[Senate Hearing 109-]
[From the U.S. Government Publishing Office]



 
  DEPARTMENT OF HOMELAND SECURITY APPROPRIATIONS FOR FISCAL YEAR 2006

                              ----------                              


                        THURSDAY, APRIL 28, 2005

                                       U.S. Senate,
           Subcommittee of the Committee on Appropriations,
                                                    Washington, DC.
    The subcommittee met at 10:29 a.m., in room SD-192, Dirksen 
Senate Office Building, Hon. Judd Gregg (chairman) presiding.
    Present: Senators Gregg, Cochran, Stevens, Craig, Allard, 
Byrd, and Inouye.

                    DEPARTMENT OF HOMELAND SECURITY

STATEMENT OF DR. PENROSE C. ALBRIGHT, ASSISTANT 
            SECRETARY FOR SCIENCE AND TECHNOLOGY

                OPENING STATEMENT OF SENATOR JUDD GREGG

    Senator Gregg. We will convene this hearing.
    The purpose of this Homeland Security hearing is to review 
where we stand relative to defending this Nation from 
biological or chemical attack, which is in my opinion the 
biggest threat to our country. If you prioritize threat, which 
is exactly what we should be doing as a Congress and as a 
Government, you have to put at the top of the list the concerns 
weapons of mass destruction used against the American 
population somewhere here in the United States or overseas 
obviously.
    We, 2 years ago, began the effort to try to aggressively 
address this issue, recognizing some fundamental flaws within 
our structure as a country, the biggest flaw being the 
pharmaceutical industry, which one would presume would 
naturally pursue ways of being able to respond to a biological 
attack, was not structured to do so, and the Government was not 
structured to deal with a chemical or a biological attack.

                               BIOSHIELD

    So we worked very hard, in my prior role as Chairman of the 
Health Committee, to pass a piece of legislation called 
BioShield, which was the initiative of the administration. And 
the purpose of this bill was to reenergize the vaccine industry 
in this country and to energize the research community within 
our Nation to pursue ways to respond to various chemical and 
biological agents which might be used against us.
    We understand, obviously, there is no market for a product 
to respond to these type of agents. These agents are by 
definition agents which do not commonly occur, but only occur 
when we are attacked, although smallpox was a problem, but it 
has been eradicated. So we needed to create a structure where 
there would be not only an atmosphere where creative 
individuals and scientists would step forward to develop 
responses to attacks involving threats such as anthrax, 
smallpox, botulism, and plague, but we also had to create a 
monetary system, a market system which would encourage this 
from a standpoint of making it a reasonable place to invest 
your money if you were an investor. And that is what BioShield 
was all about. It basically put the Government in the business 
of buying antidotes and vaccines for this list of major 
threats.
    We are now well into this process. Progress has been made 
in some areas but there is still a long way to go in other 
areas. The purpose of this hearing is to discuss what we are 
doing and what we should be doing that will better produce 
results.
    My own personal concern is we have still not stood up a 
vaccine industry in this country at the level I would like to 
see it. We still do not have many participants in the 
production of vaccine, that the research community, especially 
our academic research community, has not yet embraced this 
initiative as well as and as aggressively as I would hope, and 
that there appears to be some incentives in the system which 
are discouraging research in this area, and the question of how 
we are purchasing products, to the extent it is being brought 
on line, whether that is chilling competition or participation 
of other parties in the research and development of creative 
new ways to address these types of threats.
    It is a complex issue involving the most cutting-edge 
levels of science, and it does not have a simple solution. If 
it did, we would have gotten to it much sooner. But we do have 
a committed effort to do it, and we have got a committed 
Government to accomplish it, and I think we have got some good 
witnesses today to find out where we stand and where we should 
go.
    With that, I will yield to the honorable Senator from 
Virginia, Senator Byrd.

                  STATEMENT OF SENATOR ROBERT C. BYRD

    Senator Byrd. That is West Virginia.
    Senator Gregg. I apologize profusely.

                     BIOLOGICAL OR CHEMICAL ATTACK

    Senator Byrd. Mr. Chairman, first of all, let me thank you 
for your service. I listened with rapt attention at your 
remarks. You are well prepared to be the Chairman of this 
subcommittee and well prepared to probe this very important 
subject.
    I welcome the witnesses on both panels for this hearing, 
and I applaud you, Mr. Chairman, for calling us together for 
such an important topic.
    Earlier this year during testimony before the Senate 
Intelligence Committee, CIA Director Porter Goss warned and I 
quote ``It is only a matter of time before Al Qaeda or another 
terrorist group tries to use chemical, biological, 
radiological, or nuclear weapons in the United States.'' Mr. 
Chairman, I believe that. I believe it is absolutely the case, 
and I am not sure that we are prepared. I doubt it because we 
do not know when, we do not know where this monster will 
confront us with a bioterror attack, a chemical attack, a 
nuclear attack, or a radiological attack.
    With regard to a biological attack, Congress made a serious 
commitment by appropriating $5.6 billion to pursue new vaccines 
and medications to protect the American public from known 
biological threats. It is essential the agencies involved in 
this process be accountable for progress in this area. So, I 
look forward to discussing this and other homeland security 
efforts, not only to detect and respond to a bioterror 
incident, but what efforts are being made to prevent a 
biological, chemical, also to examine nuclear terror incident.
    Thank you, Mr. Chairman.
    Senator Gregg. Thank you, Senator Byrd.
    We will turn to the panel now. The first panel will be 
people in our Government who have first-line responsibility for 
getting us prepared for a biological or chemical attack and 
being able to respond to it. Our first witness is Dr. Albright 
who was confirmed as Assistant Secretary of Homeland Security, 
Plans, Programs, and Budgets on October 3. Our second witness 
is Mr. Simonson who is the Assistant Secretary for Public 
Health Emergency Preparedness, United States Department of 
Health and Human Services. And these two gentlemen have the 
portfolio and we look forward to hearing how we are doing. So 
let us start with you, Dr. Albright.

                  STATEMENT OF DR. PENROSE C. ALBRIGHT

    Dr. Albright. Good afternoon, Chairman Gregg, Senator Byrd, 
and distinguished members of the Subcommittee. I am pleased to 
appear before you today to discuss the progress the Science and 
Technology Directorate of the Department of Homeland Security 
is making in the Nation's efforts to prevent, protect against, 
respond to, and recover from acts of bioterrorism against the 
American people.
    President Bush has made strengthening the Nation's defenses 
against biological weapons a critical national priority. The 
President's focus on these issues has resulted in a joint 
Homeland Security Presidential Directive/National Security 
Presidential directive entitled Biodefense for the 21st Century 
that provides a comprehensive framework for our Nation's 
sustained and focused effort against biological weapons 
threats.

                     ACCOMPLISHMENTS IN BIODEFENSE

    The Department of Homeland Security and the Science and 
Technology Directorate have explicit responsibilities in this 
integrated national effort. In particular, I want to highlight 
the strategy, planning, and accomplishments to date of the 
Science and Technology Directorate in the area of biodefense 
and the essential collaborations with key Federal partners, 
including those represented here today.
    In 2004 and 2005, the Science and Technology Directorate 
developed a national architecture and plan for the detection of 
biological attacks, should they occur, and as initial steps, 
deployed the BioWatch Environmental Sensor System to protect 
our Nation's cities from the threat and ramifications of such 
an attack and also initiated the design of the National 
Biosurveillance Integration System as part of an interagency 
process.
    We completed the planning and conceptual design of the 
National Biodefense Analysis and Countermeasures Center. This 
center will focus on, among other things, creating a 
scientifically based understanding of the biological threat.
    We established the Biodefense Knowledge Center, which is an 
operational hub for enabling collaboration and communication 
within the Homeland Security enterprise. We have certified four 
material threats and have two additional certifications 
underway. These material threat determinations are required in 
order to commit BioShield funds.
    We have established a National Bioforensic Analysis Center 
to provide a national capability for conducting forensic 
analysis of evidence from biocrimes and terrorism to obtain a 
biological fingerprint to identify perpetrators and determine 
the origin and method of the attack.
    In 2006, our expectations are to complete the deployment of 
the second generation BioWatch system to the top threat cities 
and to complete test and evaluation of the laboratory 
prototypes for the third generation of these detection systems.
    We will also complete the first formal risk assessment that 
is required under HSPD-10 and close many of the key remaining 
experimental gaps in our knowledge of the classic biological 
threat agents.
    We will continue operations of the Plum Island Animal 
Disease Center and essential upgrades to the facility and 
initiate the design of the National Bio and Agrodefense 
Facility.
    We continue to develop bioassays for Foot and Mouth Disease 
and look-alike animal diseases. We continue to conduct cutting-
edge research in academia through our Homeland Security Centers 
of Excellence. Although each of the four centers we have has a 
role in addressing bioterrorism, let me highlight two.
    One is at Texas A&M and its partners which study foreign 
animal and zoonotic diseases at the National Center for Foreign 
Animal and Zoonotic Disease, and they address potential threats 
to animal agriculture, including Foot and Mouth Disease, Rift 
Valley fever, Avian influenza, Brucellosis, that sort of thing.
    The University of Minnesota and its partners established 
best practices and attract new researchers to manage and 
respond to food contamination events.

              S&T DIRECTORATE'S INTERAGENCY COLLABORATION

    Ensuring that all relevant Federal Departments and agencies 
coordinate in the area of biodefense is critical to protecting 
the Nation from biological threats. The Science and Technology 
Directorate has been and continues to be an active participant 
in relevant interagency activities. A full list of the S&T 
Directorate's interagency collaborations is in my statement for 
the record. Highlights include our integral participation in 
the creation of HSPD-10. We also participate in the 
Counterproliferation Technology Coordinating Committee, the 
National Science and Technology Council's Weapons of Mass 
Destruction Medical Countermeasures Committee, which is really 
crucial to our way ahead on BioShield. This last, which I 
personally co-chair, provides an interagency forum for 
discussing and prioritizing the medical countermeasure needs, 
as I said, that will be pursued under the BioShield program.
    We work closely with our colleagues in the Department of 
Health and Human Services and USDA. Mr. Simonson and I see each 
other very frequently, and he and I and our staffs interact 
nearly daily in our respective efforts to protect the Nation 
from the threats of bioterrorism.
    As I hope I have indicated, the Science and Technology 
Directorate's programs fully support the National Biodefense 
Program, as stated in HSPD-10. Moreover, they are conducted in 
an active collaboration with other Federal Departments and 
agencies, having a role in meeting this national priority and 
are focused on reducing the threat of a biological attack 
against the Nation's population and its agricultural and food 
infrastructures. We also support a science-based forensics and 
attribution capability.

                           prepared statement

    This concludes my prepared statement. With the 
subcommittee's permission, I request that my formal statement 
be submitted for the record. Mr. Chairman, Senator Byrd, 
members of the subcommittee, I thank you for the opportunity to 
appear before you and will be happy to answer any questions 
that you may have.
    [The statement follows:]

             Prepared Statement of Dr. Penrose C. Albright


                              INTRODUCTION

    Good afternoon, Chairman Gregg, Senator Byrd and distinguished 
members of the Subcommittee. I am pleased to appear before you today to 
discuss the progress the Science and Technology Directorate of the 
Department of Homeland Security is making in the Nation's efforts to 
prevent, protect against, respond to, and recover from acts of 
bioterrorism against the American people.
    President Bush has made strengthening the Nation's defenses against 
biological weapons a critical national priority. Although significant 
progress has been made to protect America, President Bush instructed 
Federal departments and agencies to review their efforts and find 
better ways to secure America from bioattacks.
    This review resulted in a Presidential Directive entitled 
Biodefense for the 21st Century that provides a comprehensive framework 
for our Nation's biodefense. This directive builds upon past 
accomplishments, defines specifies roles and responsibilities, and 
integrates the programs and efforts of various communities: national 
security, medical, public health, intelligence, diplomatic, 
agricultural and law enforcement into a sustained and focused effort 
against biological weapons threats.
    The Department of Homeland Security (DHS) and the Science and 
Technology (S&T) Directorate have explicit responsibilities in this 
integrated national effort. In particular, I want to highlight the 
strategy, planning and accomplishments to date of the Science and 
Technology Directorate in the area of biodefense, and the essential 
collaborations with key Federal partners.

                               BIODEFENSE

    Before I speak directly to the biodefense efforts of the S&T 
Directorate, I want to briefly address the role of the DHS's 
Information Analysis and Infrastructure Protection Directorate (IAIP), 
and how their work is linked to the S&T Directorate. IAIP assesses 
intelligence and information about threats and vulnerabilities from 
other agencies and takes preventative and protective action. They are 
partners in the total interagency efforts to obtain, assess and 
disseminate information regarding potential threats to America from 
terrorist actions. These threat and vulnerability assessments are 
inputs into the strategy and research, development, testing and 
evaluation (RDT&E) activities of the Science and Technology 
Directorate. For example, agriculture and food are two of the multiple 
critical infrastructure sectors identified by Homeland Security 
Presidential Directive 7 (HSPD-7). As such, they fall within the domain 
of the IAIP Directorate; they are also within the domain of concern for 
biological threats and are considered in HSPD-9 and HSPD-10/National 
Security Presidential Directive-33 (NSPD-33). In addition, the IAIP 
Directorate's cooperation with the Science and Technology Directorate 
is critical to the Department's mission to determine what agents would 
significantly impact national security if released (Material Threat 
Determinations).

Mission and Objectives
    HSPD-10 outlines four essential pillars of the Nation's biodefense 
program and provides specific directives to further strengthen the 
significant gains made in the past 3 years. The four pillars of the 
program are:
  --Threat Awareness.--Which includes biological weapons-related 
        intelligence, vulnerability assessments, and anticipation of 
        future threats. New initiatives will improve our ability to 
        collect, analyze, and disseminate intelligence on biological 
        weapons and their potential users.
  --Prevention and Protection.--Which includes interdiction and 
        critical infrastructure protection. New initiatives will 
        improve our ability to detect, interdict, and seize weapons 
        technologies and materials to disrupt the proliferation trade, 
        and to pursue proliferators through strengthened law 
        enforcement cooperation.
  --Surveillance and Detection.--Which includes attack warning and 
        attribution. New initiatives will further strengthen the 
        biosurveillance capabilities being put in place in fiscal year 
        2005.
  --Response and Recovery.--Which includes response planning, mass 
        casualty care, risk communication, medical countermeasures, and 
        decontamination. New initiatives will strengthen our ability to 
        provide mass casualty care and to decontaminate the site of an 
        attack.
    The Department of Homeland Security has a role and responsibility 
in each of these four pillars of the national biodefense program. The 
S&T Directorate has the responsibility to lead the Department's RDT&E 
activities to support the national biodefense objectives and the 
Department's mission.

Accomplishments and Planned Activities
    In fiscal year 2004 and fiscal year 2005, the Biological 
Countermeasures portfolio:
  --Deployed the BioWatch environmental sensor system to protect our 
        Nation's cities from the threat and ramifications of a 
        bioterrorist attack.
  --Engaged in creating additional near real-time monitoring 
        (Autonomous Pathogen Detection System) of critical 
        infrastructure facilities such as major transportation hubs. 
        New infrastructure protection efforts include shorter response 
        time biological agent detection capabilities for BioWatch. This 
        pilot (second generation Bio Watch) is in the process of being 
        deployed in New York City and will join an expansion of the 
        number of collectors in that city.
  --Initiated the design of the National Biosurveillance Integration 
        System (NBIS) as part of an interagency process. Recently 
        completed in the first quarter of fiscal year 2005, we will 
        work with the Information Analysis and Infrastructure 
        Protection (IAIP) Directorate to implement this system.
  --Conducted preliminary analyses, using the reference scenario 
        approach recommended by Homeland Security Presidential 
        Directive (HSPD)-10 for understanding the requirements of an 
        integrated national biodefense architecture, of four baseline 
        reference cases: a large outdoor release of a non-contagious 
        agent (anthrax); a large indoor release of a contagious agent 
        (smallpox); contamination of a bulk food supply; and two highly 
        virulent agricultural attacks, one on livestock (Foot and Mouth 
        Disease) and the other on crops (soy bean rust).
  --Established the Biodefense Knowledge Center, an operational hub for 
        enabling collaboration and communication within the homeland 
        security complex. The Biodefense Knowledge Center will meet the 
        operational and planning requirements of government decision-
        makers and program planners, the intelligence community, law 
        enforcement officers, public health practitioners, and 
        scientists. Specific capabilities offered to these end-users 
        include knowledge services, modeling and simulation, 
        situational awareness and a pathway to accelerate research and 
        development.
  --Certified four ``material threats'' (anthrax, smallpox, botulinum 
        toxin, and radiological/nuclear); will complete the rest of the 
        Category A bioagents (plague, tularemia) by the end of fiscal 
        year 2005.
  --Established the National Bioforensic Analysis Center (NBFAC) to 
        provide a national capability for conducting forensic analyses 
        of evidence from bio-crimes and terrorism to attain a 
        ``biological fingerprint'' to identify perpetrators and 
        determine the origin and method of attack. The NBFAC was named 
        in HSPD-10 as the lead Federal facility to conduct and 
        facilitate the technical forensic analysis of materials 
        recovered following a biological attack in support of the 
        appropriate lead Federal agency [in most cases the lead Federal 
        agency will be the Federal Bureau of Investigation (FBI)].
    In fiscal year 2006, the Biological Countermeasure portfolio plans 
to:
  --Complete the three high-level architectures initiated in fiscal 
        year 2005, identifying key requirements for each major element, 
        a ``report card'' on the current and projected status in that 
        area and performing detailed design tradeoffs for those areas 
        in which DHS has execution responsibility.
  --Complete the first formal risk assessment required under HSPD-10 
        and close many of the key remaining experimental gaps in our 
        knowledge of the classical biological threat agents. Near-, 
        mid-, and long-term plans for dealing with engineered agents 
        will be developed, and R&D on addressing the gaps in responding 
        to genetically modified organisms (e.g., antibiotic resistant) 
        initiated.
  --Complete the deployment of Generation 2 BioWatch systems to 
        additional cities while continuing to operate and optimize 
        already extant BioWatch systems.
  --Complete test and evaluation of laboratory prototypes of the 
        Generation 3 BioWatch detection systems for selection of 
        fieldable prototypes for fiscal year 2007.
  --Continue operation of the interim National Bioforensic Analysis 
        Center. International Organization for Standardization (ISO) 
        certification is expected to
  --5 have been achieved, giving the analyses conducted additional 
        credibility and authenticity in both the national and 
        international community and courts of law. R&D will continue on 
        the physical and chemical signatures of the ``matrix'' 
        materials associated with biological agents so as to develop 
        methods for understanding tell-tale remnants of enrichment 
        media, culture conditions, metabolites, and dispersion 
        technology.
  --Continue operation of the Plum Island Animal Disease Center (PIADC) 
        and essential upgrades to the facility and initiate design of 
        the National Bio and Agrodefense Facility (NBAF). R&D will 
        continue on next generation vaccines and antiviral therapeutics 
        for foot and mouth disease (FMD) and other high priority 
        foreign animal diseases.
  --Continue to develop bioassays for FMD and look-alike animal 
        diseases. The initial agricultural forensic capability 
        established in fiscal year 2004 at PIADC will be enhanced and 
        epidemiologic capability added. A High Throughput Diagnostics 
        Demonstration will be initiated to work with regional and State 
        laboratories to demonstrate a capability of analyzing thousands 
        of samples per day in support of response to a suspected case 
        or an outbreak. A FMD table top exercise will be conducted, and 
        development of a coupled epidemiological and economic model for 
        FMD will begin. The end-to-end systems study initiated in 
        fiscal year 2004 for Soybean Rust and FMD will be completed, 
        and system studies will be initiated for highly pathogenic 
        avian influenza.

National Bio-Defense Analysis and Countermeasures Center (NBACC)
    The NBACC, a key component of the National Strategy for Homeland 
Security, addresses the need for scientific research to better 
anticipate, prevent, and mitigate the consequences of biological 
attacks. The need for the NBACC facility is further defined in HSPD-10, 
the Nation's blueprint for future biodefense programs. The NBACC's 
mission will support two pillars of this blueprint--threat awareness 
and surveillance and detection. The NBACC is made up of two centers, 
the Biological Threat Characterization Center and the National 
Bioforensic Analysis Center to carry out these missions. Specifically, 
NBACC's mission is to:
  --Understand current and future biological threats, assess 
        vulnerabilities, and determine potential impacts to guide the 
        research, development, and acquisition of biodefense 
        countermeasures such as detectors, drugs, vaccines and 
        decontamination technologies; and
  --Provide a national capability for conducting forensic analysis of 
        evidence from bio-crimes and terrorism to attain a ``biological 
        fingerprint'' to identify perpetrators and determine the origin 
        and method of attack.
    In fiscal year 2004, the Department completed the planning and 
conceptual design of the NBACC facility. Additionally, the Department 
has been working through the National Environmental Policy Act (NEPA) 
process during the year, which culminated in the signing of the Record 
of Decision in January 2005 of the Final Environmental Impact Statement 
(EIS) for the construction project and subsequent operations. It was 
decided to delay the award of any contracts for design and construction 
until further in the EIS process. As the public concerns are analyzed 
and considered it is anticipated that contracts will be awarded in 
fiscal year 2005 to initiate design and construction of the NBACC 
facility
    In fiscal year 2005, the solicitations of contracts for the 
construction of the NBACC facility are expected to be awarded. The 
design of the NBACC facility will commence in March 2005. Congress 
appropriated $128 million in obligated funds, of which $35 million was 
appropriated for award of the construction contract in the fourth 
quarter of fiscal year 2005. Construction of the facility is planned 
for completion by the fourth quarter of fiscal year 2008.

University Centers of Excellence
    The mission of the University Programs is to stimulate, coordinate, 
leverage and utilize the unique intellectual capital in the academic 
community to address current and future homeland security challenges, 
and to educate and inspire the next generation of scientists and 
engineers dedicated to homeland security.
    Within the University Programs in the S&T Directorate, the Homeland 
Security (HS) Centers of Excellence provide independent, cutting-edge 
research in academia for focused areas of homeland security Research 
and Development. Established centers include: the Homeland Security 
Center for Risk and Economic Analysis of Terrorism Events, the National 
Center for Foreign Animal Disease and Zoonotic Defense, and the 
National Center for Food Protection and Defense. In the next few 
months, the S&T Directorate expects to establish the Homeland Security 
Center for Behavioral and Social Aspects of Terrorism and Counter-
Terrorism. Each Center is selected on a competitive basis, and each 
grant is for 3 years. Each Center has a role in addressing bioterrorism 
and two are specifically aligned with addressing bioterrorism.
    DHS awarded funds, over 3 years, to the University of Southern 
California (USC) and its major partners, University of Wisconsin at 
Madison, New York University and Structured Decisions Corporation 
(affiliated with MIT) to establish the Center on Risk and Economic 
Analysis of Terrorism Events. The mission objectives are to evaluate 
the risks, costs and consequences of terrorism and to guide 
economically viable investments in countermeasures. Specifically, the 
Center will develop risk assessment and economic modeling capabilities 
that cut across general threats and targets, in application areas such 
as electrical power, transportation and telecommunications. 
Additionally, USC and their partners will develop tools for planning 
responses to emergencies, to minimize the threat to human life and 
reduce economic impacts of terrorist attacks.
    Texas A&M University and its partners from the University of Texas 
Medical Branch, University of California at Davis, and the University 
of Southern California expect to receive funds over the course of the 
next 3 years for the study of foreign animal and zoonotic diseases. The 
Center, which will be known as the National Center for Foreign Animal 
and Zoonotic Disease Defense, will work closely with partners in 
academia, industry and government to address potential threats to 
animal agriculture including Foot and Mouth Disease, Rift Valley fever, 
Avian influenza and Brucellosis. The Foot and Mouth Disease research 
will be conducted in close collaboration with DHS's Plum Island Animal 
Disease Center.
    The Department of Homeland Security will provide the University of 
Minnesota and its partners, Michigan State University, University of 
Wisconsin at Madison, North Dakota State University, Georgia Institute 
of Technology, and the University of Tennessee at Knoxville with funds 
over the course of the next 3 years to establish best practices and 
attract new researchers to manage and respond to food contamination 
events, both intentional and naturally occurring. The University of 
Minnesota's National Center for Food Protection and Defense, will 
address agricultural security issues related to postharvest food 
protection.
    Negotiations began January 10, 2005, for a 3-year grant with the 
University of Maryland for a fourth Center on Behavioral and Social 
Research on Terrorism and Counter-Terrorism. We expect its mission 
objectives to be to provide strategies for intervention of terrorists 
and terrorist organizations and to embolden the resilience of U.S. 
citizens. Major domestic partners include, the University of California 
at Los Angeles, University of Colorado, Monterey Institute of 
International Studies, University of Pennsylvania, and the University 
of South Carolina.
    A broad agency announcement was released in mid-January, 2005 for 
proposals for a fifth DHS Center of Excellence on the topic of High 
Consequence Event Preparedness and Response.
    In addition to the University Centers of Excellence, the Department 
of Homeland Security's University Programs and the Environmental 
Protection Agency's Science to Achieve Results (STAR) Program are 
reviewing proposals for a research Center of Excellence focused on an 
area of high priority to both Agencies, Microbial Risk Assessment (MRA) 
for Category A bio-threat agents.

Interagency Collaboration
    Ensuring that all relevant Federal Departments and agencies 
coordinate in the area of Biodefense is critical to protecting the 
Nation from biological threats. The previously mentioned HSPD-10, as 
well as other directives including HSPD-9, Defense of United States 
Agriculture and Food; HSPD-8, National Preparedness; HSPD-4, National 
Strategy to Combat Weapons of Mass Destruction; and HSPD-7, Critical 
Infrastructure Identification, Prioritization, and Protection, identify 
national objectives and priorities, and departmental and agencies' 
roles in addressing these national objectives.
    The S&T Directorate has been, and continues to be an active 
participant in these interagency activities as illustrated by our 
participation in the biodefense program. At the highest level HSPD-10/
NSPD-33 laid out the overall strategy, department and agency roles, as 
well as specific objectives and called for periodic reviews to plan, 
monitor and revise implementation. This was followed by an interagency 
review, of specific fiscal year 2006-fiscal year 2010 science and 
technology needs to support the national biodefense strategy as 
articulated in HSPD-10.
    The National Science and Technology Council's Weapons of Mass 
Destruction Medical Countermeasures Subcommittee (WMD-MCM), co-chaired 
by the Assistant Secretary of the S&T Directorate, provides an 
interagency forum for discussing and prioritizing medical 
countermeasure needs to be pursued under BioShield. At still the next 
level of coordination, there are strong bilateral efforts around key 
elements of the strategy. Examples of this coordination including 
strong and frequent collaborations on Bioshield (HHS/DHS), the 
development of coordinated civilian and military surveillance and 
detection systems (DHS/DOD), the development and execution of a 
National Strategy for Agricultural Biosecurity (DHS/USDA), and 
development and assessment of decontamination technologies (DHS/EPA).
    In addressing these activities, DHS has a leadership role in 
several key areas and partners with lead agencies in others. Those 
areas in which the 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 biological 
        acts of terrorism.
  --Providing scientific support to the intelligence community and the 
        IAIP Directorate in prioritizing the bio-threats.
  --Developing early warning and detection 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 U.S. Department of 
Agriculture (USDA) on agriculture biosecurity; USDA and HHS on food 
security and the Environmental Protection Agency (EPA) on 
decontamination and on water security.
    In addition, the Science and Technology Directorate has engaged 
with other Federal Agencies in the following efforts:
  --The S&T Directorate worked with DOS (STAS), USDA, Office of Science 
        and Technology Police (OSTP), National Science Foundation (NSF) 
        to create and support the U.S.-Japan Safe and Secure Society 
        forum.
  --The Directorate and DOS (OES) jointly created and negotiated the 
        US-UK S&T Memorandum of Agreement (MOA). The resulting MOA 
        supports collaboration on Homeland Security research, 
        development, testing, and evaluation between the United States 
        and the UK.
  --The S&T Directorate represents DHS as the lead U.S. agency for the 
        US-CA Public Security Technical Program (PSTP) which is the 
        primary cooperative arrangement on S&T for homeland security 
        between the two countries. Other U.S. agencies involved in the 
        PSTP include: FBI, DOE, DOD, USDA, HHS, DOC (NIST), EPA, DOS, 
        NSA and other DHS components.
  --Currently leads a partnership with the Center for Disease Control 
        (CDC), EPA, and FBI on the deployment of BioWatch, a bioaerosol 
        detection system deployed to many of this Nation's cities.
  --Funds BioNet--Defense Threat Reduction Agency (DTRA) executed pilot 
        program to integrate civilian and military domestic 
        biodetection and consequence management, using San Diego as a 
        pilot city.
  --Leading an interagency effort with HHS, DOD, and the United States 
        Postal Service (USPS) to develop a National Integrated 
        Biomonitoring System, part of HSPD-10 responsibility.
  --Primary participant in the establishment of the National 
        Interagency Biodefense Campus being developed at Ft. Detrick.
  --The National Bioforensics Analysis Center (NBFAC) is a joint 
        Science and Technology Directorate-FBI program
  --In a joint effort with USDA, have developed an integrated national 
        agrodefense strategy, with especial emphasis on foreign animal 
        disease. The Directorate and USDA also conduct joint research 
        and development programs at the Plum Island Animal Disease 
        Center

Presidential Initiatives
    Three Presidential Initiatives address the needs of an integrated 
biodefense strategy and DHS plays a key role in each one. These three 
initiatives are:
    BioShield.--Signed into law July 21, 2004, BioShield is a program 
coordinated by the Secretary for Homeland Security and the Secretary 
for Health and Human Services that provides $5.6 billion over 10 years 
for the purchase and development of countermeasures to WMD. DHS's S&T 
Directorate plays a significant role in this in determining which 
agents constitute ``material threats'' and in developing scenarios that 
inform decisions on the quantity of countermeasures required. We have 
certified four ``material threats'' (anthrax, smallpox, botulinum 
toxin, radiological/nuclear, and nerve agents), have two additional 
underway, (plague and tularemia), and the rest of the Category A 
bioagents should be completed by fiscal year 2006.
    Biosurveillance Initiative.--A program that seeks to enhance 
systems that monitor the Nation's health (human, animal and plant) and 
its environment (air, food, water) and to integrate these with 
intelligence data to provide early detection of an attack and the 
situational understanding needed to guide an effective response. The 
S&T Directorate plays a major role in the Biosurveillance Initiative in 
operating its 1st Generation BioWatch System, in deploying a 2nd 
Generation system and significantly expanding the number of collectors 
in the highest threat cities and at key facilities (e.g. transportation 
systems), and in continuing to develop advanced detection systems to 
further increase the capabilities. We are also designing the 
information system that will be used to integrate health and 
environmental monitoring information from the sector specific agencies 
with intelligence data from the IAIP Directorate. Implementation of 
this system will actually be initiated by the IAIP Directorate in 
fiscal year 2005, but the S&T Directorate will continue to supply 
subject matter expertise in biological threat and defense.
    Food and Agricultural Initiative.--Seeks to enhance the security of 
our agricultural and food infrastructures. DHS activities in this area 
are led by the IAIP Directorate--but the S&T Directorate brings 
significant contributions in end-to-end studies of key agricultural and 
food threats, through the development of advanced diagnostics, and 
through R&D conducted jointly with USDA at the Plum Island Animal 
Disease Center.

                               CONCLUSION

    The Science and Technology Directorate's programs conducted within 
the Department of Homeland Security fully support the national 
biodefense program as stated in the presidential directive Biodefense 
for the 21st Century, and other Homeland Security Presidential 
Directives. Moreover, they are conducted in an active collaboration 
with other Federal departments and agencies having a role in meeting 
this national priority, and are focused on reducing the threat of a 
biological attack against this Nation's population and its agriculture 
and food critical agricultural infrastructures, and supports a science-
based forensics and attribution capability.
    This concludes my prepared statement. With the Committee's 
permission, I request my formal statement be submitted for the record. 
Mr. Chairman, Senator Byrd, 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.

    Senator Gregg. Thank you, Mr. Albright.
    Before we turn to Mr. Simonson, it is the tradition of this 
subcommittee to recognize the Chairman of the full committee, 
whenever he arrives, for any statement he wishes to make.

                   STATEMENT OF SENATOR THAD COCHRAN

    Senator Cochran. Mr. Chairman, thank you. Let me 
congratulate you on the success of the legislation which you 
authored here in the Senate to establish the legal authority to 
appropriate funds to deal with threats to our food supply and 
our agriculture infrastructure and our other concerns in the 
whole general area of bioterrorism. There is nothing more 
frightening to contemplate than an attack against these 
resources and assets in our country, and we do have a serious 
lack of products, drugs, countermeasures to deal with a serious 
assault on our food supply and our agriculture infrastructure. 
So it is very appropriate, I think, that you chair this 
subcommittee now that is in charge of funding the law you 
helped create and took a leadership role in, and we appreciate 
those efforts very much.
    I am glad to be here with Dr. Albright and Mr. Simonson to 
congratulate them on their initiatives and hard work in 
developing a response structure at the Federal level and to 
provide national leadership in this very important undertaking.
    Thank you.
    Senator Gregg. Thank you, Mr. Chairman. I would simply 
note, it is only through your generosity that I chair this 
subcommittee, and I am very appreciative of that.
    Mr. Simonson.

STATEMENT OF STEWART SIMONSON, J.D., ASSISTANT 
            SECRETARY, OFFICE OF PUBLIC HEALTH 
            EMERGENCY PREPAREDNESS, U.S. DEPARTMENT OF 
            HEALTH AND HUMAN SERVICES
    Mr. Simonson. Good morning, Mr. Chairman, Senator Byrd, 
Senator Allard, and Senator Craig, and other members of the 
subcommittee. I am Stewart Simonson, Assistant HHS Secretary 
for Public Health Emergency Preparedness, and I appreciate the 
opportunity to share with you information on the progress of 
implementing the Project BioShield Act of 2004, which was 
enacted some 9 months ago.
    The events of September and October of 2001 made it very 
clear bioterrorism is a serious threat to our Nation and the 
world. The Bush administration and Congress responded 
forcefully to this threat by seeking to strengthen our medical 
and public health capacities to protect our citizens from 
future attacks. To encourage the development of new medical 
countermeasures against threats 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 to enable the Government to purchase critical 
products.
    Since enactment, my office has moved aggressively to fill 
immediate gaps in our reserve of medical countermeasures. A 
sense of urgency has pervaded our efforts and has defined new 
ways of doing business. Let me briefly describe to you what we 
have done to address these gaps beginning with anthrax.

                                ANTHRAX

    Anthrax is a serious public health threat, and although the 
Strategic National Stockpile contains antibiotics sufficient to 
treat millions of persons exposed to anthrax, the vaccine has 
an important place in our preparedness and response strategy. 
The U.S. Government, relying on interagency expert input, 
defined the initial vaccine requirement for protecting 25 
million persons.
    The Institute of Medicine, in a report issued in 2002, 
urged that a new anthrax vaccine based on modern principles of 
vaccinology be developed. An assessment of developing 
technologies was undertaken by HHS, experts in the field, and 
it was determined there was sufficient scientific basis to 
support the aggressive development of a new generation of 
vaccine consisting of recombinant protective antigen, the so-
called rPA vaccine. Research spanning more than a decade, 
conducted in large part by the U.S. Government, permitted us to 
move the vaccine further along the development pipeline. The 
National Institutes of Health took the lead in working with the 
private sector to advance development of this new vaccine.
    When HHS felt the technology was mature enough to indicate 
that the vaccine could be licensed within 8 years, my office 
launched an initiative to acquire it for the Strategic National 
Stockpile. Utilizing a stringent evaluation process, we 
reviewed multiple proposals and finally negotiated a contract 
with VaxGen of Brisbane, California for 75 million doses of 
vaccine, anticipating a three-dose regimen. The milestone 
contract with VaxGen lays out an ambitious program, including 
delivery of the first 25 million doses of usable vaccine within 
2 years of award.
    I want to draw your attention to a feature of the contract 
with VaxGen and, indeed, all BioShield contracts. No payment 
for vaccine is made until the product is received into the 
stockpile.
    To provide for the stockpile's immediate needs, my office 
is in the process of completing negotiations for 5 million 
doses of the currently licensed vaccine and hopefully with an 
option for an additional 5 million doses. We expect those 
negotiations to be concluded shortly.
    But we are focused on threats beyond anthrax as well. My 
office has moved quickly to address the need for pediatric 
liquid formulation of potassium iodide, a drug that protects 
the thyroid from radioactive iodine. This formulation is aimed 
at young children who are at the greatest risk from the harmful 
effects of exposure to radioactive iodine. In March, a contract 
was awarded under Project BioShield for suspension potassium 
iodide to protect at least 1.7 million children. Product 
delivery will begin next month.
    In addition to the BioShield contracts that have already 
been awarded, there are several other BioShield procurement 
related activities underway. We are reviewing the responses for 
request for proposals for anthrax therapies and we are 
continuing to move forward on the acquisition of an antitoxin 
treatment for botulinum.
    To signal our intent to acquire a next generation smallpox 
vaccine, we will be releasing a draft request for proposal for 
industry comment within the next few weeks.
    Finally, in anticipation of yet-to-be-determined 
requirements, we actively monitor the state of the medical 
countermeasure pipeline, both within and outside of the U.S. 
Government, by evaluating Government research and development 
portfolios and engaging industry to the publication of requests 
for information. For example, we have released three RFIs to 
assess the time line 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 key for HHS to dialogue with industry 
partners to inform them on the development of a sound 
acquisition strategy.
    Defining priorities and quantifying the size of the threat 
to the population are key steps in focusing our efforts. In the 
process, we must be mindful of the realities of the spectrum of 
efforts needed along the research and development pipeline to 
produce a usable medical countermeasure. The process of 
defining required specifications for countermeasures often 
reveals few, if any, candidates in the pipeline. We have been 
fortunate that some of our highest priority needs for 
countermeasures could be addressed using the available advanced 
development products already in the pipeline. However, basic 
research and early development efforts, when even robustly 
funded, often take years before a concept is mature enough for 
advanced development, and it is only when a product has reached 
the advanced development stage that Project BioShield provides 
a meaningful incentive for manufacturers to take the product 
the rest of the way.

                           PREPARED STATEMENT

    In closing, HHS has a clear mandate from President Bush and 
Congress to lead the charge in countermeasure development. We 
have already made important strides to address the public 
health needs of the Nation, but there is more that needs to be 
done. Mr. Chairman, I look forward to working with you and 
Senator Byrd and other members of the committee to address the 
challenges of bioterrorism and to improve the public health of 
the Nation.
    Thank you.
    [The statement follows:]

                 Prepared Statement of Stewart Simonson

    Good morning, Mr. Chairman, Senator Byrd and Subcommittee members. 
I am Stewart Simonson, Assistant Secretary for Public Health Emergency 
Preparedness. I appreciate the opportunity to share with you 
information on our progress in implementing the Project BioShield Act 
of 2004, which was enacted some 9 months ago. Biodefense is a top 
priority for the Bush Administration and having an appropriate 
armamentarium of medical countermeasures is a critical aspect 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, monoclonal and polyclonal 
antibodies against infectious threats, therapies for chemical and 
radiation-induced diseases, and vaccines to protect against exposure 
from biological agents will have a substantial impact on our 
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 seeking to strengthen our medical and public health 
capacities to protect our citizens from future attacks. The 
Bioterrorism Act of 2002 substantially increased funding authorization 
for the Centers for Disease Control and Prevention's Strategic National 
Stockpile. To encourage the development of new medical countermeasures 
against biological, chemical, or radiological agents and to speed their 
delivery and use in the time of an attack, President Bush, in his 2003 
State of the Union address proposed and Congress subsequently enacted 
the Project BioShield Act of 2004. The Special Reserve Fund, pre-
appropriated with $5.6 billion was created to assure developers of 
medical countermeasures that funds would be available to purchase 
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 brought 
clarity to the gaps in our chemical countermeasure armamentarium and we 
immediately sought to address them. Although there is much work still 
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 chemical 
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 botulism antitoxin 
program started by the Department of Defense in the early 1990s to 
completion and we are now building our 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, or 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, namely, smallpox and anthrax. A sense 
of urgency has pervaded our efforts and has defined new ways of doing 
business. Our new national security environment demanded accelerated 
product development timelines and new paradigms of interactions between 
industry and government with risk-sharing and enhanced intra-
governmental collaboration. Using a robust interagency process, that 
mined intra- and extra-governmental expertise, requirements for medical 
countermeasures were identified, and options elaborated for addressing 
immediate and long-term needs. These experts continue to help us define 
the most expeditious way to traverse the critical pathway to develop 
and acquire usable countermeasures for the Strategic National 
Stockpile.

Application of the strategic approach: Anthrax
    Although not transmissible from person-to-person, an attack 
involving the aerosol dissemination of anthrax spores, particularly in 
an urban setting, was considered by public health experts to have the 
potential for catastrophic effects similar to smallpox. . . . 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 treat. The Secretary of the Department of 
Homeland Security determined that anthrax posed a material threat to 
the Nation. And, 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 was 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 to potentially 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. Availability of a vaccine is a critical 
requirement for repopulation and restoration of the functionality of 
any exposed area.
    The limitations inherent in the currently available anthrax vaccine 
were articulated in a 2002 Institute of Medicine report, ``Anthrax 
Vaccine: Is It Safe? Does it Work?'' The report stated, ``. . . a new 
vaccine, developed according to more modern principles of vaccinology, 
is urgently needed.'' 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). This research, spanning more than a decade from its inception in 
the early 1990s, was conducted in large part by the United States Army 
Medical Research Institute of Infectious Diseases 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 National Institutes of 
Health's National Institute of Allergy and Infectious Diseases 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 and the conduct of Phase 1 and 
Phase 2 clinical trials. Large-scale manufacturing capacity would be 
required to support the civilian requirement for this medical 
countermeasure, which was defined through an interagency process to be 
the initial protection of up to 25 million persons. Senior officials 
throughout the United States government evaluated acquisition options 
to achieve this requirement and, in the fall of 2003, the decision was 
made to pursue the acquisition of rPA anthrax vaccine.
    An evaluation of the status of the NIAID rPA anthrax vaccine 
development program suggested rPA vaccine could potentially become a 
licensed product within 8 years. 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 fiscal year 2004 Department of 
Homeland Security appropriations bill. Utilizing a robust technical and 
business evaluation process, we reviewed multiple proposals and finally 
negotiated a contract with VaxGen of Brisbane, California, for 75 
million doses of the vaccine, (anticipating a three-dose regimen). 
Using a milestone and deliverables approach utilized with the ACAM2000 
smallpox vaccine development and acquisition program, and the rPA 
anthrax vaccine development related contracts at NIAID, the VaxGen 
contract lays out an ambitious program to include the delivery of the 
first 25 million usable vaccine doses to the Strategic National 
Stockpile within 2 years of contract award. A unique and critical 
aspect of the rPA vaccine BioShield acquisition contract is the fact 
that no payment is made until a usable product is delivered to the 
Stockpile. While awaiting delivery of this new vaccine to the Stockpile 
my office will complete negotiations for 5 million doses of the 
currently licensed anthrax vaccine in the next few days to support 
immediate requirements. Delivery of the product to the Stockpile will 
begin very soon after the contract award and will have a direct impact 
on our preparedness.

Other Needed Countermeasures
    In an effort to fill other gaps in the Stockpile, we have made 
progress in contracting for products that will soon be delivered for 
use.

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 cannot take 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 will begin next month.

Ongoing Project BioShield activities
    In addition to the Project BioShield acquisition contracts that 
have been awarded in the last 9 months, there are several other 
important BioShield procurement-related activities underway. We are 
reviewing the responses for Requests for Proposals for anthrax 
therapies, and we are continuing to move forward on the acquisition of 
an antitoxin treatment for botulism. Furthermore, to signal our intent 
to acquire a next generation smallpox vaccine, we will be releasing a 
draft request for proposal for industry comment within the next 2 
weeks. 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. But, in many ways, anthrax and smallpox represent the ``low 
hanging fruit'' for medical countermeasure research, development and 
acquisition and was enabled 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 provide 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.

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 to focus 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. When a product has reached the advanced development stage, 
Project BioShield Act of 2004 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 9 months since 
Project BioShield was enacted, the incentive has sped 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 will present continuing challenges. 
Although we cannot be prepared for every threat, we have the ability to 
create a strategic approach to identifying and combating the greatest 
threats. HHS and its agencies including NIH, CDC, and FDA, have a clear 
mandate from President Bush and Congress to lead the charge in this 
arena. 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.

    Senator Gregg. Thank you, gentlemen.
    Let me start by saying I think there has been significant 
progress made. We started at zero, but I do not think we should 
underestimate how far we still have to go. We will start off by 
saying you have done a good job getting to where you are going, 
but the context of this hearing may ask questions about where 
do we have to go and how do we get there and why are we not 
there yet.
    Let us begin. You, Mr. Simonson, talked about anthrax, and 
that is probably a good case study to look at because if you 
order the pathogens which are our biggest threat, smallpox is 
number one, followed by anthrax, and you have botulism. Then 
you actually drop down a level in my opinion and you hit 
botulism and hemorrhagic fever and a number of other things 
that are much more controllable than either anthrax or 
smallpox.

                           SYSTEM WEAKNESSES

    But we have also seen three instances of what I would call 
real-life case studies as to how we react. We have got the SARS 
situation. We have got the avian flu situation, and we have 
just the simple flu vaccine situation. In each one of those 
instances, we saw weaknesses and we saw strengths of our 
system. I wanted to focus a little bit on the weaknesses 
because the strengths are good. Let me congratulate you for 
them, but I am concerned about the weaknesses.
    The weaknesses, as I see it, are this. In the flu 
vaccination situation, we found ourselves with an ``all the 
eggs in one basket'' philosophy, and the provider of the 
vaccine turned out to be incapable of maintaining the supply. 
And thus, people were unable to get the vaccine. Are we 
creating the same problem again with anthrax, for example, 
where we essentially committed to a single supplier where the 
situation is that the supplier has not even gotten through 
clinical trials yet. Should we be approaching this by throwing 
the net wider and trying to energize more input to get more 
participation from more players?
    We have one approved vaccine out there, which you mentioned 
you are buying 5 million doses from. It is a much more complex 
vaccine procedure than the one being proposed, but the one 
being proposed has not been approved, whereas the one that 
exists is approved. And so I guess my question is, why are we 
not splitting up at least into a couple baskets here rather 
than going full bore with one basket? That is the first 
question.
    The second question is, are we energizing the minds out 
there that might have even more creative answers? Again, I will 
use anthrax as an example. I hate to be anecdotal because this 
should be more systematic than anecdotal. But I was up at 
Dartmouth where they have a very fine research facility, and 
the researchers up there said they were having great success 
with a proposal which basically addressed not only pre-
prevention, but also if you were actually exposed to anthrax, 
had almost 100 percent recovery from anthrax. It was just at 
the mice level but they thought they were making great 
progress. But their attitude was they could not break into the 
system.
    How many other people are out there? Are there people at 
Baylor? Are there people at Duke? Are there people out in 
Minnesota who basically have not figured out how to break into 
the system but might have the ideas? Are we energizing the 
research community first to come up with ideas and are we 
giving them a clear pathway that gets those ideas into the 
process, or are we shutting them out by simply choosing a 
winner here and saying this is the vaccine we are going to use, 
everybody else is off the table for the next 5 years because 
all the money is committed to this vaccine?
    So it is two levels of questions. Have we made technically 
the right decision by choosing one vaccine to basically put all 
our eggs in one basket in light of the flu experience? And 
secondly, in doing that, have we also shut down the creativity 
in this area of anthrax because everybody now says, well, the 
anthrax is off the table because they have chosen this vaccine? 
So people at Dartmouth, people at Baylor, people at Duke are 
going to move on to something else.
    Mr. Simonson. I think, Senator, the influenza situation and 
other situations where we have put all of our eggs in one 
basket is distinguishable from what we are doing on anthrax. 
Utilizing what we sometimes call the push-pull, you push 
scientific development along the way using NIH and other 
instrumentalities to the point where it is far enough along 
that a Government contract can incentivize a maker to pull it. 
That is a very delicate balance in the negotiations with these 
companies. We found in our negotiations with the contractor 
that got the award that the $75 million was about what we 
needed to pull it and----
    Senator Gregg. How much does that constitute in dollar 
value?
    Mr. Simonson. $877 million.
    That was the pull needed to get there. Cutting it in half 
would have really limited our ability to take advantage of the 
economies of scale and so forth as you ramp up.
    But I think our interest in acquiring more AVA BioPort 
vaccine shows we are seeking not to put all of our eggs in one 
basket. Hopefully, we will be finishing the 5 million dose 
contract very soon. There is an option in there for another 5 
million doses. It keeps the door open and allows us to continue 
a dialogue with BioPort so we can, where appropriate, adjust 
our stockpiles there.
    Plus, we are doing some other things that are related. We 
have enormous quantities of antibiotics effective against 
anthrax.
    We are trying to develop a good anthrax therapeutic, and 
this procurement I think especially speaks to the situation you 
mentioned earlier about people feeling locked out. What we have 
said is in order to keep our acquisition in sort of the state 
of the art, we are going to engage in essentially a three-stage 
acquisition, acquire the first round of anthrax therapeutics, 
but keep RFPs open for the next 2 years so products that were 
not able to compete in the first round could compete in the 
second round so that we have a diverse portfolio of anthrax 
therapeutics. So it was specifically designed for the purpose 
of not locking out someone who was on the verge of a 
breakthrough but had not quite gotten to the point where he 
could meaningfully compete for a BioShield contract. So we are 
sensitive to that.
    I am not sure we are doing it the right way. I am not 
saying we are fully satisfied with the experience, but I think 
we are learning as we go and we are trying to be good stewards 
and to not over-commit where we do not see a need to. But we 
are sensitive to the need to keep the scientific community 
energized and interested in breakthroughs.
    Senator Gregg. Senator Byrd.

                     CHEMICAL AND BIOLOGICAL AGENTS

    Senator Byrd. The Gilmore Commission in its December 15, 
2003, report stated that a single biological or nuclear attack 
could realistically kill tens of thousands of people. The 
report went on to say that to meet today's threats, we need 
technological breakthroughs such as the development of sensors 
to detect deadly chemicals or biological agents.
    I believe that is your area, Dr. Albright. What are you 
doing to prevent these deadly agents from crossing our borders, 
coming into our ports, or arriving by plane?
    When Secretary Ridge testified before the subcommittee last 
year, he said if a passenger wanted to board a plane with a 
biological or chemical weapon, we do not have the capacity to 
detect it. Is that still the situation? Does your budget 
request address this issue?
    Dr. Albright. So there were a couple questions. To answer 
the second question, the answer is no, we do not have a good 
way of detecting someone trying to bring a vial of pathogen 
across the border. That would be an extraordinarily difficult 
technical problem to address. If you think about the amount, 
for example, of anthrax or of smallpox needed to be brought 
across the border in order to either affect a large number of 
people or to act as seed stock for a domestic capability, you 
do not really need very much. The amount of the actual anthrax 
you would need would be about the size of a quarter. You would 
need very little smallpox to start culturing seed stock.
    So the approach we have taken is rather than trying to 
solve what appears to be an intractable problem at the borders, 
let me stop and say there is another side to this, and that is 
when people and cargo do cross our borders, to the extent that 
we are able to target suspicious individuals or suspicious 
cargo and then inspect them manually and thoroughly, that would 
certainly provide a venue, just as it would provide a venue for 
detecting almost anything else they would bring across the 
border. But looking for, as I said, a vial of anthrax, the 
technical obstacles to that are just extraordinary.
    So the approach we have taken instead is rather to detect 
an attack when it occurs because, in a sense, one of the real 
dangers or terrors associated with these kinds of pathogens is 
if they are deployed covertly, they start to infect people 
before anybody really knows what has happened. And by the time 
you start to see symptoms, it is usually too late to do much 
about it. So the trick here is to detect the attack before 
people become symptomatic, and when we have an opportunity, 
deploy the stockpile and treat the individuals concerned and 
save them.

                             BUDGET REQUEST

    Senator Byrd. Would you touch upon the other question I 
asked? Does your budget request address this issue?
    Dr. Albright. Yes, sir. Our budget request I believe is 
approximately $80-odd million for the next generation of the 
BioWatch. These are the urban detection systems. We have also 
got about $100 million in our budget, roughly that is 
operations in support for the current system and actually there 
is another generation being deployed as we speak.

                           CHEMICAL DETECTORS

    Senator Byrd. The Department is spending over $100 million 
on the system of sensors known as BioWatch. The budget request 
for fiscal year 2006 proposes over $225 million for a new 
office called the Domestic Nuclear Detection Office.
    Less clear are the Department's efforts to prevent a 
chemical attack. After 9/11, the Senate approved $15 million 
for the D.C. Metro system to deploy chemical detectors in the 
D.C. subway system. Now, that is an excellent system. It gives 
Metro the capacity to immediately determine if the subway has 
been exposed to a chemical agent so it can effectively respond.
    This funding was included at Congress' initiative. It was 
not requested by the President. In fact, the White House 
specifically objected to the funding, describing it as 
excessive.
    Last year, Under Secretary McQueary listed the D.C. Metro 
project as an accomplishment.
    Is there any funding in the President's budget to take 
advantage of the lessons learned from this pilot program to 
deploy the chemical detectors in other large subway systems or 
urban areas around the country?
    Dr. Albright. The short answer is yes. Let me explain to 
you how it works.
    First, it is called the PROTECT System, the system we have 
in the Washington Metro system. We see it as a significant 
success. In fact, the Department of Homeland Security is no 
longer really involved with it. We turned it over to the 
Washington Metropolitan Area Transit Authority. They operate it 
to the extent they need technical assistance, which is almost 
never, we supply it for them, but this is something that has 
been completely transitioned.
    I will also add that during both the Republican and 
Democratic national conventions, we deployed this system also 
to the subway systems in Boston and in New York, and in fact, 
at the specific request of the New York Transit Authority 
police, we have kept the system deployed at certain sites in 
the New York subway system.
    The way it works, though, is that from our perspective, the 
technology development is finished. So now the question here is 
one of transition. How does one do that? In particular, how 
does one transition these technologies to transit authorities 
which are local government entities?
    So what we have been doing is working very closely with the 
Office of Domestic Preparedness, with ODP, to create grant 
guidance that will allow and focus grants to be deployed in 
local metro systems. There are something like over 30 metro 
systems around the country. They would then basically take the 
system and install it. It is really very inexpensive. It is 
only a few million dollars per metro system that is needed to 
do this. So that work is underway, but that would be embedded 
within our overall grant budget.
    Senator Byrd. My time is up. Thank you, Mr. Secretary.
    Senator Gregg. Thank you. Again, I recognize the chairman 
of the full committee.

           NEW PRODUCTS TO PROTECT AGAINST BIOTERRORISM ACTS

    Senator Cochran. Mr. Chairman, I just have a couple of 
questions. One is to focus attention on how we are developing 
incentives for researchers to discover and develop new products 
to protect the general public against bioterrorism acts. Dr. 
Albright, what are we doing and what is in the budget to try to 
help reach that goal?
    Dr. Albright. In terms of fundamental research for medical 
countermeasures, sits within the realm of my colleague here, 
Mr. Simonson, and the Department of Health and Human Services. 
I will point out they have well over $1 billion devoted to 
research and development activities within NIAID to invoke 
intramural and extramural contracts, and by that, I mean to 
researchers within NIAID, as well as to universities to develop 
the scientific basis for countering these threats across the 
entire list of category A and even B and C agents.
    Senator Cochran. Mr. Simonson, do you have a response?
    Mr. Simonson. That is absolutely right. We have about $1.7 
billion assigned to the biodefense research portfolio at NIH. 
It is a very aggressive agenda there to move advancement 
forward.
    Senator Cochran. Will this utilize expertise that we have 
at academic health science centers, specifically the drug 
discovery efforts of schools of pharmacy?
    Mr. Simonson. The extramural program does leverage academic 
health centers. I will check this for certain, but I would be 
shocked if discoveries in schools of pharmacology did not 
leverage some of this money.

         SYSTEMS THAT MONITOR SUPPLY OF PHARMACEUTICAL PRODUCTS

    Senator Cochran. I know there are efforts underway at the 
Centers for Disease Control and other agencies to develop 
systems that monitor the supply of pharmaceutical products 
besides those already in the strategic stockpile that could be 
needed in the event of widespread bioterrorism attack. Mr. 
Simonson, can you comment on such systems?
    Mr. Simonson. Yes. CDC, through the Strategic National 
Stockpile, has a monitoring function where we are looking for 
availability in the both reverse distribution and distribution 
system, in case something happens where we would have to 
leverage what is already out in the field.
    The FDA has a drug shortage function where they are 
tracking vulnerabilities in the pharmaceutical industry, how 
much of a particular product is out there and could be used in 
an emergency.
    The difference is FDA has access to very closely held 
proprietary data that CDC often does not have access to. So we 
work it together.
    Senator Cochran. Is there a sufficient amount of money in 
the budget request to get us started, Dr. Albright, to develop 
the infrastructure, the facilities for continued research in an 
aggressive way to meet this challenge?
    Dr. Albright. I think certainly in our fiscal year 2006 
budget request, the answer is yes. There are multiple aspects 
to your question. Certainly in the research side, again that 
would be in DHHS, but there have been funds actually 
appropriated in 2004, for example, for the development of the 
laboratory infrastructure, the capitalization, for example, of 
biosafety level 4 research facilities across the country, and 
it is my understanding is well underway.
    There are other issues, though. One of the things that Mr. 
Simonson and I have been working closely with is some of the 
capitalization needs associated with the developmental process. 
There are some unique issues associated with putting some of 
these bioterror pathogens through clinical trials, or the 
equivalent of clinical trials, because obviously we do not 
infect human beings with these diseases in order to test them, 
that we are actively discussing at the moment.
    Senator Cochran. Thank you, Mr. Chairman.
    Senator Gregg. Thank you.
    Senator Craig.

                        SHELF SENSITIVE VACCINES

    Senator Craig. Mr. Chairman, thank you very much.
    You touched upon a subject I want to pursue with our panel, 
and gentlemen, you are the professionals here. You tell me if 
this is an area that does not pertain to this particular area.
    In the last several years, I chaired the Select Committee 
on Aging and a week before Chiron announced its Liverpool plant 
had been shut down, they were before us telling us they were 
going to meet the necessary 100 million doses, or whatever the 
number was, for the flu season. They did not meet it. We got 
through that season.
    But it exposed to us the vulnerability of that particular 
vaccine industry, and it was a product, in part, because of 
what had transpired over a course of years. Here you have a 
mutating virus, I believe, and it changes annually, and you 
cannot stockpile, and so you have to predict and produce. If 
you mispredict, you end up with a lot more doses and it 
bankrupts your company and you go away. And you find out it is 
much too expensive to play in that field of health care, if you 
will, unless it is incentivized by government.
    Of course, that technology is an egg-driven culture 
technology, and we are not into cell technology yet. We are 
trying to get money there.
    The bottom line is we made it through this last season. I 
do not know that a flu virus could be brought to this country 
effectively and spread to create a pandemic by a terrorist 
organization. You are the ones who would have to be able to 
tell us that, whether it was a doable proposition.
    But if it were, we would be so unprepared at this time to 
deal with it by all situations, and in certain segments of our 
country, certain demographics, the elderly, flu can be lethal, 
as we know, losing thousands and thousands of them in a normal 
flu season.
    We are trying to correct that problem, but we are not quite 
there yet. Government is simply going to have to help these 
companies and buy off the surplus at the end of the season to 
allow them to produce.
    Senator Cochran. How many of these kinds of vaccines or 
treatments are we preparing that are shelf-sensitive, that have 
to be rotated on an annual basis, that have to be sensitized to 
the mutating viruses all the time to be good and usable?
    Mr. Simonson. Flu is the only vaccine that has to be made 
in this campaign process.
    Senator Craig. Is it transportable and can it be used as a 
weapon?
    Mr. Simonson. Influenza?
    Senator Craig. Yes.
    Mr. Simonson. One would think so, yes.
    Senator Craig. Would you agree we are totally unprepared if 
it were ever used in that situation?
    Mr. Simonson. I am not sure I would say we are totally 
unprepared, but it presents an enormous challenge to us and it 
is something we have been mindful of and worried about I think 
since the President took office.
    Senator Craig. We are proceeding into the next flu season 
with how many producers of flu vaccine? Two?
    Mr. Simonson. There are two producers of the killed 
vaccine, one producer of the live attenuated vaccine, and a 
third on the horizon. There is still regulatory work occurring 
with respect to the third.

               CELL TECHNOLOGY VERSUS CULTURE TECHNOLOGY

    Senator Craig. How much investment are we making in the new 
cell technology versus, if you will, the culture technology of 
eggs?
    Mr. Simonson. We entered into a $97 million contract for 
tissue culture, cell culture technology, which has enormous 
benefits over the embryonated hen's egg approach.
    Senator Craig. And that benefit is to be able to speed up a 
process ultimately to produce a vaccine more quickly. Is that 
not correct?
    Mr. Simonson. More quickly and it is less vulnerable to the 
things chickens are vulnerable to. We have hundreds of 
thousands of chickens who lay eggs for our vaccine every year. 
A high path influenza virus, avian influenza virus----
    Senator Craig. Clean chickens.
    Mr. Simonson. Yes, but they are still susceptible to 
disease. So it has worked out so far, but it is a fragile 
infrastructure.
    We have also developed over the last 6 months some 
contingencies for our chicken flocks. We are building up flocks 
so if we have a problem in one, we can supplement with another, 
and we can also produce year around.
    Senator Craig. But you have a tremendous time spread in 
that technology compared to tissue. Is that not correct?
    Mr. Simonson. That is right.
    Senator Craig. Well, I hope you are putting money into that 
new technology. We lucked out this year. We made it through the 
season with a lot of cooperation and, frankly, a lot of good 
coordination on the part of NIH and others and a lot of 
communities of interest. But I was absolutely amazed at our 
vulnerability in that area and the unwillingness, at least of 
Congress to date, to recognize it and incentivize it so we can 
keep industries functioning in those areas, not just in 
influenza but in other childhood areas. There is the liability 
issue, along with a lot of other things, that have just simply 
caused them to leave the market.
    Mr. Simonson. Even before 9/11, this was a very clear 
priority of the Bush administration. There was work going 
forward even before 9/11 on this. There is so much more to be 
done, but we have made a very good start I think. But it was, 
for decades, neglected as a seasonal nuisance, the flu, and the 
flu is not a seasonal nuisance. The flu is, in some ways, a 
very, very unique threat to us if you look back at 1918 and 
what that did to this country, and we have to prepare for that 
and we are.
    Senator Craig. Thank you.
    Senator Gregg. Senator Stevens.

                         ADVANCE APPROPRIATION

    Senator Stevens. Thank you very much, Mr. Chairman.
    I was pleased to join you in introducing this basic bill on 
BioShield, Senator Gregg. We gave an advance appropriation of 
$5,593,000,000. How much of that has been allocated to you for 
2005? That was for the years 2004 to 2013. I just wondered how 
much has been released to you.
    Mr. Simonson. Well, $2.5 billion has been released to us.

                    DEMONSTRATION OF IDEAS BY PEOPLE

    Senator Stevens. We had a sense of urgency in terms of your 
mission. Part of it came from the fact that I was chairman of 
appropriations. Senator Cochran is now, and he is going to have 
this delightful experience. But people came to me to 
demonstrate some of the things they said they had prepared. One 
gentleman told me he had a substance which, if it was injected 
into the leg of an individual, would guarantee protection 
against all substances for a period of 48 hours. Now, I sent 
them to see you. What do you do with people like that when they 
come in?
    Mr. Simonson. Well, there are a number of these people.
    Senator Stevens. There are a great number of people, but 
somewhere there might be one who knows what he is doing. That 
is what I want to know. What do you do with them?
    Mr. Simonson. I hold out that hope as well. So what we do 
is we gather the research and development types, the physicians 
and scientists, in my office who have the capability of seeing 
maybe a gem in the rough and we go through it. In fact, we do 
this, I would say, in the regular course of business. We are 
going to be doing it again next week with a provider, a stem to 
stern review of what they say will protect against, in this 
case, irradiation exposure.
    But it does happen often. We do it, and if we think there 
is any hope for it, we bring in our colleagues from NIH. We are 
looking all the time for more. Sometimes they are stacked up a 
little bit, but we do get to the people who come forward with 
these ideas.
    Senator Stevens. Is Dr. Franz still out there?
    Senator Gregg. He has not testified yet.
    Senator Stevens. He has not testified yet. Can I ask him a 
question?
    Senator Gregg. You can, sure.

                    NONGOVERNMENTAL SCREENING GROUP

    Senator Stevens. Do you think there should be a 
nongovernmental screening group that people will know exists 
that could review suggestions like this coming from individual 
scientists?
    Dr. Franz. I'm sorry, sir. A nongovernmental screening 
group?
    Senator Stevens. Yes. Should we have provided for such an 
entity in the bill that we passed, a nongovernmental screening 
entity to review these suggestions so it would be quickly 
reviewed?
    Dr. Franz. I think it depends on the resources. My own 
experience was as the Commander of the USAMRIID, we used to 
receive a lot of these things, and for the most part, as Mr. 
Simonson has said, I believe it is possible to look at the data 
presented, and oftentimes it is scanty. And to sit down with 
some smart people with both basic research and clinical 
experience and make a decision to do a very careful screening, 
using good laboratory practices and so on, of each of these 
products would be very, very expensive. So I think it is 
important there be some kind of careful look outside the 
laboratory by some smart people before we send them to the 
laboratory.
    Senator Stevens. Thank you.
    Mr. Simonson, my only comment is it just sounds to me there 
are a great many people in our national community who are 
thinking about these threats and some of them have capability 
and others do not. But I do hope we find some way to have an 
identification of where these people can take their 
suggestions. I am sure Senator Cochran will appreciate this 
because they still keep coming to us for money and we do not 
know one single thing about what they are talking about. So I 
do think there ought to be some identifiable place where people 
with capability and ingenuity to try to help solve some of 
these problems could go and know who they are talking to and we 
could know who to send them to.
    Mr. Simonson. There is one other mechanism we use, as I 
indicated earlier. This request for information. We will take a 
look at what is missing and having looked through the 
Government pipeline, seeing nothing, we will send out a request 
for information, sources sought. Do you have work in this area 
that might be useful to the Government? And that produces a 
fair amount of really reliable data that we can then move 
forward on. So we are trying to do that.
    I think there is no question, Senator, that when it comes 
to security countermeasures, people coming forward and saying 
we have got these ideas and we need a place to go, ours is the 
place to go. We want to have an open door for those sorts of 
inquiries.
    Senator Stevens. Thank you very much. My only comment would 
be if I let someone study how many permits the Wright brothers 
would have had to proceed with the demonstrations down at Kill 
Devil Hills, it would amaze you how many they would have had. I 
am sure similar things apply in this area. There is just an 
overwhelming number of permits necessary for anyone to even 
proceed with this independently. So I do hope we find some way 
to accommodate the knowledge of some people who may have the 
ingenuity to think a lot better than we thought they could.
    Senator Gregg. Senator Allard.
    Senator Allard. Thank you, Mr. Chairman.

                  BIOTERRORISM AND COOPERATIVE EFFORTS

    I would like to make an inquiry as to how your efforts 
against bioterrorism are being coordinated with the Department 
of Defense, as well as the CDC lab? They are all deeply 
involved in biological threats to this country either through 
an epidemic, what we naturally have occurring in this country, 
which may be introduced or could be used by other nations as 
far as a bioweapon is concerned. I wonder if you might comment 
about your cooperative efforts, if you would, please.
    Mr. Simonson. We have a structure in place that Dr. 
Albright and I, Dr. Winkenwerder, Assistant Secretary for 
Health Affairs at the Department of Defense, and Dr. Kline, who 
is Assistant to Secretary Rumsfeld for chemical and 
radiological and nuclear matters. The four of us chair an 
interagency group that works through these countermeasure 
issues, set requirements, and make sure the right hand knows 
what the left is doing because there is a fair amount going on 
outside of HHS laboratories. Parny may have something to add to 
this, but I think that really is where all the coordination is 
occurring right now on the countermeasure development front.
    Senator Allard. Are you communicating with the Department 
of Agriculture's plant and animal infectious diseases also? 
That is anthrax and potentially plague and zoonotic diseases. I 
assume you are also communicating with them.
    Mr. Simonson. Yes. They participate in this group.

             INTRODUCTION OF DISEASES FROM OTHER COUNTRIES

    Senator Allard. Now, I understand the chairman had some 
questions he raised about flu. I was not sure whether he was 
talking about just the regular variety of flu that affects 
humans or he was talking about the avian influenza, which does 
not occur in this country but causing some deaths in Asia and 
apparently is pretty virulent and is a disease that is of 
serious concern to get introduced in this country.
    When you have those kind of reports, what kind of action do 
you take?
    Mr. Simonson. The first thing we do is to ensure that we 
are getting reliable data out of the region.
    Senator Allard. So we send scientists down there to confirm 
the diagnosis.
    Mr. Simonson. We do send people there. We also bring 
material back to the CDC or other laboratories to make sure the 
sample is being properly evaluated and that we are watching for 
antigenic drift, changes in the characteristics of the disease.
    We fund, directly through the World Health Organization 
(WHO) or through bilateral agreements, ways to improve 
surveillance in these countries that have minimal 
infrastructure.
    The United Kingdom and the United States fund a transport 
fund to actually pay for isolates to be shipped out of these 
countries that cannot afford to ship them, believe it or not. 
It is a very expensive proposition.
    So that is the first thing we do. We trim that up. We send 
doctors into the field working with the WHO.
    I think the second thing we do, this is something Secretary 
Levitt has been very committed to doing, is work diplomatically 
with his counterparts, health ministers and so forth to 
underscore the importance of transparency because without 
transparency, none of this is going to do us any good. We are 
trying to back up that transparency with funding.
    Senator Allard. Well, the importation of material that is 
infected or potentially infected is a very volatile issue. We 
have a research laboratory off the shores of this country so we 
can make a claim that the disease does not occur in this 
country. I would hope that when you are bringing in those types 
of materials some consultation be made that in this particular 
case we happen to be talking about animal diseases, and it is 
important on our trade agreements that we never and we can 
always make the claim the disease does not occur in the United 
States. And avian influenza can have a dramatic impact, for 
example, in the poultry industry if we cannot make that claim 
as far as import and international trade and everything.
    So I would encourage you, if you are not, to work closely 
with those various agencies because we are trying to do what is 
necessary to protect our population. We need to study. We need 
to be prepared for them, but yet we have to be careful in what 
way we set up our studies and how we handle that kind of 
material. It can be very complicated and it could be very 
controversial.
    Mr. Simonson. I just want to follow up on something I said 
a moment ago. When we bring material back into this country, it 
is done in a very high level of bio-security so that we do not 
have to worry about it getting out, much like when other agents 
are brought back----
    Senator Allard. Very, very important. Thank you.
    Thank you, Mr. Chairman.
    Senator Gregg. Thank you. I want to thank the panel.
    I think Senator Stevens' point that we need to formalize 
the point of access where people of ideas can go is a pretty 
valid one because I know I hear it too. I have people come to 
me and say I have got a solution to this problem, and I refer 
them. It would be nice, I think, if we could pick a central 
Government place where we could send all these people who have 
those good ideas. I guess yours is the shop. I am not sure how 
we make it more visible in that area, but I think that might be 
useful.
    But we do appreciate your work and we thank you for your 
time this morning and appreciate your testifying.
    We are going to now move on to the second panel which is 
folks who are outside the Government right now and who have 
expertise as to whether or not we are doing a good job as a 
Government and who have a lot of experience, beginning of 
course with Dr. Franz, who has already been drawn into the 
discussion here, which we very much appreciate. Hopefully we 
can get the electronics here to work well so we do not end up 
with a lot of interference. Dr. Franz we know well because he 
was head of the U.S. Army Medical Research and Materiel Command 
for 23 years. He is now active in a number of other activities.
    We have Dr. Leighton Read, who has joined the Alloy 
Ventures as a general partner in October 2001. He has 14 years 
as a biotechnical entrepreneur and investor, and he is going to 
give us his thoughts as to how you get into this business and 
whether or not the Government is making it easy.
    And we have Mr. John Clerici who is an expert in liability 
issues. He was Judge Advocate in the United States Air Force 
where he spent a considerable amount of time advising the Air 
Force research laboratories on how to procure technologies.
    So we appreciate all of you taking the time to be with us 
today. What we are interested in hearing about is how you think 
the Government is doing in instituting the goals of BioShield, 
which have certainly been outlined rather thoroughly this 
morning, to prepare ourselves to deal with a biological/
chemical attack and to anticipate what the problems would be 
and be ready to deal with them. So we want to hear your 
thoughts on this.
    We will start with you. Why do we not start with Dr. Franz 
and make sure we have got this thing working so that he is up 
and running. Dr. Franz is in Boston, which is obvious because 
there is a Red Sox symbol in front of him, probably curing Red 
Sox fever. If you could give us a test, Dr. Franz, that would 
be good.
    Dr. Franz. Good morning, sir. Can you hear me?
    Senator Gregg. Yes, we can. Thank you. Why do you not 
proceed?

STATEMENT OF DR. DAVID FRANZ, CHIEF BIOLOGICAL 
            SCIENTIST, THE MIDWEST RESEARCH INSTITUTE
    Dr. Franz. Mr. Chairman, distinguished members, it is an 
honor to appear before you to address issues related to the 
procurement of medical countermeasures to protect the American 
population from bioterrorist agents and emerging infectious 
disease. I am currently Senior Biological Scientist at the 
Midwest Research Institute in Kansas City. I believe you have 
my resume.
    This committee has asked that I provide some broad 
perspective on the medical aspects of biological defense in the 
context of a world in which intentional release of biological 
agents is of significant concern and natural introduction of 
disease is a reality. I will make seven brief points that 
encapsulate my written statement and then summarize my thoughts 
regarding the implications of these points for the challenges 
at hand.
    First, regarding the threat, I believe the most significant 
barriers to biological terrorism today is the intention to 
commit the crime. This is especially true for contagious 
viruses. In the future, technology will draw on the options for 
both protection and for abuse.
    Second, we are extremely vulnerable to bioterrorist attack 
in this free society, but for many technical and behavioral 
reasons measuring actual risk to any segment of the American 
population or its agriculture will continue to be extremely 
difficult.
    Third, biology is characterized by great diversity. 
Microbes like our own immune systems can be either strong or 
weak. We can rank microbial capabilities that cause disease and 
even their utility for terrorist exploitations, but without 
solid intelligence, we can never know for sure which specific 
biological agent we might face or when. Many of us agree, 
however, as was mentioned earlier, there are outliers among the 
diverse microbial population. These include organisms that 
cause smallpox, anthrax, and foot and mouth disease.
    Fourth, biology is neither as crisp nor are the rules of 
play as well defined as they are for physics and chemistry. 
Therefore, there are many opinions regarding the way ahead for 
bioterrorism defense.
    Fifth, just trying to decide how to organize to protect 
ourselves is challenging. Secretary Richard Danzig has proposed 
a handful of select scenarios to be used ``as an anvil against 
which to hammer our ideas.'' A compatible approach, which I 
have often discussed, is to prepare for the outliers and then 
broadly enhance our public health system as if we were 
expecting an unknown emerging infectious disease.
    Sixth, regarding future threats, we should assume that 
almost anything is or will be possible, but we must not forget 
just because it is theoretically possible it is almost always 
harder for us to manipulate biology either for good or for ill 
than we predicted.
    And finally, seventh, we can do many things to protect 
ourselves but our preparation can never be perfect. I believe 
it is critically important that we carefully craft our concept 
of use and application of various biodefense measures are being 
developed so we address the greatest risks and vulnerabilities 
and ensure the maximum benefit for our investments. It will be 
costly, but the cost of failure in this area is potentially 
enormous. So how can we apply these principles?
    First for vaccines. It is relatively easy to justify the 
acquisition of vaccines for anthrax and smallpox for the 
population. It is important, however, we thoroughly understand 
our concepts of use as we attempt to develop traditional agent-
specific vaccines for the civilian population. In the short 
term, we should exploit next generation, flexible vaccine 
platforms. We were working on these in USAMRIID in the mid-
1990's already, which will allow us relatively quickly to 
produce a licensed product, counter an outbreak of either 
epidemic or even pandemic. The basic platform might be licensed 
for use in humans now, allowing us to simply add a genetic 
cassette when a new vaccine is needed, greatly shortening the 
time for use. Our current system of vaccine research, 
development, and approval is simply not flexible enough to 
respond to terrorist attack or emerging disease.
    For drugs, it is difficult to argue against spending as 
much as we can afford on antivirals and new classes of 
antibiotics and exploiting the genomic revolution to develop 
new categories of anti-infectives. All of these will improve 
the lives of Americans with or without a bioterrorist attack.
    And regarding the future, attempting to protect our 
population from the unknown threat of today and especially of 
tomorrow with specific countermeasures like traditional 
vaccines will likely be extremely costly and inefficient. 
Significantly boosting the immune system to give us broad, 
multi-agent protection is now slightly more than a great idea I 
believe. I will not be surprised if it will be 15 or 20 years 
before we can do this in domestic animals effectively and maybe 
30 years before we can really make a difference in the broad 
population of humans. But I believe we must be doing the 
necessary research right now. We probably do not yet know how 
much difference attempts to turn up the gain on our own immune 
systems will make. It is likely that for prophylactic use in a 
broad population where side effects may be totally 
unacceptable, the value could be minimal. However, in select 
populations or the already exposed or ill, where non-life-
threatening side effects are accepted, this class of 
countermeasures may be significantly more effective. We 
actually have examples of use in individual patients with 
cancer and hepatitis today, but our tools are still very, very 
crude.
    Finally, regarding market drivers for medical 
countermeasures, my experience is second-hand and limited. I 
believe specific countermeasures for most bioterrorism agents 
and probably for briefly emerging infectious diseases will, for 
the most part, require Government funding. For those 
countermeasures that have broader application, a significant 
portion of the research will still probably be funded by the 
Government. However, advanced development and even production 
will be of interest to industry, I am sure. Even there, 
incentives may be helpful or necessary in driving development 
and production of certain compounds.

                           PREPARED STATEMENT

    Again, I appreciate the opportunity to present this 
information before the committee. I worked hard to keep our 
leading national laboratory for the development of medical 
countermeasures for the force solvent through the 1990's. I 
know it is not easy to convince someone that medical 
countermeasures for a poorly understood threat of unknown risk 
are really important. The field of the vaccine and antiviral 
drugs requires both science and imagination, a phenomenal 
personal dedication by scientists and shepherding over enormous 
regulatory hurdles. And when it is completed, you cannot paint 
on the national colors and sail it around the world or even fly 
it over the Super Bowl at half-time. When it is finally 
licensed, the administration of that vaccine is often dreaded 
by the healthy recipient whose very life you want to save.
    Thank you for your important work and for this opportunity. 
I'd be happy to answer any questions.
    [The statement follows:]

                 Prepared Statement of Dr. David Franz

Medical Countermeasures to Biological Threats--and Emerging Infectious 
        Disease
    Mr. Chairman, distinguished Members, it is an honor to appear 
before you to address issues related to the research, development and 
procurement of medical countermeasures to protect the American 
population from bioterrorist agents and emerging disease. I am 
currently the Senior Biological Scientist at the Midwest Research 
Institute in Kansas City. I served on active duty in the U.S. Army from 
1971 to 1998, with 24 of those years in the U.S. Army Medical Research 
and Materiel Command. I served for 11 years at the U.S. Army Medical 
Research Institute of Infectious Disease, which I commanded before my 
retirement. I currently serve on a number of senior S&T advisory panels 
for the Department of Defense and Department of Homeland Security.
    This committee has asked that I provide some broad perspective on 
the medical aspects of biological defense in the context of a world in 
which intentional release of biological threat agents is of significant 
concern and natural introduction of disease is a reality. I have 
attempted to provide my views on a number of these issues below.

What is the nature of the bioterrorist threat?
    Biological terrorism is a unique threat to our society, our economy 
and our freedom. Like the biological warfare threat of a decade ago, 
dual-use facilities and technologies may be exploited to make terrorist 
weapons. Although we have improved our defensive capability, we can 
still not yet, geographically or temporally, warn our citizens of an 
attack in time to take evasive or protective action. Unlike biological 
warfare, the production facility' and the weapon of the bioterrorist 
may be very small indeed. Finally, as we have learned since October 
2001, attribution of a small scale attack can be very difficult or 
impossible. Furthermore, the microbes are generally widespread in 
nature and the technological tools are rapidly improving in capability 
and availability worldwide. Neither the microbes nor the tools to 
manipulate them can be outlawed, the former because if their ubiquity 
and the latter because of their value to society. Therefore, it is 
possible to easily hide a biological terrorist program. With proper 
agent selection there could be minimal technical hurdles. The most 
significant barrier to the biological terrorist today--and for the 
foreseeable future--is the intention to commit the crime.

Can we measure the risk?
    We know that our human and livestock populations are extremely 
vulnerable; this is a function of our free society and our well-
developed livestock industry. We know that the impact of an intentional 
attack with microbes could be enormous, measured in human lives or 
dollars lost. We know there are groups and individuals who threaten us 
and we have some sense of their abilities with things biological. Our 
understanding of the all-important factors of intent and motivation is 
much less clear. Therefore, risk--where all these variables come 
together--is only poorly understood. The president's directive 
``Biodefense for the 21st Century'' specifically calls for a biological 
risk assessment to be performed every two years, so that our national 
response to the threats, vulnerabilities and consequences of 
bioterrorism can be improved. This risk assessment presents technical 
challenges that are being addressed by the Department of Homeland 
Security.

Are some agents to be feared more than others?
    Biology is characterized by great diversity. Microbes of a given 
genus or family may be strong or weak. Species, subspecies or strains 
within a genus or family may be stronger or weaker than their near 
relatives. We call variola virus (the agent of smallpox), Bacillus 
anthracis bacterium, the foot and mouth disease virus and maybe even 
the toxin, botulinum, ``outliers'' because they can cause severe 
disease in humans or impact animal populations. Even that is an 
oversimplification. Botulinum isn't botulinum and anthrax isn't 
anthrax. All of these organisms, or the toxins they produce, live on a 
spectrum with regard to the pathology they can cause in humans or 
animals: some weaker; some stronger. To be an agent of concern' the bug 
need not only be able to cause disease in humans or animals, but must 
also have the right combination of a series of important 
characteristics, for example: stability, transmissibility, easy 
producability and/or the ability to overcome countermeasures. With 
regard to catastrophic bioterrorism, we may be truly concerned about 
less than 1 percent of those microbes found in nature. Yet, that's 
enough! The lesson for us is that we can--at least to some degree--
prioritize the agents for which we use our resources to develop 
countermeasures. However, without solid intelligence, we can never know 
for sure which one we will face.

What is the impact of all this variability in biology?
    If we were able to plot all known microbes in the world on a graph 
with their name stacked up on the vertical (Y) axis and their relative 
ability to hurt us spread across on the horizontal (X) axis, we would 
get some kind of a curve. Let's assume the curve would be roughly bell-
shaped with a small number of microbes having very low ability to cause 
disease, most of them with moderate ability to cause disease and few 
which can cause severe disease. We could do the same thing with 
stability, transmissibility and the ease with which they can be 
produced. If that isn't enough, we could plot all Americans on a 
similar curve, describing the relative ability of their natural immune 
systems to combat disease of various kinds. Some of us are strong and 
some are weak, but most of us are average in ability to withstand 
exposure to disease. More than half of us might survive exposure to 
smallpox, without any medical help, but maybe only a few percent of us 
would survive inhalational anthrax. To complicate the picture even 
further, the outcome of some exposures is dose-dependant. This is 
especially true of the toxins, which don't replicate within out bodies, 
but act more like chemicals. Biology is just not as crisp and clean as 
physics or even chemistry; this is one reason we have heard so many 
opinions about protecting our citizens from biological terrorism.

How can we decide what to protect ourselves against?
    The short answer is, ``We can't''. However, certain bugs are much 
better suited as weapons than others: B. anthracis, because of it's 
ability to survive in a spore form for many years; variola virus, 
because of its ability to spread from person to person and foot and 
mouth disease virus because of the way it can sweep through an 
agricultural economy so quickly that its point of introduction may be 
difficult to discern. We have recognized those and either have dealt 
with the outliers or are in the process of dealing with them 
specifically--as we should.
    Richard Danzig has proposed another scheme in his excellent 
document entitled, ``Catastrophic Bioterrorism: What is to be done?'' 
His approach involves a short set of specific agent release or 
introduction scenarios, which if prepared for properly will likely give 
us many of the tools and capabilities to deal with most other agents 
which have characteristics similar to those we specifically prepared 
for. Several of our government departments and agencies responsible 
have implemented Secretary Danzig's approach.
    Another model which I, and others, have put forward--after taking 
anthrax and smallpox off the table with specific countermeasures--is to 
think about the unknown as emerging infectious disease and take general 
steps such as establishing surveillance systems, upgrading diagnostics 
capabilities and educating healthcare providers regarding outbreak 
response. Eliminating vulnerabilities in our public health system is 
not difficult to justify, and has a beneficial ``dual use''. I have 
characterized this way of thinking about preparation by the simple 
equation, Bioterrorism--Emerging Infectious Disease + Intent. We don't 
know when we will face a bioterrorist attack, but history tells us that 
we should expect emergence and reemergence of ``exotic'' diseases every 
few years in the United States. If we prepare our public health system 
to deal with these types of occurrences, we will be far better prepared 
to deal with a bioterrorist attack.
What about future threats?
    We believe that multiple-drug-resistant bacteria were produced by 
the Soviets before the genomic era. We know that foreign genes can be 
added to both bacteria and viruses, making avirulent agents virulent, 
or conferring additional properties of virulence or pathogenicity. We 
know that the tropism--the virion's preference regarding the body's 
cells it infects--can be changed. We know that nature can change an 
animal pathogen so that it infects humans. In the biology of microbes, 
we should assume that almost anything is possible. That does not mean 
that it will be done by a human--but we are entering an era in which 
all these manipulations and more will become easier.

Can we place a value on classes of countermeasures?
    We can do many things to protect ourselves from a bioterrorist and 
his bugs; they range from political and behavioral actions to change 
intention in those who might harm us, or to undermine their support 
where they live, to medical solutions like vaccines and drugs, physical 
devices such as protective masks that filter microbes out of the air we 
breath, or monitoring systems to detect an attack on high population 
densities. All have a place in our integrated national defense, but not 
all are equally suitable for all populations we must protect--or 
deter--OR for every agent we wish to protect against. The Nunn-Lugar 
Cooperative Threat Reduction program has had a very significant 
positive result among the now-aging weaponeers of the FSU, but we would 
not expect the same model to work with Al Quiada. A protective mask 
will be of much greater utility to a soldier on the battlefield than a 
businessman in Boston, because we don't have, and probably can't 
afford, the capability to tell the business man when to don it. A 
vaccine against plague will more likely be useful to a Marine than a 
housewife, for behavioral and cost reasons. A currently-available 
antibiotic may be of great utility after an anthrax attack and useless 
after the release of highly-pathogenic avian flu virus that has been 
adapted to infect humans. We need to carefully craft our concept of use 
and application of the various biodefense measures that are being 
developed so that we address the greatest risks and ensure the maximum 
benefit of our investments.

Can we place a value on individual countermeasures within a class?
    Vaccines are the most agent specific of medical countermeasures; 
therefore, for agents which are rarely seen in the clinic, they have 
very limited application. Stockpiling vaccines for civilians makes 
sense for anthrax and smallpox for two reasons. For these two agents, 
unlike most others, vaccines can be used--in different ways--after an 
attack. For most other agents, efficacy of post-exposure vaccination 
just hasn't been demonstrated. The one instance in which, let's say a 
plague vaccine or an Ebola vaccine if we had one, might have utility is 
during a bioterrorist campaign; a series of sequential attacks (the 
term ``reload'' was coined by Secretary Danzig). Here, an individual or 
group attacks one U.S. city and then announces that another city will 
be targeted unless we capitulate. I will leave it to epidemiologists 
and statisticians to decide if we could respond effectively in such a 
situation, assuming we had the right vaccine licensed and in stock. In 
attempting to place a value on such a vaccine, we must consider actual 
cost to develop, produce and license, the shelf life, as well as the 
biology and the psychology involved. The behavioral and legal issues 
surrounding the prophylactic use of vaccines in the general population, 
without significant evidence of risk, can be difficult, as has been 
seen with both anthrax and smallpox vaccine programs in the recent 
past.
    Antibiotics are considered a general countermeasure and, therefore, 
will likely have dual-utility. They can and are typically given post-
exposure. This makes them ideally suited for protecting a civilian 
population after an attack. The issues to be considered include, first, 
sensitivity of the specific bacteria to a given antibiotic, then 
availability of the drug and its timely distribution to the affected 
population, if that population can be determined. Secondary issues, 
post attack, include possible allergy or other reactions to the drug, 
but the psychological and public relations issues may be slightly 
different after an attack than before. We currently have licensed 
antibiotics which are effective against most bacterial agents likely to 
be used by a terrorist. For some there would be issues of availability 
and, possibly, surge production. We believe that the Soviet Union 
developed antibiotic resistant strains in the past. Resistant strains 
have also developed naturally' throughout the world in recent years. 
Although, I am not expert regarding recent submissions to the FDA, it 
is my understanding that there are few, if any, new classes of 
antibiotics moving forward for licensure. This trend should be of 
concern to all of us, even if there were no potential for bioterrorist 
attack on our population.
    Anti-viral preparations can, for this purpose, be considered to 
have the general use characteristics of antibiotics, but are for use 
against viruses. They would have wide application if we never have a 
bioterrorist attack. For a number of reasons related to the way viruses 
live and function in our bodies, it is more difficult to develop 
antivirals that both stop the microbe and are safe for human use than 
it is to develop antibacterials. A very few antiviral drugs have been 
developed in the past 20-30 years. Now, with the availability of 
genomic and proteomic information, we are probably in a better position 
regarding the discovery or design of new classes of antivirals 
compounds, at least for certain families of viruses. As is with 
antibiotics, it is my understanding that market dynamics within the 
pharmaceutical industry have not, in recent years, been favorable for 
the development of antiviral drugs.
    Antibody preparations which provide passive immune protection 
without vaccination, whether produced in animals, or by modern 
synthesis methods, have a place in our medical tool kit. They, like 
vaccines, are specific in that they typically are only effective 
against the agent they were developed for. Unlike vaccines, they can be 
used immediately before exposure, immediately after and in some cases 
in the face of disease. They are typically less effective than 
vaccines, even if given before exposure; an exception to this 
generality is the antibody preparation for botulinum toxins, which, if 
given before clinical signs of disease, is amazingly effective in 
laboratory animals. Logistically, however, antibody preparations are 
cumbersome in that they must be administered either intramuscularly or 
intravenously.
    Vaccines protect by stimulating the body to produce a specific 
antibody which identifies and deals with the microbe when it enters the 
body. Antibiotics and antiviral drugs generally attack the microbe 
directly. There is a fourth possibility that we haven't fully 
exploited, primarily because we don't yet understand our immune systems 
well enough. This method is called non-specific immunity. Our bodies 
normally produce a variety of cells and chemical substances that attack 
microbes and help keep us healthy. These cells and chemicals deal with 
both bacteria and viruses. This part of our immune system is tightly 
integrated into our entire being and might be what we are describing 
when we say one person is generally ``healthy'' and another is not. The 
``innate'' immune system is generally stronger when we have had a good 
night's sleep, when we are fit, when our nutritional and hydration 
status is within normal limits and when we are ``happy''. This 
protective system breaks down when we are jet-lagged or stressed. The 
beauty of the innate immune system is that it can protect us from many 
different agents and it's always on board. The limitation is that it 
can be easily overwhelmed. Some scientists believe that, if we could 
increase the ``strength'' of the innate immune system, we might be able 
to actually shift each of us toward ``healthy'' on the population bell 
curve. Today we understand this system only well enough to use very 
crude tools to treat some cancers and viral infections like hepatitis 
C. Even when we gain greater precision, it is likely that turning up 
the power of the innate immune system won't work for everyone. Just as 
a vaccine might only work for 90 percent of a given population, this 
method might work for 40 or 60 percent--and until we get really good, 
there will be significant side effects. As we learn more and more about 
this system, we will be better able to control it and protect humans 
and animals from infectious diseases. This method of protecting our 
citizens from biological terrorist attack--or emerging infections--may 
be available in 15 years--or maybe 30. It is critical that we do the 
basic research now to make the most of the innate immune system. This 
investment will pay enormous dividends even outside the world of 
infectious disease.
    Principles regarding development of medical countermeasures for 
biodefense:
  --Vaccines are probably the best solution, but they are good for only 
        one microbe and must generally be given long before onset of 
        illness. Their concept of use is more consistent with military 
        deployment than with homeland security, with some specific 
        exceptions.
  --Antibiotics have more general application, but they are good only 
        for bacteria.
  --Antivirals that are safe and effective have been difficult to 
        discover, but we have some new tools and should exploit them.
  --Our innate immune system, if manipulated appropriately, holds 
        promise, but we have a lot to learn before we can exploit it, 
        especially in the healthy population.

What principles might we consider regarding acquisition of medical 
        countermeasures?
    Vaccines.--It is relatively easy to justify the acquisition of 
vaccines for anthrax and smallpox. Reactogenicity, cost, shelf-life, 
animal efficacy and licensure are all being considered. It is important 
that we thoroughly understand our concepts of use as we develop 
additional agent-specific vaccines. We should be developing next-
generation flexible vaccine platforms which will allow us to relatively 
quickly produce and license a vaccine to counter an outbreak that 
subsequently becomes epidemic or pandemic. The basic platform might be 
licensed for use in humans, allowing us to simply add a genetic 
cassette when a new vaccine is needed, to greatly shorten the time to 
use. Our current system of vaccine research, development and approval 
is simply not responsive enough to respond to terrorist attack or 
emerging disease.
    Drugs.--It is difficult to argue against spending as much as we can 
afford on antivirals, new classes of antibiotics and exploiting the 
genomic revolution to develop new categories of anti-infectives. All of 
these will improve the lives of Americans with or without a 
bioterrorist attack.
    Non-Specific Therapies.--We have a long way to go to achieve broad 
application of what is little more than a hypothesis, but we should be 
doing the necessary research now. Attempting to protect our population 
from the unknown threat of today, and tomorrow, with specific 
countermeasures, will likely be extremely costly and inefficient. We 
probably don't yet know how much difference these preparations will 
make; it is likely that, for use prophylactically in the broad 
population where side-effects may be totally unacceptable, the value 
will also be minimal. In select populations or the already exposed or 
ill, where non-life threatening side effects are accepted, this class 
of drugs may be significantly more effective.
Market issues:
    My experience regarding market drivers for medical countermeasures 
is second-hand and limited. I believe that specific countermeasures for 
most bioterrorism agents--and probably for emerging infectious 
disease--will remain in the category of orphan drugs. Research, 
development and production will be dependent on funding by the U.S. 
Government and the debate regarding licensure or investigational use 
will be handled for each preparation. For those countermeasures that 
have broader application, a significant proportion of the research will 
be funded by the government; however, advanced development and even 
production will be of interest to industry. Tax- or intellectual 
property-related incentives may be helpful or necessary in driving 
development and production, especially where the market is large enough 
to interest the pharmaceutical industry.
    Again, I appreciate the opportunity to present this information 
before the Committee. I shall be happy to answer your questions.

    Senator Gregg. Thank you, Dr. Franz. The last few comments 
there are well taken and very much appreciated. We appreciate 
your service to the Nation. Clearly you should have a flag 
painted over your front door and the appreciation should be 
there for all you have done in the area of protecting our 
soldiers, sailors, and airmen.
    Dr. Read.

STATEMENT OF J. LEIGHTON READ, M.D., GENERAL PARTNER, 
            ALLOY VENTURES
    Dr. Read. Mr. Chairman and members, thank you for the 
opportunity to testify about BioShield and our Nation's 
strategy. Your interest in stopping to consider the overall 
approach is timely and appropriate here.
    I am commenting today as an individual who has been 
building and financing biotechnology companies in Silicon 
Valley for about 17 years now. Before that I was an internal 
medicine doctor, and my academic career was studying costs, 
risks, and benefits of new medicines and vaccines.
    When I received your invitation just a little a while ago, 
I looked up my testimony on biodefense for the Senate 
Governmental Affairs Committee in 2002 and then in 2003 for the 
Subcommittees of the House Energy and Commerce Committee. Re-
reading that testimony, I have to say I had concerns and 
recommendations that I voiced then that are just as relevant 
today as they were when the Department of Homeland Security and 
Project BioShield were still on the drawing board. So there is 
clearly still some work to do.
    This problem requires long-term thinking. I agree with 
statements made earlier by your colleagues that there is no 
potential threat to us. I would like to focus particularly on 
our economy and our lifestyle. If an easy-to-deploy, 
transmissible bioweapon were deployed, even with a very small 
loss of life, the impact on our economy would be unbelievable 
because the necessary steps to interrupt the chain of 
transmission would interfere with travel and commerce of all 
kinds, even potentially food and medical supply distribution. 
Most importantly, I am really concerned about the impact of 
this on the freedom of people to meet during a time of stress 
and worry and political consequence. Nothing would test our 
trust in Government authority more than a quarantine separating 
loved ones. So, the stakes are very high.
    One of the companies I built was in the influenza vaccine 
business, and I agree it would be a very realistic proposition 
that someone could smuggle a dangerous strain of influenza into 
the United States. That deserves serious attention.
    Now, a great deal of positive work has been done. It is 
hard to describe how big a step forward the BioShield 
legislation was and some of the implementation that has 
followed that at the same time as talking about how much is 
still to be done, but we need to do that. Much remains to be 
done to educate the public and strengthen our traditional 
public health systems, our first responders.
    I was very heartened by some of the responses to the 
presidential directives in Mr. Albright's testimony. Many of 
those problems or challenges can be dealt with in just a few 
years of sustained effort, and one of my key points is that is 
not the case for our longest lead time countermeasures, drugs 
and vaccines, that have not even been invented yet to counter 
these threats. As you know, drugs typically take 5 to 10 years 
from the first commitment to do something to the delivery of 
something for patients; vaccines, more like 10 to 20 years.
    This company I founded in 1992 licensed a very promising 
influenza vaccine, nasal influenza vaccine technology from the 
University of Michigan in 1995. This technology had already 
undergone 20 years of clinical trials under NIH support, and 
yet it was 2003, 8 years later, and after the expenditure of $1 
billion by three different companies of private capital before 
this product was approved by the FDA. This is a product known 
as FluMist which is now of growing importance as part of our 
influenza protection armamentarium.
    My second point is we clearly need the private sector to be 
involved and BioShield represented a very strong and clear 
recognition that this was the case, that we needed to get the 
incentives right. There are many reasons why we need the 
private sector, but basically all of the drugs and vaccines we 
use today for everything outside the field of biodefense come 
from the private sector, admittedly and with great respect for 
the huge national investment in the basic science made these 
discoveries possible.
    Start-ups and smaller companies play a very important role. 
I invest in these companies as a full-time venture capitalist. 
They take on higher-risk projects. They can demonstrate proof 
of principle.
    But I would like to underscore today the importance of the 
larger, more capable companies. They often acquire technology 
by acquiring these smaller companies that we invest in or by 
carrying out licensing deals with them. But there are skills 
for the downstream development of pharmaceuticals and vaccines 
that are very hard to come by outside a relatively small number 
of very large pharmaceutical and biotechnology companies. The 
real test of whether BioShield is working is whether it engages 
the capabilities of these companies in the development of 
countermeasures. I would say we are not there yet.
    A biodefense procurement strategy that relies on companies 
that have not even launched a commercial product is likely to 
incur extra delays and other down-side surprises. So this is 
really a point for attention.
    What I think is a key missing ingredient is, we need 
markets for these products which mimic the size and the 
predictability of markets for treatment and prevention of other 
diseases. That is really the goal. The current BioShield law 
was, as I said, a step in the right direction, but it fails to 
adequately signal the Government's intention to purchase 
successful countermeasures. We need much more transparency on 
what the priority list is so the companies can begin to think 
about these things in advance. We need much more clarity about 
who are the people who have both the knowledge to comment and 
the authority to make decisions.
    There are lessons to be learned from some of the ideas 
being aggressively explored to stimulate private sector 
investment in vaccines for global health problems, such as 
AIDS, malaria, and TB. This notion of advanced purchase 
contracts deserves study as a model for your continued 
refinement and enhancement of BioShield. The notion there is a 
strong connection between the benefits of investing in 
infectious disease research for other diseases or even broadly 
and defense against biodefense is a very valid concept that is 
completely appropriate.
    BioShield misses in important respects with respect to 
providing indemnification from product liability. Basically it 
is a test of confidence. If a company tells you they are not 
really concerned about that in a conversation about working 
with the Government in biodefense, it is just because they have 
not grown up to understand how critical it is for their 
shareholders.
    We need to streamline procurement. It is not clear that any 
of the work so far by our great public servants who are 
carrying out the legislation of BioShield have taken advantage 
of the full ability to streamline the procurement process and 
take advantage of those special provisions. I think that is 
going to be important.
    I would like to come back to emphasize the point raised by 
Senator Stevens that we need a way to screen. As a venture 
capitalist, we get a very large number of proposals for 
investments, and only a tiny, tiny percentage are actually 
companies that receive investment. We have worked out screening 
processes, and I do not know that it is a model but it makes me 
sympathetic to the problem of a public servant who gets calls 
from people who think they have a good idea but the science is 
not really there and the person who gets lost in that crowd 
really does have the right idea. I can think of a number of 
ways we could use some of the new technologies, web-based 
technologies, table top exercises and maybe even a private 
sector intermediary to help with some of the filtering.
    We are in a biological arms race with our future attackers, 
and there are specific targets we should be going after. I 
completely agree with the priority for anthrax and smallpox. 
That makes sense to me. I must say it is pretty hard for people 
outside the Government to figure out what the priority list is 
below that. We have the long list of 20 or 30 agents, but the 
Government's own thinking about the rank order of what comes 
after smallpox and anthrax for civilians in particular is 
obscure. And it seems to me while it might require some defense 
of that ranking and that might be a little bit difficult, that 
it should be transparent so the private sector can set 
priorities.
    Sooner or later, despite our efforts to make good specific 
countermeasures, a clever or lucky perpetrator may deploy an 
agent for which we have not made specific preparations. And 
this calls for the notion of some kind of broader approach. We 
may need broad spectrum antimicrobials or vaccines, as has been 
mentioned. We may need to harness the nonspecific defenses 
already working in human biology like innate immunity. We may 
need to build systems, still very speculative, that you could 
move from obtaining the pathogen to having a drug in a very 
short time period. And all of those are worth stimulating some 
kind of prize or novel recognition and financial reward for 
some of these more speculative approaches. It might be very 
useful. I compare it to the X-prize for manned space flight 
that was successfully competed for and won in the last year.
    If we want to think about this broadly and in the long time 
frame which is really appropriate, a 2030, maybe even longer 
time horizon, we should be looking broadly. One idea I would 
like to suggest as an example, it should be studied before 
moving forward, would be to think about a survey of the 
microbial world on a scale that has not been attempted. Just as 
we carry out ambitious projects to systematically catalog the 
sky within reach of our light and radio telescopes, maybe it is 
time to carry out a planetary scale survey of humans and the 
microorganisms with which we frequently interact. We might want 
to begin by focusing on the respiratory tract.

                           PREPARED STATEMENT

    There is technology available. I cite a remarkable 
experiment by Craig Venter's group in which they obtained 
sequences for over a million new genes by looking at 1,500 
liters of Atlantic seawater. A company called Affy Metrix has 
gene chips that have been used to study which organisms are 
present in nasal swabs taken from approximately 10,000 subjects 
in studies. So it is possible now with some of the technology 
to think about such a broad survey. Not only could it provide 
us a baseline for measurement of new emerging infections by 
intent or by nature, but the basic science that would be 
enabled by this survey could provide more fundamental 
understandings to help us deal with the general problem.
    Thank you very much, Mr. Chairman.
    [The statement follows:]

              Prepared Statement of J. Leighton Read, M.D.

    Mr. Chairman and Members of the Committee, thank you for the 
opportunity to testify today regarding BioShield and our Nation's 
strategy for confronting bioterrorism. Your interest in stopping to 
consider our overall approach is timely and appropriate.
    I am commenting today as an individual who has been building and 
financing biotechnology companies in Silicon Valley for over 17 years. 
Before that, I was an internal medicine doctor doing research on the 
cost, risk and benefits of new medicines and vaccines. On receiving 
your invitation to appear here, I looked up my testimony on biodefense 
for the Senate Governmental Affairs Committee \1\ in 2002 and for 
Subcommittees of the House Energy and Commerce Committee \2\ in 2003.
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    \1\ http://www.bens.org/highlights_testimony_read.html.
    \2\ http://www.bio.org/healthcare/biodefense/20030327.asp.
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    Unfortunately, the concerns and recommendations voiced then are as 
just as relevant today as they were when the Department of Homeland 
Security and Project BioShield were still on the drawing board. Since 
those remarks are available on the internet, I will only restate the 
main points here before turning to new thoughts.

Long Term Thinking
    Biodefense is a gigantic, long-term problem. There is no potential 
threat to our economy or lifestyle that would be as easy to deploy or 
costly to contain as the release of a transmissible bioweapon. We 
should be clear that deliberate introduction of an agent that spreads 
from person to person is a completely different category of risk than 
an attack with dangerous organisms that do not spread. This is because 
our reasonable efforts to interrupt the chain of transmission would 
interfere with travel and commerce of all kinds, including distribution 
of food and medical supplies, and importantly, the freedom for people 
to meet each other in a time of grave worry and political consequence. 
Effective quarantine separating loved ones will profoundly test our 
trust in government authority.
    Despite a great deal of positive work, we are not yet organized to 
deal with this threat. Much remains to be done in educating the public 
and strengthening traditional public health systems and our first 
responders. Fortunately, much of this kind of work can be accomplished 
in only a few years of sustained effort. That is not the case for the 
longest lead-time components of our readiness: medicines, vaccines and 
other biomedical technologies needed to protect our population and that 
of our trading partners. For drugs against viruses or bacteria, it 
takes 5-10 years from commitment to delivery of medicine for patients. 
The process for vaccines typically takes 10-20 years. In 1995, a 
company I founded, named Aviron, licensed a promising intranasal 
influenza vaccine from the University of Michigan that had already 
undergone 20 years of clinical testing by the NIH. It took nine more 
years and over $1 billion in private investment by three companies 
before the product known as FluMist TM was approved by the 
FDA. Despite these timelines and costs, some pathogens are such natural 
candidates for potential abuse well into the foreseeable future that we 
must begin work now. It is important to seize this opportunity because 
infectious diseases represent some of our greatest triumphs in 
discovering, preventing and treating disease.

Larger, More Capable Companies must be Involved
    This work will require enthusiastic and committed engagement by our 
country's most capable pharmaceutical and biotechnology companies. All 
of the drugs and vaccines in use in the United States come from the 
private sector, often after substantial public investment in government 
and university laboratories. Start-ups and smaller companies play an 
essential role in taking on many higher-risk projects and demonstrating 
proof of principle. Larger players gain access to these technologies 
through licensing deals or purchase of the smaller companies. Several 
hundred million dollars of private capital and down-stream development 
skills rarely found outside of larger companies are usually required to 
finish the job for each important innovation. When R&D is successful, 
this investment makes sense because innovative products that address 
substantial medical need are reimbursed at the high value they 
represent to patients and healthcare payers.
    The experience factor is so important that a biodefense procurement 
strategy that relies on companies with scant experience in launching 
commercial products is likely to incur extra delays and other down-side 
surprises. Yet this appears to be exactly where we are heading with 
BioShield because the market incentives are not yet in place to attract 
the most capable innovators.
    The missing ingredients for biodefense countermeasures are markets 
which mimic the size and predictability of markets for treatment and 
prevention of other serious diseases. The current BioShield law 
provided an important step in the right direction, but it fails to 
adequately signal the Government's intention to purchase successful 
countermeasures that are still years away from completion. There is 
much to be learned from progress in defining Advanced Purchase 
Contracts and related ``pull'' mechanisms for stimulating vaccine R&D 
against global health targets such as malaria., tuberculosis and HIV. 
Restoration of patent term lost during regulatory review will be 
helpful. Important gaps still remain in the details and degree of 
indemnification from product liability. Larger, more capable companies 
will not participate unless these problems are addressed in future 
legislation.

Streamline Procurement and Improve the Dialogue With Industry
    It is time to finish the job of re-inventing procurement of 
biodefense countermeasures. The bureaucratic tangle of approvals and 
sign-offs involving multiple agencies and departments (even including 
the President) prescribed in BioShield must be streamlined. Spending 
authority should be concentrated in the hands of someone close to the 
intelligence analysis which helps set priorities.
    It is essential that much more frequent and transparent 
conversation occur between companies and those setting the priorities 
for countermeasures. The formal process of RFPs and related acronyms 
cannot substitute for frequent, informal contact. Novel formats for 
meetings, including more table-top exercises web-based interactions 
should be encouraged. Antitrust relief may be required if these 
concerns are inhibiting valuable multiparty conversations.
    BioShield did not adequately address the need for more 
centralization of authority for setting priorities, funding solutions, 
and managing incentives. There is a recurring theme in my conversations 
with executives interested in making a contribution to biodefense: they 
can't find the right person in the government who knows the issues AND 
can make a decision. This more centralized authority should also have 
enhanced ability to adjust FDA influence processes and safety standards 
in preparing for high-risk threats.

A Biological Arms Race
    One can identify the highest risk agents for the near and 
intermediate time frame, based on the biology of the microbes, the 
technical challenges faced by our potential attackers and intelligence 
data. These agents are presumably at the top of the priority list for 
BioShield, although it is hard to get clarity about which of a dozen 
potential threats rank most highly after anthrax and smallpox. There 
are at least a dozen agents that deserve serious countermeasure 
investment.
    Sooner or later, however, a clever or lucky perpetrator may deploy 
an agent for which we have not make specific preparations. It may have 
been derived from nature, cultivated in the laboratory, or engineered 
to have novel drug resistance or host range. There are several paths to 
get ready for this event. One is to seek broader spectrum antimicrobial 
drugs or vaccines. While there are examples of such agents discovered 
by accident, the rational design of broad spectrum countermeasures is 
largely beyond our current capabilities. Another path is to harness and 
enhance the non-specific defenses already available in human biology. 
We are still early in our understanding of how to manipulate innate 
immunity and the role of cellular factors such as interferon. Finally, 
highly speculative processes have been proposed by which one could move 
from knowledge of a new pathogen to a new treatment in a month, or a 
week, or a day. Technologies such as antisense agents and interfering 
RNAs may hold promise for such a goal.
    Our biodefense strategy must include a mix of disease-specific 
countermeasures and new technologies which offer more general treatment 
or prevention. I am concerned that getting the right mix depends on the 
quality of the dialogue among companies and the diverse government 
agencies that are involved. A high level of transparency on priorities 
and authority will be essential before the parties can effectively 
explore technical risk and financial incentives needed to get the job 
done. For some of the more aggressive goals, serious prizes, such as 
the X-prize for manned space flight may be the most appropriate way to 
focus innovator's attention.

The Basic Science of Biodefense
    Our country has made and continues to make a large national 
investment in the underlying science of infectious disease and host 
defense. This effort is serving us well in many current biodefense 
efforts. In many cases, adequate financial rewards for the final 
product will provide incentives to develop new research tools along the 
way. In other cases, and particularly, animal models it is more 
efficient to have centralized research tools that can be shared by many 
innovators. When the government has the keys to scarce resources needed 
to carry out research, such as higher level biocontainment facilities, 
or access to dangerous strains, it is essential that access be 
facilitated for all who need them in pursuit of sanctioned goals.
    It may be time to consider an even bolder investment in basic 
understanding of the relationship between humans and microbes. Research 
is giving us a growing appreciation of the interdependency of genetics 
and environment, with particular emphasis on the environmental 
interaction of unrelated, but physically proximal organisms. Technology 
is now available to conduct a broad survey of microorganism diversity, 
genetics and metabolism A few projects have demonstrated the 
feasibility of collecting and analyzing data on a very large number of 
organisms. One example is Craig Venter's report on a rapid genetic 
sequencing technique that found evidence of 1.2 million new genes in 
1,500 liters of Atlantic seawater. Another comes from a company called 
Affymetrix whose gene chips have been used to identify which organisms 
are present in nasal swabs taken from thousands of study subjects.
    Just as we have carried out ambitious projects to systematically 
catalogue all of the heavenly bodies within reach of our telescopes, it 
may be time to carry out a planetary-scale survey of humans and the 
microorganisms with which they frequently interact. A focus on agents 
which colonize or infect the respiratory track might be the best place 
to begin. Data from such a survey could serve as a baseline for 
detecting introduction of novel threats. More importantly, analysis of 
the data could lead to more fundamental understanding of how to create 
robust protection against such threats.
    Mr. Chairman, I know that you have recently introduced legislation 
that would address many of the concerns mentioned here. Thank you for 
your leadership on this issue and your persistence in asking whether we 
are doing enough of the right things at the right time. I would be 
happy to provide further comment if you have questions.

    Senator Gregg. Thank you.
    I have to recess. I have got to make a quick phone call. I 
will be right back. It should not take more than 5 minutes.
    Thank you for your courtesy. I apologize for the 
interruption.
    Mr. Clerici.

STATEMENT OF JOHN M. CLERICI, ESQ., PARTNER, McKENNA, 
            LONG & ALDRIDGE, LLP
    Mr. Clerici. Thank you, Mr. Chairman. Mr. Chairman, members 
of this subcommittee, it is an honor to testify before you 
regarding my views of where we are with Project BioShield and 
biodefense in general. I applaud the leadership of you, Mr. 
Chairman Gregg, in your work on the Health Committee and being 
the lead sponsor on BioShield I, and also applaud the 
bipartisan leadership of Senator Lieberman and Senator Hatch, 
and Senator Kennedy, obviously, took a great leadership role in 
that effort and continue to be leaders on the issue of 
biodefense.
    Over the last few years, I have had the chance to 
personally work with the Department of Health and Human 
Services on behalf of a number of clients and entities not only 
in the area of biodefense, but also emerging infectious 
disease. We have negotiated contracts, some of which Assistant 
Secretary Simonson referred to, for SARS, avian flu, pandemic 
influenza planning, and other issues.
    Based upon that experience, it is clear to me that HHS does 
need additional tools beyond what was provided in BioShield to 
get the goals accomplished that the legislation meant to 
accomplish. Primary and first among those goals, as Dr. Read 
has pointed out, is to address the issue of liability.
    As we have begun to purchase these countermeasures slowly 
and there have been a couple contracts let to date, as 
Assistant Secretary Simonson said, and a few more on the way 
shortly, the primary obstacle at the end of the day to getting 
these deals done is addressing how liability concerns will be 
addressed. Certainly, as Dr. Read just pointed out, the 
liability concerns of a public company with shareholders and 
large assets are much different than a small biotech which has 
the ability to bet the company without worrying about 
liability. And I am not sure those are the types of companies 
we want necessarily participating or leading the way in this 
effort to bring these countermeasures to market.
    Today, there are two primary ways liability can be 
addressed. Public Law 85-804 has been on the books since the 
first Wars Powers Act during World War II, and it allows the 
Government to indemnify contractors after award, only after 
award, for risks that are deemed in the national security 
interest. It is an indemnity contract. Therefore, the public is 
at risk, and I know in your role as budget chairman is of great 
concern to you as well, Senator. But unfortunately, it provides 
no predictability because you do not know whether you are going 
to get liability protection until after you bid on the 
proposal, negotiated a contract, and are prepared to deliver. 
It provides no certainty to industry and no transparency to 
industry to plan.
    The second mechanism has been pointed to is the SAFETY Act, 
and I am very familiar with the operations of the SAFETY Act. 
It is a piece of landmark legislation to address the tort 
concerns of providers of Homeland Security goods and services 
in general. It does not work particularly well for 
countermeasures for two primary reasons.
    First, the SAFETY Act has a gap in it that does not protect 
vaccine manufacturers because the liabilities removed by the 
SAFETY Act are only those that occur following an act of 
terrorism. Most of the liability concerns of a vaccine 
manufacturer are, of course, before anything has happened. It 
is in the administration of the vaccine itself.
    Second, much like with Public Law 85-804, it is an 
application process, and there is lack of predictability 
involved with the SAFETY Act. And currently there are less than 
20 companies that have been certified under the Act and no 
biodefense measures or pharmaceutical companies are among 
those.
    The SAFETY Act also requires a company to litigate all over 
the country to exert what amounts to an affirmative defense to 
get out of litigation. Therefore, there are still substantial 
uncertainty subject to the judicial system in America, which is 
obviously not something that anyone wants to be their company 
on sometimes.
    I note in your bill, Senator, in Senate bill 3, you have 
done an excellent job of addressing, in my view, the liability 
concerns for biodefense manufacturers, and you also attempt to 
address the liability concerns of pandemic flu manufacturers. 
As we heard during the previous panel, the threat facing the 
country from a pandemic flu is much greater in my mind than the 
threat facing the country in bioterrorism, and that threat is 
enormous, as you know. The 1918 influenza pandemic, Spanish flu 
pandemic, killed millions of Americans, and unless we are 
prepared for that pandemic, we will be facing those same sort 
of liabilities both in terms of lives and in dollars if another 
influenza pandemic occurs again.
    The reason why pandemic influenza should be treated off 
line in my view is the sense of urgency. No amount of 
detection, no amount of intervention, and we can have the 
biggest armies and navies in the world, are going to prevent 
mother nature from affecting us. And this is urgent. We are 
past the time when this country and this world should be facing 
a pandemic based on statistics.
    The threat of pandemic liability is much like the threat of 
smallpox in the sense that if there is a pandemic, you will 
need to vaccinate the entire Nation. And your previous 
committee, the Health Committee, and through the Homeland 
Security Act, addressed the liability for smallpox vaccine 
manufacturers particularly by providing them immunity. We need 
to provide at least the same sense of liability protection to 
providers of pandemic flu vaccine because the threat from 
liability is identical, if not greater than the threat of 
liability from a smallpox vaccine manufacturer.
    Your staff has also asked me, Senator, to address some of 
the challenges in the implementation of the procurement 
provisions of BioShield, aside from liability, and liability is 
certainly first among them again.
    As Dr. Read has mentioned, the Department, in implementing 
Project BioShield, has not taken full advantage of all of the 
authorities that Project BioShield gave them back in 2004 when 
the legislation was signed. They have the ability at HHS to 
conduct these procurements under simplified acquisition rules. 
They have not exercised that authority to date. What has 
transpired through these negotiations is nongovernmental 
contractors, commercial entities, that are not used to doing 
business with the Federal Government are subject to the same 
amount of Federal acquisition regulation that our large defense 
contractors are subject to in providing these goods and 
services. That causes them both delay, uncertainty, a lack of 
transparency in what they are signing up to, and the delays 
resulted have been definitely inhibiting our ability to bring 
these countermeasures into the market as quickly as possible.
    We have discussed already there have been two awards to 
date, primarily big awards. There is a third smaller award 
addressing irradiation treatment for children, but two large 
awards using the special reserve fund under Project BioShield, 
one large award and one RFP pending, one award pending.
    The first award went to VaxGen which has already been 
discussed. Although that is often labeled as the first 
BioShield procurement, I would disagree with that 
characterization. It is the first procurement using BioShield 
funding, but the mechanisms to procure that countermeasure was 
done the same traditional way the Government would normally 
procure things. It was a multi-stage procurement, taxpayer-
funded research and development resulting in, at the end of the 
day, a contract that as Secretary Simonson says, will not be 
paid until substantial delivery but, nevertheless, is a multi-
stage, prolonged procurement. We did not set a market or set 
someone to guarantee it. Rather we had them chase the market 
just as if they would traditionally.
    The next award up in Project BioShield will most likely be 
for anthrax therapeutic, and Secretary Simonson mentioned that 
as well. Now, that will be the very first BioShield 
procurement, but again, HHS has not made use, in the 
solicitation at least, of the simplified acquisition procedures 
allowed to make use of it during that process.
    As a result, those contractors, whoever will get this 
award, face the possibility of very powerful and strong 
regulatory burdens upon them, including certified cost and 
pricing data and other burdens that have led this award to take 
over a year at this point from award. The request for 
information for anthrax therapeutics was issued on April 1, 
2004, and I believe we are at least 2 months away from award 
for that contract. So these pharmaceuticals and these vaccines 
are not entering the stockpile at the rate I think Congress 
intended.

                          PREPARED STATEMENTS

    Going forward, we can certainly do oversight to make sure 
that HHS and DHS work closely together to make better use of 
the authorities that BioShield I provided them. We can also, 
through BioShield II or other legislation such as Senate bill 
S. 3, provide additional tools such as liability reform and 
encouragement to make clear these contracts are not to be 
burden by over-regulation.
    I look forward to your questions. Thank you very much.
    [The statements follow:]

                 Prepared Statement of John M. Clerici

    Chairman Gregg, Senator Byrd, and Members of the Committee, it is 
an honor for me to testify before you today regarding my views on the 
Project Bioshield Act of 2004 and whether we are meeting the biodefense 
needs of the United States.
    I appear before you today as someone who has worked with industries 
helping to supply the United States with critical biodefense, chemical, 
radiological, and nuclear countermeasures since even before the attacks 
of 2001. During this time, I have worked with a number of large 
pharmaceutical companies, mid and small size biotechs, and companies 
that provide detection equipment and other ancillary services to help 
protect the Nation from the threat of biological, chemical, nuclear, or 
radiological weapons. I also have had the opportunity to work with 
Congress and the Administration to help formulate policies to stimulate 
the creation of a thriving bio-defense industry in America. I and other 
members of our firm have provided testimony to both the House and 
Senate regarding the Project Bioshield Act of 2004 and we continue to 
work closely with your staff, Mr. Chairman, and the staff of other 
leaders in this area, including Senator Lieberman, Senator Kennedy, 
Senator Burr, and Senator Enzi, to ensure the best possible policies 
are in place to promote the deployment of the best possible 
countermeasures in this critical area.
    During the last 3 years, I have been personally involved with a 
number of direct negotiations with the Department of Health and Human 
Services (HHS) for a number of critical biodefense countermeasures, as 
well as negotiations for contracts for critical vaccines for emerging 
infectious disease such as SARS, Avian influenza, and pandemic 
influenza. That said, it is my view, and I believe the view of many 
others in this industry, that HHS should be given additional tools to 
maximize participation of the entities that are best suited to provide 
critical countermeasures.
    First among these additional tools must be expanded authority to 
address the issue of unmitigated liability associated with undertaking 
Bioshield contracts.

Liability Must be Addressed to Have a Successful Bio-Defense Industry
    Industry concerns over the massive cost of product liability 
lawsuits are preventing critical countermeasures from being developed 
for the Strategic National Stockpile (SNS). The liability concerns of a 
company engaged in day-to-day drug development are clearly different 
from the liability concerns of a company participating in Project 
Bioshield. Manufacturers of countermeasures produced under Project 
Bioshield risk exposure to devastating product liability lawsuits to a 
far greater degree than typical drug companies. Safety and efficacy 
data must be derived, for the most part, from animal trials since 
healthy humans cannot be exposed to toxic agents during testing. Thus, 
these critical countermeasures must be developed and are likely to be 
deployed without the full battery of testing typical of other drugs. 
Without liability protections, responsible companies will remain on the 
sidelines for fear of risking corporate assets to defend lawsuits 
brought as a result of producing a countermeasure that generally has a 
much lower profit margin than a typical pharmaceutical product.
    Even as the Federal Government has begun to purchase Bioshield 
countermeasures, it has no current way to resolve issues of liability 
with any degree of certainty. As a result, needed countermeasures are 
not being developed and deployed, thereby exposing the economy, and the 
Nation as a whole, to far greater potential liability due to the lack 
of available effective countermeasures in the event of attack. Either 
way, the Federal Government is likely to bear both the human and 
financial cost of such an attack as it did on September 11th. By 
failing to account for these costs before an attack, countermeasures 
will not be developed and the Nation will be more exposed to attack.
    Senate Bill 3 attempts to address these liability concerns for not 
only terrorism, but also countermeasures developed and deployed to 
protect the United States against naturally occurring epidemics such as 
SARS and pandemics such as Avian influenza. These epidemics and 
pandemics have the potential to be even more costly in terms of lives 
and dollars than even the worst terrorist attack. By addressing the 
issue of liability before an event occurs, we are not only assuring 
that needed countermeasures are developed, but also, being fiscally 
responsible by mitigating at the least economic cost of such a tragedy 
and reducing the cost of needless litigation.
    While the similarities between the public health threats of bio-
defense and infectious disease are obvious, I would strongly urge 
Congress to consider--and act upon--liability protections that are 
necessary to bring a pandemic influenza vaccine to market as quickly as 
possible. The dangers of a pandemic are real and immediate. Should the 
Nation face a pandemic similar to the one it faced in 1918 and 1919 
with the Spanish flu, millions of American are certain to die. While I 
do believe Senate Bill 3 provides adequate protections to stimulate the 
creation of a bio-defense industry, it is inadequate to protect 
providers of pandemic vaccine given that the response to such an event 
would be to quickly vaccinate nearly 300 million Americans. Thus, the 
response to a pandemic is similar to--and perhaps, far broader than--
the response to a potential outbreak of smallpox. For this reason, the 
liability protections provided for a pandemic influenza vaccine 
provider must be at least as strong as those protections given to 
providers of smallpox vaccine under the Homeland Security Act of 2002.
    Under the Homeland Security Act of 2002, manufactures, suppliers 
and administrators of smallpox vaccine are immune from any and all 
liability resulting from the administration of the vaccine during a 
declared emergency. These protections provide the certainty necessary 
to ensure the Nation has an adequate supply of smallpox vaccine in the 
event of an attack. While there are several improvements that should be 
made to this legislation to ensure health care workers are properly 
compensated, these same types of protections must be extended to 
providers of pandemic influenza vaccine.

Available Liability Mitigation Tools are Inadequate
    Under current law, there are currently only two legal authorities 
that allow the Federal Government to mitigate the liability concerns 
for providers of countermeasures other than smallpox vaccine--through 
Federal indemnification under Public Law 85-804 and through 
designation/certification under the SAFETY Act. Both measures are 
inadequate to address the practical realities of potential litigation 
facing the providers of countermeasures and the fiscal realities facing 
the Federal Government
    Public Law 85-804 grants the President an extremely broad authority 
to allow a Federal Government contractor to obtain financial or other 
forms of relief under certain circumstances, even when the government 
may have no express legal obligation to grant such relief, or when 
there are express prohibitions against such relief contained in other 
statutes, regulations, or common law. Under this authority, the heads 
of designated departments or agencies have the discretionary power to 
provide contractors with government indemnity when they are engaged in 
``unusually hazardous'' activities and when it is in the interest of 
the national defense to provide such indemnity.
    Indemnification under Public Law 85-804 relies upon the American 
tort system and places the Federal Government in the position of an 
insurer--where payments are made only after all claims have been 
adjudicated in the court system and judgments have been rendered. This 
rather lengthy process does not result in compensation to victims being 
paid in a timely manner nor does it place any effective limits on the 
Federal Government's potential payments to victims when it acts in this 
capacity.
    Although this authority has been invoked by the Department of 
Health and Human Services (which was first granted the authority in 
October 2001 following the anthrax attacks) in agreements involving the 
donation of smallpox vaccine by Wyeth and Aventis Pasteur to the 
Federal Government in 2001, HHS will only address the issue of 
indemnification prior to the award of a contract for a countermeasure. 
As a result, potential providers of countermeasures must expend scarce 
resources to prepare and submit a proposal that may result in a 
contract that cannot be accepted due to the lack of liability 
protections should HHS ultimately refuse to provide indemnification. 
More often, companies simply refuse to bid at all due to the lack of 
certainty on the issue of liability. This has resulted in the largest, 
and far more experienced, drug companies with the necessary expertise 
to address this threat being left on the sidelines.
    Moreover, HHS and OMB have taken the position that indemnification 
under Public Law 85-804 cannot be granted to protect suppliers of 
pandemic influenza vaccine since there is not an immediate connection 
to national security. This extremely narrow view of what constitutes 
``national security'' ignores the implications that our troops 
stationed in Southwest Asia (which is currently facing a potential 
Avian Flu epidemic), it also ignores the national security implications 
of having millions of America perish in a pandemic. Thus, Congress must 
address this issue immediately to ensure the Nation is fully prepared.
    Congress did attempt to address the issue of liability associated 
with antiterrorism goods and services with the passage of the SAFETY 
Act in November 2002. The SAFETY Act does, in fact, provide significant 
protections to providers of countermeasures that receive certification 
under the Act. However, to date, no such certifications have been 
granted for bio-defense countermeasures. In addition, there are 
specific limitations upon the effectiveness of the SAFETY Act for 
providers of countermeasures under Project Bioshield.
    Section 865(1) of the SAFETY Act notes that qualified anti-
terrorism technologies may include technologies deployed for the 
purpose of ``limiting the harm such acts [of terrorism] might otherwise 
cause.'' The ``harm'' that may be caused by an act of terrorism clearly 
goes beyond the immediate effects of the Act itself. An act of 
terrorism such as the attacks of September 11th or the October 2001 
anthrax attacks trigger a number of immediate remedial and emergency 
responses to limit the resulting harm and deter follow-on attacks.
    While the SAFETY Act can provide signification protections to a 
company, its application in the context of countermeasures is extremely 
limited. Most significantly, the potential liability of a provider of 
anti-terrorist technologies that may allegedly cause injury PRIOR to a 
terrorist attack, such as a vaccine, are not currently addressed by the 
SAFETY Act. This limitation of the SAFETY Act leaves providers of anti-
terrorism vaccines without any adequate projections aside from the 
possibility of Federal indemnification.
    Moreover, SAFETY Act certification is most inadequate to provide 
the type of protections required for large companies to enter the 
market for countermeasures. Holders of SAFETY Act certification are 
still faced with the possibility of hundreds of lawsuits brought 
against them throughout the country, albeit in Federal court. Since the 
SAFETY Act protections must be asserted as an affirmative defense to 
any lawsuit, the unpredictability of the American judicial system still 
places providers of countermeasures with a large degree of uncertainty 
regarding potential liability. This uncertainty, coupled with the 
``gap'' in the SAFETY Act for vaccine providers and the cumbersome 
nature of the application process to receive SAFETY Act certification 
makes it an inadequate protection for providers of countermeasures 
under Project Bioshield.
    For all of these reasons, Congress should equip HHS with the 
adequate tools to address liability concerns that are inhibiting the 
development and deployment of critical countermeasures as soon as 
possible. More over, it is in the best interests of the United States 
that Congress act immediately to extend the same types of protections 
afforded to providers of smallpox vaccine to providers of pandemic 
influenza vaccine to ensure an adequate response to the certain public 
health crisis an influenza pandemic will cause the United States unless 
we are adequately prepared.

Additional Regulatory Relief for Providers of Countermeasures is Needed
    The Project Bioshield Act of 2004 makes great strides to reduce 
many of the regulatory burdens that are obstacles to allowing companies 
that do not traditionally sell the Federal Government to participate in 
the development of needed countermeasures. Based upon the experience of 
industry during the first procurements conducted Bioshield, more can be 
done to reduce the amount unnecessarily burdensome regulations. To 
date, industry reaction to Bioshield has been muted, partly because of 
initial implementation challenges and partly because the scope and 
incentives of Bioshield are too limited to attract serious attention 
from investors, including venture capitalists, institutional investors, 
or manufacturers that are needed to grow the biodefense industry.
    It is important to examine the first actions HHS has taken under 
the Project Bioshield to understand the challenges in implementing the 
statute, as well as the need for additional procurement reforms.
    On October 26, 2004, HHS received the first proposals to provide 
therapeutic products for treatment of inhalational anthrax disease in 
response to Solicitation No. 2004-N-01385 (the ``Anthrax Therapeutics 
Solicitation'') under what was the first, true, Project Bioshield 
procurement. Just over 2 weeks later, on November 4, 2004, VaxGen, Inc. 
(``VaxGen'') received an award of a large contract to produce an 
experimental recombinant protective antigen anthrax vaccine (``rPA'').
    While this award to VaxGen was the first countermeasure contract 
funded from Bioshield's Special Reserve Fund, this was not a true 
Bioshield procurement. In fact, all of the research and development for 
this countermeasure was funded at the taxpayer's expense through the 
National Institute for Allergy and Infectious Disease under two earlier 
awards totaling over $200 million. Unlike the goals of Bioshield to 
create a market to encourage private investment, the first award funded 
by Bioshield was a very typical, multi-stage, Federal procurement fully 
funded at the taxpayer's expense, without utilizing any of the unique 
authorities Congress provided to HHS under Project Bioshield.
    The first Bioshield procurement for Anthrax therapeutics 
solicitation is for the acquisition and maintenance within the SNS of 
therapeutic products to treat U.S. civilians who have inhalational 
anthrax disease. The Anthrax therapeutics solicitation contemplates 
that the awarded contract(s) will be for 10 grams of an investigational 
new drug (``IND'') for use in testing. The actual manufacture of 
anthrax therapeutic product is an optional contract line item, which 
the government may decide to exercise within 12 months from the date of 
contract award and after the government reviews and approves the test 
sample. However, while this procurement could have utilized the 
streamlined procurement provisions provided under Project Bioshield, 
the solicitation includes numerous provisions of the Federal 
Acquisition Regulation (``FAR'') and other detailed requirements for 
bidders, including detailed rules governing the methods of preparing 
pricing for the proposal.
    This initial Bioshield solicitation was curious in three ways. 
First, the way the solicitation structures the options in the contract 
fall short of the Congressional intent of the Act to provide for a 
commitment to recommend funding for production for the SNS as 
contemplated by Project Bioshield. Contrary to the intent of the Act, 
HHS has not committed to recommend exercise of the options for 
production quantities of the countermeasure upon successful development 
of the countermeasure. Such a commitment would help to advance the 
Act's purpose of promoting the development of a biodefense industry by 
informing the markets that there is some certainty that there will be a 
government market for the product. Second, as noted above, the 
solicitation failed to use the simplified acquisition authorities that 
Bioshield makes available to the government, which would have permitted 
far fewer bidding requirements. Third, the solicitation makes IND 
status an absolute criteria for award of the contract. This has been 
criticized as unduly--restricting the ability of companies with 
promising technologies that have not yet reached IND, FDP status from 
competing.
    Unlike the Anthrax therapeutics solicitation, the VaxGen 
solicitation did not suffer from a lack of commitment to production 
quantities. The scope of work for the rPA contract requires VaxGen to 
manufacture and deliver to the SNS 75 million doses of experimental 
(and non-FDA approved) rPA vaccine in pre-filled syringes along with 
safety needles (with a minimum of 25 million doses delivered within two 
years of contract award). The contract also requires a variety of 
ancillary commitments by VaxGen related to testing and licensing.
    The VaxGen contract is valued at $877.5 million, representing 
approximately 15 percent of the amounts appropriated for Project 
Bioshield for the next 10 years. The contract provides for payments to 
VaxGen of $754 million in advance of the following milestones: (1) 
approval of a Biologics License Application (``BLA'') for general use 
prophylaxis, (2) approval of a BLA for post exposure prophylaxis; and 
(3) demonstration of 18 months of real time stability in pre-filled 
syringes. When and if these milestones are accomplished, VaxGen will 
receive specified per dose price supplements.
    There are three main criticisms of the VaxGen contract. First, it 
appears that, as with the Anthrax therapeutics solicitation, HHS 
elected not to use simplified acquisition procedures in awarding the 
contract. Second, despite the availability of an FDA licensed competing 
vaccine technology, HHS restricted the competition for the contract to 
firms that produced rPA-based vaccines, which have not been advanced 
beyond early testing in the regulatory approval process. This has made 
the government and the Nation's security against anthrax attacks highly 
dependent on an early stage, unproven technology. Third, the government 
awarded the contract to a single vendor, thereby making the Nation's 
security against such attacks dependent on this single vendor.

Proposed Implementation Improvements
    HHS can take several steps to implement Bioshield to increase 
industry participation. To fully realize the legislative intent of the 
law, HHS should enact regulations required under the Project Bioshield 
Act that take into account the following issues:
  --Specify that Project Bioshield Act procurements include only those 
        FAR clauses specifically required by FAR Part 13, Simplified 
        Acquisition Procedures;
  --Fully describe how HHS and DHS will make a determination of a 
        material threat and the other determinations required by the 
        Project Bioshield Act;
  --Provide for determinations of the order in which the government 
        plans to procure countermeasures;
  --Require HHS to specify a firm number of doses or courses of 
        treatment in the call for countermeasures stage;
  --Provide for industry participation in market surveys undertaken 
        during the assessment of the availability and appropriateness 
        of countermeasures stage;
  --Provide critical suppliers of needed medical countermeasures annual 
        ``warm base'' funding to ensure that the U.S. Government will 
        have continued access to those products following any 
        procurement contract;
  --Provide that multiple products manufactured by multiple suppliers 
        using multiple technologies be procured where practicable to 
        avoid undue dependence on any single supplier or single 
        technology;
  --Provide that countermeasures that are already licensed by the Food 
        and Drug Administration should where possible be purchased 
        under Project Bioshield; and
  --Provide for the appropriate use of HHS' ``Other Transaction'' 
        Authority in procurements under Sections 2 and 3 of the Project 
        Bioshield Act, in accordance with the authority provided to HHS 
        by Title XVI of the fiscal year 2004 Defense Authorization Act.
    Also, as required by Section 319F-2(c)(4)(C)(ii) of the Public 
Health Act, HHS should, in a call for bio-terrorism countermeasures, 
provide industry with an estimate of the quantities of a countermeasure 
(in the form of number of doses or number of effective courses of 
treatment) that HHS intends to procure upon development of a 
countermeasure that meets the statutory criteria. Providing industry 
with wide ranges of potential requirements for a countermeasure, as HHS 
did in the Anthrax therapeutics solicitation, does not serve the 
statutory purpose of promoting the development of a biodefense industry 
because it introduces additional uncertainty about the size of the 
government market for the countermeasure.
    HHS and the Department of Homeland Security (``DHS'') should 
provide industry with information concerning the implementation of the 
Project Bioshield Act. For example, HHS and DHS should provide industry 
and the public with a status report concerning the governmental 
processes required by Section 319F-2(c)(2)-(6) of the Public Health 
Act. HHS should also publish the report on the adequacy of 
biocontainment facilities required by Sec. 5(c) of the Project 
Bioshield Act. This report was due in January, and yet, has not been 
completed or provided to industry.
    Perhaps most important, DHS should inform industry of the progress 
and priority of the required threat assessments so that companies can 
make proper business decisions in their planning process. Project 
Bioshield requires that the DHS, in conjunction with the HHS, conduct a 
threat assessment to ``assess current and emerging threats of chemical, 
biological radiological, and nuclear agents; and determine which of 
such agents present a material threat against the United States 
population sufficient to affect national security'' and for which a 
countermeasure is needed. As implemented, this threat assessment must 
be conducted prior to any decision to purchase a needed countermeasure 
under the Project Bioshield.
    It is my understanding that, to date, no such assessment has been 
conducted to determine the threat of cyanide to the American people. 
Aside from cyanide's historical use as a battlefield weapon in World 
War I, this country has already suffered from terrorist attacks and 
plots using cyanide: in the 1980s, with the tampering of Tylenol; in 
2003, with the discovery of a cyanide bomb in the possession of a white 
supremacist in Texas that held enough cyanide to fatally gas everyone 
in a 30,000 sq ft facility; and, in early 2004, with the discovery by 
U.S. troops in Baghdad of a 7-pound block of cyanide salt. Moreover, 
soon after our successful liberation of Afghanistan in 2002, our forces 
discovered Al Qaeda training videos using cyanide to poison dogs and 
other animals.
    I note that in the legislative history of the Project Bioshield, a 
potential treatment for cyanide poisoning, hydroxocobalamin is 
specifically identified in the reports filed by the House Committees on 
Government Reform and Energy and Commerce. Thus, providers of this 
countermeasure are ``on hold'' pending completion of this threat 
assessment. Providing this information to industry will aid industrial 
base planning efforts and thereby promote the Project Bioshield Act's 
objective of fostering the development of a biodefense industry.
    In addition to the specific recommendations above that should be 
taken into account during regulatory process and in order to carry 
forth the initiative's legislative intent, we have several policy 
suggestions that should be considered in implementing Project 
Bioshield: HHS should keep in mind that the government's use of 
multiple countermeasure suppliers and technologies would be in the 
overall interests of public health and homeland security. As evidenced 
by the recent influenza vaccine shortage, having a diverse 
``portfolio'' of countermeasures in the strategic national stockpile 
will facilitate flexibility in responding to bioterrorism threats and 
attacks.
    First and foremost, HHS should make clear that the statute does not 
require contractors to comply with burdensome government procurement 
requirements, including the requirement for certified cost and pricing 
data, in order to stimulate the maximum interest possible by commercial 
companies. Similarly, HHS should avoid the use of cost-type contracts 
or contract line items (thus, eliminating the need for a proposed 
contractor to adopt non-GAAP accounting practices) wherever possible.
    HHS should structure Bioshield contracts to avoid a ``staged'' 
procurement approach such as that announced in the recent Anthrax 
therapeutic request for proposal, wherever possible. While we recognize 
the need for staged procurements under certain circumstances, using 
this method where HHS has conducted proper market research will avoid 
unnecessary delays and unpredictable results, thereby stimulating far 
greater private sector interest.
    Maximizing the use of these authorities, as well as enactment of 
the additional streamlined authorities identified above, will go a long 
way to ensuring the greatest possible participation in Bioshield. 
Moreover, as we have already seen in how slow the contracting process 
has been to date with Bioshield, failure to act on these procurement 
reforms will cost the Nation something that no amount of money or any 
act of Congress can ever make up for time.
    I very much appreciate the opportunity to offer testimony on this 
very important public health and anti-terrorism issue. Achieving the 
objectives of the Project Bioshield Act of 2004 and Senate Bill 3 are 
of the utmost importance to ensuring homeland and national security. 
Again, I applaud your efforts, and the efforts of President Bush and 
his Administration, and look forward to continuing our work with 
Congress and the Administration in this critical area.
    I am happy to respond to any questions you may have.
                                 ______
                                 

             Prepared Statement of the Sarnoff Corporation

    Chairman Gregg, Ranking member Byrd, Sarnoff Corporation 
appreciates the opportunity to offer testimony on ``BioShield and 
Bioterrorism.'' Sarnoff Corporation (www.sarnoff.com) produces 
innovations in information, biomedical, and electronic technology that 
generate successful new products and services for clients worldwide. 
Founded in 1942 as RCA Laboratories, Sarnoff has been serving both the 
public and private sectors to develop breakthroughs in integrated 
circuits, lasers, and imagers; drug discovery and development; digital 
TV, video for security, surveillance and entertainment; high-
performance networking; and wireless communications. Our history 
includes the development of color TV, liquid-crystal display, and the 
disposable hearing aid, as well as a leadership role in creating the 
U.S. digital television standard. With the Rosettex Technologies and 
Ventures Group (a joint venture with SRI), Sarnoff has demonstrated a 
unique ability to bring a broad range of private sector organizations 
together to accelerate technology development in the interest of the 
national security. As discussed below, we believe that these skills are 
vital to the Nation's ability to meet the bioterror threat.
    As a science and technology leader, Sarnoff recognizes the serious 
danger posed by bioterrorism and emerging infectious diseases to the 
United States. In addition to the many infectious agents already 
recognized as threats, new agents, like the SARS coronavirus and the 
avian flu continue to emerge. Moreover, the bioterrorist threat 
includes the growing potential to use biotechnology to create new, 
genetically engineered pathogens against which existing countermeasures 
are ineffective.
    To effectively secure our Nation against the threat of 
bioterrorism, in addition to developing countermeasures for all 
existing threats, it will be necessary to rapidly develop, manufacture, 
and distribute new countermeasures to treat illness and prevent further 
infections in the population for those agents we cannot predict. 
However, today it takes an average of 10 years to develop a 
countermeasure for a new agent. Clearly, this process must be 
accelerated if the entire spectrum of the biothreat, not just the set 
of currently recognized agents, is to be defeated.
    Sarnoff believes that the countermeasure development process can be 
significantly shortened with a focused effort. For this reason, we are 
highly supportive of the inclusion of the concept of ``research tools'' 
in S. 3 and other legislative efforts seeking to improve the Nation's 
biodefense. Research tools are integral to the drug and vaccine 
development process, and thus an essential focus of all efforts to 
accelerate this process. The concept of research tools includes not 
only animal models and in vitro tests, but also technologies that 
reside outside the laboratory or in computers, such as bioinformatics 
and toxicological databases and drug and disease modeling systems. In 
addition, the use of new technology and methods in the clinical setting 
and during manufacturing will have crucial roles to play in 
accelerating development. While new animal models are essential for 
approval of needed countermeasures under FDA's current Animal Rule, 
ultimately research tools will help us move beyond the existing 
regulatory system by enabling much faster, less expensive, but highly 
reliable routes to new countermeasures. The FDA's 2004 report, 
Innovation or Stagnation? The Critical Path to New Medical Products 
lays out a vision of faster translational research and improved product 
development, and calls for better research tools for determining safety 
and efficacy and new manufacturing processes.
    Determining what research tools are necessary to shorten the 
countermeasure development process is a significant challenge. Drug and 
vaccine development is extremely complicated, highly diverse, and 
multidisciplinary, involving hundreds of different types of technology 
and areas of scientific expertise. Along the pathway, roadblocks and 
time-consuming steps, often referred to as ``bottlenecks,'' are 
multiple and interconnected. We believe a systems approach is required 
to address what is essentially a complex systems problem. Research 
tools must be integrated into end-to-end systems in order to move from 
the local acceleration of the development process that is current 
practice to substantial, overall reductions in the drug development 
cycle.
    The development of research tools and research tool systems 
requires more than just scientific and technological advancements. It 
requires a well coordinated and tightly orchestrated national strategy 
designed to encourage and support creation of these systems. That 
coordinated national strategy is not yet in place.
    Further, Sarnoff believes an unprecedented public-private 
partnership will be required not only to bring new research tools and 
research tool systems into use, but also to enable their application to 
rapid development of production of life-saving countermeasures in the 
event they are needed in a national public health emergency.
    In summary, the Sarnoff Corporation thanks you, Mr. Chairman, and 
the Committee for the opportunity to submit this statement for the 
record of this important and very timely hearing. We look forward to 
working with you and your colleagues in ensuring that the threat 
bioterrorism and infectious disease pose to national security and the 
public health is adequately addressed, mitigated, and, ultimately, 
eliminated.

                      THREATS IN ORDER OF PRIORITY

    Senator Gregg. Thank you and thank all members of the panel 
for what were very informative presentations. Hopefully there 
is somebody here from HHS and Homeland Security listening to it 
besides just those of us in Congress who try to get their 
attention. I think some excellent points were made.
    Dr. Franz, you essentially seem to be attracted to the 
second approach here, which you outlined, which is to pick off 
the major threats and try to come up with ways to address those 
rather than a more global approach. You mentioned smallpox and 
anthrax as being obvious areas to start with and where we do 
appear to have started and made progress. Dr. Read said, but 
what is next, and the market does not know what is next.
    Is it possible, with your years of experience in the 
Government, to get an agreement as to what the threats are in 
order of priority for, say, the top 10 potential pathogens so 
people could predictably start to look at those, if they are in 
the scientific community, as places where they might want to 
put some resources to develop responses?
    Dr. Franz. Senator, I believe as I mentioned, there are 
clearly outliers. The two that we all agree on are well above 
many of the others in my opinion, and that is based on the 
characteristics of the organisms. I really do not know anything 
about the likelihood of their being used, but we would have 
enormous vulnerabilities to those and likewise, as the last 
speaker mentioned, influenza. I think we would have enormous 
vulnerabilities there as well.
    Senator Gregg. So should we go beyond those pathogens? 
Should we just do those three then and get ready for those?
    Dr. Franz. I think if you start into plague and tularemia 
and Q fever and even botulinum--most of my lab work was done 
back at the bench at USAMRIID before I moved into the front 
office with bot. I do not put that up as high as these others, 
and it is because of the characteristics of the organisms, how 
difficult they are to grow, how easy they are to treat, how 
stable they are in the environment and so on.
    So I think it becomes so hard and so expensive to produce 
specific countermeasures for those we do not consider outliers 
that I prefer a broad, general approach to public health for 
those, after we have dealt with the outliers. That should 
include good diagnostics, good disease surveillance, good 
epidemiology, and the same kinds of things, good education for 
our health care providers and for our citizens, the same kinds 
of things that help us in any emerging outbreak.
    So I am a believer in very specific countermeasures for 
those that are really tough to deal with and then very broad 
preparedness for those which are easier to deal with and harder 
to pick as potential threats.
    Senator Gregg. That sounds like a rational approach, and it 
is sort of the approach we are taking. Is it not?
    Dr. Franz. I think it is, and I am happy with that. In that 
regard, I am actually involved at the S&T review for DHS 
programs for Secretary McQueary's program here today, and about 
6 weeks ago, I was in Galveston to review the RCE meeting which 
is the Fauci $1.5 billion or $1.8 billion basic R&D program. 
Academe is heavily involved in both of these, and I have really 
been quite pleased with the fundamental research going on out 
there. We have some of our best scientists in the country 
stepping forward as the Nation needs them to contribute.
    As the other speakers have said and as I learned in the 
military, the hard part is transitioning that good basic 
research into the arms or into the airwaves of our citizens to 
protect them, and that is where we need the most help I think.

                            INDEMNIFICATION

    Senator Gregg. Well, the first part is good news, and the 
second part is Dr. Read's job since he is the investment guy 
here.
    You listed a whole series of points, Dr. Read, as to how we 
could create a better climate for getting people to pursue 
these and move them to commercialization, if that is the right 
term. Probably not, but at least to being used.
    Would you put indemnification at the top of that list?
    Dr. Read. Maybe because it is a non-starter without. So 
there are many important things needed to be done to enhance 
BioShield in order for it to meet the test of drawing in our 
most capable innovators into this fight. So dealing with 
product liability and indemnification is clearly going to be 
necessary to have large, capable companies join the fray.
    Senator Gregg. And next on the list would be what? The need 
to know what the targets are, targets of opportunity, so to 
say?
    Dr. Read. Well, it is nice put next because it is clear and 
somehow we ought to be able to do it. I do not understand why 
the private sector should have to guess what the Government is 
thinking about these priorities. So I would put it second for 
clarity and because we ought to be able to check that box off.
    I think one of the best ways it can be signaled is through 
the economic incentives that our public servants can send using 
the legislation and the funds available through BioShield and 
whatever improvements you are working on. The clear economic 
signals about a market, a reward at the end is by far the most 
compelling way to communicate those priorities, as opposed to a 
list. So if we knew the reward that had been created by the 
Government because it cared so much about, just for example, 
pick an agent on that list, tularemia or ebola or something, 
was twice the size of the financial incentive to succeed with a 
vaccine against another one, that would be about as clear a way 
to send those priorities as possible. And it would be 
incredibly useful not only if the reward were big enough and 
product liability were dealt with. I sincerely believe our 
largest and most capable companies would engage.
    The truth is the market signals are used all the time to 
make portfolio decisions inside large companies and small ones. 
And if the large companies are there, the small ones will be 
there, the companies I invest in, because the small companies 
often make the key early-stage contributions that enable the 
larger companies to finish the job.

                           RISK OF LIABILITY

    Senator Gregg. Which brings us to Mr. Clerici's point, 
which is that the big companies are not in there and the reason 
we have lost our vaccine industry in this country is the 
liability and the fact that the risk of liability so far 
exceeds the risk of return that there is no way to get people 
to put capital into this market.
    Do you think we need to go beyond what we have in S. 3 or 
do we have enough in there on this liability? I mean, we know 
this whole liability fight is an uphill fight in the Senate, 
period.
    Mr. Clerici. Right. The approach that you take in S. 3, 
whereby a winner of a BioShield contract is automatically 
protected from liability, so it is based on the same theories 
as the SAFETY Act, but without the same hurdles, I think would 
provide the necessary incentives for manufacturers to get into 
the biodefense market, large and small, because there at least 
would be some certainty that, assuming that you deliver, this 
liability protection is forthcoming automatically. I will put 
aside the political challenges of a system such as that which 
amounts to, more or less, tort reform rather than an 
indemnification scheme such as present with smallpox or under 
Public Law 85-804.

                     ADDITIONAL COMMITTEE QUESTIONS

    For pandemic flu, I am not sure it is going to be enough 
because the providers of that vaccine know at the end of the 
day their vaccine is going into the arms of 300 million people. 
Even under the legislation proposed in S. 3, you are still 
going to be in Federal court defending those lawsuits 
throughout the country. So the predictability of what a Federal 
judge may do with the legislation and the fact that the 
plaintiffs could certainly file litigation in every 
jurisdiction throughout the land would be problematic to those 
companies. And the companies that are primarily going to supply 
the pandemic flu vaccine are the largest of the vaccine 
manufacturers and therefore have the most shareholders and the 
most concerns, being a large public company.
    [The following questions were not asked at the hearing, but 
were submitted to the Department for response subsequent to the 
hearing:]

             Questions Submitted to Dr. Penrose C. Albright

               Questions Submitted by Senator Judd Gregg

    Question. Which Federal agency determines the bioterrorism threat 
and the Federal response to that threat?
    Answer. Homeland Security Presidential Directive 10 (HSPD-10), 
Biodefense for the 21st Century, identifies the Department of Homeland 
Security as the lead Federal agency for ``conducting threat periodic 
assessments of the evolving biological weapons threat'' and for 
``developing comprehensive plans that provide for seamless, coordinated 
Federal, State, local, and international responses to a biological 
attack.''
    Question. Under what authority is the Department of Homeland 
Security (DHS) involved in responding to bioterrorist threats?
    Answer. DHS authority to respond to bioterrorist threats traces 
originally through Section 502 of the Homeland Security Act of 2002 
which states that ``The Secretary, acting through the Under Secretary 
for Emergency Preparedness and Response, shall include  . . . (3) 
providing the Federal Government's response to terrorist attacks and 
major disasters'' and has been reaffirmed specifically for biological 
attacks in the HSPD-10 as cited previously. This role is one of 
providing overall coordination with the individual Sector Specific 
Agencies executing their legislated responsibilities, e.g. the 
Department of Health and Human Services is responsible for public 
health and the Environmental Protection Agency for decontamination.
    Question. How is a biological threat addressed once the threat has 
been determined and what avenue does DHS use to respond to that threat?
    Answer. Once a biological threat has been determined, it becomes a 
potential or actual Incident of National Significance and DHS becomes 
responsible for the overall coordination of the response. This is done 
under the framework of the National Incident Management System (NIMS) 
using the National Response Plan (NRP). The NRP provides the 
coordinating structure and mechanisms for national level policy and 
operational Federal support to state, local and tribal incident 
managers. The Homeland Security Operations Center (HSOC) serves as the 
primary national-level multi-agency situational awareness and 
coordination center. Other key coordinating mechanisms include: the 
Interagency Incident Management Group (IIMG), a senior level 
interagency group who provide strategic advice to the Secretary of DHS; 
a Joint Field Office (JFO), a temporary Federal facility established 
locally to provide a central point for Federal, State, local and tribal 
representatives responsible for incident support and coordination; and 
a Principal Federal Officer (PFO), designated by the Secretary of DHS 
to work in conjunction with other Federal officials to coordinate 
overall Federal incident management efforts. The Federal response to 
actual or potential Incidents of National Significance is typically 
provided through the full or partial activation of the Emergency 
Support Functions (ESF). The NRP applies a functional approach that 
groups the capabilities of Federal departments and agencies, as well as 
the American Red Cross, into ESFs to provide the planning, support, 
resources, program implementation, and emergency services that are most 
likely to be needed during an Incident of National Significance. Each 
ESF is composed of primary and support agencies, based on their 
authorities, resources, and capabilities.
    The NRP also includes a Biological Incident Annex, which outlines 
the actions, roles, and responsibilities associated with response to a 
disease outbreak of known or unknown origin requiring Federal 
assistance. The annex outlines biological incident response actions, 
including threat assessment notification procedures, laboratory 
testing, joint investigative/response procedures, and activities 
related to recovery. Because of its authorities, capabilities, and 
resources, the Department of Health and Human Services is the lead 
agency for the Biological Incident Annex.
    Question. What role does DHS' Science and Technology (S&T) 
Directorate play regarding research into bioterrorist threats?
    Answer. The S&T Directorate plays a major role in research into 
bioterrorist threats. The S&T Directorate is the national lead for the 
periodic assessments required by HSPD-10 under its Threat Awareness 
Pillar. These assessments include formal Risk Assessments every 2 
years, with the first due in January of 2006, and Net Assessments every 
4 years, with the first due in 2008. Under the BioShield Act of 2004, 
DHS is also responsible for making the Material Threat Determinations 
(MTDs) that inform the Department of Health and Human Services as to 
which agents are of especial concern as to warrant pursuit of medical 
countermeasures utilizing BioShield funding. To support and inform its 
assessment roles, the S&T Directorate also conducts research to improve 
the Nation's understanding of critical agent properties that might have 
a significant impact on its defense and response, e.g. the infectivity 
of agents at low doses or how long an agent survives in air, food or 
water.

    SCIENCE & TECHNOLOGY DIRECTORATE AND INTEGRATED BIOSURVEILLANCE

    Question. Can you provide the Committee an update on the status of 
Integrated Biosurveillance?
    Answer. The Information Analysis and Infrastructure Protection 
Directorate (IAIP) of DHS is implementing the National Biosurveillance 
Integration System (NBIS) to integrate biosurveillance information with 
the objective of identifying and characterizing a biological attack on 
the Nation. The NBIS implementation is closely aligned with the NBIS 
design effort that was led by the S&T Directorate in 2004, with the 
full participation of the interagency partners. Currently, IAIP is in 
the procurement process for the NBIS system.

             DEPARTMENT OF HOMELAND SECURITY AND BIOSHIELD

    Question. How does the National Biodefense Analysis and 
Countermeasures Center, or NBACC, fit into the Department's role in 
defending against a bioterrorist threat?
    Answer. The National Biodefense Analysis and Countermeasures Center 
(NBACC) is one of the Department's and the Nation's key tools in 
defending against bioterrorism. NBACC consists of two centers: the 
BioThreat Characterization Center (BTCC) and the National BioForensics 
Analysis Center (NBFAC). The BTCC is responsible for the threat 
characterization activities described previously, i.e. for conducting 
the periodic Risk Assessments required under HSPD-10 and for the 
scientific research to inform these threat assessments and support 
intelligence activities. The NBFAC, as designated under HSPD-10, is the 
lead national facility for conducting technical analysis of forensic 
materials to support attribution by the appropriate Departments and 
agencies. As such, the NBFAC is operated in close coordination with the 
Department of Justice's Federal Bureau of Investigation and with 
portions of the Intelligence Community.
    Question. Since its inception, the NBACC has received $130 million 
in Federal appropriations from various sources, beginning with work 
conducted by the Department of Defense (DOD). Given the current 
research conducted by the Army at Fort Detrick, is there any 
duplication of effort between what the Army does and what is proposed 
for the NBACC facility?
    Answer. The Department of Homeland Security (DHS) National 
Biodefense Analysis and Countermeasures Center (NBACC) and the U.S. 
Army Medical Research Institute of Infectious Diseases (USAMRIID) 
fulfill complementary but distinct missions at the Fort Detrick 
National Interagency Biodefense Campus (NIBC), where Congress has 
identified the need for Federal agencies to work collaboratively to 
address the threat of bioterrorism.
    NBACC conducts research to protect the American public by enhancing 
our scientific understanding of biological threats. This complements, 
not duplicates, USAMRIID biodefense research and development and test 
and evaluation to provide medical protections such as vaccines, drugs, 
diagnostics, and information for military service members. Unlike 
USAMRIID, NBACC does not perform research to develop medical 
countermeasures.
    NBACC threat characterization research provides a scientific basis 
to understand current and future biological threats, to assess 
vulnerabilities, and to determine potential impacts. Moreover, NBACC 
threat characterization supports DHS material threat assessment 
responsibilities under the BioShield Act.
    NBACC bioforensic research provides a national capability to 
conduct forensic analysis of bio-crimes and terrorism to attain a 
``biological fingerprint'' to identify perpetrators and determine the 
origin and method of a terrorist attack. HSPD-10 designates NBACC's 
National Bioforensic Analysis Center to be the lead Federal facility to 
conduct and facilitate forensic analysis of biological terrorism.
    Question. How does the Department address its responsibilities for 
dealing with a biological threat to our agricultural infrastructure?
    Answer. As specified in HSPD-7 (Critical Infrastructure 
Identification, Prioritization and Protection), the DHS Information 
Analysis and Infrastructure Protection Directorate (IAIP) has the lead 
DHS role for vulnerability assessments and protection of the Nation's 
critical infrastructure, and has led the inter-agency effort to develop 
a National Infrastructure Protection Plan (NIPP; sector-specific plans 
for agriculture and food are now in preparation). IAIP also has the DHS 
lead role for outreach to the private sector, including the development 
of a Food and Agriculture Sector Coordinating Council (F&ASCC) to 
facilitate information sharing between government and the private 
sector, and a Government Coordinating Council (GCC) to facilitate 
coordination across government and between government and the sectors. 
A ``food and agriculture portal'' has been created for the Homeland 
Security Information Network (HSIN) to provide a platform for the 
secure sharing of information (e.g., alerts, warnings, incident 
reporting, event tracking, etc.), and a Protected Critical 
Infrastructure Information (PCII) classification for the protection and 
special handling of proprietary industry information (e.g., 
vulnerabilities, threats).
    And, as specified in HSPD-9 (Defense of United States Agriculture 
and Food), the S&T Directorate has responsibility for the overall 
inter-agency coordination to ``accelerate and expand development of 
current and new countermeasures against the intentional introduction or 
natural occurrence of catastrophic animal, plant, and zoonotic 
diseases.'' Since June of 2003, the S&T Directorate has been 
responsible for the operation and management of Plum Island Animal 
Disease Center (PIADC) and has developed a joint research and 
diagnostic strategy with USDA (Animal Research Service and the Animal 
and Plant Health Inspection Service) for foreign animal diseases (FAD). 
Together with USDA and HHS, we have also begun the conceptual design of 
the next generation National Bio and Agro-defense Facility (NBAF) 
needed to replace the aging PIADC. Other major S&T Directorate 
agricultural thrusts include: systems studies, coupled disease and 
economic models, and table top exercises to better understand outbreak 
control options and inform policy and decision makers; demonstration of 
high throughput detection to better control and respond to outbreaks of 
foreign animal disease; detection systems for monitoring critical food 
nodes in the processing and distribution of selected food products; and 
two University Centers--one on foreign animal and zoonotic diseases and 
the other on food protection--to provide longer term research and train 
the next generation of agro-defense researchers and practitioners.
    As specified in HSPD-5 (Management of Domestic Incidents), DHS has 
developed a framework for overall national coordination. This framework 
is established in the National Response Plan (NRP) and National 
Incident Management System (NIMS). The NRP includes Emergency Support 
Functions (ESF) to organize and provide Federal resources during 
responses (e.g., ESF-8, ``Health & Medical Services'', DHHS lead; and 
ESF-11, ``Agriculture and Natural Resources'', USDA lead) and Support 
Annexes to insure efficient and effective incident management (e.g., 
``Science and Technology'', DHS Science and Technology Directorate 
(S&T) lead).
    Question. Who determines which vaccines are placed in the National 
Stockpile and what's the Department's role in that decision, given its 
responsibility for determining the bioterrorism threat?
    Answer. The process to determine which vaccines are placed in the 
National Stockpile is determined by the Centers for Disease Control and 
Prevention (CDC) within the Department of Health and Human Services 
(HHS). Recommendations for advance development of chemical, biological, 
radiological, and nuclear (CBRN) countermeasures utilize the Weapons of 
Mass Destruction Medical Countermeasures (WMD MCM) Subcommittee. This 
is an interdepartmental subcommittee initially chartered by the 
National Science and Technology Council (NSTC) and co-chaired by senior 
government officials from the Department of Homeland Security (DHS), 
the Department of Health and Human Services (HHS) and the Department of 
Defense (DOD). The material threat assessments (MTA) developed by the 
DHS based on a plausible attack scenario informs the sizing of the 
requirement. The HHS then evaluates the availability of current 
countermeasures and the possibility of development of new 
countermeasures. The WMD MC subcommittee deliberates on the nature of 
the medical consequence and the availability of appropriate 
countermeasures to develop a recommendation for the acquisition of a 
specific countermeasure. The HHS can issue a Request for Information 
(RFI) to determine the market availability and to alert industry to the 
U.S. Government interests. A Request for Proposals (RFP) announcing the 
specific requirements will then follow, once a U.S. Government 
requirement for a particular new medical countermeasure has been 
established by the WMD MC subcommittee, and approved by the Office of 
Management and Budget (OMB). The HHS implements the acquisition 
process.
    Question. Explain the steps in developing and putting into the 
stockpile new medical countermeasures. Who has the lead at each step? I 
understand the role of the National Institutes of Health (NIH) in basic 
research, but how is that science translated into product?
    Answer. The science and research to develop a new medical 
countermeasure will most likely have been supported by the National 
Institutes of Health (NIH) or the U.S. Army Medical Research Institute 
for Infectious Diseases (USAMRIID); however many industrial initiatives 
are launched independently to develop a new product. In order to 
translate a basic science advancement into a viable product, certain 
applied research and advanced development is required. This process 
will focus on establishing a ``formulation'' for the product and a 
scalable manufacturing process utilizing a Good Manufacturing Processes 
(GMP) validated process conducted under appropriate Quality Assurance 
and Quality Control activities. In addition the appropriate animal 
studies and human safety studies need to be conducted in accordance 
with FDA regulations to assure that the results can be applied to 
regulatory decisions. The ability to manufacture a consistent and 
stable product is also evaluated. Please consult HHS for a more 
complete description.
    Question. Does BioShield sufficiently incentivize industry to 
develop countermeasures to the bioterrorism threat?
    Answer. This question is perhaps best answered by industry. 
However, Project BioShield is a good first step and has sent a message 
to industry that the U.S. Government is committed to obtaining 
appropriate countermeasures for the Strategic National Stockpile (SNS). 
The establishment of a 10 year special reserve fund of $5.6 billion 
provides confidence to industry that acquisition funds are available in 
the long-term. Ten months after the enactment of the Project BioShield 
Act, the U.S. Government awarded three contracts totaling over $1 
billion for SNS acquisitions. Negotiations are in progress for two 
other contracts. In addition, two RFIs and one draft RFP have been 
recently published.
    Question. What is the appropriate Federal role regarding research 
and development of countermeasures for the National Stockpile?
    Answer. The role of the U.S. Government regarding research and 
development for countermeasures has traditionally been through the 
support of basic research. Both NIH and DOD (USAMRIID, USAMRICD, and 
AFRRI) have excellent records in this regard. The U.S. Government can 
further target and facilitate research and development (R&D) efforts by 
setting clear requirements and specifications for medical 
countermeasures; facilitating partnerships as needed between government 
and industry or between differing industries; and providing critical 
resources such as facilities (e.g. biocontainment labs), animals (for 
testing), reagents and assays.
    Question. How does the Department address the development of 
countermeasures as it relates to industry disparities regarding large 
and small companies and their available capital for research and 
development?
    Answer. Human medical countermeasures development is done through 
HHS and DOD and not through the Department of Homeland Security, so we 
will defer to them on the medical portions of this answer. For non-
medical countermeasures, the S&T Directorate does not require nor 
expect cost sharing in our R&D programs. A company's available capital 
to co-fund R&D is not an issue. Our competitive solicitations for all 
kinds of countermeasures research and development have offered multiple 
opportunities for both large and small businesses. Competitive 
solicitation results show that for research and development in highly 
technical fields, small companies can successfully compete outright, 
and this is especially true when they partner with larger or other 
small businesses.
    Question. From your perspective, how has BioShield helped DHS 
respond to the bioterror threat? Is it working as intended, and what 
would BioShield II do for DHS and S&T specifically?
    Answer. BioShield is helping DHS respond to bioterror threats by 
stimulating the development of needed medical countermeasures, by 
providing for emergency use authorization of these and other 
countermeasures if needed, and by streamlining the review process for 
research related to future generations of medical countermeasures for 
these threats. Procurements are now in progress for botulinum anti-
toxin, the current generation anthrax vaccine (AVA), the next 
generation anthrax vaccine (rPA) and for a pediatric formulation of 
potassium iodide--a therapeutic for certain kinds of radiation 
exposure. A Request for Information has recently been issued for a 
third generation smallpox vaccine (MVA) which would further minimize 
any side effects. Also, earlier this month, the National Institute of 
Allergies and Infectious Diseases (NIAID) made its first series of 
research awards using its new BioShield authorities.
    Question. Please provide a list of administrative, regulatory and 
legislative proposals needed to invigorate scientific research relevant 
to the development of needed countermeasures and products to counter 
natural pandemics and epidemics.
    Answer. The Nation has a strong program in basic scientific 
research related to the development of medical countermeasures. There 
are broad activities in understanding the genomics and proteomics of 
microorganisms. In addition many research programs are focused on the 
understanding and control of the immune system. Advanced research and 
development however falters after the proof of principle stage when 
applied product development activities are required. Additional 
attention is needed in areas critical to mid-stage development of 
medical countermeasures such as animal studies, clinical studies, 
regulatory issues and the need to establish and validate a GMP (Good 
Manufacturing Processes) production process.
    Question. I understand that you are the lead DHS representative for 
an interagency working group on bioterrorism and bioterrorism 
countermeasures. I also understand that the U.S. Department of Health 
and Human Services (HHS) and DOD participate in this working group. Can 
you tell me who else is involved in the working group, how often you 
meet, and what the basic function of the group is?
    Answer. Recommendations for advance development of CBRN 
countermeasures utilize the Weapons of Mass Destruction Medical 
Countermeasures (WMD MCM) Subcommittee. This is an interdepartmental 
subcommittee initially chartered by the National Science and Technology 
Council (NSTC) and co-chaired by senior government officials from the 
Department of Homeland Security (DHS), the Department of Health and 
Human Services (HHS) and the Department of Defense (DOD). The material 
threat assessments (MTA) developed by the DHS based on a plausible 
attack scenario informs the sizing of the requirement. The HHS then 
evaluates the availability of current countermeasures and the 
possibility of development of new countermeasures. The WMD MC 
subcommittee deliberates on the nature of the medical consequence and 
the availability of appropriate countermeasures to develop a 
recommendation for the acquisition of a specific countermeasure.

   DEPARTMENT OF HOMELAND SECURITY, BIOWATCH, AND DETECTION OF EVENTS

    Question. How does DHS respond to recent criticism in the press 
that BioWatch is not effective?
    Answer. BioWatch has been deployed to over 30 cities and provides 
these cities with protection against biological threat agents. At the 
request of the stakeholders, additional assets currently are being 
installed to provide increased coverage to include high trafficked 
facilities and other venues that attract large numbers of the 
population. DHS believes that BioWatch is an effective system which 
will be further improved by enhanced coverage while maintaining the no 
system false positives to date after conducting over two million 
assays.
    Question. What kind of measures are in place to assist the 
Department in its coordination role regarding BioWatch?
    Answer. Formal BioWatch coordination is done officially through a 
Memorandum of Understanding with the DHS, HHS/CDC, and EPA. Roles and 
responsibilities are articulated and budgetary aspects addressed. 
Additionally, the BioWatch Office works closely with CDC and EPA 
regarding day to day operations, enhancement of the current program, 
and future capabilities, thus ensuring success through close ties with 
the partners. Supported by a HSC Biodefense Memorandum of 
Understanding, the S&T Directorate also is actively engaged with USPS, 
DOD, HHS, and DoJ to discuss technology R&D programs and 
interoperability, concept of operations to include notification, and 
the development of a national architecture.

     DEPARTMENT OF HOMELAND SECURITY'S ROLE IN DETECTION EQUIPMENT

    Question. Given the overarching responsibility the Department has 
regarding biodefense, what is the Science and Technology Directorate's 
role in the development and evaluation of biological threat detection 
equipment?
    Answer. The S&T Directorate's role in the development and 
evaluation of biological threat detection equipment is to enhance 
current systems capabilities while developing the next generation of 
detection systems to provide early detection of attacks on outdoor and 
indoor areas and on our agricultural and food infrastructures. 
Currently, S&T Directorate efforts include: detection systems to enable 
the next generation of BioWatch, our urban monitoring program; the 
development of rapid (in minutes) identifiers for protection of high 
valued facilities and special events, and the development of detection 
systems for food distribution systems. Additionally, the S&T 
Directorate has a robust bio-assay development program which both 
supports our current biomonitoring systems such as BioWatch and is also 
integrated with the Directorate's detection technology development 
programs. The S&T Directorate, working through the Association of 
Analytical Chemists (AOAC), has also taken the lead in testing and 
evaluating hand-held assays for screening of so called ``white powder'' 
events.
    The S&T Directorate participates routinely on interagency working 
groups through the Homeland Security Council (HSC) and Office of 
Science Technology Policy (OSTP) to help establish and coordinate 
biodefense detection strategies and requirements. A major recent 
accomplishment in this area is the signing of a Memorandum of 
Understanding for Coordinated Monitoring of Biological Threat Agents 
Amongst the Department of Homeland Security, the Department of Health 
and Human Services, the Department of Defense, the Department of 
Justice and the United States Postal System. The S&T Directorate also 
interacts regularly with the detection development, test and evaluation 
programs in the DOD and the EPA (e.g. the Environmental Testing and 
Verification Program), including mutual participation in each others 
program reviews. S&T Directorate staff members routinely monitors 
literature, attend technology conferences, and host members from 
industries, academia, and non-profit organizations which present their 
current efforts and findings in technology development.
    Question. How does the Directorate foster the growth in biothreat 
detection equipment, and how do you respond to a rapidly changing 
industry?
    Answer. The S&T Directorate fosters the growth in bio-threat 
detection equipment through two key steps (1) a clear formulation and 
communication of our needs and requirements; and (2) an active, multi-
pronged, outreach to the broad R&D community for the best way to meet 
these requirements in a timely fashion. Through systems studies and 
scientific and interagency committees, we have focused on three classes 
of detection systems that are critical to an integrated national 
biodefense: advanced detection for monitoring urban areas; rapid 
(minutes) identification for protecting key facilities and special 
events; and detection systems for protecting our agricultural and food 
infrastructures. Detailed performance and cost requirements have been 
formulated to inform industry, academia and the national and Federal 
laboratories of our needs and have been published on the S&T 
Directorate's Homeland Security Advance Projects Research Agency 
(HSARPA) website. The S&T Directorate has had broad solicitations in 
each of these areas, typically involving an open, national level 
workshop conveying the needs and asking for inputs and refinements from 
the participants, a formal Request for Information (RFI), and then a 
formal proposal solicitation. Hundreds of proposals have been received 
and evaluated, with some fifteen proposals already funded and others in 
the works. The focus is on applied research with a goal of fielding 
technology as rapidly as possible, typically within 3 to 5 years. A 
phased development approach is used. The technology developers are 
evaluated and down selected by rigorous testing during each phase 
(Preliminary Design Review, Critical Design Review, etc.). Each 
technology does receive feedback during the testing at each phase with 
an opportunity for adjustments and re-evaluation. However, candidate 
technologies will be terminated if they fail to show reasonable 
progress. The S&T Directorate will also consider testing technologies 
funded through other programs (from other organizations) against the 
goals set forth by the S&T Directorate. In parallel, the S&T 
Directorate participates in a range of technical conferences and 
discussions with developers of detection systems to stay abreast of any 
developments that might change how it thinks about the realm of the 
possible' in both near- and longer-term biodetection system. The S&T 
Directorate believes the strategy outlined above provides both the 
guidance and the flexibility to foster growth and responsiveness in a 
rapidly changing industry.
    Question. What role do the national labs play in this arena?
    Answer. The national laboratories have played a key role in 
BioWatch sensor development and deployment and provide expertise on 
siting of detection systems. They continue to be a vital part of the 
S&T Directorate's strategy to develop and pilot advanced biothreat 
detection systems, with research and development activities in the 
following areas:
  --Development of specific instrumentation (Biobriefcase, Enhanced 
        BioAerosol Detector): Lawrence Livermore National Laboratory 
        (LLNL) and Sandia National Laboratory (SNL).
  --Development of new nucleic acid- and protein-based assays of 
        recognized biothreat agents to be used in biodetection 
        instruments: LLNL, Los Alamos National Laboratory (LANL), 
        Pacific Northwest National Laboratory (PNNL), and SNL.
  --Identification of next-generation signatures that reflect either 
        (a) the host-pathogen interaction or (b) virulence 
        characteristics or antibiotic resistance of recognized or 
        emerging biothreat agents and using these signatures to develop 
        new assays for biothreat detection: LLNL and PNNL.
  --Provision of informatics support to enable the discovery of new 
        targets for assays and to develop new reporting tools for 
        detection instruments: LLNL, LANL, Lawrence Berkeley National 
        Laboratory (LBNL), PNNL, and Oak Ridge National Laboratory.
    Question. Without getting into classified information, please tell 
us how we are doing in the deployment of surveillance and detection 
equipment.
    Answer. In January and February 2003, BioWatch was deployed to 
approximately 30 U.S. cities. At that time, a limited number of 
collectors were strategically placed in each city to provide for 
maximum population protection. At the request of the BioWatch cities, a 
Generation (Gen) 2 BioWatch was developed to provide increased temporal 
and spatial coverage and was piloted in New York City in fiscal year 
2004 and early fiscal year 2005. Gen 2 increases the number of 
collectors two to fourfold, including coverage of key priorities 
identified by the cities, such as transportation hubs and other indoor 
venues that are highly trafficked. Gen 2 is in the process of being 
deployed to the top threat cities in fiscal year 2005 and fiscal year 
2006. Additional samplers will be placed in each BioWatch city to be 
used at special events and/or at the cities' discretion. New technology 
is now under development that will enable a ``Gen 3'' BioWatch which 
reduces the sampling and analysis time to four hours on site and will 
be wirelessly networked to a local public health interface for further 
confirmation and so that positive samples can be retrieved for further 
analysis. This technology will provide for the high sensitivity and 
extremely low false positive rate consistent with the current system.
    We are also developing other detection systems. High throughput 
diagnostics for agricultural testing will be piloted in fiscal year 
2006 and food sensors for specific applications will be developed by 
fiscal year 2007. R&D is also on-going on detect-to-warn' sensors that 
can detect biological agents in a less than five minutes and hence be 
used to provide warning of releases in high value building, facilities, 
and special events.
    Question. Have you done any evaluation or testing of surveillance 
and detection equipment once it's been deployed and is in use?
    Answer. Yes, there is active evaluation and testing of the BioWatch 
system. The BioWatch Exercise and Evaluation Program (BWEEP) is an 
annual proficiency test for BioWatch laboratory and field operations 
and is designed to insure protocols and procedures continue to meet or 
exceed prescribed standards. If there are no deficiencies, they will 
not be revisited until the next annual cycle. If there are minor 
deficiencies, on-the-spot corrections or additional training will be 
administered and they will be re-inspected in approximately 6 months. 
If there are major deficiencies and/or safety violations, immediate 
remedial actions will be taken.
    Question. What collaborative process does the Department use to 
gain the input from industry, researchers, and responders in the 
development of new technology? Does the process include peer review?
    Answer. The Science and Technology Directorate uses an open and 
competitive solicitation process for research and development with the 
private sector.
    Before the official solicitation is issued, the S&T Directorate may 
publish a draft Statement of Work for public comment, giving industry 
the opportunity to provide advice and recommendations. In appropriate 
cases, full scale technical workshops are held to assess the state-of-
the-art, inform all potential bidders of current developments in the 
field, and sharpen the technical focus of the solicitation. In most 
cases, after each solicitation is published, a public Bidders' 
Conference is held to explain the solicitation in detail and answer 
questions that may have arisen in the minds of potential bidders. Each 
solicitation has an open Frequently Asked Questions (FAQ) section on 
the website where individual bidders' questions are answered and 
published for the benefit of all. In a typical solicitation procedure, 
the S&T Directorate uses the first bidder submission--the white paper--
as a vehicle for discussion with private sector bidders. In addition, 
industry representatives are free to request direct interviews with S&T 
Directorate Program Managers to describe or discuss their concepts, 
ideas, and ongoing developments for new technologies.
    The criteria by which white papers and proposals are evaluated by 
DHS technical experts are listed fully in the public solicitation so 
that bidders understand how their submissions will be judged. The S&T 
Directorate uses a technical merit review instead of peer review. 
Technical solutions to DHS needs and requirements often involve complex 
engineering, proprietary information, and other information of economic 
value to competitors. To perform technical review, the S&T Directorate 
organizes a panel of Federal Government experts, including S&T 
Directorate staff, other DHS technical and operational staff, and 
experts from other Federal agencies. The evaluation panel may be 
supplemented by outside advisors if there is a need for specialized 
expertise the government evaluators do not have. These outside advisors 
must agree that neither they nor their home institutions may bid 
against that particular solicitation. The S&T Directorate has found 
that providing review by government personnel, rather than a panel of 
peers, allows bidders to be more open about proprietary information 
supporting their proposed project.
    Additionally, DHS and national laboratories are consulted 
frequently by the S&T Directorate to formulate the strategic direction 
of research, development, technology and evaluation (RDT&E) programs.
    The science and technology needs of emergency responders are 
represented in the S&T Directorate by the Portfolio Managers. Other 
methods for collecting salient inputs include the annual Science and 
Technology Requirements Council, an annual joint conference with the 
Department of Justice, an annual conference to forecast S&T Directorate 
opportunities and major program direction to the industrial community, 
an intense 6 week effort each year involving the identification of 
responders' needs for rapid prototypes, and face-to-face contact with 
customers while working on current R&D projects.
    Question. What types of detection equipment are most difficult to 
develop, and how is the industry responding to the demands of the 
requirements? For example, the drug/vaccine industry indicates that 
decades of research are required before a drug/vaccine becomes 
available in the market. Is that same time and financial investment 
required by other industries?
    Answer. In general, any development program that deals directly 
with human health can take years of research, development, testing and 
evaluation prior to becoming available to the market because of 
extensive safety regulations. Instrumentation, including detectors for 
biological, chemical, and explosive threats, also has a difficult 
development schedule. Initial systems can be developed and deployed 
within the next few years, but it may take upwards of a decade to 
develop and deploy cost effective instruments with all the desired 
capabilities. The main reason is the requirement to achieve a high 
probability of detection and a extremely low probability of false 
alarms in instruments that are of sufficiently low cost that they can 
be widely deployed and used for continuous monitoring. This will 
require development of completely novel technologies or complex 
engineering projects.

             SCIENCE & TECHNOLOGY DIRECTORATE AND STANDARDS

    Question. Given that Science and Technology (S&T) Directorate's 
2004 guidelines and standards for biological countermeasures have been 
in place for a year, please give us an assessment of the effectiveness 
and relevance to the standards issued by the S&T Directorate regarding 
biothreat agents? How has industry responded to them?
    Answer. The S&T Directorate has a role and responsibility to ensure 
the effectiveness of biological countermeasures tools developed for and 
used by the homeland security community. By setting consistent and 
verifiable measures of effectiveness for basic functionality, minimum 
performance, interoperability, efficiency, sustainability, and 
appropriateness and adequacy for the task, standards improve the 
quality of homeland security systems and technologies. The S&T 
Directorate's Standards Program strives to enable the homeland security 
community to make informed equipment purchases by establishing minimum 
performance standards which can be linked to Federal grants programs so 
that equipment purchases comply with these minimum performance 
standards.
    In 2004, the primary focus for Standards for Biological 
countermeasures revolved around developing minimum performance criteria 
for biological screening devices (specifically lateral flow 
immunoassays) used by first responders. In fiscal year 2004 and early 
fiscal year 2005, an interagency task force was formed to address the 
effectiveness and use of lateral flow immunoassays for the detection of 
Bacillus anthracis (anthrax) by emergency responders. The task force 
agreed upon and published accepted performance criteria associated with 
the hand held assays (HHAs). The HHAs were tested and evaluated against 
the accepted criteria and those results were also published. An effort 
was also initiated with the Center for Domestic Preparedness to develop 
a standard Bio-Protocol for first responders to use to guide their 
response to a suspicious powder incident.
    The relevance and effectiveness of this important effort to develop 
and implement standards for biological field screening devices are 
clear. In the past these devices were procured in great numbers and 
often used incorrectly in the field by first responders to assess the 
biological threat associated with suspicious powders. Numerous false 
alarms were raised based on the results of these devices. Before these 
devices can be used in the field, first responders must understand 
their limitations, have a clear concept of how they are to be used, and 
be trained to use them properly. The S&T Directorate's effort to 
develop standards for the detection of anthrax using HHAs has given the 
homeland security community access to reliable information on how these 
devices perform and which devices met the performance standards. These 
standards are just a first step in ensuring confidence in the Nation's 
response to biological threats. There are numerous other types of 
biological countermeasures technologies to be evaluated against the 
range of biological agents. In addition, standard sampling protocols 
and standardized training must be developed and implemented.
    Industry was heavily involved from the onset with the process of 
developing these standards. Manufacturers voluntarily attended the 
interagency task force meetings, provided technical feedback on the 
study design and testing protocols, and provided instruments for 
testing. The entire standards development process relied upon working 
in an open atmosphere and gaining consensus of the majority of the 
stakeholders. Results of the testing were supplied to the manufacturers 
in a clear and timely manner. Unfortunately not all of the devices met 
the published acceptance criteria and hence some manufacturers were 
disappointed with the outcome. However, most manufacturers have 
indicated a desire to improve their devices and enter into a second 
round of testing.
    Question. How does S&T respond to the Department's Office of State 
and Local Government Coordination finding that its existing standards 
are inadequate?
    Answer. The S&T Directorate acknowledges that the existing 
biological countermeasures standards only address the performance of 
one type of detection equipment to one type of biological agent. The 
S&T Directorate's Standards Program is building a long-term plan and 
process for the development of standards to ensure the effectiveness 
and performance of all critical biological countermeasures technologies 
for a number of biological agents. However, the standards development 
process relies on consensus building, an activity that is often time-
consuming and costly. Therefore, standards development activities have 
focused to date on urgent, high priority areas. In order to validate 
the entire spectrum of biological countermeasures products and 
technologies, requirements for each of the technologies must be defined 
and consensus between the agencies on those requirements must be 
obtained. Additionally, standards need to be fully developed that are 
tested and evaluated for the various biological technologies, methods 
and processes. Also needed is the development of integrated policies 
and procedures based on conformance to the standards, and institute 
standardized training. All of these tasks are necessary and important 
and shall be incorporated in a long-term plan, but their accomplishment 
requires the necessary resources and cooperation of all of the key 
stakeholders. In addition, the Standards Program must assess and 
balance the need for standards in all homeland security areas based on 
the available resources. In the near future, (fiscal year 2005 and 
fiscal year 2006) the standards portfolio will address the need for 
standards for biological sampling activities and additional biological 
screening devices.
    Question. Have any revisions or refinements been made to those 
standards?
    Answer. The standards development process consists of a number of 
well-defined steps including periodic review and revision of standards 
when necessary. Revisions or refinements have not currently been made 
to the published acceptance criteria for the performance of hand held 
immunoassays for the detection of anthrax. DHS intends to initiate a 
second round of testing of new and improved devices and will hold a 
meeting of the interagency task force to determine whether revisions 
are needed and incorporate lessons learned before the new round of 
testing is initiated. As always, voluntary consensus standards 
development is an open process, and interested stakeholders will have a 
means of providing comments and feedback on any necessary revisions or 
refinements.
    Question. What process is used to update the biothreat standards?
    Answer. Because DHS is not a regulatory agency, the process of 
updating standards will follow the voluntary standards development 
organization's guidelines. In the case of the hand held immunoassays, 
the Association of Analytical Chemists International (AOACI) was the 
standards development organization. Hence, the AOAC process to update 
the standards will be followed.
    Question. Have end-users and industry found the biothreat standards 
useful in the development and use of new equipment? Can you give us an 
example?
    Answer. End-users are now able to obtain reliable information on 
the performance of various manufacturers' hand held immunoassays before 
procurement. That information enables end-users to make knowledgeable 
decisions on whether to use these devices and if so which ones are most 
reliable. In addition, many of the manufacturers have indicated that 
they have already made adjustments to their technologies and are eager 
to submit the new and improved technologies for a second round of 
testing.

                               SAFETY ACT

    Question. How much of the SAFETY Act has been implemented by the 
Department? Is it being implemented by industry, issue, or on an ad hoc 
basis?
    Answer. The Department has placed significant emphasis on the full 
implementation of the Support Anti-terrorism by Fostering Effective 
Technologies Act (SAFETY Act) and has accomplished much in an extremely 
short time period. In less than 15 months, the Department has 
established an Office of SAFETY Act Implementation (OSAI), which is 
responsible for administration of the program. The Department has 
developed, published, and implemented a proposed rule (July 11, 2003) 
and an interim rule (October 16, 2003) governing the implementation of 
the SAFETY Act. In addition, the Department is in the process of 
developing revisions to the current implementing regulations to address 
public comments and operational experience.
    More than 450 experienced technical and economic reviewers have 
been vetted and are available to evaluate SAFETY Act applications in 
accordance with the statutory criteria. OSAI has designed a reviewer 
training program specific to SAFETY Act requirements that each reviewer 
is required to attend.
    The Department initially developed a SAFETY Act application kit for 
use by interested parties and has since revised the kit. The revised 
application kit reflects substantial feedback from applicants and 
industry as well as our operational experience, and we expect it to 
provide applicants with better guidance and tools for a successful 
application. On December 13, 2004, a Paperwork Reduction Act notice for 
the revised version of the new kit was published in the Federal 
Register. Further, a web-based, interactive application process has 
been instituted that allows sellers to submit applications 
electronically, obtain automatic feedback on the status of an 
application, submit questions to a help desk to obtain assistance with 
navigating the application process, and provide access to resource 
documents and frequently asked questions.
    Significant elements of the Department's SAFETY Act implementation 
include:
  --Website.--The SAFETY Act website (www.safetyact.gov) contains the 
        electronic application kit, reference materials, Frequently 
        Asked Questions (FAQs), and specific instructions for 
        applications submitted in connection with a procurement.
  --Help Desk.--OSAI established a help desk that can be accessed by 
        way of on-line forms, an e-mail address 
        ([email protected]), or a toll free phone (1-866-788-
        9318). The Department has received much praise for the help 
        desk. Applicants not only receive timely responses, but they 
        can actually speak with a staff member.
  --Outreach.--Throughout the past year, OSAI has made presentations at 
        numerous SAFETY Act-relevant conferences, held meetings with 
        applicants, and established internal procedures to ensure that 
        each applicant has the opportunity to discuss an application 
        with relevant staff early in the review process.
  --Pre-Applications.--OSAI implemented a pre-application process 
        designed to provide applicants with a quick assessment of the 
        likelihood of its technology being approved for Designation or 
        Certification if a full application is filed. These pre-
        applications are processed within the 21 days advertised and, 
        in addition to a written assessment, each applicant is given 
        the opportunity for a personal debriefing on its pre-
        application. Early processing delays have been eliminated--
        essentially all of the approximately 120 pre-applications filed 
        since March 1, 2004, have been completed on time.
  --Application Kit.--The initial application kit was designed with the 
        expectation that changes would be required as operational 
        experience was obtained. During the past year, OSAI has sought 
        input from applicants, industry, and government on areas 
        appropriate for revision. Utilizing this input and its own 
        operational experience, OSAI prepared a revised Application kit 
        in concert with the proposed revision to the interim rule. The 
        Paperwork Reduction Act notice for the final version of the new 
        kit was published in the Federal Register on December 13, 2004, 
        and the Department anticipates early adoption of the new kit.
    The SAFETY Act requires the Department to evaluate technologies on 
an application by application basis; however, the Department has 
undertaken a significant effort to coordinate the SAFETY Act 
application process with major anti-terrorism procurements where 
multiple Sellers will be providing the same technology to ease the 
burden on applicants and speed the evaluation process.
    To date, the Department has received more than 200 pre-applications 
and 94 full applications. As of June 18, 2004, twenty Designations and 
Certifications have been granted and five applicants have received 
Designation only.
    Question. How is the SAFETY Act being applied to Project BioShield 
products?
    Answer. The Department is not aware of any application submitted in 
connection with the BioShield program. Any provider of an anti-
terrorism technology may apply for the protections afforded by the 
SAFETY Act and it is reasonable to anticipate that participants in the 
BioShield program will apply for SAFETY Act protections as their 
technologies mature.
    Question. Is the Department going to apply the SAFETY Act to the 
pharmaceutical industry when it comes to the development of biological 
countermeasures?
    Answer. A very wide range of technologies may potentially qualify 
for protection under the SAFETY Act. The Act explicitly applies to any 
qualifying product, equipment, service (including support services), 
device, or technology (including information technology) that is 
designed, developed, modified, or procured for the specific purpose of 
detecting, identifying, preventing, or deterring acts of terrorism, or 
limiting the harm that such acts might otherwise cause. This broad 
definition of ``technology'' encompasses tangible products, software, 
services, various forms of intellectual property, and anything else 
that can be sold that has a specific anti-terrorism application. This 
definition of technology would encompass pharmaceutical products and 
their related delivery technologies when used for anti-terrorism 
purposes.
    Question. How is S&T working with the drug and vaccine industry to 
determine which products should be considered for SAFETY Act 
protection?
    Answer. The Office of Safety Act Implementation (OSAI) has a robust 
outreach program. Members of OSAI staff frequently provide informative 
presentations on the SAFETY Act at a variety of trade shows and 
industry meetings and often have a presence in the vendor areas where 
additional informative material on the application process and the 
benefits of protection under the SAFETY Act are available. OSAI staff 
members also provide informal guidance on an individual basis at these 
same events. In addition, OSAI will host another round of nationwide 
SAFETY Act seminars to introduce prospective applicants to the program 
including the benefits of SAFETY Act protections, the new application 
kit, and the revised interim rule.
    The Department does not pre-determine if a particular technology is 
an anti-terrorism technology within the context of the SAFETY Act. Each 
applicant describes its specific anti-terrorism technology in its 
application and explains why it believes the technology or its proposed 
use of the technology meets the statutory criteria. OSAI does provide 
personalized guidance to applicants on a variety of issues at a number 
of points throughout the application process. Most often, the anti-
terrorism application of the technology is reviewed, analyzed, and 
discussed with the applicant during the pre-application process, 
telephone discussions following receipt of the formal response to the 
pre-application, and through telephone conversations at the end of the 
completeness review before formal evaluation is commenced.
    While we are not able to assess directly the extent to which this 
information has penetrated the pharmaceutical community, the fact that 
we have received some applications relating to vaccines indicates that 
some measure of penetration has been achieved.
    Question. Is the SAFETY Act perhaps too limited with respect to 
certain areas? Is the Department reviewing the Act's authorities and 
issuing regulations or other administrative means to best utilize the 
Act?
    Answer. The Department is committed to the primary goal of the 
SAFETY Act--to ensure that the threat of liability does not deter 
potential manufacturers or sellers of critical anti-terrorism 
technologies from developing and commercializing technologies that 
could save lives. The SAFETY Act review process is not intended to 
guarantee that anyone will be able to purchase ``the very best'' 
product or services. It is designed, as required by the statute, to 
help individual effective technologies overcome market barriers on an 
application-by-application basis. Throughout its implementation of this 
program, the Department has engaged applicants, industry, and the 
public to solicit feedback to enhance the process. Many concerns raised 
by interested parties have already been addressed and the Department 
will continue to encourage input to improve the program. The Department 
is committed to fulfilling the intent of Congress as set forth in the 
language of the SAFETY Act and will continue to improve upon efforts 
working towards successful implementation of this important 
legislation.
    Among the efforts being undertaken by the Department to improve its 
implementation of the SAFETY Act are revisions to the application kit 
and the interim rule. The initial application kit was designed with the 
expectation that changes would be required as operational experience 
was obtained. During the past year, Office of Safety Act Implementation 
(OSAI) has sought input from applicants, industry, and government on 
areas appropriate for revision. Using this input and its own 
operational experience, OSAI prepared a revised application kit in 
concert with the proposed revision to the interim rule. The Paperwork 
Reduction Act notice for the final version of the new kit was published 
in the Federal Register on December 13, 2004. In addition, the 
Department is in the process of developing revisions to the current 
regulation. The revised regulations will address public comments and 
address other areas with a view to facilitating greater participation 
in the SAFETY Act program.

                           RAPID PROTOTYPING

    Question. How does the rapid prototyping function within S&T assist 
in the Department's effort to combat bioterrorism?
    Answer. The S&T Directorate's Rapid Prototyping Portfolio assists 
in the effort to combat bioterrorism by reducing the time needed to 
develop and commercialize relevant technologies that can meet needs on 
an interim basis while technologies that meet long-range needs are in 
development. The S&T Directorate's first rapid prototyping effort 
(conducted with the Technical Support Working Group (TSWG) in fiscal 
year 2003) produced thirteen separate efforts related to combating 
bioterrorism. When developed and completed, these efforts will provide 
such capabilities as: better methods to characterize biological 
backgrounds in facilities; methods for large-scale restoration of 
biologically contaminated urban areas; a low-cost, personal bio-
decontamination system; a biological aerosol threat warning detector; 
direct detection assays for botulinum toxin; and improvements in 
biological detection systems.
    The S&T Directorate's Rapid Technology Application Program (RTAP) 
has worked intensively with the DHS internal customers and field agents 
to identify their most urgent needs for countering bio threats. These 
needs will be published to the private sector in early summer 2005 with 
the goal of delivering the prototypes to those customers within 18 
months of contract award.
    Question. Do bioterrorism-related technologies lend themselves well 
to rapid prototyping?
    Answer. All technologies, including technologies for bioterrorism 
countermeasures lend themselves well to rapid prototyping. Technologies 
needed to combat bio-terrorism range from near-term prototypes to 
extremely difficult long-term projects. Based on the expressed 
expectations of DHS customers, tactical concerns in the field dominate. 
They need technical capabilities to determine if a suspicious substance 
is a bio-agent or powdered sugar, other capabilities to tell them if an 
entire area is contaminated or not, and a fast, reliable method of 
definitive bio-agent identification. Technically effective isolation or 
containment of suspected bio-contaminants and improved protection of 
field personnel from bio hazards are cited often as developments needed 
in the short term.
    In other areas, such as bioinformatics, forensics, bioassays for 
novel or engineered bio-agents, rapid prototyping must give way to 
careful, painstaking, long-term development.
    Question. How do you determine which items are chosen for the rapid 
prototyping program?
    Answer. The Rapid Technology Application Program annually conducts 
a series of meetings with DHS internal customers and field agents, and 
State and local responders to identify their highest priority needs for 
rapid prototyping developments. These customers identify and prioritize 
their needs in any technical area. Within the constraints of technical 
feasibility, development time (no longer than 18 months), and available 
resources, their top priority rapid prototyping needs will be 
developed.
    Question. Has the rapid prototyping effort incentivized both the 
scientific community and entrepreneurs to develop products?
    Answer. Industry has been avidly interested in the S&T 
Directorate's solicitations. For example, the S&T Directorate's first 
rapid prototyping effort (with TSWG in fiscal year 2003) was valued at 
$60 million over 2 years and resulted in 94 contract awards for 
research and development work now underway. When developed and 
completed, these efforts will provide such capabilities as: better 
methods to characterize biological backgrounds in facilities, methods 
for large-scale restoration of biologically contaminated urban areas, a 
low-cost, personal bio-decontamination system, a biological aerosol 
threat warning detector, direct detection assays for botulinum toxin, 
and improvements in biological detection systems. There were more than 
3,000 initial submissions for that solicitation. The DHS Rapid 
Technology Application Program, currently valued at $35 million is 
scheduled to release its first public, competitive, rapid prototyping 
solicitation in early Summer 2005 and a proportional strong response is 
expected.
    Question. What is the most difficult hurdle when it comes to rapid 
prototyping?
    Answer. The most difficult part of the rapid prototyping process is 
deriving meaningful customer requirements that are feasible, 
affordable, and have a high potential for actual deployment upon 
completion of development.
    Question. Do antidote and vaccine development fall under the rapid 
prototyping effort or is that entirely under HHS' jurisdiction?
    Answer. Section 302(4) of the Homeland Security Act of 2002 assigns 
to the Under Secretary for Science and Technology the responsibility 
for, . . . conducting basic and applied research, development, 
demonstration and testing, and evaluation activities that are relevant 
to any or all elements of the Department, through both intramural and 
extramural programs, except that such responsibility does not extend to 
human-health related research and development activities:'' [emphasis 
added]. Section 304 (a) assigns this responsibility to the Secretary of 
Health and Human Services.
    Question. Are different tools combined and cross-pollinated to 
accelerate research and development when rapid prototyping to address 
bioterrorism?
    Answer. Yes. The S&T Directorate's Rapid Prototyping development 
period is nominally between 6 and 18 months from contract award. In all 
but a very few cases this implies that most rapid prototypes will not 
involve basic research, but will heavily involve development. These 
developments take forms such as modifications of existing equipment for 
new purposes, increases in effectiveness derived from new algorithms or 
software, changes in configuration to be smaller, lighter weight, or 
redesign for decreased power consumption for example. Many of these 
rapid prototyping developments use ``tools'' developed for other 
purposes. Personal Data Assistants can be modified for identification 
of, and use by emergency responders. Personnel protective equipment can 
be redesigned to be less bulky, more effective against an array of 
hazards and more user-friendly. Wireless communications technology, for 
example, has many uses in bio countermeasures and it can be licensed 
off-the-shelf for many applications.
    Question. How are the legal ramifications to rapid prototyping 
being addressed when S&T is dealing with items which do not have 
patents filed? Under this scenario, who owns the intellectual property 
when the product is changed as it moves through the rapid prototyping 
process?
    Answer. In all but a very few cases most rapid prototypes will be 
heavily focused on late stage development. These developments take 
forms such as modifications of existing equipment for new purposes, 
increases in effectiveness derived from new algorithms or software, 
changes in configuration to be smaller, lighter weight, or have 
decreased power consumption, for example. The S&T Directorate will use 
procurement contracts (or Other Transactions for Prototypes) for rapid 
prototyping developments. Both kinds of vehicles are legally binding 
and require negotiation of many aspects of the development. Generally 
the developer retains title in any invention or data developed with the 
Government receiving a license. When appropriate, the Government will 
require licenses for Federal, State, tribal, and local government use. 
Specific intellectual property treatment, ownership, licensing, usage 
and royalties are always addressed in these detailed negotiations and 
contractually secured on terms agreeable to the developer and the 
Government, subject to all applicable laws and regulations.
                                 ______
                                 

            Questions Submitted by Senator Pete V. Domenici

               CHEMICAL AND BIOLOGICAL DETECTION PROGRAM

    Question. In 2003, the Department of Energy transferred to the 
Department of Homeland Security a highly successfully Chemical and 
Biological Detection program, including $78 million in annual funding. 
This was a capability supported in conjunction with the nuclear 
detection capabilities at our national laboratories.
    How much progress has DHS made in implementing this capability and 
how much is budgeted for these activities?
    Answer. The Department of Energy's Chemical and Biological National 
Security Program (CBNP) was a highly successful R&D program that served 
as the foundation of the S&T Directorate's Biological and Chemical 
Countermeasures Portfolio, which was eventually split into biological 
and chemical components. The program was continued, augmented, and 
expanded to cover a range of biological and chemical countermeasures 
R&D targeted at homeland security applications. Efforts initiated in 
the CBNP that have come to fruition include the Biological Aerosol 
Sentry and Information System (BASIS), a deployable capability for 
biological threat agent detection that is now part of the S&T 
Directorate's special event monitoring and National Security Special 
Events (NSSEs), and served as the foundation for the BioWatch program 
that was deployed to over 30 U.S. cities. The Program for Response 
Options and Technology Enhancement for Chemical Terrorism (PROTECT) 
currently is operational and owned and operated by the Washington 
Metropolitan Area Transit Administration and the associated program in 
the San Francisco International Airport has provided guidance on 
airport protection. A restoration demonstration effort is underway 
there and will be completed this year. PROTECT served as a basis for 
the operational NSSE chemical protection efforts in New York City and 
Boston in fiscal year 2004.
    Another key CBNP chemical defense program is the MicroChem lab, an 
effort to develop a next-generation hand-held chemical detector with 
capability to detect a broader set of chemical hazards than currently 
available sensors and with fewer false positive responses. Under DHS 
funding in fiscal year 2003 and fiscal year 2004, the effort has now 
completed development through prototype phase and will be evaluated 
against other developing sensors under the S&T Directorate's Chemical 
Detection program test/evaluation phase. There is no current active 
funding for this project as it has already accomplished the target 
prototype needed for evaluation. After fair test and evaluation among 
all candidates, successful technologies will be selected for further 
support toward final engineering. The Local Integration of NARAC 
(National Atmospheric Release Advisory Center) with Cities (LINC) 
program will continue to operate in its current configuration in five 
U.S. cities through this fiscal year and will be subsumed into the 
Biological Warning and Incident Characterization System once it is 
mature. R&D efforts that transitioned with the program in March 2003 
have been continued through this year and new ones, such as the foreign 
animal disease R&D efforts and NBACC-related activities have been 
initiated. In fiscal year 2004, Biological Countermeasures was funded 
at $286.5 million and in fiscal year 2005, $362.6 million.
    Question. Under the DHS Chem-Bio Detection program many research 
and development contracts have been made through industry instead of 
the national labs. The laboratory program supported a long term 
capability, but has also been successful in commercializing handheld 
detection units.
    How is DHS allocating funding between industry, universities and 
national laboratories?
    Answer. The S&T Directorate collaborates with academia through the 
Centers of Excellence program and its associated Integrated Network of 
Centers, which is establishing a national network of affiliated 
universities. Additionally, the S&T Directorate has a sizeable number 
of interactions and programs with individual universities on specific 
research topics and needs.
    The S&T Directorate solicits proposals from industry and uses a 
full range of contracting vehicles and its authority under the Homeland 
Security Act to engage businesses (large and small), federally funded 
research and development centers, universities, and other entities in 
development of advanced technologies for homeland security. The 
contracted research and development work now underway is the S&T 
Directorate's main form of collaboration with industry and academia. 
The S&T Directorate maximizes and leverages the existing capability 
base of the national laboratory complex. The Directorate engages all 
the national laboratories on a case-by-case basis, to tap into unique 
technical expertise that is critical to accomplishing portfolio 
objectives and goals. The Directorate also relies on national 
laboratory technical experts as needed throughout the RDT&E processes 
based on their years of experience applying technologies and processes 
to field applications. This technical and practical expertise is used 
to accelerate spiral development of technologies for transitioning 
capabilities to operational end-users.
    The S&T Directorate's CounterMeasures Test Beds (CMTB) program 
operates in close partnership with a number of Federal and national 
laboratories to execute its mission of testing and evaluating all 
threat countermeasures and systems. The following national laboratories 
participate in all CMTB Operational Testing and Evaluation (OT&E) 
efforts and enable deployments in response to heightened alert 
conditions as necessary. Multi-laboratory teams are encouraged to 
ensure objectivity and a healthy interchange of ideas.
    The Office of Interoperability and Compatibility (OIC) is currently 
leveraging the resources of Eastern Kentucky University in developing 
effective test methodologies for equipment and to provide technical 
assistance to states and localities under the SAFECOM Program. At the 
same time, OIC has enlisted a consortium of well over one hundred 
universities and colleges to support the annual conference on 
Technologies for Public Safety in Critical Incident Response, jointly 
sponsored by DHS and the Department of Justice (DOJ).
    Industry associations participate in SAFECOM Program activities, 
especially in standards development efforts. OIC has established a 
monthly vendor process which allows for constant communication and 
collaboration with our industry partners. Additionally, OIC/SAFECOM 
will be conducting an industry summit in late fall to allow for ever 
greater collaboration.
    Question. Is this allocation sufficient to support long term 
research and development necessary to develop the next generation 
technology?
    Answer. The S&T Directorate's strategic planning process uses a 
risk-based approach (including threats, vulnerabilities, and 
consequences) that identifies critical areas of need for RDT&E. The 
potential impact of RDT&E investments is evaluated and those efforts, 
both short- and long-term, that will have the greatest impact on 
reducing risk are pursued.
    In the 2 years that this Department has been in existence, the S&T 
Directorate has focused its efforts on near-term development and 
deployment of technologies to improve our Nation's ability to detect 
and respond to potential terrorist acts. However, we recognize that a 
sustained effort to continually add to our knowledge base and our 
resource base is necessary for future developments. Thus, we have 
invested a portion of our resources, including our university programs, 
toward these objectives.
    The S&T Directorate believes the distribution of funding between 
industry, universities, and national laboratories supports both long-
term capabilities development as well as meeting near-term requirements 
for end-users. The current funding distribution may change based on 
national requirements and needs. We recognize the value of longer-term 
capability development to ensure that the Nation has the necessary 
knowledge for application development.
    Question. Can you please provide me list of the grants the 
Department has made in allocating the Chem-Bio diction funding for this 
the past year?
    Answer. The fiscal year 2004 grants that DHS has made in the area 
of chemical and biological detection and related areas are listed 
below:

------------------------------------------------------------------------
                 Performer                              Topic
------------------------------------------------------------------------
U of Pitt.................................  Surveillance--RODS Decision
                                             Enhancements for The
                                             BioWatch System
Johns Hopkins.............................  Surveillance--ESSENCE
                                             Implementation of ESSENCE
                                             Biosurveillance Systems
Arizona University........................  High Resolution DNA
                                             Signatures for biothreat
Multiple \1\..............................  ECBC--Technical Advisory
                                             Group to HSARPA on
                                             Bioaerosol sensor testing
                                             and evaluation.
Multiple..................................  Bioinformatics and Assay
                                             Development Program
Potomac Institute for Policy Studies......  Bio-Alert
MIT/Lincoln Lab...........................  Architecture Studies
Johns Hopkins University/APL..............  Real-Time Neutralization of
                                             Biological Weapons in
                                             Stadiums or Arenas
SAIC and Battelle.........................  Demonstration & Verification
                                             of Chlorine Dioxide
                                             Decontamination Tech. in
                                             Large-Scale Test
National Center for Atmospheric Research..  Urban Studies-Atmospheric
                                             Transport & Dispersion
                                             Calculations
MIT/Lincoln Laboratory....................  Water System Vulnerability
                                             Studies for Homeland
                                             Defense
Edgewood Chemical and Biological Command..  Detection Systems for
                                             Biological and Chemical
                                             Countermeasures
MIT/Lincoln Laboratory....................  High-Collection-Efficiency
                                             Bio-aerosol Sampling
General Dynamics/CBRTA....................  DFU Filter Replacement Study
NYC DOHMH.................................  Integration of Clinical
                                             Testing to Complement
                                             BioWatch and Disease
                                             Surveillance in NYC
Army Research Laboratory..................  Detection Systems for
                                             Biological and Chemical
                                             Countermeasures
Naval Research Laboratory.................  Detection Systems for
                                             Biological and Chemical
                                             Countermeasures
Battelle Laboratory.......................  Detection Systems for
                                             Biological and Chemical
                                             Countermeasures
Ionian Corp...............................  Detection Systems for
                                             Biological and Chemical
                                             Countermeasures
Johns Hopkins University/APL..............  Detection Systems for
                                             Biological and Chemical
                                             Countermeasures
Research Triangle Institute...............  Detection Systems for
                                             Biological and Chemical
                                             Countermeasures
Multiple..................................  Detection Systems for
                                             Biological and Chemical
                                             Countermeasures
Agilent Corp..............................  Detection Systems for
                                             Biological and Chemical
                                             Countermeasures
Smiths Detection/Pasadena.................  Detection Systems for
                                             Biological and Chemical
                                             Countermeasures
JHU/APL...................................  Detection Systems for
                                             Biological and Chemical
                                             Countermeasures
Smiths Detection/Watford..................  Detection Systems for
                                             Biological and Chemical
                                             Countermeasures
Goodrich Corp.............................  Detection Systems for
                                             Biological and Chemical
                                             Countermeasures
Sarnoff Corp..............................  Detection Systems for
                                             Biological and Chemical
                                             Countermeasures
DOE National Laboratories.................  Enhanced Bioaerosol
                                             Detection System
Lawrence Livermore & Sandia Natl            Bio-briefcase
 Laboratories.
Pacific Northwest Natl Lab................  Botulinum detection system
Institute for Defense Analysis............  IDA Chemical Hazard Analysis
Edgewood Chemical and Biological Command..  Evaluation of Fielded
                                             Decontaminants Against Non-
                                             Traditional Agents
Institute for Defense Analysis............  Infrastructure Sensitivity
                                             to Chemical Hazards
MITRE Corp................................  A JASON Study of Selected
                                             Topics for the Department
                                             of Homeland Security
Naval Research Laboratory.................  Detection Systems for
                                             Biological and Chemical
                                             Countermeasures use of
                                             CASPAR
Naval Research Laboratory.................  Autonomous Rapid Facility
                                             Chemical Agent Monitor
National Institute for Standards            Solid State MEMs Microsensor
 Technology.                                 Arrays to Detect Dangerous
                                             Chemicals
Goodrich Corp.............................  TeraSpec
Sarnoff Corp..............................  TeraSpec
Multiple..................................  Detection Systems for
                                             Biological and Chemical
                                             Countermeasures
Monterey Institute........................  Survey/Evaluation of CBW
                                             Detectors
Multiple..................................  Low Vapor Pressure Chemical
                                             Detectors
Los Alamos National Lab...................  Study of Receptor
                                             Development for Certain
                                             Chemical Threat Agents
Multiple..................................  Novel Personnel Protection
                                             Equipment, BAA 04-13
Multiple..................................  Bioinformatics and Assay
                                             Development Program
Lawrence Livernore Lab....................  Bioassays for Detection and
                                             Forensics
Los Alamos Nat'l Lab......................  Bioassays for Detection and
                                             Forensics
Sandia National Labs......................  Bioforensics
National Academy of Sciences..............  Assessing Vulnerabilities
                                             Related to the Nations
                                             Chemical Infrastructure
Scientific Applications International Corp  IBIS TIGER Biosensors
Space and Naval Warfare Command...........  Border Net (Chem/Bio Agent
                                             Support)
Naval Sea Systems Command.................  Chem/Bio Agent Support
Lawrence Livermore & other DOE Labs.......  High Throughput Diagnostics
                                             for Agricultural
                                             Applications
Palo Alto Sensor Technology Innovation....  New System/Technologies to
                                             Detect Low Vapor Pressure
                                             Chemicals (e.g., TICs)
Seacoast Science, Inc.....................  New System/Technologies to
                                             Detect Low Vapor Pressure
                                             Chemicals (e.g., TICs)
Intelligent Optical Systems, Inc..........  New System/Technologies to
                                             Detect Low Vapor Pressure
                                             Chemicals (e.g., TICs)
Synkera Technologies Inc..................  New System/Technologies to
                                             Detect Low Vapor Pressure
                                             Chemicals (e.g., TICs)
Cape Cod Research, Inc....................  New System/Technologies to
                                             Detect Low Vapor Pressure
                                             Chemicals (e.g., TICs)
CogniScent, Inc...........................  New System/Technologies to
                                             Detect Low Vapor Pressure
                                             Chemicals (e.g., TICs)
Technispan LLC............................  New System/Technologies to
                                             Detect Low Vapor Pressure
                                             Chemicals (e.g., TICs)
Nanomat, Inc..............................  New System/Technologies to
                                             Detect Low Vapor Pressure
                                             Chemicals (e.g., TICs)
Weld Star Technology, Inc.................  Chem-Bio Sensors Employing
                                             Novel Receptor Scaffolds
SomaLogic, Inc............................  Chem-Bio Sensors Employing
                                             Novel Receptor Scaffolds
Orthosystems, Inc.........................  Chem-Bio Sensors Employing
                                             Novel Receptor Scaffolds
Nomadics, Inc.............................  Chem-Bio Sensors Employing
                                             Novel Receptor Scaffolds
Peterson Ridge LLC (dba Fluence)..........  Chem-Bio Sensors Employing
                                             Novel Receptor Scaffolds
BioElectroSpec............................  Chem-Bio Sensors Employing
                                             Novel Receptor Scaffolds
Echo Technical............................  Chem-Bio Sensors Employing
                                             Novel Receptor Scaffolds
Operational Technologies Corporation......  Chem-Bio Sensors Employing
                                             Novel Receptor Scaffolds
Accacia International LLC.................  Chem-Bio Sensors Employing
                                             Novel Receptor Scaffolds
BioTraces, Inc............................  Chem-Bio Sensors Employing
                                             Novel Receptor Scaffolds
CFD Research Corporation..................  Advanced Low Cost Aerosol
                                             Collectors for Surveillance
                                             Sensors and Personal
                                             Monitoring
Digital Flow Technologies, Inc............  Advanced Low Cost Aerosol
                                             Collectors for Surveillance
                                             Sensors and Personal
                                             Monitoring
MesoSystems Technology Inc................  Advanced Low Cost Aerosol
                                             Collectors for Surveillance
                                             Sensors and Personal
                                             Monitoring
Research International, Inc...............  Advanced Low Cost Aerosol
                                             Collectors for Surveillance
                                             Sensors and Personal
                                             Monitoring
InnovaTek, Inc............................  Advanced Low Cost Aerosol
                                             Collectors for Surveillance
                                             Sensors and Personal
                                             Monitoring
Enertechnix, Inc..........................  Advanced Low Cost Aerosol
                                             Collectors for Surveillance
                                             Sensors and Personal
                                             Monitoring
Isotron Corporation.......................  Wide-Area TIC Neutralization
Gumbs Associates, Inc.....................  Wide-Area TIC Neutralization
Synergistic Advanced Technologies LLC.....  Wide-Area TIC Neutralization

------------------------------------------------------------------------
\1\ Multiple indicates contract awards to more than one recipient in a
  category from the funding provided for this solicitation. In most
  cases, there remain companies in negotiation for award.

                                 ______
                                 

             Questions Submitted by Senator Robert C. Byrd

                           CHEMICAL DETECTORS

    Question. In your oral testimony, you indicated that there are 
funds in the budget to deploy chemical sensors, yet the S&T budget 
document refers to ``critical design review'' of technologies, but 
nothing about deployment of sensors across the country. Based on your 
hearing comments, please provide specifics on the Department's 
capabilities and deployment schedule for chemical monitoring.
    Answer. The interface to which this question refers was a short 
discussion on the issue of PROTECT, a networked chemical detection 
system for enhanced response against chemical attacks on facilities, 
particularly transit systems. This system has been demonstrated in and 
transitioned to three subway systems (DC, Boston, and NYC). With 
successful demonstration, the program has transitioned away from DHS 
S&T Directorate and is available for installation in other transit 
systems via the fiscal year 2005 Transit Security Grants Program 
administered by the DHS Office of State and Local Government 
Coordination and Preparedness (SLGCP) Office for Domestic Preparedness. 
The reference to ``funds in the budget'' to support deployment was a 
reference to funds in the Department's budget versus the S&T 
Directorate budget. The fiscal year 2005 Transit Security Grant Program 
includes $108 million for rail transit security, targeted to specific 
urban areas for the prevention and detection of explosive devices and 
chemical, biological, radiological and nuclear agents. Expenditures to 
acquire the PROTECT system are permissible under this program. The 
Science and Technology Directorate is assisting SLGCP with technical 
data package development and is prepared to offer technical assistance 
in the deployment of the system through this program.

                           BIOWATCH DETECTION

    Question. Your budget proposes over $100 million for bio-aerosol 
detection systems, better known as the ``BioWatch'' program. These 
sensors are located in over 30 major cities across the country.
    Samples are taken manually 1 or 2 times daily and then tested at a 
lab to determine if a biological attack has occurred. If an attack 
really occurs, hundreds or thousands of people could be harmed before 
the lab results come in. What investments are you making to close the 
gap between the release of a biological agent and the time it takes to 
detect it?
    Answer. We have a major program to develop the next generation of 
biodetection systems which we call Biological Autonomous Networked 
Detection (BAND). These systems will collect and analyze the sample on 
site, reporting out as often as every four hours, and will wirelessly 
transmit the data from any positives to the nearest Laboratory Response 
Network for confirmation and to initiate sample retrieval. The BAND 
system will simultaneously perform analyses for twenty or more agents, 
significantly more than the current BioWatch system, with sensitivities 
and false alarm rates equal to or better than the current BioWatch 
system. Because the sample collection and analyses is fully automated 
and done on site, the operational costs per ``detection site'' will be 
about one-fifth that of the current system or less. This greatly lower 
operational cost and the fully autonomous nature of the system will 
enable expansion of biological protection within existing BioWatch 
cities as well as to those cities and venues where it was previously 
not practical. We are currently on schedule for demonstrating a 
laboratory prototype of the BAND system in fiscal year 2006, developing 
engineering prototypes in fiscal year 2007, piloting them in a BioWatch 
city or cities in fiscal year 2008 and deploying them throughout the 
existing BioWatch cities in fiscal year 2009/fiscal year 2010.
    Question. My understanding is that certain prototypes are being 
tested, but they won't be deployable until 2009. Is this a matter of 
resources? What is needed to accelerate deployment of this system?
    Answer. Your understanding is correct, as per the discussion 
previously, we are not scheduled to begin deployment of the BAND System 
to BioWatch cities until fiscal year 2009. This is in part technology 
limited and in part resource limited. If the available R&D funding for 
this system was increased from its projected fiscal year 2006-fiscal 
year 2007 levels of about $25 million per year to $60 million per year, 
we would be able to significantly reduce the technical risk in 
developing the system and speed its deployment by 6 to 12 months. This 
would be accomplished by pursuing more technology options more 
aggressively. The competition engendered by being able to carry two or 
three systems all the way through development would further assist in 
meeting the challenging technical performance and cost goals. In 
addition, manufacturing of these detection systems to enable wide scale 
deployment would benefit from creating a guaranteed market for 1,000-
2,000 of these advanced detection systems, at a total estimated cost of 
$50-100 million. A significant portion of this additional required 
funding would need to be available in fiscal year 2007 so as to enable 
deployment to start in fiscal year 2008.

                           BIOWATCH RESPONSE

    Question. The budget notes as an accomplishment that the 
``BioWatch'' detection systems, which are deployed in over 30 major 
U.S. cities, conducted over a million assays with no false alarms.
    While that is certainly an indication that the system works, an 
official with the National Association of County and City Health 
Officials recently complained that not enough focus has been placed on 
what happens if the ``alarm bell'' rings.
    If an incident of national significance is detected, are State and 
local governments prepared to respond?
    Answer. The S&T Directorate, in collaboration with CDC, EPA, and 
DoJ, has prepared BioWatch Preparedness and Response Guidance (interim 
draft guidance) and distributed it to the BioWatch cities. This draft 
guidance is intended to assist the cities in their development of an 
incident characterization plan following a positive BioWatch signal. 
While some cities have developed a comprehensive plan, other cities' 
plans are under development. The S&T Directorate continues to offer 
assistance to each city and currently has an effort underway to address 
the concerns of the local public health epidemiology community.
    Question. What management practices are in place at the Federal 
level to ensure that State and local governments are prepared to 
respond to an incident of national significance? I would like to hear 
both Assistant Secretary Albright and Assistant Secretary Simonson 
respond to the question.
    Answer. Contingency planning with State and local governments is an 
important and ongoing process. A key component of the National Incident 
Management System (NIMS) compliance for State and local jurisdictions 
is the requirement for updating and revising emergency operations 
plans. With the release of the National Response Plan (NRP), State and 
local jurisdictions are encouraged to align their plans with the NRP. 
State, local, and tribal organizations must adopt NIMS by fiscal year 
2007 as a condition of receiving Federal preparedness assistance. State 
and local governments can use DHS grant funds to implement the NIMS.
    The NRP and the NIMS provide the template, policies, and protocols 
for integrating all jurisdictions and the private sector as key 
components of the Nation's response to domestic incidents. The NRP and 
the NIMS are built on the principle that most incidents start, end, and 
are managed at the local level. The NIMS stresses the concepts of 
mutual aid, communications, resource typing, and preparedness, in 
addition to the command and control elements, including the Incident 
Command System and Multi-agency Coordination. The NRP details how those 
varying levels of responsibility work together during Incidents of 
National Significance (a new concept developed in the NRP to cover 
every significant incident), which require the Department of Homeland 
Security to take on the overall coordination role for Federal 
involvement in domestic incident management. The NRP provides the 
multi-agency coordination structures to support incident commanders and 
local entities at the scene. It also provides coordination structures 
for integrating with the private sector. One of the key concepts of the 
NRP is that preventing, preparing for, responding to, and recovering 
from Incidents of National Significance require the collective 
capabilities of all involved jurisdictions.

                DOMESTIC NUCLEAR DETECTION OFFICE (DNDO)

    Question. The DHS budget proposes $227 million for a new office 
called the Domestic Nuclear Detection Office (DNDO). I share the 
Department's concerns that this threat warrants a coordinated effort at 
the Federal level to address it. However, the criticism following 9/11 
that led to the creation of the Department of Homeland Security was 
that there were too many stovepiped agencies across the Federal 
Government dealing with homeland security that didn't know what the 
other was doing.
    In your opinion, is enough being done by the Secretary's office to 
ensure that the DNDO will not become a stovepiped organization?
    Answer. One of the principal motivators in the formation of the 
DNDO was to remove this type of stovepiping within the Department, and 
across the Federal Government, with regards to the prevention of 
nuclear terrorist attack. DNDO is charged with integrating and 
coordinating all planning and implementation efforts across the other 
Federal departments and agencies, and within DHS, to ensure that 
individual efforts are effectively and efficiently contributing to a 
global strategy to defend against the terrorist use of a nuclear weapon 
on our Nation.
    The DNDO serves as a unique entity within the Department to 
consolidate all nuclear-detection related activities, allowing for the 
development of an integrated office that will be responsible not only 
for research and development, but also for developing a global nuclear 
detection architecture and developing and implementing a domestic 
detection system, to include acquisition programs for detection assets 
and operational support functions. This integration, as well as 
coordination with nuclear detection programs in other departments, will 
allow for the development of a single global nuclear detection 
architecture to protect the Nation from attempts to import or transport 
a nuclear device or fissile or radiological material intended for 
illicit use.
    Question. For instance, the proposal for DNDO calls for its own 
office of assessments and evaluations. It has its own policy planning 
office. It has an R&D office as well as a systems development and 
acquisitions office. These are also functions currently performed by 
the Science and Technology Directorate and the Information Analysis and 
Infrastructure Protection (IAIP) Office.
    Is the Secretary proposing to set up a separate intelligence unit 
and a separate R&D arm just for this office? How does this affect 
ongoing efforts within the Science & Technology Directorate?
    Answer. With regards to intelligence collection and analysis, IAIP 
will continue to be the conduit for DNDO coordination with the larger 
intelligence community. Additionally, DNDO will leverage the current 
capabilities within IAIP for intelligence analysis. The DNDO's Joint 
Center for Global Connectivity (JCGC) will be closely integrated with 
the Homeland Security Operations Center (HSOC) to ensure that effective 
information flows in both directions. DNDO expects to receive all 
relevant intelligence information from IAIP in a timely manner and will 
provide additional technical analysis capabilities on a 24/7 basis as 
part of the JCGC. The JCGC, by receiving information and finished 
intelligence from sources across the Federal, State and local levels, 
will be able to additionally provide continuous analysis of real-time 
data streams and the capability to provide continual national 
situational awareness.
    With regards to research and development, the DNDO will continue to 
closely interface with the S&T Directorate on joint projects, as 
appropriate, for the development of technologies that may provide 
countermeasures against multiple threat types. The separation of the 
DNDO nuclear detection research, development, test, and evaluation 
(RDT&E) from the RDT&E conducted within the S&T Directorate will be 
conducted so as to not have any detrimental affect on potential 
collaborative efforts that would be gained through the S&T 
consolidation effort. The goal is to make sure that this Nation 
maintains a preeminent research and development program to address the 
technical challenges in radiation detection science and technology, 
while at the same time capitalizing on the benefits of integrating this 
program with larger acquisition and operational support efforts.
    Again, the intent of the DNDO is to provide an integration of 
efforts across the Department, as well as the rest of the Federal 
Government, rather than another disconnected layer of bureaucracy. For 
exactly this reason, the DNDO will be a jointly-staffed office with 
detailed employees from other DHS components, as well as other 
departments, to provide strong linkages and a mutual continual 
awareness between the DNDO and the parent organizations. The DNDO will 
not operate in a vacuum separate from the rest of the Department, but 
will instead operate in a fully-informed environment, cognizant of all 
relevant Department efforts, including the intelligence and R&D efforts 
mentioned.

    RADIOLOGICAL/NUCLEAR COUNTERMEASURES TEST AND EVALUATION COMPLEX

    Question. The budget request includes $9 million for a 
Radiological/Nuclear Countermeasures Test and Evaluation Complex. The 
budget indicates that $13 million was appropriated prior to fiscal year 
2004 and $11 million was appropriated in fiscal year 2004. When was the 
$13 million appropriated? Under which public law or laws was the 
funding included?
    Answer. At the stand up of DHS and S&T, funds were transferred from 
other departments to provide an initial funding base. In particular, 
funds for the Radiological/Nuclear Countermeasures Portfolio were 
originally transferred from the Defense Threat Reduction Agency (DTRA) 
and the Department of Energy (DOE). The first $13 million that was put 
on contract for the Radiological/Nuclear Countermeasures Test and 
Evaluation Complex was part of the fiscal year 2003 funding. Funding 
was included under a reprogramming of funds request, and Radiological/
Nuclear Countermeasures received $65 million which was approved by the 
House and Senate Appropriation Committees. The reprogramming did not 
specifically state that the S&T Directorate was using funds for the 
Radiological/Nuclear Countermeasures Test and Evaluation Complex; 
however, the S&T Directorate used $13 million for this effort.
    Question. The project schedule indicates that the construction 
phase is scheduled to begin on May 1, 2005. Is the project on schedule? 
If not, what impact does that have on the June 2006 completion goal?
    Answer. The Radiological/Nuclear Countermeasures Test and 
Evaluation Complex (CTEC) construction project is currently on schedule 
to meet the expected June 2006 completion goal.

                    UNIVERSITY CENTERS OF EXCELLENCE

    Question. Under Secretary McQueary testified last year that in 
addition to the risk analysis and agro-terrorism centers, two more 
solicitations would occur in fiscal year 2004 and if the budget request 
for fiscal year 2005 was maintained at fiscal year 2004 levels, an 
additional five Centers could be selected for a total of nine centers. 
In fiscal year 2005, the fourth center was named, but the fiscal year 
2006 budget request indicated that a fifth is being evaluated and two 
additional Centers are anticipated in fiscal year 2005 and fiscal year 
2006 for a total of seven.
    Why has the number of Centers planned by the Department changed?
    Answer. The Science and Technology Directorate plans on supporting 
seven Centers of Excellence and two Cooperative Centers in fiscal year 
2005 and fiscal year 2006, for a total of 9 Centers supported. The 
Broad Agency Announcement (BAA) for the fifth Center had proposals due 
at the end of April 2005. The BAAs for the sixth and seventh Centers 
are in development. The DHS-EPA Cooperative Center on Microbial Risk 
Assessment has been funded for fiscal year 2005, with the recipient to 
be announced shortly, and the second Cooperative Center is in 
development.
    Question. What areas of mission relevant research are not being 
considered because of the reduction from nine to seven Centers?
    Answer. We are planning on supporting a total of seven merit-based 
Centers of Excellence through fiscal year 2006; topics for the sixth 
and seventh Centers are being vetted within the Department for approval 
prior to announcement. We anticipate releasing Broad Agency 
Announcements requesting proposals for merit-based consideration in 
fiscal year 2005. In addition to the seven Centers of Excellence, the 
S&T Directorate will support two Cooperative Centers in fiscal year 
2005 and fiscal year 2006. We believe that these seven centers will 
address all current mission relevant research.

                 NATIONAL BIO AND AGRODEFENSE FACILITY

    Question. The budget proposes $23 million for the National Bio and 
Agrodefense Facility, which according to the project schedule, will 
cost over $450 million to complete. According to the project schedule, 
work to be performed in fiscal year 2006 will cost only $3 million. Why 
is $23 million needed in fiscal year 2006?
    Answer. The $3 million referenced will be spent in fiscal year 2005 
to initiate a conceptual design study to define the scope and size of 
the new facility. The $23 million fiscal year 2006 request will 
complete the conceptual design, the NEPA process including site 
selection, and initiate the detailed engineering design of the chosen 
concept.
    Question. Has a site been selected for this facility?
    Answer. No site has been chosen at this point in the NBAF 
development process. An interagency conceptual study has been 
undertaken by DHS, USDA and DHHS to explore three major options for 
NBAF each with increasing capability. The study will determine the 
programmatic requirements, scope and size of the facility taking into 
account cost, schedule, technical requirements and public support. This 
process will provide the basis for more detailed engineering design, 
NEPA evaluation and the site selection.
    Question. Is an authorization required for this facility?
    Answer. It is our understanding that under current legislation, an 
authorization for this facility is not required. However, should 
Congress decide to require one, we would of course comply.

                        CHEMICAL COUNTERMEASURES

    Question. The budget request includes an additional $49 million for 
the chemical countermeasures portfolio. The request indicates that $24 
million supports construction of a new facility for countermeasures 
testing. The object class for this funding is listed under ``Purchase 
of goods/services from Gov't accounts.'' Will this facility be leased 
or owned by DHS? Where will it be located? Why isn't this facility 
listed under the Capital Investment and Construction Initiative 
Listing?
    Answer. The budget request identifies a $24 million increase from 
fiscal year 2005 to fiscal year 2006 in ``Purchases from Government 
Accounts.'' This funding includes support of two activities: 
construction of a singular facility to conduct tests of countermeasures 
against non-traditional agents and the enhancement of threat 
characterization, analysis, and assessment, including initiation of 
toxicology and environmental fate studies of non-traditional agents. 
For clarity, of this $24 million, only $11 million are apportioned to 
support the construction of the countermeasure test facility. The test 
facility will be constructed at Edgewood Area, Aberdeen Proving Ground, 
MD, and will be a Department of Defense (DOD) facility. The DHS funds 
will be utilized to conduct a series of critical studies to provide 
much of the foundation data to support design and safe use of the 
facility, which is required for countermeasures assessment both by DOD 
and DHS. A Memorandum of Agreement (MOA) between DHS and DOD is in 
development to outline agreement on the requirements, shared expenses, 
and use terms of the facility. Since the DHS funding is provided to 
another government agency (Army) to support a facility of that agency, 
the object class is identified as ``Purchase of goods/services from 
Gov't accounts'' versus Capital Investment.
                                 ______
                                 

                Questions Submitted to Stewart Simonson

               Questions Submitted by Senator Judd Gregg

                HEALTH AND HUMAN SERVICES AND BIOSHIELD

    Question. Please provide a list of administrative, regulatory or 
legislative proposals needed to invigorate scientific research relevant 
to the development of needed countermeasures and products for natural 
pandemics and epidemics.
    Answer. There is a very active scientific effort underway to 
develop needed medical countermeasures and products for natural 
pandemics and epidemics. Much of this effort is supported by the 
National Institute of Allergy and Infectious Diseases (NIAID) at the 
National Institutes of Health (NIH). For example, NIAID is using 
Project BioShield authorities to expedite the development of assays to 
be used for the high-throughput screening of candidate therapeutics for 
influenza. Influenza is currently considered a Category C biological 
threat agent by the Centers for Disease Control and Prevention (CDC). 
The influenza antiviral therapeutics currently available are limited 
and the rapid emergence of antiviral resistance with widespread use of 
these therapeutic agents is a potential concern.
    Finding new options for treating influenza are a high priority for 
the Nation, as the Department of Health and Human Services (HHS) draft 
Pandemic Influenza Response and Preparedness Plan articulates.\1\ 
Grants will support research projects focused on the development of 
needed diagnostic assays and screening techniques to permit speedier 
identification of compounds with the potential to be effective against 
a broad spectrum of influenza strains, including newly emergent 
influenza strains.
---------------------------------------------------------------------------
    \1\ A copy of the Pandemic Influenza Response and Preparedness Plan 
can be found at http://www.hhs.gov/nvpo/pandemicplan/.
---------------------------------------------------------------------------
    In an effort to address the pressing need for additional reliable 
influenza medical countermeasures, the RFP, NOT-AI-05-045, was released 
on June 17, 2005, and the receipt date for applications is September 1, 
2005. Grants are expected to be awarded in fiscal year 2006. The 
Department of Health and Human Services will implement appropriate 
administrative and regulatory actions to facilitate this research 
activity.
    Question. Many innovators complain that they cannot get access to 
your office for an evaluation of their new product ideas. Please 
describe your process for screening new products and new ideas.
    Answer. HHS/OPHEP/ORDC has hosted numerous meetings with external 
stakeholders. These meetings provide a forum for innovators to give 
presentations on their products and to describe their capabilities to 
ORDC. We have had over thirty contacts from industry since January 
2005. ORDC hosts a Project BioShield website http://www.hhs.gov/ophep/
bioshield/ that provides frequently updated information on ongoing and 
planned acquisitions under Project BioShield. The website also has an 
email link that allows users to send a message directly to ORDC.
    New products or ideas are screened depending upon factors including 
the credibility and potential impact of the threat it proposes to treat 
and stage of development in the research and development pipeline.
    If the product is in the early stages of development, companies and 
researchers need to seek NIH funding through grants, contracts, 
partnerships or the Small Business Innovation Research (SBIR) program. 
The SBIR is a set-aside program (2.5 percent of an agency's extramural 
budget) for domestic small business concerns to engage in Research/
Research and Development (R/R&D) that has the potential for 
commercialization. The SBIR program was established under the Small 
Business Innovation Development Act of 1982 (Public Law 97-219), 
reauthorized until September 30, 2000 by the Small Business Research 
and Development Enhancement Act (Public Law 102-564), and reauthorized 
again until September 30, 2008 by the Small Business Reauthorization 
Act of 2000 (Public Law 106-554).
    If an innovator's product is sufficiently advanced in development, 
then the Office of Research and Development Coordination (ORDC) in the 
Office of Public Health Emergency Preparedness (OPHEP) at HHS meets 
with developers to provide guidance concerning the Project BioShield 
acquisition process. This process includes a Material Threat 
Determination (MTD) and a Material Threat Assessment (MTA) by the 
Department of Homeland Security. A MTD is issued by the Secretary of 
Homeland Security if it is determined that the specific CBRN threat 
presents a material threat against the United States population 
sufficient to affect national security. The MTAs provide information 
about the extent of the threat and the vulnerabilities and are used to 
inform U.S. Government (USG) medical countermeasure requirements. The 
USG requirements and recommendations for acquisitions are established 
by the interagency Weapons of Mass Destruction Medical Countermeasures 
Subcommittee of the National Science and Technology Council. The 
Project BioShield acquisition process also includes a joint 
recommendation for acquisition by the Secretaries of HHS and the 
Department of Homeland Security (DHS), and an approval for the 
acquisition by the White House.
    Question. Several recommendations have been made to formalize 
access for screening new ideas for products, including convening a 
working group of outside experts, contracting with the private sector, 
and web-based submissions. Please provide a list of proposals on how 
you would recommend formalizing access for screening new ideas for 
products.
    Answer. The NIH peer review process works very well in providing an 
initial evaluation of new ideas. Both NIH and ORDC staff frequently 
meet with developers using a ``Technology Watch'' process aimed at 
ensuring that USG medical countermeasure research and development 
experts are informed about promising, innovative products. As part of 
the Technology Watch process, ORDC issues periodic Requests for 
Information (RFI) to determine the level of maturity of the medical 
product targeting countermeasures of interest in the developmental 
pipeline. Finally, ORDC has a regularly updated website and an email 
address that allows for web-based submission of questions.
    Question. You made mention in your testimony of a number of Project 
BioShield related procurement-related activities that include Pre-
solicitation notices, Requests for Information, and Requests for 
Proposals. Can you provide additional information about these 
activities?
    Answer. A copy of the current OPHEP/ORDC BioShield procurement 
activities is attached for your convenience. Furthermore, information 
on these procurement-related activities is available on our website at 
http://www.hhs.gov/ophep/bioshield/PBPrcrtPrjct.htm. This information 
is also available at http://www.fedbizopps.gov.
    Question. As described in the Project BioShield Act of 2004, there 
are a number of determinations that must be made to support the 
acquisition of a security countermeasure using the special reserve fund 
appropriated in the fiscal year 2004 DHS Appropriations bill. Can you 
please describe the role of HHS and the process used to make these 
determinations, specifically that the determinations that 
countermeasures are necessary and are appropriate for inclusion in the 
Strategic National Stockpile and the joint recommendation for 
procurement?
    Answer. The Secretary of Homeland Security is charged with making 
material threat determinations (MTDs). Upon receipt of the DHS MTD the 
Secretary of Health and Human Services determines if medical 
countermeasures are necessary to protect the public health. If 
countermeasures are needed, the Secretary of Health and Human Services 
must determine the number of doses required, if production and delivery 
of a approved or licensed product is feasible with 8 years of contract 
award, and an evaluation of whether there is a commercial market for 
the product(s) other than as a security countermeasure. Finally, the 
Secretaries of Homeland Security and Health and Human Services jointly 
recommend to the President that the Special Reserve Fund be made 
available for the recommended countermeasure procurement. The approval 
for the procurement is made by the President (now delegated to the 
Office of Management and Budget.)
    Question. In your testimony, you've provided us with a summary of 
the many accomplishments of your office since the enactment of the 
Project BioShield Act of 2004, also known as BioShield I. As you know, 
I am sponsoring the so-called ``BioShield II'' bill to further expand 
on the efforts of BioShield I including indemnification for product 
manufacturers and liability protection for health workers and patent 
protections. Do you feel that the new bill appropriately addresses 
remaining obstacles to medical countermeasure development against 
weapons of mass destruction?
    Answer. The Department of Health and Human Services is committed to 
the development and acquisition of priority security countermeasures 
and will work with Congress and stakeholders to address obstacles to 
the effective implementation of Project BioShield.
    Question. It is often stated that it takes 10 years to develop 
medical products. What makes HHS believe that it can accomplish this in 
less time?
    Answer. It generally takes 10 years to develop a medical product 
from inception to full FDA licensure or approval by proceeding along a 
conservative, serial regulatory path. Project BioShield allows for the 
procurement and delivery of medical countermeasures to the Strategic 
National Stockpile (SNS) prior to full FDA approval or licensure and 
their use under the Emergency Use Authorization provision of the 
Project BioShield Act of 2004.
    In order to acquire these critical medical countermeasures as 
quickly as possible, Project BioShield encourages a parallel 
development process in which the developer concurrently is finalizing a 
formulation while conducting animal or human clinical trials and 
scaling up and validating a current Good Manufacturing Practices (cGMP) 
production process. This approach has some increased risk of failure; 
however, the process is very closely monitored by relevant HHS staff.
    Question. There are many different biological threats. Can you 
explain why so much of the BioShield activities are focused on anthrax?
    Answer. 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--namely, smallpox and anthrax. An 
attack involving the aerosol dissemination of anthrax spores, 
particularly in an urban setting, was considered by public health 
experts to have the potential for catastrophic effects. The potential 
for large-scale population exposure following aerosol release of 
anthrax spores, the threat demonstrated by the anthrax letters, the 
persistence of anthrax spores in the environment 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 
posed a material threat against the United States population sufficient 
to affect national security. And, because untreated inhalation anthrax 
is usually fatal, the Secretary of HHS determined that additional 
countermeasures were necessary to protect the public health.
    Question. I understand that the NIAID rPA anthrax vaccine advanced 
development contracts with VaxGen and Avecia are still ongoing. Why did 
you make the decision to commit to the acquisition of 75 million doses 
of this product before those NIAID contracts were completed?
    Answer. The material threat assessment provided by the DHS 
supported the requirement to acquire sufficient vaccine to protect 25 
million persons (75 million doses). The development work performed 
under the NIAID contracts had proceeded to a level such that HHS had 
confidence that a final rPA vaccine product was achievable and 
licensable within 8 years of a contract award.
    Question. In your statement you testified that the stockpile 
already contains sufficient smallpox vaccine to protect every American. 
Can you please explain why it is necessary to purchase any additional 
vaccine?
    Answer. The smallpox vaccines currently in the Strategic National 
Stockpile are live virus vaccines derived from a virus called vaccinia. 
These replicating vaccines are contraindicated in some segments of the 
population, particularly those with weakened immune systems. Therefore, 
there is a need to develop a vaccine which will be more appropriate for 
use in these persons. An attenuated smallpox vaccine with limited 
replication in humans, such as the Modified Vaccinia Ankara (MVA) 
vaccine would be appropriate for use in such individuals.
    Question. Former Secretary Tommy Thompson stated that food-borne 
bioterrorism was one of his greatest concerns. Certainly, deliberate 
contamination of food with botulism could result in a large number of 
casualties. Would you please further describe your planned procurement 
for botulism countermeasures?
    Answer. Botulism toxin was determined to be a material threat by 
the Department of Homeland Security on June 9, 2004. Presidential 
approval for the acquisition of botulinum antitoxin using special 
reserve funds under Project BioShield was granted on August 17, 2004. 
HHS released a presolictiation notice on September 4, 2004 indicating 
its intention to acquire 200,000 doses of heptavalent equine botulinum 
antitoxin through a sole-source contract. The Request for Proposal was 
issued to the prospective offeror on July 14, 2005. Horses are 
currently being immunized to generate the plasma necessary to produce 
the botulinum antitoxin. A contract award is anticipated in the 3rd 
quarter of 2005.
    Question. There is concern that we may not be responding adequately 
to the threat of nuclear or radiological terrorism. What is HHS doing 
to protect the public from illness after exposure to radiation? 
Particularly, would you provide more information regarding procurement 
of medical countermeasures against this threat?
    Answer. The Strategic National Stockpile (SNS) currently contains 
medical countermeasures to treat the spectrum of potentially life-
threatening effects of radiation exposures. These include drugs to 
block entry or to remove radioactive particles from the body as well as 
to treat a major effect of penetrating radiation known as acute 
radiation syndrome (ARS). Specifically, the SNS currently contains the 
following:
  --Potassium Iodide and a pediatric liquid formulation of potassium 
        iodide. Potassium Iodide is used to block the uptake of 
        radioactive iodine that could be released following a nuclear 
        detonation or a nuclear power plant accident;
  --Calcium and zinc diethylenetriaminepentaacetate (Ca/Zn DTPA). The 
        DTPAs are used to remove radioactive transuranic particles such 
        as plutonium and americium from the body following the use of a 
        dirty bomb or similar device;
  --Prussian Blue. This drug is used to remove radioactive cesium from 
        the body after a nuclear detonation or use of a dirty bomb or 
        similar device; and
  --Filgrastim. This drug is used to treat life-threatening suppression 
        of infection-fighting white blood cells after whole-body 
        exposure to high doses of penetrating radiation--a form of 
        acute radiation syndrome.
    Additionally, a Request for Information (RFI) for countermeasures 
for an acute radiation syndrome was published in October 2004. 
Responses to that RFI have been evaluated and a Request for Proposals 
(RFP) is being developed. We are in the process of determining what the 
specific requirements and acquisition options are so that we can 
proceed with the acquisition process. HHS is eager to enlarge the 
holdings of the Strategic National Stockpile (SNS) with respect to 
radiological/nuclear countermeasures. Accordingly, the quality of the 
proposals and the stage of product development will determine how HHS 
acts on the results of the RFI and RFP.
    Question. Nuclear or radiological terrorism has been cited as one 
of the greatest threats this country faces with regard to homeland 
security. Several promising bone marrow protection drugs could be 
available in the near term to protect against this threat. When do you 
expect to procure such drugs for the National Strategic Stockpile?
    Answer. The Strategic National Stockpile (SNS) currently contains 
medical countermeasures to treat the spectrum of potentially life-
threatening effects of radiation exposures. These include drugs to 
block entry or to remove radioactive particles from the body as well as 
to treat a major effect of penetrating radiation known as acute 
radiation syndrome (ARS). Specifically, the SNS currently contains the 
following:
  --Potassium Iodide and a pediatric liquid formulation of potassium 
        iodide. Potassium Iodide is used to block the uptake of 
        radioactive iodine that could be released following a nuclear 
        detonation or a nuclear power plant accident;
  --Calcium and zinc diethylenetriaminepentaacetate (Ca/Zn DTPA). The 
        DTPAs are used to remove radioactive transuranic particles such 
        as plutonium and americium from the body following the use of a 
        dirty bomb or similar device;
  --Prussian Blue. This drug is used to remove radioactive cesium from 
        the body after a nuclear detonation or use of a dirty bomb or 
        similar device; and
  --Filgrastim. This drug is used to treat life-threatening suppression 
        of infection-fighting white blood cells after whole-body 
        exposure to high doses of penetrating radiation--a form of 
        acute radiation syndrome.
    Additionally, a Request for Information (RFI) for countermeasures 
for an acute radiation syndrome was published in October 2004. 
Responses to that RFI have been evaluated and a Request for Proposals 
(RFP) is being developed. We are in the process of determining what the 
specific requirements and acquisition options are so that we can 
proceed with the acquisition process. HHS is eager to enlarge the 
holdings of the Strategic National Stockpile (SNS) with respect to 
radiological/nuclear countermeasures. Accordingly, the quality of the 
proposals and the stage of product development will determine how HHS 
acts on the results of the RFI and RFP.
    Question. It is estimated that one quarter of the U.S. population 
cannot take the current smallpox vaccine that we have in our stockpile. 
NIH has been hard at work on the development of a safe MVA-based 
smallpox vaccine for that portion of the population that is 
contraindicated. Please describe where we are in the development of the 
vaccine and when you plan to issue your RFP for the purchase of the MVA 
vaccine?
    Answer. HHS released a presolicitation notice in anticipation of 
releasing an RFP by the end of the summer to manufacture and deliver to 
the SNS up to 20 million doses of the attenuated smallpox vaccine, 
modified vaccinia Ankara (MVA).
    Question. If the recent anthrax incident at the DC postal and DOD 
facilities had turned out be a real anthrax attack requiring the use of 
both antibiotics and the vaccine for those exposed and vaccinations for 
first responders, how many doses of the FDA licensed anthrax vaccine 
that are currently in Strategic National Stockpile managed by HHS would 
be used?
    Answer. The SNS currently contains sufficient antibiotics to treat 
about 180,000 symptomatic anthrax patients and to provide for a 60 day 
prophylaxis of more than 25 million persons. This stockpile of 
antibiotics is growing monthly. The USG is currently negotiating for 
the acquisition of specific anthrax antitoxins to treat symptomatic 
anthrax patients. In addition to the use of antibiotics, HHS would 
deploy as much anthrax vaccine from the SNS as was required to respond 
to the event and to protect the population. The vaccine and the 
prophylactic antibiotics would likely be used concurrently. There 
currently is no FDA-licensed vaccine for post-exposure use following 
anthrax exposure. In May 2005, HHS awarded a contract to BioPort 
Corporation for the manufacture and delivery of 5 million doses of 
licensed anthrax vaccine adsorbed (AVA) to the stockpile. There are at 
present over 1 million doses of AVA available for the pre-exposure 
immunization of at-risk groups such as certain laboratory workers and 
first responders who would be involved with the response to an attack.
    Question. For the past 1\1/2\ years, HHS has been in the process of 
acquiring 5 million doses of the FDA licensed vaccine for the CDC 
stockpile while the agency has committed nearly $1 billion under 
government contracts to acquire 75 million doses of an early-stage 
anthrax vaccine from a single manufacturer. Why has it taken so long 
after the 2001 anthrax attacks for HHS to acquire any additional doses 
of the current FDA-licensed vaccine for the stockpile?
    Answer. HHS acquired a small amount of the AVA vaccine for civilian 
use (21,400 doses) following the anthrax events of the fall of 2001. 
Thereafter HHS initiated a process to acquire licensed AVA anthrax 
vaccine from DOD. Various administrative and legal issues caused delays 
in this acquisition. Once Project BioShield was enacted, HHS determined 
that initiating a BioShield acquisition contract directly with the AVA 
vaccine manufacturer, BioPort Corporation, would be the best mechanism 
to acquire this vaccine. HHS awarded the contract on May 5, 2005 for 5 
million doses and the company completed the initial delivery of over 1 
million doses soon after contract award. We would be happy to provide 
timelines if helpful.
    Question. Please explain the decision to eliminate from the 
President's fiscal year 2006 budget the funding for the CDC dose 
reduction studies to allow FDA approval for fewer doses of the FDA-
licensed anthrax vaccine given that FDA approval of the new anthrax 
vaccine is still years away? If the number of doses for pre-exposure 
vaccinations against anthrax could be reduced in half, wouldn't that 
also result in significant net cost savings for the Federal Government 
and double the number of 1st responders and other who could be 
vaccinated and protected before an anthrax occurs?
    Answer. At the inception of this program in 1999, HHS anticipated 
it would take 5 years to complete the necessary studies. It is 
important to note that this type of study is normally undertaken by the 
manufacturer in the interest of improving product utilization. To date 
the program has generated sufficient data to allow BioPort to submit a 
request to the FDA to change the route of administration from 
subcutaneous to intramuscular and to decrease the six dose priming 
series from six to five doses.
    CDC has now completed the anthrax vaccine clinical trial interim 
safety analysis, has presented the results to key stakeholders and has 
submitted the final report detailing all findings from the safety 
analysis to the Food and Drug Administration (FDA). Accordingly, the 
HHS bioterrorism preparedness budget placed the highest priority on 
expanding mass-casualty treatment capacity and procuring additional 
pharmaceuticals for the Strategic National Stockpile.
    Question. Would HHS provide assurance that the human clinical, 
animal and CDC laboratory dose reduction studies for the currently 
licensed anthrax vaccine will be continued and completed given the 
potential rapid deployment and cost saving benefits for first 
responders, lab workers and others from fewer doses?
    Answer. Yes. As indicated above, HHS anticipated it would take 5 
years to complete the necessary studies. CDC has now completed the 
anthrax vaccine clinical trial interim safety analysis. The program has 
generated sufficient data to allow BioPort to submit a request to the 
FDA to change the route of administration from subcutaneous to 
intramuscular and to decrease the six dose priming series from six to 
five doses.
    Question. One of the chief purposes of the Project BioShield Act of 
2004 (the ``Act'') was to provide contracting flexibility to enable the 
government to more rapidly acquire countermeasures against biological, 
chemical, radiological or nuclear agents that might be used in 
terrorist attacks. To what extent has HHS used simplified acquisition 
procedures in the following Bioshield procurements:
  --Solicitation No. DHHS-ORDC-05-01 for Pediatric Formulation of 
        Potassium Iodide;
  --Solicitation No. RFP-DHHS-ORDC-04-01 for Licensed Anthrax 
        Recombinant Protective Antigen (rPA) Vaccine for the Strategic 
        National Stockpile;
  --Solicitation No. 2004-N-01385 for Therapeutic Products for 
        Treatment of Inhalational Anthrax Disease for the Strategic 
        National Stockpile (the ``Anthrax Therapeutics Solicitation''); 
        and
  --Solicitation No. 2005-B-01696 for Anthrax Vaccine Adsorbed 
        (BioThraxTM).
    Answer. Simplified acquisition procedures were not used for these 
procurements. Some of these products could be obtained only through a 
sole source, therefore a Justification for Other than Full and Open 
Competition (JOFOC) was used. Since there was more than one potential 
source, other products were acquired under full and open competitive 
procedures as governed by the FAR.
    Question. To what extent does HHS plan to use simplified 
acquisition procedures in the following upcoming procurements:
  --Solicitation No. 2004-N-01183 for 200,000 Doses of Heptavalent 
        Botulinum Immune Globulin Reference-Number;
  --Request for Information (RFI) ORDC-05-01 for Therapeutics to Treat 
        Neutropenia and Thrombocytopenia Associated with the Acute 
        Radiation Syndrome (ARS); and
  --RFI No. ORDC-05-03 for Development and Manufacture of Plasma 
        Derived Human Butyrl-Cholinesterase as a Prophylactice/
        Therapeutic for Exposure to Nerve Agents?
    Answer. For each proposed BioShield procurement, HHS reviews the 
contract options available and applies the most appropriate authorities 
to facilitate a fair, technically sound, and rapid acquisition. For 
example, HHS has selected to use a sole-source acquisition strategy for 
the procurement of the 200,000 doses of equine heptavalent botulinum 
immune globulin cited above.
    Question. Certain discretionary procurement laws and regulations, 
such as the requirement for submission of certified cost and pricing 
data under the Truth in Negotiations Act, place tremendous burdens on 
commercial entities that do not regularly do business with the Federal 
Government. Given that the express goal and clear intent of the Act is 
to encourage greater participation by commercial entities in supplying 
the Nation with needed countermeasures, to what extent has HHS, in its 
discretion, required compliance with such laws and regulations (and 
specifically, the submission of certified cost and pricing data) 
notwithstanding the existing regulatory exemptions for commercial 
entities to avoid such unnecessary burdens and the clear intent of the 
Act to reduce the regulatory burden on procurements conducted under the 
Act as much as possible?
    Answer. In order to obtain the best value to the government and to 
negotiate a fair price it is essential for the USG to have certified 
cost and price data unless the contract can be awarded based on 
adequate price competition. Cost or pricing data is especially needed 
in regard to those entities that may not as yet have a commercially 
marketed product or may be using a unique, innovative production 
process.
    Question. Please provide an explanation for any failure in Project 
Bioshield procurements, both completed or on-going, to use the 
simplified acquisition authorities granted to HHS under Sections 319F-
1(b)(1) and 319F-2(c)(7)(C)(iii) of the Public Health Service Act 
(``PHSA'') as intended by the Act.
    Answer. Simplified acquisition procedures have not been used for 
Project Bioshield procurements to date. Some products could only be 
obtained through a sole source, therefore a Justification for Other 
than Full and Open Competition (JOFOC) was used. Since there was more 
than one potential source, other products were acquired under full and 
open competitive procedures as governed by the FAR.
    Question. Another chief purpose of the Act was to create incentives 
for manufacturers to develop countermeasures. The main incentive 
included in the Act was a grant of authority to the Secretary of HHS to 
issue a call for development of countermeasures and to include in that 
call a commitment that, upon the first development of a countermeasure 
that meets the criteria of the Act, the Secretaries of HHS and the 
Department of Homeland Security (``DHS'') will recommend procurement of 
the countermeasure to the President. This provision was intended to 
promote the development of a biodefense industry by informing the 
markets that there is some certainty that there will be a government 
market for the product. The Act also requires that calls for 
countermeasures include: an estimated quantity of purchase, necessary 
measures of minimum safety and effectiveness; estimated price for dose 
and other information necessary to encourage and facilitate research, 
development and manufacture of the countermeasure. Sec. 319F-2(c)(4) of 
the PHSA.
  --What calls for countermeasures have been issued by HHS? Please 
        provide copies of these announcements.
  --BioShield requires HHS to provide a single estimate of the quantity 
        of countermeasures needed by the government. Has this process 
        been included in every Bioshield procurement to date and if 
        not, why not?
    Answer. The publication of a Request for Information (RFI) signals 
the USG interest in a particular countermeasure. The publication of the 
Request For Proposal (RFP) is essentially a ``call for 
countermeasures'' and indicates, by setting specific requirements and 
expectations, the government's commitment to an acquisition, including 
that funds are available to proceed with the procurement. The 
publication of the RFP and the statement of the specific requirements 
in the RFP establish that there is a certainty for a government market 
for the product.
    It is expected that most RFPs for BioShield acquisitions will 
provide a single baseline required quantity for procurement. Some RFPs 
also may provide options to acquire additional product beyond an 
initial requirement, based on ongoing threat assessments and ongoing 
requirements reviews. The RFP for ``Therapeutic Products for the 
Treatment of Inhalation Anthrax Disease'' (RFP-2004-N-01385) indicated 
a range of treatments required (10,000 to 200,000 treatments). This was 
structured to allow for the flexibility to acquire several products of 
differing therapeutic classes to meet the stockpile goal.
    Question. The Act envisions the use of animal models to permit 
expedited consideration by the FDA of request for approval for 
countermeasures. What steps have been taken to assure that the FDA has 
developed and implemented new procedures under the animal rule and 
related emergency-like powers under BioShield to signal its commitment 
to not slow down industries work to develop more countermeasures as 
quickly as possible?
    Answer. The FDA has been actively engaged in the review of animal 
models and the applicability of the ``Animal Efficacy Rule'' (Federal 
Register 67: 37988-37998, 2002) to facilitate the acquisition of 
critically needed medical countermeasures. Meetings with developers and 
the review of submissions related to bioterrorism countermeasures are 
given a priority status. The FDA staff work closely with NIH and DOD 
staff in the early phases of protocol designs and test methodology 
development. The FDA has a major role in the Product Development Tools 
(PDT) Working Group of the Weapons of Mass Destruction Medical 
Countermeasures Subcommittee which includes representatives of DOD, DHS 
and USDA as well as HHS. This PDT working group evaluates the need for 
animals, appropriateness of animal models in use and the need for 
additional models, facilities and reagents to support medical 
countermeasures R&D.
    Question. As you are aware, the issue of liability protections has 
been widely discussed as a necessary component to encourage greater 
participation in Project BioShield. While additional legislation may be 
needed, what steps has HHS made to maximize use of its existing 
authorities under Public Law 85-804 and the SAFETY Act to mitigate the 
risks associated with the development of countermeasures? Specifically, 
has HHS made clear that indemnification will be included as a contract 
term during the Request for Proposal process, thus allowing potential 
bidders the assurance that liability will not be a issue should they be 
successful in winning the award in advance of incurring proposal costs? 
If not, why not? Has HHS sought and/or received an exception from the 
requirement under the implementing Executive Order for Public Law 85-
804 that application under the SAFETY Act is a condition for 
application for indemnification? If not, has HHS been willing to 
indemnify contractors for risks not otherwise excluded by the SAFETY 
Act? Has HHS worked with the Department of Homeland Security to 
integrate the SAFETY Act application process into the procurement 
process for countermeasures in order to expedite review and 
consideration of a SAFETY Act application by bidder? If not, why not?
    Answer. In a number of instances, HHS has required contractors to 
apply for SAFETY Act protection as a condition of indemnification. 
Moreover, we have complied with Executive Order No. 13286, which 
requires that before granting indemnification, the indemnifying agency 
obtain (1) the Department of Homeland Security's (DHS) judgment as to 
whether the agency's requirement may constitute a qualified anti-
terrorism technology (QATT) eligible for SAFETY Act protection, and (2) 
Office of Management and Budget approval in light of the DHS 
determination.
    HHS has not generally indicated in its solicitations that 
indemnification will be included as a contract term. Subpart 50.4 of 
the Federal Acquisition Regulation, concerning indemnification under 
Public Law 85-804, contemplates that contractors will request 
indemnification, rather than that the procuring agency will offer 
indemnification on its own initiative. Not all BioShield contractors 
have sought indemnification. Moreover, the Secretary must personally 
consider each request for indemnification on its own merits based on 
contractor submissions regarding, e.g., the availability of insurance. 
Thus, the contracting officer cannot preempt the Secretary by 
guaranteeing indemnification in the solicitation.
    Executive Order No. 13286 does not require that contractors apply 
for SAFETY Act protection as a condition of indemnification; rather, as 
described above, the indemnifying agency must obtain DHS' determination 
whether the agency's requirement may constitute a QATT eligible for 
SAFETY Act protection. HHS has not sought an exception to this 
requirement. HHS has indemnified contractors for risks not excluded by 
the SAFETY Act.
    Question. The Project BioShield Act grants HHS authority to enter 
into personal service contracts and streamlined personnel authorities 
to aid in the performance, administration or support of countermeasure 
research and development. Sec. 319F-1(d) and (e) of the PHSA. To what 
extent has HHS used this authority? Please explain any failures to use 
this authority.
    Answer. To date, NIAID has used Project BioShield authorities to 
hire two individuals, with a third appointment pending. The positions 
filled are:
  --One individual in the dual positions of NIAID Associate Director 
        for Biodefense Product Development and Director of the Division 
        of Microbiology and Infectious Diseases' Office of Biodefense 
        Research Activities; salary >$100,000.
  --One individual for the position of Associate Director for Product 
        Development in the Division of Allergy, Immunology, and 
        Transplantation; salary >$100,000.
  --One individual for the position of Associate Director for Radiation 
        Countermeasures Research and Emergency Preparedness, in the 
        Division of Allergy, Immunology, and Transplantation; salary 
        >$100,000.
    Question. Section 5(c) of the Act requires the Secretaries of DHS 
and HHS to issue a report to Congress within 120 days after the 
enactment of the Act concerning whether there is a lack of adequate 
large scale biocontainment facilities necessary for the testing of 
countermeasures in accordance with Food and Drug Administration 
requirements. Why has this report not been issued? What work has been 
done on this report? When will it be issued?
    Answer. An interim report was submitted to Congress on April 28 
2005, and the final report will be submitted soon. Additional time was 
needed to sufficiently conduct an assessment of U.S. Biocontainment 
facilities.
    Question. The Act requires the Secretaries of HHS and DHS to enter 
into an interagency agreement for procurement of countermeasures in 
accordance with the requirements of the Act. Sec. 319F-2(c)(7)(B). 
Please provide a copy of this agreement.
    Answer. A copy of this agreement as it applies to the acquisition 
of rPA anthrax vaccine is attached.
    Question. The Act requires HHS to institute appropriate controls 
concerning the use of procurement authorities under the Act. Secs. 
319F-1(b)(1)(C) and 319F-2(c)(7)(C)(iii)(III) of the PHSA. Please 
provide a copy of the written guidance explaining these controls. Does 
HHS intend to publish the controls as regulations? Does HHS intend to 
promulgate implementing regulations for the entire Act? If so, when? If 
not, why not?
    Answer. The BioShield Act is sufficiently detailed and prescriptive 
to obviate the need for regulations. The procurement control process is 
conducted consistent with the Federal Acquisition Regulations (FAR) and 
the Health and Human Services Acquisition Regulations (HHSAR). HHS will 
be happy to provide the Committee with a copy of these documents should 
you so desire.
                                 ______
                                 

              Questions Submitted by Senator Arlen Specter

    Question. What role do you envision CDC would play in any new 
BioShield legislation? Should not CDC be heavily involved in the 
implementation of any future BioShield program?
    Answer. CDC plays a significant role in current BioShield programs. 
The Strategic National Stockpile (SNS) is located within CDC, is very 
actively engaged in the BioShield acquisition process, and provides the 
primary storage sites and distribution mechanisms for BioShield 
products. Subject matter experts (SMEs) at CDC are participants of the 
Weapons of Mass Destruction Medical Countermeasure Subcommittee (WMD 
MC), which reviews and establishes the requirements for BioShield 
acquisitions.
    Section 10 of President Bush's Homeland Security Presidential 
Directive/HSPD-8 issued in December of 2003 States that ``the Secretary 
of HHS . . . and heads of other Federal departments and agencies that 
provide assistance for first responders preparedness will base those 
allocations on assessments of population concentrations, critical 
infrastructures, and other significant risk factors, particularly 
terrorism threats, to the extent permitted by law.''
    Question. Has HHS abided by this Presidential directive in the 
allocation of State and Local bioterrorism preparedness funding?
    Answer. The Department of Health and Human Services (HHS) funding 
priorities for State and local bioterrorism preparedness are consistent 
with Homeland Security Presidential Directive 8 (HSPD-8). A large 
percentage of public health emergency preparedness funds are allocated 
using a ratio of jurisdictional to U.S. population. In addition, this 
year CDC allocated funds for mass prophylaxis preparedness in 21 major 
metropolitan areas through the Cities Readiness Initiative (CRI). Mass 
preparedness is one of our Nation's priorities as described in the 
Interim National Preparedness Goal. Urban areas are selected for CRI 
based on population, risk, threats, and infrastructure. All of the CRI 
awardees are also Urban Area Security Initiative (UASI) grantees. This 
year HHS awarded funds to 15 additional metropolitan statistical areas 
to support preliminary planning for becoming full CRI awardees in 
fiscal year 2006, as proposed in the President's budget request. CDC 
has developed Preparedness Goals designed to measure urgent public 
health system response performance parameters that are directly linked 
to health protection of the public. The Preparedness Goals are intended 
to measure urgent public health system response performance for 
terrorism and non-terrorism events including infectious disease, 
environmental and occupational related emergencies. Preparedness 
measures are a subset of the overarching targeted capabilities list and 
are consistent with national preparedness goals
    Question. What is the process for determining the prioritization of 
items to be purchased for the Strategic National Stockpile? At what 
level of the process are the scientists and infectious disease experts 
of the National Institutes of Health and the Centers for Disease 
Control and Prevention included?
    Answer. The classifications of Category A, B, and C agents (agents 
that are likely to be used in a bioterror attack) have been generated 
from infectious disease and medical analyses to which NIH and CDC 
scientists contributed significantly. We have initially focused our 
countermeasure procurement efforts on Category A agents that pose the 
greatest threats. To address the threat of any one particular agent, 
consideration is given to currently available countermeasures, such as 
antibiotics and vaccines. Further consideration includes the need for 
or role of new countermeasures, such as antitoxins, next generation 
vaccines, or antibiotics. Perceived need and absence of a new 
countermeasure informs research initiatives. Scientists from OPHEP, 
NIH, CDC, Food and Drug Administration (FDA), Department of Defense 
(DOD), and Department of Homeland Security (DHS) are asked to determine 
which new countermeasures are scientifically advanced enough to invest 
in advanced development and testing, would have the greatest public 
health impact, and have the greatest likelihood of success.
    The process to determine which countermeasures are placed in the 
SNS is informed by the interagency WMD MC subcommittee. This is an 
interdepartmental subcommittee initially chartered by the Office of 
Science and Technology Policy (OSTP) and co-chaired by senior 
government officials from DHS, HHS, and DOD. The material threat 
assessments (MTA) developed by DHS based on a plausible attack scenario 
informs the sizing of the procurement requirement. HHS, through the 
coordination efforts of OPHEP, then evaluates the availability of 
currently developed countermeasures and assesses the scientific 
opportunities to develop new countermeasures. The WMD MC then 
deliberates on the nature of the medical consequence and the 
availability of appropriate countermeasures to develop a recommendation 
for the acquisition of a specific countermeasure. HHS can issue a 
Request for Information (RFI) to determine the market availability and 
to alert industry to the U.S. Government interests. Once a U.S. 
Government requirement for a particular new medical countermeasure has 
been established by the WMD MC and approved by OMB is granted, a 
Request for Proposals (RFP) announcing the specific requirements 
follows. HHS implements the acquisition process.
                                 ______
                                 

             Questions Submitted by Senator Robert C. Byrd

             LACK OF BIOSHIELD FUNDING FOR RAD/NUC RESPONSE

    Question. On April 13th, the Department of Homeland Security wrote 
Congress notifying us of the creation of the Domestic Nuclear Detection 
Office. In the letter, the Department justified the creation of the 
Office based on the assertion that, ``The risk that terrorists will 
acquire and use a nuclear/radiological device is one of the gravest 
threats that confronts the Nation.''
    Yet despite this assertion, our Nation is still without a practical 
way to medically treat the thousands or even hundreds of thousands of 
Americans who may be exposed or who may believe they have been exposed 
to radiation in the event we are attacked in this way. While I 
understand that radiological and nuclear threats have been certified as 
a ``material threat,'' I was surprised to learn that the Bioshield 
program has not actually been used to procure several very promising 
drugs that are now in late-stage development and could be available in 
the near term to respond to this most insidious of threats.
    Beyond your limited plan to purchase pediatric potassium iodide, 
what is your schedule for procuring drugs for the national stockpile to 
respond to what is called Acute Radiation Syndrome (ARS)?
    Answer. HHS is eager to enlarge the holdings of the SNS with 
respect to radiological/nuclear countermeasures. A Request for 
Information (RFI) for countermeasures for an ARS was published in 
October 2004. Responses have been evaluated; and a Request for 
Proposals (RFP) is being developed. We anticipate releasing a draft RFP 
for industry comment on the general topic of ARS as soon as July 2005. 
Accordingly, the quality of the proposals and the availability of 
resources will determine how HHS acts on the results of the RFI and 
RFP. The SNS currently contains Potassium Iodide, Pediatric Potassium 
Iodide, Calcium/Zinc Diethylenetriaminepentaacetate (Ca/Zn DTPA) and 
Prussian Blue (Ferric hexacyanoferrate (II)) as countermeasures for a 
radiation event. In addition, Granulocyte-Colony Stimulating Factor (G-
CSF) is available to the SNS under Investigational New Drug (IND).

                  PRIVATE SECTOR INTEREST IN BIOSHIELD

    Question. When the President signed the BioShield Act into law last 
July, the Washington Post reported that ``Few companies have shown much 
enthusiasm for diverting staff and money from programs to develop 
drugs, such as cancer and cholesterol treatments, with bigger and more 
established markets. Of about 1,000 U.S. biotechnology companies, about 
100 are working on biodefense projects, according to the Biotechnology 
Industry Organization, an industry trade group.''
    Has the interest in BioShield increased or are companies still 
reluctant to participate in the program? What recommendations would you 
make to increase private sector interest in BioShield?
    Answer. We have seen significant interest in BioShield, however we 
recognize the need for continuing improvement and expanded outreach. 
Many of the innovative approaches to developing a medical 
countermeasure occur in small biotech companies that are inexperienced 
in manufacturing, clinical trials, and the regulatory process. They are 
generally funded by venture capital investors and are operating at a 
loss. They usually need funds to validate a current Good Manufacturing 
Practices (cGMP) manufacturing process and to conduct the necessary 
animal studies or human safety studies to qualify for an 
Investigational New Drug (IND) application.
    The large pharmaceutical companies have numerous opportunities to 
consider when establishing their business model and the priority 
targets of their research and development portfolios. They must weigh 
the opportunity costs for the biodefense market with its intrinsic 
uncertainty regarding the size and sustainability against more 
predictable and quantifiable markets for medical products for diseases 
with relatively well-established target populations, many of which will 
be sustained over many years. As large pharmaceutical companies 
consider the profits for traditional medical products versus the 
profits available for vaccines or other medical countermeasures, the 
reason for their reluctance appears to be driven by the markets. For 
example, as mentioned by Dr. Fauci in his February 8, 2005 testimony, a 
year's supply of Lipitor to lower cholesterol is $1,608; a year's 
supply of 50-milligram Viagra is $3,500; but a flu vaccine generally 
sells for $7 to $10.
    Today, the U.S. Government is involved throughout the pipeline of 
countermeasure development, through basic research support at NIH and 
the U.S. Army Medical Research Institute of Infectious Diseases 
(USAMRIID) all the way to the procurement activities undertaken through 
Project BioShield. Both NIH and the USAMRIID have excellent records in 
this regard. The U.S. Government can further target and facilitate 
research and development efforts by setting clear requirements and 
specifications for: medical countermeasures; facilitating partnerships 
as needed between government and industry or between industry and 
industry; and providing critical resources such as facilities (e.g. 
laboratories with high-level biocontainment), animals (for testing), 
reagents and assays.

Grant Coordination--for Assistant Secretary Simonson
    Question. The recent TOPOFF 3 training event recently portrayed a 
scenario that exercised first responders, hospital capacity and the 
ability to treat a sudden rush of people affected by chemical and 
biological agents. We look forward to a report on the exercise around 
mid-summer. Since fiscal year 2002, Congress has appropriated $11 
billion to first responders through the Department of Homeland Security 
and $5.5 billion through the Department of Health and Human Services to 
provide local monitoring for outbreaks and surge capacity for 
treatment. BioShield has $5.6 billion over 10 years to feed our 
Strategic National Stockpile. We have committed a significant amount of 
money into these programs, over $22 billion. However, when tragedy 
strikes the citizens of this country demand a seamless operation that 
provides emergency care, timely correct information, and treatment if 
needed.
    Do local health agencies have the capacity and infrastructure to 
deal with a surge in activity?
    Answer. CDC funding, distributed through cooperative agreements, 
has enabled local health departments to increase both capacity and 
infrastructure to deal with surges by providing for increased 
epidemiologic capacity, terrorism preparedness and response trainings 
for public health practitioners, improved communications systems (in 
terms of not only equipment but also improved relationships between the 
public health, medical and homeland security communities), and enhanced 
technology and staff in public health laboratories. HHS recognizes that 
not each of the approximately 4,000 local health departments can or 
should have the same response capability, especially considering the 
wide variation in size, risks and populations served as well as a 
finite amount of funding. Therefore, HHS encourages and supports local 
health departments to work together to develop regional capacity and 
infrastructure through shared equipment, personnel, information and 
other assets. For example, during a mass prophylaxis event, neighboring 
local health departments might assist the affected jurisdiction in some 
aspect of the response, such as staffing, so that the local health 
department can focus on mass prophylaxis.
    Local health departments have been developing volunteer pools and 
strengthening partnerships with other agencies and businesses to 
provide support activities such as mass prophylaxis. Another example is 
laboratory capacity--a key asset for public health emergency 
preparedness and response that is expensive for a local jurisdiction's 
budget. Not every local health department can have advanced laboratory 
capability. Therefore, some local health departments have basic 
laboratory capability and refer some samples to a Laboratory Response 
Network (LRN) laboratory. Other local health departments have 
collaborative relationships with neighboring laboratories that have 
existing capability. The State public health laboratory can provide 
additional capability to all local health departments within their 
jurisdiction. While local health departments continue to improve, 
maintaining this capacity and infrastructure will also be necessary.
    For healthcare surge capacity, HHS has proposed in its fiscal year 
2006 budget funding for the procurement and maintenance of portable 
hospital units (Federal Medical Contingency Stations) as a part of its 
Mass Casualty Intiative. These units can be rapidly deployed to 
anywhere in the country and would supplement local hospital surge 
capacity by 5,500 beds in the event of an emergency.
    Question. What lessons have we learned through coordinating first 
responder efforts with medical response efforts?
    Answer. Force Protection.--Important steps have been taken to 
establish the necessary medical counter and preventive measures to 
protect first responders. Vaccination and prophylaxis for the most 
common agents have been studied and best practices developed. Personal 
Protective Equipment (PPE) standards have been established by the first 
responder industry in conjunction with public health. Manufacturers are 
now certifying equipment such as Self Contained Breathing Apparatus 
(SCBA) as Weapons of Mass Destruction (WMD) compliant.
    Surge.--Issues of surge capacity have been addressed in multiple 
ways. Solutions are being sought both in and out of the hospital. 
Within the hospitals, mechanisms are being implemented to open beds in 
case of a catastrophic incident. These mechanisms include the use of 
adding beds to the existing infrastructure as well as discharging or 
transferring patients who could receive care elsewhere. First 
responders are being asked to support efforts to sustain develop and 
various levels of treatment outside the hospitals that are free 
standing or potentially an annex to an existing hospital.
    Incident Command Structure.--With the advent of the National 
Incident Management System (NIMS) and the National Response Plan (NRP), 
we now have a common methodology for managing an event that 
incorporates first responders and medical communities. As planning 
efforts continue to move forward in these communities, the essential 
link between them may be articulated.
    Forensic Epidemiology.--CDC has created a course on Forensic 
Epidemiology in collaboration with the Federal Bureau of Investigation 
(FBI) from which more than 13,000 public health and law enforcement 
officials have graduated. Criminal and epidemiological investigative 
methods are used to demonstrate an understanding of the similarities 
and differences in public health and law enforcement investigative 
goals and methods. Common operating procedures about how finding are 
communicated between the two groups are of primary importance.
    Equipment Standardization.--HHS has supported the efforts and 
participated in the Interagency Board (IAB) for Equipment 
Standardization and Inter Operability Working Group since its 
inception. The IAB is designed to ``establish and coordinate local, 
State, and Federal standardization, interoperability, and responder 
safety to prepare for, respond to, mitigate, and recover from any 
incident by identifying requirements for Chemical, Biological, and 
radiological, Nuclear or Explosives incident response equipment.''
    Early Event Detection (Syndromic Surveillance).--Information 
recorded by the first responders such as 9-1-1 call information, 
Emergency Medical Services patient care records, and other public 
health data are reviewed for statistical anomalies in the syndromes 
that present. These anomalies are reviewed against signs and symptoms 
of bio and chemical terrorism, as well as unforeseen natural disease 
outbreaks. By collaborating with the first responder community, public 
health authorities can obtain advanced insight into the changing health 
conditions of a given population or frequency with which they occur.
    Decontamination.--The capability of first responders to properly 
decontaminate hundreds of people has become well established in the 
majority of metropolitan statistical areas, which can be attributed in 
large part to leadership from Health Resources and Services 
Administration (HRSA) grants. Hospitals understand the importance of 
not allowing facilities to become contaminated, and have taken 
important steps to protect themselves. While acute mass decontamination 
continues to be a challenge, significant efforts are under way to 
develop methods to quickly decontaminate thousands of people.
    Rapid Registry.--The Rapid Response Registry (RRR) is an HHS 
response tool intended to assist local officials in rapidly 
identifying, enumerating, and obtaining contact information for 
individuals who have been, or who believe they may have been, exposed. 
The emergency contact information collected is necessary for both 
short-term and long-term follow-up for exposed, injured, and ill 
individuals and would be available to public health officials to guide 
public health response services directed at the affected population 
during the emergency response. In addition to the data collection tool, 
the Agency for Toxic Substances and Disease Registry (ATSDR) staff can 
provide either remote or on-scene technical assistance to support 
public health needs assessment activities, medical assistance, health 
interventions, or health education in the affected population during or 
immediately following the recognition of a Chemical, Biological, 
Radiological, and Nuclear Warfare, and Explosives (CBRNE) emergency. 
This process allows State and local public health responders to target 
enrolled individuals with updated information, triage their specific 
risk for potential exposures, determine appropriate self-
decontamination procedures, and recommend any immediate medical 
evaluation or interventions (countermeasures). Real time data 
collection also enables future health studies by State and local public 
health as part of long-term mitigation activities, should these be 
determined appropriate.
    HHS Secretary's Emergency Response Team (SERT).--The SERT acts as 
the Secretary's agent on emergency sites working along with the first 
responder community under the direction of the Assistant Secretary for 
Public Health Emergency Preparedness (ASPHEP). The ASPHEP, on behalf of 
the Secretary, directs and coordinates the Department's efforts to 
prevent, prepare for, respond to, and recover from, the public health 
and medical consequences of disaster or emergency. The SERT directs and 
coordinates the activities of all HHS personnel deployed to the 
emergency site to assist State, local, Tribal, and other Federal and 
government agencies as applicable.
    Health Alert Network (HAN).--The HAN ensures that each community 
has rapid and timely access to emergent health information; a cadre of 
highly-trained professionals; and evidence-based practices and 
procedures for effective public health preparedness, response, and 
service on a 24/7 basis. The HAN is dedicated to strengthening the core 
public health infrastructure for information access, communications, 
and distance learning at the State and community levels. Through 
continuous, high-speed internet connectivity and broadcast capacity to 
support emergency communication, HAN provides the national public 
health system with a network of public health officials and other 
first-responders who are continuously connected to information vital to 
emergency and non-emergency public health practice.
    Medical Reserve Corp (MRC).--MRC units are community-based and 
function as a way to locally organize and utilize volunteers who want 
to donate their time and expertise to prepare for and respond to 
emergencies, and promote healthy living throughout the year. MRC 
volunteers supplement existing first responders and public health 
resources. MRC volunteers include medical and public health 
professionals such as physicians, nurses, pharmacists, dentists, 
veterinarians, and epidemiologists. Many community members--
interpreters, chaplains, office workers, legal advisors, and others--
also fill key support positions in the first responder community.
    SNS.--The SNS has large quantities of medicine and medical supplies 
to protect the American public if there is a public health emergency 
severe enough to drain local supplies. Should Federal and local 
authorities agree that the SNS is needed, medicines will be delivered 
to any State in the United States or territory within 12 hours. Each of 
our 62 grantees has plans to receive and distribute SNS medicine and 
medical supplies to local communities as quickly as possible. Many of 
these medical countermeasures will initially be used by the first 
responder community so that they can continue to fulfill their vital 
role in support of an event.
    The National Incident Communications Coordination Line (NICCL).--
NICCL is a special toll free line with limited access via PIN number, 
is maintained by DHS and is used to bring together the key Public 
Affairs representatives from Federal, State and local agencies during 
major incidents. DHS convenes calls to ensure all agencies are fully 
aware of the facts concerning the incident, achieve agreement as to 
which agencies have the public communications lead concerning the 
various aspects of the incident and coordinate all public announcements 
concerning the incident. The NICCL has been used effectively during a 
number of incidents over the past year and as part of the Top Officials 
3 (TOPOFF3) exercise. In each case not only Federal agencies 
participated in the calls but also State and local Public Affairs 
Officers from the affected areas were included.
    Question. Are grant programs coordinated by DHS and HHS so that 
Americans, in their time of need, are protected and treated to the 
highest standard possible without confusion or lack of direction?
    Answer. HHS cooperative agreement programs and DHS grant programs 
are being coordinated at the Federal, State, and local levels. Since 
2003 HHS has required that the State-wide joint advisory committees 
required by CDC and HRSA cooperative agreements include members from 
State homeland security or emergency management, fire, and police 
agencies. In 2005, DHS added similar language to its program guidance 
documents, which now requires State homeland security agencies to reach 
out to the public health and medical communities. Many intrastate 
coordinating bodies, which have been established by local 
jurisdictions, require participation by homeland security, emergency 
management, public health, and medical communities in regional planning 
and response efforts as well. HHS also requires its awardees to comply 
with the NIMS, which facilitates coordination, communication and 
cooperation between first responders (e.g., fire, police, public 
health) and first receivers (e.g., hospitals) during an event.
    At the Federal level, both HHS and DHS review and comment on the 
program announcements and guidance documents of their sister agencies, 
to which States and local jurisdictions respond in order to receive 
funds. Both Departments also have ten regional emergency coordinators, 
who work closely with one another and with States to plan, train and 
exercise across jurisdictional lines. More recently, HHS and DHS have 
formed a steering committee to identify additional mechanisms to 
increase coordination and collaboration between the awardees and 
grantees, as well as between the Departments at the Federal level. 
Future activities may include joint site visits and regional meetings.
BioShield Benchmarks--for Assistant Secretary Simonson
    Question. In 1999, Congress charged the Department of Health and 
Human Services and the Centers for Disease Control and Prevention with 
the establishment of the National Pharmaceutical Stockpile. The 
Homeland Security Act of 2002 renamed the effort the Strategic National 
Stockpile and tasked the Department of Homeland Security with defining 
the goals and performance requirements but the Stockpile was to be 
jointly managed by DHS and HHS. The Project BioShield Act of 2003 
returned oversight and guidance of the stockpile to HHS.
    With all of the changes in command, what information and tools are 
we using to ensure that Project BioShield is properly feeding the 
Strategic National Stockpile so that it is truly ready to provide rapid 
access to large quantities of the right types of pharmaceuticals and 
medical supplies? What specific benchmark are we using to gauge 
ourselves in the ability to respond to an unknown attack or natural 
disaster?
    Answer. The SNS staff has remained intact during the recent 
departmental changes. In addition, the deliberative process to set 
requirements and implement acquisitions for the SNS under Project 
BioShield has also remained constant. The SNS engages in deployment 
exercises with various State and local entities on a regular schedule 
to assess the readiness of State and local partners and to improve the 
deployment process. In addition, CDC and the SNS participate in 
National and international exercises, such as TOPOFF3, to fully assess 
their response capabilities for communication, logistics, resource 
allocations, and stockpile utilization. These exercises serve as a 
benchmark for the Nation's level of preparedness for an unknown or 
natural disaster. SNS performance measures to deliver assets within 12 
hours of decision to deploy. While project Bioshield is focused on 
development of new countermeasures which will be incorporated into SNS 
once available, SNS acquires and maintains significant countermeasures 
currently available.

                         CONCLUSION OF HEARINGS

    Senator Gregg. Well, if you have got thoughts, we would be 
interested in language you think would improve that because I 
do believe unless we address this issue of liability, we will 
never get this straightened out and we will never get the 
participation we need.
    Well, all of your input has been excellent. I am trying to 
think of what title we should have on this novel award. We will 
have to come up with something. We will call it the Franz 
award.
    In any event, thank you very much. We appreciate your 
input. This is not an end. This is just an ongoing discussion 
as to how we make this whole system work better and just one 
part of the discussion. We intend to continue to pursue this as 
a committee. You obviously intend to pursue it as 
professionals. So thank you.
    Dr. Read. Thanks for your leadership.
    Senator Gregg. The subcommittee is recessed.
    [Whereupon, at 12:15 p.m., Thursday, April 28, the hearings 
were concluded, and the subcommittee was recessed, to reconvene 
subject to the call of the Chair.]
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