[Senate Hearing 109-111]
[From the U.S. Government Publishing Office]



                                                        S. Hrg. 109-111
 
                         BIODEFENSE: NEXT STEPS

=======================================================================





                                HEARING

                               BEFORE THE

      SUBCOMMITTEE ON BIOTERRORISM AND PUBLIC HEALTH PREPAREDNESS

                                 OF THE

                    COMMITTEE ON HEALTH, EDUCATION,
                          LABOR, AND PENSIONS
                          UNITED STATES SENATE

                       ONE HUNDRED NINTH CONGRESS

                             FIRST SESSION

                                   ON



EXAMINING THE BIODEFENSE RESEARCH PROGRAM OF THE NATIONAL INSTITUTES OF 
HEALTH, FOCUSING ON THE DEVELOPMENT OF MEDICAL COUNTERMEASURES AGAINST 
                         A BIOTERRORIST ATTACK

                               __________

                            FEBRUARY 8, 2005

                               __________

 Printed for the use of the Committee on Health, Education, Labor, and 
                                Pensions








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          COMMITTEE ON HEALTH, EDUCATION, LABOR, AND PENSIONS

                   MICHAEL B. ENZI, Wyoming, Chairman

JUDD GREGG, New Hampshire            EDWARD M. KENNEDY, Massachusetts
BILL FRIST, Tennessee                CHRISTOPHER J. DODD, Connecticut
LAMAR ALEXANDER, Tennessee           TOM HARKIN, Iowa
RICHARD BURR, North Carolina         BARBARA A. MIKULSKI, Maryland
JOHNNY ISAKSON, Georgia              JAMES M. JEFFORDS (I), Vermont
MIKE DeWINE, Ohio                    JEFF BINGAMAN, New Mexico
JOHN ENSIGN, Nevada                  PATTY MURRAY, Washington
ORRIN G. HATCH, Utah                 JACK REED, Rhode Island
JEFF SESSIONS, Alabama               HILLARY RODHAM CLINTON, New York
PAT ROBERTS, Kansas

               Katherine Brunett McGuire, Staff Director

      J. Michael Myers, Minority Staff Director and Chief Counsel

                                 ______

      Subcommittee on Bioterrorism and Public Health Preparedness

                 RICHARD BURR, North Carolina, Chairman

JUDD GREGG, New Hampshire            EDWARD M. KENNEDY, Massachusetts
BILL FRIST, Tennessee                CHRISTOPHER J. DODD, Connecticut
LAMAR ALEXANDER, Tennessee           TOM HARKIN, Iowa
MIKE DeWine, Ohio                    BARBARA A. MIKULSKI, Maryland
JOHN ENSIGN, Nevada                  JEFF BINGAMAN, New Mexico
ORRIN G. HATCH, Utah                 PATTY MURRAY, Washington
PAT ROBERTS, Kansas                  JACK REED, Rhode Island
MICHAEL B. ENZI, Wyoming (ex 
officio)

                  Robert Kadlec, M.D., Staff Director

                David C. Bowen, Minority Staff Director

                                  (ii)












                            C O N T E N T S

                               __________

                               STATEMENTS

                       TUESDAY, FEBRUARY 8, 2005

                                                                   Page
Burr, Hon. Richard, Chairman, Subcommittee on Bioterrorism and 
  Public Health Preparedness, opening statement..................     1
Kennedy, Hon. Edward M., a U.S. Senator from the State of 
  Massachusetts, opening statement...............................     3
Enzi, Hon. Michael B., Chairman, Commmittee on Health, Education, 
  Labor, and Pensions, prepared statement........................     4
Roberts, Hon. Pat, a U.S. Senator from the State of Kansas, 
  prepared statement.............................................     6
Fauci, Anthony, M.D., Director, National Institute of Allergy and 
  Infectious Diseases, National Institutes of Health, U.S. 
  Department of Health and Human Services; Penrose C. Albright, 
  Ph.D., Assistant Secretary for Science and Technology, 
  Department of Homeland Security................................     7
    Prepared statements of:
        Anthony Fauci, M.D.......................................    10
        Penrose C. Albright, Ph.D................................    22
Painter, George, Ph.D., CEO, Chimerix, INC.; Jon Abramson, M.D., 
  Professor and Chair, Department of Pediatrics, Wake Forest 
  University School of Medicine, Winston-Salem, North Carolina; 
  Gerald L. Epstein, Senior Fellow for Science and Security, 
  Homeland Security Program, Center for Strategic and 
  International Studies; Gordon Cameron, CEO, Acambis, PLC.......    46
    Prepared statements of:
        George Painter, Ph.D.....................................    49
        Jon Abramson, M.D........................................    54
        Gerald L. Epstein........................................    60
        Gordon Cameron...........................................    70

                          ADDITIONAL MATERIAL

Statements, articles, publications, letters, etc.:
    Summary of the President's 2006 budget for Homeland Security.    31
    Questions of Senator Roberts to Mr. Albright, Ph.D...........    37
    Questions of Senator Roberts to the panel....................    37
    Questions of Senator Enzi to Mr. Albright, Ph.D..............    44
    Generic Pharmaceutical Association...........................    82
    Randi Airola.................................................    84
    Meryl Nass, M.D..............................................    87
    The Military Vaccine Education Center........................    91

                                 (iii)













                         BIODEFENSE: NEXT STEPS

                              ----------                              


                       TUESDAY, FEBRUARY 8, 2005

                                       U.S. Senate,
            Subcommittee on Bioterrorism and Public Health 
  Preparedness, Committee on Health, Education, Labor, and 
                                                  Pensions,
                                                    Washington, DC.
    The subcommittee met, pursuant to notice, at 10:05 a.m., in 
room SD-430, Dirksen Senate Office Building, Hon. Richard Burr, 
chairman of the subcommittee, presiding.
    Present: Senators Burr, Roberts, Enzi [ex officio], 
Kennedy, Murray and Reed.

                   Opening Statement of Senator Burr

    Senator Burr. I would ask that the subcommittee hearing 
come to order. I want to thank you for coming to the first 
hearing of the Health Subcommittee on Bioterrorism and Public 
Health Preparedness. I am looking forward to working with the 
chairman of the full committee, Senator Enzi, the ranking 
member, Senator Kennedy, and all the members of this 
subcommittee throughout this session of Congress.
    I think that we have the distinction of holding the first 
Health subcommittee hearing of the year, but I have always 
believed that when it comes to bioterrorism, you have to be 
ahead of the curve. Already the Senate has before it S. 3, the 
Bioterrorism Legislation, introduced by Senator Gregg. I know 
that Senator Hatch and Senator Lieberman have also been working 
hard on a Bioshield II bill.
    Bioterrorism has been an important issue to me for some 
time. In fact, I sponsored the first bioterrorism legislation 
in the House before September 11. It was obvious to me the 
United States had a very real vulnerability to being held 
hostage to bioterror. After September 11, it became even more 
apparent that the threat was real and the government needed to 
work with industry to build up our protection and our ability 
to react to any type of an attack.
    As a freshman senator, I recognized that many senators 
before me have worked very hard on strengthening our Nation's 
defense against bioterrorist attacks. I am humbled to have the 
opportunity to work with them and many of whom are members of 
this committee and specifically this subcommittee.
    As I mentioned earlier, as a member of the House of 
Representatives, I sponsored the first bioterrorism legislation 
in the House, the Public Health Threats and Emergency Act of 
2000. I was pleased to help create the Public Health Security 
and Bioterrorism Preparedness Response Act of 2002, and 
followed that legislation up with the Smallpox Emergency 
Personnel Protection Act of 2003.
    This subcommittee has a lot of important work ahead of it. 
Last year, the Project Bioshield Act was signed into law, but 
many people believe that there is a need for subsequent 
legislation that will further strengthen the program's 
viability. This year we will take up that discussion and 
legislative action on this important subject.
    Next year, unbelievably, it will be time to reauthorize the 
bioterrorism legislation from 2002. The goal of today's hearing 
is to examine implementation of Project Bioshield. I believe 
that Bioshield has begun to address the bioterrorism threat but 
acknowledge that more is needed to fully protect our country. 
In order to increase critical scientific effort in the area of 
the bioterrorism preparedness, the government must have full 
participation in this work from the pharmaceutical and biologic 
industries.
    I hope that today's witnesses will help us understand what 
we can do, what industry can do, to achieve the best working 
relationship that benefits the American people.
    Our first panel we have Dr. Tony Fauci, Director of the 
National Institute of Allergy and Infectious Diseases. Dr. 
Fauci is the lead scientist and director of the HHS effort on 
bioterrorism.
    We also have Penrose Albright, Assistant Secretary of 
Science and Technology Directorate at the Department of 
Homeland Security. Mr. Albright has been involved in the 
national security arena since 1986 and is directly involved in 
the implementation of Project Bioshield at the Department of 
Homeland Security.
    On our second panel, we have Gerald Epstein, a Senior 
Fellow for Science and Security at the Centers for Strategic 
and International Studies, Homeland Security Program. Mr. 
Epstein will give us a broad overview of bioshield 
implementation and the private sector's reaction to the law.
    We have Mr. Gordon Cameron, CEO of Acambis. Acambis is a 
successful biotechnology company with facilities in 
Massachusetts. Acambis has produced a smallpox vaccine and will 
give us their perspective of the research field pre-Bioshield 
and any changes that need to be made since then.
    I am especially pleased to introduce the next two witnesses 
who are from North Carolina. The main reason they are speaking 
today is they are experts in their field. It is just 
particularly nice for me that North Carolina has some experts 
that I can have testify. Dr. Jon Abramson is the chair of 
Pediatrics at Wake Forest Baptist Medical Center. He is a 
member of the CDC's Advisory Committee on Immunization 
Practices. Dr. Abramson will talk about the need to increase 
liability production for pharmaceutical and biologic companies 
involved in the areas of research.
    Mr. George Painter is the president and CEO of Chimerix, a 
small biotech company in North Carolina's Research Triangle 
Park. Mr. Painter will talk about the additional research tools 
and coordination needed by pharmaceutical and biotechnology 
companies in order to successfully produce bioterrorism 
countermeasures.
    I thank all of our witnesses for their attendance today. We 
look forward anxiously to your testimony. I thank the chairman 
and at this time I would recognize the ranking member, Senator 
Kennedy.

STATEMENT OF HON. EDWARD KENNEDY, A UNITED STATES SENATOR FROM 
                   THE STATE OF MASSACHUSETTS

    Senator Kennedy. Thank you very much, Mr. Chairman. The 
first meeting of a new subcommittee is always an important 
occasion. I particularly commend our full committee chairman, 
Senator Enzi, for his decision to devote a subcommittee to the 
issue of defense against biological attacks, and I also commend 
our subcommittee chair, Senator Burr, for an impressive record 
of accomplishment already on this issue. We are off to a good 
bipartisan start.
    Five years ago Senator Frist and I worked with Senator Burr 
when he was a member of the House on the first legislation to 
deal with the public health defenses against bioterrorist 
attack. That measure was signed into law a year before 
September 11, and in the wake of that attack, a more extensive 
bill on the issue was enacted in 2002.
    Senator Burr contributed important provisions in that bill. 
We also worked together on the compensation program for persons 
injured by smallpox vaccine, and his leadership will serve the 
Senate and the country well in all aspects of this issue.
    The Nation is obviously vulnerable to attacks with weapons 
of mass destruction. Our focus today is developing new medical 
initiatives in the fight to keep American families safe. We 
must also recognize that even the best new treatments will do 
little good if our emergency rooms are so overburdened that 
doctors and nurses cannot deliver the effective care. The most 
modern disease monitoring system will be of little use if 
public health agencies are so starved for funds, they cannot 
keep their community safe.
    I want to just mention on the budget matter, we have seen 
the proposed cut in funding from 2005 to 2006 in the CDC 
program. We have the two aspects of the CDC program which are 
well known and understood. First of all, you have to have the 
detection, which the public health system does, and then you 
have to have the treatment and the containment, which the 
hospitals do. The cuts impact the CDC program that has been 
working with the health agencies that do the detection and the 
hospitals for the containment. And that is all part of this 
whole effort to deal with the problems of bioterrorism. So this 
is certainly something of very considerable concern to many of 
us.
    Study after study has shown that health agencies and 
hospitals are making progress, but it is very slow, and they 
have a long way to go. Despite the clear need for greater 
Federal aid, the budget contains a 12 percent cutback in the 
Federal programs that strengthen the health agencies, a major 
cut in the program to strengthen our hospitals.
    We took a significant step in Bioshield in the last 
Congress to develop the cures of the future, but will slide 
back if these proposed cuts are allowed to take effect. Our 
committee has received many proposals to improve Bioshield 
through additional incentives to industry. Incentives are an 
indispensable part of defending against bioterrorism, but the 
incentives have to be appropriate. We cannot afford to squander 
resources on needless giveaways.
    We are hearing today from a drug industry executive who is 
doing the right thing, Gordon Cameron, who is the CEO of 
Acambis to whom America owes a great debt of gratitude for what 
Acambis did in producing 180 million doses of vaccine to keep 
the Nation safe from smallpox.
    I hope the administration will build on this success by 
providing the funds needed to keep the production line for 
smallpox active. What did it take to get Acambis to complete 
this essential project? No wildcard patent extension, no extra 
market exclusivity; it was just a contract under which Acambis 
produced the vaccine on time and on budget. Obviously we need 
to examine how Bioshield achieves its objectives, but we should 
not run into overturning a balanced system of patent incentives 
in the name of biodefense.
    A similar issue arises in cases where some patients may be 
harmed by the product itself. As part of the smallpox 
vaccination effort, Congress granted appropriate indemnity for 
the manufacture of the vaccine and the health professionals who 
administer it. That indemnity was justified in the case of 
smallpox since the vaccine could not be fully tested or meet 
FDA standards at the time. Targeted indemnity protections make 
sense, but that does not mean broad exemptions for negligence 
just because the products have value for biodefense.
    It is also important to have fair compensation for persons 
injured by faulty products and proper safety protection for the 
workers who administer them.
    I look forward to the testimony of our witnesses that are 
working with my colleagues to consider these issues and making 
genuine improvements that might be needed in Bioshield. I thank 
the chair very much.
    Senator Burr. Thank you, Senator Kennedy. At this time the 
chair would recognize the full committee chairman, Senator 
Enzi.
    The Chairman. Thank you, Mr. Chairman, and I would just ask 
that my statement be made a part of the record as well as 
anybody else who wants to make a statement to keep in the 
tradition of having the chair and the ranking member do the 
statements. I do appreciate all the expertise that you bring to 
this and am so pleased that you are the chairman and are taking 
this careful look at the impediments that are out there to the 
current system. It was not perfect, but we got it done. The 
next one will not be perfect either, but we will get it done, 
and I appreciate the work you are going to do.
    Senator Burr. I thank the chairman. Without objection, all 
opening statements will be made a part of the record.
    [The prepared statement of Senator Enzi follows:]

                   Prepared Statement of Senator Enzi

    The threat of infectious disease spread by an epidemic or 
bioterrorism is one of the greatest dangers currently facing us 
as a Nation. As great a danger as it is, however, it is dwarfed 
by our largely untapped ability to experiment, innovate, and 
deliver the next generation of diagnostics, vaccines, and 
therapeutics to address it.
    That is why I greatly appreciate Chairman Burr's 
willingness to hold this hearing and begin the work we must do 
if we are to have an effective plan in place before it is 
needed. I am looking forward to working with him, other members 
and stakeholders in the months to come on this and many other 
issues of concern that will have a great impact on our Nation's 
safety and security for a long time to come.
    Today's issue of Biodefense can't help but call to mind the 
days so many of us spent as Boy Scouts. We all had Scoutmasters 
who drilled into us the importance of the Boy Scout motto--Be 
Prepared! Since September 11, that motto has never seemed more 
relevant as we have been working to prepare ourselves and the 
people of the United States for the potential threats that lie 
before us--particularly the use of our own modern technologies 
against us.
    Fortunately, we have already begun to bring our resources 
to bear on this challenge. Last year, in response to an act of 
bioterrorism that was directed against this government, both 
the Senate and the House worked together in a bipartisan 
fashion to pass the President's Project Bioshield legislation. 
I am proud to have been a cosponsor, although I was 
disappointed that it took a year to complete the process. That 
new law was a very important first step in the effort to 
protect this country. We are continuing that journey with our 
work today.
    That legislation gave us a critical head start to meeting 
the challenge posed by the threat of an outbreak of an 
infectious disease. It established a permanent market for 
vaccines and therapeutics that are directed to known and 
foreseeable agents. It encouraged private industry to generate 
therapeutics for bioterrorism agents that might be used today. 
It did not attempt to address all of the impediments that block 
private industry from more actively partnering to protect our 
homeland from the threat of bioterror agents. It was a good 
start that showed the way as we prepare to take the next step 
in this important effort.
    With an established mechanism in place to finance the 
development of bioterror countermeasures, we must now make sure 
that it is working and that the necessary resources are in 
place to ensure the success of our efforts. That will require 
the cooperation and assistance of an active and engaged 
biotechnology and pharmaceutical industry, acting as our 
partners in this effort. We have some of the greatest minds in 
the country and in the world willing to work with us on what is 
truly a global problem and a threat to us all, no matter where 
we live. Using their creativity and expertise we can craft 
solutions to this problem before they are needed. Clearly, that 
will be the key to formulating an effective and reliable plan 
of action on this issue.
    We appreciate all the witnesses who are here with us today 
to share with us their knowledge and insights on this 
potentially devastating problem. They have come from across the 
country and around the world to tell us what else is needed to 
deliver therapeutics to health professionals. I appreciate 
having Dr. Fauci and Dr. Albright with us to update us on the 
results of our biodefense efforts. We do need their input and 
involvement to help us coordinate the efforts of the public and 
private sectors so that we will be able to rise to the 
challenge and minimize the danger we face.
    Again, I thank Chairman Burr for holding this hearing so 
that we might have a better understanding of this threat and 
what we must do to address it. I look forward to working with 
this subcommittee, other members and stakeholders to take the 
next steps that are needed to build a strong national 
biodefense and ensure the safety of our people for generations 
to come.
    Senator Burr. At this time, since I see our first panel is 
up, let me welcome both of you once again.
    Senator Roberts. Mr. Chairman.
    Senator Burr. The Senator from Kansas.
    Senator Roberts. I am riding drag in this posse, and I 
understand that, and that is my role and I am here for sort of 
a parochial reason, being the chairman of the Intelligence 
Committee and also a member of the Agriculture Committee and 
the Armed Services Committee, but I do have a statement and 
would ask permission that it be put in the record at this 
point.
    Senator Burr. Without objection, so ordered.
    [The prepared statement of Senator Roberts follows:]

                 Prepared Statement of Senator Roberts

    I am pleased that we are holding this hearing today to 
discuss biodefense and the future. I thank the witnesses for 
their willingness to share their thoughts on what steps need to 
be taken to adequately prepare our Nation for the threat of a 
bioterrorist attack. The events of September 11 forever changed 
the world in which we live. We have all re-evaluated our 
priorities and the measures of security which we take. We have 
upped the level of security and surveillance for our government 
buildings, sports venues, airports, defense facilities, and 
economic markets. However, the threat of a bioterrorist attack 
poses a unique challenge to our public health system. A 
biological attack can unfold gradually over time, unlike a 
chemical attack or an explosion where the results are 
immediate. Therefore, our Nation must depend on the 
preparedeness of our public health infrastructure to respond 
quickly and appropriately to a bioterrorist attack.
    In recent years, Congress has taken steps to alleviate the 
threat of bioterrorism. Last July, President Bush signed 
Project Bioshield into law. Project Bioshield is a step in the 
right direction for protecting our Nation against bioterror 
threats. It is no surprise that many potential bioterror agents 
lack available countermeasures. Project Bioshield was designed 
to encourage drug and biotech companies to work with the 
National Institutes of Health (NIH) to develop antidotes, 
vaccines, and other products to treat and protect against a 
biological, chemical, radiological, or nuclear attack. 
BioShield has three principal components: relaxes procedures 
for bioterrorism-related procurement, hiring, and peer review; 
guarantees a Federal Government market for new countermeasures 
for inclusion in the Strategic National Stockpile (SNS); and 
permits emergency use of unapproved countermeasures. While 
these steps are positive, I do think there is still room for 
improvement in areas such as vaccine liability, antitrust 
issues, and tax reforms, and I am pleased this committee is 
making Bioshield II a top priority.
    When considering the next steps for our biodefense, I 
believe our agriculture economy and sector should receive no 
less attention. I believe that security for agriculture merits 
serious concern by not only the agricultural community but our 
Nation as a whole. The risk to the U.S. food supply and overall 
economy is real. A close analysis of the agriculture markets 
shows that the introduction of a pathogen such as foot-and-
mouth (FMD), avian flu, or Karnal Bunt in wheat could be 
devastating. FMD is highly noxious and if properly placed in a 
feedlot or hog confinement facility it could quickly reach 
epidemic proportions.
    In 2002, President Bush signed the Public Health Security 
and Bioterrorism Preparedness and Response Act into law. The 
measure is intended to bolster our ability to respond 
effectively to bioterrorist threats and other public health 
emergencies. Included in this important piece of legislation 
are provisions to protect the Nation's food supply and enhance 
agricultural security. Some of the most significant provisions 
include:
     Continuation of grants to top agriculture 
universities and researchers across the Nation to develop 
vaccines, antidotes and plant varieties that can resist such 
diseases as Foot-and-Mouth Disease, Karnal Bunt or Avian Flu, 
as well as other diseases that have been cultivated for use in 
bio-warfare;
     Provides the agriculture system with a new, 
enhanced level of protection and biosecurity. This system for 
first-responders utilizes or is capable of utilizing field test 
devices capable of detecting biological threats to animals and 
plants and then electronically integrates the devices and the 
tests on a real-time basis into comprehensive surveillance, 
incident management and emergency response system;
     Expansion of the Food Safety Inspection Service 
(FSIS) by enhancing the ability of the service to inspect and 
ensure the safety and wholesomeness of meat and poultry 
products at ports of entry.
    In his 2006 budget released just yesterday, President Bush 
recognized the importance of protecting our Nation's food 
supply. His request includes a total of $596 million for the 
Departments of Agriculture, Health and Human Services, and 
Homeland Security to improve our ability to detect and contain 
intentional and unintentional contamination of America's 
agriculture and food system. This is a net increase of $144 
million above 2005. President Bush is also requesting a $50 
million increase for USDA's monitoring and surveillance 
activities and a $78 million increase for research by USDA, 
HHS, and DHS, including research into new detection methods. 
While I realize the focus of this hearing is not on food 
security, I do look forward to hearing from our witnesses on 
their thoughts on how to protect and defend our Nation's food 
supply. Thank you for your time.
    Senator Burr. Let me once again welcome the two of you and 
at this time recognize Dr. Fauci for his opening remarks.

STATEMENTS OF ANTHONY FAUCI, M.D., DIRECTOR, NATIONAL INSTITUTE 
  OF ALLERGY AND INFECTIOUS DISEASES, NATIONAL INSTITUTES OF 
   HEALTH, U.S. DEPARTMENT OF HEALTH AND HUMAN SERVICES; AND 
PENROSE C. ALBRIGHT, PH.D., ASSISTANT SECRETARY FOR SCIENCE AND 
          TECHNOLOGY, DEPARTMENT OF HOMELAND SECURITY

    Dr. Fauci. Thank you very much, Mr. Chairman, Senator 
Kennedy, Senator Enzi, Senator Roberts. Thank you for giving me 
the opportunity to testify before this committee this morning 
regarding the biodefense efforts, particularly at the NIH, and 
how the research endeavor helps push us toward the development 
of appropriate and necessary countermeasures.
    Before I start describing that, let me briefly outline for 
you within the Department of Health and Human Services the 
multifaceted components that go into our biodefense efforts 
including the Centers for Disease Control and Prevention that 
was just mentioned by Senator Kennedy which is responsible for 
surveillance and detection as well as training local response 
teams.
    The NIH conducts the basic and clinical research that lead 
to the development of medical countermeasures. The FDA has an 
important regulatory role and the Office of Public Health 
Emergency Preparedness coordinates all of this. A few years 
ago, the administration and the Congress gave us an enormous 
responsibility at the NIH with a very dramatic increase in our 
budget related to biodefense immediately following the 
September 11, 2001 tragedy, as well as the anthrax attacks, and 
this is reflected in the supplement for 2002, and then this 
enormous increase in budget in 2003, which has been maintained 
up through and including the current fiscal year and beyond.
    This responsibility was taken very seriously by us at the 
NIH because we knew we had to do the best science possible but 
also we had a commitment to push for the development of 
countermeasures. In order to fulfil this responsibility, we 
immediately brought together blue ribbon panels of the experts 
in the field of both infectious diseases, microbiology and host 
defenses immunology and put together a strategic plan for our 
biodefense efforts as well as two research agendas, one for the 
Category A agents, the major threats that we will be discussing 
this morning, as well as one for Category B and C, and I am 
happy to report that we have already come out with two major 
progress reports, one in August of 2003 and one in June of 
2004, delineating not only the progress in real terms vis-a-vis 
actual accomplishments but also how we are building the 
infrastructure for the future years.
    If one looks at the plan, it can be divided into a number 
of components. First and foremost was the necessity to build 
both the physical and the intellectual infrastructure necessary 
to perform these tasks over the next few years, and I will 
mention this briefly in a moment. When I say physical 
infrastructure, I mean the containment facilities necessary to 
do the research.
    All of this is founded very strongly in basic research, and 
this is a very important issue, because if we are going to do 
it, we need to do it right, and good basic research at the 
point of developing understanding of the pathogenesis of the 
microbes will be not only important for developing 
countermeasures in biodefense, but also will be extremely 
important in extrapolating this to other health issues that 
might have nothing at all to do with biodefense such as 
naturally emerging and reemerging infectious diseases and some 
cancer therapy or what have you.
    This ultimately gets translated into the countermeasures as 
we call them, namely, therapeutics, vaccines and diagnostics.
    This is a map of the United States which delineates the 
various components of the infrastructure that I am talking 
about. This has rapidly been put in place. Some of these are 
already being built. Others, the plans are in place and others 
we are having planning for the future development of these.
    First and foremost among these, we have the Regional 
Centers of Excellence in Biodefense and Emerging Infectious 
Diseases--those that are shown in the stars. This is the 
intellectual capital that is distributed throughout the 
country, generally associated with Regional Biosafety Labs, or 
BSL3s, of which there are 9 throughout the country, and most 
recently, the BSL4s, one in Boston and one in the University of 
Texas at Galveston Medical Center.
    We also have new facilities at the NIH, both on the campus 
as well as in Fort Detrick and in our Rocky Mountain 
laboratories in Missoula and Hamilton, Montana.
    Getting back to the issue of basic research, I just want to 
reiterate to you the importance of understanding, for example, 
the sequencing of the microbes that might be associated with 
bioterror. We successfully have sequences for virtually every 
microbe that we consider to be a major threat. This is 
extremely important when we target vaccines and therapies.
    We have developed animal models, but we have also looked 
at, and again, this gets to the extrapolation to other 
diseases, host defense mechanisms such as the body's ability to 
be able to fight against microbes including microbes of 
bioterror, but also a natural extrapolation to emerging and 
reemerging infections such as influenza, which we have a threat 
now as you know of an H5N1 bird flu that we are considerably 
concerned about.
    Let me very briefly just summarize some of the key 
achievements already. I came before some members of this 
committee in other hearings regarding smallpox last year and 
the year before. When we had the events in September of 2001, 
we had about 15 million doses of smallpox for the 288 million 
people in this country. We now successfully have over 300 
million doses. We have doses for everyone in this country 
including helping our allies if in fact they need it.
    We are not stopping there because we are going to the next 
generation of a safer smallpox vaccine, the modified vaccinia 
Ankara, which again is being very rapidly accelerated by the 
Bioshield that was just mentioned by you and by Senator 
Kennedy. We are developing antiviral drugs such as an oral drug 
against a microbe that was originally associated with HIV, 
cytomegalovirus, and we find that it now has activity against 
smallpox.
    In the anthrax, I think this is the first--it is the 
first--of the elements of the translation in real terms of 
Bioshield that was just signed in July of 2004, and that was 
the procurement of the recombinant protective antigen on the 
Project Bioshield. We also have the development of novel 
antitoxins and monoclonal antibodies. We also have a number of 
other components such as Ebola, influenza and botulism toxin.
    Now, Project Bioshield, as you know, is the component that 
gives us authorities to accelerate. We have emergency approval 
authority for the FDA, and we also have a set-aside amount of 
money that we would use as incentive for purchase. The normal 
paradigm at the NIH is to just do basic and preclinical 
research and leave it to the companies because they have enough 
incentive to develop a product.
    We have now had to emphasize the push of that mechanism, 
namely doing the basic research that pushes through early and 
advanced development. Project Bioshield provides the pull or 
the incentive for the companies to actually get involved in 
signing the contacts that Senator Kennedy mentioned in order to 
develop products.
    We need to continue this partnership between industry and 
academia and the Federal Government in having this push 
mechanism meet the pull mechanism.
    Finally, I just want to emphasize to you something that I 
mentioned a few times during the discussion, and that is that 
the investment in physical and intellectual capital that is 
associated with our biodefense effort goes well beyond 
preparing us for agents of bioterror. We look at the people we 
are training; we look at the facilities that are going on; we 
look at the products that are coming about. Each of these will 
inevitably have important positive spinoffs particularly in 
protecting us against naturally occurring infections such as 
influenza, SARS and others, but also in other areas such as 
cancer and other components of public health.
    I would be happy to answer questions, Mr. Chairman. Thank 
you for giving me the opportunity to testify.
    Senator Burr. Thank you, Dr. Fauci.
    [The prepared statement of Dr. Fauci follows:]
              Prepared Statement of Anthony S. Fauci, M.D.
    Mr. Chairman and members of the subcommittee, thank you for the 
opportunity to speak with you today. I will discuss our national 
biodefense research program, with particular emphasis on recent 
progress toward the development of medical countermeasures against a 
bioterrorist attack. I am particularly honored to appear at the very 
first hearing of this subcommittee, and I look forward to working with 
you to continue to improve our biodefense capabilities which are 
essential to protecting our Nation's health.
    The destruction of the World Trade Center, the attack on the 
Pentagon and the downing of an airliner over Pennsylvania on September 
11, 2001, clearly exposed the vulnerability of the United States to 
brutal acts of terrorism. The anthrax attacks in Florida, New York and 
Washington that followed only a few weeks later made it very clear that 
the threat of bioterrorism with pathogens or biological toxins 
represents a serious threat to our Nation and the world. The 
Administration and Congress responded forcefully to this threat, and 
biodefense has become a top national security priority for which 
funding has increased substantially. The Department of Defense, the 
Department of Health and Human Services (HHS), the Department of 
Homeland Security (DHS), the Department of Agriculture (USDA) and other 
Federal agencies each have been given important roles to play in 
biodefense preparedness.
    The National Institute of Allergy and Infectious Diseases (NIAID), 
of which I am Director, is a component of the National Institutes of 
Health (NIH) and the lead agency within HHS for the conduct of research 
concerning potential agents of bioterrorism that directly affect human 
health. Three other components of HHS also are charged with major 
biodefense responsibilities. Among many roles, the Centers for Disease 
Control and Prevention (CDC) carries out disease surveillance and 
detection, maintains the Strategic National Stockpile of medicine and 
medical supplies for use in an emergency, and trains and advises local 
public health response teams. The Food and Drug Administration (FDA) is 
responsible for regulatory approval of new biodefense countermeasures. 
The Office of Public Health Emergency Preparedness (OPHEP) coordinates 
all HHS biodefense activities. The President's fiscal year 2006 budget 
proposal calls for $4.2 billion in funding for HHS bioterrorism 
preparedness activities, an increase of $154 million over fiscal year 
2005.
                        nih biodefense research
    In the wake of the 2001 terrorist attacks, NIH embarked on a 
systematic strategic planning process by convening the Blue Ribbon 
Panel on Bioterrorism and Its Implications for Biomedical Research, 
comprised of distinguished researchers representing academia, private 
industry, civilian government agencies, and the military. Based on the 
panel's advice and extensive discussions with other Federal agencies, 
NIH developed three key documents to guide its biodefense research 
program; these are the NIAID Strategic Plan for Biodefense Research, 
the NIAID Research Agenda for Category A Agents (covering agents that 
pose the gravest threat to human health, such as those that cause 
smallpox, anthrax, botulism, and plague), and the NIAID Research Agenda 
for Category B and C Agents (for agents whose biological properties 
make them more difficult to deploy or less likely to cause widespread 
harm than Category A agents).
    The Strategic Plan provides a blueprint for the construction of 
three essential pillars of the biodefense research program: 
infrastructure needed to safely conduct research on dangerous 
pathogens; basic research on microbes and host immune defenses, which 
serves as the foundation for applied research; and targeted, milestone-
driven medical countermeasure development to create the vaccines, 
therapeutics and diagnostics that we will need in the event of a 
bioterror attack. The two Biodefense Research Agenda documents present 
detailed descriptions of short-term, intermediate, and long-term goals 
for research on the wide variety of potential bioterrorism threat 
agents. NIH also conducts research into ways to mitigate harm to 
civilians from chemical, nuclear, and radiological weapons. Meeting the 
goals delineated in the research agendas required a significant 
expansion of NIH programs already in place that study human pathogens 
and the immune system. To implement the biodefense agendas, Congress 
increased NIH appropriations for biodefense research from $53 million 
in fiscal year 2001 to $1.5 billion in fiscal year 2003 and 
approximately $1.7 billion in fiscal year 2005; the President has 
requested $1.8 billion for fiscal year 2006.
    The Nation's investment in a strengthened, accelerated and expanded 
biodefense research program has already begun to return substantial 
dividends in all three aspects of biodefense research outlined in the 
Strategic Plan, which has been described in two recent progress 
reports. Some of the funds are devoted to intramural research, which is 
work carried out in NIH-owned and operated laboratories; most, however, 
goes to extramural research funded through grants and contracts awarded 
to researchers throughout the country at academic institutions and in 
the private sector.
    Infrastructure. Perhaps the most tangible signs of the increased 
priority for biodefense research are the integrated research facilities 
under construction to safely contain and study pathogens. In terms of 
intramural facilities, construction is well under way for new 
biodefense laboratories. NIAID also is supporting the construction of 
National Biocontainment Laboratories (NBLs) which will include 
facilities built to Biosafety Level 4 standards and will therefore be 
capable of safely containing any pathogen. Nine Regional Biocontainment 
Laboratories (RBLs), with Biosafety Level 3 facilities, also are 
planned or already under construction. All of these high-level research 
laboratories will provide the secure facilities needed to carry out the 
Nation's expanded biodefense research program in a setting of safety 
for both workers and the surrounding communities. NIAID also has funded 
eight Regional Centers of Excellence for Biodefense and Emerging 
Infectious Diseases Research (RCEs). This nationwide network of 
multidisciplinary academic centers will conduct wide-ranging research 
on infectious diseases that could be used in bioterrorism, and will 
develop diagnostics, therapeutics and vaccines needed for biodefense. 
These Centers will develop the human infrastructure that biodefense 
research will require in the years ahead by serving as a training 
ground for biodefense researchers, and the Centers will partner with 
State and local public health agencies to help ensure a strong, 
coordinated response in a time of crisis.
    Basic Research. Advances in the field of medicine rest on a 
foundation of basic research into the fundamental properties and 
mechanisms of life. In biodefense, these studies include the sequencing 
and understanding of microbial genes (genomics), how microbes cause 
disease (pathogenesis), and how the human immune system and pathogens 
interact (immunology). NIH-funded basic researchers have made 
significant progress since 2001 in each of these areas. For example, 
researchers have determined the genetic sequence of at least one strain 
of every Category A, B, and C pathogen; in many instances multiple 
strains have been sequenced, allowing researchers to better understand 
the factors that determine virulence. NIH has established the Pathogen 
Functional Genomics Resource Center to help researchers apply and 
analyze the large new database of genome sequence information. In 
pathogenesis, NIH researchers recently determined the three-dimensional 
structure of anthrax toxin bound tightly to a target cell surface 
receptor, and thus have gained a detailed snapshot of a crucial step in 
the pathway that allows anthrax to kill. This work provides important 
new leads for the development of novel antitoxins that could save lives 
late in the disease when large amounts of toxin are present and 
antibiotics alone are no longer sufficient to save the patient. 
Finally, immunological studies of the human innate immune system, which 
is comprised of broadly active ``first responder'' cells and other 
mechanisms that are the first line of defense against infection, have 
been moving forward rapidly. These advances suggest new ways to boost 
innate immune responses and suggest that it will be possible to develop 
fast-acting countermeasures that mitigate the effects of a broad 
spectrum of bioterror pathogens or toxins. Manipulation of the innate 
immune system also could lead to the development of powerful adjuvants 
that can be used to increase the potency and effectiveness of vaccines.
    Medical Countermeasure Development. The new emphasis placed on 
biodefense as a national priority has led NIH to develop an expanded 
paradigm with respect to biodefense product development. NIH has always 
supported research that generates new knowledge about disease and has 
worked to translate these findings into vaccines, therapeutics, and 
diagnostics that protect public health. But to develop safe and 
effective products for biodefense as quickly as possible, we needed to 
intensify and accelerate this process. Thus, we have sought creative 
ways to modify NIH's traditional process of research and development to 
move ahead more rapidly while continuing to preserve the excellence in 
basic research that is a hallmark of NIH. Working in close 
collaboration with industry and academia, we have taken a much more 
pro-active role in moving promising concepts into advanced product 
development.
    The Project BioShield Act of 2004 signed into law last July 
provides powerful new mechanisms that will expedite the development and 
deployment of medical countermeasures for bioterrorism. For example, 
BioShield gives NIH additional flexibility in awarding contracts, 
cooperative agreements, and grants for research and development for 
critical medical countermeasures, and streamlines the scientific 
evaluation of biodefense research proposals. The pharmaceutical 
industry has proved to be willing and eager to help in the development 
of biodefense countermeasures, but it needs a reasonable assurance that 
a market for these products will in fact exist should industry invest 
the resources necessary to fully develop them. To help provide these 
incentives, BioShield establishes a secure 10-year funding source for 
the purchase and stockpiling of new vaccines and drugs for use in an 
emergency. To put it another way, BioShield has given us new ways to 
both ``push'' and ``pull'' science toward needed countermeasures--basic 
research provides the push, and new incentives to industry for product 
development provide the pull. NIH works vigorously with both.
    Much has been accomplished. With respect to medical countermeasures 
against attack with biological agents, we are already in a far stronger 
position today than we were only a few years ago. For example, in 
September 2001 we had 15.4 million doses of smallpox vaccine available; 
today we have more than 300 million doses. We also have a next-
generation safer smallpox vaccine called modified vaccinia Ankara (MVA) 
in clinical testing and others under pre-clinical development. In 
addition, a new oral form of an antiviral drug cidofovir is in advanced 
product development for use in the event of a smallpox attack, as well 
as to treat the rare but serious complications of the classic smallpox 
vaccine. For anthrax, NIAID has aggressively pursued a new vaccine 
called rPA; HHS has contracted with VaxGen, Inc. to purchase 75 million 
doses of rPA under BioShield. This vaccine is produced using modern 
vaccine manufacturing techniques and may require fewer doses than the 
currently licensed vaccine. New anthrax therapies that can neutralize 
the anthrax toxin are being developed, such as monoclonal and 
polyclonal antibodies. Candidate antibody treatments for the toxin that 
causes botulism are in development, as is a new vaccine to prevent the 
disease. Finally, an Ebola vaccine based on a new strategy is in human 
clinical trials at the NIAID Vaccine Research Center. I expect the 
coming years to be at least as productive.
    In addition, HHS is pursuing research, development and acquisition 
of medical countermeasures to address radiological and nuclear threats. 
These efforts include acquisition programs for a pediatric formulation 
of potassium iodide under Project BioShield and acquisition of Prussian 
blue by the Strategic National Stockpile. HHS is also seeking 
information from industry about capabilities for developing medical 
countermeasures to treat acute radiation syndrome and exposure to nerve 
agents.
                               conclusion
    I would close with one last point. Infectious diseases have 
afflicted humanity since its inception, and they will always be with 
us. The viruses, bacteria, and parasites that cause infectious diseases 
do not remain static, but continually and dramatically change over time 
as new pathogens emerge and as familiar ones re-emerge with new 
properties or in unfamiliar settings. Emerging infections such as HIV, 
Ebola and SARS and re-emerging infections such as plague and influenza 
have shaped the course of human history while causing incalculable 
misery and death. Fortunately, the knowledge and products that will 
flow from the NIH biodefense research program, including research 
results, intellectual capital, laboratory resources, and 
countermeasures in the form of diagnostics, therapeutics, and vaccines, 
will help us cope with naturally emerging, re-emerging, and 
deliberately released microbes alike. Recent experience tells us that 
knowledge developed to understand one pathogen invariably applies to 
others. When HIV first emerged, for example, antiviral drug development 
was in its infancy. Now, new technologies have led to the development 
of more than 20 antiretroviral drugs that can effectively suppress HIV 
replication and dramatically reduce AIDS morbidity and mortality. These 
same technologies, and the lessons learned about antiviral drug 
development, are being applied to the development of new generations of 
drugs against many viruses, including influenza, SARS, smallpox, and 
Ebola. Even if we are never confronted with another bioterror attack, 
the biodefense research and preparations being carried out now will 
without question prove to be very valuable.
    HHS/NIH has a strong mandate from the President and Congress, 
robust funding, and a detailed and vigorous plan to carry out needed 
biodefense research. Our long institutional experience with infectious 
disease research allowed us to seamlessly take on a greatly expanded 
biodefense role when it became a priority, and I am confident that we 
are making good progress. Again, Mr. Chairman, I look forward to 
working with you and the members of the subcommittee to address the 
challenges of bioterrorism preparedness and its impact on public 
health.
    I am pleased to answer any questions that you may have.



    
    

    Senator Burr. The chair would recognize Mr. Albright.
    Mr. Albright. Good morning, Chairman Burr, Senator Kennedy 
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 defense 
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 bio attacks.
    This review resulted in a joint Homeland Security 
Presidential Directive, HSPD-10, joint along with the National 
Security Presidential Directive, entitled ``Biodefense for the 
21st Century,'' that provided a comprehensive framework for our 
Nation's biodefense.
    This directive builds upon past accomplishments, specific 
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.
    I would also be remiss in not pointing out that a similar 
activity occurred with regard to the creation of a national 
effort to protect our agricultural and food industries, and 
that was embodied in Homeland Security Presidential Directive 
HSPD-9, and under both HSPD-9 and HSPD-10, the Department of 
Homeland Security has a role and responsibility in each of the 
four pillars of the Nation's biodefense programs: threat 
awareness, prevention and protection, surveillance and 
detection, and response and recovery. And, in particular, the 
Science and Technology Directorate has explicit 
responsibilities in this integrated national effort.
    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.
    Before I speak directly to the biodefense efforts of the 
Science and the Technology Directorate, I want to mention the 
role of the Department of Homeland Security's Information 
Analysis and Infrastructure Protection Directorate, and 
specifically I want to make clear that threat and vulnerability 
assessments from IAIP are important inputs into the research, 
development, test and evaluation activities of the Science and 
Technology Directorate and are critical to the department's 
decisions regarding the requisite material threat 
determinations required in order to commit Bioshield funding.
    In fiscal year 2004 and 2005, the Science and Technology 
Directorate deployed the Biowatch Environmental Sensory System 
to protect our Nation's cities from the threat and 
ramifications of a bioterrorist attack. We are engaged in 
creating additional near real-time monitoring. This is the 
Autonomous Pathogen Detection System, and this is relevant to 
the protection of critical infrastructure facilities such as 
major transportation hubs. These were installed, for example, 
in the Boston subway system during the Democratic National 
Convention.
    We initiated the design of a National Biosurveillance 
Integration System as part of an interagency process working 
very closely with Health and Human Services. We conducted 
preliminary analyses of four baseline reference cases using a 
reference scenario approach recommended by HSPD-10 for 
understanding the requirements of an integrated national 
biodefense architecture.
    We established a Biodefense Knowledge Center, an 
operational hub for enabling collaboration and communication 
within the homeland security enterprise and we certified four 
material threats which, of course, is relevant to the subject 
of today's hearing, Bioshield.
    We established the National Bioforensics Analysis Center to 
provide a national capability for conducting forensic analysis 
of evidence from biocrimes and terrorism to attain a biological 
fingerprint in order to identify perpetrators and determine the 
origin and method of attack.
    In 2006, the department plans to complete the first formal 
risk assessment that has been required under HSPD-10 and close 
many of the key remaining experimental gaps in our knowledge of 
classical biological threat agents. We will complete the 
deployment of the next generation Biowatch system to the top 
threat cities while continuing to operate and optimize the 
already existing Biowatch systems.
    We will complete test and evaluation of laboratory 
prototypes for the third generation of the Biowatch detection 
system for down select of fieldable prototypes in fiscal year 
2007 and continue operation of the National Bioforensic 
Analysis Center.
    We will continue operation of the Plum Island Animal 
Disease Center and perform essential upgrades to that facility 
and we will initiate design of the National Bio and Agrodefense 
Facility. And we will continue to develop bioassays for Foot-
and-Mouth disease and other look-alike animal diseases.
    The NBACC, the National Biodefense Analysis and 
Countermeasure Center, is a key component of the national 
strategy for homeland security and addresses the need for 
scientific research to better anticipate, prevent and mitigate 
the consequences of biological attacks.
    The NBACC's mission will support two pillars of the 
blueprint laid out in HSPD-10: threat awareness and 
surveillance and detection. NBACC is made up of two centers, 
the Biological Threat Characterization Center and the National 
Bioforensics Analysis Center I mentioned earlier, to carry out 
these missions.
    We also have a series of university centers that we have 
established as part of this effort, so within the Science and 
Technology Directorate, the Homeland Security Centers of 
Excellence provide independent cutting-edge research within 
academia for focused homeland security research and 
development.
    We have established centers, and they include a Homeland 
Security Center for Risk and Economic Analysis, a National 
Center for Foreign Animal Disease and Zoonotic Defense, and a 
National Center for Food Protection and Defense. In the next 
few months, the Science and Technology Directorate expects to 
establish the Homeland Security Center for Behavioral and 
Social Aspects of Terrorism and Counterterrorism.
    Each center is selected on a competitive basis. Each center 
has a role of addressing bioterrorism and two are specifically 
aligned with addressing bioterrorism. 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 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, of 
course, be conducted in close collaboration with the 
department's Plum Island Animal Disease Center.
    The Department of Homeland Security expects to provide the 
University of Minnesota and its partners, Michigan State 
University, the University of Wisconsin at Madison, North 
Dakota State University, Georgia Tech and the University of 
Tennessee, 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 National Center for Food Protection 
and Defense will address agricultural security issues related 
to postharvest food protection.
    In addition, the Department of Homeland Security and the 
Environmental Protection Agency are in the process of reviewing 
proposals for a research Center of Excellence focused on an 
area of high priority to both agencies, microbial risk 
assessment for bio-threat agents.
    The bio-threat agents of interest include bacteria, viruses 
and biotoxins relating to anthrax, smallpox, botulinum, 
botulism, plague, viral hemorrhagic fever and tularemia.
    Now 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 interagency collaborations has been provided in my 
statement for the record, and I will just highlight a couple.
    As mentioned earlier, HSPD-10 laid out the overall 
strategy, department and agency roles, as well as specific 
objectives and calls for periodic reviews to plan, monitor and 
revise the implementation of our biodefense enterprise.
    This was followed by an interagency review that was 
conducted under the aegis of the NSC and HSC specific to the 
2006 to 2010 science and technology needs to support the 
national biodefense strategy as articulated in HSPD-10.
    This and other inputs from a variety of panels such as the 
Counter Proliferation Technology Coordinating Committee and the 
National Science and Technology Council's Weapons of Mass 
Destruction Medical Countermeasures Committee help guide the 
medical countermeasures procurement activities that are being 
documented in the National Strategic Plan for Homeland Security 
Science and Technology as required by the Homeland Security Act 
of 2002.
    The National Science and Technology's Council Weapons of 
Mass Destruction and Medical Countermeasures Subcommittee, co-
chaired by myself, provides an interagency forum for discussing 
and prioritizing medical countermeasure needs to be pursued 
under Project Bioshield.
    An interagency biosurveillance committee provides a forum 
for coordinating and integrating the multiple activities in the 
biosurveillance arena to provide an integrated bio-warning and 
situational awareness system.
    At the next level of coordination there are strong 
bilateral efforts around key elements of the strategy. Examples 
of this coordination include strong and frequent collaborations 
on Bioshield between DHS and HHS, the development of 
coordinated civilian and military surveillance and detection 
systems between DHS and DOD, and the development of an 
execution of a national strategy for agricultural biosecurity 
and development and assessment of decontamination technologies, 
the latter with EPA, the former with USDA.
    So the science and technology programs conducted within the 
Department of Homeland Security fully support the National 
Biodefense Program as stated in the Presidential Directive 
HSPD-10 and other homeland security presidential directives 
such as HSPD-9. Moreover, they are conducted in 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 critical 
agricultural infrastructures.
    This concludes my prepared statement. With the committee's 
permission, I would request my formal statement be submitted 
for the record. Mr. Chairman, Senator Kennedy, and members of 
the subcommittee, I thank you for the opportunity to testify 
before you today.
    Senator Burr. Thank you very much, both of you, and the 
chair would ask unanimous consent that the full testimony of 
all witnesses be included in the record. Without objection, so 
ordered.
    [The prepared statement of Mr. Albright follows:]
            Prepared Statement of Penrose C. Albright, Ph.D.
                              introduction
    Good afternoon, Chairman Burr, Senator Kennedy 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, including those represented 
here today.
                               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. 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/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 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;
     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 design 
and construction of the NBACC facility are expected to be awarded. The 
design of the NBACC facility will commence in March 2005. Congress 
appropriated $35 million in obligated funds 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 (R&D). 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 expects to 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 post-
harvest 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 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, OSTP, 
NSF to create and support the U.S.-Japan Safe and Secure Society forum.
     The Directorate and DOS (OES) jointly created and 
negotiated the U.S.-U.K. S&T Memorandum of Agreement (MOA). The 
resulting MOA supports collaboration on Homeland Security research, 
development, testing, and evaluation between the U.S. and the U.K.
     Currently leads a partnership with CDC, EPA, and FBI on 
the deployment of BioWatch, a bioaerosol detection system deployed to 
many of this Nation's cities.
     Funds BioNet--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 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 
and radiological/nuclear 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 Kennedy, 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 Burr. The chair at this time would recognize the 
full committee chairman for the purposes of questions.
    Senator Enzi.
    The Chairman. Thank you, Mr. Chairman. Dr. Fauci, in Dr. 
Painter's and Dr. Epstein's written testimony, the NIH research 
tool guidelines are identified as impediments to developing 
anti-infective agents. Do you share the concern that these tool 
guidelines are applied to research with anti-infective agents?
    Dr. Fauci. I am not sure exactly what they are referring 
to, Senator.
    The Chairman. I think they are referring to the patenting 
of the broadly applicable research tools such as cell lines and 
animal models and things like that.
    Dr. Fauci. The patenting components are impediments. This 
is a very complicated issue, Mr. Chairman, because patents are, 
as you know, very important incentives for companies and groups 
to get involved in the development of the countermeasures that 
we need. One of the problems with it is that when there is a 
patent and the company is involved and has the patent but does 
not pursue it, it makes it difficult for other companies to get 
involved in that issue, if that is what they are referring to.
    This is not an NIH issue. This is a Federal Technology 
Transfer Act issue. So I am not exactly sure what the referral 
is to an NIH impediment, but we tried to remove most 
impediments to the kinds of goals that we are trying to set, so 
I would be happy to discuss and debate that with the person at 
a different time. Since he is not here, I cannot do that, or he 
is here, but he is not at the table.
    The Chairman. Sometimes the formats of the hearings make it 
difficult to cover all the things.
    Dr. Fauci. Yes.
    The Chairman. But we will give you another opportunity 
after we get more detail on how that works.
    Dr. Fauci. Thank you.
    The Chairman. In this hearing, we are trying to see what 
some of the potential impediments are and what suggestions 
there are for overcoming them, and then the committee will be 
determining whether those are reasonable or not at a later 
time.
    In your written testimony--this will be a little more 
fair--in your written testimony, you note the important 
benefits that flow from biodefense research to research on 
infectious diseases. Current law provides that if any product 
has a substantial use for a bioterrorism application, a dual 
use, then the provisions of Project Bioshield would generally 
not apply.
    So if a product for bioterrorism would also help say for 
AIDS or malaria, Bioshield would not apply. Others have 
suggested that dual use is a good thing. We want medicines for 
all the infectious diseases, not just bioterror. So as a 
medical doctor and the head of the infectious disease at NIH, 
would you speak to the desirability of applying the Bioshield 
provisions more broadly?
    Dr. Fauci. In the original discussions of Bioshield, 
Senator, I was and we were in favor of an extension beyond just 
the agents themselves that are considered agents of bioterror. 
As the legislation finally got to its form of being signed, 
that did not get into the bill.
    I think that is something for serious consideration. What I 
was referring to that I believe is even more important in my 
statement about the connection between what we do to develop 
agents that are countermeasures against microbes of bioterror, 
and how that impacts on others, is the actual fundamental 
science that goes into it, the people you train, not 
necessarily the end product, but the process that brings you up 
to and including the development of a particular agent, be it a 
vaccine or what have you, is going to keep us in very good 
stead when we face a naturally emerging microbe.
    We have already seen that with the SARS issue that we faced 
a year and a half ago as well as what we are going through now 
with our preparedness for pandemic flu, case in point, the H5N1 
avian flu in Asia. So the training of individuals, the 
infrastructure that was set up, the ability to deal with 
microbes, sequence them, do the cloning, do the targeted 
development of countermeasures, has been given a giant shot in 
the arm by what we are doing with bioterrorism.
    I was referring much more to that than to necessarily 
having a product in the stockpile that goes beyond something 
that is used as bioterror.
    The Chairman. Thank you. Quick question for Dr. Albright. 
In your testimony you mentioned that there are four material 
threats. With regard to those threats, as for now, do we have 
vaccines, diagnostics or therapeutics for each of those, or how 
many and what do you think we will have in 12 months or 5 
years?
    Mr. Albright. The four material threats that we certified 
as part of our responsibilities under Bioshield were smallpox, 
anthrax, botulinum, and radiological and nuclear issues 
threats.
    For each of those we have certainly a certain amount of 
arrows in our quiver. I mean obviously we have an extant 
smallpox vaccine. We have treatment available for botulinum in 
limited quantities. We have countermeasures for those people 
who are exposed to radioactive debris, that sort of thing. I 
think what this is intended to do is not just to promote new 
capabilities--Dr. Fauci mentioned earlier the MVA smallpox 
vaccine--that is certainly one of the motivators behind that 
material threat determination--but also the need to procure 
significant quantities of these materials.
    For example, the amount of botulinum antitoxin that we have 
in the stockpile or we have distributed, more importantly, to 
hospitals is probably not sufficient in order to deal with a 
mass attack or the kinds of attacks that we actually think 
about.
    So the point behind this is to be able to procure 
sufficient quantities to, in fact, be better prepared for those 
threats.
    The Chairman. Thank you. My time has expired. I will submit 
some written questions.
    Senator Burr. Thank you, chairman.
    Senator Kennedy.
    Senator Kennedy. Thank you. Just to follow up with Senator 
Enzi, which I think is an excellent point, I think it is useful 
to have as explicit as possible how you can improve the process 
and give guidance to the private sector in terms of these other 
areas as well. I think I have heard that issue raised with some 
companies, and I think it is useful just following up with what 
my chairman has said.
    I am going to try in a limited time to cover a number of 
points. I am a strong believer, as Mr. Fauci knows and others--
that this is the time of the life sciences. The Congress has 
understood it. We are seeing all kinds of possibilities out 
there. I am a great believer in it.
    There are enormous possibilities as well in this whole area 
of biodefense, but we have seen this dramatic reduction in 
terms of research, a significant reduction if you factor in the 
cost of living. We have 3.2 percent inflator, and we are 
getting .4 percent in terms of inflater. So that is going to 
affect what you are doing in the research area at the NIH.
    If you look over the graph here in terms of the preventive 
health service and the health service grants, they were $132 
million, 2004; $131 million, 2005; zero in 2006. These 
preventative health service block grants, go to local 
communities, help local communities in terms of detection and 
planning, zeroed out--zeroed out.
    You talk about the various facilities. We have the chart 
about your various facilities that you had up there. You have 
gone from 260 to 270 down to 30. I do not know how you are 
going to complete your P4, whether it is in Texas or up in 
Boston, with those kinds of figures. You are going down to $30 
million when the costs are up there in Boston are $140 million, 
$130 million to complete that facility.
    So I do not know what these--the presentation is enormously 
impressive, and I have enormous respect for both of you and 
money is not everything. But if we are talking about national 
security, and we are talking about homeland security, and we 
are talking about biodefense industry, you cannot do it on the 
cheap on this. And this is a matter, I think, of real concern 
when we see the cuts in areas which have been-targeted in terms 
of the homeland security.
    Let me ask you, Dr. Fauci, there was concern up in my city 
of Boston about the biosafety of that lab Level 4. I think you 
are familiar with the tularemia problem that we have up there 
and the issues in terms of safety for the Level 4 category is a 
concern. Safety has always been the number one issue in terms 
of both the NIH, in terms of the development of the P3 and the 
P4 facilities. I know that. I know it is for the mayor. I know 
it is for Boston University.
    Could you just very, very briefly indicate to us the kinds 
of safety and security that you all insist on in terms of 
moving ahead? Give some assurance to the people in these local 
communities that safety is first and foremost on your agenda. I 
have limited time so I am going to try and get one more area.
    Dr. Fauci. It is a very relevant question, Senator, and it 
is really quite safe. I will forward to your staff 
electronically a list of at least 9 or 10 of the issues, but 
let me just mention 1 or 2 of them because we are constrained 
on time.
    First of all, there are extraordinary precautions about 
limited access, things that go so far as thumbprints, retinal 
scans, special IDs. The BSL4 that is being built at BU has the 
classic CDC-government approved specifications such as 
filtering of all air that goes in and out, double door access, 
interlocked, so that both cannot be opened. All liquids that go 
in there are drained into what we call a cook tank where it is 
subjected to high temperatures before it is released.
    All solid waste is autoclaved. Safety cabinets, personnel 
precautions such as showers and showering down of clothing, 
disposal of clothing. It is extraordinarily safe. We take the 
concerns of the community very seriously, but I can say that it 
is quite safe. There has not historically in this country been 
a single incident of a harmful event with a community person 
associated with a BSL4 facility.
    Senator Kennedy. OK. Just two final areas. One is the 
coordination between NIH, the DHS and DOD on research, if you 
could comment? There has been some concern about that. Then, 
finally, just on your new facility that you are building out at 
NIH, the vaccine facility, what is the capability of that? I 
mean how could it respond to a crisis, if you could just make 
brief comments.
    Dr. Fauci. Yes.
    Senator Kennedy. Thank you, Mr. Chairman.
    Dr. Fauci. Will do, Senator. First of all, with regard to 
how we coordinate between DOD, DHS, we have a coordinating 
capability that really emanates out of the Office of Homeland 
Security and the Homeland Security Council at the White House 
which we all meet frequently, myself and Parney, and others. We 
exchange information. We exchange our plans, our strategic 
plans, so there is quite a good degree of coordination that 
comes actually straight from the Homeland Security Council.
    With regard to your question about the building on the NIH 
campus, that is going to be a BSL3, not a BSL4. It will serve 
to consolidate the individuals at NIH who are involved in 
research on biodefense and emerging infectious diseases. So it 
will be an increased physical capability, but also putting 
people in one place so that you can have an intellectual 
exchange that is necessary to get the best out of the science.
    Senator Kennedy. Thank you, Mr. Chairman.
    Senator Burr. Thank you, Senator. Senator Roberts.
    Senator Roberts. Thank you very much, Mr. Chairman. At this 
point, I would like to submit for the record a summary of the 
President's Budget as it applies to Homeland Security. I would 
note that there is a 3.2 percent increase in bioresponse 
spending in NIH, a .5 increase in regards to NIH overall. I do 
this only to add in a matrix and agree with the concerns by 
Senator Kennedy, but I think it is important that we have the 
total budget figures in here. So I would ask that that be 
inserted at this point.
    Senator Burr. Is there objection? So entered.
    [The material presented by Senator Roberts follows:]
                           Homeland Security
    The President's 2006 Budget will continue to ensure the security of 
the Nation's borders, ports, and transportation systems with enhanced 
screening of goods and people through programs such as the new 
Screening Coordination and Operations Office; an increase for the 
United States Visitor and Immigrant Status Indicator Technology (US-
VISIT) system; additional radiological and nuclear inspection 
equipment; and expansion of the Container Security Initiative. The 
President's 2006 Budget will also enhance enforcement, border, and port 
security with increases to the Border Patrol; continued execution of 
the Arizona Border Control Initiative (ABCI); improvements to the Coast 
Guard; and new, threat-focused State and local assistance grants.
                   fiscal year 2006 budget highlights
     An 8 percent increase in government-wide, non-defense 
homeland security spending, including fee-funded activities, over 2005.
     An overall increase of $555 million for the Federal Bureau 
of Investigation, which is 11 percent above 2005 levels, and a 76 
percent increase since 2001. Homeland security funding for FBI 
increases 21 percent in the 2006 Budget, from $1.736 billion in 2005 to 
$2.099 billion in 2006.
     $3.6 billion for State and local first-responder grants 
and other assistance. The 2006 Budget proposes to restructure $2.6 
billion of this funding so that the Department of Homeland Security 
(DHS) can target grants for States, urban areas, and infrastructure to 
fill critical gaps in State and local terrorism prevention and 
preparedness capabilities, taking into consideration their threats, 
vulnerabilities, and needs.
     $50 million to fund Citizen Corps, which brings together 
local leaders, citizen volunteers, and a network of first-responder 
organizations in local preparation and response efforts.
                   protecting critical infrastructure
     $873 million for DHS' Information Analysis and 
Infrastructure Protection Directorate, which coordinates the Federal 
Government's efforts to protect the Nation's critical infrastructure, 
including commercial assets (e.g., stock exchanges), government 
facilities, dams, nuclear power plants, national monuments and icons, 
chemical plants, bridges, and tunnels;
     $600 million for the Targeted Infrastructure Protection 
Program to assist State and local governments in reducing the 
vulnerability of critical infrastructure, such as chemical facilities, 
ports, and transit systems.
     $44 million for the Environmental Protection Agency (EPA 
to fund its Water Sentinel Initiative to help protect the Nation's 
water supply. Water Sentinel will utilize current technology and 
develop new technology to produce an operational water monitoring and 
surveillance system for threat contaminants.
     In total, the President's Budget for 2006 requests $185 
million for EPA's homeland security activities, a 73 percent increase 
over 2005. This includes:
         $19 million in new funds to develop the necessary 
capabilities for detection and decontamination of threat agents. This 
investment in decontamination will strengthen the Federal Government 
through strengthening near-term capabilities and developing improved 
methods for the future. Additionally, $12 million is dedicated to 
meeting EPA's responsibility to establish environmental lab support 
capacity.
         The Budget also maintains resources of $106 million to 
continue support for investigation and training activities, technical 
assistance to States, cooperative research, and EPA's national response 
teams.
      defending america's borders, coastlines, and ports of entry
     $6.9 billion for the Coast Guard, an 11.4 percent increase 
over the comparable 2005 level. This includes:
         $1.9 billion for the Coast Guard's Port, Waterways, 
and Coastal Security mission, to fund a variety of high-priority Coast 
Guard initiatives like armed, high-speed boats in ports with liquefied 
natural gas terminals, further implementation of the Automatic 
Identification System to track sea-going vessels and enhance Maritime 
Domain Awareness, new weapons systems for the Coast Guard's helicopter 
fleet, and implementation of the Common Operating Picture to enable 
Coast Guard assets to work better together.
         $966 million for the Coast Guard's Deepwater 
acquisition project, which will fully recapitalize the agency's fleet 
of major ships and aircraft, while simultaneously implementing a 
sophisticated new Command, Control, Communications, Computers, 
Intelligence, Surveillance, and Reconnaissance (C4ISR) system. This is 
an increase of 33 percent over 2005 levels.
         $37 million for 210 additional Border Patrol agents, 
$20 million to continue improving the sensor, communication, and video 
surveillance capabilities along our borders, and $20 million for the 
acquisition and replacement of aging Border Patrol aircraft.
     An increase of $176 million for the detention and removal 
of illegal aliens, including:
         $90 million for increased detention beds and 
additional detention and removal officers;
         $39 million for the detention and repatriation costs 
of the ABC I, which aims to deter illegal crossings of the desert;
         $8 million to apprehend alien fugitives and $5.4 
million to ensure that aliens convicted of crimes in the United States 
are deported directly from correctional institutions after their time 
is served, preventing their release into the community;
         $3.5 million for additional attorneys to prosecute 
immigration cases;
         $5.4 million to expand custody arrangements for non-
criminal aliens, particularly asylum seekers, to help ensure their 
appearance at immigration proceedings.
     A $5.4-million increase for the Container Security 
Initiative, which pre-screens cargo before it reaches America's shores.
     $178 million in DHS for improved radiological and nuclear 
screening equipment at our borders.
     An $8.2-million increase for the Customs Trade Partnership 
Against Terrorism (C-TPAT) to support partnerships with some of the 
biggest American importers to improve cargo security.
     A $50-million increase for accelerated deployment of US-
VISIT at land border ports of entry and for enhanced access for border 
personnel to immigration, criminal, and terrorist information. With the 
2006 Budget, spending on US-VISIT will total over $1.4 billion through 
2006.
                      improving aviation security
     More than $4.5 billion for TSA aviation-screening 
operations, a $400-million increase over 2005. Funding will ensure 
sufficient resources for 45,000 Federal screeners and 10,000 screening 
devices nationwide;
     A $26-million increase for the Federal Air Marshals 
program to protect our Nation's airplanes and passengers;
     $110 million to test technical countermeasures against 
shoulder-fired missiles for safety and reliability.
     safeguarding against nuclear, biological, and chemical threats
     To focus domestic efforts to combat nuclear terrorism, the 
Department of Homeland Security will stand up the Domestic Nuclear 
Detection Office (DNDO). DNDO's primary mission will be to strengthen 
the deployment of the nuclear detectors at home while working to 
improve the quality of those detectors over time. The office will 
integrate domestic nuclear detection efforts undertaken by Federal 
agencies, governments at the State and local level and the private 
sector, and will be closely linked with international efforts. DNDO 
will focus and streamline Federal capabilities in areas such as:
         Research: DNDO will oversee a coordinated approach to 
radiological and nuclear research efforts at DHS, the Department of 
Health and Human Services (HHS), and the Department of Energy. The 
Budget provides $262 million, more than twice the amount in 2005, for 
DHS research and development of advanced-detection devices to minimize 
the likelihood of a radiological or nuclear device entering the United 
States.
         Border Monitoring: DNDO will work to ensure optimal 
deployment of radiological and nuclear screening equipment.
         Grants: DNDO will work with State and local 
governments on allocating their grants towards the most effective 
detection equipment and technology.
         $4.2 billion for HHS, a $154 million increase, to 
address the threat of bioterrorism;
         $107 million, double the funding level in 2005, for 
DHS research and development into chemical agent countermeasures.
          protecting the nation's agriculture and food system
     The 2006 budgets for the Departments of Agriculture 
(USDA), HHS, and DHS include a total of $596 million to improve our 
ability to detect and contain intentional and unintentional 
contamination of America's agriculture and food system, a net increase 
of $144 million above the 2005 enacted level.
     $63 million is provided for an interconnected food lab 
network to increase the size of the network from 21 to 60 labs and 
improve the rapid exchange of data.
     Early detection of potential threats will be improved 
through a $50 million increase for USDA's monitoring and surveillance 
activities and a $78 million increase for research by USDA, HHS, and 
DHS, including research into new detection methods.
     The Budget includes $59 million to complete construction 
of USDA's state-of-the-art animal disease research and diagnostic 
facility located at Ames, Iowa, which will also support the National 
Animal Health Laboratory Network.
                             cyber security
     The 2006 Budget provides $94 million in funding to the 
National Science Foundation for research related to cyber security, 
which is critical to staying ahead of threats to IT infrastructure.
     The Budget also provides $73 million for the National 
Cyber Security Division within DHS to monitor, respond to, and notify 
the general public of cyber threats.
     The Budget also provides $10 million in funding for the 
Cybercorps program, which funds grants for graduate and undergraduate 
education in cyber security that will strengthen the future of the IT 
security workforce.
                   promoting national health security
     The 2006 Budget provides an additional $153 million for 
the Strategic National Stockpile to improve the Nation's ability to 
respond to biological and chemical weapons attacks with life-saving 
treatments and supplies, including additional antibiotics to treat 
anthrax, nerve agent treatments, and chemical countermeasures through 
the Chempack program.
     The Budget for the Stockpile also includes increased 
funding for the storage and maintenance of next-generation 
contermeasures, including a new anthrax vaccine purchased through the 
President's newly enacted Project BioShield.
     Within the 2006 Budget's nearly $29 billion for the 
National Institutes of Health, the Administration will continue to fund 
biodefense research and development activities at $1.8 billion. This 
includes $50 million for chemical countermeasure development and $47 
million for radiological and nuclear countermeasure development.
     The Budget proposes nearly $1.3 billion in investments to 
bolster hospital preparedness and State and local biodefense 
preparedness. Included in the total for hospital preparedness is $25 
million for a targeted, competitive demonstration program to establish 
a state-of-the-art emergency-care capability in one or more 
metropolitan areas.
     The Budget also includes $70 million to improve the 
emergency health care response to a mass casualty event by allowing the 
Federal Government to purchase and store deployable medical care units, 
including medical supplies and equipment that can be delivered to an 
affected area. This funding will also help ensure the availability of 
health-care providers in response to an emergency.
                  national biosurveillance initiative
     Last year, the President proposed a new biosurveillance 
initiative to provide earlier indication that an attack has occurred, 
and to more accurately determine its nature and scope by monitoring 
human, animal, and plant health, the food supply, and the environment. 
The 2006 Budget will build on this progress with a $218-million 
investment in the gathering and analysis of this information.

    Senator Roberts. I know that this hearing is not on food 
security, although it has been mentioned by Dr. Albright, and I 
thank you, sir, for your perseverance. I thank you both for 
your leadership and taking the time to come here. I am pleased 
that with all of the things in the budget that we worry about--
and those of us in agriculture do worry about some of the cuts 
that have been proposed--the President has included a total of 
$596 million for the Department of Agriculture, Health and 
Human Services and also Homeland Security to improve our 
ability to detect and contain intentional and unintentional 
contamination of America's agriculture and food system--that is 
a net increase of $144 million over last year--$50 million 
increase for USDA's monitoring and surveillance activity, $78 
million increase for research by the USDA.
    Now this is on purpose. Last year, the White House issued 
the Homeland Security Presidential Directive. Everything has to 
be an acronym in Washington. So that is HSPD-9, and it deals 
with the coordination of food and agriculture security. I know 
there have been some other concerns and primary concerns on the 
part of the subcommittee.
    But this means that the DHS should be the lead agency in 
this process, and I am aware of the many steps that the 
Department of Agriculture has taken in this area, so the 
questions I would have for you, Dr. Albright, and I will just 
submit them for the record, because we are on a very limited 
time schedule here, can you tell me what the Department of 
Homeland Security is doing to really coordinate these efforts? 
Specifically, how are you working with the Department of 
Agriculture, Food and Drug Administration, Health and Human 
Services, and Defense, and intelligence agencies, and I 
emphasize that because when I ask everybody--and we have an 
``oh-my-God-hearing'' every week--and as chairman of the 
Intelligence Committee, I said what keeps you up at night?
    One of the things, one of the top threats that we have is 
in regards to our Nation's food supply. The former department 
head, when he left, Tommy Thompson, and, you know, rode off 
into the sunset back to Wisconsin or wherever Tommy is, he said 
that basically our food supply was not safe, and that raised 
hell all up and down the ag press, and they came to me and they 
came to Saxby Chambis, and they came to me as chairman of the 
Intel committee, and said is that right? How are your efforts 
really coordinated with the National Security Council? And then 
basically the President's Homeland Security Council? How many 
DHS staff, HSC staff and other agency staff are working on this 
issue? How often does the department meet with other agencies 
to really try to coordinate these efforts?
    I notice on your chart, you have CDC, you have NIH and FDA. 
You do not have USDA. And you do not have the intelligence 
folks. Now I know that they are included in this, but I asked--
and I have gone over to the DHS and these analysts are very 
young now and they are loaned from other agencies, and I know 
that the new head of the agency that has just been approved 
will do what they can--I found one person, one person, that has 
an aggie background that is worried about agro-terrorism 
although we call it food security. We do not call it agro-
terrorism anymore because it scares people.
    Then, in addition, we have the Assistant Secretary, Jim 
Moseley, who is in Afghanistan, I think, as I speak, for about 
the fourth time trying to get ahold of Foot-and-Mouth disease 
and other diseases that could be imported by the Taliban over 
here to this country. The Department of Agriculture has 
conducted several war games. Now this is why I am so worried. 
At one time about 2 or 3 years ago, we had a war game and it 
was called Crimson Sky, and it was an attack in regards to 
Foot-and-Mouth disease from Iraq, but it could be from any 
country, and I served as president. The reason was that Senator 
Kennedy was out of town. He had important business.
    [Laughter.]
    And so consequently, what happened to us is that we had an 
attack by Iraq. There were six States involved. It is a very 
easy process. You just put a handkerchief underneath the nose 
of an infected animal over in Afghanistan. You put it in a 
ziplock bag. You send it to the United States. You drop it in a 
feedlot, hopefully not in Kansas, also Wyoming, also North 
Carolina.
    [Laughter.]
    You can drop it in Massachusetts if you want to.
     [Laughter.]
    And so I was president. In 6 days, there is the infestation 
period and then all hell broke lose. And by ``break loose,'' 
here is what happened. Number 1, our markets collapsed. Number 
2, all of our exports stopped. All agricultural export products 
stopped.
    Number 3, everybody in this room and all throughout America 
realized that their food supply does not come from grocery 
stores; by golly, it comes from the farm. So they panicked. At 
every grocery store in America, there was a panic, and so we 
had really economic chaos. I ordered a livestock stop-order 
because governors were marshaling their National Guard--when we 
had National Guard in our States--okay--and so Oklahoma was 
putting up National Guard in between Texas, which is a natural 
thing from time to time
    [Laughter.]
    But, at any rate, no livestock movement.
    So I stopped livestock movement and the Department of 
Commerce said, sir, you cannot do that, and I fired him. That 
felt very good as president.
    [Laughter.]
    Then we had to terminate, we had to terminate thousands and 
thousands and thousands, hundreds and thousands of critters, 
trying to figure out how on earth to do that. So we called out 
the National Guard, active duty force, and you had to do it by 
shooting them. You do not do it by burning them. That is 
exactly what happened with Great Britain. That is the wrong 
thing that you had to do.
    We had to dig a ditch in Kansas 29 miles long, the size of 
a football field wide, so it would not leach into the 
groundwater and we ran out of ammunition, and then we had PETA 
there to demonstrate.
    [Laughter.]
    Then we also had TV and it was one hell of a mess, and we 
lost strains of cattle and the Nation's food supply was harmed 
for 1, 2, 3 years.
    So you can see why I am a little concerned in regards to 
what is going to happen in regards to agro-terrorism or food 
security, and I am concerned there is only one person over 
there at the Department of Homeland Security, and during the 
Terrorist Threat Information Center briefing they have every 
week, I know this comes up, and I urge you with all the 
questions that I have asked, and I have not even given you a 
chance to respond, please come back and tell me that we are 
much better coordinated and we are in much better shape. We are 
in better shape, by the way, I can tell you that, in terms of 
our Nation's food supply.
    That is why I am here, and I think as I look, one of the 
egregious things that you did, Mr. Chairman, is that you did 
not put a time limit thing in front of my name.
    [Laughter.]
    But I can see it over there by Senator Kennedy and also by 
Senator Murray.
    [Laughter.]
    So I will cease and desist if you can answer those 
questions. Thank you for highlighting that. I think it is one 
hell of a problem.
    Mr. Albright. Well--
    [Laughter.]
    Senator Roberts. Why don't you just say you agree and we 
can get on with it.
    [Laughter.]
    Mr. Albright [continuing]. Yes, sir. I agree, sir. And I 
look forward to answering your questions. I think we can answer 
most of those, probably not all of them, and actually what I 
would like to do is I would be more than happy to bring our 
people that work agricultural issues to come up and brief your 
staff at their convenience.
    Senator Roberts. Why don't we have a briefing to my staff 
which I can share with all of the people here and then we will 
not take up their valuable time for questions. Senator Reed and 
Senator Murray are waiting not so patiently.
    Mr. Albright. Will do.
    Senator Roberts. OK. Thank you.
    [Questions of Senator Roberts follow:]
       Questions of Senator Roberts to Penrose C. Albright, Ph.D.
    Question 1. Last year the White House issued Homeland Security 
Presidential Directive HSPD-9, dealing with the coordination of food 
and agriculture security. HSPD-9 indicates that DHS should be the lead 
agency in this process. I am aware of many of the steps USDA has taken 
in this area both prior to and after this announcement. Can you tell me 
what DHS is doing to coordinate these efforts? Specifically, how are 
you working with USDA, FDA, HHS, and the defense and intelligence 
agencies on this front? How are your efforts coordinated with the 
National Security Council and the president's Homeland Security 
Council? How many DHS staff, HSC staff, and other agency staff are 
working on this issue? How often does the department meet with other 
agencies to coordinate these efforts?
    Question 2. The Department of Agriculture has conducted several 
``war game'' scenarios related to agriculture and food security. I 
participated in one of these known as ``Crimson Sky.'' It dealt with 
the impact of an intentional introduction of foot-and-mouth disease 
into the United States. It revealed the truly astounding impact this 
could have on not just agriculture but the overall economy. Many State 
governments have also looked at this issue, and USDA has worked to set 
up rapid diagnostic networks for both plant and animal diseases. Are 
you aware of the outcomes of this, and similar, activities conducted by 
USDA. What role would DHS play in such an outbreak, if it were ever to 
occur? Have you discussed your response plans, if any with other 
Federal agencies and State governments?
               questions of senator roberts to the panel
    Question 3. We have heard much regarding vaccine disease research 
for potential bioagent threats. This is important research. I'm 
interested in whether or not you have conducted, or looked into 
conducting, similar research on vaccines for animal diseases that could 
be used as bioagents. In addition, how important do you believe such 
research should be, in light of recent diseaeses such as SARS and avian 
influenza, that also have the potential to dramatically impact human 
health?
    Question 4. We currently have in place rapid response teams 
throughout the Nation that could quickly deploy to address acts of 
terrorism. Are you doing any work to develop similar teams to deal with 
agriculture and food security issues, and/or are the current teams 
trained in these areas as well?

    Senator Burr. Thank you, Senator Roberts, and I will not 
make the same mistake twice. I will get a little time thing 
right in front of you.
    [Laughter.]
    We are significantly advantaged by having your knowledge of 
agriculture and your experience on intelligence and let me 
assure you that the man to my right has assured me that we will 
not leave agriculture out of our review from the standpoint of 
this committee.
    Senator Murray.
    Senator Murray. Senator Reed was here ahead of me.
    Senator Burr. Senator Reed.
    Senator Reed. Thank you very much, Mr. Chairman. I am still 
trying to process the questions. So forgive me. Senator Roberts 
even looks a little like Johnny Carson from this vantage point.
    [Laughter.]
    Senator Roberts. He is dead, Jack, for God's sake.
    [Laughter.]
    Senator Reed. And I sound like Ed McMahon.
    [Laughter.]
    Senator Roberts. Now, Jack, cut that out.
    [Laughter.]
    Senator Reed. We do this all the time. Thank you, Senator. 
Dr. Fauci and Dr. Albright, thanks so much for your testimony 
and for your service. You mentioned that you have spent months 
devising a strategy to respond to these threats to the United 
States, and I am curious about the strategy in terms of how it 
relates to the need for both public and private participation 
in the process. You talked about building infrastructure. It 
seems to me that a lot of this investment involves direct 
Federal expenditures. We will eventually have legislation 
before us that talks about granting patent waivers and 
extensions, et cetera.
    I frankly do not think we in Congress are working off the 
same strategy, or at least appreciation of the strategy your 
agency has developed.
    Can you give us an evaluation of what authority you need in 
terms of incentives to private industry vis-a-vis government 
programs? One final point--it seems to me that we are buying 
products that have very little commercial applicability. 
Unfortunately, this is not something where we can dovetail on 
an industry that with a little help will do things because they 
see a commercial benefit. I would appreciate both your 
comments, gentlemen.
    Dr. Fauci. You are quite correct, Senator Reed. There is an 
issue with regard to an incentive to develop and produce a 
product in which there really is very little commercial 
interest and that was the main motivating force behind the 
original Bioshield legislation that was signed this past summer 
by the President.
    With regard to the points that I was trying to make is that 
in all of us there is what we call ``a push and a pull 
mechanism'' because if there is an arena of research that 
unless it is explored, the concept proving for a particular 
product will not occur. You can very rarely expect industry to 
make a major investment, which they usually measure in hundreds 
of millions of dollars to develop something in which there 
really is no guarantee of a profit margin.
    So what we need to do and have been doing, and that is what 
I was referring to by my comment of the changing paradigm is to 
push the process much more toward the development so that when 
industry sees that there is something there, they can then take 
that risk, and it is a risk for them, to get involved in doing 
what needs to be done to produce and develop a product that 
there will be a guaranteed purchase of.
    That was the fundamental matrix and component of Bioshield 
that was passed recently was to have that funding, but we need 
to go beyond that. We need to continue to partner with 
industry. To think that the government is going to be 
successful in getting necessary countermeasures without close 
collaboration with industry I think is folly. We have to 
partner very closely. That is not only in the things that I 
spoke about, but also in the things that this committee and 
others in the Congress are trying to do by strengthening the 
legislation, and I do believe that Bioshield I, as it is 
referred to, has already been successful in helping us to get 
to the goal, but we need to go further.
    Senator Reed. Let me, if I may, raise another issue. It 
seems to me, and this is oversimplification, is that we are 
incentivizing private industry, which is important--I agree 
with you--to collaborate so that ultimately they will sell 
products to us, the monopoly purchaser, or the monopsony, 
whatever the right term is. It seems to me that we might be 
paying on both sides of the transaction. I mean giving them 
incentives to produce it and then buying it all at the end. It 
goes to this notion of limited commercial product value.
    Dr. Fauci. You could interpret it that way, but I see it a 
little bit differently. I see it that if we do not do that, we 
are not going to have a product. We are just not. Because we 
have examined the possibility of doing it all ourselves, and 
that I do not think is a good idea because industry has the 
expertise and the capability. It is very unique, the industry 
in this country, which leads the world, so it seems to me that 
the best approach would be to do what we are saying, even 
though it could be interpreted as paying out of both ends. It 
is so important for the national security that I think it is 
worth doing.
    Senator Reed. Let me--and I want Dr. Albright to also 
comment on these issues--but a final question if I could. You 
have got a strategy. We have passed Bioshield I. Where are the 
big gaps now from your perceptive looking at your strategy? 
What elements are missing? And, again, is it appropriated 
programs that we have to put money towards or is it a gap in 
this connection with private industry?
    Dr. Fauci. I think these things need to be explored, which 
is happening with industry in the components of the Congress 
that have put forth both S. 3 as well as Bioshield II, and that 
is what it is that the industry really wants? And the only way 
you could find that is by discussing it with them because we 
have tried over the years to get--and you cannot do them all 
together because of the antitrust laws. You got to individually 
go to each person and say what is it that you would feel would 
be important to driving you toward getting us to the goal?
    Some talk about liability, some talk about patent 
protection, some talk about others. I think each of these need 
to be carefully considered as to what the pros and the cons 
are. But those are the most commonly mentioned gaps that we 
have right now.
    Senator Reed. Thank you, Doctor, and Dr. Albright, please.
    Mr. Albright. I guess I would just want to echo a little 
what Tony had to say. The whole point behind Bioshield was, in 
fact, to incentivize industry. That was the purpose behind it. 
Whether or not that level of incentivization is sufficient I 
guess remains to be seen. We have just now gone out of the 
chute with one procurement, the RPA procurement. Whether there 
are additional needed incentives required in order to get the 
kind of biodefense countermeasures in place is, I think, an 
open question.
    My view of this is, that what Bioshield has done has been 
to substantially reduce the risk from the perspective of the 
pharmaceutical industry with regard to whether or not they 
should actually be involved. What we are basically telling them 
is if you license the product, if you get it through licensure, 
we are going to buy it, and we are going to buy a whole bunch 
of it. In the RPA case, we are going to buy 25 million courses 
of it.
    Again, whether that works out on sort of a profit business 
case for them is something that is very complex. In addition to 
that, as Tony has pointed out, there are other issues which 
have pervaded the industry for a long time and really have not 
much to do with biodefense, have to do with patent protections, 
liability issues and that sort of thing, and I certainly am not 
qualified to talk much about them except to point out that I do 
not think they are really biodefense specific issues.
    Senator Reed. Thank you very much, gentlemen. Thank you, 
Mr. Chairman.
    Senator Burr. Senator Murray.
    Senator Murray. Thank you, Mr. Chairman, for this hearing. 
I was listening to Senator Reed talk about the private industry 
infrastructure and whether it is going to respond. And I cannot 
help but think, you know, with our latest experience with the 
flu vaccine just this past year, and wondering since it is the 
same infrastructure we are relying on to do all this, are we 
solving the flu vaccine issue? Is that going to come back at us 
again next year the same way?
    Dr. Fauci. It likely will come back at us somewhat and the 
general broad plan, Senator, has been to vaccinate more and 
more people each year. If you look at the history of what has 
come out of the department, just a few years ago we vaccinated 
40 or 50 and then up to 60 and then 83 million last year, and 
this year now that we are in, we were hoping to go beyond 100 
million. We had a big monkey wrench thrown into things, the 
contamination of the Chiron plant which essentially cut it in 
half, which put us into a rather untenable position of trying 
to hold back vaccinations for people who are not in the high 
risk groups at the same time as we get people who are in the 
high risk groups vaccinated.
    We need to recover from that. That was a setback and the 
recovery needs to, one, stabilize the market, and it gets to 
the same industry interaction with government. We have got to 
get the industry confident that we will be pushing for 
vaccinating more and more people. We were aiming at 100. We 
need to go beyond that. That number may be 150, 180 million and 
what have you.
    When industry sees that there is a stable market, they will 
get much more involved because it is very risky when you are 
dealing with something which the financial incentives are low, 
the process of making the vaccine is risky and the market 
fluctuates. We are trying to stabilize all of those. You can do 
it by modernizing the process of making the vaccine, by 
providing stable markets to know that you are going to be 
recommending vaccines for many others.
    So, in many respects, it relates to what we are saying 
about biodefense. It is one of those things of having to be 
able to partner in good faith and with good confidence in 
industry together with the Federal Government.
    Senator Murray. Thank you. I appreciate that. I know it is 
not under the jurisdiction of this committee so called, but it 
is related and I think we need to not lose our sight on that.
    I did want to follow up. Senator Kennedy asked you about 
the facility in Boston and the University of Washington, which 
does a fantastic job in Seattle, has also been chosen to be a 
Level 3 facility for NIH and I recognize the importance of 
that. I think they do a great job, and we are really proud of 
what they are doing, but there is a lot of concern within the 
community and I wondered, following up on Senator Kennedy's 
statement, you can tell us it is safe, but are you working with 
the communities, with the universities, to help educate the 
public about it so that they feel more comfortable with that?
    Dr. Fauci. Indeed we are, Senator, and in fact dealing with 
the community well ahead of time before you start building 
things is absolutely critical. We have now enormous experience, 
some of which is traumatic and some of which is very positive, 
about needing to get the community to understand exactly what 
you are doing, why you need to do it, and why you need to do it 
in that site? The people in Seattle at that university I think 
have done a good job of that.
    They have been an example of how you should do it 
correctly. Others throughout the country, not as well. We need 
to strengthen the ties between the community because we find 
almost invariably if they do not understand beforehand what you 
are trying to do, there will be that natural reflex of 
suspicion, and that is a natural response. That is not 
something that should be criticized. It is a natural response. 
So it is all in open transparent communication.
    Senator Murray. OK. Very good. I had one question about the 
Bioshield proposals, and I think it is really important that we 
look at what worked, what is working, what is not working, 
before we move forward down the line, and one of the things we 
did was change the FDA approval process under Bioshield and 
made a faster approval process, which I think we all agreed 
needed to be done in order to expedite some of the products 
that need to be out there to protect all of us.
    But I am concerned that we have not placed a lot of focus, 
both at FDA and NIH, on the longer-term effects of some of 
these new treatments and vaccines and where we have 
particularly seen this is a problem for our military personnel 
who can be ordered to take new experimental treatments without 
any long-term or postmarket surveillance being required by DOD 
or NIH or FDA. This is probably a better question for FDA, but 
I know that you work closely with them, and wanted to ask you 
about how we are monitoring the long-term effects of this. The 
Larium with the malaria treatment that military personnel were 
ordered to take, we are now hearing about high suicide rates 
and violence associated with that, and according to some of the 
DOD officials, they are not even sure who received these 
treatments so we can follow up with them.
    I know that FDA has changed the labeling for that 
treatment, but I am not sure if members of the military, a lot 
of them who are civilians today, are even aware of that, and I 
am not even sure if FDA or NIH is looking at these populations 
once they leave the military.
    That is just one example, but I wanted to ask you this 
morning if you can tell me what steps NIH is taking to direct 
research to postapproval or postmarket surveillance?
    Dr. Fauci. In general, the research endeavor with regard to 
a vaccine by NIH does not include late following of individuals 
in a classic sense. We are doing more of that now in 
partnership with the FDA in doing studies of follow-up of 
people who are multiple years down the pike. This is something 
that generally has not been part of the regimen of the 
development and ultimate procurement and distribution of 
vaccines, but you make a very good point. It is clear that 
there are situations in which there are late effects and the 
department in general, and the FDA particularly, is clearly 
looking at that.
    Senator Murray. OK. Very good. I think we need to really 
focus on that because when we do expedite the procedures, we 
want to make sure that any long-term effects that we do not 
know during the research at the beginning becomes part of what 
we use collectively. So thank you very much.
    Senator Burr. Thank you, Senator. The chair will recognize 
himself. Dr. Fauci, you alluded very quickly to the problem, 
the potential problem, that antitrust laws have on our ability 
to bring a world together and to address. Is there anything 
that you would like to add to that comment?
    Dr. Fauci. No, Mr. Chairman, the reason I made that 
comment, and I am not at all an expert in this, and it would be 
presumptuous for me to make any kind of recommendation, but I 
can just put it into the context of how that happened. We were 
trying to get a feel from the industry about what it is that 
they really would like to see vis-a-vis incentives when we were 
in the preparatory phase for the original Bioshield 
legislation.
    And it is extraordinary how concerned the legal counsel are 
from industry to get more than one person on the same phone 
call or in the same room because of the antitrust, so I had to 
keep going from person to person alone. It was a very 
interesting exercise. There is no such a thing as calling a 
meeting. You cannot have a meeting except that there are 
lawyers there who tell everybody to keep quiet so I was talking 
to myself for awhile, and I thought that maybe if we could 
loosen that up a little I would have been able to get more 
information.
    Senator Burr. Duly noted and it has come up before that 
that is an area that we may need to look at. It is one that we 
go into very delicately even in the conversation mode, but I 
think it is safe to say that most members of both sides of the 
Hill believe that well intended efforts like Bioshield usually 
either slow down or do not happen because of a communication 
breakdown, and clearly that is one of those obstacles that 
stand in the way that over time may force you to find a way 
around it rather than take it head on, and we may not enjoy the 
full fruits of it.
    Let me go to the push-pull methodology that you talked 
about. I think that we all understand the push and I think for 
the most part the fact that legislation passed, we all 
understand the need for the pull. I want to take you in between 
if I can. Talk to me about how robust the entities are to fill 
that middle slot which is a guarantee to move product.
    Dr. Fauci. That is an issue, Mr. Chairman--I am glad you 
brought it up--because there is a middle gap there because, in 
general, traditionally, the way the NIH research structure is 
set up, we can only push so far into what is called advanced 
development. When you have the pull mechanism, for example, of 
our typical Bioshield legislation, which would sign a contract 
with a company in which they get money only upon delivering of 
a product, so it is much easier for a large pharmaceutical 
company to take the risk of doing that advance development and 
hope to ultimately be able to recoup the money when they get 
paid for the contract that they sign. We are finding that in 
some instances some of them cannot take that risk, particularly 
the smaller biotech companies.
    So what the NIH has been faced with is how far are we going 
to push our dollars into advanced development, and that is 
risky because that costs a lot of money and that comes out of 
the basic research pool also. So we are struggling right now 
with how far we can push into advance development to get the 
companies confident enough that they know that this will 
succeed so they can go through the Bioshield mechanism.
    Senator Burr. And when in the pull part of that methodology 
you begin to alter what a company can do with that product, 
over and above the guaranteed sale to the Federal Government, 
what effect does that then have on the large pharma companies 
and their willingness to participate?
    Dr. Fauci. Well, obviously, restrictions on what they can 
do with that is something that is chilling to them. They feel, 
at least in my conversations--I am not speaking about any 
official policy on our part--but they feel that they would like 
much more flexibility in what they can do with a particular 
product. For example, a dual use product, a product that could 
go into the National Strategic Stockpile for biodefense, but 
they could also use them for something else. There are strict 
limitations on that.
    Senator Burr. Is it safe to say that the Orphan Drug Act 
happened because we saw the companies were not willing to 
invest the research dollars because the end-game was so small?
    Dr. Fauci. Right.
    Senator Burr. In relation to everything else they could do?
    Dr. Fauci. Yes. The answer is they are related, Mr. 
Chairman.
    Senator Burr. And that is very similar to what we are 
dealing with here relative to how many might meet that goal of 
fulfilling the contract at the end?
    Dr. Fauci. That is correct.
    Senator Burr. Real quickly, Dr. Albright, you talked about 
the need to create a biologic footprint or fingerprint--excuse 
me. For Senator Roberts, that might be a footprint.
    [Laughter.]
    Senator Roberts. Or a hoof print.
    Senator Burr. But a bioforensic analysis center. How close 
are we to that? How realistic is that goal?
    Mr. Albright. It is operating today. It is actually taking 
in thousands of samples every month we get from a wide variety 
of sources. It is done in close coordination with the FBI. The 
FBI is a partner. They actually have staff up there, and the 
need for this was actually a direct result of the anthrax 
attacks in 2001. I mean something as simple as needing a 
facility where you can store mailboxes that are contaminated 
and then treat them as evidence and then what we had right 
after that attack was a relatively ad hoc activity for 
sequencing the samples, genetically sequencing them, doing more 
traditional forensics, things like examining how is the thing 
milled and what other contaminants might be in the sample and 
that sort of thing.
    What we have now done is we have established this National 
Biological Bioforensic Center up at Fort Detrick, and it is 
there now. It is operating.
    Senator Burr. Clearly we have made significant advances in 
our ability of the forensic.
    Mr. Albright. Absolutely.
    Senator Burr. We are not as far along as it relates to 
therapies or antivirals or something that enables us not to 
have to go through that process.
    The chair would recognize Senator Roberts for several 
questions with answers.
    Senator Roberts. I would be happy to yield to the 
distinguished chairman if he has any questions at this point.
    The Chairman. I thank you. I will submit some questions. 
The ones I have are the accountant type that are so detailed 
that hardly anybody would be interested in them but me.
    [Laughter.]
    [Question submitted by Senator Enzi follow:]
         Question of Senator Enzi to Penrose C. Albright, Ph.D.
    Question 1. In your written testimony you mention national 
biodefense for agriculture. Specifically you mention Foot-and-Mouth 
disease and soy bean rust. Could you briefly describe DHS efforts in 
regard to agrobioterrorism?

    Senator Roberts. I study those, Mr. Chairman, every time 
that you have those. Let me just say that, Dr. Fauci, do not 
worry about talking to yourself. We do that a lot up here. Six 
of the 19 hijackers in regards to the World Trade Center attack 
had extensive agriculture training. Some evidence that the crop 
dusters that were in question back during that time were not 
for people but for crops. Noting the bioagents that are 
available in Pakistan and Iran, Russia, more especially Russia, 
in places like Obolensk and others, that is why I am so 
concerned about this, not only in terms of people, but 
agriculture and our Nation's food supply.
    We have heard a lot about vaccine disease research for 
potential bioagent threats, and it is very important. I am 
interested in whether or not you have conducted or looked into 
conducting similar research on vaccines for animal diseases 
that could be used as a bioagent?
    Mr. Albright. Absolutely. We are, as you know, partnered 
with USDA up at Plum Island and the Department of Homeland 
Security is very focused on the development of a wide variety 
of countermeasures that range from development of new vaccines 
for things like Foot-and-Mouth disease which is probably the 
highest consequence of all the threats that we are concerned 
about, including also rapid diagnostics, the ability, for 
example, to deploy potentially to the field triage systems, 
that sort of thing.
    In the 2006 budget, as a matter of fact, there is 
substantial additional dollars in the Department of Homeland 
Security's budget to develop the next generation Foot-and-Mouth 
disease vaccine. Now this is done in partnership with 
Agricultural Research Service which tends to do some of the 
more fundamental research and we tend to be more focused more 
on the developmental side, kind of filling the gap, in a sense, 
in the ag side that Dr. Fauci mentioned exists on the public 
health side of the fence. But, yes, we are absolutely involved 
in that.
    Senator Roberts. Well, then there is SARS and avian 
influenza that make the papers about every other month in terms 
of we have the sort of terrorist threat of the month, which is 
unfortunate because it sort of drives TTIC and other matters. 
But we have currently in place rapid response teams. We used to 
call them raid teams. That was on the Armed Services Committee. 
Then we changed that to CST teams and for the life of me I 
cannot tell you what CST stands for. To get it appropriated, we 
were going to call it the Ted team or the Bob Team, but there 
has been a change, so I think probably Terrorism Homeland 
Advanced Detail, which is THAD, of course. Being the chairman 
of the Appropriations Committee, I thought they may get funded. 
But they were to quickly deploy within 4 hours of anybody or 
any incident to get back to the national folks and say this is 
what we are dealing with, and with the many, many exercises 
that we have had, and one of my questions is are you planning 
exercises, and I hope that you are, this would become 
absolutely crucial.
    Are you doing any work to develop a similar team to deal 
with agriculture and food security issues or are the current 
teams trained in this area as well?
    Mr. Albright. Well, first, a response to the point about 
exercises, yes, we do exercises all the time.
    Senator Roberts. Good.
    Mr. Albright. We actually have a group of people who spend 
all their time planning exercises and TOPOFF III is coming up, 
for example.
    Senator Roberts. You scared the hell out of us with Dark 
Winter, by the way.
    Mr. Albright. Right.
    Senator Roberts. That was a seminal event.
    Mr. Albright. Yes, well, you know, we have pretty wild 
imaginations. It is not hard to come up with scenarios that 
keep you awake at night. With regard to rapid response teams in 
the agricultural area, that would be something that USDA would 
be primarily focused on and not the department, and I really do 
not know the answer to what they have in existence. So what I 
would like to do is just get back to you with that one.
    Senator Roberts. OK. I think perhaps in the Intelligence 
Committee, we ought to have CDC, NIH, FDA, USDA, and we will 
toss in a few more, and maybe we could have a good panel 
discussion about this because in terms of a national threat, 
Mr. Chairman, I think it is extremely important. Senator Burr 
has left, as has everybody else, but at any rate I want to 
thank him for his leadership. I want to thank you for your 
leadership in having this subcommittee hearing, and I 
especially want to thank the witnesses. Gentlemen, persevere, 
because this is going to be a threat and a challenge for us for 
some time to come, and thank you for the job that you are 
doing.
    The Chairman. I want to thank the panel for their testimony 
and their answers and we will be submitting some more questions 
in writing, if you would be so kind as to get those back to us 
so we can finish our planning on biodefense.
    The Chairman. Thank you. If the next panel would take their 
place.
    Senator Burr. As our witnesses are moving to the table, let 
me take an opportunity to reintroduce Gerald Epstein, the 
Senior Fellow of Science and Security at the Center for 
Strategic and International Studies, Homeland Security Program; 
Mr. Gordon Cameron, CEO of Acambis, a biotechnology company 
with facilities in Massachusetts; Dr. Jon Abramson, the chair 
of Pediatrics at Wake Forest Baptist Medical Center, and a 
member of the CDC Advisory Committee on Immunization Practices; 
and George Painter, the President and CEO of Chimerix in the 
Research Triangle Park.
    Gentlemen, we welcome all of you. We have already made 
arrangements that your full testimony is to be included as part 
of the record, and if you have no objections in the order that 
we go through, I will start to your right and my left and 
recognize Dr. Painter.

 STATEMENTS OF GEORGE PAINTER, PH.D., CEO, CHIMERIX, INC.; JON 
ABRAMSON, M.D., PROFESSOR AND CHAIR, DEPARTMENT OF PEDIATRICS, 
WAKE FOREST UNIVERSITY SCHOOL OF MEDICINE, WINSTON-SALEM, NORTH 
  CAROLINA; GERALD L. EPSTEIN, SENIOR FELLOW FOR SCIENCE AND 
 SECURITY, HOMELAND SECURITY PROGRAM, CENTER FOR STRATEGIC AND 
  INTERNATIONAL STUDIES; AND GORDON CAMERON, CEO, ACAMBIS, PLC

    Mr. Painter. Thank you, Mr. Chairman, and committee. I 
appreciate the opportunity to be here and speak to you on the 
current state of biodefense preparedness and the capacity of 
the biotechnology and pharmaceutical industries to respond to 
the biodefense needs of the United States.
    I appear before you today as the Chief Executive Officer of 
Chimerix, Inc., an emerging biotechnology company that is in 
Research Triangle Park, North Carolina. My testimony is based 
on over 25 years of experience in the biotechnology and 
pharmaceutical industry. My primary focus and experience is in 
drug development, taking drugs from the early discovery stage 
through approval of the regulatory process to 
commercialization, specifically in the area of antiviral drugs.
    From my perspective, there are two primary challenges 
facing the emerging biodefense industry. First, it is 
imperative that existing animal models of viral infection be 
further developed to a level that will allow drug developers to 
provide the Food and Drug Administration with the data 
necessary to ensure the safety and efficacy of these biodefense 
medicines.
    Second, the Department of Health and Human Services must 
ensure that the Project Bioshield Act of 2004 is implemented in 
such a way to convince investors in biotechnology such as 
Chimerix that a successfully developed biodefense 
countermeasure can be purchased for the Strategic National 
Stockpile in a predictable and timely manner.
    With support in funding by the National Institute of 
Allergy and Infectious Disease and funding from private venture 
capital firms, Chimerix has initiated an aggressive program 
focused on the development of an oral antiviral drug for the 
prophylaxis and treatment of smallpox. Originally, the primary 
goal of our effort was to produce a therapeutic alternative to 
vaccination to provide protection for the up to 50 million 
Americans who cannot be vaccinated as a result of compromised 
immune systems.
    This population includes people with cancer, people who 
have undergone organ transplants, pregnant women and small 
infants, families of people living with common skin disorders 
such as eczema and atopic dermatitis, and people living with 
HIV/AIDS.
    While this existing gap in our Nation's preparedness alone 
warrants investment in the development of safe and effective 
antiviral treatments, last year, straightforward genetic 
engineering techniques were used to create a model virus 
related to smallpox that can allude vaccines and produce 100 
percent mortality in mice that were already vaccinated. Were 
these methods successfully applied to the smallpox virus, 
variola major, the United States would be left defenseless 
despite the availability of vaccine.
    The single-most critical tool in this effort is relevant 
animal models that can provide data to ensure the efficacy and 
determine the appropriate human dose of new drugs. It is both 
impractical and unethical to study the efficacy of a potential 
treatment for virulent diseases such as smallpox in humans. 
Therefore, critical efficacy data must be gathered in animal 
models under the FDA's animal efficacy rule. The data gathered 
in that rule takes the place of clinical trials, Phase II/Phase 
II clinical trials that are usually used to justify the 
approval and registration of a drug.
    Simply put, without a good model, Chimerix nor any other 
company can develop a good antiviral for the treatment of 
smallpox infection. While a great deal of excellent research 
has been undertaken by both the Federal Government and the 
private sector in response to this critical need, current 
animal models in mice, rabbits, monkeys, using test viruses, 
mousepox, cowpox, monkeypox, even variola, human smallpox, are 
currently inadequate to fully support drug development. Thus, 
further development of treatments for smallpox is essentially 
stalled.
    Existing animal models cannot, for example, address two key 
issues that have arisen out of discussions between the FDA and 
Chimerix on the company's smallpox drug candidate.
    First, the disease produced in the animals needs to be 
analogous as possible to the disease that is going to be seen 
in humans. In current animal models, the rate and degree of 
appearance of the infection in the blood is dependent on the 
type and strain of the pox virus used, the route of infection--
is it IV, is it nasal, is it inter-tracheal, is it aerosol--and 
how much of the virus is used in the infection. We currently do 
not know which of these test conditions are appropriate in 
modeling the human disease.
    Second, the treatment in animals need to provide the basis 
for guiding physicians in the treatment or prophylaxis of a 
person who has the disease. In order to meet this condition, 
not only must the disease model be correct, but the uptake, 
distribution and elimination profile of the drug in the animal 
must be translatable, directly translatable to that in a human.
    Resolving these issues is absolutely critical in allowing 
us to determine what dose of the drugs should be given, how 
soon before exposure the drug can be given, and have a good 
prophylactic effect, and how long after the disease has begun 
to manifest itself that we can treat someone and still be 
assured of their recovery.
    There is no doubt these issues can be resolved with more 
effort. However, from a practical standpoint, this will require 
a significantly higher application of resources since animal 
experiments are both costly and time consuming, key issue being 
time.
    Additionally, this process can be expedited by creating 
expanded working groups in which people with experience in drug 
development meet with animal modeling experts and present are 
appropriate representatives from the CDER branch of the FDA.
    On Friday, I returned from a trip to Russia with a 
delegation led by Congressman Weldon. On my own initiative, I 
was able to meet with and talk extensively to the leading 
former Soviet virologist to obtain information and insight into 
their experience. Given the widely reported experience of the 
Soviet Union with smallpox long after the eradication of the 
disease, these scientists many of whom are now quite elderly, 
possess a great deal of information about the course of the 
disease. While I have no doubt the United States has already 
learned a great deal of information from these individuals, 
their knowledge about the course of the disease could 
enormously supplement our understanding and help expedite 
development of animal models to allow drugs such as those being 
developed by Chimerix to enter the Strategic National Stockpile 
sooner. I would strongly encourage Congress to consider support 
of such interactions as part of Project Bioshield.
    Recognize that any uncertainty by investors in companies 
developing countermeasures caused by unpredictable issues and 
regulatory challenges such as the animal rule have the direct 
effect of increasing the cost of developing these 
countermeasures which in turn are passed on to the taxpayer 
when the drug is purchased for the stockpile.
    Of course, there is always the very clear danger that these 
challenges drive private investment away entirely, thereby 
threatening the capacity to produce countermeasures at any 
price. Coupled with the already uncertain environment 
surrounding the creation of the emerging biodefense industry, 
the lack of a clear animal rule is potentially crippling to the 
development of the warm manufacturing base needed for 
countermeasure development.
    I appreciate the opportunity to speak to you today and 
happy to answer any questions.
    Senator Burr. Thank you, Dr. Painter.
    [The prepared statement of Mr. Painter follows:]
               Prepared Statement of George Painter PH.D.
    Chairman Burr, Senator Kennedy, and members of the committee, it is 
an honor for me to testify before you today regarding the current state 
of biodefense preparedness and the capacity of the biotechnology and 
pharmaceutical industries to respond to the biodefense needs of the 
United States.
    I appear before you today as the Chief Executive Officer of 
Chimerix, Inc. Chimerix is an emerging biotechnology company based in 
Durham, North Carolina. The company was founded in 2002 to harness a 
technology developed by Dr. Karl Hostetler, professor of medicine at 
the University of California, San Diego, and is applying this 
technology to an existing, FDA licensed antiviral medication for AIDS 
patients in order to make it effective against orthopoxviruses, in 
particular, smallpox.
    My testimony is based on over 25 years of experience in the 
biotechnology and pharmaceutical industry. During my career, I have 
worked for both large pharmaceutical companies such as Burroughs 
Wellcome Co. (now part of GlaxoSmithKline) and small biotechnology 
companies such as Triangle Pharmaceuticals, also based in North 
Carolina (now owned by Gilead Sciences). My primary focus and 
experience is in the development of effective treatments against 
viruses such as Hepatitis B and HIV, including being the inventor of 
lamivudine-HBV for the treatment of hepatitis B and being a member of 
the development team for AZT, perhaps the most widely used HIV 
treatment in the world.
    Let me begin by thanking the committee for its leadership in this 
critical public health and national security area. The work of this 
committee's members, including the leadership of Senator Burr while in 
the House of Representatives and Senator Kennedy with former-Chairman 
Gregg in the Senate, in the passage of the Project Bioshield Act of 
2004 was a credit to each of you. I applaud President Bush for his 
vision in announcing Project Bioshield in his 2003 State of the Union 
Address and look forward to working with Senator Gregg and this 
committee to see passage of S. 3 this year to further strengthen the 
Nation's biopreparedness.
    From my perspective, there are two primary challenges facing the 
emerging biodefense industry. First, it is imperative that existing 
animal models of viral infection be further developed to a level that 
will allow drug developers to provide the Food and Drug Administration 
(FDA) with the data necessary to ensure the safety and efficacy of 
needed biodefense medicines. Second, the Department of Health and Human 
Services (HHS) must ensure that the Project Bioshield Act of 2004 is 
implemented in a way to convince investors in biotechnology companies 
such as Chimerix that a successfully developed biodefense 
countermeasure can be purchased for the Strategic National Stockpile in 
a timely and predictable manner. Both of the goals are easily 
achievable.
    With support and funding by the National Institute of Allergy and 
Infectious Disease (NIAID) and funding from private venture capital 
firms, Chimerix has initiated an aggressive program focused on the 
development of an oral antiviral drug for the prophylaxis and treatment 
of one of the most deadly diseases known to man, smallpox. While 
naturally occurring smallpox was eradicated almost 30 years ago by the 
World Health Organization's vaccination program, the events of 2001 
have made it clear that terrorists can obtain and will use dangerous 
pathogens to attack our country. Originally, the primary goal of our 
efforts was to produce a therapeutic alternative to vaccination to 
provide protection for the up to 50 million Americans who cannot be 
vaccinated against smallpox as a result of compromised immune systems. 
This population includes people with cancer, people who have undergone 
organ transplant, pregnant women and infants, people and the families 
of people with common skin disorders such as eczema and atopic 
dermatitis and people living with HIV/AIDS. While this existing gap in 
our Nation's preparedness alone warrants investment in the development 
of safe and effective antiviral treatments against deadly smallpox, 
last year, straightforward genetic engineering techniques were used to 
create a model virus related to smallpox that can elude vaccines and 
produce 100 percent mortality in vaccinated mice. Were these methods 
successfully applied to the smallpox virus, variola major, the United 
States would be left completely vulnerable to attack despite the 
availability of smallpox vaccines.
    Against this backdrop, Chimerix has worked diligently to pursue the 
development of a safe and effective smallpox drug and to expedite the 
drug development process as much as possible. Reaching this goal 
requires, in essence, that a new, accelerated paradigm for the 
discovery and development of antiviral drugs be defined. If 
successfully implemented, this new paradigm could help protect 
Americans not only against biological terrorist attacks, but also 
against emerging infectious diseases such as SARS.
    The single most critical tool in this effort is relevant animal 
models that can provide data to ensure the efficacy and determine the 
appropriate human dose of these new drugs. It is both impractical and 
unethical to study the efficacy of a potential treatment for virulent 
diseases such as smallpox in humans. Therefore, critical efficacy data 
must be gathered in animal models. Under the FDA's animal efficacy 
rule, this data is used in place of the standard Phase II and Phase III 
clinical trials to support registration of the drug. Thus, animal 
models acceptable to both drug developers and the FDA are absolutely 
essential to the successful development of biodefense medicines. Simply 
put, without an appropriate animal model, neither Chimerix nor any 
other maker of antiviral drugs will be able to develop medicines to 
treat smallpox infection. While a great deal of excellent research has 
been undertaken by both the Federal Government and the private sector 
in response to this critical need, current animal models in mice, 
rabbits, and monkeys using test viruses such as mousepox, cowpox, 
vaccinia, monkeypox, and even human smallpox, are inadequate to fully 
support drug development under the FDA's animal efficacy rule. Thus, 
further development of treatments for smallpox is stalled.
    Existing animal models cannot, for example, address two key issues 
that have arisen out of discussions between the FDA and Chimerix on the 
company's smallpox drug candidate. Firstly, the disease produced in 
animals needs to be as analogous as possible to the disease that would 
be seen in a human infected with smallpox. In current animal models, 
the rate and degree of appearance of the infection in the blood is 
dependent on the type and strain of the poxvirus used, the route of 
infection and how much virus is used to induce the infection. We 
currently do not know which test conditions produce the best model of 
human disease. Secondly, the treatment in animals needs to provide the 
basis for guiding physicians in the treatment or prophylaxis of human 
disease. In order to meet this condition not only must the disease 
model be correct but the uptake, distribution and elimination profile 
of the drug in the animal must be translatable to that in a human. 
Resolving these issues is absolutely critical in allowing us to 
determine what dose of the drug should be given, how soon before 
exposure the drug can be given to have a prophylactic effect, and how 
long after the disease has begun to manifest itself that we can treat 
someone and be assured of their recovery.
    There is no doubt these issues can be resolved with more effort. 
However, from a practical standpoint this will require a significantly 
higher application of resource since animal experiments are both costly 
and time consuming. Additionally this process can be expedited by 
creating expanded working groups in which people with experience in 
drug development, animal modeling experts and representatives from the 
FDA CDER branch all participate. Finally, companies that are working to 
develop biodefense countermeasures and who are consequently gaining 
first hand experience in the use of the animal efficacy rule must be 
incentivized to participate in and contribute to these programs despite 
the fact that the models and their data will be made available to 
competitors.
    On Friday, I returned from a trip to Russia with a delegation led 
by Congressman Curt Weldon (R-PA). On my own initiative, I was able to 
meet with and talk extensively to the leading former-Soviet virologists 
to obtain information and insight into their experience. Given the 
widely reported experience of the Soviet Union with smallpox long after 
the eradication of the disease, these scientists, many of whom are 
quite elderly, possess a great deal of information about the course of 
the disease. While I have no doubt the United States has already 
learned a great deal of information from these individuals, their 
knowledge about the course of the disease could enormously supplement 
our understanding and help expedite development of animal models to 
allow drugs such as those being developed by Chimerix to enter the 
Strategic National Stockpile as quickly as possible. I would strongly 
encourage Congress to consider support of such interactions as part of 
Project Bioshield. I look forward to working with FDA and our partners 
at NIAID, to explore whether the information available from Russian 
scientists can help expedite development of proper animal models, and 
thus, the development of safe and effective treatments against 
smallpox.
    The very practical concerns that require companies such as Chimerix 
to depend upon the animal rule creates enormous challenges in 
sustaining a private market solution for development and manufacture of 
medicines such as our smallpox antiviral. Chimerix, like most 
biotechnology companies, is funded by private equity investors that 
must be able to analyze and predict a reasonable return on their 
investment. Thus, the immediate development of animal models that 
produce data with the most predictive value is critical not only to 
ensure the safety and efficacy of these drugs to satisfy the FDA, but 
also to permit a sustainable business model to allow private entities 
to continue to participate in the emerging biodefense industry. Without 
addressing this problem, the United States and, indeed, the world will 
be left without a safe and effective drug for the treatment of 
smallpox.
    In addition to addressing the animal rule, Project Bioshield must 
be implemented in a way to allow the investment community the ability 
to assess and predict with some degree of accuracy the likelihood that 
a private entity such as Chimerix can generate an adequate return on 
investment through development of biodefense countermeasures. The 
recent award of a large contract for a single vaccine technology to a 
single company to address anthrax has caused some questions to be 
raised in the investment community about whether the market is viable 
for companies developing technologies such as Chimerix's that may be 
used as part of a drug cocktail. Moreover, it is unclear from the 
recent request for proposals issued by HHS for countermeasures whether 
there will be enough certainty regarding the number of doses that are 
to be procured to attract private investment.
    Recognize that any uncertainty by investors in companies developing 
countermeasures caused by unpredictable markets and regulatory 
challenges such as the animal rule have the direct effect of increasing 
the cost of developing these countermeasures, which in turn, are passed 
on to the taxpayer when the drug is purchased for the stockpile. Of 
course, there is also the very clear danger that these challenges drive 
private investment away entirely, thereby threatening the capacity to 
produce countermeasures at any price. Coupled with the already 
uncertain environment surrounding the creation of the emerging 
biodefense industry, the lack of a clear animal rule is potentially 
crippling to the development of the warm manufacturing base for needed 
countermeasures.
    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 the Protecting 
America in the War on Terror Act of 2005 recently introduced in the 
Senate by Senator Gregg as S. 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 the Department of Defense, HHS and 
NIH in this critical area.
    I am happy to respond to any questions you may have.

    Senator Burr. Dr. Abramson.
    Dr. Abramson. Good morning, Mr. Chairman and members of the 
committee. I am Jon Abramson, Physician-in-Chief of Brenner 
Children's Hospital and Chair of the Department of Pediatrics 
at Wake Forest University School of Medicine. I am a pediatric 
infectious disease specialist. I am the immediate past Chair of 
the Committee on Infectious Diseases of the American Academy of 
Pediatrics and currently serve on the Advisory Committee on 
Immunization Practices to the CDC.
    I have served on the CDC's anthrax working group and have 
co-authored AAP policy statements on the impact of bioterrorism 
on children and the use of smallpox vaccine in children. I have 
been asked today by Senator Burr to speak to the Bioterrorism 
Subcommittee regarding the issue of liability and its impact on 
being able to effectively plan for and minimize the impact of a 
bioterrorist attack.
    The opinions today that I express are my own and do not 
represent those of Wake Forest University School of Medicine, 
the Academy of Pediatrics, the CDC or any other organization.
    Immunization is one of the greatest public health 
achievements of the 20th century and has saved millions of 
lives. Thanks to the widespread use of vaccines, millions of 
children and adults have avoided terrible diseases that cause 
great suffering and even death. For example, before 
immunization, smallpox caused death in approximately 30 percent 
of those infected and serious morbidity in many other children 
and adults.
    This disease has now been eradicated from the planet, an 
unprecedented accomplishment made possible due to the 
introduction of the smallpox vaccination throughout the world.
    Polio, a disease that previously paralyzed approximately 
350,000 people worldwide annually will be eradicated during the 
next decade. In the United States immunizations have reduced by 
more than 95 percent of the vaccine preventable diseases 
including measles, whooping cough, tetanus, Hemophilus 
influenza, previously the most common cause of bacterial 
meningitis in children.
    These vaccines have proven to be very cost effective means 
for preventing these and other serious infectious diseases.
    Despite this reduction of disease due to the immunization 
program, the fragility of the vaccine supply has never been 
greater, as demonstrated by the recent shortage of multiple 
vaccines including most recently those that prevent influenza 
and pneumococcal disease. The reasons for these shortages are 
multiple and include:
    Many of the vaccine manufacturing plants are old and a 
considerable investment would be needed to update the plants to 
meet current FDA standards for good manufacturing practices;
    Two, the price of older vaccines is relatively low and the 
profit potential is greater in other therapeutic areas. This 
relatively low profitability has led to a number of companies 
discontinuing a production of some or all of their vaccine 
products.
    The risk of a large liability suit recently has increased 
despite the protection afforded companies and health care 
providers by the National Vaccine Injury Compensation Program. 
For example, some attorneys are attempting to bypass the VICP 
and bring the allegations that vaccine can cause autism 
directly to the court.
    While each of these reasons contributes to the fragility of 
the vaccine supply, today I will focus my remarks on the impact 
that liability and compensation concerns have in allowing us to 
adequately prepare for the widespread public health emergency 
such as might occur due to emerging infections in nature such 
as pandemic flu or a bioterrorist attack.
    Indeed, the recent experience with smallpox vaccine clearly 
demonstrated the effect that liability concerns had on 
implementing a preventable program designed to protect the 
American public from a smallpox bioterrorist attack. Some of 
the liability and compensation problems that arose are as 
follows:
    One, biotechnology companies were reluctant to produce a 
vaccine unless a national liability program was enacted that 
would hold manufacturers harmless against any lawsuit that 
arose from those who developed complications or died as a 
result of the vaccine.
    Two, many medical centers struggled with developing a 
smallpox vaccination program that would allow them to fulfil 
President Bush's request to immunize groups of health care 
workers at various hospitals to care for people infected with 
smallpox.
    Even when the President and Congress assumed liability 
risks for physicians and hospitals, many did not participate in 
this program. This was due in part to other liability and 
compensation issues including liability protection offered did 
not include injury compensation for health care workers, 
patients, or household contacts who might accidentally be 
inoculated with the vaccine virus.
    The current Vaccine Injury Compensation Program that was 
created in the 1980s did not afford the liability and 
compensation protection necessary to implement a mass 
vaccination program such as might be needed in a bioterrorist 
attack or pandemic.
    In the 108th Congress, Majority Leader Frist introduced a 
bill, The Improved Vaccine Affordability and Availability Act, 
that if passed would have strengthened and made several 
important modifications to the VICP that would significantly 
help with liability and compensation issues that arise from the 
routine U.S. vaccination program
    However, it was not the intent that the proposed 
legislation addressed a widespread public health emergency 
where rapid vaccination of a very large percentage of the 
population would be needed to maximally protect both the 
individuals as well as society.
    The Project Bioshield Act of 2004 and the Safety Act 
attempt to deal with some of these liability issues that arose 
in response to the smallpox vaccine program, but these pieces 
of legislation do not go far enough.
    So what is needed today to be done to minimize the impact 
of a bioterrorist attack? Congress needs to enact a no fault 
mechanism that covers not only bioterrorist attack but any 
widespread public infectious disease outbreak where emergency 
interventions such as vaccination would be done on a large-
scale basis. It should protect vaccine manufacturers and health 
care providers from lawsuits due to the potential side-effects 
of the vaccine and compensate children and adults injured 
directly or indirectly by the vaccines that are recommended to 
prevent bioterrorism inflicted disease.
    While the Vaccine Injury Compensation Program does need to 
be modernized and strengthened, any program to address 
immunizations in the face of a widespread outbreak should be a 
system separate from the VICP and encompass all circumstances 
where mass emergency immunization would be necessary.
    The program needs to have the following components:
    One, protection of the vaccine manufacturer against 
lawsuits should be absolute except in the case of gross 
negligence. What do I mean by that? For instance, a failure to 
follow good manufacturing procedures during the production and 
distribution of the vaccine.
    Two, health care workers and medical facilities 
participating in the immunization program need complete 
protection against lawsuits unless they violate standard 
medical procedures when administering the vaccine. For 
instance, failure to change needles when withdrawing vaccine 
from a multidose vial.
    Three, those who develop a complication due to the vaccine 
should be reimbursed for their medical costs and lost earnings, 
but should not receive punitive damages.
    Although the liability and compensation issues raised by a 
widespread public health emergency due to an infectious agent 
are multiple and complex, the overall goal is simple: the 
ability to make the necessary vaccines, administer them to a 
large number of people, and have a public willing to be 
immunized. Those events must occur in consecutive order to 
minimize the impact of such an event.
    The Federal Government is the only entity in a position to 
declare that mass vaccination is necessary and prioritize those 
who would receive the vaccine. As such, the Federal Government 
is the logical entity to provide the compensation.
    Similar liability and compensation issues will occur if 
experimental drugs are used to treat patients infected with 
microbial agents. For example, there are currently no FDA 
approved drugs to treat smallpox although several antiviral 
agents are under development. In the event of a smallpox 
bioterrorist attack, one or more of these drugs might need to 
be used in an attempt to decrease mortality. The liability and 
compensation issues and recommendations that I have just 
discussed for vaccines would also apply to antimicrobial 
agents.
    I urge Congress to thoughtfully, yet quickly, address the 
need to develop a compensation program to deal with the 
specific issues raised by a bioterrorist attack. It is critical 
to minimizing the impact of such an attack on the public 
health. I thank the committee for letting me testify and would 
be happy to answer any questions.
    Senator Burr. Thank you, Dr. Abramson.
    [The prepared statement of Dr. Abramson follows:]
                Prepared Statement of Jon Abramson, M.D.
                           summary statement
    Immunization is one of the greatest public health achievements of 
the 20th century and widespread use of vaccines has prevented millions 
of people from contracting diseases that can cause great suffering and 
death. Unfortunately, today the risk of a widespread bioterrorist 
attack is real and the development and use of vaccines is a critical 
component to minimize the impact of such an attack. The recent 
experience with smallpox vaccine clearly demonstrated how liability and 
compensation concerns can have negative impact on our ability to 
implement a preventive program designed to protect the American public 
from bioterrorism.
    The current national Vaccine Injury Compensation Program (VICP) 
that was created in the 1980s does not afford the liability and 
compensation protection necessary to implement a mass vaccination 
program. Congress needs to enact a ``no fault'' mechanism that could be 
modeled after the VICP, but needs to be more comprehensive to allow for 
mass vaccination. This program needs to have the following components:
    (1) Protection of the vaccine manufacturer against lawsuits should 
be absolute except in the case of gross negligence (e.g., failure to 
follow good manufacturing procedures during the production and 
distribution of the vaccine).
    (2) Health care workers and medical facilities participating in the 
immunization program need complete protection against lawsuits unless 
they violate standard medical procedures when administering the vaccine 
(e.g., failure to change needles when withdrawing vaccine from a 
multidose vial).
    (3) Those who develop a complication due to the vaccine should be 
reimbursed for their medical costs and lost earnings, but should not 
receive punitive damages.
    Although the liability and compensation issues raised by a 
widespread public health emergency due to an infectious agent, 
including those caused by a bioterrorist attack, are multiple and 
complex, the overall goal is simple. The ability to make the necessary 
vaccines, administer them to a large number of people and have a public 
willing to be immunized are three events that must occur in consecutive 
order to minimize the impact of this type of event. Similar liability 
and compensation protection also needs to be extended to those 
producing and receiving experimental drugs needed to treat an 
infection.
                                 ______
                                 
    Good morning, Mr. Chairman and members of the committee, I am Jon 
Abramson, M.D. Chair, Wake Forest University Physicians, Physician-in-
Chief, Brenner Children's Hospital and Weston M. Kelsey Professor and 
Chair of Pediatrics at Wake Forest University School of Medicine. I am 
a pediatric infectious disease specialist. I am the immediate past 
Chair of the Committee on Infectious Diseases of the American Academy 
of Pediatrics (AAP) and currently serve on the Advisory Committee on 
Immunization Practices of the Centers for Disease Control and 
Prevention (CDC). I have served on the CDC anthrax working group and 
have coauthored AAP policy statements on the impact of bioterrorism on 
children and the use of smallpox vaccine in children. I have been asked 
by Senator Burr to speak to the Bioterrorism Subcommittee regarding the 
issue of liability and its impact on being able to effectively plan for 
and minimize the impact of a bioterrorist attack. The opinions I 
express today are my own and do not represent those of Wake Forest 
University School of Medicine, the AAP, CDC or any other organization.
    Immunization is one of the greatest public health achievements of 
the 20th century and has saved millions of lives. Thanks to the 
widespread use of vaccines, millions of children and adults have 
avoided terrible diseases that can cause great suffering and even 
death. For example, before immunization, smallpox caused death in 
approximately 30 percent of those infected and serious morbidity in 
many other children and adults. This disease has now been eradicated 
from the planet, an unprecedented accomplishment made possible due to 
the introduction smallpox vaccination throughout the world. Polio, a 
disease that previously paralyzed approximately 350,000 people 
worldwide annually, will likely be eradicated during this decade. In 
the United States immunizations have reduced by more than 95 percent 
other vaccine-preventable infectious diseases including measles, 
whooping cough, tetanus, and Haemophilus influenzae, previously the 
most common cause of bacterial meningitis in children. These vaccines 
have proven to be a very cost-effective means for preventing these and 
other serious infectious diseases.
    Despite the great reduction of disease due to the immunization 
program, the fragility of the vaccine supply has never been greater, as 
demonstrated by recent shortages of multiple vaccines including most 
recently those that prevent influenza and pneumococcal disease. The 
reasons for these shortages are multiple and include:
    (1) Many of the vaccine manufacturing plants are old, and 
considerable investment would be needed to update the plants to meet 
current FDA standards for good manufacturing practices.
    (2) The price of older vaccines is relatively low and the profit 
potential is greater in other therapeutic areas. This relatively low 
profitability has led to a number of companies discontinuing production 
of some or all of their vaccine products.
    (3) The risk of large liability suits recently has increased 
despite the protection afforded companies and health care providers by 
the national Vaccine Injury Compensation Program (VICP). For example, 
some attorneys are attempting to bypass the VICP and bring the 
allegation that vaccines can cause autism directly into court.
    While each of these reasons contribute to the fragility of the 
vaccine supply, today I will focus my remarks on the impact that 
liability and compensation concerns have in allowing us to adequately 
prepare for a widespread public health emergency such as might occur 
due to emerging infections in nature (e.g., pandemic influenza) or a 
bioterrorist attack. Indeed, the recent experience with smallpox 
vaccine clearly demonstrated the effect that liability concerns had on 
implementing a preventive program designed to protect the American 
public from a smallpox bioterrorist attack. Some of the liability and 
compensations problems that arose are as follow:
    (1) Biotechnology companies were reluctant to produce a vaccine 
unless a national liability program was enacted that would hold 
manufacturers harmless against any lawsuits that arose from those who 
developed complications or died as a result of the vaccine.
    (2) Many medical centers struggled with developing a smallpox 
vaccination program that would allow them to fulfill President Bush's 
request to immunize a group of healthcare workers at various hospitals 
to care for people infected with smallpox. Even after the President and 
Congress assumed liability risk for physicians and hospitals, many did 
not participate in the smallpox immunization program due, at least in 
part, to liability and compensation issues. This was because the 
liability protection offered did not include injury compensation for 
healthcare workers' patients or household contacts who might be 
accidentally inoculated with the vaccine virus.
    The current VICP was created in the 1980s and does not afford the 
liability and compensation protection necessary to implement a mass 
vaccination program, such as might occur from a bioterrorist attack or 
a pandemic. In the 108th Congress, Majority Leader Bill Frist (R-TN) 
introduced a bill, the Improved Vaccine Affordability and Availability 
Act (S. 754) that, if passed, would have strengthened and made several 
important modifications to the VICP that would significantly help with 
liability and compensation issues that arise from the routine U.S. 
vaccination program. However, it was not the intent that this proposed 
legislation address a widespread public health emergency where 
vaccination of a very large percentage of the population would be 
needed to maximally protect both the individual as well the population 
as a whole.
    So what needs to be done to minimize the impact of a bioterrorist 
attack? Congress needs to enact a ``no fault'' mechanism that could be 
modeled after the VICP. It should protect vaccine manufacturers and 
health care providers from lawsuits due to potential side effects of 
the vaccine and compensate children and adults injured directly or 
indirectly by vaccines that are recommended to prevent bioterrorism-
inflicted disease. While the VICP does need to be modernized and 
strengthened, any program to address immunizations given in response to 
a bioterrorist attack should be a system separate from the VICP. The 
program needs to have the following components:
    (1) Protection of the vaccine manufacturer against lawsuits should 
be absolute except in the case of gross negligence (e.g., failure to 
follow good manufacturing procedures during the production and 
distribution of the vaccine).
    (2) Health care workers and medical facilities participating in the 
immunization program need complete protection against lawsuits unless 
they violate standard medical procedures when administering the vaccine 
(e.g., failure to change needles when withdrawing vaccine from a 
multidose vial).
    (3) Those who develop a complication due to the vaccine should be 
reimbursed for their medical costs and lost earnings, but should not 
receive punitive damages.
    While I have focused my remarks today on the use of vaccines in a 
bioterrorist attack, many of the same liability and compensation issues 
would arise during any widespread public health emergency due to an 
infectious disease such as will occur the next time there is a pandemic 
influenza season. Although the liability and compensation issues raised 
by a widespread public health emergency due to an infectious agent are 
multiple and complex, the overall goal is simple. The ability to make 
the necessary vaccines, administer them to a large number of people and 
have a public willing to be immunized are three events that must occur 
in consecutive order to minimize the impact of this type of event.
    Similar liability and compensation issues will occur if 
experimental drugs are used to treat patients infected with microbial 
agent. For example, currently there is no FDA-approved drug to treat 
smallpox, although several antiviral agents are under development. In 
the event of a smallpox bioterrorist attack, one or more of these drugs 
might need to be used in an attempt to decrease mortality. The 
liability and compensation recommendations I have just discussed for 
vaccines would also apply for antimicrobial agents.
    I urge Congress to thoughtfully, yet quickly, address the need to 
develop a compensation program to deal with the specific issues raised 
by a bioterrorist attack. It is critical to minimizing the impact of 
such an attack on the public health.

    Senator Burr. Dr. Epstein.
    Mr. Epstein. Thank you, Mr. Chairman. Mr. Chairman, I am 
Gerald Epstein, a Senior Fellow for Science and Security at the 
Center for Strategic and International Studies. I have been 
looking at issues of science, technology and security for my 
entire career which I cannot resist pointing out I began when I 
worked for this body. I was initially an analyst at the 
Congressional Office of Technology Assessment, which is a 
capability that no longer exists today, but I think it is one 
that you and the rest of the members of this body and the other 
would find very useful at precisely the kind of question that 
we are looking at today.
    I would like to spend some time this morning discussing 
some overall aspects of the bioterrorism threat, what these 
characteristics imply for our ability to counter these threats, 
some of the high priority actions that we need to take as a 
result, and then I want to conclude with a few overall cautions 
that we have to keep in mind as we think our way through.
    Clearly, this is not a hearing all about the threat, and 
the members of this committee are quite familiar with it. But 
as we know, history is a very poor guide. We have, I know, few 
areas with as great a gulf between a demonstrated proven 
capability to do tremendous damage, on the one hand, and a 
relative paucity of actual examples of significant human 
casualties on the other.
    We know that major State programs almost 50 years ago have 
demonstrated the capability that the technologies and equipment 
available can do tremendous damage. We know that in the 
intervening 5 decades that the technology, materials and 
expertise from which this ability arises is propagating around 
the world and sufficiently motivated terrorists can avail 
themselves of the ability to produce these weapons.
    We also know now something we may not have known more than 
5 or 10 years ago, that terrorists do exist who want to kill 
vast numbers of us. So what we do not know is why they have not 
applied this capability to that desire. There is a whole other 
debate which I will not go into, but it may be just that these 
technologies have been unfamiliar to the people who have tried 
to commit these acts.
    Maybe the generation of terrorists we face today have not 
taken high school biology. Next generation of terrorists will 
and tomorrow's high school biology classes will be much more 
potent than what is available in classes today.
    So the capabilities that we are worried about are not only 
around today, but if one looks at how technology is evolving, 
the dissemination around the world, its availability to people, 
the endemic nature in which it is building itself into the 
economy, means that more and more capability is going to be in 
the hands of more and more people. I think one debate we 
sometimes get into is not particularly helpful: here is a given 
level of capability that terrorists have today and this is what 
they need to do a major biological attack; how close or how far 
are we? That is an important question if I want to worry about 
what is my chance of being attacked today.
    But the questions in front of this committee involve 
preparations that will take many years to put in place. We have 
to look down the road, not what today's threat is going to be, 
but what the threat is going to be years out when the systems 
that we are talking about and voting funds for today are put 
into place. So no matter what that gap may be right now, it is 
going to be smaller next year and smaller the year after that, 
and eventually we just have to assume that the capabilities 
will be available.
    So what does this tell us about the nature of the future 
threat? First of all, it is unpredictable in detail. We know, 
and I appreciate Senator Roberts' interest in particular--he 
has a very hard job with the intelligence oversight and the 
intelligence agencies--the amount of effort one needs, the 
footprint, as it has been referred to, for producing biological 
weapons can be very small. Maybe even harder, the natural 
background of legitimate biotechnology activity all over the 
world is large and is increasing. So we are looking for a very 
small signal in a very large background. It is going to be very 
difficult to find these activities.
    Second major aspect is that while our defensive efforts 
take some time to put into motion, particularly when we are 
talking about drugs and therapeutics and approval, the 
activities of those developing weapons can be much more 
flexible and much more rapid. So these all say that we are not 
going to be able to rely on intelligence to give us firm 
details about the problem we are worried about.
    We are not going to be able to say these are the lists of 
bugs we know people are going to work on. These are the ones we 
know are the problems. We can say there are some agents that 
are more serious than others. And those are the ones that we 
are working on today.
    But looking out into the future, we are not going to be 
able to pick off one by one by one. We have to prepare a broad 
response and a rapid flexible biodefense capability if for no 
other reason than the threat we may face in 10 years does not 
exist today. The groups that are going to be posing that threat 
may not have formed so we are not going to be able to steer 
directly our efforts based on hard, firm intelligence. We have 
to develop broad capabilities.
    This then goes directly to the question of some 
therapeutics, anti-infectives, antibiotics, and antivirals. If 
we do not know exactly what agents we may be forced to 
confront, we want mechanisms that can provide broad protection. 
It would not matter so much. We do not want a bug-specific 
drug. We want something that can address a wide variety of 
threats.
    This also has direct applicability to another problem. We 
spent some time talking today about the public health questions 
which are apart from biodefense. We have a serious problem with 
microbes becoming resistant to our existing arsenal of 
antibiotics and antiviral drugs. If we are able to develop 
broad spectrum therapeutics to anticipate future bioterrorism 
threats, these are also very important developments we were 
going to need just to handle conventional health threats.
    We have had a report, if I may be so bold as to bring up 
your counterparts across the water, the British House of Lords, 
say we may be approaching a pre-antibiotic era. Antibiotic 
resistance threatens mankind with a prospect of referring to 
the pre-antibiotic era if these diseases continue to evade the 
therapeutics we have. We need to do research for that reason 
alone.
    In order to get this broad flexible responsive biodefense 
capability, we need a lot of research infrastructure. Part of 
that is the laboratories and the science base that Dr. Fauci 
described before. A lot of it is tools, methods, assays, 
reagents, a whole supporting industry of tools and capabilities 
that are going to make our research in the future better able 
to be rapidly responsive.
    And this is a capability that does not fit directly under 
Bioshield. We are not going to say we are going to buy one 
product to provide that capability. That is the kind of 
capability that is going to come when there is an industry that 
is developed in response to the demand that we are putting on 
the mission of getting a more flexible biodefense.
    So in terms of the programs we have in place, the NIH 
programs are very, very important. A basic science base is 
absolutely important. The Bioshield I investments showing that 
we need to make connections and provide incentives to industry 
are also very important. But I think neither of those is 
sufficient by itself, and we have heard already on this panel 
some important gaps in that package, one on very important 
liability concerns: if a firm has a capability but is not 
willing to bet its future survival on the fact that it may not 
have been able to anticipate some of the rare side-effects.
    Particularly recognizing that in the case of a therapeutic 
or vaccine against a bioterror event, we are developing that 
product for a situation we really cannot even anticipate today. 
We do not know what the future bioterrorist event is going to 
look like so I think liability concerns are even more pressing 
for biodefense products than we already have in terms of other 
products.
    And we have also had the question of how much incentive is 
enough for industry, and I guess I would just have to argue, 
not running a biotech or a pharmaceutical company myself, I am 
not quite sure what that level is. But I think there is a 
legitimate concern that the existing incentives may not be 
sufficient. I am reluctant to raise this story, an anecdote. I 
am reminded about an argument my parents once had, and I 
believe they will probably read this in the transcript so I 
have to watch it. But my mother once said that she really liked 
Robert Redford in a movie and my dad said no, she did not. It 
was not that he knew what she liked better than she did, but to 
his defense, I think he is recalling that she may have said 
something at the time.
    But the point is it does not matter what I think as a 
sufficient incentive for industry. What matters is what 
industry thinks is a sufficient incentive, and I think we have 
also heard about some of the difficulties of having these 
conversations in a group. I believe there may be some legal 
mechanisms that under the Defense Production Act or some other 
means where we can actually hold some. I know the Commerce 
Department has industry advisory committees where they are able 
to provide useful collective advice under a Federal Advisory 
Committee process. So that is an important mechanism I think we 
should pursue.
    Let me just go into some of the overall cautions I want to 
leave you with before I conclude. One is the other question we 
have already touched on today, which I think is a very 
difficult one for a public policy, the degree to which the 
things we need to develop in the future are restricted to 
government biodefense missions or the degree to which they may 
actually benefit a commercial or a private or a public health 
aspect as well.
    In looking for a broad flexible responsive biodefense 
research base, I think the things we are going to have to build 
for that are not going to be labeled ``government only.'' They 
are not going to be labeled ``biodefense only.'' They are going 
to have to be broad and capable measures, assays, screening 
tools, licenses that are going to be of benefit to everybody, 
to the industry as a whole, and I think rather than worry about 
that and say that is a fault of the provision, I think that is 
something we need to actually embrace if we want to build a 
partnership between government and industry and if we want to 
have an industry that is able to be responsive.
    The initial draft of the Bioshield legislation did provide 
that products with commercial utility were not eligible for 
Bioshield. That, as I understand, was modified in the last act 
and the final bill that passed said generic products would be 
available to Bioshield; however, the commercial utility of the 
product would be something the Secretary of HHS would have to 
consider. So we realize there is a tension here. I think that 
tension is going to get worse because the research supporting 
capabilities we need are ones that are going to benefit more 
broadly, and I think we have to encourage that and not be 
afraid of it.
    And, finally, I just do want to leave the last reminder 
that although we have talked about medical countermeasures 
today and they are terribly important, that is just one part of 
our overall defense against the bioterrorist threat, and it is 
important to address the problem at every stage we can, from 
dissuading folks who might go down that road to trying to 
frustrate their ability to collect the materials and technology 
and expertise. That is a very hard thing to do because the 
technology is there, but if we can frustrate that, we want to 
work on it, very important aspect of trying to do what we can 
to detect these programs wherever they are taking place. And 
finally increase our ability to respond after the fact.
    I would be happy to answer your questions. Thank you.
    Senator Burr. Thank you.
    [The prepared statement of Mr. Epstein follows:]
                Prepared Statement of Gerald L. Epstein
    Mr. Chairman and members of the subcommittee, I appreciate the 
opportunity to appear before you today to discuss the capacity to 
generate medical countermeasures against biological weapons and 
bioterrorism. I am currently serving as Senior Fellow in Science and 
Security in the Homeland Security Program at the Center for Strategic 
and International Studies here in Washington. I also teach a course on 
science, technology and homeland security in the Security Studies 
Program at Georgetown University's Edmund A. Walsh School of Foreign 
Service. I have been working in the area of science, technology, and 
security policy for more than 20 years and have been studying 
biological weapons issues and responses for nearly 15 years.
    At CSIS, my colleagues and I are launching a major international 
effort, supported by the Carnegie Corporation of New York and the John 
D. and Catherine T. MacArthur Foundation, to look broadly at biological 
weapons threats and to identify opportunities to counter them at all 
stages, from influencing the intent to produce weapons, to denying 
access to materials and expertise, to detecting illicit programs, to 
managing the consequences of an attack. We are also looking at 
perceptions and threat reduction activities across Nations and across 
professional communities. The activities to be addressed at today's 
hearing are an important part of the United States'--and the world's--
response to biological weapons threats.
    At CSIS I also organized a workshop to examine the global evolution 
of dual-use biotechnology, looking specifically at the implications of 
this evolution for the spread of biological weapons and bioterrorism 
capabilities. The report for this workshop is in press.\1\
---------------------------------------------------------------------------
    \1\ Gerald L. Epstein, Global Evolution of Dual-Use Biotechnology: 
A Report of the Project on Technology Futures and Global Power, Wealth, 
and Conflict (Washington, DC: Center for Strategic and International 
Studies, in press).
---------------------------------------------------------------------------
    I'd like to spend some time this morning discussing aspects of the 
bioterrorism threat, what they imply for our ability to counter them, 
and some high priority actions we need to take as a result. Let me set 
out the following points:
    (1) Bioterrorism is a very serious threat, but the details of 
future biological weapons cannot be known today. Although certain 
diseases currently pose more serious terrorist threats than others, a 
wide variety of agents might nevertheless be used, and the exponential 
growth and dissemination of biotechnology will foster the creation of 
new ones. Since the time to develop and produce bioweapons agents is, 
in general, much shorter than the time to develop, license, and produce 
a response, we cannot rely on hard intelligence alone to direct the 
development of countermeasures.
    (2) Uncertainties about the future threat put a premium on breadth 
of capability and speed of response. Looking ahead, the most important 
medical countermeasures are new ``broad spectrum'' antibiotic and 
antiviral drugs and other post-exposure therapies. Traditional vaccines 
have only a limited role in civilian biodefense, because of the time 
they need to develop protection; we cannot vaccinate our way out of 
this problem.
    (3) Substantially increased NIH biodefense research and the new 
Bioshield program are necessary components of our national response, 
but they are insufficient. Further incentives are needed to stimulate 
production of post-exposure therapeutics and rapid response 
capabilities, for which we need new research tools and methods. We also 
need to develop animal models for human disease and increased animal 
production and testing capacity.
    (4) Successful incentives that foster biodefense missions could 
benefit commercial enterprise as well, because many of the necessary 
supporting capabilities are inherently generic. Policies that attempt 
to ensure that government incentives or investments apply only to 
government biodefense missions--as the original version of the first 
Bioshield legislation attempted to do--are guaranteed to fail at 
fostering a dynamic, responsive, and flexible biodefense response 
capability.
    (5) Medical countermeasures are very important, but they are only 
one component of a comprehensive biodefense strategy. Countering 
bioterrorism also requires efforts to dissuade, frustrate, detect, and 
counter bioterrorism programs at every possible stage of their planning 
and execution, not just after an attack has been conducted.
               characteristics of the bioterrorist threat
    Importance of Taking the Threat Seriously. As members of this 
subcommittee no doubt know, history is a poor guide to the bioterrorist 
threat. There are few areas with so great a gulf between the proven, 
historical capability to do grievous harm, and the relative paucity of 
actual attacks. We know for sure that biological weapons, when prepared 
for effective dissemination in large enough quantities, can kill over 
large areas. All the necessary capabilities to place many thousands of 
lives at risk were demonstrated decades ago. We know that the 
technology, materials, and expertise required to produce biological 
weapons are available to those terrorists who are sufficiently 
motivated and skilled to pursue them; essentially all the equipment, 
materials, and expertise have legitimate application or can be found 
without great difficulty.
    And we know that enemies exist who are eager to kill Americans in 
vast quantities. What we are not sure of is why we have not yet been 
attacked in this way. Maybe not enough of today's terrorists took high 
school biology. Tomorrow's will--and their high school biology classes 
will be much more potent than today's. We cannot bet our country that 
whatever restraints have kept terrorists from pursuing this path will 
persist indefinitely.
    Exactly how close terrorist groups are right now to the capability 
to conduct a major biological attack matters if we want to know how 
likely it is that such an attack will take place in the near future. 
However, looking out over the several years that our defensive 
preparations will take to implement, the details of today's threat are 
less important than the realization that the rapidly increasing 
capability, market penetration, and geographic dissemination of 
relevant biotechnical disciplines will inevitably bring weapons 
capabilities within the reach of those who may wish to use them for 
harm (see figure 1).
    Difficulty in Predicting or Specifying Future Threats. Given the 
diversity of potential biological weapon agents and the increasing 
ability to modify or augment them, either through conventional 
techniques or genetic engineering, we will never be able to restrict 
our efforts to a short list of agents considered to be the most serious 
threats. It is true that certain agents today are considered to pose 
greater terrorist risks than others because of their combination of 
health consequences and ease of dissemination. Moreover, a few 
diseases, such as smallpox and anthrax, pose such dangers that they are 
worth special attention (smallpox because of its lethality and 
contagiousness; anthrax because of its lethality and hardiness). 
However, a wide variety of agents could be used as weapons, and that 
list will grow over time as science advances, biotechnology spreads, 
and new capabilities become feasible.
    Intelligence collection efforts will not provide a reliable guide 
for our biodefense activities. First, the ``signatures,'' or observable 
signs, of a terrorist bioweapons development activity will be very 
difficult to detect, particularly amidst a large and rapidly growing 
background of legitimate biotechnical activities. Bioweapons programs 
do not require large, expensive, or distinct facilities, and we cannot 
have much confidence that we will spot them.
    More serious is the significant mismatch in time scales between 
attackers and defenders. Unless we radically transform the way we do 
business--a scientific and technical challenge as much as a management 
or resource one--our programs to design, develop, approve, and produce 
medical countermeasures will have lead times that are much longer than 
those of the terrorist weapons programs they are intended to counter. 
Today's defensive programs cannot be designed against today's threat 
but rather must anticipate the threat years in the future--posed by 
groups and programs that may not even exist today. Moreover, we are 
unlikely to be able to mount major countermeasures development programs 
covertly. Attackers will probably know what countermeasures we are 
developing and if possible, will work to evade them.
                      implications for biodefense
    Role of Vaccines. Unavoidable uncertainties in the future 
biological threat place a premium on broad-spectrum, post-exposure 
therapeutics and rapid reaction capabilities. Traditional vaccines are 
less relevant, since they are only effective against specific diseases 
(and often only against specific strains), and because they generally 
generate immunity too slowly to be of much value if given after the 
fact. (Smallpox and anthrax vaccines are exceptions, because they have 
therapeutic value even if given after exposure). Too many possible 
other disease threats exist for us to vaccinate our way out of the 
bioterrorism problem. And we are very unlikely as a society to decide 
to vaccinate large groups against potential bioterror agents in advance 
of any attack, since we would not be able to justify imposing the small 
but nonzero risk of vaccination when we have absolutely no way of 
knowing what harm--if any--those vaccines will have avoided.
    Novel vaccine approaches--such as so-called ``DNA vaccines''--are 
very important because they offer the tantalizing prospect of mounting 
an immune response fast enough to have therapeutic value post-exposure. 
However, such vaccines are too speculative to be able to anticipate 
successful products, or to fit within the 8-year window needed to 
qualify for Bioshield I funding. Vaccine research might also lead to 
the development of antibodies to provide quick but temporary protection 
against a disease during the time needed for a more conventional 
vaccine to take effect. Even though these techniques would--if 
successful--provide some ``post exposure'' response capability, they 
would still be very specific towards particular diseases.
    Need for Additional Antivirals and Antibiotics. Since traditional 
vaccines are of limited value in responding to an attack, we need 
antibiotics and antiviral drugs. However, despite their importance for 
dealing with natural disease outbreaks, let alone bioterror attacks, 
the development of such anti-infective has been neglected by the 
pharmaceutical industry in favor of drugs to treat chronic conditions, 
such as hypertension, cancer, and heart disease. These conditions 
provide large and continuing markets, whereas most infectious diseases 
occur only sporadically, particularly in the developed world markets 
that can readily afford pharmaceutical products. The required course of 
anti-infective treatment lasts only a week or two, and if successful it 
clears up the problem--and eliminates the need for further business. 
Pharmaceutical manufacturers would rather devote their resources to 
drugs with larger and more lucrative markets--and they would be 
punished by their investors if they didn't. (As a public policy 
researcher, I would love to be able to focus my attention on policy 
problems without considering the financial consequences--but if I am 
not able to convince a funder to support my expenses and those of my 
institution, I'm not going to be in a position to work on that topic 
for long).
    A 2004 paper by UCLA researchers finds that, out of 506 new drug 
candidates that have been disclosed in the development programs of the 
largest pharmaceutical and biotechnology firms, only 31 represented 
anti-infectives: 6 antibiotics; 12 antiviral drugs to combat HIV; 5 
other antivirals; 5 drugs to combat parasites; 5 to combat fungi; and 1 
other.\2\
---------------------------------------------------------------------------
    \2\ Brad Spellberg, John H. Powers, Eric P. Brass, Loren G. Miller, 
and John E. Edwards, Jr., ``Trends in Antimicrobial Drug Development: 
Implications for the Future,'' Clinical Infectious Disease 2004:38: 
1279-86.
---------------------------------------------------------------------------
    This dearth of new anti-infectives in the pipeline is especially 
troubling given the rate at which naturally occurring pathogens are 
evolving resistance to existing antibiotics and antiviral drugs.
    The Infectious Disease Society of America points out that 
infections that were once easily treatable are becoming ``difficult, 
even impossible, to treat'' today. More than 70 percent of the bacteria 
causing hospital-acquired infections are resistant to at least one of 
the drugs typically used to combat them. Resistance to multiple drugs 
is increasing, including resistance to vancomycin, a drug of ``last 
resort.'' Only two new classes of antibiotic have been developed in the 
last 30 years, where a class represents those drugs that all utilize 
the same mechanism to kill bacteria or viruses--and that are all 
subject to losing their effectiveness as soon as pathogens evolve the 
ability to evade that mechanism.\3\
---------------------------------------------------------------------------
    \3\ Quotations and statistics in this paragraph from The Infectious 
Disease Society of America, Bad Bugs, No Drugs: As Antibiotic Discovery 
Stagnates . . . A Public Health Crisis Brews, July 2004 available 
online at (http://www.idsociety.org/pa/IDSA Paper4 final web.pdf) 
accessed February 6, 2005; pp.9,10.
---------------------------------------------------------------------------
    A 1998 United Kingdom House of Lords report concluded that 
``antibiotic resistance threatens mankind with the prospect of a return 
to the pre-antibiotic era.'' \4\
---------------------------------------------------------------------------
    \4\ United Kindom Parliament, House of Lords, Science and 
Technology Committee, ``Resistance to Antibiotics and Other 
Antimicrobial Agents,'' Seventh Report, March 17, 1998, available 
online at (http://www.parliament.the-stationary-office.co.uk/pa/
ld199798/ldselect/ldsctech/081vii/st0703.htm) accessed February 6, 
2005; section 1.19.
---------------------------------------------------------------------------
    Clearly there is a critical need for new antibiotics and antiviral 
drugs not only for biodefense, but also to combat naturally occurring 
infectious disease.
    Need for Research Tools, Methods, and Infrastructure. In the long 
run, we need a vibrant, flexible, and responsive biodefense system that 
can adapt to threats as they materialize. We cannot mount decade-
length; billion-dollar scale vaccine or drug development programs to 
combat every potential threat agent. Therefore, we must develop 
research tools that can make a much more responsive system possible. 
Building such a system will be a tremendous challenge, and there are 
fundamental scientific questions that will need to be resolved. 
However, there will certainly be need for tools such as assays for 
rapidly screening drug candidates; improved methods for determining 
chemical and biological properties of drug candidates that can 
accelerate and/or replace certain stages of preclinical testing; 
bioinformatics approaches to identify promising drug targets; and a 
wealth of other approaches, including many that are undoubtedly yet to 
be envisioned.
    A major component of this research infrastructure will be improved 
animal facilities and understanding. Given that many diseases of 
bioterror concern occur too rarely in humans to permit clinical trials, 
the Food and Drug Administration has specified that efficacy testing of 
drugs can be conducted in two different species of animals, rather than 
humans. However, the ``animal models'' utilized in these tests must be 
sufficiently well understood so that the drug's effect on the disease 
in those animals can be reliably related to how that drug would work 
against human disease. Development of these animal models; as well as 
the construction of animal facilities in which these animals can be 
bred and these tests can be conducted, is a critical biodefense need. 
Right now, shortages of animals, animal facilities, and animal models 
threaten to limit and constrain research.
   existing government r&d programs and incentives for industry are 
                     necessary, but not sufficient
    The Role of the National Institutes of Health. Substantially 
increased NIH biodefense research funding and the Bioshield program 
that was enacted last year are necessary components of our national 
response, but they are not sufficient to generate these post-exposure 
therapeutics and other essential components of a response to 
bioterrorism. Important parts of the problem remain unaddressed, such 
as the research tools and animal model issues described above.
    Scientific investments made by NIH have driven the growth of the 
biotechnology industry over the last few decades, and the very 
substantial ($1.7 billion) increase in the level of annual NIH funding 
for biodefense research will improve our basic understanding of disease 
pathogenesis as well as lay the groundwork for the development of drug 
and vaccine countermeasures. These investments are also funding 
substantial increases in ``high containment'' research facilities that 
allow scientists to work with dangerous organisms safely. In its 
traditional role of pursuing the most exciting and productive 
biomedical science, leaving industry to pick up and run with what it 
wants, NIH has been tremendously productive. However, this largely 
``bottom-up'' approach is less well suited for a more mission-oriented, 
product-focused program to filling specific biodefense needs that 
involve product design and development, clinical trials, FDA approval, 
scaleup, and manufacturing. Industry's involvement in this process is 
critical.
    NIH research investments will also be essential for bolstering the 
scientific underpinnings for improved research tools and methods. NIH 
has developed guidelines that are intended to ensure that research 
tools, materials, and other resources developed in the course of NIH 
sponsored research become available to other investigators. However, it 
is not clear that these guidelines are optimally designed to achieve 
that end, particularly on the scale that will be needed to support a 
robust, responsive biodefense capability. The working group that 
developed those guidelines found that ``intellectual property 
restrictions can stifle the broad dissemination of new discoveries and 
limit future avenues of research and product development.'' \5\
---------------------------------------------------------------------------
    \5\ Federal Register, vol.64, no. 100 (May 25, 1999), p. 28206.
---------------------------------------------------------------------------
    Although the group also found that ``reasonable restrictions on the 
dissemination of research tools are sometimes necessary to protect 
legitimate proprietary interests and to preserve incentives for 
commercial development,'' \6\ the resulting guidelines do not appear to 
give sufficient emphasis to the role that commercial firms play in 
improving, standardizing, distributing, and marketing these tools--and 
to the corresponding ability that these firm must have to control the 
distribution of the resulting materials and recoup their investment. I 
hope that other witnesses at this hearing can provide further 
information on incentives that NIH and others can offer that will best 
facilitate the development and dissemination of research tools.
---------------------------------------------------------------------------
    \6\ Ibid.
---------------------------------------------------------------------------
    The Role of the Pharmaceutical/Biotech Industry. Pharmaceutical and 
biotech firms, on the other hand, have not in the past had much 
incentive to develop products for what are essentially government 
biodefense markets. Debate leading up to the passage of the original 
Bioshield legislation last year recognized the importance of engaging 
these firms, the barriers that had prevented them from participating, 
and the need to develop new incentives to engage them. Indeed, Congress 
has appropriated $5.6 billion dollars as of fiscal year 2004 to fund 
Bioshield purchases, and procurements using these new authorities are 
now underway. However, it is not clear that these existing incentives 
will be sufficient, for example, to motivate firms to increase their 
development of anti-infectives. Given how important it is to augment 
our existing antibiotic and antiviral arsenal for public health 
purposes as well as for biodefense, government incentives to stimulate 
their development--even ones that are not immediately applicable to 
biodefense--would be appropriate.
    The original Bioshield legislation also left gaps, such as the 
failure to provide liability protection for firms that develop medical 
countermeasures in good faith the best available scientific and 
technical understanding notwithstanding, no vendor preparing products 
to mitigate the consequences of a terrorist attack can ever fully 
predict the circumstances under which those products would be used, let 
alone conduct fully realistic tests or evaluations. It will therefore 
be important to assure firms who are otherwise willing and able to 
produce medical countermeasures that the threat of product liability 
lawsuits will not put their survival at risk. An Institute of Medicine 
Committee that examined DOD's program to develop medical 
countermeasures against biological warfare agents concluded that ``it 
is important for the government to address industry concerns about 
product liability risks as part of efforts to accelerate the 
development of medical biodefense countermeasures.'' \7\
---------------------------------------------------------------------------
    \7\ Committee on Accelerating the Research, Development, and 
Acquisition of Medical Countermeasures Against Biological Warfare 
Agents, Giving Full Measure to Countermeasures: Addressing Problems in 
the DOD Program to Develop Medical Countermeasures Against Biological 
Warfare Agents, Lois M. Joellenbeck, Jane S. Durch, Leslie Z. Benet, 
eds., (Washington, DC: National Academies Press, 2004), p. 80 available 
online at (http://books.nap.edu/books/0309091535/html/80.html#pagetop) 
accessed February 6, 2005.
---------------------------------------------------------------------------
    The SAFETY Act (part of the Homeland Security Act, Public Law 107-
296) does provide some liability protection to manufacturers of 
products to counter terrorist attacks, but it does not apply to 
products used in anticipation of such an attack, as many medical 
products might be. Nor does it provide compensation for those who may 
have been harmed by an antiterrorism product. Therefore, if liability 
protection is to be provided to shield vendors from unwarranted 
liability claims, some mechanism going beyond the SAFETY Act--and 
preferably one that provides compensation for legitimate claims--must 
be provided.
  inadvisability of drawing strict boundaries between biodefense and 
                          commercial missions
    At an earlier stage of my career, I directed a study that examined 
the relationship between military and commercial technologies, looking 
in particular at the effects and implications of government policies to 
stimulate one or the other.\8\
---------------------------------------------------------------------------
    \8\ Alic, John A.; Branscomb, Lewis M.; Brooks, Harvey; Carter, 
Ashton B., and Epstein, Gerald L.; Beyond Spinoff: Military and 
Commercial Technologies in a Changing World (Boston, MA: Harvard 
Business School Press, 1992).
---------------------------------------------------------------------------
    It was clear at the time--and it remains true today--that 
government policies that have the intent--or the effect--of stimulating 
commercial technology development can be quite controversial. 
Legitimate objections would be raised to policies that would put 
government in the position of ``Picking Winners and Losers,'' with the 
argument being made that the marketplace was much more appropriate than 
the government in making such a determination. Interestingly, I think 
that ``picking winners'' was often a bigger problem than ``picking 
losers.'' The latter merely wasted money, whereby the former took 
resources from all of us and had the effect of applying them to the 
benefit of just a few. Even when such actions were well justified on 
the basis of their public benefit, the fact that there were private 
beneficiaries raised issues of equity and fairness.
    I revisit this debate because I fear that similar concerns could 
cripple our efforts to generate a vibrant, responsive, and effective 
biodefense capability. Some of the most important requirements we 
face--improved research infrastructure; new tools and methods; new 
antiviral and antibiotic products; new animal models and facilities--
are not specific to biodefense; they apply to biodefense and to 
commercial missions alike. If we are too concerned about ``picking 
winners''--if we avoid taking actions that might benefit commercial 
firms, even as they support the biodefense mission--we are guaranteed 
to fail at developing the capabilities we need. The original Bioshield 
legislation attempted to do just that, making any product that had a 
nonbiodefense application ineligible for Bioshield support. Congress 
wisely eliminated that prohibition before enacting that legislation.
    Future actions to support our biodefense capability are similarly 
bound to raise this same question. Given how generically applicable the 
necessary capabilities are, we must embrace, rather than avoid, these 
``dual-use'' benefits. Clearly, careful attention will have to be paid 
to the details in any such incentive scheme to ensure that they are not 
abused by firms that are not contributing to the biodefense mission, or 
that are taking advantage of loopholes in the procedures to enrich 
themselves at the public's expense. But if firms acting in good faith 
to support the Nation's biodefense mission are unable to benefit in 
their commercial activities, we are not doing what we need to be doing.
                   need for a comprehensive approach
    Finally, although my comments today have been directed primarily at 
medical countermeasures to bioterrorist attack, it is important to 
recognize that we cannot rely solely on after-the-fact responses in 
dealing with the threat of bioterrorism. As important as they are, 
medical countermeasures are only one component of a comprehensive 
biodefense strategy. We must put programs in place to dissuade, 
frustrate, detect, and counter bioterrorism programs at every possible 
stage, not just after an attack has already taken place.
    One of the chief difficulties in fighting bioterrorism is that none 
of the measures we can imagine, by itself, can offer high confidence in 
successfully countering this threat. But by putting a combination of 
measures in place, or a layered defense--recognizing that each measure 
or layer has limitations and weaknesses--we can maximize our chances of 
success.
                        other useful references
    Bradley T. Smith, Thomas V. Inglesby, Tara O'Toole, ``Biodefense 
R&D: Anticipating Future Threats, Establishing a Strategic 
Environment,'' Biosecurity and Bioterrorism, Vol. 1, No. 3: September 
2003, pp. 193-202.
    Lynne Gilfillan, Bradley T. Smith, Thomas V. Inglesby, Krishna 
Kodukula, Ari Schuler, Mark Lister, and Tara O'Toole, ``Taking the 
Measure of Countermeasures: Leaders' Views on the Nation's Capacity to 
Develop Biodefense Countermeasures,'' Biosecurity and Bioterrorism, 
Vol. 2, No. 4: September 2003, pp. 320-327.
    FIGURE 1: Implications of Technology Advance for Bioterrorism
    No matter what the actual gap is today between a terrorist group's 
level of capability in biological weapons and the level needed to do 
substantial harm, that gap will disappear over time.
                            one-page summary
    (1) Bioterrorism is a very serious threat, but the details of 
future biological weapons cannot be known today. Although certain 
diseases currently pose more serious terrorist threats than others, a 
wide variety of agents might nevertheless be used, and the exponential 
growth and dissemination of biotechnology will foster the creation of 
new ones. Since the time to develop and produce bioweapons agents is, 
in general, much shorter than the time to develop, license, and produce 
a response, we cannot rely on hard intelligence alone to direct the 
development of countermeasures.
    (2) Uncertainties about the future threat put a premium on breadth 
of capability and speed of response. Looking ahead, the most important 
medical countermeasures are new ``broad spectrum'' antibiotic and 
antiviral drugs and other post-exposure therapies. Traditional vaccines 
have only a limited role in civilian biodefense, because of the time 
they need to develop protection; we cannot vaccinate our way out of 
this problem with single-disease-specific remedies.
    (3) Substantially increased NIH biodefense research and the new 
Bioshield program are necessary components of our national response, 
but they are insufficient. Further incentives are needed to stimulate 
production of post-exposure therapeutics and rapid response 
capabilities, for which we need new research tools and methods. We also 
need to develop animal models for human disease and increased animal 
production and testing capacity.
    (4) Successful incentives that foster biodefense missions could 
benefit commercial enterprise as well, because many of the necessary 
supporting capabilities are inherently generic. Policies that attempt 
to ensure that government incentives or investments apply only to 
government biodefense missions--as the original version of the first 
Bioshield legislation attempted to do--are guaranteed to fail at 
fostering a dynamic, responsive, and flexible biodefense response 
capability.
    (5) Medical countermeasures are very important, but they are only 
one component of a comprehensive biodefense strategy. Countering 
bioterrorism also requires efforts to dissuade, frustrate, detect, and 
counter bioterrorism programs at every possible stage of their planning 
and execution not just after an attack has been conducted.




    Senator Burr. The chair will recognize Mr. Cameron.
    Mr. Cameron. Mr. Chairman, members of the Bioterrorism and 
Public Health Preparedness Subcommittee, I am honored to be 
testifying before you today on the issue of scientific progress 
in developing bioterror countermeasures. I am Gordon Cameron, 
Chief Executive Officer of Acambis. Acambis is a leading 
developer and producer of vaccines to prevent and treat 
infectious disease. We employ around 280 people, predominantly 
in Cambridge and Canton, Massachusetts, although we also have 
operations in Miami, Florida and Cambridge, UK.
    Before I begin, I would like to acknowledge the dedication 
of the members of this subcommittee to the improvement of 
current U.S. biodefense preparedness capabilities. In 
particular, I would like to thank Acambis' constituent senator, 
the Honorable Edward Kennedy, for his continued support of our 
smallpox vaccine programs and for his leadership in introducing 
Project Bioshield together with Senator Gregg. Chairman Burr, 
we value your leadership on smallpox vaccine compensation so 
that first responders would be encouraged to be vaccinated 
against smallpox. It is with your dedicated leadership, we can 
ensure the United States and the world can be shielded from the 
ever-present threat of bioterrorism.
    As members of the subcommittee are aware, Acambis' 
involvement in biodefense has been in the area of smallpox. 
Under contracts with the Centers for Disease Control, Acambis 
developed ACAM2000, a new smallpox vaccine with our partner, 
Baxter Bioscience Vaccines, manufactured over 180 million doses 
which have been delivered in complete vaccination kits to the 
Strategic National Stockpile. Extensive clinical trials have 
been conducted of the vaccine. Acambis has also supplied 
ACAM2000 to a number of foreign countries also to be used for 
emergency use stockpiles.
    In addition, Acambis and Baxter are developing a weakened 
smallpox vaccine under contract with the NIH known as MVA. This 
vaccine is intended for vaccination of the many individuals 
with skin diseases and compromised immune systems who have 
contraindications for the use of standard smallpox vaccine.
    Acambis is a real-life case study of biodefense policy in 
action. I thought it would be useful, therefore, to draw upon 
some lessons learned from Acambis' experience. On the positive 
side, ACAM2000, that project and that contract have undoubtedly 
been a major success. Since we were awarded that contract at 
the end of 2001, we have developed a new vaccine and tested in 
clinical trials in over 4,000 subjects, both Phase I and Phase 
II and Phase III clinical trials, and we expect to file a 
product license application this year.
    In addition, we have delivered over 180 million doses to 
the Strategic National Stockpile. So I think this contract and 
our performance on it is virtually unprecedented in terms of 
both scale and in terms of the pace of development and 
production that took place. As Senator Kennedy pointed out, it 
was on time and on budget.
    So whenever these kind of things happen, we always need to 
analyze what were the critical success factors in making it 
happen. I think in the first instance, we had excellent 
partnership with the U.S. Government and the various agencies. 
In particular, I would highlight the cooperation we received 
from the FDA where, unlike a typical periodic review type 
process of the FDA course of action, we were getting real-time 
assistance and real-time cooperation, almost daily contact with 
the FDA, so as issues surfaced, whether they be in the clinical 
trial design or whether they be in the manufacturing process, 
we were able to resolve them almost immediately.
    Second, in terms of the contractual piece of the contract, 
we had a very flexible approach to funding in the way the 
contract was designed. We would get our funded research and 
development payments on a monthly basis, and that enabled us to 
in part offset the inherent risk in a development program, but 
also actually provided some working capital for the large-scale 
production that was taking place alongside the research and 
development.
    In addition, a technical point of view, the contract 
permitted fixed price subcontract arrangements with our 
subcontractors, and through that arrangement, we were able to 
then draw upon the expertise and capability of our primary 
subcontractor, Baxter Health Care Corporation, for whom without 
a fixed price arrangement would not have participated.
    In addition, the way the contract was set up, the 
government actually procured and paid us for product as we 
delivered it into the stockpile, irrespective of the fact that 
it was not actually yet licensed. And that was clearly, you 
know, advantageous to us, both in terms of cash flow, both in 
terms of delivering on the final contract.
    So I have highlighted some positives and what I would also 
then do is maybe highlight possible areas for improvement or 
reflection. We believe, in the first instance, that the final 
product procurement should be at a level that is consistent 
with either the original or previously stated goals or 
policies, and I would cite three examples in this regard: with 
ACAM2000, there was an intended policy at one point in time to 
procure 209 million doses of the vaccine, and yet when the 
final contracts were drawn up, only 182 million doses of the 
vaccine were ordered. We believe this is in part due to 
budgetary issues, but the point being that the decision was 
made relatively late in the day after such time as Acambis had 
already incurred the cost and the effort to actually work 
toward the 209 million dose requirement.
    Partly related to that is a second issue whereby the first 
generation vaccine, which many of you are aware was 
manufactured decades ago on the bellies of calves through a 
process that would not be acceptable to the FDA today, that 
vaccine in itself makes up a significant proportion of the 
smallpox vaccine stockpiled today. And we had previously 
understood or been led to believe that the old vaccine was 
being used as a short-term insurance policy until such time as 
the ACAM2000 product was available.
    Over time that policy appears to have changed. ACAM2000 
vaccine is now available. However, the first generation vaccine 
now appears to be a core part of the policy in the stockpile. 
Granted that it is still effective, but I think in the context 
of having differentiated products sitting in the stockpile, 
some unlicensed or unlicensable and some product that is about 
to be licensed, I think that provides some perception issues 
for the government.
    The third aspect of this we would highlight, on MVA, 
Project Bioshield and other documentation supporting Project 
Bioshield has highlighted the need to procure up to 60 million 
doses of MVA vaccine, but until such time as the RFP comes out 
for the third contract, we still are not aware of how many 
doses will actually be procured.
    In each of the above three cases, the element of 
uncertainty has been introduced into the process and actual or 
potential financial loss has also been introduced. Both of 
these issues make industry wary and does not help in the 
government's stringent efforts to try and encourage industry to 
participate in the biodefense initiative.
    The second area of improvement I would highlight would be 
in terms of the long-term manufacturing arrangements. This is 
not just about acquiring a stockpile. It is about acquiring a 
capability over a longer period of time. Very few companies 
will be interested in putting in all the infrastructure 
required simply to provide a short-term stockpile and get a 
short-term return.
    All companies are going to be interested over the longer 
term. So we have discussed over the last several months and 
years, in fact, with the government the concept of warm-based 
manufacturing which essentially is ensuring a state of 
readiness in the production process such that should there be a 
need to acquire or procure significant additional doses in the 
event of an outbreak, then there would be a facility ready and 
available to make large quantities of vaccine.
    This concept is consistent with what the World Health 
Organization outlined recently in its smallpox vaccine 
initiative where it declared that it wanted to have at least 
two sites around the world capable and ready to produce 
smallpox vaccine at short notice. We are clearly one of those 
suppliers.
    But I think we need to learn from the lessons from the past 
here where in the case of smallpox vaccine, production ceased 
in the early 1980s because there was no defined market. So 
creating the market through a warm-based manufacturing approach 
which would essentially involve annual production runs and the 
government procuring vaccine on an annualized basis would serve 
both parties well. The government would have a state-of-
readiness facility available to it for the company to produce 
vaccine. The company would have a longer term revenue 
arrangement which in itself would be attractive.
    In our case, we are still awaiting confirmation. We have 
submitted a proposal to the government for a warm-based 
manufacturing proposal over the longer term and we still await 
both confirmation and budgetary approval for that particular 
process. Each of that adds to this issue of uncertainty for the 
contractors that are highlighted above.
    Finally, I will just refer to the issue of manufacturing 
generally. The topic of this hearing is scientific progress. On 
that subject, it is all too easy to focus on the research and 
development aspects. Much has already been done to support 
innovative research in the area of biodefense. This is only 
part of a much larger and much more complex picture if 
scientific developments are to bring real benefits. In 
particular, I refer to manufacturing.
    There is little point in developing a countermeasure if it 
cannot be made at the required scale. Incentives should be 
applied as much to production as to research and development of 
countermeasures. Acambis has been a proud and willing 
participant in the biodefense arena to date. However, Acambis' 
and other companies' willingness to participate or continued 
participation is dependent upon a stable commercial arrangement 
for manufacturing and upon government commitment to stockpiling 
contracts and production readiness or warm-based programs.
    Without these, the scarce and highly valuable resources and 
capabilities of companies such as Acambis will be deployed in 
other areas that are more commercially attractive, leaving the 
government less able to fulfil its stated policy commitments. 
Mr. Chairman, members of the subcommittee, I thank you once 
again for inviting me to speak today and I am happy to answer 
any questions you may have.
    Senator Burr. Thank you so much and thank all four of you 
for your testimony.
    [The prepared statement of Mr. Cameron follows:]
                  Prepared Statement of Gordon Cameron
                           testimony summary
    Acambis is a leading developer of vaccines to prevent and treat 
infectious diseases, employing around 280 people in Cambridge and 
Canton, Massachusetts, Miami, Florida and Cambridge U.K.
    Under contracts with the Centers for Disease Control, Acambis 
developed ACAM2000, a new smallpox vaccine and, with our partner, 
Baxter Bioscience Vaccines, manufactured over 180 million doses, which 
have been delivered in complete vaccination kits to the Strategic 
National Stockpile. In addition, Acambis and Baxter are developing a 
weakened smallpox vaccine under contract to the NIH. Designated as MVA, 
this vaccine is intended for vaccination of individuals with skin 
diseases and compromised immune systems, who have contraindications for 
use of standard smallpox vaccine.
    The incredibly rapid pace of the vaccine development program for 
ACAM2000, which will break all existing records for time to receive FDA 
licensure and for the scale of vaccine supply, was in part due to our 
unique partnership with the Federal Government. The Federal Government 
worked closely with Acambis to minimize risk and drive development from 
the laboratory through large-scale manufacturing and clinical trials.
    At the same time, our private-public partnership taught Acambis 
that government support at the development stage of production, while 
contributing to the rapid deployment of ACAM2000 to the Strategic 
National Stockpile, was an insufficient precondition for Acambis to 
realize the full benefits of our mutual investment with the Federal 
Government. What was needed was a stable and commercially viable 
funding arrangement for sustainable manufacturing, not just for the 
``now'' but to secure supplies for the future. Consequently, our 
willingness to develop new countermeasures relies on the availability 
of this arrangement.
    Lessons learned include: (1) The final dose order should be 
consistent with original plans negotiated between the manufacturer and 
Federal Government; and (2) The government should provide for a 
production readiness arrangement, otherwise referred to as ``warm-based 
manufacturing.'' This policy involves continued funding to support a 
minimum level of annual production, to strengthen domestic preparedness 
for a smallpox emergency, while providing an incentive to build and 
maintain a specialized facility for biodefense vaccine production.
    It is necessary that manufacturers of biodefense countermeasures 
have stable and commercially viable funding arrangements for 
manufacturing to ensure continued scientific progress because: (1) 
Vaccine manufacturing is associated with tremendous risk and cost. 
Without the appropriate incentives for manufacturing, our facilities 
and technological know-how will be used for purposes other than 
biodefense; and (2) there is an enormous need for scientific progress 
with other bioterrorism agents. Because of the benefits of advanced 
science, the U.S. Government must encourage innovation of new 
production methods such as cell-culture to improve domestic 
preparedness for biodefense and infectious disease.
                                 ______
                                 
    Mr. Chairman, members of the Bioterrorism and Public Health 
Preparedness Subcommittee, I am honored to be testifying before you 
today on the issue of scientific progress in developing bioterror 
countermeasures. I am Gordon Cameron, CEO of Acambis. Acambis is a 
leading developer of vaccines to prevent and treat infectious diseases, 
employing around 280 people in Cambridge and Canton, Massachusetts, 
Miami, Florida and Cambridge U.K.
    Before I begin, I would like to acknowledge the dedication of the 
members of this subcommittee to the improvement of current U.S. 
biodefense preparedness capabilities. In particular, I would like to 
thank Acambis's constituent Senator, the Honorable Edward Kennedy, for 
his continued support of our smallpox vaccine programs, and for his 
leadership in introducing Project Bioshield together with Senator 
Gregg. Chairman Burr, we value your leadership on smallpox vaccine 
compensation, so that first-responders would be encouraged to be 
vaccinated for smallpox. Senator Gregg, I would also like to applaud 
your introduction of S. 3 along with your colleagues, Senate Majority 
Leader Frist and Senators Sessions, DeWine, Santorum, McConnell, DeMint 
and Allen. It is with your dedicated leadership that we can ensure the 
United States--and the world--can be shielded from the ever-present 
threat of bioterrorism.
    Mr. Chairman, members of the subcommittee, among all of the 
diseases that could be used for bioterrorism, smallpox is widely 
acknowledged to be by far the greatest threat. Not only is it a 
fearsome disease, killing over one-third of those afflicted, but it is 
contagious and if introduced, could spread rapidly across the Nation 
and the world. Nearly half the world population has no immunity to 
smallpox, since routine vaccination ceased 30 years ago. Two dramatic 
table-top exercises, ``Dark Winter'' conducted in June 2000 and the 
recently completed ``Atlantic Storm,'' have demonstrated the global 
impact of a bioterrorist incident, highlighting the widespread economic 
and societal devastation it would provoke around the world. The 
eradication of smallpox remains one of the world's greatest medical 
achievements, but knowing that the former Soviet Union developed 
smallpox as a strategic biological weapon, and fearing that stocks of 
the virus could have spread to other former Soviet States or even to 
terrorist groups, it is essential that the world prepare against the 
possibility of its return.
    Currently, vaccines offer the only realistic countermeasure to 
smallpox. Under contracts with the Centers for Disease Control, Acambis 
developed ACAM2000, a new smallpox vaccine and, with our partner, 
Baxter Bioscience Vaccines, manufactured over 180 million doses, which 
have been delivered in complete vaccination kits to the Strategic 
National Stockpile. Extensive clinical trials have been conducted of 
the vaccine. Acambis has also supplied ACAM2000 to a number of foreign 
countries for emergency-use stockpiles.
    In addition, Acambis and Baxter are developing a weakened smallpox 
vaccine under contract to the NIH. Designated as MVA, this vaccine is 
intended for vaccination of the many individuals with skin diseases and 
compromised immune systems, who have contraindications for use of 
standard smallpox vaccine.

Scientific Progress: Cell-Cultured Smallpox Vaccine

    Even before the terrorist attacks on September 11, 2001, the CDC 
recognized that the U.S. stockpile of smallpox vaccines had to be 
augmented and updated. In September 2000, it awarded Acambis a contract 
to develop a new smallpox vaccine, and to manufacture and maintain a 
stockpile of 40 million doses.
    The objective of this contract was to develop a modern equivalent 
to the old smallpox vaccines that were used so effectively in the 
worldwide eradication program while taking advantage of state-of-the-
art cell-culture manufacturing technology, equipment and processes. 
Vaccine manufacture has come a long way since the old vaccines were 
produced from the skin of cows. Cell-culture manufacture allows for 
production of a 21st century product, consistent with Good 
Manufacturing Practices, free from concerns about potential animal-
related contaminants, and capable of being produced more rapidly and in 
larger quantities.
    The U.S. Government has a clear policy to maintain a stockpile of 
smallpox vaccine sufficient to vaccinate every man, woman and child in 
case of a smallpox outbreak. The 182.5 million doses of ACAM2000 we 
successfully delivered to the Strategic National Stockpile represent 
only part of the U.S. stockpile. The balance is comprised of two brands 
of animal-derived smallpox vaccines, and we understand that the 
government has reserved 20 million doses of these vaccines for use by 
World Health Organization in case of an outbreak in a foreign country.
    Mr. Chairman, Acambis believes that all citizens should have access 
to the most technologically advanced smallpox vaccine available, which 
is ACAM2000. Following extensive clinical testing, ACAM2000 will 
shortly be reviewed for licensure by the FDA, which has identified it 
as a product for fast-track regulatory review. Moreover, we support a 
policy that would make this modern cell culture-derived product, 
particularly if it is licensed by FDA, available to our friends and 
allies through the auspices of WHO, rather than the antiquated cow 
skin-derived vaccine.
    As members of the subcommittee are well aware, concerns about the 
lack of countermeasures extend far beyond known bioterrorism agents and 
covers a long list of infectious diseases. Nature has been the most 
efficient purveyor of new biological threats, such as pandemic 
influenza, SARS and West Nile. I would submit that because of the 
benefits of advanced science, the U.S. Government must encourage 
innovation of new production methods such as cell-culture to improve 
domestic preparedness for biodefense and infectious disease.

Ensuring Continued Scientific Progress of Biodefense Countermeasures

    Mr. Chairman, I would like to highlight the incredibly rapid pace 
of this vaccine development program, which will break all existing 
records for time to receive FDA licensure and for the scale of vaccine 
supply. A key element of technical progress was our unique partnership 
with the Federal Government. From the beginning, the Department of 
Health & Human Services, the CDC, and in particular the FDA's Center 
for Biologics Evaluation and Research worked closely with us, thereby 
minimizing risk and driving development from the laboratory through 
large-scale manufacturing and clinical trials.
    Three specific government actions were instrumental in moving our 
vaccine development program forward. The first involved a flexible 
approach to funding, particularly the form of monthly installments for 
research and development funding, which helped to maximize flexibility 
and alleviate the myriad of risks associated with accelerated product 
development. The second relates to the FDA's willingness to monitor all 
aspects of the manufacturing, control, and clinical development on an 
ongoing basis instead of upon completion of all studies. With FDA's 
real-time assistance and cooperation, Acambis was able to successfully 
develop manufacturing plans for ACAM2000. Finally, the willingness of 
HHS to view subcontractor relationships as commercial fixed price 
efforts allowed Acambis to utilize large healthcare companies--with 
proven infrastructure and supply chain capabilities--to perform 
important facets of the program.
    I can say with all certainty that we would not have a partial U.S. 
stockpile of cell-cultured smallpox vaccines without the hard-work and 
dedication of our government and partners, particularly during the 
critical years following September 11.
    At the same time, our private-public partnership taught us that 
government support at the development stage of production, while 
contributing to the rapid deployment of ACAM2000 to the Strategic 
National Stockpile, was an insufficient precondition for Acambis to 
realize the full benefits of our mutual investment with the Federal 
Government. What was needed was a stable and commercially viable 
funding arrangement for sustainable manufacturing, not just for the 
``now'' but to secure supplies for the future. Consequently, our 
willingness to develop new countermeasures relies on the availability 
of this arrangement.
    Allow me to provide you with two examples from Acambis' experience 
to highlight instances where the funding arrangement for manufacturing 
could have been made more stable and commercially viable to encourage 
continued scientific progress in biodefense.
    First, it is important that the final dose order be consistent with 
original plans negotiated between the manufacturer and Federal 
Government. In the case of ACAM2000, in initial discussions, the 
government had expressed an intention to order 209 million doses for 
the U.S. Strategic National Stockpile. In the end, the government 
ordered 182.5 million doses, in part, we believe, due to budgetary 
constraints. Acambis, as the contractor, had been working towards the 
209 million dose goal, so was both surprised and disappointed by the 
government's decision. Acambis also suffered financially, as the 
investment made, largely in good faith, did not yield the expected 
return. This type of a scenario is exactly what dissuades many industry 
players from participating in the biodefense business. It is also 
unfortunate that it comes at a critical time when government is making 
extensive efforts to attract industry to participate in supporting its 
Biodefense initiatives.
    Second, the government should automatically provide for a 
production readiness arrangement, otherwise referred to as ``warm-base 
manufacturing.'' This involves continued funding to support a minimum 
level of annual production, once the initial stockpile requirements 
have been sent to the Strategic National Stockpile. The ACAM2000 
contract did not establish funding for a specific program.
    From a biodefense standpoint, warm-base aims to strengthen domestic 
preparedness for a smallpox emergency. The lead time associated with 
reinstating manufacturing for the smallpox vaccine is anywhere between 
6 and 8 months, and could be several years if the trained personnel, 
validated equipment, and entire production train were allowed to fall 
into disuse. The warm-base program enables the manufacturer to provide 
a ``turn-key'' operation, should an outbreak occur or demands for 
production increase.
    From the manufacturer's point of view, warm-base manufacturing 
provides an incentive for the tremendous investment and compliance 
costs associated with building and maintaining a specialized facility 
for vaccine production. For example, in preparing to manufacture 
ACAM2000, we modified facilities with specific capabilities for 
handling the live smallpox virus, which took nearly 4 years to 
complete.
    At the end of the warm-base program, the government would have an 
adequate stockpile to ensure domestic preparedness, and the 
manufacturer would have been able to justify its investment. The 
Executive Board of the World Health Organization recently highlighted 
the importance of a warm-base manufacturing arrangement in a report on 
the Global Vaccine Stockpile Reserve (dated December 23, 2004), citing 
the need for not one but two active manufacturing locations in the 
world.
    Since it is Acambis' intention to file a Biologics License 
Application for ACAM2000 in 2005 for FDA licensure, a warm-base program 
would allow for steady replacement of the older vaccines with ACAM2000. 
Once the smallpox vaccine stockpile is fully FDA licensed, the 
government would no longer need to be concerned with informed consent 
or issuing orders under Bioshield, which would ultimately speed up the 
process of vaccination in the event of an attack.
    Acambis presented a recommendation for warm-based manufacturing to 
the CDC in December 2004, and is currently awaiting a decision on 
whether the distribution of fiscal year 2005 funds will permit the CDC 
to finance this request. However, a contract that only spans 1 year is 
insufficient to warrant the investments we must make in warm-base 
manufacturing. To be certain that our government is ensuring adequate 
biodefense preparedness and an incentive for continual investments into 
our smallpox vaccine facility, a more long-term arrangement is 
necessary. Acambis has requested an extension of this program to the 
CDC with funds to be appropriated in the fiscal year 2006 cycle.

The Need For Stable and Commercially Viable Funding Arrangements

    Why is it necessary that manufacturers of biodefense 
countermeasures have stable and commercially viable funding 
arrangements for manufacturing to ensure continued scientific progress? 
Allow me to expand on these issues and provide the subcommittee with a 
sense of lessons learned from our public-private partnership.
    First, as I suggested earlier, vaccine manufacturing is associated 
with tremendous risk and cost. There are many companies ready and 
willing to engage in early stage research for biodefense 
countermeasures, but very few have the expertise, experience, and 
facilities necessary to manufacture and deliver the vaccine. Acambis 
and our partner, Baxter Vaccines, wish to be part of this manufacturing 
base, but without the appropriate incentives for manufacturing, our 
facilities and technological know-how will be used for purposes other 
than biodefense.
    At this point in time I would like to emphasize to members of the 
subcommittee that, for biodefense countermeasures such as our ACAM2000 
and MVA smallpox vaccines, our sole customer is the government. As 
such, we rely on a private-public partnership that acknowledges the 
unique concerns of our industry and encourages progress--not only from 
research and product development to manufacturing, but also from 
manufacturing to the final sale, in this case the Strategic National 
Stockpile. Thus, continued scientific progress for biodefense can be 
achieved if the manufacturer is presented with options that intend to 
make the investment in production stable and worthwhile through support 
for product industrialization or commercialization.
    Secondly, Mr. Chairman, there is an enormous need for scientific 
progress with other biodefense countermeasures. For example, as much as 
20 percent of the U.S. population--60 million people--could suffer from 
serious or potentially fatal adverse reactions if vaccinated with the 
current smallpox vaccines in the case of an actual or threatened 
smallpox outbreak. As part of Project Bioshield, the government has 
recognized the need to protect this vulnerable population, which 
includes individuals with compromised immune systems, HIV and skin 
diseases, particularly eczema. Through contracts with the National 
Institutes of Health, Acambis is now developing an attenuated smallpox 
vaccine, known as MVA, intended for use by this sub-population.
    A final solicitation to acquire this vaccine for the Strategic 
National Stockpile is expected in 2005 under Project Bioshield. If the 
value or size of this solicitation were to be below the 50 to 60 
million doses originally projected by the NIH and the Congressional 
Budget Office, it may be difficult to dedicate staff and facilities to 
the project at the cost of pursuing other commercial opportunities, and 
it would certainly make other manufacturers wary of committing to 
develop countermeasures to other bioterrorism agents. Most importantly, 
such a decision would leave a huge segment of the population without 
access to the vaccine they need.
    Acambis recognizes that the government must strike a balance 
between prudent government purchasing and the multi-year cost to build 
a domestic industrial base for biodefense products. Mr. Chairman and 
members of the subcommittee, you are undoubtedly aware of the difficult 
position America faced last year because it was dependent on a foreign 
manufacturer of influenza vaccine. Strategically important vaccines 
against epidemic diseases, such as smallpox, should be made in the 
United States and not be subject to foreign control or dependent on 
regulatory oversight of other countries. To achieve a viable domestic 
capacity, however, the government must provide adequate incentives for 
manufacturing. Acambis, as one of the few companies with the capability 
to perform this activity, is willing to work with the government to 
devise a solution that manages government costs while sustaining a 
domestic biodefense readiness capability.

Concluding Remarks

    Having stood at the frontline of biodefense work in the United 
States to date and, in many areas, blazed a trail for other companies, 
Acambis has developed a unique insight into this vital area. My 
testimony today has focused on just one aspect of countermeasure 
production where improvements are needed to ensure continued scientific 
progress and the growth of a viable domestic industry. Other aspects 
include a review of liability and regulatory provisions, particularly 
concerning the animal model for testing and possibly tax credits.
    Much is already being done to support innovative research in the 
area of biodefense, but this is only part of a much larger and more 
complex picture if scientific developments are to bring real benefits. 
Incentives should apply as much to production as to development of 
countermeasures. Acambis has been a proud and willing participant in 
the biodefense arena to date. However, Acambis' and other companies' 
continued participation is dependent upon a stable, commercial 
arrangement for manufacturing, and upon government commitment to 
stockpiling contracts, and production readiness or ``warm-base'' 
programs. Without these, the scarce and highly valuable resources and 
capabilities of companies such as Acambis will be deployed in other 
areas that are more commercially attractive, leaving the government 
less able to fulfill its stated policy commitments.
    Mr. Chairman, members of the subcommittee, I thank you once again 
for inviting me to speak to you today and would be happy to answer any 
questions you may have.

    Senator Burr. At this time, I would recognize the chairman 
of the full committee, Senator Enzi.
    The Chairman. Thank you, Mr. Chairman. Dr. Painter, you run 
a small company based in North Carolina and I think to have a 
strong biodefense policy for the United States, we are going to 
have to involve a lot of small companies. I am from Wyoming 
where we do not have a single big business headquartered, and I 
run a small business. I know that the Federal Government 
sometimes needs to be reminded that small companies do not have 
all the specialists that big ones do and it can be a little bit 
more difficult for them to make it through the maze.
    From your perspective, what does HHS need to do to ensure 
that small companies like yours understand how to work with the 
government or can you suggest some ways to make it easier to 
work with the government?
    Mr. Painter. Yes, Senator, that is a good question. From 
our perspective, some clarity with regard to the nature of the 
market. We recently went out and borrowed a significant amount 
of venture money, and with that venture money, we can contract 
expertise. So we can leverage our capacity to do development, 
but the problem is we cannot tell the people we are borrowing 
from how much smallpox drug the government might want to 
procure because we do not understand how it would be applied 
nor is there an overall process visible to us or a strategy for 
using the drug in the event of attack.
    So we do not know the market size. Furthermore, because of 
the problems associated with the animal model, we cannot tell 
investors the time to approval to sale. So without clarity, we 
cannot answer the two critical questions that drive risk 
determination in venture investment. So any clarity that can be 
offered there will be of profound importance to our being able 
to stay viable and get the countermeasure made.
    The Chairman. Thank you. As you think of more of them, 
convey those to us, too, because we want to be sure that small 
business has a part in this. There is usually a lot more 
flexibility and quickness to adapt to the market from small 
businesses than there are from big ones, so we want to 
encourage that.
    Dr. Abramson, you called for no fault liability protection 
systems for bioterrorism related to the vaccines that cover the 
manufacturers and health care workers. You suggested the 
compensation system that would cover medical expenses and lost 
wages but not punitive damages. Do you believe this type of 
protection is also important for the therapeutics that treat 
these infections caused by these same agents?
    Dr. Abramson. I think many of the issues are the same, 
Senator, and a lot of times I would foresee us using drugs that 
are nonFDA approved at all, forgetting age and indication, but 
then we would be using them on a mass scale, and every drug, 
every therapeutic we have has side effects, and somebody, not 
one person but multiple people are going to be adversely 
affected.
    In a lot of ways, they're willing to take the vaccine, to 
take the medicine helps protect the next person in society, and 
so the people who do not do it we call sort of freeriders, and 
you cannot have that in a mass emergency outbreak whether it is 
a bioterrorist attack or not. So I see a lot of the same 
issues. And I would call for the same measures.
    The Chairman. OK. Thank you. Dr. Epstein, what would you 
say to those who believe that additional incentives to produce 
bioterror agents would just be a windfall to the biomedical 
research community or the pharmaceutical industry?
    Mr. Epstein. I think across the board incentives for 
anything are something one has to look closely at, and I do 
worry that if there is an incentive program and someone says, 
you know, if we hang another molecular group on the end of this 
drug, we can call it a new product and get another incentive. 
So the details will matter. The incentives have to be ones that 
actually get the benefits we want.
    I personally, think that new, particularly a new broad 
spectrum, a new class of antibiotic would be something I think 
is very valuable, and by class of antibiotics, we have, each 
antibiotic works by interfering with some mechanism in a 
pathogen. It shuts off this particular molecule. You can have a 
lot of variations of drugs that basically work on the same 
principle but have different properties in the body, so a whole 
family of drugs take effect at different speeds or they have 
different dosages, but they all work on one basic mechanism. 
Once the bugs figure out how to block that drug, all the drugs 
in that class are gone, and we do not have very many classes of 
antibiotics. If we had a new class, that means all the drugs 
that are already out there working against microbes that have 
found resistance to them, a new category of drug is one that 
those bugs would not be resistant to.
    So something that would provide a new class of drugs or a 
major increase in our therapeutic ability is something I think 
we need. So I do not consider that a windfall. One does have to 
worry how the incentive is actually worded in detail, and by 
the time the lawyers get done with it, I do not want someone 
figuring out how to make a huge amount of money without really 
making a contribution. So that means the details are going to 
matter.
    The Chairman. Thank you. Could I ask a couple more 
questions?
    Senator Burr. Absolutely.
    The Chairman. Or would you prefer I did it in the second 
round?
    Senator Burr. Go ahead.
    The Chairman. Thank you. Dr. Epstein, you mentioned that of 
the 506 therapeutic candidates that there are really only 60 
that are being worked on now. Would you consider with the 
bioterrorism threat that is facing this country what number of 
anti-infectives would you like to see in the pipeline to 
indicate that we have a strong biodefense?
    Mr. Epstein. Senator, I think the number was six. Of the 
500 and something new candidate molecules or drugs, six 
antibiotics and a smaller number of antivirals are in the 
pipeline. I do not know what the right number is, but I do know 
that the incentives facing the industry do not lead them in 
this direction because when you have an infection and you take 
an antibiotic for it, in 2 weeks, if you are lucky, it is 
cleared up, and you are no longer a customer. So what makes 
much money for the drug companies is a chronic condition where 
you will be taking medication for the rest of your life, and I 
cannot fault the companies for saying that is a better return 
on their investment, and if they decided to do differently, the 
stock markets would probably punish them for it.
    So I do not know what the right number of anti-infectives 
and antibiotics is, but I do think that we are not going to get 
enough if it is just left to the market. I think we do have to 
provide an explicit attention to increasing the number of new 
drugs and therapeutics.
    The Chairman. Thank you. One quick question for Dr. 
Cameron. I could not help but notice that all of you in your 
statement had something dealing with liability protection. 
Could you expand a little bit more on what you are talking 
about with the liability protection particularly?
    Mr. Cameron. Well, in the context of ACAM2000, our 
contract, we were able to secure liability protection through a 
number of different efforts, the original contract and then 
subsequently through legislation. So from our perspective, that 
box was ticked, and it had to be ticked. It was a precondition 
effectively toward taking on the contract. So all I would say 
in that regard is we were okay in ACAM2000. I would just 
encourage to make sure that all the other countermeasures 
thereafter follow a similar pattern.
    The Chairman. Thank you. Thank you, Mr. Chairman.
    Senator Burr. Thank you, Mr. Chairman. Let me follow up on 
that, Mr. Cameron, if I could. Without that box being checked, 
without the total liability, could you have moved forward as a 
company?
    Mr. Cameron. We would not have.
    Senator Burr. Would not have?
    Mr. Cameron. No. Quite simply, we are a public company with 
stockholders. They would not have accepted that potential risk 
nor would we as a board of directors and as a company.
    Senator Burr. So any company in a similar situation is 
going to weigh risk in relation to the guaranteed sale. In this 
particular case you might have ended up short of what you 
thought, but there was a revenue projection that you were able 
to match with that.
    Mr. Cameron. Yes, I think all companies will assess risk in 
whatever investment proposal they are looking at and trying to 
define the risk associated with potential use of unlicensed 
smallpox vaccine.
    Senator Burr. Is there anybody within the world of 
manufacture out there that is going to look at it any 
differently?
    Mr. Cameron. I can only speak for us. But if I was a 
responsible leader of my company, I think I would look pretty 
carefully. I think you need to obviously look at the profile of 
the product and the likelihood of it actually being utilized. I 
think clearly the smallpox vaccine, it had a history of adverse 
events, so in that context then we needed to be extra, extra 
vigilant. But it may well be with some other countermeasures or 
other products where the risk is deemed to be lower.
    Senator Burr. Does Acambis have any restrictions placed on 
them for the sale of this product outside of our government's 
contract?
    Mr. Cameron. We are allowed to sell, as I highlighted 
actually in my testimony, we have been and are allowed to sell 
our product around the world and have sold to around 13 
countries outside of the U.S. We are not allowed to sell to the 
private market in the U.S. unless it has an ACIP 
recommendation, but that is the only restriction per se, 
although the control and the distribution and the sale of the 
product outside of the U.S. is actually under the guise or 
control of the FDA. So they are fully informed and fully 
involved in that process.
    Senator Burr. You talked about the wonderful job that FDA 
did in this fast track approval process or fast track process. 
Did FDA have individual FDA employees on site in your facility?
    Mr. Cameron. There is a time they did. Yes, the interaction 
was a mixture of people on site or regular telephone 
conferences or whatever. I think the point is it was real-time 
interaction so any issues that surfaced, and they did--issues 
do surface as you go along--were able to be resolved in a very 
timely manner rather than the typical process where they would 
come in once every 12 months and visit a plant or visit a 
facility or have a telephone conference.
    Senator Burr. Is it safe to assume that a majority of their 
concerns dealt with the manufacturing process?
    Mr. Cameron. It is twofold. The issues were related to 
manufacturing and the whole design of the clinical trials and 
the protocols associated with them. There was a lot of 
interaction with them, and then from a safety perspective as 
much as anything else.
    Senator Burr. Dr. Painter, some have referred to the 
changes in this FDA fast track as we did it in the legislation, 
that they look at that with great fear, that a small change 
might become a large change, might become disastrous to the 
rest of what FDA does. You mentioned the need for improved 
animal models and offered a two-part solution. Can you give us 
any more details about the solution, both the working groups 
and the incentives for companies to participate in the 
development?
    Mr. Painter. Yes, sir, that is a difficult question. In the 
case of utilizing animal models to try to develop a 
therapeutic, it is unprecedented. I have worked many years on 
Hepatitis B and C, HIV. We always had animal models, but those 
models were to give an indication of activity in a living 
organism, not to provide data for registration.
    So as this idea of the animal efficacy rule gets reduced to 
practice, the majority of questions that have come back to us 
from FDA are relating to, is how do you know the model is 
relevant? So there is going to have to be a lot of time and 
effort put into that, and I think that private companies should 
be incentivized to take on the challenge, and somehow there 
would be a mechanism where they can gain revenue by improving 
the model.
    Working groups--the NIH has some of them. It is interesting 
that a lot of the questions that are really relevant to proving 
that a drug works, only evolve out of the interaction between 
an FDA regulatory panel and the sponsor of the drug. So as the 
vanguard goes through and the key questions get asked, they 
need to be taken back to really real-front line working groups 
to try to take the issues and reduce them to practice so that 
we can move the indication forward.
    That may not be a very satisfactory answer. I cannot be 
very crisp. We are doing this in real time. And it has really 
only been in the past 3 or 4 months that we have begun to 
understand the questions from the FDA. How do we provide 
guidance to a physician from efficacy in drug distribution data 
in a mouse? And it may not be the right virus. We do not know 
what viruses were weaponized. At what rate does that virus 
replicate in the blood. We have to get some answers.
    Senator Burr. Without that flexibility of changes, could 
you even move forward?
    Mr. Painter. No, we need flexibility and I must say that I 
am encouraged by the degree of flexibility and the dedication 
and the interactions we have had with the people at the NIAID, 
the people in academia, and we have had the same experience. 
The CDER regulatory people at FDA have responded to us in real 
time which is unprecedented.
    Senator Burr. I would mention to all of you the further we 
get away from September 11, 2001, the greater concern I have 
with our ability to have a long-term program that addresses us 
in the same fashion as we are learning today as we try to go 
out and get these enacted. It is safe to say that if today you 
were at a point with your antiviral and we had a smallpox 
attack, if the Federal Government said for the sake of 
mortality, we want to go ahead and give this to people, you are 
protected from liability when they make that decision based 
upon some acts we have already done.
    If you were not doing what you are, if there was no company 
out there, sort of in the antiviral world for smallpox, what 
would happen?
    Mr. Painter. I think we would lose a lot of our citizens. 
There would not be a capacity to respond.
    Senator Burr. Does this debate, this decision that we have 
got in Congress, does it come down to that that is black and 
white?
    Mr. Painter. The question that we are constantly asked, 
particularly by investors, is they want to discount our value 
based on attack probability. Is there going to be an attack? 
There seems to be a wide range of opinions. If the attack is 
using smallpox, if there is a high probability, and that is 
known, then I think we should move heaven and earth to do 
anything that is possible to get every countermeasure on line 
so that we have antivirals to augment vaccines.
    Senator Burr. Let me ask any of you about what I would call 
and some of you have dual use products, those that might be 
applicable to a particular area of concern that we have from a 
bioterrorist standpoint, that either up front we know or later 
on we learn, that they have a commercial marketplace for them.
    And rather than ask you specifics or to be general on how 
we deal with them, let me ask a specific if I could. Is it 
conceivable that were we to come up with a set of incentives 
for those products to enter our system, could we have a 
separate regimen for those same products introduced into the 
commercial stream? In other words, were we to extend patents on 
this side, could we, in fact, mirror existing patents on the 
commercial side were we to choose to do that?
    Mr. Painter. I would like to jump to the mike on that one. 
We have the possibility of dual use in the smallpox drug. And I 
would like to add that to Dr. Epstein's challenge to have broad 
spectrum antiviral agents, if one can indeed find such an 
agent, and they are very rare, there is only one that I know of 
right now, then in all probability its applicability will 
extend beyond the weaponized to more common needs for 
antivirals.
    So in order to have success, as he asked for, then we will 
indeed have this issue. Certainly, anything that will 
incentivize and provide additional opportunity for companies, 
particularly now, for dual use, where there are at least 
perceived to be quite large uncertainties on the commercial 
side by investors, would incentivize not only people to stay, 
but give them a way to live through some of the uncertainties 
and ups and downs as we try to answer the questions like the 
animal model that we have to get past.
    If on a parallel path, we can keep a commercial product 
going, then the company can remain viable, and I might add that 
any experience you get either on the biodefense side or on 
developing a drug for a commercial use, you can leverage that 
to expedite development on either side.
    So these two uses are intertwined and when you confine 
them, I think they need to be encouraged, not discouraged or 
looked upon as a liability.
    Mr. Epstein. Mr. Chairman, let me add to that. I think 
clearly today we can say there is a difference between 
commercial products and biodefense products. Commercial 
products are the ones that have been on the market and the 
biodefense products have not, and we have had a short list of 
bio-threat agents we have been working on because there are a 
couple that are so much worse than others--we say smallpox and 
anthrax, and let us start there. And then you get a very long 
list. We have a Category A, but nature does not draw sharp 
lines, and I think as we go into the future, it is going to be 
harder and harder to say what is biodefense and what is public 
health.
    If we have SARS and it gets distributed as a weapon. Even 
the term ``weaponized'' really dates back to military conflict 
where you have to make a bug that can be spread over a 
battlefield and stay alive when it goes 20 kilometers downwind. 
If you are in a shopping mall with a perfume sprayer, is that 
weaponization? I think the era we are getting to gets back to 
what I was saying, the inability of firm intelligence to really 
guide us with specifics and a corollary to that is the 
inability to draw some of these sharp distinctions, and I think 
it does pose a real problem if public policy tries to treat 
biodefense differently than public health or than commercial 
products.
    It is going to, again, now we can do it. The first 
Bioshield results did that. But it is going to be harder and 
harder to keep those straight as we go on, and I think it will 
probably mislead us and maybe get us to the wrong answer.
    Senator Burr. I said at the beginning I thought one of the 
obligations we had was to be ahead of the curve so even though 
there may be some people behind me that are cringing as I ask 
that question, why are you going there, why would you get into 
this now, I think it is real important that we talk about it. 
And it means something different potentially to somebody in 
academia than it might mean to a CEO of a company that is very 
reliant on the capital markets to finance tomorrow and next 
year and the year after, and for somebody like Mr. Cameron who 
may already be out there, might already have this experience of 
some type of dual markets, there is some light that can be very 
important to us as we head down this road.
    Dr. Abramson.
    Dr. Abramson. I think influenza is the prime example of the 
blurring of this issue. So H5N1 is sitting over in Asia and is 
one, probably one, genetic mutation away, whether it is 
weaponized by somebody or just occurs in nature from being able 
to be transmitted person to person. So you have an extremely 
virulent organism that when it does get into a person kills 
them at a very high rate, somewhere in the range of about 50 to 
70 percent, and it is one small mutation away from being able 
to be a true mass pandemic. And I see a lot of trouble in 
trying to split hairs here in differentiating something like 
that.
    Senator Burr. Well, you spoke specifically to the liability 
issue, and let me ask you to elaborate a little bit more. There 
are some that believe that current law provides a sufficient 
protection or assurance for a robust interest of companies to 
become involved. Dr. Fauci and I focused on the word 
``robust,'' and I am not sure that we know, in fact, in this 
spirit what the definition of it is yet. I think you explained 
very well that Bioshield ultimately cannot be successful----
    Dr. Abramson. That is right.
    Senator Burr [continuing]. Unless we address liability. 
Specifically why?
    Dr. Abramson. Well, again, I will use the H5N1 as an 
example. I do not see a company willing to be able to produce 
that product or drugs that are needed against that product, 
because some of the antivirals that we have against influenza 
do not work against that particular bug, without knowing that--
if it is going to be used for millions and millions, and I mean 
literally that many people, there will be side effects that are 
true, and there will be side effects that are associated, and 
there is going to be an extremely high risk from a legal 
standpoint that the company is going to have to assume--and I 
do not see companies willing to do that. I have had lots of 
discussions in trying to think about pandemic flu about this, 
and I get no sense that they really want to step up to the 
plate and take on this risk without that kind of protection.
    Senator Burr. Let me once again thank our witnesses and let 
me say to Dr. Painter the question you have raised as it 
relates to Soviet scientists, the collaboration, if we are not 
aware of the answer to the question you raised, I can assure 
you that it is something that we will pursue and hopefully 
Senator Roberts as well will pursue that from an avenue of 
other committees, specifically Intelligence that he has the 
chairmanship of.
    As I said at the beginning, I see this as the first of 
several hearings that enable us to prepare for the possibility 
of further legislation, legislation that would be for the 
purposes of refinement of Bioshield. If for some reason we get 
through the process and we find that short-term that is not 
needed, we do have a reauthorization that comes up very soon 
where there is another opportunity to refine the product that 
came out.
    Our goal is to create the capability to deal with the 
unknown. I mean you have helped us focus on particular things 
that are out there and the Department of Homeland Security has 
a hit list and Dr. Fauci has a hit list over at NIH and there 
certainly is a lot of commonality in all the lists. If we are 
truly ahead of the curve, then we have to be designing some 
type of structure that addresses what is not on the list. What 
gives us the capabilities, the flexibilities, the assurance 
that when something happens, that we are at a point where 
everything just progresses naturally. And we have got the 
ability to have an answer.
    I am not sure that we are there yet, and I think your 
testimonies today have enabled us to realize that in a very 
real way. I am disappointed that nobody or at least our first 
witnesses from HHS and DHS did not stick around. I think 
outside of antitrust, this is a great opportunity to hear from 
people who have companies and individuals within academia who 
really are experts on this, and I would encourage any 
representatives from there to make sure that those individuals 
have an opportunity to read the testimony, and I would 
encourage those agencies in the future that it is probably to 
everybody's benefit for witnesses to stay around. If not, we 
will reverse the order of the subcommittee hearing so that they 
are forced to stick around because I think that their interest, 
not just their expertise, their interest is needed if, in fact, 
we are all to be successful in this process.
    At this time, I would ask unanimous consent that the record 
of this hearing remain open for 10 days as is customary on this 
committee so that members may have the opportunity to pose 
additional questions to our witnesses. Without objection so 
ordered. We also have written testimony of several witnesses 
submitted by Senator Bingaman, and without objection, it will 
be entered into the record.
    Senator Burr. This subcommittee hearing is adjourned.
    [Additional material follows.]

                          ADDITIONAL MATERIAL

                Generic Pharmaceutical Association,
                                                  February 8, 2005.
Hon. Richard Burr,
Hon. Edward Kennedy,
Subcommittee on Bioterrorism and Public Health Preparedness,
Senate Health, Education, Labor, and Pensions Committee,
U.S. Senate,
Washington, D.C. 20510.

    Dear Chairman Burr and Ranking Member Kennedy: As Congress looks 
for ways to better protect the population against potential biological 
threats, it is vital that any initiative: (1) uses appropriate 
financial and legal liability protection incentives to produce a novel 
countermeasure against known chemical or biological agents; (2) 
provides for rapid production and dispersal of the countermeasures; (3) 
spreads the costs of research and development evenly; and (4) avoids 
unnecessarily and excessively increasing cost to consumers, businesses, 
and public purchasers by providing new loopholes to block access to 
affordable generic drugs.
    The BioShield bill that was signed into law last year was a 
positive first step toward finding and producing vaccines and 
treatments for several high-risk agents. Although the program is just 
getting started, there already has been a movement in Congress to 
expand BioShield to include additional incentives for companies to 
conduct research and development to manufacture a larger variety of 
countermeasures. While GPhA supports the concepts behind expanding 
research and development of novel drugs to combat the biological and 
chemical threats that face the world, any proposal should not 
needlessly delay generic competition of everyday medicines at the 
expense of the overstretched health care budgets of employers, 
consumers, and Federal and State Governments.
    The Protecting America in the War on Terror Act of 2005 (S. 3) 
remedies some of the shortcomings of the BioShield legislation; 
however, it includes unnecessary patent extensions for everyday 
medicines that will cost consumers tens of billions of dollars by 
delaying generic competition. With Medicaid reform on the horizon, 
State health budgets shrinking, and the Medicare prescription drug 
program coming into effect in the coming year, the Federal Government 
cannot afford to further increase prescription costs by billions of 
dollars a year by needlessly reducing the availability of affordable 
medicines.
    S. 3 would give a very wide variety of everyday medicines UNLIMITED 
patent extensions, providing brand manufacturers with huge payouts for 
minimal research or licensing efforts at the expense of consumers, 
especially seniors and the uninsured--individuals who need affordable 
versions of these medicines most. (Title I, Subtitle A, Chapter 1, 
Section 113 (c)(1)).
     S. 3 defines a countermeasure so broadly that almost every 
drug in most people's medicine cabinets would qualify. Commonly 
prescribed drugs that treat headaches, nausea, and depression would be 
eligible for patent extensions with minimal testing performed by the 
brand manufacturer. Patent extensions on these products would put the 
healthcare system in crisis by forcing tens of billions of dollars in 
expenditures on these already profitable drugs.
     S. 3 would extend the patent terms of products that 
qualify as countermeasures up to the full amount of time from when the 
patent is issued until the product is approved. Current law balances 
innovation and access by providing only 5 years of the regulatory 
review period to be added to the patent's life. If a company were given 
the full review time under an unlimited regulatory review period, it 
could add a decade of patent exclusivity and monopoly pricing per brand 
product. Moreover, providing patent extension for the full development 
time is contrary to the intent of the goal of expediting research and 
development.
     S. 3 also would allow for unlimited patent extensions per 
product. Under current law, only one patent can be extended for 
developing a novel drug product. Under S. 3, multiple patents claiming 
the brand drug can be extended, forcing consumers to pay monopoly 
prices for many years to come.
    S. 3 allows for ANY patent on ANY drug product of a brand company 
to be extended by up to 2 years when that company has a product 
approved as a countermeasure. (Title I, Subtitle A, Chapter 1, Section 
113 (d)(1)).
     When the company gets a countermeasure product approved 
(even for a secondary use to treat a common ailment, or merely licenses 
research from some other entity), the company is eligible to receive a 
``wild card'' patent extension. This ``wild card'' in effect transfers 
the awarded patent extension to any other product the company makes. 
For example, if Pfizer were to have a countermeasure labeling statement 
approved for an already existing product, it could reap up to 2 extra 
years of patent monopoly for a blockbuster drug such as Viagra.
     And, if Pfizer decided to license a product for which 
another drug company performed all the requisite research and 
development, Pfizer could still receive yet another wild card. This 
time, Pfizer could decide to extend its monopoly for another one of its 
blockbuster drugs, or put a second wild card on Viagra.
     The result of this legislation would be an additional 2 
year delay of generic competition for all major blockbuster drugs. If 
the ``wild card'' extension was only applied to the current top 20 
revenue generating pharmaceuticals, it would provide tens of billions 
of dollars in uncontested sales for the brand manufacturer.
     Additionally, as the term implies, the ``wild card'' 
extension can be pocketed by the company and can be applied at any time 
before patent expiration, creating uncertainty for generic companies to 
invest in the requisite development of affordable medicines. Having 
certainty in timing as far out as possible before the patent and 
exclusivity periods end is what allows affordable medicines to enter 
the market quickly, efficiently, and inexpensively. Any added 
uncertainty will increase costs for all generic pharmaceuticals in the 
future.
    While S. 3 allows for brand companies to be rewarded for the simple 
testing for new indications of currently marketed drugs, the Federal 
Government already has determined which everyday medicines are 
effective countermeasures for known bioterror threats.
    For instance, the CDC, NIH--NIIAD and Department of Defense provide 
a wealth of information on currently available products to use in case 
of exposure to many forms of biological and chemical agents. Since the 
research already has been performed at taxpayers' expense, there is no 
reason the brand pharmaceutical company that manufactures the product 
should be given any additional patent life on that product or any other 
product.
     It would be much more efficient and cost effective for the 
FDA to establish an ``Emergency Drug Preparedness Compendium'' 
consisting of an approved emergency biodefense drug monograph for each 
drug a Federal agency (CDC, USAMRIID, NIAID, DOD, USDA, etc.) has 
identified as an effective agent to treat, detect or prevent harm from 
any biological (including an infectious disease), chemical, 
radiological, or nuclear agent that may cause a public health emergency 
affecting national security.
    GPhA does support many of the ideas included in S. 3 that are 
needed to facilitate future development of vaccines and other 
treatments for bioterrorism threats. As Congress looks forward to 
determining the best course of action, it is important that these 
provisions are included in the legislation.
     S. 3 includes necessary liability protections for drug 
manufacturers as they develop and produce these potentially life-saving 
treatments. (Title I, Subtitle B, Chapters 1 and 2).
     S. 3 also includes tax incentives and manufacturing grants 
to companies for research and development in bioterrorism 
countermeasures. (Title Subtitle B, Chapter 3). As the vast majority of 
research is done by small biotechnology companies, these incentives are 
much more pertinent than patent extensions that would have little or no 
benefit to these companies.
     S. 3 includes fast-track approval authority for these 
products. Allowing FDA to speed these countermeasures to market will 
ensure that they are available when they are needed. (Title I, Subtitle 
A, Chapter 2).
    The BioShield program has been a success in its short history, and 
any expansion of these provisions should be based on the same 
procurement model incorporated in that legislation.
     The upfront funding gives the research companies the 
resources they need at a fraction of the cost that would result from 
unlimited, protracted and needless patent extension provisions.
     The Federal Government already has contracted $5.6 billion 
in research for vaccines and treatments for the agents spelled out in 
the original BioShield legislation last year. Additionally, without the 
need for any further incentives, vaccines for smallpox, modified 
anthrax, and ebola are now close to being approved.
            Sincerely,
                                        Kathleen D. Jaeger,
                                                 President and CEO.
                   Prepared Statement of Randi Airola
    I am a Veteran who served honorably in the Army and Air National 
Guard from 1991-2000. This testimony is to serve as part of the public 
record regarding ``Biodefense Next Steps'' as presented to the 
Subcommittee on Bioterrorism and Public Health Preparedness.
    I received my first 3 doses of the anthrax vaccine in late 1998, 
followed by the 4th injection in March of 1999. Two days following my 
4th shot I began experiencing extreme fatigue that nearly kept me bed-
ridden the following week. I began noticing I would get gray-outs with 
overexertion. I had such severe migraines that I averaged approximately 
16,000 mg. of Motrin daily. I began getting winded climbing a flight of 
stairs. I noticed when I bent my joints there was an audible crack; 
others noticed it, too. I had no strength in my arms or my legs. I 
forgot passwords to programs that I would use everyday. I was easily 
confused and found myself unable to concentrate or focus on more than 
one task at a time. I was easily agitated and it took everything I had 
to hold back on acting out physically. I was 26 years old at the time, 
with no history on any of the above problems preceding my 4th shot. I 
was seeing civilian doctors weekly who were baffled by my condition, 
considering I was previously in perfect health. In a 2 month time span, 
I missed approximately 140 hours of work, and no one in command 
authority found this to be a sign that there was something wrong. I had 
a cat scan and MRI done to check for tumors to possibly explain the 
migraines. It was determined that I was too young to have had a stroke, 
so the cause of the paralysis that would occasionally occur on the left 
side of my body with a cough or sneeze was left undetermined. Military 
doctors never examined me, nor seemed interested. When the time came to 
receive my 5th shot, I was still experiencing the above problems. I was 
denied any referral to see a competent military physician for a second 
opinion. As a result of my problems, for the sake of my own health, I 
refused my 5th shot. I was ultimately discharged from service with an 
honorable discharge. As a result, I also lost my civilian position as 
an Air Technician. I was not eligible for VA disability or 
compensation, as I was never classified as Active Duty.
    From 1999 through 2002 I was on approximately 19 different 
medications for my ailments. I ultimately received help through a 
nutritionist; today, I am on no medications.
    I am directly and intimately involved with the Military Vaccine 
Education Center, Inc., at www.milvacs.org, which was formed in 2004. 
The organization exists to provide medical and legal resources, 
networking, and current information to those who have been vaccinated 
by the military's mandatory bioterrorism vaccines. We help soldiers/
veterans and their families with referrals, the process of going 
through Medical Evaluation Boards; the process of receiving treatment 
through the Vaccine Healthcare Centers, V.A. disability or 
compensation, etc. I have chosen to stay involved with our soldiers and 
the problems surrounding the anthrax biological vaccines, as I know 
first hand the debilitating problems that soldiers and their family can 
go through. It was one of the worst experiences in my life, and as long 
as I was and am able to, I have chosen to help others who were and are 
in the same shoes I was in. I have communicated with over 1,000 service 
members (or members of their families) who were/are having problems 
with the anthrax vaccine. Last year, I compiled the records of 100 
individuals into a 36-page document that I sent to the Veterans' 
Affairs Committee. All of these individuals had reported their problems 
and vaccine reactions to me within a 6 month time period. No one on 
that committee seemed to care, as I never heard a response.
    I took the initiative to learn the process of how soldiers were to 
get help through the Walter Reed Vaccine Healthcare Center(s), a 
process mandated by Congress in 2001. This information was not being 
passed down to the troops by the Department of Defense or by their 
chain of command.
    With the anthrax vaccine alone, I have spoken with and met many 
soldiers who all had one thing in common. They were all healthy before 
the anthrax vaccine, and are now stuck with a life-changing ailment for 
a time that no one knows how long considering long-term studies have 
not been conducted. Some in their 20's, walk with the assistance of a 
cane; some cannot walk at all. Some were able to get help through the 
Vaccine Healthcare Centers, which at least helped them through their 
Medical Evaluation Board and VA compensation; others were not that 
fortunate.
    As of now, as noted in an article in Global Security Newswire, 
``U.S. Army Provides no Funds for Vaccine Healthcare Centers,'' as 
quoted by Col. Renata Engler, the Walter Reed Vaccine Healthcare Center 
evaluated over 1,000 patients, and consulted with more than 139,000 
individuals via phone/email as a result of problems with the anthrax/
smallpox vaccine in 2003 alone. The Vaccine Healthcare Centers are 
always on the verge of losing their funding, and are overloaded with 
the current anthrax and smallpox vaccine caseloads; yet more biological 
vaccines are being discussed and developed. Who is going to take care 
of those that become ill from these new vaccines, or is that not a 
factor? No information will be available regarding human data for 
safety studies, so how many soldiers will be denied admission of a 
causal relationship between adverse events and the vaccines?
    The War on Terror has become a droning drum beat that many believe 
exists solely for the purpose to benefit the pharmaceutical companies 
and their shareholders. If protection of the soldiers or the American 
people were actually the focus, then better detection and outer 
protective equipment would be the primary goal. It stands to reason 
that if an enemy knows a vaccine exists for a specific strain of 
biological warfare, a genetic alteration of that strain would render 
that vaccine useless. Where is the logic of spending billions of 
dollars on biopreparedness through vaccinations, where the only thing 
that is at least known is that it can become easily obsolete?
    Who will regulate the use of these vaccines?
     The DOD? The agency that can't even comply with a Federal 
Judge's order or Congress?
         Vaccinations were given despite Judges Order; http://
        www.washingtonpost.com/wp-dyn/articles/A59190-
        2005Feb2.html?sub=AR
         ``DOD's medical credibility disputed'' http://
        www.govexec.com/dailyfed/0200/020100b3.htm
         ``Army Proposal to use U.S. Soldiers as Human Test 
        Subjects;'' (http://www.bna.com/press/guest/aotto.htm).
         ``U.S. Army Buys $30 Million in Anthrax Shots'' 
        (http://dailynews.att.net/cgi-bin/
        news?e=pri&dt=040102&cat=news&st=newshealthan). \1\
---------------------------------------------------------------------------
    \1\ The Defense Department announced on Friday a $29.7 million 
order for anthrax vaccine based on the assumption that a Federal 
judge's ban on mandatory inoculations will be served.
---------------------------------------------------------------------------
     The FDA? As best put by David Graham in his testimony 
before a Senate hearing:
         ``This culture [at the FDA] views the pharmaceutical 
        industry it is supposed to regulate as its client. It 
        overvalues the benefits of the drugs it approves, and seriously 
        undervalues, disregards and disrespects drug safety.''
         ``The FDA, as presently configured, is incapable of 
        protecting Americans against another Vioxx.''
     The NIH? The agency that has recently come under fire for 
its conflict of interest with the drug manufacturers?
         ``Panel Wants Top Health Officials Off Drug 
        Payrolls,'' (http://www.ahrp.org/infomail/04/05/07.php).
         ``NIH to Ban Deals with Drug Firms'' (http://
        www.latimes.com/news/nationworld/nation/la-na-
        nih1feb01%2C0%2C5059199.story?coll=la-home-headlines). \2\
---------------------------------------------------------------------------
    \2\ For the last decade, government scientists at the NIH have 
quietly been allowed to consult for biomedical companies under policies 
that defenders have said helped attract talented personnel to the 
agency. Hundreds of scientists took millions of dollars in fees and 
stock from industry. Most of the payments were hidden from public view, 
raising questions about the scientists' impartiality in overseeing 
clinical trials and in making recommendations to doctors for treating 
patients. In some cases, NIH scientists worked for drug companies that 
directly benefited from their recommendations to doctors. In other 
cases, scientists appeared at public forums and commented upon or 
endorsed treatments or drugs without revealing that they were on the 
payroll of companies making the products.
---------------------------------------------------------------------------
    The regulating agencies have become such a revolving door, it's 
hard to determine where one agency ends and the drug manufacturer's 
door begins. Though NIH is taking steps to correct the conflict of 
interest, the fact that such a move even needs to occur should sound 
major alarms. The public is becoming extremely wary of these regulating 
agencies. People within these agencies have lost sight of their primary 
responsibility to the public, unable to see beyond their own greed.
    I'd like to remind the committee of the Government's own words on 
vaccination biological programs:
     ``House Democrats Call for Revitalizing U.S. Smallpox 
Vaccine Program'' (http://www.nti.org/d	newswire/issues/2004	1	
29.html#88E92E9A). \3\
---------------------------------------------------------------------------
    \3\ Calling Federal efforts to vaccinate U.S. health care workers 
against smallpox ``an embarrassing failure of government, with serious 
implications for homeland security,'' Democracts in the U.S. House of 
Representatives yesterday called on the Bush administration to reassess 
the smallpox bioterrorist threat and improve the U.S. ability to 
respond to such an attack.
---------------------------------------------------------------------------
     Study Slams Biodefense Plan (http://www.boston.com/news/
nation/articles/2004/01/23/study	slams	biodefense	plan/). \4\
---------------------------------------------------------------------------
    \4\ The Pentagon's efforts at creating new vaccines and drugs to 
combat biological weapons are poorly organized, under-funded, and 
unlikely to produce successful results in the near term, if ever, 
according to a congressionally mandated study released yesterday.
---------------------------------------------------------------------------
    We do not know the final outcome of the current vaccines in use, 
let alone any new ones that are yet to come. So far, what is known is 
that the anthrax vaccine has been linked to birth defects, spontaneous 
miscarriages, auto-immune disorders, which include (but are not limited 
to): Bell's palsy; Guillain Barre Syndrome; Multiple Sclerosis; Lupus 
and heart disease.
    (http://www.fayettevillenc.com/printer.php?Story=6787445).\5\
---------------------------------------------------------------------------
    \5\ Tech. Sgt. Lavester Brown almost died last year when his heart 
swelled to twice normal size hours after he received an anthrax 
vaccination. A few months later, he had to have a heart transplant.
---------------------------------------------------------------------------
    Taken directly from the product label, further associations to the 
anthrax vaccine, to also include death, are as follows:
    ``Other infrequently reported serious adverse events that have 
occurred in persons who have received BioThrax have included: 
cellulitis, cysts, pemphigus vulgaris, endocarditis, sepsis, angioedema 
and other hypersensitivity reactions, asthma, aplastic anemia, 
neutropenia, idiopathic thrombocytopenia purpura, lymphoma, leukemia, 
collagen vascular disease, systemic lupus erythematosus, multiple 
sclerosis, polyarteritis nodosa, inflammatory arthritis, transverse 
myelitis, Guillain-Barre Syndrome, immune deficiency, seizure, mental 
status changes, psychiatric disorders, tremors, cerebrovascular 
accident (CVA), facial palsy, hearing and visual disorders, aseptic 
meningitis, encephalitis, myocarditis, cardiomyopathy, atrial 
fibrillation, syncope, glomerulonephritis, renal failure, spontaneous 
abortion and liver abscess. Infrequent reports were also received of 
multisystem disorders defined as chronic symptoms involving at least 
two of the following three categories: fatigue, mood-cognition, 
musculoskeletal system.
    Reports of fatalities included sudden cardiac arrest (2), 
myocardial infarction with polyarteritis nodosa (1), aplastic anemia 
(1), suicide (1) and central nervous system (CNS) lymphoma (1). (http:/
/www.bioportcorp.com/AnthraxVaccine/insert/avainsert.asp).
    According to Ron Brookmeyer, a professor of biostatistics at Johns 
Hopkins Bloomberg School of Public Health, mass vaccination programs 
aimed at protecting most or all Americans against anthrax are 
impractical and would save fewer lives than a speedy, localized 
response in the event of an attack, a new report concludes. \6\
---------------------------------------------------------------------------
    \6\ http://www.forbes.com/lifestyle/health/feeds/hscout/2004/12/15/
hscout522909.html.
---------------------------------------------------------------------------
    The smallpox vaccine has been linked to enough heart problems that 
the civilian program for first responders was put to a halt; yet it's 
still mandatory for our military personnel. \7\
---------------------------------------------------------------------------
    \7\ Lexis-Nexis--Friday September 3, 2004--Vaccine-induced heart 
problems; Smallpox vaccinations and anthrax vaccine--Smallpox 
vaccinations have been linked to serious heart problems. Seventy-seven 
of over 615,000 (1.25 percent), according to the Pentagon, have 
developed myopericarditis, an inflammation of the sac around the heart. 
The Centers for Disease Control say that 21 of the 39,500 (5.3 percent) 
U.S. medical professionals who received the vaccination also contracted 
the illness. When three people enrolled in clinical trials to test a 
new smallpox vaccine, developed by British biotechnology company 
Acambis, also developed myopericarditis, the company ended the trial. 
The anthrax vaccine, which is also linked to heart attacks and strokes, 
is being implicated in unexplained blood clot disorders, according to a 
report by United Press International (October 6, 2003). The label on 
the anthrax vaccine given to military personnel ``warns of infrequent 
reports of heart attacks or strokes.'' Both can be caused by blood 
clots. Several soldiers and an NBC news correspondent have suffered--
and in some cases died--because of unexplained blood clots.
---------------------------------------------------------------------------
    Further vaccinations that are in the talking/planning stage to be 
tested on our soldiers should be used only with informed consent. Any 
forced vaccinations on our troops would make the U.S. Government solely 
responsible for any and all negative outcomes regarding adverse events, 
which will inevitably occur. Has the committee considered how many 
negative adverse events or deaths from these vaccines will be 
considered an acceptable loss? According to President Bush's State of 
the Union Address on February 2, 2005, ``the destruction of life is not 
acceptable for medical research.'' It takes 5 to 7 years after approval 
before a new drug's risks are fully understood. Do these biological 
vaccination programs not stand in complete contrast to the President's 
own words?
    It is the members of our Armed Forces that will be forced to test 
these vaccinations, with no option of refusing, no recourse to take 
should they become ill and lose their health and career; yet talk 
continues about shielding the manufacturer's from liability should 
these events occur--what about our service members? Where is their 
shielding? Pure rhetoric rallies support for our troops from the 
legislature at election time, or the beginning of wars, yet falls short 
when it comes time to put actions behind the words. Our military has 
given our Nation their all; should they at least not be given some of 
their God-given rights: The right to have integrity over their own 
bodies?
    The continuous rotation of deployment of our troops in Afghanistan 
and Iraq with the War on Terrorism, has caused a major strain on our 
forces. Further requirements of biological vaccinations with unknown 
risk factors will break an already thin force. \8\
---------------------------------------------------------------------------
    \8\ When the military ordered all military personnel bound for 
Korea and the Middle East to be inoculated with the anthrax vaccine, 
pilots staged a massive walkout at Dover Air Force Base, where the Air 
Force's largest cargo aircraft are flown.
---------------------------------------------------------------------------
    ``Dover short pilots since vaccine order'' (http://
www.delawareonline.com/newsjournal/local/2004/12/
28dovershortpilot.html).
    The men and women who serve in our military may not be your sons or 
daughters, but they are someone's. As you think about the ``Next Steps 
in Biopreparedness,'' please keep that in mind. Until then, my 
colleagues and I will continue to assist the soldiers and their 
families the best we can--those whose lives have already been 
destroyed, by just two of these biological vaccines.
    The Government continues to try and find ways to combat terrorism 
and biological warfare. Aggressive measures should be taken; however, 
we need an honest and open assessment from all parties concerned 
regarding biopreparedness and the next steps, which goes beyond 
pharmaceutical companies and the NIH. Our Nation is billions of dollars 
in debt, and spending billions of more dollars on biological 
vaccination programs that may fail on all counts, is financially and 
morally irresponsible. I submit my testimony today not as an expert in 
biowarfare, but, as a concerned individual that has seen, in some 
cases, the deadly and life-changing result that has occurred from 
biological vaccines.
    I am a volunteer, and I do this willingly along with my colleagues, 
considering we care more about our troops than the Department of 
Defense or most of those in the legislature. Perhaps when the members 
of Congress have to begin getting intimately involved in receiving 
these vaccinations, or enlisting their sons and daughters into the 
Armed Forces, they may finally realize that those receiving these 
vaccines are, in fact, human beings, not dispensable models. Perhaps 
then, Congress will begin to provide the civilian oversight of the 
Department of Defense as it is supposed to do. Perhaps then, the 
Department of Defense can get back under control; and perhaps then, 
soldiers will once again begin to display faith in their leadership.
    In closing, I am willing, at any time, to speak with anyone 
concerning any questions you may have. My email address is: 
[email protected]; my phone number is 517-819-5926. Thank you for the 
opportunity to submit this written testimony for public record.
                     Statement of Meryl Nass, M.D.
    Thank you for the opportunity to submit this testimony for the 
record. My name is Meryl Nass, M.D., and I have worked for the past 20 
years as an emergency physician and internist in community hospitals. I 
have also studied many aspects of bioterrorism since 1989. I am the 
person who first demonstrated that one could investigate an epidemic 
retrospectively, and prove that it was due to biological warfare, using 
Rhodesia's 1978-1980 anthrax epidemic as a model.\1\
---------------------------------------------------------------------------
    \1\ Nass M. Anthrax Epizootic in Zimbabwe 1978-1980: Due to 
Deliberate Spread? PSR Quarterly, 1992; 2: 198-209. http://
www.anthraxvaccine.org/zimbabwe.html.
---------------------------------------------------------------------------
    Since then I have authored and coauthored numerous documents on the 
subjects of preventing, investigating and ameliorating the effects of a 
bioterror attack. These included recommendations to the Biological 
Weapons Convention Review Conference of 1996, \2\ and a Congressional 
testimony on medical responses to bioterrorism in November 2001.\3\
---------------------------------------------------------------------------
    \2\ Report of the Subgroup on Investigation of Alleged Use or 
Release of Biological or Toxin Weapons Agents. Federation of American 
Scientists Working Group on Biological Weapons Verification, April 
1996.
    \3\ Preparing a Medical Response to Bioterrorism. Written Testimony 
of Meryl Nass, M.D. House Committee on Government Reform hearing, 
November 14, 2001: Comprehensive Medical Care for Bioterrorism 
Exposure.
---------------------------------------------------------------------------
    Because I continue to practice medicine, have a strong background 
in biological warfare, and do not consult for the drug industry, my 
concerns may differ from most Congressional witnesses. They are:
    (1) Achieve maximal readiness at the local level.
    (2) Assure the development and availability of safe and effective 
measures, especially drugs and vaccines, to protect our citizens.
    (3) Urge a much stronger focus on prevention of bioterrorism. 
Although it is a truism that it is impossible to fully protect our 
population against this form of attack, in our rush to buy protections 
we seem to ignore their limitations. The ability of an enemy to defeat 
our preparations will increase in the future. Furthermore, the 
potential for biowarfare to destroy whole species or even end life as 
we know it is not inconsiderable.
    I'd like to briefly cover these three issues. With respect to local 
readiness:
    Through State and Federal grants, hospitals have been given 
antidotes for chemical agents, and other appropriate drugs for use in a 
limited chemical or bioterrorism event. Hospitals do not have 
sufficient stockpiles of these substances to care for more than a tiny 
percentage of the population, should a massive event occur. We have 
even fewer people with the knowledge or experience to take charge of 
the situation appropriately, should a terrorism event occur. We lack 
sufficient gloves, gowns and masks on site in the hospital to handle a 
sustained infectious catastrophe.
    Our practice and knowledge of infection control needs to be 
improved. During the past month my hospital had several cases of 
hospital-acquired influenza in both staff and patients, despite 
following CDC-specified infection control measures. This occurred, in 
my opinion, because CDC did not pay adequate attention to transmission 
of the virus by fomites (inanimate objects that harbored transmissible 
virus) and because we had patients who were spreading virus prior to 
being diagnosed with the infection, i.e., before appropriate control 
measures were instituted, because it took up to 24 hours to get lab 
confirmation of the diagnosis. As most of the flu cases I cared for had 
received flu vaccine, flu was not suspected initially. Yet the vaccine 
apparently failed to protect them.
    Attention to improving our understanding of infectious disease 
management will yield great dividends in helping us control a 
bioterrorism event. I am simply repeating what many others have said: 
the public health system has been a poor stepchild of the medical 
system for decades, generally relegated to providing a modicum of care 
for those who cannot pay, and handling conditions like tuberculosis and 
sexually transmitted diseases. It needs to expand its horizons, and it 
should become fully integrated into our practice of medicine.
    My second concern is that the provision of safe and effective drugs 
and vaccines to our population is of utmost importance. However, we 
cannot develop and manufacture a vaccine or antidote for every possible 
infectious agent for compelling reasons:
    (a) we do not yet know how to do so (witness the lack of an AIDS 
vaccine or an effective drug for viral hepatitis).
    (b) the number and variety of potential pathogens is infinite, so 
we cannot predict or identify all the pathogens that might be used as 
weapons, which makes finding treatments difficult or impossible.
    (c) the cost of developing and producing even one drug or vaccine 
for the entire population is likely to range from one to many billion 
dollars.
    At this point, the United States has not even begun to develop a 
surge capacity for manufacturing such products, although it is clear 
this is what is required. My 2001 Congressional testimony included many 
suggestions for rapid development of effective drugs and vaccines, so I 
will not belabor those points today.
    What is urgently needed by the Nation is for a group of 
knowledgeable, nonpartisan experts in and out of government to review 
our weaknesses and strengths, and plan an overall approach to the 
problem of bioterrorism, while avoiding measures that could increase 
the threat. Until now, we have put the cart before the horse, 
purchasing a few drugs and vaccines (that may in fact be unusable due 
to problems that are only now being identified), without any overall 
program to protect the Nation from the range of threats we face. 
Instead, there has been great duplication of efforts by agencies with 
overlapping responsibilities, but little attention to systematically 
plugging the gaps in our preparedness.
    NIAID was given a large amount of money in 2002 to allocate to 
bioterrorism preparedness, and elected to use much of it to support 
building new high containment laboratories around the country. Although 
some additional capacity was probably needed, much of the additional 
capacity appears at this stage to be superfluous. More worrisome than 
wasteful, however, is the fact that the new labs will employ thousands 
of scientists with new careers in bioterrorism, who will study 
weaponizable pathogens, thus proliferating knowledge about these 
pathogens. This could lend itself to serious blowback in the future. We 
have no systematic mechanisms in the civilian sector to screen these 
scientists and other new biodefense employees, nor have we the means to 
prevent researchers from taking miniscule samples of pathogens out of 
the lab, nor to follow their activities once they leave our research 
centers. Nor do we have foolproof systems to maintain the security and 
safety of the labs. An electrical failure with loss of generator 
capacity at Plum Island, New York 2 years ago graphically demonstrated 
that even redundant systems can fail, and that one may not always be 
able to keep dangerous pathogens safety confined. It is simply not 
possible to have a fail-safe system. Researchers can become infected 
and bring their illness to the community; cultures thought to be dead 
or attenuated are found to be virulent.
    Plum Island was chosen for biodefense work decades ago because 
there was no land link to Long Island or the U.S. mainland. This was a 
powerful safety measure that we are now ignoring at our peril. There 
cannot be a sufficient rationale for siting biodefense laboratories in 
heavily populated areas, even if this makes attracting quality staff 
easier. The hubris of assuming that nothing can go wrong does not augur 
well for the scrupulous safety planning that should be taking place, 
particularly in light of accidents at these very same labs in the 
recent past. (Three researchers at Boston Medical Center developed 
tularemia and one researcher at Fort Detrick developed glanders 
recently as a result of working with the organisms; in each case, it 
was not suspected until late that they were ill due to occupational 
exposures).
    How do we best get safe new drugs and vaccines to the population? I 
would venture to say that when government has employed medical 
therapies for political ends, rather than for a demonstrated medical 
need, the strategy often backfires. Using public relations techniques 
to create a need for treatment in the public's mind is another 
dangerous strategy with a tendency to backfire, as the public learns to 
mistrust the medical pronouncements of government. This probably 
accounts for why we have a flu vaccine surplus today, despite what was 
touted as a dangerous shortage several weeks ago.
    The swine flu vaccine program of 30 years ago failed because 
vaccine was made and Americans vaccinated due to a political program, 
in the absence of an outbreak. In order to get rapid production of 
vaccine by industry, the Federal Government assumed the liability for 
vaccine-induced injuries, and paid for many cases of neurological 
illness. Americans learned that Guillain-Barre Syndrome could be caused 
by vaccines.
    In 1998 the anthrax vaccine was rolled out as the first 
immunization in a potentially large program of vaccinations to protect 
the military from biowarfare threats. Here again the Federal 
Government, in the person of the Secretary of the Army, indemnified the 
manufacturer against all liability from adverse effects or product 
failure. This measure was reportedly designed to avoid costs, but may 
become quite costly, due to ongoing litigation about the vaccine's 
safety and efficacy. The vaccine's license for prevention of inhalation 
anthrax was removed in October 2004 by Judge Emmet Sullivan.
    The ability to shift the costs of product indemnification by 
Federal agencies probably works to make indemnification attractive. 
Although it was the Army that indemnified the vaccine manufacturer 
(reducing the manufacturer's need to produce a quality product) 
soldiers who become disabled as a consequence of anthrax vaccination 
are paid primarily by the Department of Veterans Affairs and/or Social 
Security Disability. So far there has been little impact on the Army's 
budget from its decision to use a poorly tested and manufactured 
vaccine.
    In late 2002 the Federal Government initiated the smallpox 
immunization program, with plans to vaccinate, stepwise, 10 million 
first responders and medical personnel. The manufacturer, Wyeth, had 
turned over its smallpox vaccine stockpile to the Federal Government 2 
decades ago, and it too received immunity from liability claims. Due to 
a poor initial response by volunteers, Congress crafted a plan to 
insure vaccine recipients against death or disability, with a maximum 
payout per recipient of $262,100. However, despite this guarantee, 
higher than expected rates of cardiac complications caused the pool of 
volunteers to dry up. The civilian smallpox vaccine program withered on 
the vine in late 2003, but mandatory military smallpox vaccinations 
have continued, perhaps helped along by shifting the costs of the 
programs's adverse medical consequences to other agencies.
    In November 2004, FDA added a black box warning to the vaccine 
label, limiting use to only those at high risk of smallpox, and 
indicating that myocarditis was occurring approximately 100 times more 
often than initially reported: one in every 145 vaccine recipients had 
developed this complication in a clinical trial conducted by industry. 
The military smallpox program continued nonetheless.
    A historical lesson that industry may not want to acknowledge is 
that when the removal of manufacturers' liability is sought and 
obtained, the resulting products have usually been associated with 
serious safety issues. And when the government assumes the liability, 
it has a strong disincentive to perform appropriate scientific studies 
that will identify and quantify the health risks of such products. Thus 
we still lack reliable statistical data on the types and rates of 
adverse reactions for anthrax vaccine. And despite CDC surveillance of 
40,000 smallpox vaccine recipients, we remain in the dark about the 
rates of vaccine complications, apart from myocarditis and skin 
conditions.
    The Food and Drug Administration used to be the preeminent agency 
in the world for protecting citizens from bad drugs. Unfortunately, 
this began to change about 10 years ago, spurred by two Congressional-
FDA initiatives: the Food and Drug Administration Modernization Act and 
the Prescription Drug User Fee Act.
    Encouraged by the Executive branch, FDA came to view industry as 
its primary client, rather than the public, and focused more on rapid 
drug approvals than on assuring safety and efficacy of new products. 
Allowing direct-to-consumer advertising further damaged the agency's 
reputation. This also made it harder for physicians to prescribe 
medicines cost-effectively. Ignoring serious bacterial contamination in 
2004 at flu vaccine manufacturer Chiron Corporation, FDA demonstrated a 
willful failure to carry out its responsibility for assuring good 
manufacturing practices.
    Things have gone from bad to worse at FDA lately. The large number 
of recent drug withdrawals, the continuing series of scandals involving 
FDA's connivance with industry to hide serious adverse drug effects, 
and widespread loss of trust--by its own employees--that the FDA can do 
its assigned job grace the pages of our newspapers daily. The fact that 
the American Medical Association recently recommended that assessment 
of drug safety be performed by a separate agency confirms that the 
credibility of FDA has dropped to a critical level, and serious reforms 
are way overdue.
    It is this flawed, unreliable FDA that is now charged with 
approving new drugs and vaccines for bioterrorism: products likely to 
receive less testing, using fast-track procedures, than for standard 
drug approvals. This FDA also approves the use of unlicensed, 
investigational products under certain circumstances, and has just done 
so for the military with anthrax vaccine.
    Given FDA's ongoing credibility problems, the procedures currently 
in place to assure that American citizens obtain safe and effective 
products to prevent and treat diseases due to bioterrorism are 
inadequate. We are talking, after all, about drugs that cannot be 
tested for efficacy in humans: potentially the entire Nation could 
receive such drugs or vaccines that have had only rudimentary human 
testing. And animal testing is uniformly acknowledged to be inadequate 
to assess human safety.
    Americans cannot currently rely on FDA to guarantee quality 
manufacturing, testing, safety and effectiveness of these products. 
Because these drugs are likely to be used all at once, i.e., the entire 
Nation might be treated during the same week, we will have only very 
limited information about the drugs' side effects and effectiveness 
when the decision to use them is made. We will not have acquired the 
clinical familiarity and longer term data that accrue over the 1st year 
or 2 of a new drug's use, and upon which most physicians rely.
    As a clinician, I consider this entirely unacceptable. Such drugs 
need more attentive oversight than ordinary drugs, not less, before 
they are approved for use. A reliable track record must exist before I 
can prescribe a drug or vaccine. Because all drugs cause adverse 
reactions in some recipients, and the administration of every drug 
involves a risk-benefit calculation, their appropriate use requires 
care and skill. No one should decide to prescribe for the Nation 
without the availability of reliable information on the drug to be 
used. Yet current law permits the Secretary of HHS to do so, even if 
that person has no medical training. He may consult with the FDA 
Commissioner; but the current Acting Commissioner is a veterinarian. 
HHS will bear no financial liability if the drug turns out to be more 
dangerous than anticipated.
    Of course industry needs incentives in order to develop and produce 
useful products. I submit that current patent protections for industry 
should be changed. Why should the clock start ticking on a drug patent 
the day the patent is issued, even though this is years before FDA 
approval is obtained and the product can be manufactured? The ticking 
clock forces FDA to eschew safety considerations for speed.
    A preferable alternative would be, for example, to extend patent 
protection based on the date of FDA licensure. This would give FDA and 
the manufacturer breathing space, allow for clinical safety trials of 
longer duration, and give the manufacturers a reasonable incentive. In 
order to speed new drug development, the length of patent extension 
could also become a function of how quickly the new product is 
developed. Another advantage to this proposal is that it would remove 
the incentive manufacturers now have to rush out drugs before they are 
well understood.
    Other incentives for industry have been discussed elsewhere, but 
should not be used if they are associated with significant safety 
risks. Industry may wish to use certain products, such as currently 
unlicensed vaccine adjuvants, in vaccines designed for bioterrorism 
because they improve efficacy. Possibly this back door approach would 
help them move these adjuvants toward licensure. However, given the 
known risk of these products to induce autoimmune disorders in 
susceptible recipients, bioterrorism must not become the excuse to 
initiate their widespread use in humans.
    My final point is that prevention of bioterrorism should be the top 
priority of Bioshield legislation. Because we cannot afford to protect 
against all potential pathogens, because we cannot even predict the 
potential pathogens we might face, and because the minute size of 
microorganisms makes bioagent proliferation extremely easy, it should 
be clear to all that we will never be able to purchase adequate 
protection from bioterrorism, no matter how many resources we expend. 
Therefore, finding ways to maximize international cooperation in the 
development of countermeasures, in inspections of biological research 
and manufacturing facilities, and in preventing the proliferation of 
bioweapons scientists should receive our full attention and resources.
    It is hard to understand why successive U.S. administrations have 
failed to embrace the value of this approach, and why diplomatic 
measures, such as strengthening the verification provisions of the 
Biological Weapons Convention, have not received strong support from 
the U.S. government. This is a low cost approach that can be undertaken 
in tandem with all the other measures designed to boost protection for 
our population. Although industry had reservations about inspections in 
the past, because of the potential loss of trade secrets, PHaRMA now 
supports strengthening the Biological Weapons Convention with 
inspections and other efforts.
    The clock is ticking for our species and planet. We can throw money 
scattershot at this problem and move on, or we can give it the 
prolonged attention and effort it deserves, and ask some of our 
strongest scientists, engineers, and statesmen to help think through 
the overall problem of readiness and appropriate preparation. If we are 
to take the threat seriously, we must maximize our resources on the 
local and global levels. So far we have not done so. Thank you.
                                 ______
                                 
             The Military Vaccine Education Center,
                                        Missoula, MT 59807,
                                                  February 7, 2005.
Hon. Jeff Bingaman,
Subcommittee on Bioterrorism and Public Health Preparedness,
U.S. Senate,
Washington, D.C. 20510.

RE: Feb. 8, 2005 Hearing on Biodefense: The Next Steps

    To Members of the Committee: My name is Kathryn Hubbell, and I am 
writing as President of both the Military Vaccine Education Center, 
Inc. (www.milvacs.org), a networking, resource and referral center for 
troops and veterans, and the Military Vaccine Action Committee, L.L.C., 
a ``non-connected PAC'' (www.mvacpac.org).
    I am hoping these remarks and the accompanying timeline will prompt 
you to learn from the mistakes--the outright disasters--that have 
occurred with the military's mandatory bioterrorism vaccines, so that 
as you move forward discussing ways to help the public, these same 
mistakes will be replaced by sound policy, medically stringent 
procedures, and proper protocol.
    I am very tempted to relate to you the heartbreaking letters we 
receive on a daily basis from service members and veterans, describing 
their extreme illnesses as a result of the anthrax vaccine (and now of 
the smallpox vaccine); the way they are insulted and humiliated by 
their chains of command, who have been taught that there is no relation 
between these illnesses and the vaccines; their years of struggle to 
obtain any kind of medical benefits, a struggle which too often results 
in the loss of their homes, cars, jobs and marriages; and finally, 
their ensuing struggle to maintain a sense of dignity in the face of 
extreme disability, and to have faith that they still have something to 
contribute to their country.
    But let's not go there. Many of the ill have already written to 
you, and you might be tempted to think ``This is terrible, but these 
are isolated incidents.''
    So I would like to speak in a different language, one that looks at 
the larger picture and does not dwell on individual sadness. I would 
like to talk about numbers, processes, and finances; and finally, about 
alternative solutions, solutions which are badly needed because what's 
been done up until now for our troops has backfired badly. We should 
review the past steps and ask pertinent questions in order to determine 
what the next steps are.
    Here are some facts and concepts which need serious questioning:
     The anthrax vaccine label itself--mandated by the FDA in 
2002--admits to a systemic averse reaction rate of between 5 percent 
and 35 percent--where previously, the DOD claimed it was a mere .02 
percent (http://www.bioportcorp.com/AnthraxVaccine/insert/
avainsert.asp). Since then, the GAO (Government Accounting Office) has 
come out with a new report estimating the systemic adverse reaction 
rate is probably as high as 85 percent.\1\ In addition, it is known 
that women have a much greater adverse reaction rate than men.\2\
---------------------------------------------------------------------------
    \1\ Government Accounting Office; 2002; Anthrax Vaccine: GAO's 
survey of Guard and Reserve Pilots and Aircrew; GAO-22-445, p.22.
    \2\ Ibid. p.9.
---------------------------------------------------------------------------
    Questions: Why would the Department of Defense risk losing over a 
third of its troop strength to this highly reactive, questionable 
vaccine?
    Are we not to believe that our troops are stretched quite thin all 
over the world?
    How many of our fine men and women in uniform have left the service 
because of the anthrax vaccine? This is more of a rhetorical question, 
because many service members leaving active duty simply didn't give the 
real reason. My son was one of them. He still misses the Air Force; but 
he misses his full health even more.
     We've had nearly 1,600 service members killed in Iraq, and 
several thousand have returned home wounded. But nearly 17,000 have 
been medically evacuated out of Iraq due to non-combat causes.\3\
---------------------------------------------------------------------------
    \3\ United Press International, 2004: Pentagon not listing 17,000 
war casualties. (http://www.washtimes.com/upi-breaking/20040915-052239-
8792r.htm).
---------------------------------------------------------------------------
    Is this a normal figure in time of war? Is it acceptable? And 
exactly what are those non-combat causes? Who has the records?
    How much is it costing the VA and the Vaccine Health Care Centers 
to treat these sick troops? Is it cost-effective to wait until they get 
sick and are medical-boarded out of the service, rather than provide 
them with protective gear and antibiotics so they can stay in and serve 
their country as they so much want to do?
     The 2002 GAO also stated that of the Guard and Reserve 
units forced to take the vaccine, at least 18 percent of the pilots 
resigned or obtained transfers out of their units rather than take the 
vaccine and jeopardize their civilian flying careers.\4\
---------------------------------------------------------------------------
    \4\ Government Accounting Office; 2002; Anthrax Vaccine: GAO's 
survey of Guard and Reserve Pilots and Aircrew; GAO-22-445, p.9.
---------------------------------------------------------------------------
    Questions: How much does it cost to train an F-16 pilot?
    How much does it cost to replace a fighter jet if the pilot 
suddenly suffers an attack of vertigo--one of the most common anthrax 
vaccine reactions--and has to bail out?
    How many pilots are we short right now?
     Walter Reed Vaccine Healthcare Center saw over 1,000 
patients and consulted with more than 139,000 individuals via phone/
email as a result of problems with the anthrax/smallpox vaccine in 2003 
alone.\5\
---------------------------------------------------------------------------
    \5\ Rupple, David; 2004; U.S. Army Provides No Funds for Vaccine 
Care Centers; Global Security Newswire, May 18, 2004; (http://nti.org/
d%5Fnewswire/issues/2004/5/18/
b047b91a%2Dbaae%2D4469%2Da369%2Dce894037d5a1.html).
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    Questions: Why is funding for the Walter Reed Vaccine Healthcare 
Center constantly jeopardized?
    How will we fund the four new Vaccine Healthcare Centers that are 
needed and proposed, when we can barely take care of the ones we've 
got?
    If there is no connection between these illnesses and the anthrax 
and smallpox vaccines, why are the current Vaccine Healthcare Centers 
needed at all--let alone requesting expansion into other cities and 
States?
     The anthrax vaccine was never licensed for use against 
aerosolized anthrax. Despite the FDA's ``finalizing the rule'' for the 
anthrax vaccine in December of 2003, just 8 days after Judge Emmett 
Sullivan declared it illegal, the Vaccine in its current form was never 
meant to be used against aerosolized anthrax.\6\
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    \6\ Rempfer, T; Dingle, R.; Connecticut Air National Guard, 2001 An 
analysis of the flawed process behind the development of the anthrax 
vaccine, pp.1-2.
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    Question: The FDA and the pharmaceutical industry are currently 
under intense scrutiny--and facing lawsuits--for drugs freely used off-
label, and/or drugs whose dangers were known, such as Vioxx, but 
reached the open market, for years anyway. There are now consequences 
to pay for both Merck, the manufacturer of Vioxx, and the FDA.
    If these standards and consequences are good for our civilians, why 
do we not uphold such standards for our troops? Are they somehow made 
of totally different genetic material than the families from which they 
came?
     The anthrax vaccine was originally licensed based on data 
from a different vaccine. The only safety/efficacy study ever done on 
human beings was done on that different vaccine.\7\
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    \7\ Ibid.
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    The FDA and DOD have also previously admitted that efficacy based 
on animal studies against inhalation is problematic because no proven 
correlate of immunity between animals and humans exists for anthrax 
infection.
    Question: Again, why are standards lowered for our troops? Why are 
the normal safety standards and protocols consistently bypassed when it 
comes to our troops?
     The anthrax vaccine protocol originally called for 3 shots 
only; the change to a series of 6 shots with annual boosters was done 
with no foundation in research or fact. The label was actually changed 
to reflect the protocol then in practice; the protocol was not dictated 
by instructions on the label. In 1985, a review panel ``also found the 
dosage of the anthrax vaccine to be incorrect, and recommended a 
correction to the labeling to only 3 shots.'' \8\
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    \8\ Rempfer, T; Dingle, R.; Connecticut Air National Guard, 2001: 
Time Line: Development and use of the Anthrax Vaccine and the Anthrax 
Vaccine Immunization Program.
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    Question: Why is it that no one went back to the source documents 
to understand what really happened? The problem is that the ``sound 
bites'' and convenient answers get repeated so often that they are 
finally accepted as the truth.
     There have been no long-term studies done of reactions to 
the anthrax vaccine.\9\
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    \9\ Chan, K.C., 1999; Summary of GAO's findings on the safety and 
efficacy of the anthrax vaccine. Letter to Hon. Steve Buyer. Government 
Accounting Office, NSAID-00-54R.
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    The bottom-line question for all of the points we have just brought 
up is this: Why have such shoddy processes and practices been allowed? 
Where were the standards for the development process and the follow-up? 
Why has the FDA not enforced its own rules and procedures?
     ``Researchers at Johns Hopkins University said Wednesday 
that early detection--and not a pre-exposure vaccination--is the key to 
limiting an outbreak of anthrax.'' (http://www.cnn.com/2004/HEALTH/12/
15/anthraxdetect/) Dec. 14, 2004.
     There are a number of anthrax early-detection kits and 
products on the market. (example: http://osborn-scientific.com/PDF/
anth	data	OSG	0411.pdf). In addition, antibiotics and protective 
garments, masks and filters are readily available.
    Question: Why are funds being directed at vaccine instead of being 
used for better detection equipment and better protective gear for our 
troops?
     The military has a tendency to administer multiple 
vaccines in one day--smallpox, anthrax, the Hepatitus B, and more. 
Nearly 2 years ago, a young Army Reservist named Rachel Lacy died 
within a month of receiving this assault upon her immune system.\10\
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    \10\ Dept. of Defense, 2003; Panel Issues Report on Vaccine Adverse 
Event Case. (http://www.anthrax.osd.mil/media/pdf/
safetypanelQA.pdfhttp://www.anthrax.osd.mil/media/pdf/
safetypanelQA.pdf).
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    Questions: Why are non-medical commanders in charge of 
administering this program, instead of military physicians? Is there no 
one in the military medical establishment who understands that the 
human body cannot accommodate such an assault without severe problems?
    Here's the bottom line: If the anthrax vaccine was a civilian 
vaccine, it would have been pulled from the market years ago, and the 
resulting lawsuits would have bankrupted the manufacturer.
    We do not want to see these travesties perpetuated on the general 
public. At the same time, we know that it is only when the public is 
subjected to the same investigational drugs that a public outcry will 
finally force accountability over these issues.
    My understanding is that you are a subcommittee dealing with 
bioterrorism issues and with public health. If you want to protect the 
public, do not treat them the way our service members have been 
treated. Our men and women in the military have long served as 
unwitting medical guinea pigs.\11\
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    \11\ Committee on Veterans' Affairs, 1994: Is Military Research 
Hazardous To Veterans' Health? Lessons Spanning Half A Century. U.S. 
Congress. (http://www.datafilter.com/mc/
militaryHumanExperimentationReport94.html).
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    Vaccines, at their best, still carry a risk for a certain 
percentage of the population. As we move into an era of more--and more 
difficult--bioterrorism vaccines, the terrible lessons of the past must 
guide our actions. We cannot afford to decimate our military due to 
unproven, unsafe, investigational new drugs. Nor will the general 
public stand for such results.
    Please consider the following:
    1. Demand a full explanation of the exact anthrax threat that 
constitutes the ``emergency'' recently declared by Tommy Thompson of 
Health & Human Services.
    2. If the public is definitely facing an anthrax threat, then the 
triple-pronged approach--better detection equipment, antibiotics and 
protective clothing--is the one increasingly recommended.
    3. If the public genuinely needs an anthrax vaccine, or a smallpox 
vaccine--or a vaccine against ricin or anything else--then a new 
vaccine must be developed that adheres to the strictest of sound 
scientific and medical principles and processes. Because it takes years 
to run clinical trials, people must be given informed consent 
documents, as they were after the 9/11 attacks--the same documents our 
troops have never been given, but to which they are constitutionally 
entitled.
    4. If new smallpox and other bioterrorism vaccines are going to be 
made available to members of our armed forces as well as civilians, 
there must be a better protocol in place for administering these 
vaccines. Giving a person multiple shots in one day is against every 
form of medical protocol for vaccinations that there is.
    5. We are against providing complete legal protection for those 
manufacturing these vaccines, because we have seen what it has done to 
members of the armed services. They have no recourse to sue for their 
injuries and illnesses due to a 1950 body of law called the Feres 
Doctrine.\12\ We are convinced that Feres Doctrine was not meant to 
pave the way for unregulated medical experimentation upon members of 
the armed services--but despite its good intent, that's exactly the 
result. We need to be able to hold vaccine manufacturers as well as the 
FDA completely accountable for the policies and procedures by which 
these vaccines are developed and come to market. Giving them complete 
immunity merely because vaccines are not a high profit-producing area 
for a pharmaceutical company will result in the same sloppy procedures, 
carelessness, haste, and desire to improve the bottom line that we have 
seen in the development and administration of the anthrax vaccine.
---------------------------------------------------------------------------
    \12\ http://usmilitary.about.com/library/milinfo/blferes.htm.
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    If you doubt this, consider that Vioxx was legally approved for 
placement on the market by the FDA. Consider that Merck had warnings 
about the dangers of Vioxx as early as 1996, and was able to market the 
drug anyway; in fact, the FDA apparently pressured a researcher to 
withhold evidence about the drug's dangers.\13\
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    \13\ Associated Press, 2005: Journal Releases Vioxx Study. CNN.com 
at (http://www.cnn.com/2005/HEALTH/01/25/vioxx.study.ap/).
---------------------------------------------------------------------------
    All this was done working with our current system of regulation by 
the FDA, and with our current system of supposedly holding drug 
manufacturers accountable. The bottom line for Merck was that Vioxx 
accounted for over 10 percent of its gross earnings each year, a $2.5 
billion dollar product.\14\ It's far too tempting, given those figures, 
to ignore or hide warnings and proceed toward depositing that check in 
the bank.
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    \14\ (Merck & Co., Annual report, 2003).
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    Vaccine manufacturers and health care providers want protection 
without accountability or at best with very limited accountability--
except in case of violating standard medical procedures when 
administering the vaccine, or in cases of gross negligence.
    But, as you have just seen, the military has consistently violated 
standard medical procedures when administering the anthrax vaccine, 
and, in conjunction with the FDA, has shown gross negligence in 
development of the anthrax vaccine.
    6. Although we are reluctant to suggest yet more government 
bureaucracy, we are convinced that a separate body might provide more 
stringent oversight of the procedures for developing and administering 
vaccines than does the FDA. We need an independent body that is not so 
closely aligned with the pharmaceutical industry, and is not beholden 
to the industry in any way.
    Finally, I have taken the rather extraordinary step of attaching a 
full timeline, documented with footnotes and references, describing the 
flawed, careless and deceitful development of the anthrax vaccine, a 
process in which the Department of Defense, BioPort, Inc., and the FDA 
all took part. If the vaccines we want to manufacture in the future 
cannot be done in any better way than this, our country is in serious 
trouble. I thank you for your time.
            Sincerely,
                                        Kathryn D. Hubbell,
                President, Military Vaccine Education Center, Inc.,
               President, Military Vaccine Action Committee, L.L.C.

    Attachment: Time Line: Development and use of the Anthrax Vaccine 
and the Anthrax Vaccine Immunization Program, Compiled by Major Thomas 
Rempfer and Lt. Col. Russell Dingle, Connecticut Air National Guard.





    [Whereupon, at 12:32 p.m., the subcommittee was adjourned.]
