[House Hearing, 110 Congress]
[From the U.S. Government Publishing Office]
CAN BIOSHIELD EFFECTIVELY PROCURE
MEDICAL COUNTERMEASURES THAT
SAFEGUARD THE NATION?
=======================================================================
HEARING
before the
SUBCOMMITTEE ON EMERGING
THREATS, CYBERSECURITY AND
SCIENCE AND TECHNOLOGY
of the
COMMITTEE ON HOMELAND SECURITY
HOUSE OF REPRESENTATIVES
ONE HUNDRED TENTH CONGRESS
FIRST SESSION
__________
APRIL 18, 2007
__________
Serial No. 110-23
__________
Printed for the use of the Committee on Homeland Security
[GRAPHIC] [TIFF OMITTED]
Available via the World Wide Web: http://www.gpoaccess.gov/congress/
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__________
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COMMITTEE ON HOMELAND SECURITY
BENNIE G. THOMPSON, Mississippi, Chairman
LORETTA SANCHEZ, California, PETER T. KING, New York
EDWARD J. MARKEY, Massachusetts LAMAR SMITH, Texas
NORMAN D. DICKS, Washington CHRISTOPHER SHAYS, Connecticut
JANE HARMAN, California MARK E. SOUDER, Indiana
PETER A. DeFAZIO, Oregon TOM DAVIS, Virginia
NITA M. LOWEY, New York DANIEL E. LUNGREN, California
ELEANOR HOLMES NORTON, District of MIKE ROGERS, Alabama
Columbia BOBBY JINDAL, Louisiana
ZOE LOFGREN, California DAVID G. REICHERT, Washington
SHEILA JACKSON LEE, Texas MICHAEL T. McCAUL, Texas
DONNA M. CHRISTENSEN, U.S. Virgin CHARLES W. DENT, Pennsylvania
Islands GINNY BROWN-WAITE, Florida
BOB ETHERIDGE, North Carolina MARSHA BLACKBURN, Tennessee
JAMES R. LANGEVIN, Rhode Island GUS M. BILIRAKIS, Florida
HENRY CUELLAR, Texas DAVID DAVIS, Tennessee
CHRISTOPHER P. CARNEY, Pennsylvania
YVETTE D. CLARKE, New York
AL GREEN, Texas
ED PERLMUTTER, Colorado
VACANCY
Jessica Herra-Flanigan, Staff Director & General Counsel
Rosaline Cohen, Chief Counsel
Michael Twinchek, Chief Clerk
Robert O'Connor, Minority Staff Director
______
SUBCOMMITTEE ON EMERGING THREATS, CYBERSECURITY, AND SCIENCE AND
TECHNOLOGY
JAMES R. LANGEVIN, Rhode Island, Chairman
ZOE LOFGREN, California MICHAEL T. McCAUL, Texas
DONNA M. CHRISTENSEN, U.S. Virgin DANIEL E. LUNGREN, California
Islands GINNY BROWN-WAITE, Florida
BOB ETHERIDGE, North Carolina MARSHA BLACKBURN, Tennessee
AL GREEN, Texas PETER T. KING, New York (Ex
VACANCY Officio)
BENNIE G. THOMPSON, Mississippi (Ex
Officio)
Jacob Olcott, Director & Counsel
Dr. Chris Beck, Senior Advisor for Science & Technology
Carla Zamudio-Dolan, Clerk
Dr. Diane Berry, Minority Senior Professional Staff Member
(ii)
C O N T E N T S
----------
Page
STATEMENTS
The Honorable James R. Langevin, a Representative in Congress
From the State of Rhode Island, and Chairman, Subcommittee on
Emerging Threats, Cybersecurity, and Science and Technology.... 1
The Honorable Michael T. McCaul, a Representative in Congress
From the State of Texas, and Ranking Member, Subcommittee on
Emerging Threats, Cybersecurity, and Science and Technology:
Oral Statement................................................. 2
Prepared Statement............................................. 3
The Honorable Bennie G. Thompson, a Representative in Congress
From the State of Mississippi, and Chairman, Committee on
Homeland Security.............................................. 5
The Honorable Donna M. Christensen, a Representative in Congress
From the U.S. Virgin Islands................................... 23
The Honorable Bob Etheridge, a Representative in Congress From
the State of North Carolina.................................... 50
The Honorable Jackson-Lee, a Representative in Congress From the
State of Texas................................................. 52
The Honorable Daniel E. Lungren, a Representative in Cogress From
the State of California........................................ 47
Witnesses
Panel I
James H. Davis, Phd., J.D., Senior vice President and General
Counsel, Human Genome Sciences:
Oral Statement................................................. 14
Prepared Statement:............................................ 16
Mr. Richard Hollis, Chief Executive Officer, Hollis-Eden
Pharmaceuticals, Inc.:
Oral Statement................................................. 7
Prepared Statement............................................. 8
Panel II
Anthony Fauci, M.D., Director, National Institutes of allergy and
Infectious Diseases, National Institutes of Health, U.S.
Department of Health and Human Services:
Oral Statement................................................. 32
Prepared Statement............................................. 34
Jesse Goodman, M.D., MPH., Director, Center for Biologics
Evaluation and Research, Food and Drug Administration, U.S.
Department of Health and Human Services:
Oral Statement................................................. 36
Prepared Statement............................................. 39
Gerry Parker, Ph.D., DVM., Principal Deputy Assistant Secretary,
Office of the Assistant Secretary for Preparedness and
Response, U.S. Department of Health and Human Services......... 30
Jeffrey Runge, M.D., Assistant Secretary for Health Affairs
(Acting) and Chief Medical Officer, Office of Health Affairs,
Department of Homeland Security:
Oral Statement................................................. 27
Prepared Statement............................................. 28
For the Record
Prepared Statement:
The Honorable Richard Burr, Senator, North Carolina............ 53
CAN BIOSHIELD EFFECTIVELY PROCURE
MEDICAL COUNTERMEASURES THAT
SAFEGUARD THE NATION?
----------
Wednesday, April 18, 2007
U.S. House of Representatives,
Committee on Homeland Security,
Subcommittee on Emerging Threats, Cybersecurity,
and Science and Technology,
Washington, DC.
The subcommittee met, pursuant to call, at 1:18 p.m., in
Room 1539, Longworth House Office Building, Hon. James Langevin
[chairman of the subcommittee] presiding.
Present: Representatives Langevin, Thompson, Lofgren,
Jackson Lee, Christensen, Etheridge, Green, McCaul, and
Lungren.
Mr. Langevin. [Presiding.] Good afternoon.
Today the subcommittee will receive testimony regarding the
BioShield program, focusing specifically on some recent
difficulties within the program.
Biological threats, both manmade and naturally occurring,
present a real danger to the security of the United States. We
must, therefore, do everything in our power to create and
maintain robust tools to protect against these threats.
Project BioShield can and should be an important component
of our nation's defenses against such threats. This critical
program is far too important to fail.
Unfortunately, since its creation, BioShield has enjoyed
varying levels of success, and, in recent months, there have
been some fairly significant setbacks this committee is
particularly concerned with.
The cancellation of the $877 million anthrax vaccine
contract, the largest under BioShield, after VaxGen invested
$175 million of its own funds, does not bode well for the
future of the program. Problems must be identified and fixed,
and we must learn from any mistakes that have been made.
Also of concern was the decision in March to close the
request for proposals for a medical countermeasure to treat
acute radiation syndrome.
As this subcommittee is responsible for preparation and
response for both nuclear and biological attacks, we are
especially concerned about these two cancellations. However,
our witnesses on both panels should not assume that this
subcommittee has pre-judged these matters.
The BioShield process is a complicated one, and we are here
today to hear from our witnesses about their experiences
navigating the process.
Our private-sector witnesses have had different experiences
working with the program, and this subcommittee asked them to
be here for precisely that reason. Our witnesses from the
Departments of Homeland Security and Health and Human Services
hold additional pieces of the BioShield puzzle.
Dr. Runge from DHS and Dr. Parker from HHS represent the
lead offices for BioShield activities in the two departments.
Although not officially part of the BioShield program, the
NIH and the FDA have played important roles in the process,
including the VaxGen contract cancellation, and we have to
better understand and define their roles if we want the program
to succeed in the future.
The new Biodefense Advance Research and Development
Authority, BARDA, may also have a role to play by supporting
transitional research and development and bridging the so-
called ``valley of death'' between early basic research
supported by NIH and final development and production.
However, that will not happen by itself. I believe we need
to provide a more definite roadmap on how all these moving
pieces fit together. That is the proper role of oversight, and
that is our responsibility on this subcommittee.
I am hopeful that today's hearing will shed light on some
of the difficulties of implementing Project BioShield. I am
also hopeful that after hearing from our two panels, we will
gain insight on how best to move forward and fix some of these
problems.
We must work together to ensure that Project BioShield
remains an effective line of defense. I believe that today's
hearing is a good first step towards that goal, but I also
understand that the solutions will not be simple--they will
take time, cooperation and diligence on all of our parts.
I want to thank both of our panels, witnesses, for taking
time to appear before our subcommittee today and I look forward
to their testimony.
The chair now recognizes the ranking member of the
subcommittee, the gentleman from Texas, Mr. McCaul, for the
purposes of an opening statement.
Mr. McCaul. Thank you, Mr. Chairman.
In my judgment, the greatest threat we face today is a
chemical, biological or nuclear attack on the United States.
Such an attack could kill hundreds of thousands, possibly
millions of our citizens.
I remember reading the book ``The Hot Zone,'' which
described the threat of the Marburg virus and whether that
could actually--we could develop an airborne strain that could
kill thousands, if not millions of people in a very short
period of time.
I also toured several level four facilities and you see up
close and personal the threats of these biological agents, what
they call ``the demon on the jar.'' We all know the Soviet
Union has weaponized many of these agents and after September
the 11th, we had a scare and a threat from the anthrax strain
that we have still not to this day, in my judgment, adequately
addressed.
Project BioShield plays a key role in addressing this
threat. It remains unclear how well it is in achieving its
goals. The basic premise of BioShield is to increase the
strategic national stockpile with medicines to treat those who
would be affected by an attack and to encourage private
industry to develop new countermeasures.
Obviously, BioShield has had a rough start and it is up to
us in the Congress to help solve some of the problems that this
program has faced.
There have been problems regarding the rate by which DHS
completes material threat determinations. HHS has made what I
consider to be missteps. There have also been issues with the
transparency and the overall management of the BioShield
program.
To be fair, though, without BioShield, we would not be
stockpiling the countermeasures we have today, including an
antidote to the botchulinum toxin anthrax vaccine and two types
of anthrax treatments and two kinds of countermeasures against
radiological and nuclear agents.
Without BioShield, no companies would be working on these
countermeasures at all. So I have also seen encouraging chances
to see how BioShield does business.
DHS used to take about 4 months to complete a material
threat assessment on just one agent. They changed their process
and have significantly reduced that period of time.
The Pandemic and All Hazardous Preparedness Act, introduced
by my Republican colleague, Senator Burr, and passed last year
establishes the Biomedical Advanced Research and Development
Authority.
And at this time, Mr. Chairman, I would like to ask
unanimous consent that that report be entered into the record.
Prepared opening Statement of Hon. Michael T. McCaul, Ranking Member,
Subcommittee on Emerging Threats, Cybersecurity and Science and
Technology
Thank you Chairman. I' like to preface my remarks by saying if it
were not for Project BioShield and the government's grant funding in
this arena, we would not be here today. There would be nothing to
discuss. While we wouldn't have the failed acquisitions that we'll be
hearing about, we also wouldn' be stockpiling the countermeasures that
we are currently--including an antidote to botulinum toxin, anthrax
vaccine, two types of anthrax treatments, and two kinds of
countermeasures against radiological or nuclear agents. No companies
would be working on biodefense vaccine and therapeutic targets at all.
So while the process may have had a rough beginning, let's bear in mind
Congress tasked the Department of Homeland Security (DHS) and the
Department of Health and Human Services (HHS) and its agencies with an
enormous challenge, building the BioShield initiative from the ground
up. The magnitude of the public-private partnership necessary for
BioShield to protect the nation from CBRN threats is unprecedented in
the area of biopharmaceutical development.
Drug development is an inherently expensive, slow and risky
business. It can cost more than $1 billion to launch a technically
successful drug and take 12.5 years. And only 8% of the products
entering trials actually make it to the market. Perhaps only the movie
industry tolerates such enormous costs and failure rates in the search
for blockbusters, but they can go from concept to commercial success in
a few years, whereas the average for pharmaceutical development is more
than a decade. While we sitting here aren't in the movie business, nor
can we do much to minimize the failure of programs due to scientific or
technical problems, we can confront this risk and ensure the BioShield
process has mechanisms in place to address this risk. We must also
ensure BioShield is managed with the sense of urgency under which it
was conceived. With the terrorist threat growing every day, we don?t
nearly have enough medical countermeasures we will need to respond and
save lives.
Without a model to provide a blueprint of how best to implement
BioShield, one common feature of a successful startup is adaptability,
not being afraid to make decisions and change direction. While
``adaptability'' and ``Federal Government'' appear to be at odds most
of the time, I have already seen positive indications that DHS and HHS
are learning from their experiences and evolving their strategy based
on both their failures and successes to-date.
During a past hearing, DHS testified that it typically took them
four months to complete a material threat assessment on just one agent.
At that rate, it would take on the order of 9 years to make it through
all the agents on the CDC bioterrorism list, and this only accounts for
the biological agents, not the chemical or radiological ones!
Fortunately, DHS has found a way to fulfill their responsibilities
expeditiously and have now completed threat determinations and
associated assessments for all the biological agents and is working on
the list of chemical agents.
HHS. Well, HHS has the toughest job of managing risk--risk to the
government in awarding only one contract for a product that has a large
chance of failing scientifically or technically during one of the
lengthy stages of development and testing, or risk to the private
sector, especially less-established companies, that may not have the
necessary financial resources necessary to support advanced product
development prior to receipt of payment upon delivery of their product
to the stockpile. We owe my Republican colleague, Senator Burr, credit
for ushering through legislation last Congress that will provide HHS
with the tools it needs to help manage these risks. The Pandemic and
All Hazards Preparedness Act establishes the Biomedical Advanced
Research and Development Authority (BARDA) to provide much needed late-
stage research and development funding and allow for incremental
payments that will shift some of the risk away from BioShield
acquisition programs. In theory, funding this part of the development
process, the so-called `Valley of Death', could allow countermeasures
to mature further through the development process before competing for
a Project BioShield contract, and it could allow multiple products to
be supported in parallel in case one should fail during development.
This will reduce the risk that a countermeasure will fail while under a
Project BioShield contract.
What I believe to be most promising is the formation of the
interagency Public Health and Emergency Medical Countermeasure
Enterprise in 2006 in an effort to streamline the BioShield process.
Just using the term `T3Enterprise demonstrates that HHS and DHS grasp
the enormous challenges and understand the limitations within which it
has to work to enable BioShield's success.
First, an enterprise is a readiness and willingness to
undertake new, often risky and complicated, ventures and
initiatives. What?s more risky and complicated than drug and
vaccine development?
Second, an enterprise represents a business
organization. Businesses need to work in partnership, engage in
dialogue and coordination, to develop clear and predictable
requirements. Businesses can only be successful in developing
products with a clear understanding of the end goal. Businesses
develop objectives within a framework that addresses the
complexities of their industry, in this case the
biopharmaceutical industry, and contains the appropriate level
of specifications and delivery terms.
And finally, an enterprise is diligent and systematic
in its activities. A comprehensive strategy is needed that
addresses the various threats, current and future, for which we
must prepare. BioShield is one part of this strategy, BARDA is
another, and the basic research funded by NIH is yet another.
The objectives of each must be aligned and as products move
through the different phases of development, investments must
be reevaluated to avoid potentially life-saving products
falling into the ``Valley of Death''.
Only an Enterprise can take on BioShield. With DHS, HHS, and the
private sector working together in this Enterprise, to harness modern
scientific tools and industry expertise and taking smarter approaches
to drug development and acquisition, we can improve BioShield's
prospects, making it more efficient--yes faster--with less chance of
failed contracts, so that new medicines can get to the Nation's
stockpile and ultimately be available to the patients who may need
them.
I thank our witnesses for coming today and I look forward to
hearing their testimony and hope that this hearing spurs further
progress in realizing the true potential of BioShield.
Mr. Langevin. Without objection.
Mr. McCaul. Thank you.
In my view, this legislation will provide much needed late
stage research and development funding and should reduce the
risk that a countermeasure will fail while under a Project
BioShield contract.
And at this time, Mr. Chairman, I would also like to say we
are seeing changes to how the interagency process works,
including the implementation of Homeland Security Presidential
Directive 18 and the formation of the Public Health Emergency
Countermeasure Enterprise.
We all know that drug development is an inherently
expensive, slow and risky business. It can cost more than $1
billion to launch a technically successful drug and take
approximately 12.5 years. And we also know that only eight
percent of the products entering trials actually make it to the
market.
While we can't do much to minimize the failure of programs
due to scientific or technical problems, we can confront this
risk and ensure the BioShield process has the appropriate
mechanisms in place.
The important thing to remember is that the terrorist
threat is growing every day, and we don't have enough medical
countermeasures that we need to respond to a weapon of mass
destruction attack.
Time is of the essence, and the time to act is now.
I thank the chairman, and I yield back the balance of my
time.
Mr. Langevin. I thank the ranking member.
The chair now recognizes the chairman of the full
committee, the gentleman from Mississippi, Mr. Thompson, for
the purposes of an opening statement.
Mr. Thompson. Thank you very much, Mr. Chairman, and I
would like to thank you for holding this important hearing and
thank our witnesses for being here today.
As Chairman Langevin noted in his opening remarks,
BioShield is a new program. That said, new doesn't necessarily
equate with a license to make mistakes. Yet, mistakes have been
made with regard to the development and implementation of the
program.
I would like to believe that those were honest mistakes and
that by doing proper oversight, we can figure out what problems
exist and address them. We need to get the program to a state
where it is procuring enough medicine and vaccine to protect
the American people.
To date, Project BioShield has only awarded contracts for
immunizing against or treating anthrax, botchulinum toxin and
radiological sicknesses, even though the CDC has listed over 30
select agents of concern.
After the VaxGen contract cancellation, BioShield currently
has contracts for 10 million doses of the old anthrax vaccine
currently used by the military, as well as two much smaller
contracts for new anthrax treatment, one of which is held by a
witness from Human Genome Sciences.
Now, the largest contract under BioShield is a $363 million
contract for 200,000 doses of botchulinum antitoxin. The
remaining contracts are for protection from radioactive
materials.
These contracts account for nearly $1 billion of the $5.6
billion 10-year BioShield fund and deal with only three agents
and not comprehensively, by any measures. In contrast to this
fund, Pfizer, for example, spends over $7 billion annually on
research and development.
Does this program make sense at all, Mr. Chairman? Can it
succeed if we identify the right problems? That is what I hope
we will get to today in the answers from our witnesses.
I look forward to the testimony, Mr. Chairman, and I yield
back the balance of my time.
Mr. Langevin. Thank the chairman for his statement.
Other members of the subcommittee are reminded that under
the committee rules, opening statements may be submitted for
the record.
I want to now welcome our first panel of witnesses. Let me
begin by saying, as you may know, VaxGen was originally
supposed to be part of today's discussion and I think a very
important part of today's discussion.
However, because HHS and VaxGen were unable to reach an
agreement concerning the testimony, they will, unfortunately,
not come before our subcommittee today, although their
testimony, I believe, is critical, a critical element of this
discussion and I look forward to a time in the near future when
they may testify before this subcommittee.
And for the record, I had the opportunity to speak with
representatives of VaxGen, who very much wanted to testify
today, and they are here, but for the fact that HHS would not
sign off and allow them to testify without repercussion on a
recent settlement between HHS and VaxGen after the cancellation
of the recent contract to develop the next generation anthrax
vaccine.
I am both disappointed and upset that HHS would not grant
that sign-off, but we will have further discussions as we go
forward and I hope to have VaxGen before us at the earliest
possible opportunity.
Our first witnesses are Richard B. Hollis, founded Hollis-
Eden in August 1994 and currently serves as chairman, president
and CEO. Mr. Hollis has over 29 years experience in the
healthcare industry, has a proven track record of launching and
marketing important new medical products, and a distinguished
career of managing the growth and operations of companies in a
variety of senior management positions.
Our second witness is James Davis, executive vice president
and general counsel and secretary of Human Genome Sciences,
where he has served since 1997. From 1995 to 1997, Dr. Davis
was of counsel to the Washington, D.C., law firm of Finnegan,
Henderson, Farabow, Garrett and Dunner, LLP.
Prior to this time, Dr. Davis served in a number of
capacities with the agricultural biotechnology company, Crop
Genetics International. Prior to joining Crop Genetics, Dr.
Davis was a partner in the Washington, D.C., office of Weil,
Gotshal and Manges.
Without objection, the witnesses' full statement will be
inserted into the record and I now ask each witness to
summarize their statements for 5 minutes, beginning with Mr.
Hollis.
Again, I want to thank you both, again, for being here. We
look forward to your testimony.
STATEMENT OF RICHARD HOLLIS, CHIEF EXECUTIVE OFFICER, HOLLIS-
EDEN PHARMACEUTICALS, INC.
Mr. Hollis. Mr. Chairman, members of the committee, thank
you for very much for this opportunity.
Shortly after 9/11, we were contacted by the Department of
Defense and asked to develop our investigational drug, Neumune,
to protect American citizens from a nuclear terrorist event.
Since that time, we have committed over $85 million in
developing Neumune and, to our knowledge, Neumune remains the
leading drug candidate for the treatment of acute radiation
syndrome, otherwise known as ARS, by the Department of
Defense's Armed Forces Radiobiology Research Institute.
To date, Hollis-Eden has been recognized as the world
leader in developing a drug for this indication because of the
following--we have the first and only open IND at the FDA for a
drug candidate specifically for the treatment of acute
radiation syndrome.
Neumune is the only compound in peer-reviewed published
papers to demonstrate a statistically significant survival
benefit in non-human primates exposed to lethal doses of
radiation without any other clinical support.
Over 120 humans have been involved in the clinical trials
with Neumune and the safety profile is similar to placebo.
Neumune is further along in the development than any other
medical countermeasure for acute radiation syndrome.
With this background, I would encourage you to take a very
critical look at the government's words and actions in our
case.
Let me focus on the law. The purpose of BioShield
legislation was to incentivize the private sector by setting
guaranteed markets where none currently exists for promising
countermeasures to weapons of mass destruction and to award
advance purchase contracts before a drug is fully approved or
licensed by the FDA.
This is a creative and market-driven idea to spur
investment capital and industry participation. However, that is
not how HHS is implementing the BioShield bill today. The
legislation clearly states that a BioShield countermeasure must
have a sufficient and satisfactory experience or research data
to support a reasonable conclusion that the drug candidate will
qualify for licensing with the FDA within 8 years.
Instead, the agency now requires countermeasures to be
BioShield eligible, a term that appears nowhere in the law, is
subjective and can arbitrarily require a drug candidate to be
significantly further along in development than the law
requires.
This undermines the criteria under BioShield legislation
for advancing purchase contracts for promising medical
countermeasures well before FDA approval.
Mr. Chairman, considering the facts, I am totally at a loss
to explain how the agency could determine our proposal did not
meet the requirement of BioShield legislation.
To help us all understand this, allow me to respectfully
suggest a few questions I would like you to ask the agency.
If a promising development stage drug like Neumune does not
meet the requirements for a BioShield advance purchase
contract, what drug does?
Why were we told that our company's proposal was in the
competitive range for this award for 9 months before being
told, with no warning, that our proposal was technically
unacceptable?
The law requires the agency to procure the best possible
countermeasures in development today. Was the agency waiting
for something better to be developed?
Why didn't the agency comply with the legislation and award
the advance purchase contract to allow our company to continue
to develop the drug?
Why did the acute radiation syndrome drug evaluation from
RFI to RFP take over 2.5 years? And why were there four delays
in the final 9 months of negotiations from June 2006 to March
2007?
Does the final decision to cancel this RFP have anything to
do with the BARDA legislation that was passed in December of
2006?
Is there a conflict of interest between investor-funded
companies and NIH taxpayer-funded entities when the NIAID,
which awards research grants to develop biodefense
countermeasures, is the same agency that advises HHS on which
drugs to award contracts to?
These last questions underscore how HHS's own actions have
created the valley of death, which the agency claims has
undermined the program.
I want to be perfectly and absolutely clear about this--
there is no valley of death in the private-sector markets for
known attractive commercial products and market opportunities.
By changing the criteria for awarding the advance purchase
contracts and thereby not setting the markets early for these
important medical countermeasures, the agency has eliminated
the investment community from funding BioShield research and
development.
So in other words, the legislation, the way it is being
implemented, has created the valley of death.
Mr. Langevin. If you could just--
Mr. Hollis. I am almost done here.
When government officials tell you that the pharmaceutical
sector has responded to BioShield and so their agencies need
more authority, power and money, realize that these actions are
the same, come from the same officials that have driven
companies and investors away from the program.
So the failing of BioShield, from my perspective, will have
serious consequences for our national security and because HHS
has failed to act according to the law, we have suspended the
development of Neumune.
And in conclusion, as we and other companies have learned
in this process trying to do business with the government under
Project BioShield, as implemented by HHS, appears to be more
about politics than protecting the American citizens and
following the law that Congress approved.
Mr. Chairman, thank you very much, and I welcome the
opportunity to answer any questions.
[The statement of Mr. Hollis follows:]
Prepared Statement of Richard Hollis
Chairman Thompson, Chairman Langevin, Ranking Members King and
McCaul, Members of the Committee, thank you for the opportunity to
appear before you to discuss the state of Project BioShield and the
experience of Hollis-Eden Pharmaceuticals.
I have previously testified four times on these issues before
various Congressional committees during the last Congress.
Unfortunately, not much has changed to fix the BioShield Program. As I
have testified before, HHS is not implementing the BioShield
legislation as Congress intended. Additionally, Project BioShield will
continue to fail unless it can attract private sector participation--
and that is the result of the lack of transparency, missed timelines,
poor communication and the inexperience of agency representatives. Mr.
Chairman, it is my strongest hope that this hearing signals that things
will be different going forward. Absent such a sea change, the
BioShield program will remain fundamentally broken. Novel next
generation medical countermeasures to protect American's from future
terrorist attacks involving a weapon of mass destruction may never
materialize. I hope this Committee and the other relevant Congressional
Committees will do whatever is necessary to remedy this situation.
Allow me to begin with a brief history of our attempt to answer the
call by our nation to develop the first practical treatment to the life
threatening effects of radiation exposure, a condition known as acute
radiation syndrome or ARS.
Shortly after 9/11 we were contacted by the Department
of Defense and asked to develop our investigational compound
NEUMUNE to protect Americans from ARS in the event of a
terrorist attack with a nuclear or radiological weapon in one
or more of our cities.
Since that time we have committed $85 million in
developing NEUMUNE.
To our knowledge, NEUMUNE remains the leading drug
candidate of DoD?s Armed Forces Radiobiology Research
Institute, or AFRRI.
To date, Hollis-Eden has been recognized as the world
leader in developing a drug for this indication because of the
following:
We have the only open IND with a drug
candidate specifically for the treatment of ARS.
NEUMUNE is the only compound, in peer reviewed
published reports, to demonstrate a statistically
significant survival benefit in non-human primates
exposed to lethal doses of radiation without any other
clinical support.
We have shown statistically significant
benefits in tests involving more than 300 nonhuman
primates
Over 120 humans have been involved in clinical
trials with NEUMUNE, and the safety profile is similar
to placebo.
NEUMUNE is further along in development than
any other medical countermeasure for ARS.
With our history in mind as you consider the remainder of my
testimony I encourage you to take a very critical look at the
government?s words and actions here?far more critical than has been the
practice to date.
The expertise in these matters lies with the private sector, not
with the government. BioShield is intended to incentivize the private
sector to develop medical countermeasures to better prepare and protect
this nation from a terrorist attack using WMD. With all due respect, in
dealing with HHS we were surprised and disappointed with the reasons
the agency gave for decisions made during the procurement process.
Although HHS may have good intentions, the expertise required to
successfully develop a practical medical countermeasure for a nuclear
mass casualty scenario resides in the private sector.
Allow me to illustrate this point. In late 2005, the news show ``60
Minutes'' did a segment on HHS? failure to protect the American people
from a nuclear attack by deciding the government needed to stockpile
only 100,000 treatment courses of a medical countermeasure for ARS that
could save lives in the immediate aftermath. During the due diligence
process for the episode, 60 Minutes discovered that HHS? rationale for
ordering such a small number of treatment courses was because they were
planning to treat the potentially hundreds of thousands of ARS victims
in hospitals. Unfortunately, experts who have studied nuclear scenarios
have concluded this will be very challenging if not impossible. This is
precisely why a safe and effective practical medical countermeasure
that could be self administered without any other medical support
should be embraced by the agency as the only viable option for the
majority of victims.
To highlight the lack of understanding of the appropriate medical
treatment for ARS altogether, when HHS was asked by members of Congress
as to why the major requirement detailed in the final RFP for the ARS
drug focused on treating neutropenia (infection) when the major issue
behind mortality for ARS victims is both neutropenia and
thrombocytopenia (bleeding), HHS told then-Government Reform Committee
Chairman Davis in writing that every hospital in America had drugs to
treat neutropenia as well as a supply of ``flash frozen platelets''
that could be utilized in the event of a nuclear or radiological event.
HHS also suggested to others that there were two Navy ships ``off the
coast'' with similar stockpiles of frozen platelets.
When challenged by 60 Minutes, HHS had to admit that there was no
such thing as ``flash frozen platelets'' and there were no such Navy
ships, let alone the hospital beds to treat the hundreds of thousands
of victims who may suffer from acute radiation syndrome in a mass
casualty scenario. This was not a one-time misstatement; it was the
agency?s rationale as to why there was no rush to procure too much of a
practical next generation medical countermeasure that may alleviate the
need for hospitalization and blood products. The government's response
was not to fix the problem; rather it sought to find like-minded
experts to support their position and lack of urgency in providing the
country with a practical medical countermeasure and adequate nuclear
emergency response plan.
As this Committee examines the BioShield program, I would
respectfully suggest that the starting point must be the BioShield law
that Congress passed and the President signed. As stated in my previous
testimonies, the BioShield legislation was written in such a way that
it would incentivize the private sector pharmaceutical and biotech
industries by setting guaranteed markets for companies having promising
technology that might be developed over time and used to protect the
American people from WMD terrorism. The concept of awarding advance
purchase contracts that would define the market (identify how many
doses or treatment courses the government was going to buy and what the
government would pay upon successful delivery) up to eight years before
FDA approval was a brilliant market-driven idea. However, unfortunately
for the American people, that is not how BioShield is being implemented
today.
The law clearly states that a qualified BioShield countermeasure
``is a countermeasure for which the Secretary determines that
sufficient and satisfactory clinical experience or research data
(including data, if available, from pre-clinical and clinical trials)
to support a reasonable conclusion that the countermeasure will qualify
for approval or licensing within eight years.'' The law further
provides that in issuing a call for the development of such
countermeasure the Secretary shall state: ``(i) estimated quantity of
purchase (in the form of number of doses or number of effective courses
of treatments regardless of dosage form); (ii) necessary measures of
minimum safety and effectiveness; (iii) estimated price for each dose
or effective course of treatment regardless of dosage form; and (iv)
other information that may be necessary to encourage and facilitate
research, development, and manufacture of the countermeasure or to
provide specifications for the countermeasure.'' (emphasis added) This
is how the law says the program shall work. Implementing the program in
accordance with these parameters is a nondiscretionary duty of the
agency.
Unfortunately HHS has chosen to implement the law in a manner that
conflicts with these provisions and the Congress' statutory intent.
They have taken it upon themselves to change the definition of the
provision ``support a reasonable conclusion that the countermeasure
will qualify for approval or licensing within eight years.'' HHS has
stated that countermeasures must be ``BioShield eligible,'' a term that
appears nowhere in the law, before they can award an advance purchase
contract. And the bar as to what constitutes ``BioShield eligible'' has
been applied in an arbitrary manner that is significantly higher than
what the law provides. HHS' BioShield eligibility requirements, as they
have been applied to us, are essentially just shy of what we would be
required to show to obtain full FDA approval. In other words, to be
``BioShield eligible'' according to HHS, a countermeasure must be
significantly further along in development than was contemplated under
the specific language of the BioShield law. This new, arbitrary
requirement undermines the BioShield Program and Congress' intent for
awarding advance purchase contracts for promising medical
countermeasures years before they would be FDA approved.
When HHS rejected our RFP proposal, after telling us on multiple
occasions that our proposal was in the competitive range, they did so
precisely by so changing the criteria for an award. Numerous peer
reviewed studies have been published demonstrating the efficacy of
NEUMUNE in animal models of radiation exposure. We have shown that
NEUMUNE can significantly increase survival rates if administered post
exposure. This survival benefit derives from the fact NEUMUNE mitigates
both the neutropenia and thrombocytopenia conditions of ARS without the
need for other medical support. Over 100 healthy volunteers have been
involved in NEUMUNE safety trials, without any significant adverse
health effects. In fact, NEUMUNE?s impact on humans isn?t just safe; it
is beneficial--increased levels of neutrophils and platelets--such that
we have been cleared by the FDA to conduct Phase I/II clinical trials
using NEUMUNE to potentially help patients ward off hospital-acquired
infections.
Obviously NEUMUNE still needs to be proven safe and effective in
large pivotal trials that were planned to take place once an advance
purchase contract was awarded. That is how BioShield is supposed to
operate under the law. Further, under the specific terms of the RFP,
these pivotal studies required pre-approval by HHS after contract
award. In other words, the reasons HHS gave for rejecting our proposal
conflicted not only with the statute, but also with the very terms of
the RFP.
Mr. Chairman, I am honestly at a loss to explain how HHS decided to
cancel outright the ARS RFP. We clearly met the requirements of the
BioShield statutute--we estimate that our drug could have been
stockpiled for emergency use in 2008 and approved by the FDA shortly
thereafter, far less than the eight-year requirement provided in the
law. HHS, even after the RFP was cancelled, admitted we met the
mandatory requirements of the RFP. The agency repeatedly stated over
the last nine months we were in the competitive range for a contract
award, and only on the day of the RFP cancellation were we told
otherwise. In fact, the agency has confirmed to third-parties we were
the only company that remained in the competitive range. Peer-reviewed,
published studies show NEUMUNE has a significant survival benefit
against acute radiation syndrome, without significant adverse effects.
We had no reason to suspect that HHS would fail to follow the BioShield
legislation and not award an advance purchase contract to us, thereby
preventing Hollis-Eden from being able to continue developing the drug
to protect the nation.
As a result, in order to get to the real reasons for HHS' actions
here, the Committee will need to fully investigate this process. Allow
me to respectfully suggest a series of questions HHS should be asked to
answer as part of that investigatory process:
1. If a promising drug candidate like NEUMUNE does not lead HHS to
reasonably conclude ``that the countermeasure will qualify for approval
or licensing within eight years,'' then what product does? The agency
itself told us that we met the RFP's mandatory requirements even after
they cancelled the RFP. The Department of Defense?s experts, AFRRI, to
this day continue to identify this drug as their lead ARS
countermeasure and are still asking us to develop it. We have shown
statistically significant benefits in tests involving more than 300
non-human primates, and to date demonstrated a good safety profile when
NEUMUNE was tested in human clinical trials. We have achieved all these
milestones at a cost of more than $85 million of shareholder dollars.
If NEUMUNE doesn't qualify for an advanced purchase contract, what
will?
2. Why were we told that our company was in the competitive range
for this award for nine months before being told with no warning or
discussion that we were ``technically unacceptable''? Throughout the
entire RFP process, we were repeatedly informed that we were in the
competitive range--meaning that our drug met the mandatory requirements
of the RFP, or in other words was ``technically acceptable.''. As is
typical in these types of procurements, in June 2006 HHS requested each
company in the competitive range to respond to specific technical
issues raised by the Technical Evaluation Panel regarding such
company's drug candidate.
We submitted complete responses to each issue in July 2006. Then,
after reviewing our responses, and after a successful government audit
of our costs and accounting system at our facilities, HHS informed us
in October 2006 that we remained in the competitive range and that HHS
wanted to conduct face-to-face meetings with us in Washington. At that
meeting, the agency indicated they expected an award some time in
January 2007. On January 31, 2007, HHS informed us that the new
expected date of award would be March 7, 2007. For at least the last
four and a half months of the RFP process we understand that we were
the only company remaining in the competitive range. During this time,
and in fact during the nearly eight months since our detailed response
to the technical issues raised by HHS, none of the technical issues
brought up in June were ever again addressed, not even during the face-
to-face meeting with HHS. In fact, the only new information provided to
HHS after we were confirmed in the competitive range and were the only
company remaining was information that strengthened the case for
NEUMUNE.
We answered all of HHS' questions. We provided them copies of a
newly published preclinical study demonstrating NEUMUNE provided a
survival benefit against lethal doses of radiation when given to
monkeys after exposure. We confirmed and demonstrated for HHS that we
were not on clinical hold, nor had we experienced any significant
safety issues. The record will show we acted in good faith and met
every request--for over a year. Given this record, on what basis could
HHS determine that a drug candidate that was in the competitive range
for months, then somehow, without any new negative information,
suddenly was no longer acceptable? And even if there were any issues
remaining, if HHS was truly interested in procuring a medical
countermeasure for ARS to protect the American people, why didn?t the
agency engage in a good faith dialogue with us to resolve any such
issues?
3. The BioShield law makes it patently clear that the agency is to
procure now the best possible drugs to address the most significant
threats this nation faces. Congress specifically created this
requirement to ensure that the agency had a sense of urgency that
reflected the race against time that we are in against the terrorists
and others who want to do us great harm. Congress feared the agency
would waste valuable time looking for the perfect drug at the expense
of good drugs that could protect people now. Congress also understood
that science is not linear. Just because one wants a perfect drug or
cure doesn't mean that one will find it now, or perhaps ever. In
medicine we constantly rely upon the good now in the absence of the
perfect later.
For example, between 1981 and now, NIH, and in particular Dr.
Fauci's NIAID, has spent billions in taxpayer dollars on HIV/AIDS
research aimed at a cure, yet NIH still has not found one. In fact, the
WHO now reports that by 2030 HIV/AIDS is expected to be the third most
deadly global disease.
NEUMUNE was judged by HHS? own evaluators to be the only drug in
the competitive range. After decades of research and testing thousands
of potential drugs, the experts at DoD's AFRRI have identified this as
their lead drug candidate. The President and Vice President have both
repeatedly said the nuclear threat is the greatest threat we face. Each
day we learn of new nuclear threats. NEUMUNE is the most advanced drug
for ARS in development today and has an attractive safety profile--
under BioShield that is all that should have mattered. Why didn't the
agency comply with the legislation and award the advance purchase
contract enabling the continued development of this important
countermeasure?
4. If the Co-Chairman of the 9/11 commission believes 10 million
treatment courses of an ARS drug would be required to protect the
American people, and HHS had entered into contracts for anthrax and
smallpox seeking tens of millions of doses, why was HHS only interested
in procuring 100,000 treatment courses for ARS? DHS? own National
Planning Scenario estimate for a single terrorist-size nuclear attack
against one US city documents that a mere 100,000 treatment courses is
inadequate under even the most favorable conditions.
5. Isn't there a conflict of interest when the NIAID, which awards
research grants to develop biodefense countermeasures, then advises HHS
on which products are ?BioShield eligible? for an advance purchase
contract?
6. How does the determination of technical acceptability relate to
the actual ability of a counter-measure to save lives? Bioshield has
spent over $21 million to buy two chelating agents that the well-
respected NEW ENGLAND JOURNAL OF MEDICINE has stated are useless in the
event of either a nuclear or radiological attack. None of these drugs
have ever been proven to have a survival benefit against lethal doses
of radiation. According to their FDA-approved inserts, these compounds
need to be given as quickly as possible after exposure. And the
chelating agents must be given by medical personnel, which will be in
extremely short supply after a nuclear attack. In contrast, our drug
has been shown in DoD-administered, peer-reviewed studies to increase
survival from lethal doses of radiation exposure if given up to four
hours post exposure. It is self-administrable, requires no special
handling, and needs no supportive medical care. How can a compound that
has a survival benefit and fits the scenario be determined to be less
technically acceptable than ones that do not? If such a paradox is
possible under the program, this is a major flaw in its design.
7. Why did the evaluation for a drug to treat ARS, from RFI to RFP,
take over 2 1/2 years--from October of 2004 until March of 2007? Why
was the award decision delayed four times? In particular, how can the
agency justify these delays when we were the only company focused on
developing a drug specifically for this indication and now know that
ours was the only proposal in the competitive range for much of this
process? In late October of last year we had a very positive meeting
with HHS officials where none of the technical issues deemed to make
our proposal ``technically unacceptable'' were brought up, leading us
to believe we were headed to a contract award. Did this delay, and the
final decision to cancel this RFP, have anything to do with the lengthy
anticipation and ultimate passage of the BARDA legislation in December?
If BARDA didn't pass, HHS would have to stimulate the private sector by
implementing BioShield the way Congress intended.
This last question also underscores how HHS' own actions?the
agency's history of delays, failure to implement the program in
accordance with the law, and failure to create markets?has in fact
created the ``Valley of Death'' that the agency claims has undermined
the program. Ironically, this is the same Valley of Death that provided
the rationale and impetus for the recently enacted BARDA legislation.
Let me be absolutely clear, there is no Valley of Death in the
private sector. If a technology is promising, there is a market for it
and the path to approval is clearly defined, companies have no
difficulty in obtaining investor capital--even though development of
the typical drug costs hundreds of millions of dollars, takes over a
decade, and numerous promising compounds never get approved.
Pharmaceutical and biotech investors understand risk and reward. By
raising the bar--changing the definition of the criteria required by
companies to be awarded an advance purchase contract (including
identifying the market size)--HHS has pushed the investment community
away from BioShield. They have created their own Valley of Death.
When you hear government officials telling you that the
pharmaceutical sector has not responded to BioShield--and therefore
their agencies need to take the lead in researching and developing new
drugs for WMD, and be given a bigger budget--realize that these same
officials and their actions are the precise reason why companies and
investors are running away from, not towards, this BioShield program.
They are like the proverbial arsonist who sets the fire so they can
rush in afterward to save the day.
With all due respect to the Members who worked hard to pass the
BARDA bill, it is my opinion that the BARDA legislation, though well
intended, will only make things worse. BARDA actually shifts biodefense
efforts away from market-driven development of deployable
countermeasures, to government research grants. BARDA also shifts the
risks from the private sector to the taxpayer--with no guarantee of
results.
Under the BioShield law, if a BioShield company doesn't produce a
drug, it doesn't get paid; if a BARDA company fails to develop a drug
it still gets paid. Let me be clear, if a company fails to deliver on a
BioShield contract, the government isn't out a penny; if a BARDA-funded
drug fails, the taxpayers foot the bill. And, given that there are
hundreds of failures for every approved drug, and that each failure can
cost a significant amount of money, the cost to the taxpayer will
quickly add up.
Finally, given the high-risk, highly technical nature of drug
development, there is absolutely no reason to believe that government
agencies with very limited expertise in drug development will have
nearly the success rate of private industry, which has been doing this
for decades.
All that said, perhaps the best way to judge the BioShield program
is to look at its record of results--or lack thereof:
Three years into the program and the agency has issued
only nine RFP's against just four of the numerous CBRN threats
we face--and roughly a third of those RFP's and/or contracts
have been cancelled. This despite the fact that the Centers for
Disease Control have maintained a priority list of CBRN threats
for years.
Three years into the program and BioShield has yet to
produce a newcountermeasure that was not already in existence
before the program began.
The market cap and share values of nearly every
company in this sector have fallen sharply since the program
was implemented?despite the fact that Congress intended
BioShield to drive the development of a vibrant biodefense
industry.
In just the last two months, no less than three of the
leading BioShield companies have all stated that they are
quitting their program-related drug development efforts and
will never again seek to work with the government--my company,
Hollis-Eden, is included in that number.
These failures stand to have real consequences for our national
security. For example, had HHS awarded this contract, the government
may have begun protecting the American people from the life
threatening effects of ARS in 2008. Instead, because HHS has failed to
act, we have suspended the development of NEUMUNE indefinitely.
Fortunately for Hollis-Eden our research was not limited to NEUMUNE. We
have made great progress over the last few years as we are bringing
forward several promising drug candidates addressing well-defined
mainstream global medical markets.
Unfortunately, as we and other companies have learned in this
process, trying to do business with the government under Project
BioShield, as implemented by HHS, appears to be more about factors
other than sound science. By the actions outlined in this testimony of
how HHS is handling companies like Hollis-Eden, the government is
sending the wrong message and is discouraging innovative companies from
participating in Project Bioshield. Ultimately, the U.S. citizens
future security won't have the benefit of the ``best and the
brightest'' technologies and expertise that industry has to offer, as
originally envisioned in the Project BioShield legislation.
Only after the horror of 9/11, have we taken steps to improve
airline security. Only after the levies broke during Hurricane Katrina,
have we focused on the adequacy of FEMA. Will Americans have to wait
until terrorists use a nuclear device in one or more of our cities
before our government addresses our lack of preparedness? If we do not
act, the weight of those lives lost because we failed to adequately
prepare for a nuclear attack will fall squarely upon the people who
knew and did nothing to rectify this situation before it was too late.
I fear only then things may change.
Mr. Chairman, thank you for the opportunity to appear before you
today.
Mr. Langevin. Mr. Hollis, thank you for your testimony.
Dr. Davis, the floor is yours.
STATEMENT OF JAMES H. DAVIS, PH.D., J.D., SENIOR VICE PRESIDENT
AND GENERAL COUNSEL, HUMAN GENOME SCIENCES
Mr. Davis. Mr. Chairman, members of the subcommittee, thank
you for the invitation to appear today. I am Jim Davis,
executive vice president and general counsel of Human Genome
Sciences.
In this capacity, I have been extensively involved with all
the issues related to the development and anticipated sale of
ABthrax, HGS therapeutic treatment for victims of anthrax
exposure.
As you know, ABthrax is one of several products that have
been procured by HHS under Project BioShield. Our initial
contract was awarded in September 2005 and in June 2006, the
HHS exercised first of several options for delivery of 20,000
doses of ABthrax to the strategic national stockpile.
We are on track to deliver that product in 2008, subject to
FDA approval. We are confident we have the processes and
capability to manufacture the product for the national
stockpile and to do so on schedule.
By way of background, HGS is a biopharmaceutical company
located in Rockville, Maryland that discovers, develops and
manufactures drugs to treat and cure disease. The primary focus
of HGS has not been nor will it be the development of drugs to
protect against the attack by biological and chemical weapons.
The principal focus of our company is the pursuit of
innovative biopharmaceutical products for the commercial
market.
But for this very reason, HGS also represents one of the
successes of Project BioShield. While there is no doubt the
program faces numerous challenges, the fact that HHS was able
to attract the participation of a company whose focus has not
been the biodefense market demonstrates the potential of
Project BioShield.
Nearly 6 years ago, we realized that our company had the
technology and capability to develop an effective near-term
countermeasure against one of the nation's most immediate and
serious bioterrorism threats.
As a company headquartered just outside Washington, D.C.,
we witnessed firsthand the potentially devastating effects of
the use of anthrax as a terrorist weapon in late 2001.
Thus, using our own funds, without any assistance
whatsoever from the U.S. government, we developed a fully human
monoclonal antibody drug called ABthrax that can prevent or
treat the lethal effects of anthrax infection.
In contrast to the vaccine, a single dose of ABthrax
confers protection immediately. In contrast to antibiotics,
ABthrax is effective against the lethal toxins released by the
bacteria and can be used to prevent and treat infections by
antibiotic-resistant strains of anthrax.
In a therapeutic setting, we believe that ABthrax could
significantly reduce anthrax toxicity and increase the survival
of exposed patients. We have initiated the final efficacy and
safety studies necessary for FDA approval.
As the first BioShield procurement for a product developed
after 9/11, the ABthrax contract allows for the acquisition of
a therapeutic product to treat U.S. civilians who have
inhalation anthrax disease.
HHS has currently agreed to purchase 20,000 doses of
ABthrax. While it has not yet committed to exercise all the
options contained in the contract, the contract includes
options and pricing for quantities ranging from 10,000 to
100,000 doses.
As is the nature of biological production, the cost per
dose of 100,000 doses is significantly less than the cost per
dose of 10,000 doses.
Given the limited quantities of vaccine, we believe it may
be prudent for HHS to consider purchasing additional quantities
of ABthrax.
While HGS appreciates its positive experience with Project
BioShield and HHS, Congress and HHS can take several steps to
increase industry participation. The BARDA legislation is a
significant step by Congress to provide HHS with additional
tools to ensure success.
We applaud the bipartisan leadership of Senators Burr and
Kennedy, as well as Representatives Rogers and Eshoo in making
BARDA a reality. It is now incumbent upon Congress to fund
fully BARDA.
HGS strongly supports the industry recommendations to fund
BARDA with at least $500 million in fiscal year 2008. We also
urge the agency to hire an individual with private-sector
development experience to lead BARDA.
HHS should also enact regulations to take into account the
regulatory flexibility included in both Project BioShield and
BARDA. The agency should make clear that the statute does not
require contractors to comply with burdensome government
procurement requirements.
Finally, while HGS has found FDA to be extremely responsive
in working with us on both the pre-clinical and clinical
studies required for approval, there remains a need for greater
clarity about the regulatory requirements for an emergency use
authorization permit and the decision-making process necessary
for final approval to stockpile the product.
I applaud the subcommittee for its continued oversight of
this critical biodefense program. In the case of ABthrax, we
are working in partnership with HHS as intended by Project
BioShield to deliver an effective anthrax therapeutic to the
strategic national stockpile.
We look forward to delivering on our commitment to HHS and
the American people in 2008 and would appreciate every effort
to ensure that additional quantities of ABthrax are made
available to the stockpile.
Thank you again for the opportunity to testify, and I look
forward to answering your questions.
[The statement of Mr. Davis follows:]
Prepared Statement of James H. Davis, Ph.D
Mr. Chairman, members of the Subcommittee, thank you for the
invitation to appear before you today on behalf of Human Genome
Sciences. I am Dr. Jim Davis, Executive Vice President and General
Counsel of Human Genome Sciences (HGS). In this capacity, I have been
extensively involved with the business development, regulatory approval
process, and federal procurement issues related to the anticipated sale
of HGS' innovative therapeutic treatment, ABthraxTM, for
victims of anthrax exposure. I have been involved with this project
since we undertook to develop this product on our own initiative and at
our own expense immediately following the anthrax attacks of 2001.
As you know, ABthrax is one of several products that have been
procured by the Department of Health and Human Service (HHS) under the
Project BioShield Act of 2004. Our initial contract was awarded in
September 2005 for purchase of a test quantity of our novel anthrax
therapeutic. In June 2006, HHS exercised the first of several options
under the contract for delivery of 20,000 doses of ABthrax to the
Strategic National Stockpile (SNS), valued at$168 million. We are on
track to deliver the product in 2008, subject to approval of the Food
and Drug Administration (``FDA''). We have already initiated both human
and animal studies and have manufactured the product at scale for those
studies. We are confident we have the processes and capability to
manufacture the product for the SNS, on schedule. Of course, if HHS
elects to exercise the remaining options for delivery of up to 100,000
doses of ABthrax to the SNS, we stand ready, willing, and able to meet
that obligation also.
By way of background, HGS is a biopharmaceutical company located in
Rockville, Maryland, that discovers, develops and manufactures gene-
based drugs to treat and cure disease. Currently, we have six drugs in
clinical development, including five monoclonal antibodies, and a broad
pipeline of preclinical compounds. These include novel human protein
and antibody drugs discovered through our genomics-based research, as
well as new, improved, long-acting versions of existing proteins
created using our albumin fusion technology.
Let me be clear. The primary focus of HGS has not been - nor will
it be - the development of drugs to protect against attack by
biological and chemical weapons. The principal focus of our company has
been, and remains, pursuit of innovative bio-pharma products for the
commercial market. We are not a ``bio-defense'' company as that term
has come to be known in the post-9/11 environment. Our business plan,
our executives, and our investors do not see the primary focus of HGS,
now or in the future, to be the federal marketplace.
For this reason alone, HGS represents, at least in this aspect, the
success of Project BioShield. While there is no doubt the program has
faced challenges, the fact that HHS was able to attract the
participation of a company whose focus has not been--and will not be--
the biodefense market demonstrates that the initial objectives of
Project Bioshield can be achieved. The background of HGS and ABthrax
demonstrates that Project BioShield can succeed, and thus, the
procurement of this product must be examined as the program moves
forward to address the challenges BioShield has faced, and the
potential it holds for the future.
History of ABthraxTM
Nearly six years ago, we realized that our company had the
technology and capability to develop an effective, near-term
countermeasure against one of the nation's most immediate and serious
bioterrorism threats--anthrax. As a company headquartered just outside
Washington D.C., we witnessed first-hand the potentially devastating
effects of the use of anthrax as a terrorist weapon in late 2001. Thus,
using our own funds--without any assistance whatsoever from the United
States Government--HGS developed a fully human monoclonal antibody drug
called ABthrax that specifically binds to a key anthrax toxin, thereby
preventing or treating the lethal effects of anthrax infection. The
drug can be given prior to or after exposure; and it could be used
alone or in conjunction with the current vaccine and antibiotics.
As you know, anthrax infection is caused by a spore-forming
bacterium, Bacillus anthracis, which multiplies in the body and
produces lethal toxins. Most anthrax fatalities are caused by the
irreversible and destructive effects of the anthrax toxins; as we saw
in the fall of 2001, survival rates for patients who contracted
inhalation anthrax were only 50%. Research has shown that protective
antigen is the key facilitator in the progression of anthrax infection
at the cellular level. After protective antigen and the other anthrax
toxins are produced by the bacteria, protective antigen binds to the
anthrax toxin receptor on cell surfaces and forms a protein-receptor
complex that makes it possible for the anthrax toxins to enter the
cells. HGS' ABthrax antibody blocks the binding of protective antigen
to cell surfaces and prevents the anthrax toxins from entering and
killing the cells.
Currently, there are only two licensed options available for the
prevention and treatment of anthrax infections--the AVA vaccine and
antibiotics. Both are essential in dealing with anthrax, but both have
limitations for individuals who are suffering from the effects of
inhalation anthrax. The only available, licensed anthrax vaccine,
BioThrax, coupled with antibiotics, is recommended--but not licensed--
for use in a post-exposure setting prior to manifestation of symptoms
of inhalation anthrax. Antibiotics alone, without the vaccine, are
effective in killing anthrax bacteria from spores that have germinated,
but are not effective against the anthrax toxins once those toxins have
been released into the blood, nor will they kill ungerminated anthrax
spores that linger in the bloodstream. Currently available antibiotics,
such as Ciprofloxacin, also may not be effective against antibiotic-
resistant strains of anthrax. And neither the vaccine nor antibiotics
have proven to be effective once symptoms of inhalation anthrax set in.
In ABthrax, HGS has discovered a third critical defense against
anthrax infections, including following the manifestation of symptoms.
In contrast to the anthrax vaccine, a single dose of ABthrax confers
protection immediately following the rapid achievement of appropriate
blood levels of the antibody. In contrast to antibiotics, ABthrax is
effective against the lethal toxins released by anthrax bacteria. It
may also prevent and treat infections by antibiotic-resistant strains
of anthrax. ABthrax has the potential to be used both therapeutically
and prophylactically.
In a therapeutic setting and based on initial preclinical studies,
we believe that ABthrax could significantly lessen the natural
progression of anthrax toxicity when given after inhalation exposure to
anthrax and increase the survival of exposed patients. Results from
preclinical studies previously conducted demonstrated that a single
dose of ABthrax administered therapeutically, after an animal begins to
exhibit symptoms of anthrax poisoning, increases survival significantly
in rabbits exposed to many times the lethal dose of inhaled anthrax
spores.
HGS now has initiated the final pivotal rabbit studies necessary
for the approval by FDA under an Experimental Use Authorization and
under a Biological License Application. HGS is also conducting key
characterization studies in non-human primates and will be conducting
additional confirmatory efficacy studies in these animals; HGS has
previously shown that administration of ABthrax immediately after
exposure to anthrax significantly increases survival in non-human
primates. HGS will be conducting additional studies in a therapeutic
setting. HGS has already conducted a Phase 1 clinical trial in humans
to evaluate the safety, tolerability and pharmacology of ABthrax in
healthy adults and has initiated the additional human studies that will
be required for EUA and BLA approval.
Our preclinical data also show that ABthrax administered
prophylactically (before exposure to anthrax) or immediately afterwards
increases survival rates significantly and thus ABthrax could be used
to protect rescuers entering a contaminated building or soldiers in an
infected environment.
Procurement of ABthrax under Project Bioshield
Many companies have the capability and are willing to develop new
products to protect against attack by biological and chemical weapons
or other dangerous pathogens. However, very few companies, such as HGS,
have already done so. In fact, HGS is among the largest, best funded,
and most qualified companies to participate in Project Bioshield to
date.
The fact that HGS was successful in negotiating a viable business
relationship with the federal government to purchase ABthrax should
have sent an extremely powerful, positive signal to similarly qualified
companies considering whether to enter this market. The primary
challenge of bio-pharma companies such as HGS is the absence of a
commercial market for such drugs. In most cases, the only viable market
is the federal government and, potentially, our foreign allies. Project
Bioshield, which aims to harness public and private resources in an
innovative effort to develop defenses against bioterrorism, is
specifically intended to create such a market. With the consummation of
the contract for ABthrax, the promise of Project BioShield's ability to
create a market for anthrax therapeutics was realized.
As the first Bioshield procurement for a product developed after 9/
11, the ABthrax contract allows for the acquisition and maintenance
within the SNS of therapeutic products to treat US civilians who have
inhalational anthrax disease. The remaining development and
manufacturing will be completed at HGS' Rockville, Maryland facilities
by 2008, pending FDA approval. HHS has currently agreed to purchase
20,000 doses of ABthrax for the SNS. While HHS has not yet committed to
exercise all of the options for production quantities for ABthrax
contained in the contract, the contract does include options, and
pricing, for a broad range of quantities ranging from 10,000 doses to
100,000 doses. As is the nature of biologics production, the cost per
dose of 100,000 doses is significantly less than the cost per dose of
10,000 doses. Given the limited quantities of anthrax vaccine currently
in the SNS, it may be prudent for HHS to consider purchasing additional
quantities of ABthrax to be available in the event of another anthrax
attack. The sooner HHS makes the decision, given the lead time required
for manufacturing, the sooner we will be able to deliver additional
quantities beyond our initial commitment.
Proposed Implementation Improvements
While HGS very much appreciates its positive experience with
Project BioShield and its work with HHS in performing under the ABthrax
contract, Congress and HHS can take several steps to increase industry
participation in Project Bioshield.
To begin, the recently enacted Biopharmaceutical Advanced Research
and Development Authority (BARDA) legislation is a significant step by
Congress to provide HHS with additional tools to ensure success of
BioShield. We applaud the bi-partisan leadership of Senator Richard
Burr (R-NC) and Senator Edward Kennedy (D-MA), as well as
Representative Mike Rogers (R-MI) and Representative Anna Eshoo (D-CA)
in making BARDA a reality. It is now incumbent upon Congress to fund
fully BARDA to realize the benefits of these powerful tools. HGS
strongly supports the industry's recent recommendations to fund BARDA
with at least $500 million in appropriations in Fiscal Year 2008. We
also urge HHS to hire an individual with private sector drug
development experience to lead BARDA, as was the clear intent of
Congress.
In addition to fully implementing--and funding--BARDA as soon as
possible, HHS should enact regulations required under the Act that take
into account the regulatory flexibility included in both Project
BioShield and BARDA in order to realize fully the legislative intent of
Project Bioshield. First and foremost, HHS should make clear that the
statute does not require contractors to comply with burdensome
government procurement requirements, including the requirement for
certified cost and pricing data, in order to stimulate the maximum
interest possible by commercial companies. Similarly, HHS should avoid
the use of cost-type contracts or contract line items (thus,
eliminating the need for a proposed contractor to adopt non-GAAP
accounting practices) wherever possible.
HHS should also consider structuring Bioshield contracts to avoid a
``staged'' procurement approach such as what occurred with the Anthrax
therapeutic contract, wherever possible. While we recognize the need
for staged procurements under certain circumstances, using this method
where HHS has conducted proper market research will avoid unnecessary
delays and unpredictable results, thereby stimulating far greater
private sector interest. Of course, the advance development authority--
and eventual funding--available under BARDA should provide the
necessary tools to HHS to avoid this result in the future.
Finally, while HGS has found the Food and Drug Administration to be
extremely responsive in working with us on the preclinical and clinical
studies that will be needed for EUA and BLA approval of ABthrax, there
remains a need for greater clarity about the regulatory requirements
for an EUA and the decision making process necessary for final approval
to stockpile an as yet unlicensed biological product.
All agencies responsible for administering Project Bioshield should
take a proactive approach to identifying, evaluating and procuring
effective countermeasures. I applaud the Subcommittee for its continued
oversight of this critical bio-defense program. In the case of ABthrax,
HGS is working in true partnership with HHS, as intended by Project
BioShield, to bring ABthrax into production, and eventually, into the
Strategic National Stockpile. We look forward to delivering on our
commitment to HHS, and the American people, in 2008 and appreciate
every effort to ensure that additional quantities of ABthrax are
purchased for the stockpile, as appropriate.
Thank you again for this opportunity to testify and I look forward
to answering your questions.
Mr. Langevin. Thank you, Mr. Davis, for your testimony.
Just for the record, there is a vote on right now. It is my
intent to go until there are 5 minutes left on the vote. We
will recess and then reconvene so that members can continue to
ask questions.
Let me begin with Mr. Hollis.
I guess let me ask, briefly, both witnesses, your
experience, if you had to summarize, given your experience with
BioShield, A being the best and F being the worst, what was
your experience with dealing with BioShield? Just briefly on
that.
Mr. Hollis. You said from A to what?
Mr. Langevin. A being the best, obviously, good experience
going through the process, and F being the worst, what would
you give your experience with BioShield? What grade would you
give them?
Mr. Hollis. It hasn't been a pleasant experience for us. I
would have to grade them an F.
Mr. Davis. I would have to say it is probably a solid B. It
took us a long time to get the contract, but in working with
HHS since we have gotten the contract, it has been a very good
experience.
Mr. Langevin. Mr. Hollis, when the contract was canceled
for your company, you said it was without warning.
Was there any appeal process that was afforded before it
was just done or the contract was just canceled and no further
action?
Mr. Hollis. There was no appeal process.
Mr. Langevin. Mr. Hollis, you have testified before this
committee before and I have heard that your company announced
that it would no longer pursue biodefense work and your stock
has quadrupled in price, from what I hear.
Is it solely your company's experience with the BioShield
process that led to this decision and was it solely your
decision to no longer pursue biodefense work that was the sole
reason for the increase in stock price?
Mr. Hollis. Our stock price actually decreased by 60
percent and, therefore, we can no longer justify from a
fiduciary responsibility to invest in this program.
Mr. Langevin. It was solely the experience with BioShield
that led to this decision.
Mr. Hollis. Yes. We were in an RFI/RFP procurement process
for 2.5 years. It is really unexplainable. And as a publicly
traded company, to explain to shareholders continued delays
over 2.5 years.
Our stock basically has lost $700 million in market
capitalization because there has been no transparency in the
procurement process and we could not communicate with Wall
Street in regards to the transparency and guidance that we were
receiving from the agency during this whole procurement
process.
Mr. Langevin. Thank you.
Dr. Davis, your company, as you mentioned, is currently on
track to deliver another anthrax countermeasure. Before
entering into the contract, you also had some concern and
confusion about the emergency use designation and initially
were not going to sign the contract.
Is that correct? And how was the situation resolved?
Mr. Davis. I think there was some initial contract
discussions over how you would define what was the criteria for
product to go into the national stockpile.
And there was a series of discussions. We did, in fact, end
up filing a protest, but we very quickly came to agreement with
HHS over how to define that definition and the definition was
one that we were quite satisfied with.
Mr. Langevin. So you clarified that before you actually
signed the contract.
Mr. Davis. Absolutely, yes.
Mr. Langevin. Very good. Well, in the interest of time, I
am going to yield to the ranking member for 5 minutes for
questions.
Thank you, gentlemen.
Mr. McCaul. Thank you, Mr. Chairman.
Mr. Hollis, you talked about the goal of BioShield being to
incentivize private markets, and I agree with you. I think this
is a high-risk business. The government needs to incentivize.
You make profits. And I will touch on BARDA in a minute, but
you mentioned the word BioShield eligible.
Could you expand on that in terms of what is your
understanding of BioShield eligible?
Mr. Hollis. Well, that is a very good question, because I
really don't know the answer to it. It is what we heard several
times when we were here in Washington trying to get guidance in
developing our drug and participating in Project BioShield and
it is a term that we heard quite often.
And when we tried to get clarification from it, we really
never got clarification and I think that has a lot to do with
the lack of transparency and leadership and guidance that the
agency has not provided the industry.
Mr. McCaul. And as I understand, the RFP was withdrawn in
your case.
Mr. Hollis. Yes.
Mr. McCaul. After about, what, 2 years?
Mr. Hollis. Two and a half years.
Mr. McCaul. Did they tell you why it was withdrawn?
Mr. Hollis. Yes. We had a debriefing here in Washington and
basically they said that it was technically unacceptable and it
was compared to the standards basically of an FDA approved
drug.
They wanted a more robust dataset of safety and efficacy
and that can only come through a late stage pivotal trial, of
which the company had spent 5 years developing the drug and had
incurred tens of millions of dollars.
And before a company would actually conduct a pivotal
trial, it would need an advance purchase contract to justify
spending that kind of investor money on the project.
So without setting the markets, without advance purchase
contracts, you cannot incentivize companies and the capital
markets and if you don't incentivize the capital markets, then
this will be a taxpayer-funded program and is exactly--I should
rectify one of the comments that you made.
Only eight percent of the drugs actually succeed. It can
take 10 to 12 years and $1 billion to get a drug approved. With
all that risk and failure, do we want to spend all the BARDA
money on that risk and failure and or do you want participation
by the capital markets and industry?
I do not think that has really been rectified with this
legislation.
Mr. McCaul. Is it your testimony that your drug would have
been FDA approved at what level, again?
Mr. Hollis. Excuse me?
Mr. McCaul. Was it your testimony that your drug would have
been FDA approved or could be?
Mr. Hollis. Well, we could have conducted a pivotal trial
and our expectations were never to receive any award from the
government until we delivered an FDA approved product and that
is how the initial legislation was written.
They would guarantee you a market, give you advance
purchase contracts and they would pay you upon delivery of an
FDA approved product.
So we were never looking for grants or government funding.
We were going according to the BioShield legislation that was
approved by Congress.
Mr. McCaul. And you were not provided any financial
incentives.
Mr. Hollis. No.
Mr. McCaul. With the new legislation, the Biomedical
Advance Research and Development Authority, BARDA, do you
believe that that would be helpful?
Mr. Hollis. No. I think that exacerbates the condition,
because what happens is you have a single agency that is
becoming the gatekeeper for all technology.
What this country needs is the best in innovation and
ingenuity of the industry and that means all-comers and they
should open it up to competition for anybody.
And when you have an agency that is controlling what
products get grants and what don't, then it is basically
prejudiced to begin with. If the legislation was to be
implemented the way that Congress passed, the risk would be on
industry, not on the taxpayer.
Mr. McCaul. Let me--my time is running out--go to Mr.
Davis.
You had a totally different experience. Why did you have a
different experience from Mr. Hollis's company? And in your
view, this new legislation we passed in the last week of the
last Congress, will that be helpful in terms of BioShield? And
maybe expand on what Mr. Hollis was talking about. What would
need to be done to improve that?
Mr. Davis. Sure. I can't explain why we have had different
experiences. I can only really talk to my own experience.
We had an RFP that was very clear as to what sort of
product the agency wanted, what the criteria had to be met. We
entered into the contracting process and we were successful in
getting a contract.
We had lots of discussions along the way. It is never an
easy process to come to a meeting of the minds on exactly what
a product is going to deliver, but we were able to do that and
we were very successful in getting the contract awarded and now
we are proceeding very deliberately along that pathway.
In terms of the BARDA legislation, I think the BARDA
legislation is a definite right step in the right direction. I
think you need many different avenues to develop these
products.
BARDA provides a way for companies who are not willing to
fund the initial research themselves to get funding to do the
development. It helps in those companies who do face the valley
of death.
We did not. We developed this product fully on our own and
we will get paid when we deliver it to the stockpile. That is
what we signed up for, that is what we were willing to do.
We are a biopharmaceutical company. That is the normal way
pharmaceutical companies develop products. You develop a lot of
products. You take them through clinical trials. Not every one
makes it and you don't get any reward until the end.
So we are willing to take that risk and that is clearly a
risk that you want to encourage companies to take. But there
are clearly many other companies, smaller companies that can do
it with BARDA funding and that can help very much, I think, the
biodefense industry and the U.S. government and the people.
Mr. McCaul. Thank you. I see my time has expired and we
have to vote.
Mr. Langevin. Good, yes. We are going to recess right now.
There is about a minute left on the vote. So we are going to
have to go quick.
But we will return, and we ask your indulgence. The
committee stands in recess.
[Recess.]
Mr. Langevin. I want to thank the witnesses again for their
indulgence.
Before I go to other members, I just had one question, if I
could, for Dr. Davis.
I understand a while ago that--and this is going back to
your testimony in terms of your grading and your experience
with BioShield.
A while ago you had said that you would never pursue
another BioShield contract, is what I had been told, and,
again, during your testimony today, you gave your assessment
and gave the BioShield process, in your experience, a B.
Did I hear that correctly in terms of--
Mr. Davis. No, you did not hear that. I mean, you did hear
correctly about the B, but not correctly about we would never
pursue another BioShield.
What I was saying is it is not our primary focus. If we are
in a position where we have the right technology and the
government has the right need, we certainly want to respond to
that need and seek a BioShield contract. It is not our primary
business, though.
Mr. Langevin. I see. And your primary business is?
Mr. Davis. Is biopharmaceutical products for the general
public. We are working on drugs for lupus, rheumatoid
arthritis, cancer, hepatitis C. So we are really a
pharmaceutical company, but we had the technology, we had the
capability to develop an antibody for anthrax.
We saw the need for anthrax. We talked to various people in
the government when we first started to develop it. We realized
that there was going to be a need. The Bioterrorism Act was
passed which allowed for animal testing to prove efficacy and
with the passage of BioShield, then there was the opportunity
to get a contract.
And so that is why we entered this area. We are certainly
interested in continuing to provide more anthrax therapeutic to
the government and we would certainly be optimistic as other
opportunities arise.
Mr. Langevin. I appreciate you clarifying that for the
record.
The chair will now recognize other members for questions
they may wish to ask of the witnesses.
In accordance with our committee rules and practice, I will
recognize those members who were present at the start of the
hearing based on seniority in the subcommittee, alternating
between the majority and the minority, and those members who
are coming in later will be recognized in the order of their
arrival.
The chair now recognizes for 5 minutes the gentlewoman from
the Virgin Islands for 5 minutes.
Mrs. Christensen. Thank you, Mr. Chairman and Ranking
Member, for holding this hearing. The BioShield is something
that I have been interested in and never quite satisfied with.
So I am glad that we are taking a look at it again.
I guess I would begin by asking, Mr. Davis, you said that,
in response to another question, the phrase ``BioShield
eligible'' had been adequately defined for you. Could you tell
us in what way it was defined? How did they define it?
Mr. Davis. Actually, the term ``BioShield eligible'' was
never used, and I am not familiar with that term.
What I can say is that the RFP made clear what type of
products they were looking for, what stage of products and what
the criteria was. And then, doing the contract negotiation
process, we further clarified the characteristics that would be
needed in order to have the product stockpiled and then
eventually we will obviously be getting BLA licensure.
So that particular term I am not familiar with, at least in
our contract discussions.
Mrs. Christensen. Okay. And these two contracts were
occurring around the same time.
Mr. Davis. I am not sure exactly the timing of the Hollis-
Eden one. Ours was originally awarded in 2005.
Mrs. Christensen. And your RCA process started in what
year?
Mr. Davis. I believe 2004.
Mrs. Christensen. And yours, Mr. Hollis?
Mr. Hollis. October 2004.
Mrs. Christensen. So you heard the term ``BioShield
eligible.''
Mr. Hollis. We spent a lot of time here trying to get
clarification in regards to what was going to be necessary to
get an advance purchase contract and initially--
Mrs. Christensen. Well, before you answer, because Mr.
Davis said he was clear on his product, what was required, the
criteria and so forth, that that was clear. Was that clear to
you?
Mr. Hollis. There was a request for proposal that finally
came out and it had requirements on there and we met all the
mandatory requirements.
Mrs. Christensen. So you were clear what was required in
your RFP and what product was to be delivered, just as Human
Genome Sciences was. You were clear in your RFP what the
product was, what was required, what criteria.
Mr. Hollis. It wasn't spelled out thoroughly. It was more
broad and general.
Mrs. Christensen. I think you have answered the question
about BARDA for me.
In other testimony and I believe, also, in the GAO report,
the statement is made that not enough the private medical
industry is participating in BioShield.
I am asking the question to both of you and I think maybe
in the chief medical officer's testimony, it says it encourages
more companies to participate.
Well, I would like to hear from you why each of you think
that this is the case, that not enough companies are
participating in BioShield.
Mr. Hollis. I will tackle that first.
When the president first announced BioShield in his State
of the Union in 2003, I was also at a conference in New York
where the president also gave a follow-up speech to that and he
was calling for the industry to participate in Project
BioShield.
And subsequent to that, at the time, Dr. Mark McClellan,
who was the commissioner at the FDA at the time, also gave a
presentation to try to stimulate the industry to respond to
Project BioShield.
The cornerstones are guaranteed markets, advance purchase
contracts, pay on delivery. This was going to be a new way to
finance medical countermeasures.
At first, industry was very interested and so was banking.
As a matter of fact, many bankers were looking at a whole new
biodefense sector and a way to finance companies that were
going to develop these products.
If you were to look at this today, most investment bankers
have dropped out almost completely. The investment banker we
have no longer funds companies in BioShield.
Industry can't participate because it really doesn't know
what the markets are. What are the threats? How many doses do
they plan on purchasing? How can you make an economic decision
whether you want to develop a product or not when you don't
know what the market is?
And there is no transparency and guidance in regards to the
procurement process. Is this a government-run program or is
this a program to drive incentives for the industry?
Now, if it is one or the other, that is perfectly fine. It
just needs to be stated.
Mrs. Christensen. Mr. Davis?
Mr. Davis. I think what would help the most is if we had a
clearer idea of exactly what the market is. We know a number of
the threats that HHS is interested in, but it would be much
better, as Mr. Hollis said, if we knew exactly what threats,
what type of products they want and the number of doses they
wanted to buy, because then you can make the market judgment of
whether you want to invest in that and I think that is the one
thing that is lacking and I am hoping that is what comes out of
the BARDA implementation plans is a clearer indication of what
those markets are.
Mrs. Christensen. Thank you. My time is up. I just wanted
to say for the record that I have asked on a number of
occasions what was the status of Neumune, had it ever been
accepted for BioShield, but I could never really get a straight
answer and this is in hearings that either the committee or
subcommittee has had.
So I understand why I couldn't get an answer now.
Mr. Hollis. Thank you very much, appreciate that.
Mr. Langevin. I thank the gentlelady for her questions.
I want to thank the witnesses for your testimony and as I
said earlier, I look forward to the opportunity to have VaxGen
back before the subcommittee to offer testimony about their
experiences with Project BioShield.
Your testimony today was valuable and I appreciate you
sharing your experiences with us.
BioShield is too important to fail and we need to do what
we can to further dot the I's and cross the T's to make sure
that BioShield is working at maximum effort and as it was
intended.
I am glad to hear, Dr. Davis, that you had a relatively
positive experience.
I am disappointed, of course, Mr. Hollis, that you and, it
is my understanding, VaxGen, two major contracts, did not have
a good experience. But we hope to get to the bottom of this and
work to fix the problems.
Again, I just want to thank the witnesses for their
valuable testimony and the members for their questions.
The members of the subcommittee may have additional
questions for the witnesses and we would ask that you respond
expeditiously in writing to those questions.
And, again, I thank you for your testimony. At this time,
the first panel of witnesses is dismissed and the chair calls
up the next panel.
Thank you.
I want to thank the panel for being here today.
The first witness today is Dr. Jeffrey Runge, the acting
assistant secretary for health affairs and chief medical
officer, Department of Homeland Security. Dr. Runge's service
to the department began on September 5, 2005 as the
department's first chief medical officer position, he still
holds.
The DHS chief medical officer serves as the principal
advisor to the secretary for public health and medical issues
across the department. Dr. Runge is responsible for
coordination with other federal departments and agencies and
the Homeland Security Council on issues of biodefense and
medical preparedness.
The next witness is Dr. Gerry Parker. Dr. Parker serves as
the principal deputy to the assistant secretary, office of the
assistant secretary for preparedness and response at the
Department of Health and Human Services.
The office coordinates HHS-wide efforts with respect to
preparedness for and responses to public health and medical
emergencies and serves as the focal point for coordination with
other federal departments, agencies, offices and state and
local officials responsible for emergency medical preparedness,
and the protection of the civilian population from acts of
terrorism and other public health emergencies.
Next we have Dr. Anthony Fauci, director of National
Institutes of Allergy and Infectious Disease, a position he has
held since 1984. He has had the opportunity to testify, I know,
on a number of occasions before the subcommittee in its prior
life on prevention of nuclear and biological attacks.
And I have always appreciated your testimony in the past,
Dr. Fauci, and look forward to hearing from you today.
In 1968, Dr. Fauci came to the National Institutes of
Health as a clinical associate in the laboratory of clinical
investigation at the National Institutes of Allergy and
Infectious Disease. In 1974, he became head of the clinical
psychology section, LCI, and, in 1980, was appointed chief of
the laboratory of immunoregulation, a position he still holds.
Finally, we welcome Dr. Jesse Goodman, the director of
FDA's Center for Biologics Evaluation and Research, which
oversees a broad range of medical, public health and policy
activities concerning the development and assessment of
vaccines, blood products, tissues and related devices and novel
therapeutics, including cellular and gene therapies.
He first came to FDA in late 1998 from the University of
Minnesota, where he had joined the faculty in 1985 and most
recently served as professor of medicine and director of the
division of infectious disease.
Before I turn it over to the panel of witnesses, starting
with Dr. Runge, I wanted to mention two things.
First of all, the committee rules require that testimony is
submitted no later than 48 hours before the subcommittee. We
received the testimony from HHS only at 9:30 last night. Dr.
Runge's and Dr. Fauci's testimony was in on time.
And just for the record, I understand that you all have
other people that need to sign off before you can actually
submit the testimony, but we can't do business this way, in not
having the testimony in in a timely manner. And I would hope
that in the future it would be in in the 48-hour requirement.
Second, I wanted to say how deeply disappointed I am that
HHS would not give a sign-off to VaxGen to testify before the
subcommittee. As I said earlier on, prior to the start of the
hearing, that VaxGen very much wanted to testify.
We need to have VaxGen's testimony so we fully understand
their experience with BioShield if we had to exercise proper
oversight and work together to try to fix the problem.
So I would expect that at the earliest opportunity, that
the sign-off would be given from HHS and that, in fact, VaxGen
will be allowed to testify before the subcommittee.
I can promise you that there will be a follow-up hearing on
the BioShield issue, at which time I expect that VaxGen will be
allowed to testify.
Without objection, the witnesses' full statements will be
inserted into the record. And I now ask each witness to
summarize their statement for 5 minutes, beginning with Dr.
Runge.
Dr. Runge, thank you again for being before us once again,
and the floor is yours.
STATEMENT OF JEFFREY RUNGE, M.D., ASSISTANT SECRETARY OF HEALTH
AFFAIRS (ACTING) AND CHIEF MECICAL OFFICE, OFFICE OF HEALTH
AFFAIRS, DHS
Dr. Runge. Thank you, Mr. Chairman, Ranking Member McCaul
and members of the subcommittee. I appreciate the opportunity
to be here today.
I also appreciate the attention that you and your
subcommittee have given to the subject of bioterrorism
countermeasures in the past since my arrival 18 months ago as
chief medical officer.
We believe Project BioShield to be an essential component
of the overall strategy to combat the effects of bioterrorism
and this subcommittee has played a very important role in DHS's
responsibilities under the Act.
We have shared with the committee on numerous occasions the
results of our assessments of biologic agents as they present a
threat to national security and you have been supportive of our
maturing relationship with HHS and its various components
concerning our roles and responsibilities for the program.
We have deepened our partnership with HHS to become part of
its public health emergency medical countermeasure enterprise,
along with members of the executive office of the president, as
well as the Department of Defense.
HHS possesses most of the moving parts of this enterprise,
including the basic sciences of NIH, the advanced research
authority of the new BARDA, the safety and regulatory capacity
of the FDA and the strategic national stockpile, the CDC.
For our part, we have delivered a comprehensive assessment
of the 28 agents of concern and we have delivered to the White
House and to this subcommittee a stratified list of agents that
present a material threat to national security and population
threat assessments on 13 of those agents, as well as an
additional assessment for nerve agents.
We have completed a tool that will allow us to conduct
detailed modeling of vulnerabilities and consequences as
changes occur for various possible scenarios of a terrorist
attack.
This model was informed by inputs from the intelligence
community, law enforcement, the science community and public
health. We will continue periodic assessments to update this
list and to restratify it as conditions change and we will keep
our partners abreast of these updates to ensure that all of our
efforts remain synchronized.
Once DHS determines which agents are material threats, HHS
then performs consequence modeling to support the procurement
of the appropriate countermeasure. When a countermeasure is
identified that meets the eligibility requirements to warrant
use of the special reserve fund, both secretaries, HHS and DHS,
jointly request that OMB release funds to HHS from the special
reserve fund in order that HHS may acquire the countermeasure.
We have greatly improved the processes over the last
several months to realize many efficiencies in what started out
as a very difficult bureaucratic process.
While DHS completes its responsibility, as I previously
described, HHS is ultimately responsible for managing the
countermeasure procurement process, including the negotiation
of terms, entering into contracts for research, development,
acquisition, procurement, storage and distribution of those
countermeasures.
DHS is completely supportive of the new enterprise, of the
BARDA law and the transparency to which Secretary Leavitt is
committed and we look forward to continued improvements in this
process.
Mr. Chairman, from my perspective, what is still missing
from the enterprise is a commitment, a partnership from the
nation's medical industry as a whole to invest in our
biodefense.
If this public-private partnership is going to work, our
nation needs investment from both sides. We cannot rely simply
on the smaller biotech companies to carry the burden of new
countermeasure development.
I believe it would be a worthy investment in time, talent
and treasure for companies, large and small, to come to the
table, even without the promise of large returns on their
monetary investments.
Of course, we can't expect these companies to invest
blindly in countermeasure research and development without some
economic incentive, but we really need to recognize that
success benefits everyone and the lack of success in this area
carries a potential for harm to our citizens and to our
economy, including companies, large and small, inside the
biotech industry and outside.
So we need the ingenuity and creativity of the entire
American enterprise to reach a condition of security from
bioterrorism.
Mr. Chairman, you have my more detailed remarks for the
record. I appreciate it. I will just stop here, if that is okay
with you.
[The statement of Dr. Runge follows:]
Prepared Statement of Jeffrey W. Runge, MD
April 18, 2007 (revised)
INTRODUCTION
Good afternoon, Mr. Chairman, Ranking Member McCaul and
distinguished members of the Subcommittee. Thank you for the
opportunity to describe the role of the Department of Homeland Security
(DHS) under Project BioShield.
PROJECT BIOSHIELD OVERVIEW
The Project BioShield Act of 2004 (PL 108-276) amended the Public
Health Service Act to provide protections and countermeasures against
biological, chemical, radiological, or nuclear agents that may be used
in a terrorist attack against the United States by giving the National
Institutes of Health contracting flexibility, infrastructure
improvements, expediting the scientific peer review process, and
expanding the Food and Drug Administration authority to allow the use
of unapproved medical countermeasures in a declared emergency.
Today, Project BioShield is a $5.6 billion program designed to
stimulate the development of medical countermeasures for natural or
chemical, biological, radiological, and nuclear threats for which there
are no existing commercial markets. Both DHS and the Department of
Health and Human Services (HHS) have major responsibilities under the
Project BioShield Act.
DHS RESPONSIBILITIES UNDER PROJECT BIOSHIELD
In accordance with section 319F-2(c)(2) of the Project BioShield
Act of 2004, it is the DHS' responsibility, in consultation with HHS
and other agencies, to assess current and emerging threats of natural
or chemical, biological, radiological, and nuclear agents, and to
determine which agents present a significant material threat to the
U.S. population.
To fulfill this responsibility, DHS conducted detailed modeling of
threats, vulnerabilities, and consequences for various plausible
scenarios of a terrorist attack. As a result of this work, DHS
identified 12 biological threats, plus radiological and nuclear
devices, meeting the statutory requirement to merit a Material Threat
Determination (MTD). As of September 20, 2006, DHS completed the MTD
list based on detailed assessments of the agents with inputs from the
intelligence, law-enforcement, scientific, and public-health
communities. This MTD list will be updated, as needed, based on the
outcomes of biennial Chemical, Biological, Radiological and Nuclear
(CBRN) risk assessments.
Accompanying each MTD is a Population Threat Assessment (PTA). The
PTA estimates the size of the population exposed by the agents
identified in the MTDs to gauge the impact on the population and
national infrastructure if that particular agent was released for a
given high consequence plausible scenario. As of December 2006, DHS
completed the PTAs of all MTDs. Moreover, DHS remains engaged in
ongoing threat assessments and communicates regularly with our Federal
partners to ensure we have accurate, up-to-date material threat
information.
THE TRANSITION OF RESPONSIBILITY TO HHS
Once the MTDs are issued and PTAs are completed for any given
threat, the results are shared with HHS for consequence modeling to
support the procurement of appropriate countermeasures. HHS created the
Public Health Emergency Medical Countermeasures Enterprise (PHEMCE),
under the direction of the HHS Assistant Secretary for Preparedness and
Response, to identify, develop and acquire medical countermeasures that
will improve public health emergency preparedness, including preventing
and mitigating the adverse health consequences associated with the
priority CBRN threats identified by DHS. On the PHEMCE Executive
Governance Board (EGB), whose members are the Assistant Secretary for
Preparedness and Response, the Centers for Disease Control and
Prevention, the National Institutes of Health, and the Food and Drug
Administration. DHS serves as an ex officio member along with the
Department of Defense, the Homeland Security Council, the Office of
Science and Technology Policy, the Office of Management and Budget
(OMB), and the Office of the Vice President.
Upon identification of countermeasures that meet the eligibility
requirements to warrant use of the Special Reserve Fund (SRF) the
Secretary of DHS and the Secretary of HHS jointly request that OMB
release funds to HHS from the SRF, to acquire the countermeasures. DHS
has worked with HHS to expedite the implementation of BioShield by
clarifying roles and responsibilities and by establishing mechanisms to
improve efficiencies in this process.
Under section 319F-2(c) (7) (C) of the Public Health Service Act,
as amended, HHS is ultimately responsible for managing the
countermeasure procurement process including the negotiation of terms
and entering into contracts for research, development, acquisition,
procurement, storage and distribution of countermeasures.
THE FUTURE OF THE BIOSHIELD ENTERPRISE
DHS is confident that the Secretary of HHS' plan for the future of
BioShield will result in addressing the appropriate needs of the Nation
in terms of preparedness. In order to address the above, improvement in
transparency to the program?s stakeholders was in evidence at the
meeting held in September of 2006. The Pandemic and All-Hazards
Preparedness Act of 2006 (PL 109-417) provided a missing piece to HHS'
ability to stimulate the development of needed countermeasures with the
authorization of the Biomedical Advanced Research & Development
Authority to help companies through the advanced development process,
if funded appropriately. The formation of the Public Health Emergency
Medical Countermeasures Enterprise will provide the HHS Secretary with
expert advice to make his decisions in collaboration with the
interagency and its respective stakeholders. The PHEMCE strategic plan
is a key step in defining, in a transparent way, how BioShield will
carry out its business moving forward.
What is still missing from the enterprise is a commitment from the
Nation's medical industry as a whole to invest in our biodefense. We
must find ways to involve the private sector more broadly in this
priority for our Nation. The ability of our private sector to thrive
depends on their safety and security. It would be a worthy investment
in time, talent and treasure for companies large and small to come to
the table, even without the promise of large returns on their monetary
investments. We thank the Congress for giving us a wide range of
innovative acquisition and other authorities to pave the way for
increased private investment. We will need to rely on the ingenuity and
creativity of the American enterprise to reach a condition of security
from bioterrorism.
CONCLUSION
Thank you, Mr. Chairman, for the opportunity to speak to you today
on the role of DHS under the Project BioShield Act. I am happy to
answer any questions the Subcommittee may have.
Mr. Langevin. Dr. Runge, thank you for your testimony.
Dr. Parker?
STATEMENT OF GERRY PARKER, PH.D., DVM, PRINCIPAL DEPUTY
ASSISTANT SECRETARY, OFFICE OF THE ASSISTANT SECRETARY FOR
PREPAREDNESS AND RESPONSE, DHS
Mr. Parker. Mr. Chairman and members of the subcommittee, I
am honored to be here today to discuss the development and
acquisition of medical countermeasures for chemical,
biological, radiological and nuclear threats under Project
BioShield, and the new authorities by the Pandemic and All
Hazards Preparedness Act.
I am especially pleased to be here with my colleagues, Dr.
Fauci from NIH, Dr. Goodman from the FDA, and Dr. Runge from
the Department of Homeland Security, with whom we coordinate on
a regular basis.
Project BioShield, enacted in 2004, authorized the $5.6
billion special reserve fund for the acquisition of security
countermeasures. It was designated to incentivize industry to
pursue the development of next generation products, to improve
preparedness, and as an important complement to the NIH
research program and the CDC's strategic national stockpile.
HHS has already achieved a significant level of
preparedness against a number of threats. For example, we have
stockpiled antibiotics that provide a substantial level of
preparedness for bacterial threat agents, including anthrax and
tularemia.
During the 2.5 years of implementation, Project BioShield
launched eight acquisition programs for the four material
threats defined by the Department of Homeland Security in 2004.
These include programs for current and next generation anthrax
vaccines, anthrax antitoxins, a next generation smallpox
vaccine, botchulism antitoxins, and three medical
countermeasures for radiological and nuclear threats, potassium
iodine, DTPA, and acute radiation syndrome therapeutics.
Two programs, next generation anthrax vaccines and ARS
therapeutics exemplify the challenges encountered in
implementation of Project BioShield.
Because of these setbacks for the second generation anthrax
vaccine and RPA and ARS are multifactoral, I will take this
opportunity to convey, within limitations imposed by the Trade
Secret Act and Procurement Integrity Act, HHS perspectives on
lessons learned and intentions with regard to the path forward.
In December 2006, HHS terminated the acquisition contract
with VaxGen for RPA when VaxGen failed to meet critical
contract milestones. This followed a previous contract
modification that provided VaxGen with substantial time to
develop and deliver their product.
HHS developed a comprehensive strategy for advanced
development and acquisition of current and next generation
anthrax vaccines. As part of that strategy, the NIH continues
to support the development of another second generation anthrax
vaccine candidate and we remain committed to procure RPA.
HHS will also pursue the acquisition of an additional 10
million doses of ABA for near-term preparedness, the current
license anthrax vaccine.
Last month HHS withdrew a request for proposals for acute
radiation syndrome therapeutics because no competing product
was sufficiently mature to warrant a BioShield acquisition at
this time.
HHS will continue to pursue research, development and
acquisition of these medical countermeasures and will take
advantage of new authorities and scientific advances in
development of potential candidates.
We have observed the following lessons in implementing
Project BioShield. First, for the most part, experienced and
well resourced companies have not responded to BioShield and
the contract terms dictated by BioShield were challenging,
particularly for less resourced companies.
Second, it is critical that developers establish effective
relationships with the FDA early to gain a clear understanding
of the regulatory requirements with respect to their product
for the stockpile and for emergency use prior to licensure.
Finally, absence of a robust advanced development program
has placed too much risk on BioShield acquisition programs.
We are pleased that the Pandemic and All Hazards
Preparedness Act provides HHS with biomedical advanced research
and development authority, BARDA, which includes important new
tools.
We will use new authorities, such as advanced and
milestone-based payments, in future contracts. We will
facilitate discussions with the FDA and work to improve clarity
on regulatory requirements to stockpile a product for emergency
use prior to licensure. But we will also continue to insist on
and verify demonstrated understanding of those products by
developers for their products.
The importance of advanced development is exemplified by
our pandemic influenza advanced development program and we are
successfully pursuing a portfolio of countermeasure candidates
with industry partners to mitigate acquisition risk in that
program.
I cannot overstate the importance of advanced development
and the fiscal year 2008 request for advanced development
funding is critical to BARDA implementation.
Finally, last July, HHS established a public health
emergency medical countermeasures enterprise to coordinate all
levels of public health preparedness against terrorist and
naturally occurring threats.
We today have submitted to the Federal Register, and
hopefully it will be released today, we submitted it yesterday,
but hopefully it will be released today, the enterprise
implementation plan, which identifies the top priority medical
countermeasure development and acquisition thrust.
The implementation plan reaffirms and further identifies
our commitments to acquisition of anthrax vaccines, anthrax
antitoxins and therapeutics for radiological and nuclear
threats. It also identifies the need for continued development
and acquisition of broad spectrum antibiotics, antivirals and
diagnostics.
The department is committed to fulfilling its role both as
a steward of the public's trust and as a reliable and
predictable partner for industry.
The release of the enterprise strategy and implementation
plan signals our commitment to greater transparency in
partnership with our stakeholders. We will build on past
successes, lessons learned, and new authorities under the
Pandemic and All Hazards Preparedness Act to continue to
improve the implementation of Project BioShield.
Mr. Chairman, this concludes my testimony, and I will be
happy to answer any questions. Thank you.
Mr. Langevin. Thank you, Dr. Parker.
Dr. Fauci, the floor is yours.
STATEMENT OF ANTHONY FAUCI, M.D., DIRECTOR, NATIONAL INSTITUTES
OF ALLERGY AND INFECTIOUS DISEASES, NATIONAL INSTITUTES OF
HEALTH, HHS
Dr. Fauci. Mr. Chairman, members of the committee, thank
you for giving me the opportunity today to discuss with you the
NIH's role in the research endeavor associated with the
development of countermeasures for emerging public health
threats, both naturally occurring, as well as deliberately
propagated.
I have some visuals here. On this first chart, I just want
to emphasize the traditional role of the NIH whose activities
are all based on fundamental matrix of basic research.
In addition, in our approach to emerging public health
threats, we have built both physical and intellectual
infrastructure in the form of training individuals in this
subspecialty, not only of infectious diseases, but also, most
recently, in RAD, NUKE and CHEM.
Importantly, we conduct and have considerable experience in
clinical trials leading to the ultimate development and use of
countermeasures. A typical example of that was the pandemic
H5N1 influenza vaccine that was just approved yesterday by the
FDA, was done through the NIAID clinical trials network.
All of our activities are ultimately aimed for the
development not by us, since we do the research of it, but the
ultimate development of countermeasures in the form of
diagnostics, therapeutics and vaccines.
This slide, Mr. Chairman, I have shown to you before. It is
a map of the world in which we have listed, over the last 25 to
30 years, emerging and reemerging threats, ranging, for
example, from a brand new threat like HIV and SARS to a
reemerging threat like West Nile and recurrent drug-resistant
tuberculosis, malaria, staphylococcus, enterococcus, et cetera,
and, finally and unfortunately, deliberately propagated
microbes.
We play a role in this endeavor because we have decades of
experience in the arena particularly of microbiology and
infectious diseases, of dealing with naturally occurring
infectious disease threats.
This holds us in good stead to be able to extrapolate the
knowledge, the fundamental basic research, as well as the
clinical applicability when we are looking at bioterror
threats.
And in response to the post-September the 11th anthrax
attack, we revved up considerably our research component of the
broader HHS effort. On this slide shown here are the original
strategic plan and research agendas for the various category A,
B and C agents together with the progress reports, the most
recent of which was this past summer.
In addition, we have published our radiological and nuclear
strategic plan and research agenda and soon to be published,
the CHEM component of that.
With regard to the expansion of our research capacity, we
have made great strides in the last 5 years. With regard to
physical capacity, we have two additional extramural, namely,
in the university, BSL-4, the highest level of containment. We
have several BSL-313. We have regional centers of excellence
and note the name, the regional centers of excellence for
biodefense and emerging infectious diseases, because even if we
never get and we hope we never will get another bioterror
threat, the work that is done at the research level will have
important extrapolation to the things that we know will happen
and that is naturally occurring and reoccurring threats.
With regard to some of the accomplishments in biodefense
research, let me just mention very briefly a few. First, the
threat-specific. In regard to vaccines, when we started off
post-September 11, there were 18 million doses of smallpox
vaccine available for this country.
Based on the clinical trials, using dilutional techniques
and the newer generation, we now have a vaccine dose of
smallpox vaccine to every person in this country. We have
developed a first hemorrhagic fever vaccine, Ebola, which will
soon combine with Marburg and Lassa.
In addition, we have done work with anthrax. You have heard
about the RPA research that we have done, but also we have
shown that when the standard original first generation anthrax
vaccine is given with antibiotics, you can decrease the time on
antibiotics and allow for greater clearance of those spores.
In therapeutics, we have had some interesting successes. We
now have the first what we believe to be effective anti-
smallpox antiviral, the SD-246. Parenthetically, that was used,
we believe, successfully on the child of the armed forces
personnel who had a complication of their smallpox vaccine when
the child developed a vaccinia complication, because the child
had eczema.
We also have molecular approaches to Ebola and antitoxins
against anthrax. In diagnostics, we now have molecular
capability, Mchip, to distinguish between influenza A that is
pandemic and that is seasonal. And, finally, you may have read
in the newspapers just a few days ago, we have the ability now,
by looking at gene expression in animals that have been
irradiated, as to what the dose of irradiation that they have
received, which will allow us to prepare how we might treat
that individual.
And then we have these cross-cutting things, such as
genomic sequencing, therapeutic screening and understanding
what we call host pathogen interaction, namely, how the body
responds to threats of microbes.
This is of great importance, because, again, even if we
never get another bioterror threat, it will have important
spin-offs in other diseases.
And, finally, on this last slide, I thought I would
schematically diagram the place that the NIH plays in the
schematic between fundamental basic research up through and
including the purchase and acquisition by BioShield.
And as you see, classically, our activities are in the area
of research that is basic and applied and the early part of
product development. BioShield does the acquisitions and what
you were talking about in your introductory statement about
BARDA and the hopeful role that BARDA will play in bridging
that gap between the research endeavor and the acquisitions
through BioShield.
Thank you very much, Mr. Chairman. I would be happy to
answer questions for you.
[The statement of Dr. Fauci follows:]
Prepared Statement of Anthony S. Fauci, M.D.
INTRODUCTION
Mr. Chairman and Members of the Committee, thank you for the
opportunity to speak with you today about the role of the National
Institutes of Health (NIH) in preparing the Nation to respond
effectively to emerging public health threats. In my testimony today, I
will describe NIH research that is leading to new and effective
countermeasures against these threats. I also will discuss the NIH role
in the implementation of the Project BioShield Act of 2004 and the
Biomedical Advanced Research and Development Authority (BARDA),
established by the Pandemic and All-Hazards Preparedness Act of 2006.
As a Nation, we must be prepared to respond quickly and effectively
to any threat to public health. The threats we face include new
microbes that might emerge naturally, such as the virus that caused
Severe Acute Respiratory Syndrome (SARS), and familiar pathogens that
re-emerge with enhanced properties or in unusual settings, such as
bacteria that cause extensively drug-resistant tuberculosis (XDR-TB)
and influenza viruses with pandemic potential. As was made clear by the
terrorist attacks of 2001--including the anthrax attacks in the eastern
United States--we must also be prepared for the deliberate release of
pathogenic organisms, biological toxins, chemical poisons, or
radioactive substances. The primary role of the NIH in confronting
these diverse threats is to carry out basic and applied scientific
research and early-stage development of potential products, upon which
late-stage advanced product development and ultimately approval of
vaccines, therapeutics and other medical countermeasures can be based.
NIH RESEARCH ON EMERGING PUBLIC HEALTH THREATS
Research to mitigate emerging threats to public health is a key
focus of the NIH. The National Institute of Allergy and Infectious
Diseases (NIAID) is the component of the NIH assigned primary
responsibility for research on emerging and re-emerging infectious
diseases, including the deliberate use of infectious biological agents
and toxins that directly affect human health. The NIAID also
coordinates NIH research into medical countermeasures against chemical,
radiological and nuclear agents; this research is supported by several
NIH institutes, including the NIAID, the National Cancer Institute, and
the National Institute for Neurological Disorders and Stroke.
Strategic planning to guide the broad NIH biodefense and emerging
infections research effort has been extensive, and has involved
substantial consultation with outside experts in academia, private
industry, civilian government agencies, and the military. The overall
strategy encompasses three components of NIH biodefense and emerging
infections research: the infrastructure needed to safely conduct
research on dangerous pathogens; basic research on microbes and host
immune defenses that serves as the foundation for applied research; and
targeted, milestone-driven, early-phase development of medical
countermeasures to create the vaccines, therapeutics and diagnostics
that will be needed in the event of a public health crisis. These
efforts enhance the Nation?s preparedness for both potential
bioterrorism attacks and naturally occurring infectious disease
outbreaks.
The NIH is substantially expanding the Nation?s biodefense research
infrastructure, which will greatly enhance our ability to safely and
efficiently conduct research on infectious agents. Facilities currently
or soon to be under construction will be capable of safely housing
research on the most deadly pathogens, as well as microbes that are
more familiar and less virulent, but nonetheless deleterious to human
health. These facilities include two National Biocontainment
Laboratories (BSL-4 - the highest level of containment) and thirteen
Regional Biocontainment Laboratories (BSL-3 ? one level down from
highest level of containment). In addition, three intramural
biocontainment labs?on the NIH campus in Bethesda, Maryland (BSL-3), on
the National Interagency Biodefense Campus at Fort Detrick in Fredrick,
Maryland (BSL-4), and at the NIAID Rocky Mountain Laboratories in
Hamilton, Montana (BSL-4)?are operational or nearing completion.
In addition to building new facilities, the NIH has strengthened
the Nation's intellectual infrastructure by establishing a network of
ten Regional Centers of Excellence for Biodefense and Emerging
Infectious Diseases Research. These Centers conduct research and
development activities and provide training for future biodefense
researchers. Most recently, the NIH announced awards to create six
Centers of Excellence for Influenza Research and Surveillance; these
centers will bolster influenza research in key areas, including
understanding how animal viruses can adapt to cause human disease and
how the human immune system responds to infection with the virus.
The NIH role in biodefense research is similar to its role in
biomedical research in general; namely, to support basic scientific
discovery, applied research and early-stage development activities that
start new vaccines and drugs down the pathway toward approval. Early-
stage development activities that the NIH often supports include
preclinical testing, animal model development, and establishment of
pilot lot-scale manufacturing processes. Late-stage advanced product
development, such as commercial-scale process development and
validation, is usually left to industry. On rare occasions, however,
the NIH has supported late-stage medical countermeasure development
activities. For example, in 2003, the NIH awarded milestone-driven
contracts to two companies, Avecia and VaxGen, Inc., for late-stage
advanced development of second-generation anthrax vaccines. These
contracts predated the Project BioShield Act of 2004.
The vaccines are based on a purified, recombinant (r) anthrax
protein called Protective Antigen (PA), against which the body
generates a strong antibody response; studies conducted in the 1990s
showed that rPA vaccines could protect animals exposed experimentally
to airborne anthrax spores from developing anthrax disease. The Avecia
and VaxGen contracts supported activities such as advanced
manufacturing process development, Phase II clinical trials, and
advanced assay development. As noted above, NIH funding of late-stage
advanced development for biodefense countermeasures is the exception
rather than the rule.
RESEARCH PROGRESS
NIH research has yielded substantial scientific advances in the
effort to counter emerging public health threats. For example, new or
improved candidate vaccines and therapies against smallpox and Ebola
virus have shown great promise. Among these is ST-246, a promising
smallpox drug candidate that has protected nonhuman primates from what
would otherwise be a lethal exposure to live smallpox virus, and that
is now in human clinical trials. Basic research also has proceeded
rapidly. NIH-supported researchers recently determined the structure of
botulinum toxin--a Category A bioterror threat agent and the cause of
botulism--as it binds to its receptor protein on nerve cells; these
findings may lead to the development of new drugs to treat botulism.
Further, an NIH program that screens both approved drugs and new drug
candidates has identified several promising anti-influenza drug
candidates, including FluDase (which binds host cell receptors to
prevent viral entry), T-705 (which inhibits replication of viral RNA)
and Peramavir (which inhibits an influenza enzyme called
neuraminidase). All three of these influenza drug candidates are
undergoing further development in partnership with industry sponsors.
With regard to the development of medical countermeasures against
radiological, nuclear, and chemical threats, the NIH has established
eight Centers for Medical Countermeasures against Radiation, and four
Centers for Countermeasures against Chemical Threats. Basic and applied
research conducted in these centers and elsewhere is moving forward
rapidly. For example, researchers supported by one of these Centers
recently characterized changes in gene activity in mice exposed to
different doses of ionizing radiation and in cancer patients undergoing
radiation therapy; these results may lead eventually to a diagnostic
test to distinguish people who have suffered serious radiation exposure
from those who have not prior to the onset of clinical illness. That
capability would allow treatments to be efficiently directed early on
to those who need them most following a radiological incident.
NIH ROLE IN BIOSHIELD AND BARDA
Two landmark pieces of legislation designed to speed the
development, approval, and acquisition of biodefense and emerging
infections countermeasures have been enacted in recent years: the
Project BioShield Act (Public Law 108-276), which became law in July
2004, and the Pandemic and All-Hazards Preparedness Act (Public Law
109-417), which became law in December 2006.
The BioShield legislation provided HHS and its constituent agencies
with several new authorities regarding medical countermeasures against
a terrorist attack with a biological, chemical, nuclear, or
radiological agent or device. Three of these authorities were of
particular relevance to the NIH. First, BioShield provided the NIH
additional flexibility in awarding contracts, cooperative agreements,
and grants for research and development of critical medical
countermeasures. Second, BioShield gave the NIH streamlined personnel
authority that has allowed expedited hiring to fill key biodefense
positions. Third, BioShield provided the NIH with additional authority
for the construction of research facilities. The NIH has used all three
of these authorities in carrying out its biodefense and emerging
infections research and development responsibilities.
Perhaps the most important provision of BioShield was the
establishment of a secure funding source at HHS for the purchase of
critical medical countermeasures. Many pharmaceutical and biotechnology
companies have been willing to help in the development of biodefense
countermeasures, but they needed reasonable assurances that a market
for these products would, in fact, exist should they invest the
resources necessary to fully develop them. To provide these incentives,
BioShield established a Special Reserve Fund for the purchase of
biodefense countermeasures to be placed in the Strategic National
Stockpile for use in an emergency.
Procurement contracts under BioShield are developed and awarded by
the HHS Office of the Assistant Secretary for Preparedness and Response
(ASPR). As is the case with other scientists within the Federal
government and particularly within HHS, NIH personnel often serve as
subject matter experts, consultants, and members of committees and
boards that participate in the planning and execution of the HHS
preparedness activities, including the development of contracts for
BioShield acquisitions. Ultimately, however, the decisions regarding
acquisitions are made by the Office of the ASPR.
Title IV of the Pandemic and All-Hazards Preparedness Act
established BARDA within HHS. When BARDA is fully implemented, the
Office of the ASPR will administer the Biodefense Medical
Countermeasure Development Fund to support late-stage advanced product
development. Because the NIH is likely to have played a role in earlier
phases of development of some of the products that BARDA might support,
the NIH will coordinate with BARDA staff. However, all decisions
concerning products to be supported by BARDA will be made in the Office
of the ASPR.
CONCLUSION
Emerging and re-emerging public health threats pose a perpetual
challenge. At one time, some in public health thought it might be
possible eventually to ?close the book? on the study of infectious
diseases because of advances in therapies and vaccines. However, it is
now clear that naturally emerging and re-emerging infections will
challenge us for the foreseeable future, as will threats from
deliberately disseminated infectious diseases, chemical, or
radiological terrorist attacks. The task for the NIH is to continue
building a strong foundation of basic and applied research and
development that is needed to counter these threats, and also to be
nimble enough to respond with speed and precision to new threats as
they arise. NIH efforts to address these challenges complement those of
our colleagues in ASPR, CDC, FDA and other agencies in the Federal
government to protect the health and safety of our Nation.
Thank you for the opportunity to appear before you today. I am
happy to answer any questions you may have.
Mr. Langevin. Thank you, Dr. Fauci.
Dr. Goodman?
STATEMENT OF JESSE GOODMAN, M.D., MPH, DIRECTOR, CENTER FOR
BIOLOGICS EVALUATION AND RESEARCH, FOOD AND DRUG
ADMINISTRATION, HHS
Dr. Goodman. Good afternoon, Mr. Chairman and members. I am
Jesse Goodman, director of the Center for Biologics at FDA, or
CBER. I appreciate both your interest in this very important
subject and the opportunity to be here to tell you about our
role in regulation and development of vaccines, including those
intended for response to a threat to our national security.
At CBER, enhancing the nation's preparedness is one of our
highest priorities, including the development of vaccines and
other products needed to face natural or potential deliberate
threats, and I would like to second Tony's comment that really
we see this kind of preparedness as dual use for the threats
that occur naturally, building the infrastructure and
capabilities will also prepare us for threats that occur not
naturally.
So when we think about pandemic, we are also thinking about
bioterrorism.
It is essential to do everything we can to assure that such
products, though, which really we need to understand could be
received by millions of people in an emergency, that those
products are safe and that they perform as expected, that they
work.
Therefore, while we work very closely with many partners,
including those at this table, to achieve our nation's and
indeed our global preparedness goals, our responsibility and
one that only FDA has is to provide an objective scientific
assessment of the safety and efficacy of these products.
To help provide some perspective, I am going to briefly
discuss some relevant issues in vaccine development that
illustrate some of the challenges there. I won't be discussing
any particular product in detail, because my understanding is
that under applicable laws and regulations, FDA cannot normally
publicly provide information concerning a specific
investigational product prior to its licensure.
Vaccines are really different from most drugs in a number
of respects and achieving the highest quality in manufacturing
can be especially complex, challenging and critical. It is very
important to get this, that the vaccine--medical products, in
general, are not always predictable and vaccines represent a
particular challenge.
The manufacturing includes many steps and requires careful
in-process monitoring to assure that the product is safe, pure
and potent, and even undetected or poorly understood or not
understood changes in process or materials can significantly
affect the product and even its safety and effectiveness.
Thus, the process must produce a consistent and well
characterized product. In addition, unlike drug products that
are often used to treat an existing disease or condition,
vaccines, as you well know, are given typically to large
numbers of healthy people.
So, therefore, any concerns about averse events, for
example, are very special concerns.
In developing a vaccine, there are four major stages that
are worth your while to think through.
There is the pre-clinical stage, which is predominantly the
testing that occurs before a product can even be used in
people, animal testing, toxicology testing, et cetera.
There is the investigational new drug stage, in which,
based on that information, FDA may allow a sponsor to then do
studies in humans to help establish a dose, safety,
effectiveness.
These studies, it is very important, because this is
relevant to some of your concerns, have to be done in a well
monitored situation and very well understood conditions.
And then there is the license application stage, where the
manufacturer submits all of this information together to
support our review of the manufacturing process and the safety
and effectiveness of the vaccine.
And as many of you know, our responsibilities extend even
after the licensure to look at safety, the quality and ongoing
inspection and quality assurance of manufacturing.
So again, while all medical product development is
challenging, new vaccine development is especially complex and
we actually expect that challenging issues will arise.
Such issues can also raise safety concerns or study design
concerns that result in FDA placing an IND or a study proposed
by a sponsor on what we call a clinical hold and, as you know,
that is one of the issues in VaxGen.
A clinical hold is an order by FDA not to initiate or
continue human studies until the issues of concern have been
satisfactorily addressed. Most of these kinds of issues are
eventually resolved, allowing product development to proceed.
What are the typical reasons we might place a study on
hold? One would be if companies are--if patients are exposed to
an unreasonable risk, for example, a safety risk.
Another would be if the study plan or the protocol is
deficient in design to meet its objectives.
So clinical hold is an important human subject protection
safeguard and would also help prevent studies in
investigational products which might be unlikely to provide
useful information.
So a study that isn't going to provide useful information
would be an unethical study, because you would ask people to
take an investigational product without adequate assurance that
you were going to get useful information from that study.
Now, on top of these responsibilities, we strive to develop
processes that can facilitate the development of these products
that meet public health needs. An example is the animal rule,
which provides a mechanism to evaluate the effectiveness of a
new product based on data from animals when those studies can't
be done in humans, because, for example, the disease doesn't
occur or challenge studies would be unethical.
Such approvals still require demonstration of effectiveness
in humans. An additional tool made available, in part, under
BioShield is for FDA to allow the use of unapproved products or
uses of products in a declared emergency.
This is under the emergency use authorization, or EUA. To
authorize such emergency use, FDA needs to find that the known
and potential benefits of the product's use for that specific
emergency situation or scenario outweigh the known and
potential risks of the product and that there is no adequate
approved and available alternative.
And our approach has been to try to get as much and as high
quality of information ahead of time so if we ever face an
emergency where we have to make these decisions for the
American public, we can make the best decisions.
Now, we work very hard with partners to develop and define
these kinds of innovative pathways and tools. Perhaps most
importantly, we do provide intensive interactive consultation
and technical assistance to facilitate development and
availability of products. This can be hundreds or thousands of
hours in product development of high priority products like we
are talking about here today.
As noted, though, we always come back to our most critical
core role, which is to protect the human subjects and provide
an independent scientific assessment of the product both during
its development, in reviewing an application for approval, and
particularly in reviewing a request that might come for an
emergency use authorization.
Now, I think it is very important to say--I am almost
done--that to protect and preserve our scientific integrity,
our independence and judgment and that of our review staff, our
professional review staff, we do not involve ourselves in
specific HHS decisions to award or terminate contracts.
In fact, if myself or staff are present when such issues
arise, we will actually leave the room. This was our process at
the time of HHS's VaxGen acquisition and it remains so today.
We do provide the technical and scientific assistance that
I mentioned. We may provide technical comments to try to help
form requests for proposals, et cetera.
At FDA, we base our important decisions on the available
scientific information and a careful independent evaluation of
risks and benefits to patients. That is what you expect.
We are fully committed, though, and fully engaged in
continuing to work with our federal partners and also with
product developers and industry to achieve our nation's highest
priority public health preparedness goals.
So I really appreciate the opportunity to come and discuss
this with you, and I will welcome our discussion and your
questions.
Thank you very much.
[The statement of Dr. Goodman follows:]
Prepared Statement of Jesse L. Goodman, M.D., M.P.H.
Good afternoon Mr. Chairman and members of the Committee, I am
Jesse L. Goodman, M.D., M.P.H., Director of the Center for Biologics
Evaluation and Research (CBER) at the United States Food and Drug
Administration (FDA). I am also a practicing infectious diseases
physician and a microbiologist. CBER is the Center within FDA that is
responsible for the regulation of most biological products, including
vaccines, blood and blood products, and cellular, tissue and gene
therapies. Thank you for the opportunity to discuss FDA?s role in the
regulation of vaccines including those intended for use in response to
a threat to our national security.
At CBER, enhancing the nation?s preparedness is one of our highest
priorities, whether it is protecting the safety of our blood supply
from emerging threats like West Nile Virus or facilitating the
development of vaccines needed to face natural threats or potential
deliberate threats, from pandemic flu to smallpox to anthrax. It is
essential to do all we can to assure that such products be safe, and
that they work. Therefore, while working closely with many partners to
achieve our nation?s and our global preparedness goals, our most
critical and unique responsibility is to also do all that is possible
to provide an objective, scientific assessment of the safety and
efficacy of these and other biologic products. To help provide
perspective, I am going to discuss relevant issues in vaccine
development that illustrate the opportunities and challenges faced in
developing these important products. As you know, under applicable laws
and regulations, information provided to FDA concerning a specific
investigational product is not available for public disclosure prior to
licensure of the product.
Vaccines are different from most drugs in several respects and
achieving the highest quality in manufacturing can be especially
challenging and critical. Vaccines production frequently utilizes
living cells and organisms, as well as complex growth conditions and
materials often derived from living sources. The manufacturing process
for vaccines usually includes many steps and requires frequent in-
process monitoring of the product and components to assure that the
product is safe, pure, and potent.
The production of most vaccines requires the growth of the
immunizing agent (i.e. bacteria, virus, etc.) or the genetically
engineered expression, in living cells, of recombinant immunizing
proteins derived from that agent. The conditions for accomplishing this
are complex and subtle, and even undetected or poorly understood
changes in process or materials can significantly affect the
composition of the vaccine and its safety, efficacy, or both. Thus, the
process must be well controlled and monitored, and produce a consistent
and well characterized product prior to its licensure. Even after
licensure, manufacturers conduct a series of tests on the bulk,
intermediate and final vaccine products and typically are required both
to meet all product and process specifications and to submit the
results of key tests, along with samples of the product to CBER for
evaluation prior to CBER?s approval of lot release and administration
of vaccine. The tests performed on the final product may include those
for sterility, identity, purity, and potency to assess immunogenicity
and/or antigen content and, depending on the nature of the vaccine and
its manufacturing process, additional tests as required by CBER to
assure vaccine safety and quality.
Unlike drug products that are most often used to treat an existing
illness or condition, vaccines are generally administered to large
numbers of healthy individuals in order to prevent infectious diseases.
Therefore, the potential adverse effects of vaccines, even if the
events are rare, present unique risk-benefit considerations and may
give rise to heightened concerns in the public health context.
From a regulatory perspective, there are four major stages in
vaccine development. These stages include:
The preclinical stage which consists of the
development and testing of the product prior to the product
being tested in humans. Early in the product development
process, sponsors test candidate vaccines in-vitro (e.g., in
laboratory assays, studies in cell lines, etc) and in animals.
These early nonclinical studies give an indication of whether
studies would be reasonably safe to proceed in humans and may
also provide information regarding the potential effectiveness
of the product.
The Investigational New Drug (IND) stage consisting of
multiple phases where the investigational product is studied in
human subjects under well-defined conditions and with careful
monitoring. In certain cases where studies to demonstrate
efficacy in humans are not ethical or feasible, sponsors may
conduct studies to demonstrate efficacy of the product in
appropriate animal models.
The license application stage is when manufacturers
submit data and information regarding the results of the
clinical and nonclinical studies, as well as complete
information regarding the product and its manufacturing process
to FDA for a complete review of product manufacturing, safety
and effectiveness in support of licensure.
Finally, for products that are approved, FDA continues
its oversight during the post licensure stage to include review
of post-marketing safety information from adverse event
reports, periodic reports, post-marketing studies, review of
lot release information and testing, and inspections of
manufacturing facilities.
FDA often provides guidance to sponsors, even prior to submission
of an IND, in regard to both the types of preclinical studies needed
and the design of the clinical trials needed to assess the intended
use(s) of the product. FDA?s guidance is intended both to help protect
human subjects and to assure that the studies performed are designed in
such a manner that the study results are likely to provide sufficient
information to allow a determination of the product's safety and
efficacy.
While all medical product development is challenging, vaccine
development is especially complex, and we expect that new challenging
issues will arise during the development process. The issues may arise
in any number of areas, and may affect product potency, quality, and
safety. Such issues can raise safety or study design concerns that may
result in FDA placing an IND on clinical hold. A clinical hold is an
order by FDA not to initiate or continue clinical studies until the
issues of concern have been satisfactorily addressed. It is important
to note that most clinical hold issues are eventually resolved,
allowing product development to proceed. I'd like to describe some of
the more typical reasons for FDA to place a trial on hold. FDA may
determine that study participants would be exposed to an unreasonable
and significant risk of illness or injury. Or, the IND application may
not have sufficient information for FDA to adequately assess the risk.
For later phase studies, FDA may place an IND on hold if the study plan
or protocol is deficient in design to meet its stated objectives.
Clinical hold is an important human subject protection safeguard and
also helps prevent the conduct of studies of investigational products
that are unlikely to provide information that is useful in evaluating
the product. FDA staff spends a considerable amount of time interacting
with sponsors to resolve clinical hold issues.
FDA strives to develop processes that facilitate product
development to meet emerging public health needs, such as protection
from terrorist agents and prevention of pandemic influenza and other
emerging threats. The regulation known as the ``Animal Rule'' provides
a mechanism for FDA to approve medical treatments based on
effectiveness data from animal studies when human efficacy studies are
unethical and/or not feasible. Under the ``Animal Rule,'' effectiveness
would be evaluated in adequate and well-controlled animal studies that
establish that the product is reasonably likely to produce clinical
benefit in humans. Such approvals also require the demonstration of
safety in humans. These safety studies may be conducted concurrently
with the animal studies.
An additional tool available to speed product availability is the
ability for FDA to allow the use of unapproved products and unapproved
uses (so-called ``off-label'' uses) of approved products, in a declared
emergency, under the Emergency Use Authorization (EUA) provision of the
Food, Drug, and Cosmetic Act. This authority was expanded under the
Project BioShield Act. To authorize such emergency use, FDA would need
to find that the agent can cause a serious or life-threatening disease
or condition; that based on the available information it is reasonable
to believe that the product may be effective against the disease or
condition; that the known and potential benefits of the product's use
outweigh the known and potential risks; and that there is no adequate,
approved and available alternative.
FDA works very hard to develop and define innovative and needed
pathways and evaluation tools, and to provide technical assistance to
facilitate development and availability of needed products that are
safe and effective. One of our most critical and core roles is to
protect human subjects and to provide an independent scientific
assessment of the product, both during the development process, and in
reviewing product applications and requests for EUA.
To protect and preserve our scientific independence and judgment,
FDA does not involve itself in specific HHS contracting decisions to
award or terminate contracts. FDA's longstanding practice is to recuse
ourselves from HHS decision making in specific contracting decisions.
This was our process at the time of HHS's VaxGen acquisition contract
and it remains so today. FDA does provide scientific and technical
expertise on various HHS-led interagency counterterrorism working
groups, which among other things are involved in defining the needs for
medical countermeasures being pursued by HHS for the Strategic National
Stockpile. In addition, FDA may provide technical comments to HHS upon
request on draft Requests for Proposals for such countermeasures.
At FDA, providing the American public with safe and effective
medical products is our core mission. We base important decisions, such
as to allow specific human studies of an investigational product, or to
approve a vaccine or allow its emergency use, on the available
scientific information and a careful evaluation of risks and benefits
to patients. We also are fully committed and engaged in continuing to
work with our federal partners and with product developers to provide
an efficient product development pathway to achieve our nation's high
priority public health preparedness goals.
Thank you again for this opportunity to discuss vaccine development
with the Committee. I welcome your comments and questions.
Mr. Langevin. Thank you, Dr. Goodman.
I want to thank all witnesses again for their testimony.
Let me begin with Dr. Parker, if I could.
Doctor, VaxGen's original contract from November 2004
stipulated that the company begin delivering its vaccine to the
strategic national stockpile once it met the standard for
contingency use.
In May 2006, HHS unilaterally modified VaxGen's contract to
require the company to conduct an additional clinical trial so
that the vaccine would meet the higher standard of emergency
use before it could be delivered.
What was the rationale for imposing this additional
requirement?
Mr. Parker. Mr. Chairman, thank you for the question.
First, there was no additional requirement. It was clear
that VaxGen was not going to be able to make their delivery
time by the original contract.
It was necessary to modify the contract to basically reset
the clock and give the contractor the ability to continue the
development and hopefully be able to deliver product that would
be sufficient to meet the requirements for acceptance into the
strategic national stockpile.
We actually even used proposed timelines and the most
conservative timelines that VaxGen had provided to us in
resetting that clock for an imposed additional interim
milestone so we could better track progress of this development
effort.
So the bar was not changed. The standards remained the
same. We had to modify the contract to allow them additional
time to hopefully be successful.
Mr. Langevin. Now, when I had discussions with VaxGen, I
asked the question in such a way that I said that it is my
understanding that some thresholds were missed and we have
spoken about that, but that the goalpost, so to speak, was
moved further down the field. So that there were alterations
that were made and so which is true, and the answer was
basically both.
You are saying that the goalpost was not moved.
Mr. Parker. The goalpost was not moved. We modified the
contract because it was clear they were not going to meet the
original deadline to deliver product to the SNS. We modified
the contract to allow additional development time using their
timelines, most conservative timelines for delivery.
The standards for meeting that requirement did not change
and that was--in the contract, there was, in fact, spelled out
very clearly, as an advanced understanding of what is required
in regards to the clinical, non-clinical data, the need to have
a validated manufacturing process in three consistency lots,
and that they needed to--ultimately, these were going to be
requirements that would be agreed upon by the FDA and also in
consultation with us.
It was also incumbent on the contractor, who worked very
closely with the FDA, to very clearly understand what those
ultimate requirement were.
Now, VaxGen perceives and they have an opinion that there
was a difference in what is defined as contingency use IND and
emergency use authorization. But VaxGen was informed that the
requirements, to satisfy requirements for either the use of a
contingency use IND terminology or emergency use were the same
thing. And so the requirement didn't change.
Mr. Langevin. But didn't modification require additional
tests for phase two?
Mr. Parker. If it did, it was far into the future, but it
still was the original terms of the contract did not change.
Mr. Langevin. But additional tests are moving the goalposts
down the field. Wouldn't you agree?
Mr. Parker. No, no.
Mr. Langevin. Doctors Fauci and Goodman, to what extent, if
I could ask you, did NIH and CBER participate with HHS in
review and evaluation of the RFP responses, in particular,
VaxGen's proposed scope of the work and project plan?
If they weren't involved with a program of this importance
and viability, why weren't they? And if they were involved, why
did CBER claim in December 2005, a year after the contract was
issued, that they could not provide regulatory guidance
specific to the SNS program because they were unaware of how
HHS intended to use the vaccine in the stockpile?
Dr. Fauci. Mr. Chairman, from the standpoint of the NIH, we
were not involved in the evaluation of the contract. We did
provide logistical assistance in the actual drawing up of the
contract. In other words, people with contracting expertise
were able to do that.
We did not get substantively involved at all in the actual
evaluation of that, but we did, on an ad hoc basis, the way any
of a number of the agencies within HHS and outside of HHS were
involved on an ad hoc basis with subject matter expertise, but
not in the actual evaluation and scoring of the contract.
Mr. Langevin. Dr. Goodman?
Dr. Goodman. Mr. Chairman, we were not involved in
reviewing contract applications for any applicant whatsoever
and, as I have said, we have really tried to draw a bright line
to be very clear and independent then in our evaluations of
these projects.
We have, as I have also mentioned, provided--to try to help
the process and make things more likely to succeed, we have
tried to provide technical input, scientific input to our
colleagues at HHS as they develop the RFPs, et cetera.
Now, with respect to your question about, I guess, VaxGen's
statement that we, in December, when they asked for details
about requirements, information, wanted to consider an
emergency use authorization, I can make a couple of points.
One is that that request was received very close in time,
is my understanding from the review staff, before a meeting. So
that in terms of time to review and do some of the fact-finding
needed, that was an issue.
What we needed to do at that point was there had been a
number of changes that occurred over several months, including
the addition of the licensed anthrax vaccine to the national
stockpile, and we wanted to check with our colleagues in HHS
and CDC to understand, in a possible emergency use
authorization, what was their vision of how this product might
be used, because part of our assessment are things like what
kind of patients would get it, for what indication, how many
patients might get it, how would it be used relative to the
licensed vaccine.
Actually, this was an attempt to get the best information
in order to be able to provide VaxGen with the most up-to-date
advice, which we then provided them very shortly thereafter.
And I would say that that advice, also, from talking to my
review staff, who had very intensive interactions with this
company over many, many months, that that advice was entirely
consistent with previous advice that they have received.
Mr. Langevin. Thank you, gentlemen.
The chair now recognizes the ranking member of the
subcommittee, the gentleman from Texas, Mr. McCaul.
Mr. McCaul. I thank the chairman.
Mr. Parker, on May 9th of 2006, you appeared before a House
Government Reform Subcommittee and you were asked by
Congressman Shays about what you perceived as the number-one
threat to this country and your response was, as you will
recall, ``Anthrax, anthrax, anthrax.''
I think you were correct then and I think it is still
correct today. Yet, on November the 4th, 2004, a contract that
was awarded to VaxGen, a company that really had no history of
any production success, had no history of a successful vaccine
being produced, a company which since then has defaulted on its
contract, the contract has been canceled and now they have
appealed and have apparently settled with the United States
government.
I question that contract award, particularly when you had
companies like Emergent Biosolutions, particularly that
company, which had an FDA approved vaccine.
Now, I understand the contract was for a second generation
vaccine, but I would like to know, and this is more for the
panel, why was this contract awarded to VaxGen, again, a
company with really no track record of success, over a company
which did have a track record, actually had stockpiled doses of
anthrax, was actually on contract with the Department of
Defense?
This is the number-one priority in terms of bioterrorism
and I don't understand why that award was made the way it was.
And I will say that I just received word, though, that HHS
has announced that they will be buying 10 million doses of the
anthrax vaccine, an additional four million that DOD will be
purchasing.
To date, I am only aware of one manufacturer that could
possibly comply with that.
And I don't know--and that has happened, Mr. Chairman,
during the course of this hearing, which, if that is in any way
attributed to this hearing, a policy success in a bipartisan
fashion.
Having said that, as a former federal prosecutor, I
question the integrity has been compromised in the bidding
process when you have a copy such as VaxGen getting this type
of award.
So I would like to just go ahead and throw that out to the
panel for your comment.
Mr. Parker. There is a lot in your question, but let me
first just take the original award to the VaxGen contract and
why it was important to pursue a second generation anthrax
vaccine.
And I will just summarize very quickly, but that was
originally a recommendation out of the Institute of Medicine at
about the same time when formerly BioPort, now Emergent was
still undergoing their renovation and really coming out of a
tough period in their corporate history.
But there was a strong recommendation out from the
Institute of Medicine to pursue a newer generation vaccine that
would have some manufacturing advantages, particularly when it
comes to consistency and characterization of the product.
And so there was a decision at the time to vet it in the
interagency and a decision that went to the deputies committee
to pursue the second generation anthrax vaccine.
Now, that was a procurement that was an open, competitive
procurement. There was a technical evaluation panel that
included government and non-government experts that reviewed
the submissions against that proposal and VaxGen received the
highest technical score and cost and was the one that was
recommended for approval.
The I.G. has subsequently looked back at that acquisition,
has rendered an opinion and if you haven't seen it, we will
make sure that you get a copy of that.
We are actually going back into doing an acquisition
analysis, a well, as part of our quality assurance and lessons
learned in the department to take a real hard look at that, as
well.
But it was a straight-up, under the FAR, competitive
acquisition and was selected. Now, in regard to--
Mr. McCaul. If I can say it, it is either a competence
issue or something worse as to why a company with absolutely no
success gets awarded a contract over one that has an FDA
approved vaccine.
It just raises some serious questions--
Mr. Parker. That particular procurement was only focused on
second generation, a recomb protective antigen and anthrax
vaccine absorbed wasn't able to submit under that, because it
is the current generation's licensed anthrax vaccine.
Now, we do have a comprehensive--I agree, my statement
still stands from that former testimony. That is my opinion
about the seriousness of the threat and it is extremely
important that as we move forward to pursue a very
comprehensive strategy for anthrax vaccines, because of--
Mr. McCaul. If I could just conclude, because I know my
time has expired.
It has been 6 years since we have had the anthrax threat
and since 2004--we don't have anymore time to waste on this. It
is an urgent matter and I commend the chairman for holding this
hearing.
I would hope that when VaxGen returns for their testimony,
that we will look into this bidding process, as well, and
conduct an investigation into that.
Thank you and I yield back the balance of my time.
Mr. Langevin. I thank the ranking member.
The chair now yields to the gentlelady from the Virgin
Islands, Ms. Christensen, for 5 minutes.
Mrs. Christensen. Thank you, Mr. Chairman.
Dr. Parker, you were, I think, here when we had the
previous panel and there was a question of what did ``BioShield
eligible'' mean, because that is the criteria for eligibility
for the contract.
So can you define ``BioShield eligible'' for me?
Mr. Parker. BioShield eligibility is not a request for
proposal terminology. I think the heart of your question,
though, really gets at some of the issues of how we need to
move forward with BioShield and some of the shortcomings that
were recognized as we began to look at how to better improve
BioShield almost a year ago when we began to discuss the merits
of BARDA and the need for advanced development.
The BioShield acquisition, they stipulate procurement
contracts. We also have, although it sounds like a lot, in the
special reserve fund, $5.6 billion. It is fixed and it is
limited.
And when we are talking about the development and
acquisition of medical countermeasures, when some procurements
or development costs may be in the realm of $800 million to
$1.5 billion, there are some limitations.
We have to exercise fiscal responsibility. So what
BioShield, as in Dr. Fauci's slide, was at that very end of the
acquisition procurement and what we didn't have to be able to
reduce some of the risks was the robust advanced development so
we could bridge that gap between the basic and applied
research, whether it is coming from an NIH-funded, whether it
is coming from DOD-funded, whether it is coming from the
private sector, without government support, that we could help
and bridge that gap and hopefully have more candidates in an
advanced development that would be more mature when it is time
to do a BioShield procurement.
Mrs. Christensen. I have a number of questions. I think I
read it in the GAO report and I am assuming that referred to
Neumune, that it was canceled because it was not mature, it
wasn't at the level of maturity.
So I would like you--
Mr. Parker. Well, that speaks--
Mrs. Christensen. --to tell me that and I would like FDA to
tell me if you get involved at that level to decide whether the
drug is mature enough to be a part of BioShield, to get a
contract.
Mr. Parker. It is a matter of timing and risk and we
actually discussed this in the barriers report to Congress,
which we will make sure you have a copy.
It is an issue of timing and risk when you move a product
into a BioShield type program.
Mrs. Christensen. They have 8 years to develop the project.
So how much further does it have to be is what I am trying to
figure out.
Mr. Parker. In any countermeasure, there has to be
sufficient and convincing data, whether that is clinical, non-
clinical, safety, efficacy data, not just proof of concept, but
very convincing data.
There has to be a very strong manufacturing plan and there
has to be assurance and confirmation that their whole
developmental plan includes all of the necessary studies that
is going to allow a product to move in and be eligible for,
one, licensure, but also eligible to move into the strategic
national stockpile prior to licensure so they can begin to
receive payment.
Mrs. Christensen. Within 8 years.
Mr. Parker. The law stipulates that there has to be
convincing data that would support licensure within 8 years.
Mrs. Christensen. Does FDA get into the decision of level
of maturity at that point?
Mr. Parker. No, not normally, although, again, if our
colleagues ask us, we might provide scientific input. We
wouldn't evaluate a specific product necessarily.
Mrs. Christensen. I have a question that comes out of the
GAO report, actually it is two, that was prepared for us this
month and you mentioned the limits, the appropriation limits.
The funding is available during certain time limits.
To what extent is that limiting factor explaining the
contracts lagging behind the MTDs and to what extent is another
factor that was raised in the GAO report, which is problems in
interagency coordination and communication, a part?
I would ask Dr. Runge to answer, also, both of you.
Mr. Parker. I will talk about the--the special reserve fund
is $5.6 billion over 10 years, $3.2 billion can only be
obligated through the fiscal year 2008 and the remainder of
fiscal year 2009 to 2013.
And what we have done is moved out with the original four
material threat determinations to establish acquisition
programs against those original material threat determinations
and now we have a larger list of material threat determinations
in our implementation plan that is just now going to be coming
out, actually establish our development and acquisition thrust
targeted against the new material and older material threats,
the complete list of material threat determinations to signal
what are going to be the priority medical countermeasures, also
using the principles that we establish in our strategy and the
national strategy, HSB-18, I think, that was mentioned earlier,
to make a prioritized list of the highest priority medical
countermeasures against the highest priority threats against
those material threat determinations.
Again, the advanced development is going to be critical to
help us improve in not only implementing BARDA, but to improve
the implementation of BioShield which is component of this.
Now, as far as interagency coordination, we have actually
done a great deal of work and Dr. Runge and I, with both of our
leadership, we have been able to work very, very well over the
last year to really streamline and improve any issues that may
have been there in the past as far as interagency coordination.
And so I thank Dr. Runge in his help in doing that.
Dr. Runge. Dr. Christensen, thanks for the question. Just
very briefly, your direct question, does the limitation of
BioShield funding affect lag time and MTD development or
response to the MTDs, and I don't believe so.
Those funds are strictly for the acquisition. The funding
for the material threat determination process and the
population threat assessment process is, of course, separate
funding that is given to DHS to do that.
Dr. Parker is correct and I do think that the original four
were more common sense based on intelligence and history and
what we knew at the time. They were not based on the same tool
that we use now to stratify the material threats or determine
which are material threats and which are not.
I do think that HHS moved out smartly in the beginning on
those and DHS was a bit slow in delivering the rest of the list
and it was dependent upon the development of a very complex
tool that was delivered to the White House on February 1st of
2006.
Since that time, we have completed the look at all 28
agents and have come up with the list of 12 biologicals, as you
are well aware, I think.
Mr. Langevin. The gentlelady's time has expired.
The gentleman from California, Mr. Lungren, is recognized
for 5 minutes.
Mr. Lungren. Thank you very much, Mr. Chairman.
I have probably not delved into this as much as some of the
other members of the panel, so my questions might be a little
more basic.
But, Dr. Fauci, you mentioned that one of the great
accomplishments is that we have gone from smallpox capacity
from 18 million to you say now we have it for everyone in the
country and I suppose that is so that if we were exposed to a
smallpox epidemic either because of natural causes or a
terrorist threat, we would want to be able to cover all the
potential victims.
Then, Dr. Parker, you said that if you were to line up the
most important threats, it would be anthrax, anthrax, anthrax
and you said you still look at it that way, correct?
Mr. Parker. Of the bio threats.
Mr. Lungren. Of the bio threats, yes. And we just talked
about material threat determination and population threat
assessment and I guess if we did all that with respect to
anthrax, it would be pretty much up towards the top.
So my question is this--is there something structurally
wrong with the legislation that we have given you under which
you operate, that as we are attempting to pursue the second
generation anthrax medical fix, that we don't do enough to deal
with the anthrax medical fix that is currently available to us,
as Dr. Fauci said.
You have proven that with the first generation plus
antibiotics, we have got a pretty good answer to those who are
exposed, if I understand you correctly.
If that is the case and we have an obligation for a
strategic stockpile, my question is you have made the
determination here, Dr. Parker, or at least it was announced to
us that you made the decision to buy 10 million more units, why
now? Why not before?
Are you constricted by funding? Is it because we have given
you a thrust that you ought to be looking at that which is more
perfect in the future than that which is available now?
This is a very practical question. If we had an anthrax
attack--excuse me--if we had another anthrax attack, only this
one was based on weaponized and it affected a large population
base and at least there have been some scenarios to suggest
that that could be true in my state of California and
Washington or New York, I take it we don't have the capacity to
respond right now the way we would want to if we had that, even
though we know through the work that has been done that Dr.
Fauci talked about we have a fix for it.
And if we had that attack, we had a large number of people
severely injured and died and part of the problem was we didn't
have enough of the medical response to it, number one, how
could I look myself in the mirror, but, number two, how could I
respond to constituents to say that we were looking for the
second generation that would have really solved the problem,
but we didn't put enough money to the first generation?
Is that our fault? Is that Congress, such that we have
structured it that you don't have the funds to do that? That is
what I am trying to get at.
Can you help me?
Mr. Parker. Well, first, I just want to say that
antibiotics are the first line of defense and we do have a very
significant stockpile of antibiotics and that is the first line
of defense. Anthrax--
Mr. Lungren. But haven't we learned that antibiotics--
Mr. Parker. Anthrax vaccines--
Mr. Lungren. --and the other actually really works?
Mr. Parker. Pardon me?
Mr. Lungren. Didn't Dr. Fauci say it is antibiotics and the
combination of the vaccine that really works?
Dr. Fauci. But that was an experiment to answer a question
that was somewhat vaguely answered several years ago that if
you challenge an animal and you know that you would have to
give them 60 days of, for example, ciprofloxacin and still not
be 100 percent certain that you have eliminated every single
anthrax spore, if you give antibiotics with the vaccine versus
antibiotics without the vaccine, the time element is less.
That doesn't take away from the fact that the best approach
towards anthrax is antimicrobial therapy.
Mr. Lungren. So I guess my question is if it were your
child or your family member, would you give them both the
vaccine and the antibiotic?
Dr. Fauci. Based on the data in the animal study, based on
the data in the animal study, it suggests that you would get an
extra kick out of doing both. However, I would point out that
following the anthrax attack here in the Congressional area,
that the people who took just antibiotics in prophylaxis, there
was zero subsequent cases.
Mr. Lungren. So what am I get out of that, that we
shouldn't worry about having any of the vaccine, we can just
satisfy ourselves with the--
Dr. Fauci. No, I don't think so, because there are other
uses for the vaccine besides complementing the antibiotic
therapy. When you have people who might be first responders
that would have to go in and, for example, decontaminate a
building or if there are repeated attacks and you have to have
the first responders go in and expose themselves, you would
like to have them vaccinated as opposed to keeping them on
perpetual antibiotics.
Mr. Lungren. But I guess I would ask what the Capitol
physician would tell me if I were exposed to anthrax here. Do
you think the Capitol physician would tell me to just take the
antibiotics or do you think he would tell me to take both the
vaccine and the antibiotic?
What I am trying to get at is do we have sufficient already
existing first generation vaccine in the stockpile? That is
question one.
Mr. Parker. No, we don't. No. We need--
Mr. Lungren. Question two is we are how many years past the
anthrax threat and should we in Congress be directing us to do
that or would we be wasting money because we want to go for
another attempt at the second generation?
Mr. Parker. Yes, we need a balanced approach to anthrax
vaccines. It is critical that we have anthrax vaccines and, you
are right, we need to aggressively continue to move forward and
we need to have not reliance on one technology, because this is
an evolving field, but our strategy needs to--yes, we need to
make sure that we can sustain and have the current generation
anthrax vaccine, but we need to continue to develop and procure
a second generation vaccine.
But we also need to look forward to that third generation
that has better characteristics that make it more deployable in
an emergency, in a disaster situation.
So we need that balanced approach for anthrax vaccines.
Mr. Langevin. The gentleman's time has expired.
Mr. Etheridge is recognized for 5 minutes, the gentleman
from North Carolina.
Mr. Etheridge. Thank you, Mr. Chairman.
Mr. Langevin. Before I do that, Ms. Jackson Lee has joined
the committee and I would just ask unanimous consent for her to
sit in. I don't know that there will be time to ask questions,
but if there is, she would be invited to ask questions last.
Without objection.
Mr. Etheridge. Thank you, Mr. Chairman. Thank you.
I am going to try to follow that line of questions for just
a minute, too, if I may, because we are now almost 5 years past
the anthrax scare here on Capitol Hill.
Ultimately, in the process of all that, a number of people
lost their lives. We have yet to find out who was behind it or
who was involved in it.
And the VaxGen contract indicates that HHS sees the need
for the next generation, as you talked about. So let me ask my
question all three in one.
Dr. Parker, you first, and then the rest of you may comment
on it, so we can expedite this.
What is the current state of the strategic national
stockpile supplies of licensed anthrax vaccine and
therapeutics? And, of course, that includes antibiotics, as
well as the treatment for post-exposure treatment to anthrax.
Secondly, what is the current state of public health
systems readiness for another attack, including specifically
the status of vaccines for emergency responders, critical
workers at the federal, state and local levels, and should we
be stockpiling existing licensed medical countermeasures while
new technologies are being developed?
And, finally, has the failure of VaxGen caused significant
damage to our state preparedness and what are HHS's plans to
meet the required 75 million doses of anthrax vaccine for the
strategic national stockpile?
Mr. Parker. I really think I would maybe answer the last
question as we are going to be moving forward in a multi-
pronged approach on satisfying enough vaccine in the stockpile
to be able to provide protection to post-exposure prophylaxis
for 25 million people.
We have already procured 10 million doses of ABA. We are
going to and we plan to procure an additional 10 million doses
of ABA. We continue the development of the second generation
anthrax vaccine through the NIH program and we are looking at
the right timing to come out with the next request for proposal
for the second generation anthrax vaccine, as I have talked
about, risk and timing and we have to time that perfectly.
And then I have forgotten now the first question. Let me go
back to that.
Mr. Etheridge. Well, the first one dealt with the current
state.
Mr. Parker. And another thing that is very important here,
that another part of our armamentarium, in addition to the
antibiotics, are the antitoxins, as well, that we need to have
antitoxins to be able to treat symptomatic anthrax disease.
And so that is some of the BioShield procurement programs
that are underway. You heard about one of the candidate
products earlier this afternoon. So it is the vaccines, it is
the antitoxins, and it is the antibiotics and currently in the
strategic national stockpile, we have enough antibiotics to
provide post-exposure prophylaxis for up to 40 million people.
And we also have intravenous--
Mr. Etheridge. And that would take care of all of our first
responders and emergency personnel.
Mr. Parker. Antibiotics, that would be in case there is an
anthrax attack to provide antibiotics for post-exposure
prophylaxis. And there is also intravenous antibiotics for
treatment of anthrax disease, as well.
In addition, what we need is the antitoxins and we have a
small amount of antitoxins.
Mr. Etheridge. How small amount?
Mr. Parker. I don't recall that exact number, but it was--
Mr. Etheridge. Could we get that number?
Mr. Parker. We can get that number for you, sir.
Mr. Etheridge. Thank you.
Mr. Parker. But another key component of this, though, is
for emergency response and it continues to be something we are
going to work very hard on.
These medications in these stockpile have got to be--we
have got to be able to get them into patients quickly. So mass
distribution of medical countermeasures is also a very key
problem and we have a few programs, like city readiness
initiative, a program called the MedKit.
We are working at novel ways to help our colleagues at the
state and local and the community level be able to--where we
can more rapidly, once we have a detection that there is an
anthrax attack, deploy the stockpile and more rapidly be able
to distribute the medications where they need to be, and that
is with people that are potentially exposed, are exposed.
Dr. Runge. Congressman Etheridge, if I could just elaborate
on that one second.
Dr. Parker has outlined a comprehensive plan within the
public health response and I don't think I have to tell this
committee that that is only one piece of an end-to-end
strategy.
DHS is doing planning around everything from biosecurity
overseas, the intelligence necessary to prevent people from
coming here to do this sort of thing, working with EPA all the
way through the ``how clean is clean'' protocols and
environmental cleanup.
The importance of anthrax vaccine, I might add, also, is
that because of these protocols of when do you re-inhabit a
building, there will also be significant pressure to vaccinate
people so that they can re-inhabit a building that may have
been exposed to anthrax.
We are also engaged in early detection through our BioWatch
program, which I am sure you all are familiar with.
So it is a great continuum here of our overall approach to
what we do believe to be the number-one bio threat.
Mr. Etheridge. Thank you.
Mr. Langevin. The gentleman's time has expired.
We have a vote on right now. My plan is I can go to Ms.
Jackson Lee for about 3 minutes, if we can be brief, and then
we could keep you here for another 24 hours, I suppose, and
keep asking these questions.
But we will adjourn the hearing at that point and we will
be back for subsequent hearings and look forward to working
with you.
The gentlelady from Texas is recognized for brief
questions.
Ms. Jackson Lee. Thank you very much, Mr. Chairman. I will
speak with all deliberate speed and I appreciate the chairman's
indulgence.
I was here in Congress when the Senate buildings were shut
down with anthrax. I was also in my district when everyone with
baby powder were suggesting that anthrax was amongst them.
I was in Asia during the avian flu. It created a great deal
of hysteria and this is the government and I asked the
question. I am listening to all of my colleagues and I wonder
whether or not we are moving fast enough.
And I know that you will quickly answer this question--
should we not be engaged in what I call reflective hysteria?
This is a pending crisis, if it ever happened, and do we have
enough urgency, Dr. Runge, Department of Homeland Security and
others? If you could answer that quickly.
Has Congress got their focus on it? Do you have your focus
on it--I know you have been answering questions--sufficiently?
And thank you, Chairman.
Dr. Runge. Thank you, Congresswoman Jackson Lee. I do
believe that we do feel a tremendous sense of urgency and I
will confess that our office of health affairs that has been
tasked with doing planning around this effort is fledgling.
We were created officially on March the 31st, 2007. So we
are about 3 weeks ago. We are awaiting a reprogramming to come
over here to actually give us some funds to engage in this
planning.
In the meantime, our science and technology directorate has
been very actively engaged with HHS, as I have as chief medical
officer. There is very little I think we can do to speed up
this process. It is kind of like we need a baby in a month, but
we can't ask for nine women to produce one.
Ms. Jackson Lee. Do you have enough money?
Dr. Runge. The funding that we have right now, as we have
outlined it, will be sufficient to do what we have to do, yes.
And, again, welcome to the subcommittee and we would be happy
to come over and brief you on the timelines for this.
Ms. Jackson Lee. Quickly, I don't know if you have a quick
answer.
Mr. Parker. Actually, I do, maybe about the threat and,
actually, it is a good discussion. We have had this discussion
actually about pandemic influenza and that certainly is a very
predictable threat.
One thing we do have to caution against and that is
complacency and I really think that is your issue. That may be
our biggest threat is complacency.
And so we have got to work hard and this is a sense of
urgency. Certainly from my staff, our department, our working
relationships, you can bet that we have a sense of urgency. But
we have to guard against complacency.
Ms. Jackson Lee. Yes, Dr. Goodman?
Dr. Goodman. I really appreciate the opportunity. One thing
I frequently say when I go around and talk about what we are
doing is we are not conducting business as usual and at CBER
and at FDA, we are looking at this not as that we sit there and
wait for these products to come in and have a passive process,
but that we are very active.
We engage. We are constantly meeting with our colleagues,
with manufacturers. We have come up with our colleagues with
new science, new pathways to move stuff forward.
So I think we see this as a very high priority, but I agree
with the complacency issue. I think our country is interested
in the news of the day or the week and we as the government and
as leaders in the government have to keep this important threat
on the front burner.
The other comment that Tony and I both made is the
investments we make in public health and product development in
general will help us in general. So the vaccine industry and
its recovery and its infrastructure getting stronger will help
prepare for all these threats.
So whether it is pandemic flu, anthrax, et cetera, we need
to recognize how important these sort of non-economically-
driven public health needs are and how we need to strengthen
our infrastructure to deal with those.
Ms. Jackson Lee. Thank you.
Mr. Langevin. I want to thank the panel for their testimony
and thank the gentlelady for her questions.
Ms. Jackson Lee. Thank you.
Mr. Langevin. As I said in my opening statement, the bio
threat is very real. I realize we all take that seriously. We
need to move with all deliberate speed in developing
countermeasures.
We all want BioShield to work as it was intended and we
want to make sure that you have resources to make sure that it
does.
We look forward to working with you in this continued
challenging issue and, again, I thank you for your expertise,
your service to the country and look forward to having you back
before us once again.
I thank the witnesses again for their valuable testimony,
the members for their questions.
The members of the subcommittee may have additional
questions for the witnesses and we will ask that you respond
expeditiously in writing to those questions.
Hearing no further business, the subcommittee stands
adjourned.
[Whereupon, at 3:56 p.m., the subcommittee was adjourned.]
For the Record
Prepared Statement of the Honorable Richard Burr, Senator, North
Carolina
Mr. Chairman, members of the Subcommittee, thank you for the
opportunity to make a statement before your committee on the
implementation of the Project BioShield Act of 2004, and the
improvements authorized in the Pandemic and All-Hazards Preparedness
Act, which was signed into law in December 2006. Although the
Department of Homeland Security has a key role to play in successful
implementation of Project BioShield--namely, timely completion of
material threat determinations--my comments today will focus on the
Department of Health and Human Services (HHS).
Being one of the principle sponsors of Project BioShield in the
House of Representatives, our intent was for BioShield to provide
incentives for manufacturers of vaccines and drugs to swiftly bring new
countermeasures to the market that would help protect us from attacks
with chemical, biological, radiological, or nuclear (CBRN) agents. We
have certainly made progress since its passage three years ago, but we
remain unprepared for the possibility of such an attack. We do not have
the range of vaccines and drugs necessary to prevent, contain and treat
potential deliberate, accidental or natural disease outbreaks or
chemical or nuclear attacks. The pharmaceutical and biotechnology
industries and academia are still reluctant partners.
I know there will be criticism voiced today about the recent
termination of BioShield contracts and cancellation of Requests for
Proposals. However, I hope we will be able to look back and see how the
new requirements and authorities provided in the Pandemic and All-
Hazards Preparedness Act will help alleviate some of the concerns.
There will undoubtedly be areas that still need improvement, and I look
forward to working with my colleagues to address them in the future. At
the end of the day, we all want Project BioShield and the new
Biomedical Advanced Research and Development Authority (BARDA) to be
successful in order to protect the American people from future threats.
Project BioShield
The Project BioShield Act of 2004 was an important step forward in
accelerating the development of medical countermeasures. It established
a $5.6 billion ``guaranteed market'' for biodefense medical
countermeasures developed by private industry. It was the right idea,
but we needed more. BioShield has ended up being primarily a
procurement mechanism and has not been enough to persuade large
experienced pharmaceutical companies to redirect their research and
development dollars towards biodefense. The organizations doing
biodefense countermeasure research are smaller, less experienced
biotechnology companies and research institutions.
Drug and vaccine development is a risky and complicated business--
most products under development never make it to market. Since the
federal government is usually the only viable market for biodefense
countermeasures, these companies and research institutions need a
government partner that accepts some of the risk. We also need to get
products further along the development pipeline before we expect HHS to
make billion dollar procurement decisions.
While the National Institutes of Health supports basic research,
BioShield was not structured to support the advanced research and
development of medical countermeasures. A lack of funding for advanced
development at this critical stage stalls many promising drugs and
vaccines in the lab. But BioShield was not set up to be a development
program; rather, it is a procurement program.
Biomedical Advanced Research and Development Authority
As Chairman of the Senate Subcommittee on Bioterrorism and Public
Health Preparedness during the 109th Congress, I had the opportunity to
reevaluate Project BioShield. I developed the model for BARDA after a
year of public hearings and roundtables to explore the challenges in
biodefense medical countermeasure development.
BARDA, established in the Pandemic and All-Hazards Preparedness
Act, will improve our ability to quickly develop drugs and vaccines to
protect against CBRN threats. The intent of BARDA is to bring more and
better medical countermeasures to the public faster in case of
emergency. BARDA reorganizes and enhances HHS medical countermeasure
research, development, and procurement activities--providing three
major benefits.
First, BARDA is the single point of authority within the federal
government for the advanced research and development of promising new
medical countermeasures to meet the government's civilian needs. This
makes it clear to industry and academic institutions where they should
go to be connected with necessary guidance, technical assistance, and
funding. BARDA will be headed by a Director and will have a lean
management staff that is experienced in product development and is not
risk averse.
Second, BARDA will be an aggressive venture capitalist partnering
with universities, research institutions and industry on the advanced
research and development of promising drugs and vaccines, through an
open, transparent, and unclassified process. BARDA will have real-time
access to the results of drug and vaccine trials and will directly
invest in the most promising candidates to bridge the ``valley of
death'' where most products fail. Using milestone-based payments, BARDA
will become a financial partner with these institutions and companies
during later stages of development to share some of the risk and prove
the merit of promising drug and vaccine candidates. Modest investment
by the government during the critical advanced research and development
stage can attract four to six times that amount in private investment
and can ensure that promising products cross the finish line.
BARDA will cast a wide net in search of promising research on
possible medical countermeasures being done domestically and abroad,
and will enable HHS to bring products further along the development
pipeline, before making a decision to buy them through BioShield.
Finally, BARDA will bring innovation to a process that is too slow
to combat terrorist activities or Mother Nature. Modeled after the
Defense Advanced Research Projects Agency's successes in defense
research, BARDA will make HHS more dynamic, nimble and accountable.
There is not enough time or funding to develop one medical
countermeasure for each identified threat. It still takes up to a
decade and costs hundreds of millions of dollars to develop a new drug
or vaccine countermeasure. This one-bug, one-drug strategy must change.
BARDA has the flexible authorities and necessary resources to
support research and development of platform technologies, research
tools, and other devices that have the potential to revolutionize drug
and vaccine development. For example, BARDA has flexible hiring
authorities to attract the best and the brightest minds to staff it.
BARDA has ``other transactions'' authority to enter into more flexible
arrangements with researchers. And HHS has a limited antitrust
authority, which enables HHS and BARDA to engage with industry in a new
way ? possibly linking smaller biotechnology companies with larger
pharmaceutical companies during advanced development to create new
synergies of expertise.
Conclusion
If we fail to overcome the fundamental obstacles to rapidly
identifying and developing new medicines to counter biological,
chemical, radiological or nuclear agents and emerging pandemic
infectious diseases we will miss yet another opportunity to improve
America's preparedness for all public health threats. BARDA builds on
BioShield to do just this.
I am pleased the Senate confirmed Dr. Craig Vanderwagen as the new
HHS Assistant Secretary for Preparedness and Response, a position
created in the Pandemic and All-Hazards Preparedness Act. I am
confident he has the experience to do the job well. Now, HHS needs to
recruit a BARDA Director who has the necessary skills and experience in
private sector drug and vaccine development, and Congress must
appropriate sufficient funds to give BARDA every opportunity for
success.
In the fiscal year 2007 supplemental appropriations bills, the
House and Senate transferred $49 million to get BARDA up and running.
In the 2008 budget resolution, the Senate accepted my amendment to
increase funding for BARDA by at least $140 million. This would fully
fund the President's request of $189 million for advanced research and
development of medical countermeasures.
With a strong BARDA Director, and sufficient funding, BARDA has the
potential to fill many of the voids identified in BioShield and ensure
that more and better medical countermeasures are available to the
public faster in case of emergency.