrastructure in the public health sector. 
But you are quite right. We have a concern about localities 
being able to receive the stockpile and get it into the hands 
of people who need it within a very narrow window, and we are 
not quite there.
    We have an initiative right now, the Cities Readiness 
Initiative, which is intended to really add some capacity there 
so that, combined with the other entities of the Federal 
Government, working with the local authorities, we can insure 
that we are able to get countermeasures.
    This is especially true in the context of anthrax, 
countermeasures out and into people's hands within a 48-hour 
window. But there has been an enormous amount spent there. We 
have not quite seen the results we would like on building that 
distribution capability. Some jurisdictions have done a 
terrific job. But this is not uniform across the country, and 
we are working on that.
    Mr. Etheridge. Let me follow it up. Because the answer I 
got really isn't, to me, a good answer. You said, ``aggressive, 
concerned initiative.'' I didn't hear anything about a plan 
with the results to follow up to make sure we have a 
measurement to know where we are with follow-through in terms 
of having mileposts to know where we are.
    Mr. Simonson. Well, that is the objective of the Cities 
Readiness Initiative, this program that we have to build 
capacity.
    Mr. Etheridge. Cities?
    Mr. Simonson. Cities Readiness Initiative.
    Mr. Etheridge. For metropolitan areas?
    Mr. Simonson. Yes.
    Mr. Etheridge. What about the rural areas?
    Mr. Simonson. Well, at this point it is not in the rural 
areas. It is meant to be a threat-based metropolitan--
    Mr. Etheridge. You mean, we are not a United States of 
America?
    Mr. Simonson. No, no, no, that is not what I meant at all. 
But there are varying levels of threats that we are working 
with, and so we are trying to reach out and to make strides 
there, strides which will be replicated across the country.
    Mr. Etheridge. I believe you need to work on your plan some 
more. Because--really and truly. Because we have seen, with 
what is happening in London recently and other places, they are 
looking for soft targets. Seems to me--I understand we have to 
have a high profile first, but we have got to prepare.
    Let me ask each of the three of you this question, if I 
may. There are a number of States--my State of North Carolina 
included--has a large poultry industry. There is a large 
concern about the possibility of the spread of avian flu. Is 
DHS considering the use of the concern of avian flu as a 
similar disease? This could be a weapon of mass destruction as 
well. Have you done any work in this area at all?
    Mr. Vitko. Yes. We have two activities. One is the risk 
assessment that I mentioned before in support of the 
President's Biodefense for the 21st Century. Avian flu is one 
of the assessments considered in that risk assessment. The 
second is in the bioportfolio that I had. We had a special end-
to-end study to look further at how avian flu would differ in a 
terrorist context than if it occurred naturally and what the 
synergisms could be for the public health sector in that.
    Ms. Morr. I would say both the National Counterterrorism 
Center and IA have worked on a red cell product that looks at 
avian flu and tries to get ahead of actually seeing the threat. 
Dr. Vitko mentioned there will be a risk assessment done in 
January of a number of agents.
    Mr. Simonson. I have nothing to add to that.
    Mr. Etheridge. Thank you, Mr. Chairman. I assume my time 
has expired.
    Mr. King. Thank you, Mr. Etheridge.
    The vice chairman of the full committee, Mr. Weldon of 
Pennsylvania.
    Mr. Weldon. I thank our distinguished witnesses for their 
testimony today.
    Just to give some history to our colleagues on the 
committee, in October of 1997, as chairman of the Defense R&D 
Subcommittee, we had a hearing where Jessica Stern testified. 
She was, in her testimony, supporting the statement of Senator 
Richard Lugar that in the 1993 attack on the World Trade Center 
the investigators and the sentencing judge both agreed that 
there was, in fact, a large cache of sodium cyanide that was 
actually in the Trade Center that was designed to be vaporized. 
But it wasn't vaporized. It, in fact, was burned. Had it been 
vaporized we would have had the first major attack of a 
chemical agent on our people that would have affected hundreds 
of thousands of individuals, from the first attack, not the 
second, the first attack on the Trade Center.
    I am reminded of a hearing that Ken Alibek testified--again 
before my subcommittee in May of 1998. Dr. Ken Alibek, who is 
really Alibekov, who will be before this committee tomorrow--
was in charge of the Soviet biological weapons program called 
Biopreparat before he defected in 1992. Ken Alibek testified 
back then that there were over 2,000 full-time Soviet 
scientists working on the weaponization of biological and 
chemical agents.
    I won't go through all of the agents and the diseases, but 
it is significant. I have them all in front of me. I go through 
this because, as we go through the whole issue of biological 
warfare, it is a multi-pronged approach that we have to take.
    It first of all starts with securing the current agencies 
stockpiles that are still occurring in Russia and the former 
Soviet states today. Our current effort while under President 
Bush has, I think, been improved dramatically, is still not 
adequate.
    One of the things we are working on is an attempt to work 
with our industry--many in this room attended a session we had 
last evening--to try to work in a collaborative way with the 
Russian biological and chemical scientists.
    After identifying and securing some 79 sites throughout 
Russia that have been identified, including six that we have 
never been into, the second part is to destroy those agents. 
That is also a massive project. Because if we don't secure and 
destroy them, then it is not that difficult for a terrorist 
organization or a rogue nation state to acquire the existing 
capability that was developed by those 2,000 Soviet scientists 
and researchers back in the Cold War.
    The third major effort is to collaborate. That is where 
reaching out to our former enemies is critical. To that extent, 
we have been working for 2 years. Chairman Cox has been 
involved with this. In fact, he had 2-1/2 hour meeting with the 
counterpart, the chairman of the Duma Security Committee, 
General Vladamir Vassiliev, just a couple of months ago on 
establishing a joint effort that will give us access to those 
six sites in Russia that no foreigner has ever set foot on.
    I mention all of this because I understand the importance 
of BioShield II. In fact, that was the topic of our discussion 
last evening. But it is equally important, if not more 
important, that we deal with the storage and threats and 
perhaps the continued production or research on developing new 
strains that are still going on within the former Soviet 
states. It is a critical element that this committee needs to 
be questioned on, and tomorrow one of our subcommittees will do 
that when Dr. Alibek comes in.
    We also need to focus on ways to encourage additional 
development of detection capabilities; and for that our 
military, our good friends at Aberdeen, our good friends at Ft. 
Detrick, are doing a fantastic job in cooperation with our 
Homeland Security administration.
    But, finally, and the subject of this hearing that is most 
critical, how do we encourage those private companies and small 
entrepreneurs to do research into strains that we have not yet 
provided proper support and protection against? That requires 
the passage of BioShield II, and it requires the input from the 
private sector.
    What we encouraged last night in a continuing series of 
BioShield showcase workshops was a--basically an agenda that 
the private sector would bring to us of ideas, changes in our 
tax laws, our investment policies, so that private 
entrepreneurs and companies have more incentives to do the kind 
of work on these diseases that have been identified largely 
having been developed in the former Soviet States.
    So I don't have any questions today. I challenge 
particularly the second panel to not just come and testify in 
this hearing today but to come in with a suggestion of ideas, a 
suggestion of policy options, legislative remedies and ideas 
that we can pursue in Congress to help have a more dramatic 
response to what we all know to be an obvious threat that has 
been documented many times over the past 10 or so years by a 
number of top experts, including Dr. Alibek.
    I would again encourage our colleagues to attend that 
subcommittee hearing tomorrow where Dr. Alibek will come back 
and testify. He also wrote a book, Biohazard, which I would 
encourage everyone to read, which was published in 1998. This 
is a major threat to our security and one that deserves the 
full attention of our committee and the subcommittee.
    Mr. King. I thank the gentleman for his testimony.
    The gentlelady from the Virgin Islands, Mrs. Christensen.
    Mrs. Christensen. Thank you, Mr. Chairman.
    I also want to begin with Assistant Secretary Simonson and 
follow up on the question of my colleague, Mr. Etheridge, 
because I really am not satisfied or clear about the answer. 
Because even as he said, even if we had all the countermeasures 
we need, which we don't, there is a great concern that the 
public health fracture is not there, and it really goes beyond 
even just the distribution capability.
    So we are coming on 4 years post 9/11. I would like to know 
if the Department has determined a basic level of public health 
preparedness or readiness that every community should meet and 
assess the level of preparedness of public health around the 
country. Have you determined what level of funding is needed to 
bring it up to the state of readiness that it needs to be, and, 
if so, what is your timetable forSec. 
    Mr. Simonson. Well, let me say that the cooperative 
agreements between CDC and HRSA to make these grants to State 
and in some cases is local units of government, they have 
outcome-based measurements and work is under way right now to 
evaluate those.
    Mrs. Christensen. In terms of those grants, I mean, how 
close do they come to what is really needed to prepare the 
public health?
    Mr. Simonson. We are very comfortable with the cooperative 
agreement and the critical benchmarks that are in there and the 
outcomes that we have sought. There has been a fair amount of 
money, you know. Since 2002, $3.6 billion between CDC and HRSA 
have been sent out. We still have--I haven't checked the last 
few weeks--but we still had--nearly $1 billion of that had not 
been drawn down. Some of that goes all the way back to 2002. So 
we think that the level of funding is adequate.
    Mrs. Christensen. Could you--Mr. Chairman, could we ask 
that the Department let us know where those funds have not been 
spent?
    Mr. King. Mr. Simonson, do you have any problem with that 
at all?
    Mr. Simonson. Of course, I would be happy to provide.
    Mrs. Christensen. I would like to go on to another 
question.
    Mr. King. Provide to the subcommittee as well. I would 
obviously like to see that, as well as Mrs. Christensen.
    Mrs. Christensen. Thanks.
    I have been--always been concerned about the dual 
responsibilities between the Department of Health and Human 
Services and Homeland Security, and we have talked about it 
insofar as different respects this morning. But in the event of 
a bioterrorism attack there is still some dual responsibility. 
How do you see it working? Who is ultimately in charge? Who is 
in charge?
    Mr. Simonson. The Secretary of Homeland Security is the 
national incident manager in an event, whether it is a CBRN 
event or something else, some hurricane.
    Mrs. Christensen. We are talking about a bioterrorism event 
where we have to bring the public health modalities to bear and 
distribute from the stockpile and so forth. How does that work? 
How is that going to work? Who in the Department of Health and 
Human Services is in charge, at what level? Because you are not 
a public health--you don't have a public health background?
    Mr. Simonson. No. The Secretary of Homeland Security is the 
national incident manager. He coordinates all the Federal 
Government's response. HHS has the lead for medical and public 
health response in a disaster, act of terrorism. In our 
Department, the Office of Public Health Emergency Preparedness 
is the coordinating entity among all of our public health 
service organizations that would respond to an emergency like 
that.
    The CDC has the lead role as an operating division. That is 
what the CDC does. But, in addition to that, there are other 
elements of the Public Health Service, the Commission Corps, 
the National Institutes of Health. Recall back in--
    Mrs. Christensen. The Office of Emergency Preparedness has 
the top level of responsibility and the Department of Health 
and Human Services?
    Mr. Simonson. The Office of Emergency Preparedness is the 
coordinating agency within the Office of the Secretary, yes.
    Mrs. Christensen. Let me ask another question, which any 
one of you could probably answer. But as we went through the 
BioShield hearings initially, I was one of the members here who 
was probably not very supportive of Project BioShield, or only 
reluctantly so. Reading the testimony of some of the companies 
that will talk--speak to us on the next panel, one of the 
issues is that the prohibition against utilizing some of these 
countermeasures in the commercial market is a big obstacle to 
us utilizing some of the countermeasures that are available and 
could be used. As we look at BioShield II, what can we do about 
that prohibition against using it in the commercial market or 
some of the other issues? Or do you think that we should just 
scrap BioShield and use DARPA and the orphan drug process, 
which has proven to be effective in the past?
    Mr. King. Mrs. Christensen, your time has expired. I would 
ask the witnesses to answer. In about 15 minutes we are running 
up against some votes.
    Mr. Simonson. Let us me answer as to scrapping. BioShield, 
no. DARPA--all the wonderful things DARPA has done it has not 
produced a lot of medical countermeasures, to my knowledge at 
least. There is no strict prohibition on the commercial market 
analysis. It is a consideration, when the Secretary makes a 
determination, but it is not a condition precedent. So it is 
not a strict prohibition.
    Mr. King. The gentleman from Pennsylvania, Mr. Dent.
    Mr. Dent. Thank you, Mr. Chairman.
    My questions are going to be directed to Dr. Vitko and Mr. 
Simonson. Are the Centers for Disease Control prevention list 
for category A, B and C pathogens insufficient or sufficient, 
number one. And, two, how does DHS take into account novel 
biological agents or biologically-engineered agents? How do you 
take that into account?
    Mr. Vitko. I will answer both questions.
    One is we believe the A, B, C lists--the category A, B and 
C lists are a good starting point but need to be expanded. One 
of the things we are looking at now, in fact, in doing the risk 
assessments for the Biodefense of the 21st Century is we are 
starting with that list, doing a fuller examination, doing a 
full analysis of the risks. I expect that we will validate most 
of the things on that list, but there may be some surprises 
that come up.
    Second, with respect to how do we deal with novel and 
engineered threats, that actually is an issue that we worked 
with in HHS in developing a strategy. We did that over the 
course of 3 to 5 months--I don't remember exactly how many--in 
which we made our best collective assessment with intelligence 
inputs about what a terrorist might be able to accomplish in 
the way of engineering a drug in the next 3, 5 and 10 years, 
what indicators one would look for that might change our 
thinking, and then we developed a strategy based around that 
that had four key elements.
    One was to do continuous technology watch and threat 
assessments to support that.
    The second was to expand our biosurveillance and 
biodetection capabilities to look for unknown agents, not just 
a set that we are normally looking for on the suspect list, if 
you will.
    The third was, in fact, to pursue additional medical 
countermeasures, and that might have broader applicability, but 
also very importantly to enhance the infrastructure for the R&D 
research development, test and evaluation of medical and 
countermeasures.
    The fourth, very importantly and often overlooked, is to 
develop an integrated concept set of operations that says how 
would you respond to a new pathogen, whether it was for an 
emerging disease or an engineered threat. What are the steps in 
there so we could get those worked out and then look at the 
places in there where we could reduce the timelines.
    Those are the strategies we have been working on.
    Mr. Simonson. I agree with Dr. Vitko's answer.
    Mr. Dent. Thank you.
    Next question, to date, the Department of Homeland Security 
has not completed a material threat assessment determination 
for a chemical agent. Why not, is the main question, and what 
would be your process for prioritizing those chemical agents?
    Mr. Vitko. In fact, we have a draft material assessment 
written and in review on chemical nerve agents. It is still 
going through the vetting process, and this is a useful insight 
on all of these assessments.
    As you might expect, there is little definitive information 
and a fair agree of uncertainty on a number of these issues. 
When we bring these issues together, we try to vet it 
extensively in the community. So we vet it from all 
perspectives and then reach a decision. We are still refining 
that process, that draft. We are probably a month away, is my 
guess, but I don't know that, actually, and I could give you a 
specific date when I call back.
    Mr. Dent. Another question. I know the Federal Government 
this year will spend $1.5 billion on BioShield--excuse me, we 
are spending $1.5 billion of BioShield this year for vaccines 
on anthrax. For that cost, how many countermeasures will 
BioShield actually be able to purchase?
    Mr. Simonson. It is a difficult question to answer. We 
haven't got the market research data, I think, to give you a 
precise answer. But we ought to be able--with the existing $5.6 
billion we ought to make major inroads in chemical, biological, 
radiological and nuclear threats.
    I can't give you the exact number of agents that we are 
likely to have direct countermeasures against because, as I 
said, the process is ongoing. I have learned the hard way that 
you don't really know until after the proposal gets in. You 
know, you don't really know what it is going to cost.
    Mr. Dent. Finally, last question. We could sit around here 
all day and think of the various frightening scenarios that 
could be launched against us. How will we know when we are done 
acquiring countermeasures, is my question. Is it based on how 
much we are willing to spend or, you know, what level of risk 
we are willing to accept? Or what countermeasures are not 
feasible or technically possible?
    Ms. Morr. I would hope in this instance the threat would 
come in and play a big role--or at least in the initial 
guideline on what is the list of threats that we continue to 
see on an initial intelligence-based way to begin to inform 
whether we have adequate countermeasures.
    Mr. Simonson. This may be a function of where I work every 
day, but it is hard to imagine a scenario where we will not be 
buying countermeasures or seeking to develop other 
countermeasures that have less of an adverse action profile, 
that are more efficacious, that cover a broader band of 
threats, to avoid the one-bug/one-drug concept. So I hope we 
will be developing those for years to come. Whether or not we 
will stockpile them in enormous quantities as we do now is 
another matter.
    Mr. King. The gentlelady from California, Ms. Harman.
    Ms. Harman. Thank you, Mr. Chairman; and I thank our 
witnesses. I think this is a very good hearing, and your 
comments and responses to questions are strategic. That is 
something, as I think everybody knows is critical if our 
Homeland Security effort and our counter bioterror effort are 
to succeed. It is not just rearranging the deck chairs. It is 
just creating one deck. As you have gone through the different 
pieces of an effective assessment and response, I think you are 
all focused on that. I want to commend you.
    My question is about strategy and actions you are 
contemplating beyond U.S. borders. Germs don't recognize 
borders. This is obvious. I heard you discussing the avian flu. 
I am not sure if anyone mentioned SARS, but, you know, pick a 
germ, pick smallpox, pick anything. It should be obvious to all 
of us that if some evidence of that is somewhere else, given 
frequent travel in and out of America, that whatever is out 
there can come here easily.
    So my question to the panel is, how do you think about 
intelligence on the existence of these bad germs in other 
countries, and how do you think about those germs coming here, 
and how do you think about the relationships that at least I 
think we need with foreign intelligence services, foreign 
health services, the World Health Organization and so forth 
with relation to this?
    Maybe Ms. Morr is my candidate for response. I do want to 
commend her for an excellent report yesterday to the House 
Intelligence Committee on the London bombings.
    Ms. Morr. Thank you.
    On the intelligence side, the best mechanism that I believe 
we have in place right now is what I would call the red cell or 
alternative analysis piece of this. The community has done 
these estimates on SARS. They did it on the avian flu. It is 
the best way to sit down analysts and begin to talk about, you 
know, the threat and how it can evolve.
    I think what the Department is learning how to do is you 
don't stop there. What is the next operational response that 
should be put in place and then what is the risk for the 
countermeasures? I think at that point, you know, we have got 
people at the borders, we have got other officials that we can, 
you know, declassify some of this information and make them 
more aware. But I think that what I see is, in the intelligence 
arena, I will call it a whole discipline of alternative 
analysis and thinking about how it can get to the shores is 
going to be really important as the OD&I sets up that whole new 
capability and gets us more focused on projecting out.
    Ms. Harman. I would just add to that how it might leave us 
and go to other places. Let us not just think about America. 
Let us think about a world community, hopefully, which we hope 
not to harm ourselves by exporting some of these bad germs, am 
I right?
    Ms. Morr. Absolutely. I would again say what is so unique 
about the Department is it doesn't stop, as you are talking 
about, with terrorism. It pushes the rest of the community to 
think about homeland threats in a much broader, you know, 
context. I think the whole community piece of putting the 
Department as part of the OD&I and focusing on the 
international threats as you are talking about is really the 
wave of the future.
    Ms. Harman. Thank you. Other comments?
    Mr. Simonson. No, I agree with what Ms. Morr said. We are 
spending an enormous amount of time with respect to flu working 
with the World Health Organization and the impact capability to 
build a surveillance there. So I agree with you this is 
something we need to pay a whole lot of attention to.
    Ms. Harman. Let me close with this, because I want to 
respect the time of others.
    It is at our peril we build big walls around America and 
think that threats here are different or our only focus should 
be or can be on threats here. There is one world here, and in 
an era of terror we better get it right across the world. I 
think ultimately it is the only way we will win against the 
threats of the 21st century.
    Thank you, Mr. Chairman.
    Mr. King. Timing is everything.
    The gentleman from New Mexico, Mr. Pearce.
    Mr. Pearce. Thank you, Mr. Chairman.
    My first question I think would be for Ms. Morr. It may 
have been asked, I apologize, if we have enough intelligence to 
determine the capability and intent, I think that was your 
testimony, do we have enough capability to stop it rather than 
provide a response?
    Mr. Simonson. I am sorry, I didn't understand.
    Mr. Pearce. Why don't we remove the intent and capability, 
rather than trying to inoculate against every response they can 
do to us?
    Ms. Morr. The issue of the capability is that we don't have 
all of the factors to make a definitive conclusion on 
capability. What we do have is a steady progression of learning 
and at some point--for example, we took down some of the 
training camps. It is not--the people that have that 
capability, that kind of expertise are still around. They are 
easily acquired throughout the world. It is never something 
that you can automatically definitively eradicate. A lot of 
this is a skill set that exists in people, in training, and 
available in stockpiles or skill sets around the world. So the 
capability--
    Mr. Pearce. I use those skill sets to obtain and pass 
along. Because if we know who the individuals are who would 
create smallpox, it seems like it would be easier to eliminate 
them rather than spend billions that may not be spent in the 
proper fashion.
    You don't have to address that.
    Mr. Vitko, how complex is it to develop and maintain 
strands of smallpox and anthrax, for example? How difficult is 
it for the terrorists to maintain their ongoing supply stock?
    Mr. Vitko. Let us say that with anthrax it is quite 
feasible. I could give you more specifics in a closed session.
    Mr. Pearce. It is quite easy for them to develop and 
maintain, in other words--in other words, the vaccine has run 
out of date. Do the diseases that are being created kind of 
fade if they don't put them into actual act, if they don't put 
them into functioning?
    Mr. Vitko. I am missing part of your question. I thought 
the original question was around the technical feasibility of a 
terrorist developing an anthrax--
    Mr. Pearce. No, maintaining it if they develop it. Do they 
have to maintain it or, once it is developed, and it is a 
formulation in your mind, or do they then have to develop a 
sample and culture and maintain?
    Mr. Vitko. In the case of anthrax, it is a hardy agent.
    Mr. Pearce. It is straightforward and stays there. How easy 
is it to develop new strands that are resistant to our 
countermeasures?
    Mr. Vitko. The other issues, what do you lose when you 
develop those strands? Any kind of genetic engineering comes at 
a cost in an organism and details. Again, because of the 
sensitivity, I would prefer to discuss it in a closed session.
    Mr. Pearce. Same thing on smallpox. My fear is we are going 
to put--I mean, we have $5.18 billion I think that is targeted, 
basically 2 on a list of 52 possible threats, and so you begin 
to genetically add on top of that. I am not sure we are going 
to add $250 billion. But even if we do, as we develop the 
remedy, they develop things that are resistant to the remedy--
and you are shaking your head no. Is that not possible?
    Mr. Vitko. I hope I wasn't shaking my head no.
    Mr. Pearce. It was a little quiver.
    Mr. Vitko. No, no. What I would say is that I understand 
your concerns and your extrapolation and just multiplying that. 
I would say that the threats that we have currently addressed--
anthrax, smallpox and botulinum--are the highest threats on the 
list. So taking that and simply multiplying and saying if I 
have 20 agents I have to do 6.5 times that--
    Mr. Pearce. Fair enough.
    Trying to get my last question in, Mr. Simonson, what is 
the life of the smallpox vaccine that we currently have in 
stock? You said we have enough stock to handle all of our 
citizens. At what point does that become--
    Mr. Simonson. What is the shelf life?
    Mr. Pearce. Yes.
    Mr. Simonson. The sizable amount of our stockpile has been 
around for a long time and is still very potent. So we are 
hopeful that the new material that we are making will have a 
very long shelf life.
    Mr. Pearce. Thank you, Mr. Chairman.
    Mr. King. The gentleman from Connecticut, the chairman of 
the Subcommittee on Intelligence, Information Sharing and 
Terrorism Risk Assessment, Mr. Simmons.
    Mr. Simmons. Thank you, Mr. Chairman; and I thank the 
witnesses for their testimony.
    I wanted to focus on Ms. Morr's testimony, although others 
may wish to respond. I am recalling one of my favorite movies, 
Casablanca, with Humphrey Bogart and Peter Lorre where the 
phrase ``round up the usual suspects'' occurs at least once. In 
looking at what we have done to deal with the threat of 
bioterrorism, by communicating with the National 
Counterterrorism Center, CIA, FBI, the various BKC entities, 
the labs and so on, I think you have done a good job of 
rounding up the usual suspects.
    My question goes to this, however. Are we also thinking out 
of the box? Are we making substantial initiatives with 
academia--and traditionally the intelligence community and 
academia have had somewhat of a difficult relationship. Are we 
talking full advantage of information that is available in the 
open-source domain, and are we trying to solve some of these 
problems in nontraditional ways because we are dealing with a 
nontraditional threat? That would be my first question.
    My second question, are we moving fast enough? I think we 
have one MTA completed, two MTDs, others in the process. Are 
you satisfied with the speed with which we are moving on some 
of these programs?
    Then the final question is, are we getting the word out to 
our State, local and tribal partners? I know that you are 
having briefings. I would be interested to know where and how 
frequently those briefings are taking place. Perhaps--ertainly 
myself, but perhaps members of the committee would like to 
attend a regional briefing, just to see how that goes. So three 
questions.
    Ms. Morr. Let me start with the last one--
    Mr. Simmons. Out of the box, fast enough briefings.
    Ms. Morr. Let me start the last one first. The briefings 
are being done, I would say, rather ad hoc on a--as we go out, 
we know we are going to be there, or there is a request. And so 
we need to beef that up, and we plan to do a more thorough 
outreach program.
    I would also say that I think we have done a much better 
job of getting those information bulletins out to State and 
locals. We have done a couple on like when the financial 
institution surveillance came up, the HVAC systems on the top 
of those buildings, put out a State and local information 
bulletin on making sure those were looked at as protective 
measures because they could be used as dispersal devices for 
chemical, biological weapons.
    On the are we pushing the envelope, we frankly rely an 
awful lot on S and T to help us with pushing the envelope. They 
have the types of expertise to bring us together to get in a 
room and push the envelope. Quite frankly, we are just trying 
to keep up with a lot of the basics.
    I will go back again to my remarks to Congressman Harman 
that the DNI now is going to take on a whole lot more 
responsibility when we do these interagency threat assessments. 
There will be a piece on the end of this that sort of pushes 
the envelope on the what if scenario. The sector assessments 
that we were beginning to do out of DHS, the first one will be 
the chemical sector. These are requirements to the private 
sector. They will also have the what if factor to it. So there 
is a number of mechanisms in place.
    And the middle question was?
    Mr. Simmons. Out of the box.
    Ms. Morr. Out of the box. I would go back to our colleagues 
here back in S and T. We depend an awful lot for them to bring 
us together and do out of the box. We have had a couple 
briefings from people in the community that have come and told 
us about the complex urban environment, how all of this hooks 
together. So we are very much aware of it, just have not had 
the capability to deal with it in a multidisciplinary fashion 
yet.
    Mr. Simmons. I thank you for those remarks. I will simply 
say I think you know I am an advocate for open source 
intelligence. I think it really applies to the Department of 
Homeland Security, and I think we can build a robust capability 
in that area that works to answer many of these questions in an 
open and transparent way, which I think is really important.
    With regard to your regional briefings, if you are coming 
to the New England area, I would be happy to attend. I am sure 
my colleagues would be happy to attend briefings in New York, 
New Jersey, and elsewhere.
    Thank you, Mr. Chairman. I yield back.
    Mr. King. I thank the gentleman for injecting Hollywood 
into an otherwise very somber hearing.
    The gentleman from Texas, speaking of Hollywood, Mr. 
McCaul.
    Mr. McCaul. Thank you, Mr. Chairman. I am reading the book 
1776 by David McCullough. I will go to a literary piece, if 
that is all right. It is interesting, General Washington, as 
the Revolutionary War is starting, talks about the weapon of 
choice by the British, and he talks about smallpox, how the 
British were trying to infect our troops with the virus. And so 
this is not a new, a brand-new idea. We had our Homeland 
Security retreat where we talked about an epidemic; had a 
tabletop exercise, an outbreak of smallpox globally start in 
Europe, and the question was, what do we do? Do we send some of 
our stockpiles over to Europe to build a ring around there?
    And my question is, I know we have enough stockpiles in 
this country for our own citizens, but in the event of an 
outbreak in Europe where we want to send the vaccine over to 
Europe to prevent the spread, the issue came up, and this may 
be a very simple short answer--the issue came up with respect 
to dilution. If we can, if it is scientifically possible to 
dilute the vaccine by a ratio of 2 or maybe 4 to 1 and the 
vaccine still be effective.
    Mr. Simonson. There is research over at the National 
Institutes of Health done right after 9/11 that indicates that 
a 5 to 1 dilution still produces a good immunological boost. 
The license isn't for 5 to 1, so it is a little--there is some 
technical issues that we have to deal with, but it can be 
diluted. Now, we don't know, I think, about the new material; I 
don't believe those studies have gone forward on the newly 
produced vaccine.
    I should also say that there is--WHO, World Health 
Organization, manages a virtual stockpile of about 30 million 
doses of smallpox. It is 30 million, isn't it? About 30 million 
doses of smallpox vaccine. And they are building more. Yeah. So 
just--
    Mr. McCaul. So we have an adequate supply; and the answer 
is, yes, we can dilute, if necessary, to stop the spread 
overseas as well, I guess, right?
    Mr. Simonson. I am sorry, I was just checking.
    Mr. McCaul. That is okay. I guess the answer is we have an 
adequate supply here; but we could also dilute, if necessary, 
to prevent the spread overseas?
    Mr. Simonson. Yes. And, in fact, we participate in and we 
are able to participate in the WHO virtual stockpile because of 
this ability to dilute here originally. Now we have more 
product one for one that we can use. WHO, their objective is to 
be at around 150 million doses in this virtual stockpile, but I 
don't think they are much higher than 30--right now.
    Mr. McCaul. My second question has to do with security of 
the biological agents in existence, both in the--you know, when 
the former Soviet Republics had this intense biological warfare 
center going, we stopped our program in the Nixon 
administration, obviously Fort Detrick, we have CDC, we have a 
lot of level four facilities in this country. I had a tour of 
the Southwest Research Lab in San Antonio, some pretty nasty 
viruses that they have there. And my question is, what are we 
doing overseas particularly in Russia to secure these agents, 
but also what are we doing at home to better secure the 
biological agents we have in this country? Because when I got 
the tour, I have to tell you, I was a little surprised at what 
I noticed to be a lack of security at that facility.
    Mr. Simonson. I can answer the domestic part of your 
question. The CDC runs the select agent program, which requires 
very specific security handling of the most dangerous of these 
agents, control in the way they are handled in the lab and also 
in the way they are shipped, background checks for people who 
use them and that sort of thing. It is, we think, an effective 
program.
    But our experience in securing this sort of material is 
only a few years old; and, indeed, when Secretary Thompson 
directed Public Health Service agencies to take much more 
aggressive steps to secure material, there was a fair amount of 
resistance because it just is counter to the culture in some of 
these labs.
    I am happy to say that they have all come along very well, 
and we are very happy with the level of security improvements. 
But the select agent rule is our principal mechanism for 
controlling these things domestically.
    Mr. McCaul. I am glad to hear that.
    What about--can anybody comment on securing agents in 
Russia?
    Mr. Vitko. That generally falls under the domain of the 
Department of Defense and the Cooperative Threat Reduction 
Program.
    Mr. McCaul. Okay. Lastly--
    Mr. King. The gentleman's time has expired.
    Mr. McCaul. I will pick it up next time.
    Mr. King. Okay. The gentlelady from New York, my colleague, 
Mrs. Lowey.
    Mrs. Lowey. Thank you. And I want to thank the Chairman, 
and I apologize having to go to another event in between.
    But I would like to follow up, Mr. Simonson, on your 
responses to Mr. Pascrell's questions, because one of the 
things that has concerned me as a New Yorker since 9/11, 3 
years later we are still not coordinating between the agencies. 
Now, the center, as you probably know, the Infectious Disease 
Society of America, recommended that the Federal Government 
stockpile vaccines and antivirals in advance of a pandemic 
influenza outbreak. They recommend a stockpile to cover 50 
percent of the population. In the United States we have a 
stockpile of less than 2 percent; England has a stockpile of 25 
percent; France has a stockpile of 20 percent; and Canada for 
about 17 percent of its population.
    Now, what concerned me when my colleague Congressman 
Pascrell asked you the question, you didn't have a response. So 
maybe you are not as worried about avian flu and other 
infectious diseases as I am. But when Julie Gerberding appeared 
before my committee, Labor, Health and Human Services, 
Education Appropriations Committee, they clearly didn't have a 
plan to get from 1 percent of Tamiflu antivirals up to even 
close to what England has, what France has, what Canada has. 
Can you explain this? I don't get it.
    And I would like to know, if a pandemic arrived on the U.S. 
shores tomorrow, has any progress been made to cover the 
population? Is the CDC working with other agencies in the 
Federal Government to build up an antiviral stockpile 
comparable to countries like England, France, and Canada? And 
do you agree with the 50 percent?
    In other words, what are you doing? Why aren't we making 
progress? And why can't you respond to my colleague Congressman 
Pascrell, who is asking a question that I think every American 
wants an answer to?
    And I feel a real sense of responsibility to know why we 
are not moving faster. We have to, it seems to me, have 
comprehensive plans, we have to move fast, and we have to have 
plans in place and then fund them to do this. How much money do 
you need? Why isn't it moving? Give us a number, and let us get 
it done.
    Mr. Simonson. Well, thank you, Mrs. Lowey. I thought I had 
responded to the Congressman's question, so if I hadn't, I 
appreciate the opportunity to try again.
    We have now a stockpile of antivirals. It is not what the 
U.K. has ordered; however, it surpasses--
    Mrs. Lowey. What percentage of the population would it 
cover?
    Mr. Simonson. I think you are about right there.
    Mrs. Lowey. So we are at under 2 percent compared to the 
U.K., compared to France.
    Mr. Simonson. Well, actually the U.K. doesn't have all of 
theirs yet. I mean, we have probably surpassed them right now. 
It will take them some time to build up. We started building 
this up a while back.
    The industrial base to make this stuff does not exist to 
immediately or even in the intermediate term get up to the 
numbers that you are talking about, 50 million.
    Mrs. Lowey. And forgive me if I am interrupting you, but I 
know the gavel is going to come down in 5 minutes. We know that 
it would take $100 million and a year to build another factory. 
We had the experience with Chiron; we lost 50 percent--
correct?--of our vaccine. And this was just for a regular flu. 
Why can't we do it? Here we are, the richest country of the 
world, why can't we do it? How much would it cost? How long 
would it take?
    Mr. Simonson. As to Tamiflu, as to that antiviral, the 
active pharmaceutical ingredient comes from Asia, comes from a 
plant. That is the limiting major factor.
    Mrs. Lowey. Can we make it here?
    Mr. Simonson. These are discussions that are occurring.
    Mrs. Lowey. Three years after 9/11, and we are still having 
the discussions? Why can't we do it?
    Mr. Simonson. We have also invested, as I indicated 
earlier, in technologies to convert over and to be able to 
surge our vaccine capability. This is the so-called cell 
culture or tissue culture vaccine, entered into a contract some 
months ago on that. We have taken steps to secure the egg 
supply that is used for the current vaccine. They are subject 
to avian disease and so forth. And also, we have taken steps to 
be able to surge production of these eggs so that if we needed 
to vastly expand the amount of vaccine we produce, we can do 
that.
    Unlike the U.K., we have gone in and produced commercial 
runs of H5 and 1 vaccine. And we have H5 and 1. This is the 
avian strain floating around Asia right now. We have clinical 
tests under way right now to determine how that vaccine can be 
used.
    So there is a fair amount of activity here, and there is no 
threat that we take higher than pandemic influenza. We came 
forward in our 2003 budget request for 100 million to build the 
Nation's pandemic influenza preparedness, and that is what 
helped us do some of these things in terms of securing the egg 
supply and building a cell culture base. But it takes some 
time. There is no way we will be able to get up to these levels 
of coverage, 50 percent, that the IDSA is recommending. And 
even if we did, there is a very serious debate in the public 
health community about the wisdom of that.
    This is a very expensive drug. When you, as Dr. Gerberding 
has said--when you use these things, you lose them, because the 
virus mutates, it develops resistance. And so what we are 
focusing on is much more of a vaccine-driven approach.
    Mrs. Lowey. Let me just say this in conclusion. I 
understand, based upon information from the CDC and Dr. 
Gerberding, that they are working on a vaccine, and at a 
minimum it is going to take 6 months to get this vaccine 
produced; isn't that correct?
    Mr. Simonson. We already have some.
    Mrs. Lowey. It is still mutating. We don't really know. But 
if, God forbid, that avian flu began aggressively mutating to 
humans, what I don't understand--and I asked this of Dr. 
Gerberding, and I have great respect for her and Dr. Fauci. 
What I don't understand is when the military needs a weapon, we 
produce it and we stockpile it. And if--and I understand if you 
don't need it, please, God, we won't need it, you may have to 
throw it out. So be it. They throw out weapons, too.
    I don't understand why we are at 1 percent, England is at 
25 percent, France is at 20 percent, and Canada is 70 percent. 
With all the people we have working on this, there seems to be 
a lack of determination and a lack of focus. And ask us for the 
money. I mean, ask us for the money. Why are we still depending 
on one factory? And why are we still depending on an overseas 
supply? Last time it was London; now it is Zurich.
    I think we have real problems here, and I would like to see 
a sense of urgency. And, again, if the vaccine goes bad because 
we don't have it, so be it. It is like an insurance policy for 
the American people. And, to me, it is really disappointing 
that we can't tell the American people that if, God forbid, 
something happened, we are ready.
    Mr. Simonson. As much as I admire and respect you, Mrs. 
Lowey, I have to disagree. There is a very serious 
determination at our Department to address influenza. We took 
very proactive steps long before there was interest in the 
general population and indeed some quarters up here on 
influenza. We were very aggressive.
    Mrs. Lowey. If you are so aggressive, then why do we still 
have one factory.
    Mr. King. We will let Secretary Simonson answer, thenSec. 
    Mrs. Lowey. Okay.
    Mr. Simonson. They are the developers of this drug. They 
are the ones who own the drug. That is the way it works.
    Mrs. Lowey. This is a longer discussion, and my time is up. 
And I am rooting for you, and I do hope that we can resolve it 
because the health of the public is at stake.
    Mr. King. We have just seen a match made in heaven. The 
gentleman from the State of Washington, Sheriff Reichert.
    Mr. Reichert. Thank you, Mr. Chairman.
    We are all rooting for you. The whole country is rooting 
for you. You have a tough job, and we know that. Some people 
might think it is a disadvantage to be one of the last people 
to ask a question; those of us who are freshmen Congress 
Members, House of Representatives Members, are usually left to 
last. But we kind of get the opportunity to sum up just a 
little bit, too.
    My background is in law enforcement, as the Chairman 
mentioned the word ``sheriff.'' I was the sheriff in Seattle 
for 8 years, and 33 years in law enforcement. So what I have 
heard--and I just jot down a few words that all three of you 
have spoken since I have been here this morning. I really am 
encouraged when you use words like technology and research and 
development and intelligence gathering and assessment, risk 
assessment, and the sharing of that intelligence, and State and 
local bulletins. Those are important words for local law 
enforcement across the country to hear. They understand those 
words. Partnership is huge, outcome-based, all of those 
terminologies. And most of all, I think most important is 
someone used a little bit earlier integrated operation. And 
this is the tough place to get to, and we understand that in 
the local law enforcement world.
    I am also glad to hear that you have a structure set up 
where you have an incident manager, and then you have listed 
HHS and CDC and the Office of Public Health and Commission 
Corps and all of those entities that come under the direction 
of the incident manager.
    I understand incident management very well, having been a 
SWAT commander for years, but there was some concern and always 
has been about information that comes to or doesn't come to 
local law enforcement, especially in light of the recent events 
in London and the inability of local law enforcement in the 
northwest part of the country and not hearing about this until 
hours and hours later, and then having to take action in a 
Metrobus tunnel or on a train that might run through the city 
of Seattle and the county that I live in.
    My question is you have mentioned all these other entities, 
but I haven't heard really any talk about how you might be 
interacting with local law enforcement and what you see their 
role in the whole BioShield Project, because I know that we 
have a role to play in this event. Public health has got the 
majority of the shouldering the burden here, but what do you 
see as the role of local law enforcement agencies in this 
effort?
    Ms. Morr. As I mentioned before, on the bulletins, one of 
the reasons that we do put out information bulletins, the whole 
reason is to inform people of what to look for, because what we 
are trying to do is encourage the reporting both locally 
through the JTTFs and on through the Department of Homeland 
Security. And as we begin to set up these fusion centers, not 
we, the Department, but as the State and local jurisdictions to 
begin set up their fusion centers, it is important that we have 
a reporting mechanism.
    As you may know, we have the Homeland Security information 
networks. Seattle is a robust member of that network. It has 
interoperability with RISNET and LEO, and so we are continually 
mining the information that is passed to us, and that is where 
we post the information and the analysis that we do. So we do 
believe we are on the cusp of this more active information 
exchange, not just through paper or faxes or e-mails, but also 
through the interact that the HSIN provides us.
    In terms of local law enforcement, the ones that I have 
talked to, I mean, they have been so proactive of reporting 
incidents that they do see. You may know of our Terrorist 
Screening Center, for example. This isn't the biothreat, but it 
is the same mechanism. These officers are out there sending in 
people that they are stopping, and we are getting hits on 
criminals or in some cases people in our terrorist databases.
    So I think it is a revolution in the way that we are 
reporting information and sharing information. And I see that 
the same way as BioShield. It is going to be the officers on 
the job who notice that there is, you know, funny lab equipment 
being stockpiled in an apartment building that they may go 
into, or noticing that a student is communicating at an 
Internet cafe with several others and wants to report on that 
that activity. So I think it is the continued spectrum of it is 
going to happen locally. We need to prepare our eyes and ears 
on the ground.
    Mr. Reichert. I appreciate that.
    I see my time has expired, Mr. Chairman. Thank you.
    Mr. King. Thank you, Sheriff Reichert.
    And the gentleman from Washington, Mr. Dicks.
    Mr. Dicks. I know this subject has been discussed, but I 
would like to go back to it. What are we doing with the public 
health infrastructure? I am told that if we had this, a nuclear 
attack, for example, and you got into advanced radiation 
syndrome, that, in fact, we are going to ship people to other 
parts of the country by rail or train or some other way? Bus? I 
mean, are we doing enough in New York, Washington, and the 
major cities to have public health people who can deal with 
these victims of an attack? Let us say we had a nuclear 
detonation. Our friend Curt Weldon talks about it. We lose a 
million people. But a lot of them would be the people who don't 
die but are affected by the radiation. What are we doing on 
that score?
    Mr. Simonson. We have made--as I said a bit earlier, we 
have made very substantial investments since 2002 in our public 
health infrastructure, about 5.2 billion between our HRSA 
grants and CDC grants. One of the programs that HRSA funds is a 
surge capacity program in order to build additional capacity 
within existing hospitals to handle local events.
    But an event, Mr. Dicks, like the one you referenced, is 
not something that is going to be able to be handled in a local 
part of the country or even in a region. We are going to have 
to move people out; we are going to have to bring assets in. A 
good example of this is the burn capacity in the Nation, burn 
hospitals. We have a fairly modest burn capacity in this 
country, probably no more than 2,000 licensed burn beds across 
the whole country. And so one of the things that we are doing 
is working with the Burn Association and trying to figure out 
alternate ways to be able to absorb large numbers of burn 
patients.
    Mr. Dicks. You mentioned two sources of funding HRSA and 
CDC. Have they been increased, or are these the same budget 
levels that we had prior to 2001?
    Mr. Simonson. They have not been increased. There is a--
    Mr. Dicks. Yeah. I mean, it is the same amount of money 
that we have been using; now we are just using it for these 
additional problems. Isn't that correct?
    Mr. Simonson. Well, and it is not entirely expended. As I 
said, we have monies still from 2002 that have not been drawn 
down. And so it is not clear that more money--
    Mr. Dicks. We are on the Appropriations Committee; we can 
take care of that. Why hasn't it been spent?
    Mr. Simonson. This is a question for the authority 
receiving it. It is within their power to do that. But I can 
tell you, from fiscal year 2002 grants--now, this is an older 
run. It is good as of June 14th--we have something like 92 
million that has still not been drawn down.
    Mr. Dicks. Out of 5 billion? Or how many billion was it? I 
assume you are talking about the HRSA money.
    Mr. Simonson. That would have been--it is about 10 percent 
of the 2002 money that was not drawn down.
    Mr. Dicks. Is this HHS's fault, or has it been granted?
    Mr. Simonson. It is granted. It is out there. It is just a 
question of--
    Mr. Dicks. It just hasn't been spent.
    Mr. Simonson. Right. So as I said, it is not clear to us--
    Mr. Dicks. Can you give us a list of who hasn't spent the 
money?
    Mr. Simonson. Yeah. Your colleague requested, and I will be 
happy to provide that.
    Mr. Dicks. Thank you, Mr. Chairman.
    Mr. King. Thank you, Mr. Dicks.
    I want to thank all members of the panel for your testimony 
today, for your patience, and for your perspectives. And, with 
that, the panel is excused.
    Mr. King. I would ask the second panel to step forward. 
Thank you very much.
    I want to thank the members of the panel for taking the 
time to be with us today and for your patience in sitting 
through the first panel. We will start and try to move this 
along. We do have votes coming up at approximately 12:00. At 
most it will be a brief recess; we will keep the hearing going 
until everyone has had a chance to both testify and answer 
questions from each member of the committee.
    I will recognize Dr. Marcus Eugene Carr, the executive 
director for clinical research-hemostatis, at Novo Nordisk, 
Inc., to testify.

              STATEMENT OF MARCUS EUGENE CARR, JR.

    Dr. Carr. Thank you, Mr. Chairman and members of the 
subcommittee. I appreciate the invitation to appear on behalf 
of Novo Nordisk today. I am Mark Carr. A little bit of 
background. I am an executive director for clinical research in 
hemostasis at Novo Nordisk. Hemostasis is blood clotting, and I 
have been involved with business development and regulatory 
approval for a primary product known as NovoSeven. I have got 
extensive experience in real-world treatment of acute bleeding 
and mass casualties, with over 3,000 hours as an emergency room 
physician; I have been a professor of medicine in pathology at 
the Medical College of Virginia in Richmond; and I am currently 
a colonel in the Medical Corps of the Army, having served in 
Desert Storm, Desert Shield, Noble Eagle, Enduring Freedom, and 
the Kosovo campaign.
    Novo Nordisk is the world leader in diabetes care, and with 
the development of NovoSeven introduction has taken a leading 
position in the treatment of bleeding disorders; also produces 
growth hormone and hormone replacement therapies. At U.S. bases 
in Princeton, it has greater than 20,000 full-time employees in 
78 countries. And so it is truly a global organization, and 
produces products and markets them in the United States and 180 
other countries, and is traded on the New York Stock Exchange, 
London, and Copenhagen Exchanges.
    But Novo Nordisk is not a biodefense company, and it does 
not have as its primary focus the Federal market as a 
marketplace. However, we will work diligently to supply 
medications that the Federal Government identifies as critical, 
and since 9/11 we at Novo Nordisk are becoming more and more 
convinced that NovoSeven is such an agent.
    There has already been several discussions about the 
chemical, biological, and nuclear threat. One of the problems 
with it is the similarity of symptoms that some of these agents 
produce can look as simple as a cold, developing into a rash 
and a fever, and then end with massive bleeding disorders. 
Because of that, in many instances, probably the first 
indication of a bioterrorist attack may be previously healthy 
people who develop similar symptoms and are known to have a 
common site of exposure. Therefore, it will be difficult to get 
a rapid specific diagnosis, and, therefore, early treatment in 
lots of cases will be simply symptomatic: Treat what the 
patients appear to be presenting to you.
    Strategies for preparations for such an attack does include 
preventative, such as vaccines, but also the development of 
countermeasures for postexposure, and to this point, this has 
primarily been antibiotics. But I would point out there are no 
approved therapies for hemorrhagic fever viruses, and therefore 
initial treatment will once again be symptomatic.
    There are problems with countermeasures, and these 
include--most to this point have been targeted to specific 
agents, and therefore very few are fully developed, Cipro for 
anthrax being probably the only one. Many are at very early 
stages of development. There is also a very critical window in 
which they can be applied. If you give them too early or you 
give them too late, they simply don't work. There is also a 
period of latency which makes it even more complex, and you can 
end with a dead man walking syndrome where they are not 
effective.
    Therefore, countermeasures that are broadly applicable to 
the symptoms of the patient will be needed. NovoSeven may be 
one of those measures. It is a mature medical product, having 
been used for treatment of bleeding for more than 10 years. It 
has a unique mechanism of action, stops bleeding that is 
refractory to all other forms of therapy. It works at the site 
of injury, and therefore side effects are reduced. And we think 
that it might be an agent where we can extend the window of 
opportunity where you could have more time to diagnose a 
patient and treat specifically with the agents under 
development.
    NovoSeven reached the market in 1996, has been given more 
than 700,000 doses. It is 90 percent effective in the worst of 
bleeders, which is hemophilia, and has reported uses from the 
literature in multiple other indications. It is a recombinant 
product, it is safe; there are no human proteins. It undergoes 
a dramatic purification process, no viral contamination. It is 
nonantigenic. Its main potential side effect would be 
thrombosis production, but that has occurred in 104 out of 
700,000 doses.
    So why NovoSeven for Project BioShield? First, Novo 
Nordisk, the company producing it, is a qualified health 
company. Inclusion of NovoSeven would send a positive signal to 
equally qualified companies. NovoSeven is FDA-approved, it is 
available, it has a broad spectrum of activity, and may be of 
use in things like hemorrhagic fever viruses or end stage 
bleeding from multiple causes. I would also point out that it 
has potential in trauma; and as recent events in London have 
demonstrated, explosive devices remain our enemy's weapon of 
choice.
    We do have a couple of proposals for improvements in the 
BioShield process. The current scheme--
    Mr. King. Excuse me, Dr. Carr. I would ask you to try, each 
of the witnesses, to keep this to 5 minutes, because we do have 
a series of votes coming up at 12:00, and to try to get 
everyone at least to make opening statements before we go for 
the votes, and then come back for the questions. So if you 
could try to wrap up, I would appreciate it.
    Mr. Carr. The recommendation I was going to make is that 
BioShield consider simultaneous stockpiling of vaccines and 
therapeutics, and also encourage pharmaceutical companies to 
look at their products for potential uses in the BioShield 
area. This would maximize near-term solutions.
    And I thank you for your attention. I will stop there.
    Mr. King. Thank you, Doctor. I am sorry for the 
interruption.
    [The statement of Dr. Carr follows:]

       Prepared Statement of Marcus Eugene Carr, Jr., M.D., Ph.D.

    Mr. Chairman, members of the Subcommittee, thank you for the 
invitation to appear before you today on behalf of Novo Nordisk. I am 
Marcus Carr, Executive Director for Clinical Research-Hemostasis of 
Novo Nordisk. I am here today to give you information and perspective 
about the use of Novo Nordisk's drug NovoSeven as a countermeasure to 
bioterrorism. I also want to urge the committee to adopt a goal to find 
broadly applicable countermeasures and to look for products that can 
save lives today (and not just those that will save lives years from 
now) as you seek to ensure the viability of our Strategic National 
Stockpile (SNS).
    Since joining Novo Nordisk in March of this year, I have been 
extensively involved with the business development, regulatory approval 
process, and federal procurement issues related to the potential sale 
of Novo Nordisk's innovative therapeutic treatment, NovoSeven, for 
trauma victims. I have personally used NovoSeven to treat bleeding 
patients since its FDA approval in the late 90s, and have knowledge of 
NovoSeven from a research perspective that dates to the early 1990s. I 
also have extensive experience in treating bleeding patients of all 
varieties in my roles as an emergency department physician, as Director 
of the Central Virginia Bleeding Disorders Center at the Medical 
College of Virginia of Virginia Commonwealth University in Richmond 
Virginia, as Professor of Medicine and Pathology at the same 
institution and as a Medical Corp officer in the United States Army 
mobilized for Operations Desert Shield, Desert Storm, Noble Eagle, 
Enduring Freedom and the Kosovo Campaign.
    Novo Nordisk is an established pharmaceutical company and a world 
leader in diabetes care. The company has the broadest diabetes product 
portfolio in the industry, including the most advanced products within 
the area of insulin delivery systems. In addition, Novo Nordisk has a 
leading position within areas such as hemostasis management, growth 
hormone therapy and hormone replacement therapy. Novo Nordisk 
manufactures and markets pharmaceutical products and services that make 
a significant difference to patients, the medical profession and 
society.
    With a U.S. base of operations in Princeton, New Jersey, Novo 
Nordisk employs approximately 20,250 full-time employees in 78 
countries, and markets its products in the U.S. and nearly 180 other 
countries. Novo Nordisk's shares are publicly traded on the New York 
Stock Exchange (symbol, NVO), as well as the stock exchanges in 
Copenhagen and London.

The Chemical, Biological, Radiological and Nuclear Threat (CBRN)
    As everyone here today knows, the threat of a terrorist attack on 
the United States involving chemical, biological, radiological, or 
nuclear weapons is very real. In October 2001, shortly after the 9/11 
terrorist attacks on the World Trade Center and Washington, D.C., 5 
letters containing anthrax killed five people, sickened nearly two 
dozen, and required prophylactic antibiotic treatment for 32,000 more. 
Since the 1980s, terrorist organizations have embraced the use of CBRN 
threats. For instance, in the last 10 years, the Japan-based Aum 
Shinrikyo cult has attempted an aerosolized release of anthrax from 
Tokyo building tops, unsuccessfully attempted to obtain Ebola during an 
outbreak in Africa and released sarin gas into a subway system. Concern 
continues to mount about the potential use of CBRN agents against U.S. 
troops and interests abroad, as well against U.S. civilian populations.
    Even small scale use of these agents has the potential for enormous 
social and economic disruption and exhaustion of local and national 
resources needed to combat the threat, treat disease and clean up 
environmental contamination. As a basic first step, therefore, efforts 
have been made to better understand the scope of each threat and the 
consequences of an attack in order to prioritize pursuit of defenses 
against the highest priority agents.

A Multitude of Threats
    For biological threats, the CDC has identified and classified over 
40 agents in Categories A-C. For a vast majority of these agents, there 
are no effective preventive vaccines, diagnostic systems or antidotes 
following exposure.
    Several national programs exist to monitor and provide early 
warning in the case of a terrorism event, including BioWatch and 
BioSense, as well global programs such as the Emerging Infections 
Sentinel Networks. In addition to screening the environment for the 
presence of pathogens, a sudden increase in non-specific syndromes may 
indicate a bioterrorism event. The recognition of a large number of 
previously healthy individuals with a common site of exposure 
presenting with similar symptoms including severe respiratory illness 
with fever, gastrointestinal maladies, encephalitis or meningitis, 
neuromuscular illness, fever with rash or bleeding disorders could 
indicate a CBRN attack. However, the development of rapid diagnostics 
for both known and unknown threats remains a challenge.
    Even before a definitive diagnosis is made, greater problems will 
arise in identifying, isolating and treating a potentially large 
numbers of victims and such a situation could develop into a crisis. In 
the case of a CBRN attack, there will likely be difficulty in 
diagnosing the causative agent, especially since many of the potential 
threat agents manifest with very similar symptoms. For this reason, it 
is critical to develop countermeasures that are broadly applicable, 
especially in the absence of a diagnosis or in the case of a 
genetically modified or emerging threat. Further, countermeasures that 
are efficacious in treating a variety of ailments are highly desirable 
since the nature of future terrorist attacks are unknown.

The Need for Broadly Applicable Countermeasures
    There are two main strategies to prepare for a CBRN attack. The 
first is to develop preventatives for the known threat agents, 
typically vaccines, such as anthrax and smallpox vaccines. This 
strategy has certain weaknesses. First and foremost, it is effective 
only against a biological attack, not chemicals or radiation. Second, 
it works only with previously known and characterized agents, A third 
major weakness is the monumental difficulty of vaccinating the entire 
U.S. population against each and every threat agent. Mass vaccinations 
pose a significant risk/benefit concern with children, the elderly, 
women of child bearing age and immunocompromised individuals. Lastly, 
to date, anthrax and smallpox are the only biological threat agents 
with FDA approved vaccines, and these vaccines are associated with 
certain limitations on their use. Therefore, it is clear that 
preventatives alone will never adequately address the CBRN threat.
    The other main anti-CBRN strategy is to have available 
countermeasures for post exposure treatment. There are also certain 
weaknesses to this strategy. For example, at this point in time, only a 
few approved therapies exist for exposure to a toxin, chemicals or 
radiation, and treatment is dependent on identifiable symptoms in the 
individual patient. There is no approved treatment for any of the 
hemorrhagic fever viruses. While ribavirin may be used under an 
Investigational New Drug (IND) protocol for the arenaviruses and 
bunyaviruses, no such treatment exists for the filoviruses or 
flaviviruses. Although countermeasures are being pursued that target 
specific agents, most of these, if successfully developed, will not be 
available for stockpiling for over a decade. Moreover, many of these 
agents must be administered within a narrow window of time to be 
efficacious. Often a definitive diagnosis is needed to decide upon an 
appropriate countermeasure to administer. The period of latency before 
symptoms emerge that is associated in particular with biological agents 
adds a significant hurdle in that without adequate diagnostic tests to 
detect disease in early stages, by the time the patient exhibits 
identifiable symptoms, the drugs under development may prove 
ineffective.
    Therefore, today the reality is that therapy following exposure to 
most CBRN threats will be largely supportive. This leaves us highly 
unprepared to deal with the casualties following a CBRN attack.
    One answer to the difficulties posed above is to have available 
countermeasures that address common symptoms of CBRN agent exposure.

NovoSeven
    This is where our company's revolutionary new drug, NovoSeven, 
enters the national medical preparedness picture. But first, let me be 
clear about one thing to the committee today. The primary focus of Novo 
Nordisk has not been the development of drugs to protect against attack 
by CBRN weapons. The principal focus of our company has been, and 
remains, pursuit of innovative bio-pharma products for the commercial 
market. We are not a ``biodefense'' company as that term has come to be 
known in the post-9/11 environment. While we will certainly work 
diligently to supply NovoSeven for whatever purpose the US Federal 
Government feels appropriate, our business plan, our executives, and 
our investors do not see the primary focus of Novo Nordisk, now or in 
the future, to be the federal market place.
    Nevertheless, in the years since the horrific 9/11 attacks and the 
ensuing threats which our country faces everyday, we have come to 
realize that one of our commercial products would be a great asset to 
responding to terrorist attacks.
    NovoSeven is a mature medical therapy approved by FDA for use in 
hemophilia patients, but it could be also be used to save lives in a 
CBRN attack by treating bleeding disorders caused by a wide array of 
threat agents. The immense value of NovoSeven as a life-saving therapy 
for CBRN applications lies in its unique mechanism of action to prevent 
severe blood loss and extend the window of opportunity for therapeutic 
intervention. Availability of NovoSeven would make an immediate 
contribution to enhancing our nation's medical and public health 
readiness for mass casualty events. To realize these benefits, Novo 
Nordisk believes that NovoSeven should be considered as a key component 
of the comprehensive national plan for readiness against a CBRN attack 
and as a key asset to the SNS.
    Since it reached the general market in 1996, over 700,000 doses of 
NovoSeven have been administered. NovoSeven is currently only approved 
by the FDA for use in hemophilia A and B patients and is 80-90% 
effective in treating bleeding episodes. NovoSeven is also approved for 
use in treating bleeding episodes in acquired hemophilia, Factor VII 
deficiency and Glanzmann's thrombasthenia in the European Union. Other 
reported uses in normal patients include individuals with trauma or 
surgery-associated hemorrhage, intracerebral and pulmonary hemorrhage, 
or bleeding following bone marrow transplantation. Pivotal phase three 
trials to support applications for indications in the areas of 
intracerebral hemorrhage and trauma should begin this calendar year in 
the US, Canada and Europe. An application for FDA approval for the use 
of NovoSeven in inhibitor patients requiring surgery is currently 
pending. Plans are being prepared for a discussion with the FDA on the 
most appropriate pathway for approval of NovoSeven in pulmonary 
hemorrhage. Novo Nordisk currently holds IND protocols for other uses 
of NovoSeven including treatment of bleeding in trauma patients and 
also thrombocytopenia following chemical or radiological exposure.
    NovoSeven has an excellent safety profile, since it is a 
recombinant product and contains no human products. To produce 
NovoSeven, the gene for human Factor VII was cloned and expressed in 
baby hamster kidney cells. The recombinant protein is secreted into the 
media of the cells from which it is purified using a chromatographic 
purification process. The purification process has been demonstrated to 
remove any potential contaminating viruses. Further, no human serum or 
other proteins are used in the manufacturing of this product.
    NovoSeven has been found to be safe and effective in both patients 
with bleeding disorders and those without pre-existing coagulopathy. 
Even following repeated administration, there is no evidence of 
antigenicity, or immune responses to the product, in patients receiving 
NovoSeven. NovoSeven has been shown to be effective when other 
treatments fail, are contraindicated, or blood products are 
unavailable. NovoSeven has a very low frequency of serious adverse 
events, remaining around 1% following administration of greater than 
700,000 doses. Even when very high `mega' doses of the drug are 
administered, it appears to be safe. The most important serious adverse 
event type for NovoSeven is thromboembolic (i.e. serious blood 
clotting) events; however, only 104 thromboembolic events have been 
reported following administration of more than 700,000 doses of 
NovoSeven. This represents an event rate of two thromboembolic events 
per 10,000 standard NovoSeven doses--a very low frequency considering 
the clinical severity of diseases in which NovoSeven is being used. Of 
further importance, the mode of action of NovoSeven localizes the 
coagulation effects to the area of injury, thus avoiding systemic 
activation of clotting and the risk of thrombosis.

Use of NovoSeven Against CBRN Agents
    Many companies have the capability to develop new products to 
protect against attack by biological and chemical weapons or other 
dangerous pathogens. A few firms, such as Novo Nordisk, have already 
done so. In fact, Novo Nordisk is one of the largest and most qualified 
companies to express interest in Project BioShield to date. Should the 
federal government work with Novo Nordisk to negotiate a viable 
business relationship with respect to the federal government's purchase 
of NovoSeven, it will send an extremely powerful, positive signal to 
similarly qualified companies to enter this marketplace. Of course, the 
failure of this endeavor could have a negative effect on the goal of 
stimulating greater interest of large biopharma companies.
    NovoSeven could be immediately tapped for filling current 
shortfalls in our medical defense arsenal. NovoSeven has the potential 
to be broadly used against bleeding disorders caused by a chemical, 
biological, radiological or nuclear attack. The use of NovoSeven might 
be particularly useful in the immediate time period following a CBRN 
attack--before confirmed diagnosis of the attack agent or in the case 
of unknown diagnosis. Further, NovoSeven could be a critical component 
of the SNS for treatment of diseases, such as the hemorrhagic fever 
viruses, that have no other treatments. NovoSeven could also be useful 
in combination with other therapies in difficult patient cases or with 
genetically modified or emerging threats for which treatment is 
unknown. NovoSeven will also likely be used by health care providers in 
patients that have not received the proper treatment in time to stop 
the severe end-stage bleeding disorders associated with CBRN attacks. 
Additionally, even where there is a definitive diagnosis, cessation of 
bleeding would be a valuable and necessary component of a combination 
of treatments to enhance survival in victims with hemorrhagic symptoms.

Proposed BioShield Implementation Improvements
    Recognizing the need to protect its citizens, the U.S. government 
is committed to spurring CBRN medical countermeasure development 
through policy means. The Project BioShield Act of 2004 provides new 
and necessary tools to improve medical countermeasures protecting 
Americans against a CBRN attack.
    Although Project BioShield is a commendable first step, a number of 
issues concerning BioShield and the SNS deserve further attention. More 
specifically, the current implementation scheme for BioShield can be 
improved upon to maximize the authorities granted through the 
legislation and to more rapidly and effectively bolster the SNS. First, 
the procurement of countermeasures is limited by the current 
implementation scheme because there must be a call for material threat 
assessments against a specific agent, followed by a call for a 
countermeasure against that threat. Unfortunately, this process is not 
well-suited to countermeasures such as NovoSeven that are effective for 
treatment of multiple threats.
    Further, the current procurement process precludes products with a 
significant commercial market. This provision of the legislation serves 
as a disincentive to companies with marketable products with potential 
broad applications in the CBRN arena (e.g., broad spectrum antibiotics) 
and deters their participation in CBRN medical countermeasure research 
and development. While many of the specifically targeted 
countermeasures are in such early stages of development that it will be 
years before they can be stockpiled under IND status and then 
subsequently licensed, it is likely that mature technologies exist that 
are approved for other uses that could also provide near-term solutions 
to the country's CBRN defense needs if given the opportunity to compete 
for Project BioShield contracts. Pursuing FDA-approved drugs for other 
CBRN related indications could significantly expedite the regulatory 
and development process since these products have already been used in 
humans.
    With the two changes identified above, BioShield is more likely to 
meet its goal of establishing a stockpile of vaccines and therapeutics 
to counter various CBRN agents. Our nation should acquire effective 
countermeasures now, while still promoting an innovative pipeline of 
countermeasures, thereby stockpiling a broad range of products that 
defend against immediate and future threats.
    In closing, let me say that I hoped I have provided you with 
valuable information about the use of NovoSeven as a broadly applicable 
countermeasure and also about changes to the legislation that represent 
good, sound public policy that will enhance US security. I look forward 
to hearing the committee's thoughts and answering any questions the 
members may have.
    Thank you again for this opportunity to testify today.

    Mr. King. Mr. Michael Greenberger.

                STATEMENT OF MICHAEL GREENBERGER


    Mr. Greenberger. Thank you, Mr. Chairman. My name is 
Michael Greenberger. I am director of the University of 
Maryland Center for Health and Homeland Security. I am not a 
scientist or involved with any corporation; I am a lawyer by 
training and a professor of law. But I do work extensively with 
researchers who have been given substantial grants by the 
National Institute of Allergy and Infectious Diseases to 
develop countermeasures for Class A, B, and C agents on the 
CDC's lists.
    My focal point of what I would like to say to you in this 
brief time is I think emblematic of the difficulties with 
Project BioShield is that nothing, none of that $5.6 billion, 
can be released until the Department of Homeland Security makes 
a material threat assessment. You heard time and time again 
worries about pandemic flu and the avian flu, and the answers 
that we do not have an industrial base. The $5.6 billion was 
intended to create an industrial base. After 1 year after 
BioShield has been passed, almost 4 years after 9/11, 5 years 
after the Defense Science Board has made findings in this 
regard, the Department of Homeland Security, its one 
responsibility that it is the leader of under BioShield, has 
made four material threat assessments for anthrax, smallpox, 
botulism toxin, and radiological and nuclear devices.
    Dr. Carr is talking about something that his company has 
that is principally designed to deal with hemorrhagic fevers. 
You, Mr. Chairman, opened the meeting up by talking about 
Marburg and ebola hemorrhage fevers. After 1 year, the 
hemorrhagic fever is not on the material threat assessment 
list; therefore, the entire country who is worried about this 
is being told do not invest your time, your research time, your 
development time, your manufacturing time in hemorrhagic 
fevers.
    Dr. Vitko says--first in prior testimony he said by the end 
of fiscal year they will--which I take it to mean before 
October 1st, hemorrhagic fevers will be on the list of--
material threat assessment list. Today we learned it will be at 
the end of the fiscal year. These--nothing can be done until 
these items are listed. They have talked about a 3--or 4-month 
assessment to get a draft up with regard to meetings. Dr. Morr 
says in Afghanistan they found in the tents of al-Qa'ida 
documented information that they intend to use tularemia and 
plague. Tularemia and plague are not yet material threat 
assessments.
    When the BioShield statute was set up, this wasn't supposed 
to be some complicated hearing endorsed by substantial evidence 
and reviewed by courts of appeals. My reading of the statute is 
this was a very preliminary assessment that was supposed to be 
made, the Defense Science Board, the Center for Disease 
Control. Congressman Weldon talked about Jessica Stern, who has 
one of the leading scholarships in this area. Her book was 
published in 1999. She lists 60 agents that need to be 
considered.
    Now, Dr. Vitko said the CDC's work is a good starting 
point. They are going to add to it. Well, the CDC, by however 
you count, is at least 33 agents, and they are going to add to 
it? How long is that going to take? And if there are surprises, 
he said, some of the CDC's agents aren't going to be listed. 
That is going to be a very big surprise.
    I can tell you that the scientists I work with are in the 
elementary stages of developing vaccines for tularemia, plague, 
smallpox, anthrax, avian flu, and many other threats to this 
country. It goes--even if they are successful, it is a long 
step between the research and going through all the clinical 
trials and then getting the stuff manufactured. And if we can't 
do this fundamental work, which is the one responsibility the 
Department of Homeland Security has, in all this time, that is 
worrisome. And I think this committee should grab the 
Department of Homeland Security by the scruff of its neck and 
get these assessments made.
    The final point I would make in this regard is that there 
are--if we want to create an industrial base, we must move more 
quickly. I know there is worry about coordination between 
Department of Homeland Security and HHS. To my mind, there is 
too much coordination. There are a lot of committee meetings, 
and we have to wait until everybody is available for the 
meeting.
    I am reading a biography now of Winston Churchill. He would 
have not taken 3 to 4 months to figure out material threat 
assessments when the blitz was happening in London.
    We are essentially--speaking of London, we are in our own 
kind of blitz. We must move more quickly. There are many 
problems with BioShield. I would be happy to answer other 
questions, but I think this is emblematic of the 
maladministration of a wise program proposed by the President 
and passed bipartisan by this Congress.
    Mr. King. Thank you for your understated testimony. Thank 
you, Mr. Greenberger.
    [The statement of Mr. Greenberger follows:]

               Prepared Statement of Michael Greenberger

    My name is Michael Greenberger.
    I want to thank the subcommittee for inviting me to testify on the 
important issue that is the subject of today's hearings.
    From 1999 to 2001, I served as Justice Department's Principal 
Deputy Associate Attorney General. Included within my portfolio of 
responsibilities were several counterterrorism projects concerning both 
law enforcement and public health policy, including organizing the 
first nationwide counter terrorism field exercise, ``TOPOFF I.''
    I now serve as a Law School Professor at the University of Maryland 
School of Law and, since May 2002, as the Director of the University of 
Maryland Center for Health and Homeland Security.
    At the School of Law, I have designed and teach two courses focused 
on legal and public policy issues concerning counterterrorism: (1) 
``Homeland Security and the Law of Counterterrorism,'' which addresses 
the legal framework surrounding the response to the terrorist threat 
facing the United States, including the Project Bioshield Act of 2004; 
(2) ``Homeland Security--The Interdisciplinary Study of Crisis and 
Health Consequence Management Policy in the Era of Counterterrorism'' 
which is open to students from all of the University of Maryland 
professional schools and explores public health policy implications of 
counterterrorism strategy, including the development of a stable 
biodefense vaccine industry.
    The University of Maryland Center for Health and Homeland Security 
(CHHS) serves as an advisor on public health emergency planning to 
various state and local agencies. CHHS also works closely with: (1) the 
Center for Vaccine Development (CVD) at the University of Maryland 
School of Medicine, which is the only university vaccine center in the 
world engaged in the full range of vaccinology: from basic science 
through vaccine development, clinical evaluation and field studies, 
including groundbreaking work on biodefense vaccines; and (2) the Mid-
Atlantic Regional Center of Excellence for Biodefense and Emerging 
Infectious Diseases (MARCE), one of eight Regional Centers of 
Excellence (RCE) funded by the National Institute of Allergy and 
Infectious Diseases (NIAID). MARCE is headed by Dr Myron Levine, the 
director of CVD. MARCE is now in the process of researching and 
developing new biodefense vaccine products to be used as prophylaxis 
against a broad array of biological agents.
    Through CHHS's work with CVD and MARCE, CHHS has organized symposia 
\1\ and I have written several articles \2\ addressing the substantial 
economic, regulatory, and legal roadblocks to creating biodefense 
vaccines.
---------------------------------------------------------------------------
    \1\ Symposium, Eliminating Legal, Regulatory, and Economic Barriers 
to Biodefense Vaccine Development, at the University of Maryland School 
of Law, June 9, 2004.
    \2\ Michael Greenberger, The 800 Pound Gorilla Sleeps: The Federal 
Government's Lackadaisical Liability and Compensation Policies in the 
Context of Pre-event Vaccine Immunization Programs, 8 J. Health Care L. 
& Pol'y 7 (2005) (hereinafter Greenberger, 800 Pound Gorilla); Michael 
Greenberger, et al., The Threat of Smallpox: Eradicated but not Erased, 
J. HOMELAND SEC, Feb. 2004, http://www.homelandsecurity.org/journal/
Articles/displayarticle.asp?article=103; Elin Gursky & Michael 
Greenberger, ANSER Institute for Homeland Security, Institute 
Commentary: Suppose They Gave a Civilian Smallpox Vaccination Program--
and (Almost) Nobody Came? (Feb. 20, 2004), http://
www.homelandsecurity.org/Hls/commentary/
gursky_smallpox_commentary_20feb04.html.
---------------------------------------------------------------------------
    One of the bright milestones toward the development of a vibrant 
biodefense vaccine industry was the passage of the Project BioShield 
Act of 2004. That statute was designed ``to provide protections and 
countermeasures against chemical, radiological, or nuclear [CBRN] 
agents that may be used in a terrorist attack against the United 
States.'' \3\ The most prominent parts of that legislation were its 
procurement provisions designed to address the key significant 
impediment to biodefense vaccine production, lack of a significant 
market.\4\ These provisions encourage the development of effective 
vaccine countermeasures by establishing a Special Reserve Fund of $5.6 
billion to be spent over the next ten years to purchase for the 
Nation's Strategic National Stockpile (SNS) the ``next generation of 
countermeasures against'' a broad array of chemical, biological, 
radiological, and nuclear agents, all of which were seen by Congress as 
weapons that could be deployed against the United States in the War on 
Terror.\5\ Due to the substantial expense and risk of bringing a 
vaccine to market, along with the infrequency with which these diseases 
occur naturally, pharmaceutical manufacturers have little to no 
incentive to invest without BioShield funds.\6\
---------------------------------------------------------------------------
    \3\ Project BioShield Act, Pub. L. 108-276, 118 Stat 835 (2004).
    \4\ Frank Gotron, Project BioShield, CRS REP. NO. RS21507 (Updated 
December 27, 2004), at 1.
    \5\ United States Department of Health and Human Services, HHS Fact 
Sheet--Project BioShield, July 21, 2004, http://www.hhs.gov/news/press/
2004pres/20040721b.html
    \6\ Bioshield: Countering the Bioterrorist Threat: Hearing Before 
the House Select Committee on Homeland Security, 108th Cong. (May 15, 
2003) (statement of Alan Pemberton, Pharmaceutical Research and 
Manufacturers of America), available at http://www.globalsecurity.org/
security/library/congress/2003_h/5-15-03_pharmaceutical.pdf; Frank 
Gotron, Project BioShield, CRS REP. NO. RS21507 (Updated December 27, 
2004), at 1-2.
---------------------------------------------------------------------------
    In order for the Bioshield Special Reserve Funds to be released for 
the purchase of a countermeasure for SNS, a series of actions must 
occur.\7\ However, the first action (and the one on which all later 
actions are based) is that ``the Homeland Security [DHS] Secretary, in 
consultation with the [HHS] Secretary and the heads of other agencies 
as appropriate,'' must make a ``determination'' of ``current and 
emerging threats of CBRN agents'' that ``present a material threat 
against the United States. . .'' \8\ Once that ``material threat 
assessment'' is made various government agencies, up to and including, 
the President, through a series of decisions then determine whether 
promising countermeasures may be purchased with the special reserve 
funds to address those identified threats.\9\
---------------------------------------------------------------------------
    \7\ Project BioShield Act of 2004, Pub. L. 108-276, Sec. 3(a)(2), 
118 Stat. 835,843-52 (2004); United States Department of Health and 
Human Services, Procurement Items--BioShield Funds, March 23, 2005, 
http://www.hhs.gov/ophep/bioshield/bioshieldfunds.html.
    \8\ Project BioShield Act of 2004, Pub. L. 108-276, Sec. 3(a)(2), 
118 Stat. 835, 844 (2004).
    \9\ Project BioShield Act of 2004, Pub. L. 108-276, Sec. 3(a)(2), 
118 Stat. 835, 843-48 (2004); United States Department of Health and 
Human Services, Procurement Items-BioShield Funds, March 23, 2005, 
http://www.hhs.gov/ophep/bioshield/bioshieldfunds.html.
---------------------------------------------------------------------------
    The BioShield Act established no procedure for DHS to employ in 
supervising the making of the material threat determinations. Despite 
what was an obvious Congressional invitation to summarily determine 
what are the widely recognized CBRN threats to the United States, DHS 
has employed an opaque, highly bureaucratized, relatively lengthy 
process for determining material threats. Over the course of the past 
year, this cumbersome and poorly delineated administrative process has 
led to only four material threat determinations. Findings have been 
made that Anthrax, Smallpox, Botulinum toxin and radiological/nuclear 
devices pose a material threat to the United States. DHS officials have 
promised that by the close of this fiscal year material threat 
determinations will be made concerning plague, tularemia, and viral 
hemorrhagic fevers.\10\
---------------------------------------------------------------------------
    \10\ Combating Weapons of Mass Destruction: Hearing Before the 
Subcommittee on National Security, Emerging Threats, and International 
Relations of the H. Comm. Of Government Reform, 109th Cong. (June 15, 
2005) (testimony of Dr. John Vitko, Jr.. Director, Biological 
Countermeasures Portfolio, Science and Technology Directorate, 
Department of Homeland Security), available at http://reform.house.gov/
UploadedFiles/ST.Govt%20Ref.Vitko.06-14-05.pdf.
---------------------------------------------------------------------------
    Because there have only been material threat determinations 
pertaining to four CBRN agents, BioShield's Special Reserve funds can 
only be used for countermeasures directed to those agents. Accordingly, 
three contracts have been let over this last year, two directed to the 
purchase of anthrax vaccines \11\ and one for the delivery of pediatric 
doses of liquid potassium iodide.\12\ Even if a promising 
countermeasure were to meet the other requirements for purchase under 
the statute, it would not be eligible for procurement if there were no 
corresponding finding that the agent to which it was directed was a 
``material threat.''
---------------------------------------------------------------------------
    \11\ Press Release, United States Department of Health and Human 
Services, HHS Buys New Anthrax Vaccine for Stockpile (Nov. 4, 2004), 
http://www.hhs.gov/news/press/2004pres/20041104a.html; Press Release, 
United States Department of Health and Human Services, HHS Awards 
BioShield Contract for AVA Anthrax Vaccine (May 6, 2005), http://
communitydispatch.com/artman/publish/article_961.shtml.
    \12\ Press Release, United States Department of Health and Human 
Services, HHS Awards BioShield Contract for Liquid Potassium Iodide 
(March 18, 2005), http://www.hhs.gov/news/press/2005pres/20050318.html.
---------------------------------------------------------------------------
    DHS's lassitude in supervising the making of material threat 
findings is mystifying. The legislative history of the statute is 
replete with references to a myriad of agents, beyond the four agents 
identified, posing a substantial threat to the United States.
    Moreover, the Center for Disease Control (CDC) has a long 
established and widely recognized hierarchy of highly damaging 
biological agents that are likely to be deployed by terrorists against 
the United States. CDC's Category A agents, ranked as the most 
dangerous to the United States, include Anthrax, Botulism, Plague, 
Smallpox, Tularemia, and Viral hemorrhagic fevers. Only three of those 
agents have as yet been identified under the BioShield bureaucracy as 
posing a material threat. DHS has assured committees of Congress that 
it will by the end of this fiscal year make findings on the remaining 
three Class A agents identified by CDC.
    When you look at the Category B and C agents identified by CDC, 
there are total of more than 33 agents which ultimately will need to be 
addressed with medical countermeasures.\13\ At the rate the ``material 
threat'' findings have been made to date, it could be years before 
BioShield procurement funds can be used to purchase products designed 
to counter the as yet undesignated agents.
---------------------------------------------------------------------------
    \13\ CDC, Bioterrorism Agents/Diseases (Nov. 19, 2004), http://
www.bt.cdc.gov/agent/agentlist-category.asp.
---------------------------------------------------------------------------
    Leaving CDC's findings to the side, scholarship on terrorist 
threats abound with long standing and well recognized findings about a 
significant number of CBRN agents likely to be deployed against the 
United States. For example, Jessica Stern in her 1999 classic, The 
Ultimate Terrorists, lists two dozen chemical agents that have been 
historically deployed by terrorists going all the back to World War 
I.\14\ Not one of these chemical agents has been certified under DHS' 
leadership. Nor has DHS even committed to making such designations in 
the future.
---------------------------------------------------------------------------
    \14\ Jessica Stern, The Ultimate Terrorists 24-25 (1999).
---------------------------------------------------------------------------
    Quite ironically, under other provisions of the BioShield statute 
concerning HHS funding for research (which does not require a 
``material threat'' finding), grants have been made for the development 
of countermeasures relating to tularemia, Ebola, and plague.\15\ Yet, 
none of these agents has yet been designated as a material threat. If 
HHS has already commenced funding for research in this area, one would 
assume that there is substantial evidence available to DHS 
demonstrating that these agents should be so designated.
---------------------------------------------------------------------------
    \15\ Press Release, United States Department of Health and Human 
Services, NIH News, NIAID Awards First $27 Million Using New Bioshield 
Authorities (May 9, 2005), http://www.nih.gov/news/pr/may2005/niaid-
09.htm.
---------------------------------------------------------------------------
    From CHHS own experience, substantial NIH funding outside of the 
BioShield appropriations is being committed to the development of 
medical countermeasures not yet declared to be ``material threats''. 
For example, MARCE is researching countermeasures for tularemia as part 
of a five-year, grant from NIAID, which is supported by funding wholly 
apart from monies appropriated under the BioShield statute.\16\ 
Simultaneously, plague vaccine research is being performed in the 
laboratories of James Nataro, M.D. at the CVD that is funded by funded 
by a National Institutes of Health U19 grant,\17\ again a project being 
done wholly apart from the BioShield Act.
---------------------------------------------------------------------------
    \16\ Virginia Bioinformatics Institute, Mid-Atlantic Regional 
Center of Excellence, https://www.vbi.vt.edu/article/view/426.
    \17\ Center for Vaccine Development, University of Maryland School 
of Medicine, Nataro Lab, http://medschool.umaryland.edu/cvd/natarolab/
natarolab.html
---------------------------------------------------------------------------
    The BioShield Act is an impressive starting point for the creation 
of a vibrant biodefense vaccine industry. It has many problems that 
must be corrected both administratively and legislatively.\18\ I would 
be happy to address each of those issues with you today. However, only 
one of those problems deals directly with DHS, the agency over which 
you have direct oversight responsibilities. DHS bureaucratic quagmire 
in identifying CBRN agents posing a material threat to the United 
States (thereby delaying the use of procurement efforts for well 
recognized CBRN dangers to this country) is a matter that deserves your 
full attention.
---------------------------------------------------------------------------
    \18\ For a complete description of the problems with implementing 
the BioShield statute, see Crossing the Valley of Death: Bringing 
Promising Medical Countermeasures to BioShield: Hearing Before the 
Senate Health, Education, Labor and Pensions Subcommittee on Public 
Health, 109th Cong. (June 9, 2005) (statement of Dr. Phillip Russell, 
Major General, Retired, U.S. Army), http://help.senate.gov/testimony/
t319_tes.html. I agree with almost all of Dr. Russell's assessments. 
For a proposal to resolve indemnification problems identified by Dr. 
Russell and others, see Greenberger, 800 Pound Gorilla, supra note 2.
---------------------------------------------------------------------------
    This problem does not require a legislative fix. What it requires 
is prodding the agency to abandon an administrative morass. It requires 
directing the agency to follow the well worn path already trodden 
through scholarship and the work of the CDC to quickly list the full 
panoply of CBRN agents. Such an expedited effort would be an 
encouragement to both researchers and the vaccine industry that a broad 
array of efforts might be funded over the next decade by the BioShield 
Special Reserve Fund.
    Finally, this subcommittee should be aware that the legislation 
recently introduced as a corrective to the Bioshield Act (S. 975, or 
the Project Bioshield II Act of 2005) places the major procurement 
responsibility principally in the hands of DHS, reducing substantially 
the role of HHS.\19\ This displacement of HHS is supposedly called for 
because industry supporters of Bioshield II view ``HHS as having a 
contentious relationship with the biopharma industry.'' \20\ However, 
given the difficulties DHS has had with effectively carrying out its 
single major mission under the existing legislation, Congress should 
think long and hard before it puts the entire biodefense vaccine 
apparatus under DHS.
---------------------------------------------------------------------------
    \19\ Arnold & Porter, LLP., Client Advisory: ``BIOSHIELD II'' Bill 
Would Expand Incentives to Develop BiOdefense Countermeasures 1 (May 
2005), http://www.arnoldporter.com/pubs/files/A&PAdvisory-
BioshieldII(0505).pdf.
    \20\ Id. at 2.

                           Testimony Summary

    The Department of Homeland Security has employed an opaque, highly 
bureaucratized, and lengthy process under the Project Bioshield statute 
for determining those chemical, biological, radiological and nuclear 
(CBRN) agents which pose ``material threats'' to the United States. 
BioShield's Special Reserve funds can only be used for countermeasures 
directed to those agents designated by DHS as material threats. DHS's 
decision-making apparatus has to date only made material threat 
determinations pertaining to four CBRN agents. It is well understood 
both within the Center for Disease Control and in the scientific 
research community that there are as many a 60 agents that now pose a 
``material threat.'' Even if a promising countermeasure were to meet 
the other requirements for purchase under the statute, it would not be 
eligible for procurement because of a lack of a material threat 
finding. At the rate the ``material threat'' findings have been made to 
date, it could be years before funds will be eligible to purchase 
products designed to counter those as yet undesignated agents. 
Moreover, the delay in recognizing agents as a material threat amounts 
to a disincentive to both researchers and the vaccine industry to 
devote resources to CBRN agents that are not as yet designated as 
material threats.

    Mr. King. The Chair now recognizes Dr. Richard Hollis, the 
chief executive officer of Hollis-Eden Pharmaceuticals.

                 STATEMENT OF RICHARD B. HOLLIS

    Mr. Hollis. Thank you, Mr. Chairman, members of the 
committee. My name is Richard Hollis. I am chairman of Hollis-
Eden Pharmaceuticals, the manufacturer of a product called 
NEUMUNE. It is the first drug that is specifically being 
developed as a medical countermeasure to acute radiation 
syndrome, commonly referred to as radiation sickness, as a 
result of nuclear terrorism.
    And I also ask that I please have my entire statement 
entered into the record.
    Mr. King. Without objection.
    Mr. Hollis. All of our Nation's leaders from the President 
on down have concluded that the greatest threat to our Nation 
is nuclear proliferation and nuclear materials in the hands of 
a terrorist. The head of the Domestic Nuclear Detection Office 
recently said there is a 100 percent chance someone will try to 
attack the U.S. with a nuclear weapon in the next 5 to 10 
years. Also, in a recent televised interview the Chairman and 
Vice Chairman of the 9/11 Commission both stated that not only 
is a nuclear detonation in one or more of our inner major 
cities possible, but it is also probable.
    Imagine what would happen if a small nuclear bomb went off 
in Washington, New York, or Los Angeles, a bomb similar to the 
mockup that Congressman Weldon uses to demonstrate how small 
these devices actually are. The death toll from the detonation 
of a relatively small nuclear device in one or more of our 
major cities would be devastating. Medical reports indicate the 
vast majority of those who are killed, hundreds of thousands 
would die from acute radiation syndrome, also known as ARS.
    When humans are exposed to radiation injury, the bone 
marrow is incapacitated, and it doesn't have the ability to 
produce red blood cells that carry oxygen, platelets that help 
fight blood clots, and white blood cells that help fight 
infection, and people will die from bleeding and infection.
    The sad thing is the overwhelming majority of these people 
could be saved if the government was better prepared to respond 
to a nuclear scenario deploying the appropriate medical 
countermeasures. Our inability to manage the aftermath of a 
nuclear attack is now caused by our failure to deploy a drug 
for acute radiation syndrome. Now, if you can imagine that you 
could rapidly distribute a drug to the people and give it to 
them much like soldiers with autoinfectors following a chemical 
attack; and imagine if that drug could stimulate the body to 
make white blood cells to fight infection and platelets to 
protect you from bleeding; and, most importantly, imagine that 
up to 90 percent of the people who received the treatment could 
survive. This is not a fantasy. We have an experimental drug 
with the potential to treat ARS that could be in the strategic 
national stockpiles as early as next year. And primate tests 
done under the Department of Defense oversight using lethal 
doses of radiation, this drug, NEUMUNE, has been shown to 
increase survival rates up to 90 percent. To date, it has no 
serious side effects, it is inexpensive, and it can be self-
administered without hospitalization.
    There is currently no therapy in the stockpile for acute 
radiation syndrome. Prussian Blue and potassium iodide, 
currently stockpiled, both address long-term health impacts; 
they do not address ARS. What we need is an ARS therapy, and so 
let me be blunt. Every treatment of this drug or something like 
it given to a victim of such an attack stands to save a human 
life. However, HHS has continued to delay the procurement of an 
effective radiation drug for ARS.
    I would submit that the key question for this committee is: 
Given the nuclear threat is the greatest one that we face, and 
given that more than a million lives per detonation may be on 
the line, and given that a promising, effective medical 
countermeasure to a nuclear attack to treat ARS is close to 
fruition, and it is now 4 years after 9/11, why is this drug 
not a top priority to be deployed to protect the American 
public?
    The failure here reflects a series of fundamental 
disconnects between HHS and DHS's role under BioShield. Our 
BioShield priorities are not coordinated with our national 
security priorities. As experts interviewed on Meet the Press 
just this past Sunday stated, our DHS spending is still not 
based on prioritized risk assessment.
    Overwhelmingly, experts agree that the greatest threat 
facing this Nation is a nuclear threat. That said, DHS and HHS 
have committed billions of dollars to second- and third-
generation products such as anthrax drugs, and we don't even 
have a first-generation--or RFP out issued for a first-
generation acute radiation syndrome drug. This is in part 
because DHS has failed to publish a prioritized list of 
BioShield threats. This not only causes confusion, but also 
creates market uncertainties, exactly the opposite of what 
BioShield was intended to do, which is to guarantee markets. As 
a result, since the passage of BioShield, our company has lost 
over $600 million in market capitalization. There needs to be 
better transparency and leadership in implementing BioShield.
    At the same time, DHS planned nuclear threat efforts are 
based on assumptions that do not reflect the postnuclear 
reality. We can't evacuate hundreds of thousands or a million 
people without an infrastructure. We can't treat people in 
medical facilities that will be overwhelmed. We can't treat 
people without an acute radiation syndrome drug. And we can't 
deploy medicines that need to be given to victims immediately 
after an incident.
    Our nuclear response planning should focus on getting 
effective ARS treatments out to the greatest number of victims 
in the fastest way possible. This is detailed in my full 
written testimony.
    So, in closing, how will our leaders try to explain why so 
many people died unnecessarily from a nuclear 9/11 when experts 
are predicting this nightmare scenario and we failed to prepare 
our Nation by providing and forward-deploying a drug that could 
possibly save millions of lives? So I ask your help today in 
ensuring that we look carefully at why this country remains 
unprepared to deal with its greatest threat, that of a nuclear 
detonation on our soil.
    We all know that the terrorists are racing to acquire 
nuclear weapons, and I want to assure the committee and the 
government and the people of America that Hollis-Eden is racing 
to develop NEUMUNE. But our political leaders must also ensure 
that HHS and DHS join that race, because it is the one race we 
have no choice but to enter. Last week in London there were 
multiple bomb blasts--I am wrapping this up--and the world was 
lucky that those bomb blasts were not nuclear. So the question 
is, can we be so lucky next time?
    So, Mr. Chairman and members of the committee, I want to 
thank you for the honor of allowing me to testify today, and I 
hope you agree that Hollis-Eden is a role model for Project 
BioShield and what Congress intended this legislation to 
achieve, and that is to create innovative new pharmaceutical 
drugs to mitigate the medical consequences of weapons of mass 
destruction. Thank you very much.
    Mr. King. Thank you, Mr. Hollis, especially for giving us 
the benefit of your own dealings with the Federal Government.
    [The statement of Mr. Hollis follows:]

                Prepared Statement of Richard B. Hollis

    Mr. Chairman, Ranking Member Pascrell, distinguished members of the 
Committee:
    Thank you for the opportunity to testify before you today. Before I 
begin, allow me to thank you personally for your longstanding 
leadership, both as a Committee and individually, to help safeguard 
this nation against terrorism, and specifically against the threat 
posed by weapons of mass destruction.
    My name is Richard Hollis. I am Chairman and Chief Executive 
Officer of Hollis-Eden Pharmaceuticals. Hollis-Eden is a San Diego-
based Biotechnology Company founded in 1994 and publicly traded on the 
NASDAQ stock exchange since 1997. Hollis-Eden has under development a 
number of proprietary immune-regulating hormones, compounds that are 
key components of the human immune system. We believe that by properly 
utilizing these hormones we can help the body to mount an appropriate 
immune or metabolic response to a number of different diseases or 
challenges. Specifically, we have developed and tested our compounds 
for the potential treatment of Acute Radiation Syndrome (ARS, or what 
is commonly known as ``radiation sickness''), among other possible 
applications.

THE NUCLEAR THREAT
    The President of the United States, the Vice President, the 2004 
Democratic candidate for president Senator Kerry, scores of military 
leaders, leaders from the medical and scientific community, the 
intelligence agencies, and leaders in homeland security, as well as the 
chairman and Vice Chairman of the 911 commission have all publicly 
stated that the greatest threat to this nation is nuclear proliferation 
and nuclear material in the hands of a terrorist. In fact, the Director 
of the Domestic Nuclear Detection Office at DHS recently stated that, 
``There is a 100 percent chance someone will try to attack us with a 
nuclear weapon in the next five to 10 years.''
    Imagine that a small nuclear bomb were to go off in Washington or 
New York or Los Angeles. The bomb is similar to the ``mock up'' 
Congressman Curt Weldon often uses to demonstrate how small these 
devices can be.
    The results of such an attack on this nation would be devastating. 
By extrapolation, the Department of Homeland Security's Nuclear 
National Planning Scenario (NNPS) \1\ estimates that the number of 
lives lost from a terrorist attack on a major U.S. city could be as 
high as one million or more people per detonation.
---------------------------------------------------------------------------
    \1\ The NPPS here refers collectively to The Planning Scenarios, 
Executive Summaries, The Homeland Security Council (July 2004), and the 
accompanying Improvised Nuclear Device, Predecisional Draft (undated).
---------------------------------------------------------------------------
    Contrary to popular belief, the vast majority of the victims of a 
terrorist nuclear attack would die not from the blast, but from Acute 
Radiation Syndrome (ARS). ARS is the result of radiation-induced bone 
marrow damage. Specifically, ARS is characterized by the loss of 
infection fighting cells and clotting elements that are produced in 
bone marrow. This loss of the body's ability to fight infection and 
prevent bleeding is believed to be the leading cause of sickness and 
death in the event of a nuclear attack.
    In fact, expert estimates of the medical consequences from a 
nuclear bomb indicate that ARS would likely kill three to five times as 
many people as the initial blast. For example, the British Medical 
Journal recently estimated that a 12.5 kiloton bomb detonated in New 
York City would kill at least 50,000 people instantly. These 50,000 
victims would be beyond help. However, the vast majority of victims--
between 200,000 to 700,000 people--would die days or weeks later from 
the effects of ARS.
    The sad fact is that the overwhelming majority of these people 
could be saved if the federal government was better prepared to respond 
to a nuclear scenario, including deploying the appropriate medical 
countermeasures.

OUR INABILITY TO MANAGE THE AFTERMATH OF A NUCLEAR ATTACK IS CAUSED BY 
OUR FAILURE TO DEPLOY A DRUG FOR ARS
    No city has the medical surge capacity to handle the massive 
numbers of ARS casualties: In the wake of a nuclear attack on a major 
city, medical facilities will be immediately overwhelmed. Adequate 
hospital and other clinical medical facilities of most large cities are 
already utilized at or near full capacity. A nuclear attack will 
destroy scores of beds and take others off-line because they will be in 
contaminated areas. This would mean little meaningful ability for 
hospitals to treat the victims of a nuclear blast.
    In New York, for example, a study published in the British Medical 
Journal recently estimated that approximately 1,000 hospital beds would 
be lost in a nuclear blast and an additional 8700 beds would be 
contaminated from radiation fallout. Additionally, the bulk of any 
region's medical personnel--doctors, nurses, technicians, EMT's--are 
located in the heart of the area most likely to be targeted by such an 
attack. Most of these medical personnel would be victims of the attack 
and would not be mission ready to treat other victims.
    Additionally, in the wake of an attack, we would expect to see 
hundreds of thousands of ``worried well'' flood medical facilities. 
These people will fear that they have been exposed to radiation and 
they will seek treatment from whatever medical facilities remain. There 
is no inexpensive, fast and accurate method to determine the level of 
radiation exposure and triage radiation victims. This will only 
complicate the difficult task of determining who is among the worried 
well, who is sick but can be saved, and who is beyond help. The burden 
of tens or hundreds thousands of worried well, on top of hundreds of 
thousands of ARS victims, will immediately overwhelm area medical 
facilities. The 2004 influenza vaccine shortage gives only a hint of 
the mass panic and possibly violent demand for medical services that 
would ensue after a nuclear attack.
    Because regional medical facilities will be overwhelmed, one plan 
is to ship victims to distant care, which will only increase death 
rates: Because medical resources in the area of any attack will be 
severely degraded and dangerously over-stretched, we have been briefed 
by DHS and HHS officials that one element of the plan for handling the 
injured and dying is to ship them off in buses and trains to remaining 
medical facilities that are located at a greater distance from the 
impacted area.
    This plan is fundamentally flawed in at least three respects. 
First, as described in greater detail below, the transportation 
infrastructure required to move these people will be destroyed or 
damaged. Second, even if these victims reach medical facilities that 
have capacity, medical personnel will have little to offer beyond 
prayers and compassion. Third, and most importantly, because ARS kills 
by opportunistic infection, putting scores of immune system compromised 
victims into enclosed buses and trains will only hasten the spread of 
infection and death. In other words, such evacuation efforts will hurt 
victims more than they help them.
    Without an ARS treatment first responders will be pulled back--not 
sent in: The typical American believes that if his or her city was hit 
by a nuclear attack, help, in the form of first responders, military 
units and medical personnel will come streaming in to assist victims. 
This ignores the reality that, at present, we have no way to protect 
first responders from ARS. Because of the lack of protection, we may 
not be able to afford to risk sending these units into contaminated 
areas to help victims and to restore order.
    We will have to evacuate hundreds of thousands of people within 24 
hours, because of radiation: Because there is no approved and effective 
treatment for people who have been exposed to enough radiation to 
trigger the onslaught of ARS, the DHS/NNPS is principally focused on 
evacuation. The NNPS calls for the immediate or near immediate (within 
24 hours) evacuation of roughly 450,000 people from the impacted city. 
The virtual impossibility of such a mass evacuation is self-evident to 
anyone who has negotiated rush hour traffic in a major American city.
    Without an ARS drug, medical personnel will have little to offer 
victims of radiation: Absent a drug to counter ARS, the only available 
treatments are bone marrow replacement and/or the administration of a 
drug approved for use in conjunction with chemotherapy. Both of these 
courses of therapy will be of little to no use after a nuclear attack. 
These therapies are highly expensive, making them cost prohibitive for 
a mass casualty event. Both of these treatments require intensive 
medical care in a fully functioning medical facility. There simply will 
not be enough hospital beds and medical professionals to administer 
these treatments on a mass casualty scale after a nuclear attack. The 
DHS NNPS states, ``The level of care that can be expected may be 
significantly lower than would normally be expected.''
    Victims lucky enough to get themselves to aid facilities will be 
able to receive help in the form of decontamination. This will help 
halt further radiation damage but do nothing for the harm from the 
radiation already received. Absent the deployment of NEUMUNE, even 
remaining hospitals will have no treatment to offer the mass casualties 
such an attack will produce. For the vast majority of evacuees from the 
impacted area, currently planned rescue and medical efforts provided at 
the periphery will have little impact on mortality. In short, hundreds 
of thousands of Americans could die of ARS because we have no effective 
treatment in the Strategic National Stockpile.

AN EFFECTIVE ARS TREATMENT IS NOW AVAILABLE
    Now imagine that you could rapidly distribute a drug that people 
could give to themselves much like our soldiers do with auto- injectors 
following a chemical attack. Imagine that that drug stimulated the body 
to make white cells to fight infection and platelets to protect you 
from bleeding. More importantly, imagine that up to 90 percent of the 
people who receive this treatment could survive.
    In fact, such a drug isn't a figment of the imagination. This drug 
could be procured today under Bioshield and be in the Strategic 
National Stockpile as early as next year.
    Two weeks after the devastating September 11, 2001 attacks on our 
country, officials from the Armed Forces Radiobiology Research 
Institute (AFRRI), a research division of the Department of Defense, 
approached Hollis-Eden and told us that they wanted to fast track the 
development of one of our experimental drugs for the treatment of ARS. 
In some early studies with mice, AFRRI found that this compound saved 
literally 100 percent of the animals that would have otherwise died 
from acute radiation exposure. Since that time, AFRRI has continued 
testing and publishing results in the medical literature on this 
compound, known as NEUMUNE, for use in mitigating the effects of acute, 
high-level radiation exposure.
    To date, results in over 200 non-human primates treated with 
NEUMUNE have demonstrated that the investigational drug is safe and 
effective in the treatment of ARS. In one recent trial, 90 percent of 
the treated primates survived otherwise lethal doses of radiation, but 
only 55 percent of the untreated group survived. Extrapolating those 
results to a nuclear attack on a major American city, one can see how 
dramatic an effect this drug could have on mitigating human casualties.
    Testing to date has also shown that the drug is stable and can be 
easily stockpiled. In addition, NEUMUNE can be self-administered in the 
field by victims of such an attack, without the need for supportive 
medical care. This capability would free up medical resources that will 
be stretched beyond the breaking point. The drug has also exhibited no 
significant negative side effects. And, assuming a contract of 
sufficient size to offer economies of scale, we can provide the drug at 
a cost akin to that of a standard antibiotic.
    Moreover, NEUMUNE can be administered before exposure or for some 
period of time after exposure. The ability to administer the drug 
before exposure makes NEUMUNE ideal for first responders and military 
units. Protected by NEUMUNE, such units could safely be sent into the 
irradiated area carry out rescue, recovery and relief efforts. This 
ability alone would fundamentally improve our ability to respond to a 
nuclear attack. More importantly, however, the capability of the drug 
to be self-administered hours after an attack offer us the potential to 
save hundreds of thousands of lives if we respond effectively.
    Perhaps most importantly, NEUMUNE represents a dramatic 
breakthrough in our civilian and military security posture when one 
considers that here is currently no drug in the stockpile for ARS.
    With much fanfare, the federal government has stockpiled two 
compounds, potassium iodide and Prussian Blue, to address radiation 
injuries; neither of these compounds will save the lives of the upwards 
of one million people that will die from ARS in the wake of a nuclear 
attack. Potassium iodide blocks the absorption of certain radioactive 
isotopes that can lead to thyroid cancer. However, the hundreds of 
thousands of people who will die from ARS within weeks of a nuclear 
attack will perish long before they can contract thyroid cancer.
    The second drug, Prussian Blue, is a dye used for many years by 
artists which can act as a chelating agent that helps the body rid 
itself of radioactive isotopes more quickly, thereby reducing the 
radiation damage to the gut area. However, Prussian Blue has no impact 
on the two primary causes of death from ARS: opportunistic infection 
from immune suppression and bleeding caused by platelet loss. In other 
words, this compound will not materially impact the numbers of people 
that will die in the immediate wake of a nuclear attack.
    The limitations and possibly over reliance on these drugs gives 
rise for concern by Congress. In connection with a recent Senate 
oversight hearing on Project Bioshield implementation, Senator Robert 
Byrd (D-WV) submitted a question for the record to Assistant Secretary 
Stewart Simonson about the status of the procurement and stockpiling of 
radiation medical countermeasures. Secretary Simonson responded by 
highlighting the Department's acquisition and pending acquisition of 
potassium iodide and Prussian Blue. In addition, he cited the possible 
emergency off-label use of an existing drug now given to cancer 
patients undergoing chemotherapy.
    In addition to the limitations cited of potassium iodide and 
Prussian Blue, the response failed to indicate that the cancer therapy, 
in addition to not having been approved specifically for ARS, is 
prohibitively expensive for mass casualty treatment, must be given in a 
highly controlled clinical (hospital) setting, must be refrigerated 
prior to administration, and would likely need to be given in 
conjunction with adjunctive therapies, like intravenous platelet 
administration.

    In short:
         Drugs now in the stockpile do not address ARS, which 
        will be the primary cause of death from a nuclear attack.
         We need an ARS therapy.
    In contrast--and allow me to say this bluntly--every treatment of 
NEUMUNE given to a victim of such an attack stands to save a life.
    I would submit the key question for the Committee to consider is 
this: Given that the nuclear threat is the greatest threat we face; 
Given that more than a million lives may be on the line; Given that a 
promising effective medical countermeasure to a nuclear attack to treat 
ARS is close to fruition; And considering the fact that nearly four 
years after the 9/11 terrorist attacks, why hasn't the procurement of 
this drug apparently been a higher priority for the federal government?

THE FAILURE HERE REFLECTS A SERIES OF FUNDAMENTAL DISCONNECTS BETWEEN 
HHS' AND DHS' ROLE UNDER BIOSHIELD

1. Transparency and leadership are lacking:
    We have worked in Washington for almost 3 \1/2\ years now meeting 
with numerous government agencies about biodefense. We have witnessed a 
clear lack of consensus as to:
         What the government wants;
         How much they will buy;
         What they will spend;
         When they will buy it; and,
         Who is making the decisions?
    No one seems to be in charge. Who is ultimately responsible? As 
discussed in greater detail in the next section of this testimony, when 
gaps are identified in our defenses, we have seen agencies point the 
finger of blame at other agencies--rather than aggressively fixing the 
problem.
    2. Our Bioshield priorities are not coordinated with our national 
security priorities:
    There is no apparent linkage between the threats identified for 
Bioshield purchases and the greatest threats identified by security 
experts for homeland security:
    The 9-11 Commission, the President, the intelligence community, 
DHS, others agree: greatest threat to our nation is the threat of 
nuclear terror. However, nearly four years after 9-11, and one year 
after the passage of Project Bioshield there still is no binding 
statement that the federal government is seeking to buy a medical 
counter-measure to a nuclear attack that addresses ARS. In fact, we are 
still waiting on a promised draft RFP.
    At the same time, we have purchased and are seeking to purchase 
counter-measures for a range of biological threats that are important 
but clearly do not rise to the level of threat that a nuclear attack 
does. For example DHS and HHS have committed billions on second and 
third generation anthrax drugs and we still don't have an RFP issued 
for a first generation ARS therapy. It may be instructive to note that 
tens of millions of federal dollars have been committed to developing 
and procuring Ebola vaccines, when to the best of our knowledge Ebola 
is not easily weaponized and used as a WMD. This should be compared to 
the all too real and known threat of a nuclear or radiological attack 
on the United States.
    Additionally, there is no single DHS/HHS common list of major WMD 
threats and intended/desired medical countermeasures to those threats. 
DHS speaks of one set of threats to the nation--and nuclear is 
typically first on that list. Meanwhile, HHS procures drugs from a 
different list, or, at the very least, a list with vastly different 
priorities. The lack of a list reflects a lack of threat coordination, 
which hampers our security efforts.

    In addition, this lack of a coordinated set of threats to be 
addressed creates market uncertainties--exactly the opposite of what 
Bioshield intended. As a result:
         Industry doesn't know what the nation needs to protect 
        itself;
         This leaves the market undefined;
         As a result, industry hasn't become invigorated by 
        Bioshield; and
         Investors are reticent to fund Bioshield ventures.
    This climate does not help us deploy medical countermeasures 
against WMD.
    In general, the federal government's Bioshield priorities do not 
appear to line-up with our national security imperatives.
    3. DHS' planned nuclear response efforts are based on assumptions 
that do not reflect the likely post-nuclear war environment:
    Another disconnect is the how DHS plans to respond to a nuclear 
attack. These plans are fundamental divorced from the reality of the 
post-nuclear-attack environment.
    Because there is no stockpiled way to treat ARS victims, the NNPS 
focuses on getting people away from radiation contaminated areas as 
fast as possible. In order to do so, the NNPS calls for the immediate 
or near immediate (within 24 hours) evacuation of roughly 430,000 
people from the impacted city. Let me emphasize that such a Diaspora-
scale evacuation is required to reduce the amount of radiation 
exposure, which is required to prevent ARS, which, in turn, is required 
because we have no scenario-based, field-ready ARS treatment. Here the 
NNPS states: ``For people in Zones 1 through 5 [heavily irradiated 
areas] this evacuation. . .is absolutely essential and must take place 
immediately or it will have a significant impact on the number of lives 
that will be lost.''
    These evacuation plans are not grounded in the post-nuclear-attack 
reality. First, the NNPS states that all infrastructure within + mile 
will be completely destroyed; damage to infrastructure within 3 miles 
will be severe. Within these areas bridges will be down, tunnels will 
be flooded, and roads will be damaged or destroyed.
    Consider the impact on two of the most likely target cities: 
Washington, D.C. and New York, N.Y. In Washington, the blast will 
likely destroy or severely damage roads and bridges that allow passage 
out from the city to the South and Southwest. Normal prevailing weather 
conditions will take the fallout plume from Southwest to Northeast. 
This will eliminate the use of the largest evacuation routes out of the 
city. These impacts may leave dry-land evacuation routes (e.g., 
Wisconsin Avenue) that travel to the Northwest as the only passable 
means of escape. These routes are heavily congested under normal 
conditions to say nothing of what conditions would be like in the wake 
of such an attack.
    With respect to the island of Manhattan, it is likely that a 
terrorist nuclear attack would destroy or render unusable most of the 
bridges that service the city. In addition, train and vehicular tunnels 
would likely experience flooding as water flows into the crater formed 
by the blast. This would be particularly true if the terrorist target 
was one of the main transit tunnel hubs, such as Grand Central or Penn 
Stations. These impacts would leave only far northern routes available 
to those seeking to escape fallout from the attack. Here again, under 
normal rush hour conditions--with far more means and routes of movement 
available than an attack would leave--these routes can become parking 
lots for hours as a result of a mere traffic accident.
    In addition, in New York, such impacts would likely strand the 
eight million people who live on Long Island. Depending on the plume 
path, Long Island residents could be left with little other means of 
escaping a certain death from radiation exposure except by sea in 
whatever form of craft they could find.
    In both cities even undamaged evacuation routes will be gridlocked 
by the impacts of the attack. For a distance of 13 or 14 miles, people 
who are looking in the immediate direction of the blast will be 
blinded, most temporarily. Immediate flash blindness to people 
operating vehicles will cause scores of accidents along key evacuation 
routes. Additionally, countless people who have been exposed to high 
levels of radiation will get into their cars and drive to get out of 
the area. These individuals will find themselves stuck in massive tie-
ups. Those who are most irradiated will at some point begin to get very 
sick and die; some of them will be behind the wheel when this occurs. 
Their cars--in some cases abandoned and in others wrecked--will only 
further impede the progress of any evacuation.
    The NNPS notes that: ``If [the city attacked] has an efficient, 
functional transportation infrastructure that is not bottlenecked by 
bridges, tunnels or other major obstructions and a high percentage of 
the population has access to the system, it is certain that [the high 
numbers of people exposed to deadly dose levels calculated to occur in 
the NNPS] will be drastically reduced.'' Query, what major American 
city has such a transportation system on its very best day? (See Graph 
1.)

        Graph 1: ANNUAL HOURS OF TRAFFIC DELAY PER TRAVELER: 2003
Los Angeles................................................       93
San Francisco..............................................       72
Washington, DC.............................................       69
Atlanta....................................................       67
Houston....................................................       63
Chicago....................................................       58
Miami......................................................       51
New York...................................................       49
Phoenix....................................................       49
Philadelphia...............................................       38
Source: Texas Transportation Institute 2005................
 

    Further, it is unlikely that the NNPS called for response can be 
achieved without first responders. Here again, ARS will block rescue 
and recovery efforts and frustrate the NNPS' efforts to save lives.
    The typical American believes that if his or her city was hit by a 
nuclear attack, help--in the form of first responders, military units 
and medical personnel--will come streaming in to assist victims. This 
is false. Until such time as NEUMUNE is widely deployed, we have no way 
to protect first responders who enter the irradiated area from falling 
victim to ARS. Standard issue breathing devices and protective clothing 
do nothing to protect individuals from deep-body penetrating gamma 
radiation. According to the NNPS, ``First responders may don 
[protective gear] to prevent internalization of fallout, but [this 
gear] does not reduce the gamma or neutron dose from external sources 
of radiation.''
    As a result, first responder units will actually be pulled back 
from assisting victims in the impacted area to a safe distance 
perimeter. Those few first responders who ignore these orders, and 
those already in the irradiated area who remain to help victims, will 
be working in a highly contaminated environment using equipment that is 
highly contaminated and suffering from ``battlefield stress'' that also 
works to diminish the body's immune system; they will soon begin to 
suffer from ARS and their mission readiness will decline precipitously 
as they go from savior to victim.
    The NNPS states obtusely, ``In a limited manpower situation, where 
the total integrated dose that can be absorbed by the finite number of 
trained and equipped response workers is fixed, as it is likely to be 
during the first few hours [more likely days] after the event, the 
value of these rescue activities will need to be weighed against those 
of preventing or reducing the future exposure of people in the high-
does fallout regions downwind.'' Lara Shane, DHS' Director of Public 
Education recently put this more directly in an article in the National 
Journal: in the event of a nuclear attack, ``We need people to take 
care of themselves for 72 hours.'' Sadly, this 72 hour timeframe is the 
period of time that will determine life and death for the vast majority 
of ARS victims of the attack--and the current plan has the American 
people on their own during this timeframe.
    Without help during this period, the number of casualties will be 
staggering. According to the NNPS, ``Victims will continue to absorb 
radiation doses while waiting on rescue and this will result in an 
increased likelihood of death.'' Victims lucky enough to get themselves 
to this perimeter will be able to receive help in the form of 
decontamination, which will help halt further radiation damage but do 
nothing for the harm from the radiation already received. In other 
words, absent a cure for ARS, decontamination will do nothing to help 
those who have already been irradiated to the level that triggers ARS. 
For the vast majority of evacuees from the impacted area, currently 
planned rescue and medical efforts provided at the periphery will have 
little impact on mortality.
    Absent first responders to assist in response efforts, the 
situation within the area of the blast--most likely the entire 
metropolitan area of one of the nation's largest cities--will be 
horrific. Power will be out for some period of time. The area of 
outage, according to the NNPS, is likely to span several states. The 
NNPS further states that power will be out for a period of several days 
to weeks. There will be no street lights to direct evacuation traffic 
flows. There will be no street lamps to light evacuation routes.
    Together the loss of power and the effects of the electro-magnetic 
pulse (EMP) will render most modern means of communication--cellphones, 
television, radio, blackberries, most Internet services, and even most 
satellite communications devices--inoperable.
    Without direction, victims will be left largely in the dark about 
the proper courses of action. For some, the best course of action will 
be to shelter in place. However, such a response runs counter to normal 
human instinct. Without the ability to receive information from 
authorities, most people will leave their homes, offices and other 
places of shelter and seek to evacuate--in doing so they may only 
increase their likelihood of contracting ARS and dying.
    Most food and water will be contaminated; ingesting these staples 
will cause further radiation injury. Depending on the timing of the 
attack, parents will be separated from their children, with little or 
no hope of reuniting during the immediate future. ATM machines will be 
down. Phone-dependent credit card transactions will be halted. People 
will have only cash-on-hand-reserves to pay for survival necessities.
    Without police and military units, which will be kept out of the 
area do to the risk of ARS, some measure of chaos, and likely violence, 
is inevitable. Curfews will exist only for the truly law abiding and 
scared.
    It may take up to two weeks before radiation in the downtown area 
falls below the Civil Defense ``all clear'' standard. Those who die 
from the blast will be left where they fell. The injured who cannot 
fend for themselves and make their own way out of the blast area will 
soon succumb. Bodies will liter the roadsides and rubble. Soon these 
corpses will begin to decompose and fester causing a wave of disease 
among a population that is already immune-suppressed from ARS.
    Additionally, the timing of medical relief efforts under the 
current Strategic National Stockpile System does not fit the nuclear 
attack scenario. Whatever medical help we have to offer will arrive too 
late.
    This system will not work for a nuclear attack. The deadly effects 
of nuclear radiation will have begun before this system can reach 
people with drugs. In a nuclear attack contamination will cause and 
require an evacuation Diaspora. Unless we reach these victims before 
they are spread around the nation we will have no way of catching them 
in time. In other words, if we let our preordained, one-size-fits-all 
system for distributing drugs determine our nuclear response, we will 
have no way to save these people.
    This disconnects between plans and reality is, however, not, at 
base, DHS' fault. Absent a drug to treat ARS, any realistic plan is 
doomed to failure. And, DHS has not been given an ARS drug to work with 
by HHS, which is charged with procuring such drugs.

Our nuclear response planning should focus on getting NEUMUNE out to 
the greatest number of victims in the fastest possible way.
    How do we achieve this?
    Based upon the damage ARS does and the speed at which these health 
impacts occur, the drug will need to be forward deployed in all high-
risk areas, such as in and around major metropolitan areas, nuclear 
power plants, nuclear weapons facilities, nuclear waste facilities, and 
designated national security events. Within these areas, NEUMUNE stocks 
will need to be decentralized to give victims the maximum opportunity 
to obtain the lifesaving drug. For example, we should seriously 
consider pre-positioning the drug at stadiums, large malls, post 
offices, fire and rescue stations, police stations, hospitals, major 
employers, and schools and universities. Along these lines, the NNPS 
focuses heavily on using first responders and military units to set up 
decontamination stations. These units will become natural distribution 
points to get everything from food to blankets into the hands of vast 
numbers of victims and radiation refugees. It would make sense to equip 
these decontamination centers with NEUMUNE, which could be handed out 
to people as they enter the decontamination process.
    Further, the forward deployment of NEUMUNE has the advantage of 
knowing, generally speaking, where we need to get the drug to be most 
effective. We not only know with some degree of certainty the most 
likely terrorist nuclear targets, but we also know if such an attack 
were to occur where we would need the drug to be available. We have the 
benefit of years of data about common prevailing weather conditions for 
most if not all of these target areas. We know what areas will most 
likely be downwind of an attack.

    The NNPS itself notes the importance of downwind focused efforts:
        Early emergency response efforts have historically been focused 
        on lifesaving needs close to the emergency site. However, other 
        actions need to be taken downwind where the plume will deposit 
        radioactive fallout. Perhaps the greatest impact on saving 
        lives will be activities immediately following the detonation 
        that address the reduction of the future radiation dose that 
        will be received by the population in the fallout zone 
        immediately downwind of ground zero.
    We can pre-position the drug in the likely epicenter (e.g., 
downtown) and in the most likely downwind regions. Beyond these 
commonsense initiatives, our planning processes should also consider 
more creative mechanisms to pre-deploy and push NEUMUNE out to the 
affected population. For example, in the area adjacent to ground zero, 
and directly downwind from the epicenter, the areas that will be 
hardest hit, we might use other means, perhaps even including carpet-
air-drops, to get NEUMUNE into victims' hands. We should also find 
ways--ranging from the bully pulpit to a tax break--to encourage 
people, families and businesses to have their own mini-stockpiles. When 
DHS called upon people to purchase duct tape and plastic wrap, these 
goods flew off hardware stores shelves. A similar effort here could do 
far more to actually protect people from the nuclear threat.
    Further, we cannot simply put this drug into our stockpiles and 
hope that people will know what to do in the event of an attack. Any 
effective plan to use NEUMUNE to save vast numbers of people post-
nuclear attack must begin with public education. Most Americans seem to 
believe that it is the nuclear blast that poses the greatest likelihood 
of death, when in fact they are more likely to be killed by ARS. And 
most think you cannot possibly survive a nuclear attack, when in fact, 
as I have indicated, ARS can be treated and the chance for survival can 
be significantly increased.
    These misconceptions and knowledge gaps will undermine the ability 
of DHS and the other response agencies to save lives with NEUMUNE. In 
fact, given decades of doomsday talk, I doubt the average American 
believes that a mere drug could help protect them from a nuclear bomb. 
We need to begin to educate the American people now about how this drug 
can save their lives and what they should do after any such attack to 
avail themselves of the drug and increase their likelihood of survival. 
For example, in most instances, if a family has NEUMUNE in the home, 
and if they have prepared by stockpiling food and water, and have a 
sheltered room in the home, that family will be better off not 
evacuating immediately. Rather, they should take the drug and shelter 
in place for a period of time to allow radiation levels to drop before 
seeking to evacuate. However, families aren't going to react in this 
way if they don't have NEUMUNE or haven't been educated about how to 
use it.

CONCLUSION
    Imagine if we fail to act now to deploy an effective medical 
countermeasure to a nuclear attack. Imagine that our worst nightmare 
comes to pass: Osama bin Laden uses a nuclear device on American soil.
    Finally, imagine the impact this attack will have on the American 
public as night after night, the entire rest of this nation watches in 
utter horror as endless news coverage captures the dying, the chaos, 
the ruins of the blast and the streets deserted in the wake of the 
fallout. The video footage will be heart wrenching. Victims left 
trapped under the wreckage will be seen crying for help and no help 
will be coming. Photographers will capture first responder units 
sitting on the periphery unable to go in to help. Military units, 
finally unable to stand these images, will disobey orders and will go 
in to help, only to become sick. The Pentagon will struggle with how to 
handle growing widespread dissension in the ranks. Television crews 
will track the demise of hundreds of thousands of people as ARS slowly 
kills them. We will hear limitless stories of families shattered, 
promising lives extinguished, and other boundless tragedies and 
ironies.
    If our attackers are smart they will leave little in the way of a 
return address. Our political and military leadership will look 
impotent as they struggle with how to respond to the greatest tragedy 
in our nation's history--in the words of Harvard's Graham Allison, the 
author of the leading text on the nuclear threat, this tragedy ``will 
make 9-11 look like a pin prick.''
    Commentators will appear on the network and cable news stations 
talking about a drug that could have saved hundreds of thousands lives 
had it only had been stockpiled and on hand. Talk radio will be awash 
with allegations of a vast conspiracy that allowed this to happen. 
Political leaders will call for hearings and investigations. New 
commissions will be formed to once again tell us that we suffered a 
``failure of imagination'' yet again.
    The failure of imagination here will not be our inability to 
imagine what the terrorists seek to do to the American people. We know 
that Osama bin Laden and al-Qa'ida are working day-in-and-day-out to 
attack us with a nuclear device. Bin Laden has said so himself.
    Here the difficulty is in the inability to imagine how to respond 
to that threat.
    Imagine how the public will judge their leaders if, after a nuclear 
attack, they learn a drug was available that could have saved hundreds 
of thousands of lives.
    How will our leaders explain why so many people died unnecessarily 
from a nuclear attack when there was a drug that could have saved them 
but their government wasn't willing to make it available to America's 
cities?
    I ask your help today in ensuring that we look carefully at why 
this country remains unprepared to deal with the greatest threat facing 
our nation: a nuclear detonation on American soil.
    Thank you for the opportunity to appear before you today

    Mr. King. And now we would recognize Mr. James A. Joyce, 
chairman and chief executive officer of Aethlon Medical, 
Incorporated. Mr. Joyce.

                  STATEMENT OF JAMES A. JOYCE

    Mr. Joyce. Mr. Chairman, I thank you and the committee 
members for the opportunity to testify today. My observations 
and recommendations will be based on both an entrepreneurial 
and scientific perspective. My name is Jim Joyce. I am the 
chairman and CEO of Aethlon Medical, based in San Diego, 
California.
    Since 2001, my company has focused on developing a 
therapeutic device that is able to deliver the immune response 
of clearing pathogens and related toxins from circulation. Our 
technology, known as the Hemopurifier, converges the well-
established principles of hemodialysis and affinity 
chromatography with new discoveries of affinity agents that are 
able to bind a wide range of envelope viruses, including many 
of those that are currently designated as Class A pathogens.
    Our scientific efforts have been supported and guided by a 
world-class team of infectious disease advisers, including the 
former head of the Russian bioweapon program, who Congressman 
Weldon referenced earlier today, Dr. Alibek, and the former 
commander of infectious disease research at USAMRIID, which 
today operates as our Nation's top facility in developing 
countermeasures against biological weapons.
    We believe that our Hemopurifier will serve as an effective 
adjunctive therapy when treatment options do exist, and most 
importantly the Hemopurifier is available today as the first 
line of defense against drug-and vaccine-resistant bioweapons, 
including pathogens that have been genetically engineered for 
virulence and treatment resistance.
    I should reference that the concept of extracorporeal 
devices to filter or clear pathogens is not novel. 
Hemofiltration was utilized in the Soviet Union in 1990 to save 
a bioweapon researcher from late-stage Marburg infection. This 
is published in scientific journals. Leroy Richmond, a postal 
worker infected with anthrax in the attacks of 2001, attributes 
the difference between his survival and the death of two 
coworkers as being a series of plasmapheresis procedures he 
received to combat anthrax toxins. Today, hemofiltration has 
evolved to be a common therapy in treating sepsis and septic 
shock, which is the primary cause or cause of death in most 
viral conditions, including conditions related to biological 
weapons.
    Now that I have provided the committee with background 
information, I wish to proceed with two comments related to 
current BioShield legislation. Number one, further 
clarification in the definition of ``countermeasure.'' New 
legislation expands the definition of countermeasure to include 
the general term ``therapeutics,'' but does not reference 
therapeutic devices specifically. In our pursuit of research 
grants with the NIH, we have found that the general term 
``therapeutic'' for viral infection is traditionally considered 
by examiners to mean a drug or vaccine. In this regard, the 
definition of ``countermeasures'' should specify and include 
therapeutic devices that reduce viral load or modulate cytokine 
production.
    Number two, presence of nonbioweapons markets. Early 
versions of Project BioShield would have eliminated the 
consideration of a stockpile purchase if other significant 
markets existed for a countermeasure. Such language has since 
been revised to require the presence of another commercial 
market must be factored into the HHS Secretary's decision to 
purchase a potential countermeasure.
    I believe that such open-ended language will deter 
organizations from pursuing development of innovative therapies 
against biowarfare agents. This language is also 
counterintuitive as the best hope for treating such a wide 
range of threats is through the evolvement of postexposure 
immunotherapeutic countermeasures, especially when considering 
the added challenge of combating pathogens that have been 
genetically modified.
    Therapies that are able to augment the immune function or 
modulate cytokine production are going to have large market 
opportunities beyond the treatment of bioweapons. If developed, 
these therapies will globally impact the treatment of other 
infectious disease, including established pandemics such as HIV 
and AIDS, and new evolving pathogens such as avian flu virus.
    BioShield legislation should be embraced because of these 
possibilities. If the goal is to attract the development of 
treatment countermeasures, then references that imply the 
presence of a broader market as being potentially detrimental 
should be eliminated.
    In the case of Aethlon Medical, we are preparing to 
initiate human trials to treat HIV and hepatitis C. We do not 
have the luxury of betting the life of our company on the hope 
that BioShield legislation will be inclusive of our technology. 
In that case, we would like to think that science itself will 
drive the value of new technologies into the marketplace. Thank 
you for your time.
    Mr. King. Thank you, Mr. Joyce.
    [The statement of Mr. Joyce follows:]

                  Prepared Statement of James A. Joyce

    Mr. Chairman, I thank you and the Committee Members for the 
opportunity to testify. The observations and recommendations I provide 
today are derived from both an entrepreneurial and scientific 
perspective. I am the Chairman, and CEO of Aethlon Medical, Inc., based 
in San Diego, California. Since 2001, my Company has focused on 
developing a therapeutic device able to deliver the immune response of 
clearing pathogens and related toxins from circulation. Our technology, 
known as the Hemopurifier TM converges the established 
principals of hemodialysis and affinity chromatography, with the recent 
discovery of affinity agents that are able to bind a broad spectrum of 
envelope viruses, including those that have been classified as 
bioterror threats.
    Our scientific efforts have been supported and guided by a world-
class team of infectious disease advisors, including the former head of 
the Russian Bioweapon Program, and the former Commander of Infectious 
Disease Research at USAMRIID, which today operates as our Nation's 
premier bioweapon research institute. We believe that the Hemopurifier 
will serve as an effective adjunctive therapy when treatment options 
exist, and most importantly, the Hemopurifier is available today as a 
first line of defense against drug and vaccine resistant bioweapons. 
This includes pathogens that have been genetically engineered for 
virulence and treatment resistance.
    I should reference that the utilization of extracorporeal devices 
to filter or clear pathogens is not a novel concept. Hemofiltration was 
utilized in the Soviet Union in 1990 to save a bioweapon researcher 
from late stage Marburg infection. Leroy Richmond, a postal worker 
infected with Anthrax in the attacks of 2001, attributes the difference 
between his survival and the death of two co-workers as being a series 
of plasmapheresis procedures he received to combat circulating anthrax 
toxins. Today, Hemofiltration has evolved to be a common therapeutic 
intervention for the treatment of sepsis and septic shock, which is 
often the primary cause of death in viral infection.
    Now that I have provided the Committee with background information, 
I wish to proceed with two comments related to current BioShield 
legislation.
    1. Further Clarification in the Definition of Countermeasure--New 
BioShield legislation expands the definition of countermeasure to 
include the general term ``therapeutics'' but does not reference 
therapeutic devices specifically. In our pursuit of research grants at 
the NIH, we have found that the general term ``therapeutic'' for viral 
infection is traditionally considered by examiners to mean a drug or 
vaccine. In this regard, the definition of countermeasure should 
specify and include; ``therapeutic devices that reduce viral load or 
modulate cytokine production''.
    2. Presence of Non-Bioweapon Markets--Early versions of Project 
BioShield would have eliminated the consideration of a stockpile 
purchase if other significant markets existed for a countermeasure. 
Such language has since been revised to require that the presence of 
another commercial market must be factored into the HHS Secretary's 
decision to purchase a potential countermeasure. I believe that such 
open-ended language may deter organizations from pursuing the 
development of innovative therapies against biowarfare agents. This 
language is also counter intuitive as the best hope for treating such a 
wide range of threats is through the evolvement of post-exposure 
immunotherapeutic countermeasures. Especially when considering the 
added challenge of combating pathogens that have been genetically 
modified. Therapies that are able to augment the immune function or 
modulate cytokine production are going to have large market 
opportunities beyond the treatment of bioweapons. If developed, these 
therapies would globally impact the treatment of infectious disease, 
including established pandemics such as HIV/AIDS, and new naturally 
evolving viral conditions. BioShield legislation should be embraced 
because of these possibilities. If the goal is to attract the 
development of treatment countermeasures, then references that imply 
the presence of a broader market as being potentially detrimental 
should be eliminated. In the case of Aethlon Medical, we are preparing 
to initiate human trials to treat HIV and Hepatitis-C. We do not have 
the luxury of betting the life of our Company on the hope that 
BioShield legislation will be inclusive of our treatment technology. As 
the same time, our pursuit of other treatment markets should have no 
bearing as to whether our technology is stockpiled as a countermeasure 
against biowarfare agents. The stockpiling of our Hemopurifier should 
be based solely on its ability to save the lives of citizens exposed to 
biowarfare agents.
    In closing, I thank you again for the opportunity to testify. 
Bioterrorism is clearly one of the most dangerous threats facing our 
nation, and I commended the committee members for devoting attention to 
this problem. I would now be pleased to address any questions you may 
have.

    Mr. King. And the Chair now recognizes the president of-Ms. 
Nancy Wysenski, the president of EMD Pharmaceuticals.
    Excuse me, Mr. Wright, I am sorry, we will come back to 
you, sir.

                 STATEMENT OF NANCY J. WYSENSKI

    Ms. Wysenski. Thank you. Chairman King, Congressman 
Pascrell, members of the committee, thank you for the 
opportunity to appear before you today. My name is Nancy 
Wysenski. I am the president of EMD Pharmaceuticals, located in 
Durham, North Carolina. EMD is a research and development 
pharmaceutical company specializing in the areas of 
neurodegenerative diseases, oncology, and cardiometabolic care. 
Our parent company is also the global provider of Cyanokit, a 
cyanide antidote kit designed specifically to be used as an 
immediate field antidote against large-scale cyanide poisoning, 
whether resulting from chemical terrorism, industrial 
accidents, or due to smoke inhalation. This promising 
technology has the potential to provide dual-use protection. It 
has the potential benefits not only for responding to terrorist 
incidents, but also to everyday emergencies where our first 
responders and others fall victim to smoke inhalation every 
day.
    EMD's Cyanokit is precisely the type of countermeasure the 
government should be considering for broad deployment to both 
the strategic national stockpile and first responders 
throughout the country. EMD, a subsidiary of Merck, KGaA, is 
currently working with the Food and Drug Administration to 
register this product in the United States. Indeed, the FDA's 
Division of Counterterrorism has shown significant interest in 
our development plan to obtain U.S. marketing approval. 
Clinical trials are in progress for the use of 
hydroxocobalamin, the chemical name for the compound comprising 
Cyanokit, encountering what we believe should be one of the 
most concerning chemical threats facing Homeland Security, 
cyanide poisoning.
    Cyanide is one of the most prevalent industrial chemicals 
in use today in the United States. It is also one of the most 
deadly chemicals in the environment. Nearly 100,000 tons are 
produced by various industries in the United States annually, 
with most of it shipped via our inter-model transportation 
system, rails, highways, waterways, et cetera.
    Cyanide is one of the deadliest and most widely available 
potential agents for use by terrorists as identified by U.S. 
intelligence sources. In public documents released by the 
Central Intelligence Agency on the potential threat of 
chemical, biological, radiological, and nuclear attacks to the 
U.S., cyanide is listed as the leading potential chemical agent 
of choice by terrorist groups. Specifically, the CIA cites that 
Cyanokit can cause--excuse me. Exposure to cyanide can cause 
nausea, vomiting, palpitations, confusion, hyperventilation, 
anxiety, and vertigo, which eventually progress to agitation, 
stupor, coma, and death. At high doses, cyanide causes 
immediate collapse.
    The reality of the current state of preparedness for 
meeting the threat of cyanide poisoning in the United States is 
disheartening. In 2001, prior to the incidents of 9/11, a 
medical expert quoted, ``The United States is under the 
constant threat of a mass casualty cyanide disaster from 
industrial accidents, hazardous material transportation 
incidents, and deliberated terrorist attacks. The current 
readiness for cyanide disaster by the emergency medical system 
in the United States is abysmal. We as a Nation are simply not 
prepared for a significant cyanide-related event.''
    During the legislative process that led to the passage of 
Project BioShield, both the House Committees on Government 
Reform and Energy and Commerce directed that provisions should 
be made to address the threat of cyanide poisoning under the 
supervision of the Department of Homeland Security. EMD did 
nothing to lobby for this report language. In fact, it was only 
brought to our attention by our outside counsel in 2004 when we 
stepped up our efforts for greater outreach to policymakers in 
Washington, D.C. Thus, it appears that the Federal Government, 
not industry, made Congress aware of the potential benefits of 
hydroxocobalamin to treat cyanide and the need to purchase this 
important countermeasure under Project BioShield.
    Once approved for use in the U.S., or even prior to final 
FDA approval under IND status or emergency use authorization 
provisions afforded by Project BioShield, hydroxocobalamin can 
be stockpiled and then administered on site at the scene of a 
chemical terrorism disaster, providing immediate aid to 
victims. The only currently licensed cyanide kit generally 
requires transport to a local hospital and further is 
cumbersome to administer, consisting of not just one component, 
but three.
    Most importantly, the current antidote cannot be used for 
victims of smoke inhalation; it may worsen their medical 
condition. However, Cyanokit is available for use in this 
manner, and according to the current implementation of Project 
BioShield by the Departments of Homeland Security and Health 
and Human Services, DHS must first determine that cyanide is a 
material threat by conducting a material threat assessment.
    To date, the Secretary of DHS has issued material threat 
determinations, as we have heard today, for four agents. In our 
quest for an answer, EMD became aware that a material threat 
assessment had not been conducted for analyzing the cyanide 
threat, and therefore HHS had no grounds for dictating the need 
for a medical countermeasure against cyanide.
    Mr. McCaul. [Presiding.] Ms. Wysenski, I would ask that you 
try to wrap up your testimony. Thank you.
    Ms. Wysenski. Okay. In conclusion, the need is clear that 
more must be done to address the threat of a terrorist-created 
cyanide poisoning event. The international community is acutely 
aware of just how quickly terrorist organizations are 
recognizing cyanide poisoning as a leading method for 
inflicting mass casualties. Indeed, the Governments of both 
France and Italy have not only recognized the substantial risks 
of this threat, but have recently stockpiled significant 
quantities of Cyanokit to better prepare their communities for 
responses to these threats.
    In conclusion, I would suggest that, given the most recent 
and graphic terrorist attacks that have been perpetrated in 
Europe, it is even more important to assess whether we are 
adequately prepared. This will require much more aggressive 
focus on material threat assessments, a transparent 
relationship between DHS and private industry, and, lastly, a 
purchase agreement must be clear to incent industry to bring 
products from R&D to our citizens.
    Mr. McCaul. Thank you, Ms. Wysenski.
    [The statement of Ms. Wysenski follows:]

                  Prepared Statement of Nancy Wysenski

    Chairman King, Congressman Pascrell, members of the committee, 
thank you for the opportunity to appear before you on this critically 
important subject of Project BioShield and chemical, biological, 
radiological, and nuclear medical countermeasures. My name is Nancy 
Wysenski and I am the President of EMD Pharmaceuticals, located in 
Durham, North Carolina. EMD is a research and technology company 
specializing in the areas of neurodegenerative diseases, oncology and 
cardio metabolic care. Our parent company is also the global provider 
of Cyanokit, a cyanide antidote kit designed specifically to be used as 
an immediate field antidote against large scale cyanide poisoning 
whether resulting from chemical terrorism, industrial accidents, or due 
to smoke inhalation. This promising technology has the potential to 
provide dual use protection--it has potential benefits not only for 
responding to terrorist incidents, but also, to everyday emergencies 
where first responders and others fall victim to smoke-inhalation every 
day. EMD's Cyanokit is precisely the type of countermeasure the 
government should be considering for broad deployment to both the 
Strategic National Stockpile and first responders throughout the 
country.
    EMD, a subsidiary of Merck, KGaA, is currently working with the 
Food and Drug Administration to register this product in the United 
States. Indeed, the FDA's Division of Counter-Terrorism has shown 
significant interest in our development plan to obtain US marketing 
approval. Clinical trials are in progress for the use of 
hydroxocobalamin, the chemical name for the compound comprising 
Cyanokit, in countering what we believe should be one of the most 
concerning chemical threats facing Homeland Security: cyanide 
poisoning.

The Threat:
    Mr. Chairman, cyanide is one of the most prevalent industrial 
chemicals in use today in the United States. It is also one of the most 
deadly chemicals in the environment. Nearly 100,000 tons are produced 
by various industries in the United States annually, with most of it 
shipped via our inter-model transportation system; including rail, 
highway and waterway transportation systems. Cyanide also remains one 
of the deadliest--and most widely available potential agents for use by 
terrorists as identified by U.S. intelligence sources.
    In public documents released by the Central Intelligence Agency 
(CIA) on the potential threat of Chemical, Biological, Radiological and 
Nuclear attacks (CBRN) to the U.S., cyanide is listed as the leading 
potential chemical agent of choice by terrorist groups. The relative 
ease of access and plentiful supply make cyanide a particularly 
attractive method for inflicting large scale harm to the general 
population. Specifically, the CIA cites the following rationale as to 
why much greater concern should be given regarding the potential use of 
cyanide by terrorist groups:
        ``several groups of Mujahidin associated with al-Qa'ida have 
        attempted to carry out ``poison plot'' attacks in Europe with 
        easily produced chemicals and toxins best suited to 
        assassination and small-scale scenarios. These agents could 
        cause hundreds of casualties and widespread panic if used in 
        multiple simultaneous attacks. . . Exposure to cyanide may 
        produce nausea, vomiting, palpitations, confusion, 
        hyperventilation, anxiety, and vertigo that may progress to 
        agitation, stupor, coma, and death. At high doses, cyanides 
        cause immediate collapse. \1\
---------------------------------------------------------------------------
    \1\ CIA, ``Terrorist CBRN: Materials and Effects''. September 2003.
---------------------------------------------------------------------------
    I thank you for your time and I would welcome your questions.
    The most important point to be drawn from the CIA's analysis is the 
need to have immediate and adequate quantities of antidotes made 
available in the field prior to the emergency or attack to provide the 
greatest chance of survival.
    However, the reality of the current state of preparedness for 
meeting the threat of cyanide poisoning is disheartening. In 2001, 
medical experts viewed the ability of the United States to respond to a 
terrorist incident involving cyanide with a high degree of angst:
        ``The United States is under the constant threat of a mass 
        casualty cyanide disaster from industrial accidents, hazardous 
        material transportation incidents, and deliberated terrorists 
        attacks. The current readiness for cyanide disaster by the 
        emergency medical system in the United States is abysmal. We, 
        as a nation, are simply not prepared for a significant cyanide-
        related event.'' \2\
---------------------------------------------------------------------------
    \2\ Sauer SW, Kein ME. Hydroxocobalamin: improved public health 
readiness for cyanide disasters. Annals of Emergency Medicine. June 
2001; 37: 635-641
---------------------------------------------------------------------------
    This comment came from a publication prior to 9/11, and 
unfortunately, in the last four years, nothing has changed.
    With the passage of Project BioShield, the Department of Homeland 
Security in conjunction with the Department of Health and Human 
Services now has the mechanism at hand that can greatly increase U.S. 
emergency medical preparedness for a cyanide disaster. They will not 
meet that goal, however, without increased involvement by industry and 
a demonstrated willingness for the government to push forward with the 
implementation of Project BioShield in the way Congress intended.

The Challenge:
    During the legislative process that led to the passage of Project 
BioShield, both the House Committees on Government Reform, and Energy 
and Commerce directed that provisions should be made to address the 
threat of cyanide poisoning under the supervision of the Department of 
Homeland Security:
        ``. . .under the authority provided by the bill, the government 
        could procure countermeasures against chemical agents (nerve, 
        blister, blood, and pulmonary agents) and radiological and 
        nuclear agents. The Administration currently does not plan to 
        use the bill's authority to purchase agents that could mitigate 
        threats from these sources, but it could do so if the perceived 
        threat from these agents changed or if certain treatments 
        became scientifically feasible. Countermeasures that could be 
        acquired under Project BioShield include existing treatments 
        for many nerve gases (including VX, Sarin, and Soman gas), 
        Prussian Blue (a treatment for certain types of radiation 
        poisoning), and hydroxocobalamin (a treatment for cyanide 
        poisoning that is in an advanced stage of development).''
    EMD did nothing to lobby for this report language. In fact, it was 
only brought to our attention by our outside counsel in 2004 when we 
stepped up our efforts for greater outreach to policymakers in 
Washington D.C. Thus, it appears that the Federal Government--not 
industry--made Congress aware of the potential benefits of 
hydroxocobalamin to treat cyanide and the need to purchase this 
important countermeasure under Project BioShield.
    Hydroxocobalamin is being developed as an antidote for treatment of 
cyanide poisoning due to smoke inhalation, chemical terrorism, or 
industrial exposure. As previously stated, the product is already 
registered by EMD's French affiliate, Merck Sante as a cyanide antidote 
under the international brand name Cyanokit, and currently is stocked 
on fire trucks and ambulances for first responder use in France where 
it has been in use for over 8 years.
    Once approved for use in the U.S., or even prior to final FDA 
approval under IND status or Emergency Use Authorization provisions 
afforded by Project BioShield, hydroxocobalamin can be stockpiled and 
then administered on-site, at the scene of a chemical terrorism 
disaster, providing immediate aide to victims. The only currently 
licensed cyanide kit generally requires transport to a local hospital 
and, further, is cumbersome to administer, consisting of not just one 
component but three. More importantly, the current antidote cannot be 
used for victims for smoke inhalation, because it may actually worsen 
their medical condition. However, before hydroxocobalamin or Cyanokit 
is available for use in this manner, and according to the current 
implementation of Project BioShield by the Departments of Homeland 
Security and Health and Human Services (DHS and HHS, respectively), DHS 
must determine that cyanide is a material threat by conducting a 
Material Threat Assessment (MTA). Even though during the first days in 
Afghanistan in 2001, our military seized videotapes from terrorist 
training camps showing al-Qa'ida experimenting with cyanide by 
poisoning dogs, it is our understanding that, as of yet, no MTA is 
underway or planned.
    Within DHS, the Directorates for Information Analysis and 
Infrastructure Protection (IAIP) and Science & Technology (S&T) work 
together in conducting assessments and determinations of biological, 
chemical, radiological and nuclear agents of greatest concern so as to 
guide near-term BioShield requirements and acquisitions. Plausible high 
consequence scenarios that provide an indication of the number of 
exposed individuals, the geographical extent of the exposure, and other 
collateral effects are drafted. If these consequences are of such a 
magnitude to be of significant concern to our national security or 
public health, the Secretary of DHS then issues a formal Material 
Threat Determination to the Secretary of HHS, which initiates the 
BioShield process.
    To date, the Secretary of DHS has issued Material Threat 
Determinations for four agents: anthrax, smallpox, botulinum toxin, and 
radiological/nuclear devices. DHS tells us that additional threat 
assessments are underway for the remaining Category A biological agents 
as identified by the Centers for Disease Control and Prevention 
(plague, tularemia, viral hemorrhagic fevers) and for nerve agents. In 
our quest for answers, EMD became aware that an MTA had not been 
conducted for analyzing the cyanide threat and therefore HHS had no 
grounds for dictating the need for a medical countermeasure against 
cyanide. Disconcertingly, there appeared to be confusion among the DHS 
staff as to who would actually conduct the MTA. It is surprising that, 
to our knowledge, DHS has not addressed the threat of toxic industrial 
chemicals, such as cyanide, considering the high level recognition of 
the threat posed by such chemicals.
    EMD's status in the BioShield procurement process has been stalled 
in the very first phase of the Material Threat Determination. For over 
a year EMD has been seeking answers to questions that clearly have an 
impact on critical business decisions. Without the MTA from DHS, HHS 
understandably is not armed with the information necessary to address 
our questions. We have no indication if the government will buy 
Cyanokit, when it will buy it, or how much it will buy. Without the 
MTA, we don?t even know if Cyanokit will fit the operational profile of 
the countermeasure that is called for to meet cyanide countermeasure 
needs or if it could be adapted to meet those needs. Without such 
answers, answers that will be informed by the results of an MTA on 
cyanide, EMD cannot adequately plan for production and facility 
expansion, and makes us question whether to proceed with product 
development at our company's expense in making Cyanokit available to 
the USG. Without a change in that status, the country is not likely to 
receive the benefit of protection against this looming threat.
    The need is clear that more must be done to address the threat of a 
terrorist created cyanide poisoning event. The international community 
is acutely aware of just how quickly terrorist organizations are 
recognizing cyanide poisoning as a leading method for inflicting mass 
casualties. Without adequate countermeasures in place, on the ground, 
stockpiled for use in time of emergency, most if not all victims will 
succumb to the effects of cyanide poisoning. However, without greater 
cooperation between industry and the government and, most importantly, 
greater transparency from the Federal government on how Project 
BioShield is being implemented, companies with the resources and 
capabilities of EMD will simply not be able to sustain viable interest 
in this market. The nation, and in fact, the world, cannot afford this 
risk.
    Indeed, the governments of both France and Italy have not only 
recognized the substantial risks of this threat, but have recently 
stockpiled significant quantities of Cyanokit to be better prepared in 
responding to this threat.
    In conclusion, I would suggest that given the most recent and 
graphic terrorist attacks that have been perpetrated in Europe, it is 
even more important to assess whether we are adequately prepared to 
deal with the additional threat of a lethal release of cyanide in such 
a circumstance. The events in Tokyo in 1990's starkly bear this fact 
out.
    If we are to address the threat of cyanide poisoning in the United 
States, we must move forward with the implementation of Project 
BioShield as Congress and the President intended. First and foremost, 
Material Threat Assessments should be completed on all perceived 
threats. Furthermore, industry needs increased transparency of the 
BioShield process and feedback from the government to keep us engaged 
in bio-chem defense efforts and be able to provide the government and 
public with urgently needed medicines. Enhanced communication and 
teamwork between DHS and HHS and industry will greatly aid EMD and 
other companies to bring products from R&D to market for the purpose of 
defending our Nation against chemical, biological, radiological, and 
nuclear attacks.
    I thank you for your time and I would welcome your questions.

    Mr. McCaul. The Chair now recognizes David Wright, the CEO 
of PharmAthene, Inc., for 5 minutes.

                  STATEMENT OF DAVID P. WRIGHT

    Mr. Wright. Mr. Chairman, members of the committee, 
PharmAthene was founded to develop countermeasures for 
bioterrorism. In 2 short years we have brought two products 
forward to a stage where the national strategic stockpile could 
soon acquire them. PharmAthene has had experience with Project 
BioShield, DHHS, DOD, DHS in developing our products Valortim, 
an anthrax therapeutic, and Protexia, a chemical bioscavenger 
against nerve agents.
    DHS plays a critical role in determining what constitutes a 
material threat and what the scope of that threat is. Today I 
would like to discuss how the material threat analysis and 
requirements, products, processes affect biodefense companies 
like mine. Three critical issues I would like to highlight are: 
Number one, transparency, identifying the government's 
countermeasure needs early enough for companies to make 
informed decisions; two, the requirements process, creating a 
more coordinated streamlined and timely process; and, three, 
BioShield funding, ensuring adequate funds are made available 
to support the Nation's biological and chemical defense needs.
    The Project BioShield procurement process should be more 
transparent. I believe Department officials should develop ways 
to integrate industry into countermeasure decisionmaking 
sooner. DOD, which has considerable experience in developing 
complex weapons systems that have no other commercial market, 
is a good case study. DOD identifies future capacity needs 
early on and fully funds these programs. For instance, several 
times a year DOD officials meet with industry to outline their 
needs and seek partners.
    Mr. Wright. Once a promising technology is identified, 
funding is available to support complete product development, 
from proof of concept, through the actual acquisition. We 
contend that Project BioShield would attract more interest and 
investment from industry if it employed similar techniques.
    The second issue, the requirement process, much can be done 
to expedite the process and better communicate the results. The 
current process is too complicated and disjointed. DHS, HHS and 
many other agencies and departments, including DOD, OMB and the 
Intelligence Community, are involved in decisionmaking. With so 
many chefs in the kitchen, it is unclear who or which 
department or which agency has the ultimate decisionmaking 
authority. Moreover, the time needed to reach an agreement is 
substantially lengthened.
    Another issue involves a link between the original threat 
analysis and the actual strategic stockpile requirement.
    Last year PharmAthene responded to an RFP that requested 
bids to provide from 10,000 to 200,000 anthrax treatments. 
10,000 or even 20,000 treatments is not a market any company 
can afford to consider. Furthermore, the cost to the U.S. 
government would be prohibitive on a per dose basis.
    If the MTA indicates only a very limited exposure that 
leads to a small strategic national stockpile requirement, 
companies need this information up front to evaluate the 
program opportunities and make informed decisions. We propose 
that your committee consider mechanisms to both streamline the 
requirement process and communicate early and clearly the 
government's procurement intentions.
    Lastly, Congress has taken an important first step to 
combat biological and chemical terrorism by setting aside 5.6 
billion. Unfortunately, it is insufficient to support the 
breadth of technology's needed to protect this Nation. Because 
of this we are troubled by the prospect that MTAs may, in some 
instance, be based on unrealistic scenarios to meet a certain 
fiscal end.
    To be effective, MTA would should into account not only the 
likely exposure estimate, but also the long-term effects of 
biological or chemical attack. Threat analysis should not be 
limited to what can be accomplished with current funding but 
should be devised separately from fiscal constraints.
    I am convinced that BioShield II can be a powerful 
incentive to companies in the biodefense sector, and I urge you 
to include provisions to enhance transparency, streamline the 
requirement process and authorize additional funds as 
necessary.
    Thank you.
    [The statement of Mr. Wright follows:]

                 Prepared Statement of David P. Wright

    Mr. Chairman, Members of the Committee: I commend this committee 
for its focus on the vital legislation which brings us together today.
    I am David Wright, President and CEO of PharmAthene.
    PharmAthene was founded to develop countermeasures for bioterrorism 
and has made significant progress in developing products which prevent 
and treat anthrax and agents of chemical warfare. In two short years, 
we have brought two products forward to a stage where they could soon 
be acquired for the Strategic National Stockpile.
    PharmAthene has had experience with Project BioShield, DHHS, DOD, 
and indirectly DHS in developing our products. Our lead product, 
Valortim TM, which we are co-developing with Medarex based in New 
Jersey, has demonstrated significant efficacy in preventing and 
treating anthrax and is poised to become an important component of the 
U.S arsenal to combat this dire threat. Our second product, Protexia 
TM, an effective countermeasure against chemical and nerve agents, has 
gained critical support from DOD, which has a strong interest in 
developing and procuring effective nerve agent antidotes to protect the 
war fighter. PharmAthene has invested in these technologies because the 
USG clearly communicated it was seeking effective countermeasures in 
the anthrax and chemical areas.
    As a company devoted to the area of biological and chemical defense 
we have made a great start in a short amount of time. However, it is 
difficult to determine where we should go next, or to substantiate 
potential acquisitions or investments to my board, because the current 
procurement process is cumbersome from two principal vantage points: 
(1) it is not transparent and (2) it does not provide sufficient 
information about future countermeasure needs. It costs over $150 
million to bring a new biodefense drug to the market and a typical drug 
development program takes 4-6 years. Companies, particularly small 
biotechnology companies like PharmAthene, cannot afford to make these 
types of investments unless they believe there is a real and 
sustainable market for their products.
    DHS plays a critical role in determining what constitutes a 
material threat and what the scope of that threat is. It is this role, 
and how the material threat assessment (MTA) process, which culminates 
in an actual requirement for SNS procurement, affects biodefense 
companies like mine, that I would like to discuss this morning. These 
include:

        (1) Transparency--identifying the government's countermeasure 
        needs early enough for companies to make informed decisions
        (2) The Requirements Process--creating a more coordinated, less 
        burdensome, and timely requirements process, and
        (3) BioShield Funding--ensuring adequate funds are made 
        available to support the nation's biological and chemical 
        defense needs
    In order to be successful, the Project BioShield procurement 
process must be more transparent. I believe Department officials and 
industry must work together to develop ways to integrate industry into 
countermeasure decision making sooner. The DOD process is a good one to 
review here, as DOD has a lot of experience developing complex weapons 
systems and involving industry early. Our Protexia product has 
certainly benefited from the DOD approach. DOD identifies capability 
needs for the near-term, mid-term and long-term and fully funds these 
programs. These capability needs are shared with industry and several 
times a year, DOD officials meet with industry to outline their needs 
and seek partners. Further, once a promising technology is identified, 
funding is available to support development across the complete 
development spectrum through the tech base, Milestone A and Milestone B 
process. Project BioShield would attract more interest and investment 
from industry if it employed similar techniques.
    With regard to the requirements process, much can be done to 
expedite the process and better communicate the results. The current 
process is complicated and disjointed. Before DHHS can actually procure 
a countermeasure for stockpile, a number of activities must occur--DHS 
must complete an MTA, which can take from several months to several 
years, DHHS must determine there is a need for new countermeasures, and 
the many members of the Weapons of Mass Destruction--Medical 
Countermeasures group must agree on a requirement. In addition, to DHS 
and DHHS, many other agencies and Departments are involved in this 
process including DOD, OMB, and the intelligence community. It is 
unclear who or which department or agency has ultimate decision making 
authority. Plus, with so many chefs in the kitchen the time needed to 
reach agreement is substantially lengthened delaying procurement 
decisions.
    A second issue is, what appears to be, a tenuous link between the 
original threats analysis and the actual SNS requirement. Last year, 
PharmAthene responded to an RFP that requested offerors to bid on 
providing anywhere from 10,000 treatments to 200,000 treatments. Ten 
thousand treatments or even 20,000 treatments are not a market any 
company can afford to consider. It is not reasonable to expect 
companies to invest millions of dollars in a technology for such a 
small order. If the original MTA indicated only a very limited exposure 
resulting in a limited SNS requirement, companies need this information 
up front to evaluate program opportunities and inform decision making. 
Furthermore, the cost to the U.S. government would be prohibitive on a 
per dose basis. If, on the other hand, a much larger requirement is 
warranted based on the MTA and DHHS assessments, but the resulting RFP 
does not reflect the real need, there is a disconnect in the 
requirements process. We would hope that given the importance of 
developing countermeasures to protect the nation, that as part of your 
deliberations on BioShield II, the committee would consider mechanisms 
to both streamline the requirements process and communicate early and 
clearly the government's procurement intentions (what, when, how much).
    Finally, I would like to note one other issue that we believe is 
critical in your consideration of BioShield II--funding. Congress has 
taken the first step in combating biological and chemical terrorism by 
setting aside $5.6 billion for SNS procurement. This is a good first 
step. Yet it is insufficient to support the breadth of technologies 
needed to protect this nation. To be effective, MTAs should take into 
account not only the likely exposure estimate but also the long-term 
effects of a biological or chemical attack. A realistic anthrax 
scenario, for example, must address not only the morbidity and 
mortality of the exposed population, but also take into account how the 
geographic area will be impacted. Anthrax can exist in the soil for 
over 30 years. The resources necessary to make the area inhabitable 
again will be enormous. Threat analyses should not be limited to what 
can be accomplished with current funding, but should be devised 
separately from fiscal constraints. While industry recognizes that 
funds in this area are not limitless, a process that begins with 
estimates based on unrealistic scenarios or developed to meet a certain 
fiscal end, will not only discourage companies from entering this 
market, but also leave our country woefully unprotected.
    Thank you for the opportunity to share my views on BioShield II 
with you today. I believe BioShield II can be a powerful incentive to 
companies in the biodefense space, and urge you to include important 
provisions enhancing transparency, streamlining the requirements 
process and authorizing additional funds as necessary. Doing so, will 
go a long way toward ensuring that the USG can procure the products it 
needs to protect the American people.
    I would be pleased to address any questions the Committee may have 
at this time. Thank you.

    Mr. McCaul. Thank you, Mr. Wright. The Chair recognizes 
himself for 5 minutes for questions.
    I mentioned to the previous panel I am reading ``1776'' by 
David McCullough. He talks about how the British were using 
their weapon of choice beginning at the Revolutionary War. They 
were looking at something called smallpox and infiltrating our 
troops in an attempt to wipe out the enemy. So it is nothing 
new in our history. It is something that we need to remain 
vigilant and focused on.
    I am very interested in the public and private partnerships 
in all areas of the government. This is clearly one where there 
is a great need for that. What I am concerned about, though, is 
that the biggest pharmaceutical companies--and I appreciate the 
ones who are here, the smaller companies--but the biggest 
companies are not interested in participating in BioShield.
    I wanted to see if you could tell me what impact you 
believe that is making on our homeland security and what, if 
anything, the Federal Government could do to bring them to the 
table so they can be full participants in protecting our 
national security.
    Mr. Hollis. I will try to answer that. I don't really think 
it makes a difference whether it is a big pharma or small 
biotech. I think the bottom line to it is industry needs to 
understand what this biodefense industry really is. The threats 
need to be identified, and the size and scope of the markets, 
so we can determine whether our technology is worth developing 
for that particular medical countermeasure.
    I think the reason that a lot of small companies are 
looking at this is because they are the ones that are really 
pushing the envelope on new cutting edge technology.
    Big pharma licenses a lot of its products from small 
biotech companies. So I don't know if it is big versus small. I 
think it is just the biodefense sector in general is really not 
really excitable by the capital markets. The capital markets 
are not responding, because they don't believe that the 
government is totally committed to this. If the capital markets 
were interested, believe me, so would big pharma.
    Mr. McCaul. Any other comments?
    Dr. Carr. If I could add a little bit to that. One of the 
problems that was raised earlier in the first panel was about 
the procurement precluding to a certain degree the products 
that already had significant commercial markets. And although 
we were told that that was not an absolute preclusion, it 
certainly is a preclusion. I think that is one thing that would 
deter a large company from being involved. Also, the fact that 
several people have addressed, in terms of the process, of the 
material threat assessment followed by a specific response to 
that and a call for grants is very protracted and really 
precludes responses that might be already inherent in some 
drugs that have been developed by large pharma companies and 
have not been looked at for potential in applications in these 
areas.
    I think if the process could be allowed to let them look at 
some of these other indications, you would have drugs that are 
already FDA approved for other indications that might come into 
application.
    Mr. Greenberger. I would just use one word, 
indemnification. That is, everywhere you look, phase 1 smallpox 
program, where the President wanted 500,000 first responders 
vaccinated, 40,000 ended up being vaccinated. A survey was 
done, indemnification. Be very careful.
    I know that BioShield II is talking about indemnification 
and people want to grab old statutes and say well, here is 
indemnification. They tried to do that, Congress passed a law 
in April of 2003 to indemnify. Not good enough.
    You have to look at this very carefully. If the government 
needs to be a deep pocket in this regard, it is well worth it 
to get these vaccines on the market.
    Mr. Joyce. Mr. Chairman, I would add one other comment. I 
was privileged to be involved in a gathering of bioindustry 
thought leaders yesterday afternoon. I think there was one 
common, and that is therapeutic innovation occurs at small 
companies. The challenges we have today are challenges of 
efficiency and clarity in the system.
    Another conclusion is that small companies do not have 
experience in navigating through systems that seem to be 
developed for companies of the magnitude of Northrop Grumman 
and other large biodefense or other large defense contractors. 
So there needs to be greater clarity and efficiency of systems.
    The other thing that was a conclusion or a concern is that 
a lot of the decisions being made regarding what pathogens are 
actual threats are being made by individuals that don't 
actually have experience in dealing with these pathogens. That 
is a very large concern, and it goes back to the material 
threat assessment issues.
    There are people available that do have experience in 
dealing with these pathogens, and there has been a lot of 
academic pontification regarding what is and what isn't a 
threat. I think in many cases those thoughts are not the same 
thoughts of people that have experience with dealing with these 
pathogens.
    Thank you.
    Mr. McCaul. Ms. Wysenski.
    Ms. Wysenski. If I could add again, the need to expedite 
the process so that we can see a far higher number of material 
threat assessments being done. That is the only way that 
private industry, small or large, knows that they will have a 
market to address. Most companies are making trade-off 
decisions between investment opportunities. If it isn't clear 
what the process is, that a material threat assessment will be 
done, which will likely lead to a market demand, companies will 
be swayed to make their investments in other areas.
    Mr. McCaul. I thank you. I see my time has expired. The 
Chair now recognizes the ranking member, Mr. Pascrell, for 5 
minutes.
    Mr. Pascrell. Thank you. There seems to be agreement that 
pharmaceutical companies are hesitant to take part in the 
BioShield program due to the potential for liability, the low 
or uncertain demand even if products are developed, and the 
potential that companies would lose intellectual property 
rights if the government allowed others to produce the product 
during an emergency. I think that these concerns are 
reasonable.
    I want you to rank these issues quickly.
    Should the Congress address these concerns? How should they 
address those concerns? Why don't we start with
    Mr. Hollis, as quickly as you can?
    Mr. Hollis. Well, sure the liability issues are important 
because pharmaceutical companies have a lot to lose. They are 
targets for lawsuits. I believe that the experience that we had 
with other products when the anthrax attack first happened, I 
think it was the Secretary who was looking to basically bypass 
that pharmaceutical company's patents because of a public 
health emergency.
    So I think patents are extremely important, and there 
should be protection under the legislation that if you are 
developing a medical countermeasure against WMD that those 
patents should be honored.
    Mr. Greenberger. I think liability definitely needs to be 
dealt with in legislation. Congress has tried to do this most 
recently with the SEPA Act in 2003 dealing with smallpox. Both 
manufacturers, medical providers, unions who represent first 
responders that are worried about compensation were uniformly 
unhappy with that.
    I think the government is going to have to spend a lot of 
money in this area a very small portion of it would be to tell 
big pharma, who is really worried about liability, because they 
have so much at stake.
    And conversely, the first responders, who have to be 
vaccinated pre-event, don't worry, will step in. This is so 
important the government will be a deep pocket, and we will 
take care of things. Now, that may sound shocking, but the cost 
of doing that pales against the amounts of money that are being 
spent on other efforts.
    With regard to patents, you have got to be very careful, 
what happened in anthrax. I mean, we have these very high drug 
prices. And if somebody who holds a patent is going to stand in 
the way of making affordable and easy distribution in an 
emergency, reassuring the strength of that patent may not be 
the wisest course in an emergency. It is a very tricky issue, 
but it deserves the attention of Congress, and it can be solved 
legislatively.
    Mr. McCaul. Anybody else?
    Mr. Joyce. Yes, I would make one comment as a rebuttal and 
it would refer back to what we heard from the Assistant 
Secretary of HHS today. Educated that they had allocated $88 
million towards a certain countermeasure issue, the reality is 
that the average drug, the cost of developing the average drug 
today is about $800 million and takes about 10 years. If you 
look at the development process of drugs and vaccines, only a 
very minute percentage of those compounds that even go into 
trials ever are proven to be safe and effective.
    So there is a major disconnect between the dollars being 
spent and the dollars required to develop new therapeutics.
    Mr. Pascrell. Anyone else?
    Dr. Carr. I would just emphasize once again the liability 
issue. I think that goes across the board, because a large 
company with a deep pocket, there is grave concern. But also 
for a small, could be wiped out in these same situations.
    Mr. Pascrell. You know, Dr. Greenberger, right, I read your 
testimony quickly. I find it pretty astonishing in terms of 
what else we have heard today and the questions from both 
sides.
    You say on page 3 of your testimony that the BioShield Act 
established no procedure for DHS to employ and supervise the 
making of material threat determinations. That is interesting 
and true.
    Despite what was an obvious Congressional invitation to 
summarily determine what are the widely-priced CBRN threats to 
the United States, DHS has employed an opaque, highly-
bureaucratized relatively lengthy process for determining 
material threats. Congressmen--you say poorly-delineated 
administrative strengths. Do you really mean what you said?
    Mr. Greenberger. Oh, absolutely. I am absolutely confident 
that when Congress assigned DHS the responsibilities of 
outlining material threats that they thought that that was 
going to be a very easy and quickly done task. I mean, the 
testimony here today, Chairman King, opened up Marburg and 
Ebola. Who would argue about Marburg and Ebola? Yet that isn't 
there.
    I don't think Congress thought the reason they didn't 
establish a procedure, maybe they should have and made it 
clear. But this material threat thing has a field that is well 
trod. You know, Ken Ellerbeck from the Soviet Union, Jessica 
Stern who was referred to by Congressman Weldon, the CDC, we 
know what the material threats are. Cyanide is not on it. It is 
recognized that cyanide is a material threat. What is taking so 
long?
    Mr. Pascrell. What would you do about the MTAs that are 
lasting 3 to 4 months? What do you think is the best response 
to that problem?
    Mr. Greenberger. Frankly, I think it would be the chairman 
of the committee and the ranking member of the committee and 
the chairman of the subcommittee and the ranking member of the 
subcommittee getting on the phone with Mr. Chertoff and saying 
to him, this was never intended to be--this is the pivot on 
which the act operates, it is simple, get this done, we want it 
done by December 31, 2005.
    Mr. Pascrell. We are going to have the Secretary in front 
of us, the entire committee tomorrow. We should have some 
interesting debate or discussion, whatever.
    Mr. Greenberger. You don't need legislation to fix this. 
Somebody has to say. I am sure if Mr. Chertoff, who I know and 
is a very intelligent, hard-working guy, this were explained to 
him--it is probably way below his pay grade but if he 
understood the whole statute was coming down because these 
assessments weren't being made he would have it done in a 
flash.
    Mr. Pascrell. Mr. Chairman, so many times we have had 
problems regardless of what issue we talk about in Homeland 
Security of moving the process along--I almost feel as if 
people are hesitant to make a decision to move the process 
along and that we are waiting for somebody else or they don't 
know who is supposed to make the decision.
    Mr. Wright. If I may, I believe that is a very good point. 
I believe the way the system was put together and using what 
was available was commendable at the time. But there is not a 
central person responsible. There is not a central department.
    It falls in a number of departments, in a number of 
people's area of responsibility. And trying to coordinate this 
all has caused these problems. It is not just the MTAs and 
getting them out. It is the length of time it takes to develop 
these drugs, and companies are going to have to expend hundreds 
of millions of dollars to meet these threats. They have to know 
that there is something at the end of the table.
    If you look at the DOD process--as I mention in my 
testimony--the DOD has been buying and creating systems for 
years that there is no other commercial market for. They can't 
go out and sell an F-15 to anybody else. They have a process 
for doing that.
    Mr. Pascrell. You know, Mr. Wright, I am listening to you 
very carefully. I listened to all of you very carefully. There 
has got to be a difference between us developing a particular 
drug and us developing a particular antidote that is going to 
save people's lives.
    We are asking guys and gals to go to Afghanistan and Iraq 
to defend the country. They are sacrificing every day, for 
whether we are for this war or against is immaterial. We 
support them. I want to know what sacrifices are going to be 
made on homeland to protect us.
    So I know, we don't want to develop a drug that we are not 
going to get any response to and it is going to be hanging out 
there. But on the other hand, we all have responsibilities on 
this side as well as that side, to develop it. I am very 
concerned about us simply looking at product and how much this 
product is going to mean to the company in terms of the bottom 
line. The bottom line is, we all have a responsibility in this. 
If we meet it, if we can expedite, if we can lay down standards 
that make sense and move the anecdotal product to the front, 
then we will have accomplished something. I agree, we have been 
caught in a bureaucratic trap, which is not surprising, is it,
    Mr. Greenberger?
    Mr. McCaul. The Chair now recognizes Mr. Reichert for 5 
minutes.
    Mr. Reichert. Thank you, Mr. Chairman. I just want to 
follow up on the latter question that the ranking member has 
been pursuing. We are getting the message loud and clear that 
there is a problem in DHS in coming up with a material threat 
assessment. Especially, Mr. Greenberger, you were very 
critical.
    I would just like to ask you, in referring to Mr. Wright's 
comments about transparency and requirements and BioShield 
funding, do you agree with those three assessments as something 
that needs to be addressed?
    The second part of that question is, are there any others 
that you would add to that list of three?
    Mr. Greenberger. Well, yes, I agree. I focused on material 
threat assessments, because that is what your committee really 
has direct jurisdiction over.
    Mr. Reichert. Sure.
    Mr. Greenberger. But there are a litany of problems with 
BioShield. Dr. Phillip Russell, who was the father of BioShield 
and has testified many times in front of committees, has listed 
problems, and one of those is transparencies.
    It is a question of who is in charge here. Nobody knows 
where to go to and that is a very big problem. I agree, whether 
it is formally or informally, there needs to be a person who 
understands the medicine and can work the bureaucracy to get 
these things ready and out there.
    I do know that Dr. Fauci at NIAD, who is at the research 
end of this, and is giving out money for vaccines to be 
developed, I know this because the University of Maryland 
School of Medicine is the lead institution in that regard and I 
work closely with the center for vaccine development. They are 
making great strides in developing vaccines.
    But all the research in the world--you have to do clinical 
trials, you have to have capitalization, you have to have 
laboratories. That is not being done. I think it is not being 
done because, unlike Dr. Russell, who understood all of this 
and what was needed, there is nobody in charge who understands 
how the science, the industry and the bureaucracies have to 
come together.
    I am reminded in World War II we had a War Mobilization 
Board, and someone was put in charge of making sure that the 
country produced the products that we needed to defend 
ourselves. We have got lots of committees.
    That is the trouble. Nobody knows which committee is in 
charge. The Weapons of Mass Destruction Committee, this 
committee, that committee, who is running the show? I truly 
believe no one is running the show. It may very well be because 
this is not on the top of the Secretary of HHS and the 
Secretary of DHS's primary focus. They have got much more 
immediate problems to worry about. So it should be worked from 
the top down and bottom up.
    Mr. Reichert. I wish you would just be honest and tell us 
what you really feel.
    Mr. Greenberger. I have no vested interest here. I can tell 
you what I really think.
    Mr. Reichert. It was very clear, thank you.
    Any other comments in regard to that question? Yes.
    Mr. Hollis. Yes, in regards to expediency, when you are 
coming from the private sector like myself, we have invested 
tens of millions of dollars, over $100 million already year-to-
date in developing an acute radiation symptom drug. We were 
asked to develop this product by the Department of Defense. 
Here we are 4 years later and we still don't even have an RFP 
out for the nuclear threat.
    This is really--I don't even know how that can be 
explained, but we are still waiting. We are in a real time 
scenario.
    Mr. Dicks. Will the gentleman yield. Is that from Defense 
or DHS?
    Mr. Hollis. That is correct. We have no request for 
proposal from DOD, HHS or DHS. We are in a real-time situation 
going through our FDA approval process. The product is being 
geared up to go through the peripheral efficacy trial for FDA 
approval. We have to commit to manufacturing, we have to commit 
a lot of money to get this drug approved.
    We still don't know what the size and scope of the market 
power pursuing is. This is really unexcusable. I really believe 
I am putting a lot of the shareholder dollars at risk not even 
knowing what this market opportunity is.
    Mr. Reichert. Thank you.
    I yield the balance of my time, Mr. Chairman.
    Mr. McCaul. The Chair recognizes Mrs. Christensen for 5 
minutes.
    Mrs. Christensen. Thank you, Mr. Chair. I thank you all for 
your testimony. I think it has been very, very informative, 
both the written and the oral testimony. I wanted to follow up 
on Mr. Greenberger's last comment.
    Among the things he shared with us is that DFI 
International's summer, quarterly publication that suggests 
that we need a stand-alone biodefense agency to begin to really 
focus on these issues. The fact that it is--for example, 
biological defense is part of the chemical and biological 
defense program causes biodefense to have less priority as the 
programs are being developed and as budgets are being 
allocated.
    So my question is, do we need a stand-alone biodefense 
agency or office? Would that help?
    Mr. Greenberger. I am very hesitant to tell you that, 
because I am worried that every time we have a problem, the 
solution is a new bureaucracy. I think--I presume because of 
people like D. A. Henderson and Jerry Howard, who is sitting 
here. When they were at HHS, Dr. Russell was brought in to 
shepherd the BioShield program through and get it started. He 
has since left.
    We need somebody of that caliber here to be given the lead 
opportunity to run this thing, for both Mr. Chertoff and Mr. 
Leavitt to say he is the person who is going to run this. That 
is a person who understands the research side, understands how 
you get to research to commercialization, knows how to run a 
bureaucracy and can knock heads together, all the legislation 
in the world.
    I think this is not a partisan concern, it is a bipartisan 
concern, does not help if you don't tell the secretaries how 
important this is and to get somebody in there. If they do get 
somebody of that caliber in there, this can start to work, and 
you will get solid advice about what you need going forward in 
terms of legislative help.
    Mrs. Christensen. Anyone else?
    Mr. Wright. I actually believe that a single agency or 
department or whatever it is that is responsible for biodefense 
with the right resources in it would provide the right focus we 
need to get this thing done. I think with the number of 
different departments involved and the number of different 
people involved and the true lack of responsibility, which has 
been brought up a number of times here this morning, that there 
is no one you can go to and say make this happen and that 
person has the responsibility and resources to make it happen. 
I think it is a real, a real lack in the system.
    Mr. Hollis. May I please add something to that? I think 
someone who is in that position would be beneficial. However, 
they also need to understand capital formation, because if we 
don't understand capital formation we are going to be dependent 
upon taxpayer and grant funding to get these medical products 
through.
    Someone needs to be the voice to the capital markets that 
this is a very important sector, a biodefense sector and the 
government is committed to it so that investors are willing to 
take the risk and invest in companies that are developing 
medical countermeasures, because without that excitement there 
will be no investment in this area and there will be no medical 
countermeasures unless the government wants to fund the whole 
thing themselves and all the up front risk and research and 
development money.
    Mrs. Christensen. Go ahead.
    Ms. Wysenski. I would just like to support both
    Mr. Wright's and Hollis' comments in that we really do need 
to have one responsible source to receive direction from in a 
rather transparent way, and beyond that that we do have to deal 
with the very realistic consideration surrounding capital 
investment.
    We are in the same situation, uncertain about what the 
demand for a cyanide antidote kit may be and at the same time 
estimating 2 to 3 years in advance for investments in a 
production facility. We are grappling with that issue as you 
speak. Until I can show the data about the potential size of 
the market, it is very hard for me to make a compelling 
argument for further investment in capital.
    Mr. Joyce. I would say one other thing that seems to be 
quite dangerous in these issues. The multitude of different 
parties involved is starting to turn this into a longer term 
perspective, that the countermeasures that we are talking about 
are countermeasures that need to be developed, that may not be 
on the market for 5 years, 10 years. It is an open-ended 
question.
    Because there is not a single entity no one is really 
asking the question, what would we do if we knew there would be 
an attack with an unknown pathogen in the next 6 months? What 
countermeasures are available now and can be manufactured? 
There are treatments available now. There are things that are 
applicable to other viral conditions that can be developed now. 
One of the things that also needs to be analyzed is there seems 
to be a lot of focus on vaccine development.
    Well, I think you need to closely analyze the history of 
vaccine development. Throwing money at vaccine development does 
not make vaccines appear. I am very familiar with the issues of 
HIV and AIDS. There has been a multitude of dollars, more than 
anyone is willing to throw at BioShield right now, spent in 
trying to develop a vaccine for the last 20 years. There is not 
one now and there is not one in sight in any time in the 
future.
    So there has to be a focus on what countermeasures are 
there now, what treatments can be modified to be here in the 
coming months, not in 5 years or in 10 years. Thank you.
    Dr. Carr. I would just like to end by saying I absolutely 
agree with that. There needs to be someone or someplace where 
they are beginning to address the potential near-term 
solutions, because vaccines and the development of them are not 
near-term solutions.
    Mr. McCaul. The Chair recognizes Mr. Dicks for 5 minutes.
    Mr. Dicks. Mr. Hollis, the drug you mentioned in your 
testimony, is it NEUMUNE?
    Mr. Hollis. Yes, sir.
    Mr. Dicks. That has not yet been approved by the FDA. That 
is the big problem here, right?
    Mr. Hollis. No, well, we have an open I&D. We are going 
towards our pivotal trial and we are going towards FDA 
approval. However, BioShield is supposed to give you advance 
purchase contracts to give you the incentive to invest the 
dollars to develop the drug through the FDA approval process.
    So if you are developing a drug through the FDA approval 
process and you have no idea of the size and scope of your 
market or a request for proposal, it is like asking a defense 
contractor to build a tank without knowing what the market is.
    Mr. Dicks. What has been the problem? You said an advance 
purchase agreement?
    Mr. Hollis. Yes, sir.
    Mr. Dicks. What has been the problem in getting an advance 
purchase agreement?
    Mr. Hollis. Well I think it is unanimous on this panel what 
the problem is--
    Mr. Dicks. There is a material threat paper on this issue, 
right?
    Mr. Hollis. You know, I am very glad you asked that. 
Because when we asked DHS about that, they said they had 
provided a national strategic nuclear threat assessment to HHS.
    When we asked HHS where it was, they said they had not 
received an official risk assessment. But here we are 4 years 
into development and we still don't even have a request for 
proposal. As a consequence, our investors have lost confidence 
in the BioShield procurement process, and that is the reason we 
have almost a half a billion dollars loss in market 
capitalization because there is no transparency. The markets do 
not know what the government wants. When you ask me what the 
problem is, I really wish I knew, sir.
    Mr. Greenberger. One point I might add is I do think the 
BioShield legislation--
    Mr. Dicks. But let me on this point--just one second. DHS 
has done an MTA for the nuclear radiological, right? But they 
haven't given it to HHS.
    Mr. Hollis. It is not an official risk assessment document 
that gives HHS the authority to go ahead and put this request 
for proposal out, is our understanding.
    Mr. Dicks. So it is HHS that does the request for proposal, 
not Homeland Security?
    Mr. Hollis. Yes.
    Mr. Dicks. This is screwed up.
    Mr. Hollis. Yes.
    Mr. Dicks. So you think Congress should come up with an 
amendment, Mr. Greenberger?
    Mr. Greenberger. Well, as I understand--
    Mr. Dicks. We put somebody in charge, we can create a 
deputy secretary or an assistant secretary, someone, and say 
you are in charge and pass a bill to change the law and try to 
fix this?
    Mr. Greenberger. Yes. I think that is a good suggestion. I 
would just warn you, as I understand BioShield II, the answer 
is to give this all to DHS. My--because--and I read the big 
pharma counsel's memo on this, because HHS is hostile to big 
pharma. Now, if DHS, now I am finding out we have been told 
there are material threat assessments for nuclear devices. Now 
I am told there may be but it hasn't been transferred to HHS. 
That is astonishing.
    I think that you should be very leery of putting this in 
the hands of HHS certainly. I think HHS is the proper place for 
it, and I think if you want to have a deputy secretary or 
something for countermeasures--and I agree the vaccines are not 
the only answer--then that would be very good and make that 
person in charge of making BioShield work. But right now I 
think what you are hearing here is nobody knows who is in 
charge, nobody knows what is going on.
    Mr. Dicks. Mr. Hollis, again what happened to the Defense 
Department? I am on defense appropriations. What happened to 
them in this deal? Where did they fall on it or is it just the 
FDA thing that is still holding them up from buying something?
    Mr. Hollis. Well, that is a separate department.
    Mr. Dicks. Yes, we realize that.
    Mr. Hollis. So I think they are more of an FDA issue 
because they are not operating under Project BioShield.
    Mr. Dicks. The Defense Department?
    Mr. Hollis. Yes.
    Mr. Dicks. Are you still working with them?
    Mr. Hollis. Yes, as a matter of fact are you familiar with 
AFRI, Armed Forces Research Institute. We are coordinating this 
product with AFRI. AFRI is one of our Nation's experts in 
radiobiology.
    Mr. Dicks. How long do you think it will take to take get 
the FDA approval, in your judgment?
    Mr. Hollis. I believe we can be on market next year. This 
is a real-time situation. We are actually looking at going into 
a pivotal efficacy trial this year.
    Mr. Dicks. Efficacy trial, I take it that is a human trial?
    Mr. Hollis. We are using the FDA's animal efficacy rule 
where it is unethical to expose human beings to lethal doses of 
radiation. You have to establish it in relevant animal models, 
in this case non-human primates, and then establish the safety 
in human beings.
    Mr. Greenberger. One other point I think should be made is 
that the BioShield statute, if you get into this program, which 
starts at the material threat assessment and then moves on, the 
countermeasure can be used even if there isn't FDA licensing. 
The statute authorizes the Secretary of HHS to do this. But if 
you don't have a material threat assessment that gets you in 
the door, then you need FDA licensing.
    Mr. Dicks. HHS. Material threat assessment at HHS?
    Mr. Greenberger. No.
    Mr. Hollis. No, it comes from DHS.
    Mr. Greenberger. HHS does the MTAs.
    Mr. Dicks. I know that, but I thought their argument was 
HHS had not seen it and HHS has to do the RFP.
    Mr. Greenberger. That is correct. Because HHS must receive 
that, and then they can put in place everything that needs to 
be done to get these contracts out the door. If they don't get 
this piece of paper--and that is all it is, a piece of paper--
they can't do anything.
    Also, if DHS doesn't put cyanide or hemorrhagic fever, 
things that everybody recognizes are likely threats, I am for 
the MTA, even if the piece of paper goes to HHS, and it doesn't 
have those things on it, nothing can be done. Those people then 
have to worry about getting FDA licensing.
    The anthrax--the $1 billion spent with VaxGen's anthrax 
countermeasure is only in clinical trials. It is way away from 
FDA licensing. So if you can get in the door here and get 
BioShield working for you, you can start laying out your 
capital plan because you don't need all these things. They are 
looking for promising countermeasures.
    Mr. Hollis. However, the process still takes too long 
because the understanding is that when HHS finally started to 
get the risk assessment here, they put out an RFI, a request 
for information. That was in October. We are here in July. 
Nine, 10 months later, they still have not put out an RFP.
    That is a lot of time to look at a request for information 
before determining what the request for proposal is. So this 
loss of time is really a killer in an industry because you 
can't put out your capital plan in developing the product.
    So what I want to ask this committee, not only for acute 
radiation syndrome but any other medical countermeasure, is 
they need to put these RFPs out to industries so that we know 
what our size and our scope of our market is and we can 
respond.
    Mr. Dicks. One final thing, Mr. Chairman.
    Mr. McCaul. That is fine.
    Mr. Dicks. Just to wrap this up. I want to make sure I 
understand this now. You said that--who could give FDA, FDA-
like approval, the Secretary could?
    Mr. Hollis. There is emergency use authorization provision. 
It is called the EUA. If the Secretary determines that--
    Mr. Dicks. Which Secretary?
    Mr. Hollis. The Secretary of Health. Determines that the 
benefit of having an identified drug outweighs the risk because 
of the nature of the threat, they can actually procure the drug 
before it is FDA approved.
    Mr. Greenberger. Yes. I would just amend that to say they 
could use the drug short of an FDA approval if they make these 
emergency findings, they being the Secretary of HHS. But they 
can purchase the countermeasure before an FDA approval too. 
That is even more important.
    VaxGen's promising anthrax vaccine is a while away from 
approval but $1 billion has been spent to purchase it. Now 
obviously when we are talking about forming capital markets, 
VaxGen's shareholders are pretty pleased with that. They know 
they are going to get $1 billion. All of these other people are 
sitting up here with what they think are great countermeasures 
and they can't even get in the door because DHS hasn't started 
the process by making a material threat assessment for cyanide 
or hemorrhagic fevers. If they did, then these people could 
start, if they knew who to go to, start marketing it if they 
wouldn't have to worry about FDA, because you can get a 
BioShield contract without FDA approval.
    Mr. Dicks. Well, do you think this is being done simply to 
stop the money from being spent or is it just complete 
negligence?
    Mr. Greenberger. There could be an argument--and I think 
somebody raised that--that they don't think they have enough 
money to buy all the countermeasures, so they are going into a 
four corners offense to slowly dribble it out.
    After all, they have had one major contract for $1 billion. 
That means 15 percent of the money is already gone. If there 
are, as I think there are, at least three dozen candidates to 
be material threats, they may be saying to themselves, whoa, we 
are going to lose this 5.6 before it happens.
    Ms. Wysenski. If I could--
    Mr. Greenberger. If I could respond for a second to that 
thought. Because you have got to believe that a lot of people 
who appear at the door with effective measures for hemorrhagic 
fever, for pandemic flu, Congress may start thinking it may be 
worth appropriating more than 5.6 if we have got real solutions 
here. So if that is what they are thinking, that doesn't make a 
lot of sense.
    Ms. Wysenski. It seems to me that one method to really 
force a change in this whole process is to show some quick wins 
to the public and to private industry. In fact, we do have low 
hanging fruit that can easily be turned into a quick win for 
the government and for government industry.
    At EMD, we are in the same situation that Mr. Hollis 
explained. We are nearing completion of our animal studies, 
because, of course, you can't subject humans to these trials. 
We have completed the safety work, we are negotiating with the 
FDA. We are preparing to submit the MDA.
    We are going on pure faith to Mr. Pascrell's earlier 
comment that the government will continue to work with us, 
because in fact we are getting ahead. Until that MTA is done 
and the purchase order can then hopefully be produced in a 
somewhat timely manner, we are really putting these investments 
down at this point at risk.
    Mr. Dicks. This is your cyanide?
    Ms. Wysenski. Yes, sir.
    Mr. Dicks. Thank you for being so generous, Mr. Chairman, I 
appreciate it.
    Mr. McCaul. Thank you. Are there any other members that 
have additional questions at this time. I would like to thank 
the witnesses for their valuable and very insightful testimony 
and the members of the committee may have additional questions 
for you to submit in writing.
    This hearing record will be open for 10 days. Without 
objection, the committee stands adjourned.
    [Whereupon, at 12:50 p.m., the subcommittee was adjourned.]

                             FOR THE RECORD

      John Vitko Responses to the Honorable Mike Rogers Questions

    Question: 1. Does the Department of Homeland Security consider 
Avian Influenza a potential threat? If yes, did Congress grant 
authority through Project BioShield to the Department of Homeland 
Security to address the threat of Avian influenza?
    Response: The Department of Homeland Security views the natural 
emergence or intentional introduction of a highly pathogenic influenza 
strain as a potentially serious public health risk. If a strain emerges 
naturally and acquires human-to-human transmissibility, there is the 
potential that terrorists might use this strain as a bio-terror threat 
agent.
    The Project BioShield Act of 2004 authorizes the Homeland Security 
Secretary in consultation with the Secretary of the Department of 
Health and Human Services (HHS) and the heads of other agencies to 
assess current and emerging threats, including biological agents. We 
interpret the legislative language to be sufficiently broad enough that 
the Secretary of Homeland Security has the authority to issue a 
material threat determination for any strain of influenza that poses a 
threat to the United States population sufficient to affect national 
security.

    Question: 2. Has the Department of Homeland Security funded, 
through Project BioShield, research and development of therapeutic 
drugs to address potential bio-threats?
    Response: Although the Department of Homeland Security is 
critically involved in establishing and prioritizing the medical 
countermeasure requirements for acquiring medical countermeasures 
utilizing the BioShield Special Reserve Fund, it is HHS, through the 
Office of Public Health Emergency Preparedness, that is charged with 
actually making such procurements. To date, the Project BioShield 
Special Reserve Fund has already been used by HHS to contract for a 
second generation anthrax vaccine (rPA), additional quantities of the 
current anthrax vaccine (AVA), and a pediatric formulation of potassium 
iodide (for certain radiological/nuclear exposures). HHS is in the 
midst of procurement actions for additional countermeasures including 
anthrax therapeutics and a next generation smallpox vaccine (MVA). All 
these procurement actions are for vaccines and therapeutics that are 
relatively far along in the developmental pipeline so as to meet the 
statutory requirement that there is ``sufficient and satisfactory 
clinical experience or research data (including data, if available from 
preclinical and clinical trials) [to] support a reasonable conclusion 
that the countermeasure will qualify for approval or licensing within 
eight years''. The Project BioShield Special Reserve Fund is not meant 
to fund, nor has it funded, any early stage R&D. The appropriate 
funding source for early stage R&D is the research funding appropriated 
to the National Institutes of Health (NIH) through the traditional 
appropriations process. However, the Project BioShield Act did provide 
mechanisms for streamlining and expediting the solicitation, 
acquisition, review, and award process used by NIH to support such 
projects, and NIH has begun using those authorities.

    Question: 3. Can Project BioShield fund research for medical 
countermeasures in order to anticipate potential pandemic threats?
    Response: As noted above, the Special Reserve Fund created under 
the Project BioShield Act is only for the procurement of medical 
countermeasures that are in advanced development and can be reasonably 
expected to qualify for approval or licensing within eight years. 
Early, or even mid-stage research is to be funded through the NIH 
research program and not the BioShield Special Reserve Fund. In an 
effort to accelerate this research, the Project BioShield Act did 
however streamline the peer review process used by NIH in evaluating 
and selecting such projects.