[House Hearing, 114 Congress]
[From the U.S. Government Publishing Office]



EXAMINING H.R. 3299, STRENGTHENING PUBLIC HEALTH EMERGENCY RESPONSE ACT

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

                                 HEARING

                               BEFORE THE

                         SUBCOMMITTEE ON HEALTH

                                 OF THE

                    COMMITTEE ON ENERGY AND COMMERCE
                        HOUSE OF REPRESENTATIVES

                    ONE HUNDRED FOURTEENTH CONGRESS

                             SECOND SESSION

                               __________

                              MAY 19, 2016

                               __________

                           Serial No. 114-147
                           
                           
 [GRAPHIC NOT AVAILABLE IN TIFF FORMAT]                          
                           
                           


      Printed for the use of the Committee on Energy and Commerce

                        energycommerce.house.gov


                               __________
                                  

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                    COMMITTEE ON ENERGY AND COMMERCE

                          FRED UPTON, Michigan
                                 Chairman

JOE BARTON, Texas                    FRANK PALLONE, Jr., New Jersey
  Chairman Emeritus                    Ranking Member
ED WHITFIELD, Kentucky               BOBBY L. RUSH, Illinois
JOHN SHIMKUS, Illinois               ANNA G. ESHOO, California
JOSEPH R. PITTS, Pennsylvania        ELIOT L. ENGEL, New York
GREG WALDEN, Oregon                  GENE GREEN, Texas
TIM MURPHY, Pennsylvania             DIANA DeGETTE, Colorado
MICHAEL C. BURGESS, Texas            LOIS CAPPS, California
MARSHA BLACKBURN, Tennessee          MICHAEL F. DOYLE, Pennsylvania
  Vice Chairman                      JANICE D. SCHAKOWSKY, Illinois
STEVE SCALISE, Louisiana             G.K. BUTTERFIELD, North Carolina
ROBERT E. LATTA, Ohio                DORIS O. MATSUI, California
CATHY McMORRIS RODGERS, Washington   KATHY CASTOR, Florida
GREGG HARPER, Mississippi            JOHN P. SARBANES, Maryland
LEONARD LANCE, New Jersey            JERRY McNERNEY, California
BRETT GUTHRIE, Kentucky              PETER WELCH, Vermont
PETE OLSON, Texas                    BEN RAY LUJAN, New Mexico
DAVID B. McKINLEY, West Virginia     PAUL TONKO, New York
MIKE POMPEO, Kansas                  JOHN A. YARMUTH, Kentucky
ADAM KINZINGER, Illinois             YVETTE D. CLARKE, New York
H. MORGAN GRIFFITH, Virginia         DAVID LOEBSACK, Iowa
GUS M. BILIRAKIS, Florida            KURT SCHRADER, Oregon
BILL JOHNSON, Ohio                   JOSEPH P. KENNEDY, III, 
BILLY LONG, Missouri                 Massachusetts
RENEE L. ELLMERS, North Carolina     TONY CARDENAS, California7
LARRY BUCSHON, Indiana
BILL FLORES, Texas
SUSAN W. BROOKS, Indiana
MARKWAYNE MULLIN, Oklahoma
RICHARD HUDSON, North Carolina
CHRIS COLLINS, New York
KEVIN CRAMER, North Dakota

                         Subcommittee on Health

                     JOSEPH R. PITTS, Pennsylvania
                                 Chairman
BRETT GUTHRIE, Kentucky              GENE GREEN, Texas
  Vice Chairman                        Ranking Member
ED WHITFIELD, Kentucky               ELIOT L. ENGEL, New York
JOHN SHIMKUS, Illinois               LOIS CAPPS, California
TIM MURPHY, Pennsylvania             JANICE D. SCHAKOWSKY, Illinois
MICHAEL C. BURGESS, Texas            G.K. BUTTERFIELD, North Carolina
MARSHA BLACKBURN, Tennessee          KATHY CASTOR, Florida
CATHY McMORRIS RODGERS, Washington   JOHN P. SARBANES, Maryland
LEONARD LANCE, New Jersey            DORIS O. MATSUI, California
H. MORGAN GRIFFITH, Virginia         BEN RAY LUJAN, New Mexico
GUS M. BILIRAKIS, Florida            KURT SCHRADER, Oregon
BILLY LONG, Missouri                 JOSEPH P. KENNEDY, III, 
RENEE L. ELLMERS, North Carolina         Massachusetts
LARRY BUCSHON, Indiana               TONY CARDENAS, California
SUSAN W. BROOKS, Indiana             FRANK PALLONE, Jr., New Jersey (ex 
CHRIS COLLINS, New York                  officio)
JOE BARTON, Texas
FRED UPTON, Michigan (ex officio)

                                  (ii)
                             
                             
                             C O N T E N T S

                              ----------                              
                                                                   Page
Hon. Joseph R. Pitts, a Representative in Congress from the 
  Commonwealth of Pennsylvania, opening statement................     1
    Prepared statement...........................................     3
Hon. Gene Green, a Representative in Congress from the State of 
  Texas, opening statement.......................................     4
Hon. Susan W. Brooks, a Representative in Congress from the State 
  of Indiana, opening statement..................................     5
Hon. Frank Pallone, Jr., a Representative in Congress from the 
  State of New Jersey, opening statement.........................     7
    Prepared statement...........................................     9

                               Witnesses

Richard J. Hatchett, M.D., Acting Deputy Assistant Secretary, 
  Office of the Assistant Secretary for Preparedness and 
  Response, Acting Director, Biomedical Advanced Research and 
  Development Authority, Department of Health and Human Services.    11
    Prepared statement...........................................    13
    Answers to submitted questions \1\...........................   104
Michael Mair, Director of Strategic Operations, Office of 
  Counterterrorism and Emerging Threats, Food and Drug 
  Administration.................................................    28
    Prepared statement...........................................    30
Colonel Russell E. Coleman, Ph.D., Joint Project Manager for 
  Medical Countermeasures Systems, Joint Program Executive Office 
  for Chemical and Biological Defense, Department of the Army, 
  Department of Defense..........................................    39
    Prepared statement...........................................    41

                           Submitted Material

H. R. 3299, the Strengthening Public Health Emergency Response 
  Act of 2015, submitted by Mr. Pitts............................    56
Letter of May 17, 2016, from Nancy Goodman, Executive Director, 
  Kids v Cancer, to Mr. Upton and Mr. Pallone, submitted by Mr. 
  Pallone........................................................    63
Letter of May 17, 2016, from David Ridley, Ph.D., Faculty 
  Director, Health Sector Management, Duke University, to Mr. 
  Pallone and Mr. Green, submitted by Mr. Pallone................    65
Statement of Richard Hamburg, Interim President and CEO, Trust 
  for America's Health, May 19, 2016, submitted by Mr. Pallone...    67
Letter of February 11, 2016, from Joseph I. Lieberman and Thomas 
  J. Ridge, Co-Chairs, Blue Ribbon Study Panel on Biodefense, to 
  Mrs. Brooks and Ms. Eshoo, submitted by Mr. Pitts..............    70
Letter of May 19, 2016, from the American Thoracic Society, et 
  al., to Mr. Pitts and Mr Green, submitted by Mr. Green.........    71
Letter of April 1, 2016, from Douglas W. Bryce, Joint Program 
  Executive Officer for Chemical and Biological Defense, to Mrs. 
  Brooks, submitted by Mrs. Brooks...............................    75
Letter of July 29, 2015, from Elisabeth Posillico and Paul 
  Chaplin, Co-Chairs, Alliance for Biosecurity, to Mrs. Brooks 
  and Ms. Eshoo, submitted by Mrs. Brooks........................    76

----------
\1\ Dr. Hatchett did not answer submitted questions for the record by 
the time of printing.
Letter of September 16, 2015, from Todd Gillenwater, Executive 
  Vice President, Advocacy & External Relations, California Life 
  Sciences Association, to Mrs. Brooks and Ms. Eshoo, submitted 
  by Mrs. Brooks.................................................    78
Letter of September 14, 2015, from James C. Greenwood, President 
  and CEO, Biotechnology Industry Organization, to Mrs. Brooks 
  and Ms. Eshoo, submitted by Mrs. Brooks........................    79
Letter of October 14, 2015, from Bertrand C. Liang, et al., to 
  Mrs. Brooks and Ms. Eshoo, submitted by Mrs. Brooks............    80
Article of June 2009, ``Drug and Vaccine Development for 
  Infectious Diseases: The Value of Priority Review Vouchers,'' 
  by J. Matheny, et al., Clinical Pharmacology & Therapeutics, 
  submitted by Mrs. Brooks.......................................    82
Article of 2007, ``Incentives for Biodefense Countermeasure 
  Development,'' by Jason Matheny, et al., Biosecurity and 
  Bioterrorism: Biodefense Strategy, Practice, and Science, 
  submitted by Mrs. Brooks.......................................    84
Article of May 2016, ``The Commercial Market for Priority Review 
  Vouchers,'' by David B. Ridley and Stephane A. Regnier, Health 
  Affairs, submitted by Mr. Green................................    95

 
EXAMINING H.R. 3299, STRENGTHENING PUBLIC HEALTH EMERGENCY RESPONSE ACT

                              ----------                              


                         THURSDAY, MAY 19, 2016

                  House of Representatives,
                            Subcommittee on Health,
                          Committee on Energy and Commerce,
                                                    Washington, DC.
    The subcommittee met, pursuant to call, at 10:00 a.m., in 
room 2123, Rayburn House Office Building, Hon. Joseph R. Pitts 
(chairman of the subcommittee) presiding.
    Members resent: Representatives Pitts, Guthrie, Shimkus, 
Murphy, Burgess, Lance, Bilirakis, Ellmers, Brooks, Collins, 
Green, Engel, Capps, Schakowsky, Butterfield, and Pallone (ex 
officio).
    Also present: Representative Eshoo.
    Staff present: Rebecca Card, Assistant Press Secretary; 
Carly McWilliams, Professional Staff Member, Health; Graham 
Pittman, Legislative Clerk; Chris Sarley, Policy Coordinator, 
Environment and Economy; Heidi Stirrup, Policy Coordinator, 
Health; John Stone, Counsel, Health; Sophie Trainor, Policy 
Advisor, Health; Waverly Gordon, Democratic Professional Staff 
Member; Tiffany Guarascio, Democratic Deputy Staff Director and 
Chief Health Advisor; Samantha Satchell, Democratic Policy 
Analyst; Andrew Souvall, Democratic Director of Communications, 
Outreach, and Member Services; and Kimberlee Trzeciak, 
Democratic Health Policy Advisor.
    Mr. Pitts. Ladies and gentlemen, if our guests will take 
their seats, the subcommittee will come to order. The Chair 
will recognize himself for an opening statement.

OPENING STATEMENT OF HON. JOSEPH R. PITTS, A REPRESENTATIVE IN 
         CONGRESS FROM THE COMMONWEALTH OF PENNSYLVANIA

    Today's hearing will take a closer look at bipartisan 
legislation introduced by our Energy and Commerce Committee 
colleagues Representative Brooks and Eshoo, H.R. 3299.
    This bipartisan bill builds upon our previous work to 
modernize our biodefense systems, ensuring that we are well 
equipped to handle current and emerging biothreats.
    The biothreat is not new. Pandemics have occurred 
throughout history. There have been four flu pandemics in the 
United States since 1918, each with different characteristics 
such as the H1N1 flu most recently in 2010. Even more worrisome 
is the threat of biological weapons or infectious diseases 
employed as weapons of terror, such as the use of salmonella in 
Oregon in 1984 by the Rajneeshee cult or the anthrax scare in 
2001.
    Science has made significant advances in genomics and 
genetics and biotechnology that hold tremendous promise for 
those affected by illness and disease. However, that same 
technology could theoretically be used to biologically engineer 
superbugs that are more virulent, more lethal, more difficult 
to treat than their naturally occurring counterparts.
    Imagine a weaponized and bioengineered version of the Ebola 
virus or polio or smallpox, and the devastating effect that 
would have on an American city.
    Since the terror attacks on September 11, 2001, Congress 
took steps to build our Nation's health infrastructure and 
foster a development of medical countermeasures, MCM, in the 
event of a future chemical, biological, radioactive, or 
nuclear, CBRN, attack.
    In 2004, Congress enacted the Project BioShield Act, and 
later, in 2006, enacted the Pandemic and All Hazards 
Preparedness Act, PAHPA, which was authorized through 2011. In 
addition to establishing a strategic plan to direct research, 
development, procurement of MCMs, PAHPA also established the 
Biodefense Advanced Research and Development Authority, BARDA, 
within the Department of Health and Human Services.
    BARDA was charged with coordinating and accelerating the 
development of MCMs. BARDA was created from the understanding 
that most MCMs needed by the Nation did not yet exist, and 
their development is a risky, expensive, and lengthy process. 
There is little to no demand in the private market for vaccines 
and therapeutics that protect against bioterror agents.
    BARDA bridges the funding gap between early stage research 
and the ultimate procurement of products for the National 
Stockpile under Project BioShield. By partnering with private 
industry, using money from the Biodefense Advanced Research and 
Development Fund, BARDA, can reduce the development risk 
entailed in MCM research, thereby helping to mitigate the 
disincentives associated with countermeasure development and 
ultimately improving our national readiness with regard to a 
CBRN attack.
    The bill before us today reforms our Nation's medical 
countermeasure acquisition process, incentivizes research to 
combat the next generation of deadly diseases, and increases 
accountability of preparedness spending. Such improvements will 
go a long way toward helping our preparedness for future public 
health emergencies, such as Ebola, by creating new incentives 
for developing necessary medicines and vaccines and 
streamlining the contracting process for medical 
countermeasures.
    Incentives are necessary to attract private investment in 
product development, and so too must the contracting processes 
be efficient. We must get this right. The stakes are too high, 
the cost of failure too dire. And I look forward to our 
discussion today about how to best protect our country from 
biological threats.
    [H.R. 3299 appears at the conclusion of the hearing.]
    [The prepared statement of Mr. Pitts follows:]

               Prepared statement of Hon. Joseph R. Pitts

    Today's hearing will take a closer look at bipartisan 
legislation introduced by our Energy and Commerce Committee 
colleagues, Reps. Brooks and Eshoo, H.R. 3299. This bipartisan 
bill builds upon our previous work to modernize our biodefense 
systems, ensuring that we are well-equipped to handle current 
and emerging biothreats.
    The biothreat is not new. Pandemics have occurred 
throughout history. There have been four flu pandemics in the 
United States since 1918, each with different characteristics, 
such as the H1N1 Flu most recently in 2010. Even more worrisome 
is the threat of biological weapons or infectious diseases 
employed as weapons of terror, such as the use of salmonella in 
Oregon in 1984 by the Rajneeshee cult or the anthrax scare in 
2001.
    Science has made significant advancements in genomics, 
genetics, and biotechnology that hold tremendous promise for 
those afflicted by illness and disease. However, that same 
technology could theoretically be used to biologically engineer 
``superbugs'' that are more virulent, more lethal and more 
difficult to treat than their naturally occurring counterparts. 
Imagine a weaponized and bioengineered version of the Ebola 
virus, or polio, or smallpox and the devastating effect that 
would have on an American city.
    Since the terror attacks on September 11, 2001, Congress 
took steps to build our Nation's health infrastructure and 
foster development of medical countermeasures (MCM) in the 
event of a future chemical, biological, radioactive, or nuclear 
(CBRN) attack.
    In 2004, Congress enacted the Project Bioshield Act and 
later in 2006, enacted the Pandemic and All-Hazards 
Preparedness Act (PAHPA) which was authorized through 2011. In 
addition to establishing a strategic plan to direct research, 
development and procurement of MCMs, PAHPA also established the 
Biodefense Advanced Research and Development Authority (BARDA) 
within the Department of Health and Human Services. BARDA was 
charged with coordinating and accelerating the development of 
MCMs.
    BARDA was created from the understanding that most MCMs 
needed by the Nation did not yet exist and their development is 
a risky, expensive and lengthy process. There is little to no 
demand in the private market for vaccines and therapeutics that 
protect against bioterror agents.
    BARDA bridges the funding gap between early-stage research 
and the ultimate procurement of products for the national 
stockpile under Project BioShield. By partnering with private 
industry using money from the Advanced Research and Development 
Fund, BARDA can reduce the development risk entailed in MCM 
research, thereby helping to mitigate the disincentives 
associated with countermeasure development, and ultimately 
improving our national readiness with regard to a CBRN attack.
    The bill before us today reforms our Nation's medical 
countermeasure acquisition process, incentivizes research to 
combat the next generation of deadly diseases, and increases 
accountability of preparedness spending.
    Such improvements will go a long way toward helping our 
preparedness for future public health emergencies, such as 
Ebola, by creating new incentives for developing necessary 
medicines and vaccines and streamlining the contracting process 
for medical countermeasures. Incentives are necessary to 
attract private investment in product development. And so too 
must the contracting processes be efficient.
    We must get this right. The stakes are too high and the 
cost of failure too dire. I look forward to our discussion 
today about how best to protect our country from biological 
threats.

    Mr. Pitts. Mrs. Brooks, do you seek time?
    Mrs. Brooks. Yes, Mr. Chairman.
    Mr. Pitts. The Chair will recognize Mrs. Brooks for her 
time.
    Mrs. Brooks. Thank you, Mr. Chairman.
    I want to thank you and the leadership of the Energy and 
Commerce Committee so much for holding this important hearing 
today on our bill. Congresswoman Eshoo and I and our staffs 
have worked very hard over the course of this Congress to craft 
this piece of legislation that now enjoys significant support 
from both sides of the aisle. And I commend the chairman for 
understanding the urgency of this matter.
    Last Congress, I served as chairman of the Homeland 
Security Committee's Subcommittee on Emergency Preparedness and 
Response, where I was amazed to learn of truly what I thought 
was the dire straits our biodefense capabilities are in as a 
result of more than a decade of neglect. I wish I could sit 
here today and tell you that I think things have improved 
dramatically over the last couple of years. And I appreciate 
from your written testimony that some of you believe they have.
    Mr. Pitts. If you will suspend, I will recognize you for 
the chairman when he comes in. You will have more time.
    Mrs. Brooks. Oh, I am sorry.
    Mr. Pitts. The Chair now will recognize the ranking member 
of the subcommittee, 5 minutes for an opening statement.

   OPENING STATEMENT OF HON. GENE GREEN, A REPRESENTATIVE IN 
                CONGRESS FROM THE STATE OF TEXAS

    Mr. Green. Thank you, Mr. Chairman, and to our witnesses 
for joining us this morning.
    The Federal Government has undertaken many initiatives, 
especially since the anthrax attacks of 2001, to fortify our 
biodefense capabilities to address the threat of a biological 
outbreak or attack. With stockpiling medical countermeasures, 
MCMs, to build public health capacity, we are better prepared 
today than we were a decade ago.
    But the fact is we still are dramatically underprepared to 
respond to biological event of disaster proportions. The 
current Zika virus epidemic underscores our need for a robust 
pipeline of vaccines and treatments effective against current 
and emerging threats. Over the last decade, the amount of 
cooperation between Government and the private sector has 
improved and our level of preparedness has increased, but we 
must do more in order to meet the new challenges we face.
    Currently, the Federal Government's biodefense initiatives 
span across a number of agencies and vary in scope and 
approach. Department of Homeland Security, Department of Health 
and Human Services, and Department of Defense each play a role.
    For example, HHS operates the Biomedical Research and 
Development Authority, or BARDA, which was created to advance 
capability to develop, manufacture, and distribute medical 
countermeasures, like vaccines, during public health 
emergencies. BARDA is housed within the Assistant Secretary for 
Preparedness, or ASPR, the agency responsible for leading 
prevention, preparations, and response to the adverse health 
effects of public health emergency disasters.
    H.R. 3299, Strengthening the Public Health Emergency 
Response Act, offers a range of ideas to move our biodefense 
and medical countermeasures development and procurement 
capacities forward. I want to thank the bill's sponsors for 
their leadership. Medical countermeasures are essential to our 
Nation's health and security. There is a clear and vital role 
for the Federal Government to play in order to contribute to a 
greater public health security and ensure preparedness against 
biological threats.
    We need meaningful countermeasures, research incentives, 
transparency, and predictability, and flexible contracting 
mechanism in order to shore up our ability to respond to 
biological threats and infectious disease outbreaks. Without 
strong commitment from the Federal Government, public-private 
partnerships, predictable processes and incentives, this market 
arguably could not exist.
    The Government is the only market for most of the medical 
countermeasures. Unlike other drugs and vaccines, these 
products are not sold or distributed within the healthcare 
system. To incentivize companies to develop and produce these 
critical products, Congress created the Project BioShield 
Special Reserve Fund in 2004. The Special Reserve Fund was a 
market for medical countermeasures and was originally funded 
through the advanced appropriations at $5.6 billion over 10 
years to procure successful product candidates.
    The availability and certainty this 10-year fund offered 
had a positive impact on the Government's ability to attract 
innovative companies into this space. Twelve MCMs against 
several national security threats were delivered to the 
National Stockpile under this program. Unfortunately, in fiscal 
year 2014, we shifted to annual appropriations for the Special 
Reserve Fund, which created an uncertainty where there was once 
confidence that there would be a markup for urgently needed new 
vaccines and treatments.
    The market guarantee for successful MCM candidates is much 
weaker, and funding has dropped significantly. While Congress 
has many levers and options to incentivize development, many of 
these simply nibble around the edges and fall short of making 
up with the lack of long-term sustained funding. This Congress, 
I cofounded the Public Health Caucus to evaluate the 
conversation around public health and emergency preparedness.
    We need to break the cycle of lurching from crisis to 
crisis, outbreak to outbreak, and invest in public health 
infrastructure and medical product development that protects us 
against current future threats. H.R. 3299 puts forth a range of 
reforms to improve MCM development and procurement response to 
emerging infectious diseases and hospital preparedness.
    While I have some concerns about the aspect of the 
legislation, I believe we can find common ground and strike the 
right balance to protect the health and welfare of our Nation. 
And I want to thank the stakeholders for their willingness to 
work with us and look forward to learning more about their 
proposals in today's hearing.
    And I want to thank, again, our panel and the chairman for 
calling this. I think sometimes we are not topical, but with 
Zika and 2 years ago Ebola and no telling what is coming next, 
this is a very important hearing.
    And, Mr. Chairman, I will yield back my time.
    Mr. Pitts. The Chair thanks the gentleman.
    I now recognize the gentlelady, Mrs. Brooks, for 5 minutes 
for opening statement.

OPENING STATEMENT OF HON. SUSAN W. BROOKS, A REPRESENTATIVE IN 
               CONGRESS FROM THE STATE OF INDIANA

    Mrs. Brooks. Thank you, Mr. Chairman.
    I want to thank you so very much and the leadership of 
Energy and Commerce for holding this hearing today.
    This legislation now enjoys significant bipartisan support 
from both sides of the aisle, including 21 members of Energy 
and Commerce, and I commend the chairman for understanding the 
urgency of this matter.
    Imagine for a second if the weapons used in San Bernardino, 
Paris, or Brussels were not guns and bombs, but instead 
aerosolized smallpox. And this isn't farfetched. In fact, I 
learned last week at a simulation at the McCain Institute in 
Washington that this easily weaponized, highly contagious 
disease could result in the death of upwards of 1 million 
people if dispersed in Madison Square Garden alone.
    That number is not just for New York City. But in reality, 
those expose individuals would have returned home infecting 
every person with whom they came into contact along the way. 
And for a disease with a 30-percent kill rate, responsible for 
the deaths of 300 million people in the 20th century alone, the 
fallout would be global and catastrophic.
    So I have been working with my good friend from California, 
Congresswoman Eshoo, one of the original architects of Project 
BioShield, to develop a set of policy changes that could make a 
difference in the next outbreak or, God forbid, a terrorist 
attack. H.R. 3299 was developed in collaboration with leading 
experts in biodefense, academia, first responders, and the 
private sector.
    Among other things, this bill would reform contracting 
procedures at BARDA to ensure faster development of critical 
medical countermeasures and create a limited priority review 
voucher for diseases on DHS' material threat list. Returning 
this negotiating authority to BARDA will alleviate the 
bureaucratic red tape, make an immediate impact on the 
development of vaccines and treatments, and the new PRV program 
will spur development in an effective vaccine to stockpile 
against threats like Ebola, anthrax, or smallpox, which often 
take more than a decade and cost hundreds of millions of 
dollars.
    So when you think about how we can improve our system, we 
could have possibly saved lives if we had an Ebola vaccine--
thousands of lives--had it been deployed to West Africa. Or the 
Zika vaccine could have possibly already last spring have been 
in process and saved pregnant women in Brazil. The impact can 
be immeasurable if we make improvements and acknowledge that 
the system can be improved.
    And so these are commonsense reforms. But they are not just 
coming from Congress. This Blue Ribbon Study Panel, the 
National Blueprint for Biodefense, listed 33 recommendations to 
improve our biodefense. It was authored by experts, some of 
whom have testified before our committee. It includes leaders 
such as former Senators Tom Daschle and Joe Lieberman; former 
Governor Ridge; Donna Shalala, the former HHS Secretary under 
President Clinton.
    Now, a similar version of our bill has been authored by 
Senators Burr and Casey, and it has already passed out of the 
Senate Health Committee by a wide bipartisan margin. 
Preparedness is not a partisan issue. It has never been, and it 
shouldn't be treated as such again. And so I assure my 
colleagues that any concerns we might have with this 
legislation can be addressed in a bipartisan manner because it 
is our duty to really support and protect the American people. 
I think that is Federal Government's top priority and must be 
our first priority.
    I look forward to hearing from our witnesses, working with 
my colleagues to pass H.R. 3299.
    And at this point, I would yield the remainder of my time 
to Dr. Burgess.
    Mr. Burgess. I thank you for yielding.
    I thank the chairman for holding this hearing.
    And recognizing the topic of this hearing is strengthening 
public health response, I hope we will spend some time visiting 
the recent past and expanding upon whether or not we have 
learned any lessons from what has happened to us in the past 
few years.
    Almost in a twist of cruel irony, President Obama went to 
the CDC in Georgia and gave a talk that Ebola has not come--
this was in September of 2014. He made the statement that Ebola 
has not come to this country, but if it does, we will be ready. 
Well, less than 2 weeks later, Ebola did come to our country. 
It came at the back door of a hospital in the middle of the 
night, wasn't recognized, the patient was sent home, eventually 
came back, eventually died, infected two other people in the 
hospital. So the second part of his statement was not 
operative. We were not ready.
    And then I saw, with this problem literally in my backyard 
for the section several months, just how that not being ready, 
how that was manifest. We didn't have the type of direction for 
people. And the first responders in our emergency rooms, they 
didn't have the type of protective equipment. What was posted 
on the CDC Web site was woefully inadequate, as we 
unfortunately learned later, when two nurses were infected at 
the hospital.
    When people were looking for the type of protective 
clothing that they would need, if someone showed up in the 
middle of the night of their emergency room, how can they get 
an additional moon suit or two? Do they call a hospital across 
town? Are they going to be willing to give up their moon suit 
because they could have a patient coming in within the hour 
with the same set of symptoms?
    I hope we have explored these situations. I hope we have 
learned from them. One of, I think, the biggest weaknesses from 
2 years ago was the lack of a single repository, a single place 
that a hospital administrator or manager or doctor could call 
to be able to access the equipment from the National Stockpile.
    So, Mr. Chairman, thank you for calling the hearing. I look 
forward to the testimony of our witnesses, and I think this is 
a timely topic. I yield back.
    Mr. Pitts. The Chair thanks the gentleman.
    I now recognize the ranking member of the full committee, 
Mr. Pallone, 5 minutes for an opening statement.

OPENING STATEMENT OF HON. FRANK PALLONE, JR., A REPRESENTATIVE 
            IN CONGRESS FROM THE STATE OF NEW JERSEY

    Mr. Pallone. Thank you, Mr. Chairman.
    Since the attacks of September 11, Congress has worked in a 
bipartisan manner to increase our efforts to combat and respond 
to biological threats. However, experts have repeatedly warned 
that our ability to respond to biological threats must be 
improved.
    Earlier this year, the Subcommittee on Oversight and 
Investigations heard from another member of the Blue Ribbon 
Panel on Biodefense and other experts about the U.S.' 
biodefense preparedness. According to this report, the Unites 
States, quote, ``does not afford the biological threat the same 
level of attention as it does other threats,'' unquote. The 
report notes that we lack a centralized leader for biodefense, 
a comprehensive national strategic plan, and a dedicated budget 
for biodefense. And this review also offered 33 recommendations 
about how Congress and the administration can improve our 
preparedness.
    H.R. 3299, the Strengthening Public Health Emergency 
Response Act, includes a number of provisions that would make 
progress in improving our readiness. While I support the intent 
of this legislation, I do have some concerns that I am 
interested in discussing with our panel today.
    One area is related to the hospital preparedness program. 
This legislation would limit the amount of funding that the 
Assistant Secretary for Preparedness and Response can use to 
operate this program to 3 percent of the program's total 
funding. And I am concerned that this limitation, while well-
intended, could limit the ability of ASPR to effectively 
oversee and evaluate the hospital preparedness program. And 
this limitation also would eliminate funding for other efforts 
that support our healthcare preparedness, response, and 
recovery ecosystem. So this is one thing we need to look at.
    I am also concerned about the delegation of contract 
authority to the Biomedical Advanced Research and Development 
Authority, or BARDA. Like other HHS divisions, ASPR operates 
the contracting office for all divisions and programs under its 
authority. This structure ensures that Federal investments are 
made through a fair and open process that is free of any 
conflicts. Removing ASPR oversight could lead to some influence 
on the contracting process by the BARDA Director, another 
program officer and outside source.
    Then, finally, I want to express some concern about further 
expanding the Tropical Disease Priority Review Voucher Program. 
This program, created in 2007, was intended to incentivize 
research and development of drugs to treat tropical diseases 
that disproportionately affect poor and marginalized 
populations. Once a qualifying drug is approved, the sponsor 
receives a priority review voucher that entitles the sponsor to 
a second 6-month review of any other human drug application, 
and the sponsor is also able to sell this voucher.
    Recently, a priority review voucher sold for $350 million. 
Since creation of the Tropical Disease PRV Program, three PRVs 
have been awarded, and there has been a significant interest 
from industry and others in expanding the program as a way to 
encourage development of medical countermeasures.
    While I believe we should explore additional ways to 
incentivize medical countermeasure development, I do not 
believe expanding the Tropical Disease PRV Program is 
necessarily the answer. Not only could expansion decrease the 
value of a PRV and the incentive to develop drugs under such 
programs, but it also increases the burden on FDA to expedite 
review of additional applications that may not otherwise 
qualify for expedited review.
    I am concerned that expansion would only exacerbate known 
flaws in the current program. For example, current law requires 
FDA to award vouchers to sponsors even if a drug was previously 
approved in other countries. Additionally, there is no 
requirement that a sponsor market a product approved under the 
program; therefore, there is no guarantee that these drugs are 
actually helping.
    So I look forward to hearing from our Government witnesses 
on these issues. And as the committee moves forward, I hope 
there will be an opportunity for members to hear from 
additional stakeholders.
    I would like to yield the minute I have left to Mr. 
Butterfield. Oh, he left, OK.
    Then I yield back.
    [The prepared statement of Mr. Pallone follows:]

             Prepared statement of Hon. Frank Pallone, Jr.

    Thank you, Mr. Chairman. Since the attacks of September 
11th, Congress has worked in a bipartisan manner to increase 
our efforts to combat and respond to biological threats. 
However, experts have repeatedly warned that our ability to 
respond to biological threats must be improved.
    Earlier this year, the Subcommittee on Oversight and 
Investigations heard from members of the Blue Ribbon Panel on 
Biodefense and other experts about the U.S.'s biodefense 
preparedness. According to this report, the United States 
``does not afford the biological threat the same level of 
attention as it does other threats.'' The report notes that we 
lack a centralized leader for biodefense, a comprehensive 
national strategic plan, and a dedicated budget for biodefense. 
This comprehensive review also offered 33 recommendations about 
how Congress and the administration can improve our 
preparedness.
    H.R. 3299, the Strengthening Public Health Emergency 
Response Act, includes a number of provisions that would make 
progress in improving our readiness.
    While I support the intent of this legislation, I do have 
some concerns that I am interested in discussing with our panel 
of witnesses today. One such area is related to the Hospital 
Preparedness Program. This legislation would limit the amount 
of funding that the Assistant Secretary for Preparedness and 
Response can use to operate this program to three percent of 
the program's total funding. I am concerned that this 
limitation, while well-intended, would limit the ability of 
ASPR to effectively oversee and evaluate the Hospital 
Preparedness Program. This limitation also would eliminate 
funding for other efforts that support our health care 
preparedness, response, and recovery ecosystem. This change may 
harm rather than strengthen our health system preparedness.
    I am also concerned about the delegation of contract 
authority to the BiomedicalAdvanced Research and Development 
Authority or BARDA. Like other HHS divisions,ASPR operates the 
contracting office for all divisions and programs under 
itsauthority. This structure ensures that Federal investments 
are made through a fair andopen process that is free of any 
conflicts. Removing ASPR oversight could lead toundue influence 
on the contracting process by the BARDA Director, another 
programofficer, or an outside source.
    Finally, I want to express serious concerns about further 
expanding the tropical diseasepriority review voucher program. 
This program, created in 2007, was intended toincentivize 
research and development of drugs to treat tropical diseases 
thatdisproportionately affect poor and marginalized 
populations. Once a qualifying drug isapproved, the sponsor 
receives a priority review voucher that entitles the sponsor to 
asecond six-month review of any other human drug application. 
The sponsor is also ableto sell this voucher. Recently, a 
priority review voucher sold for $350 million. Sincecreation of 
the tropical disease PRV program, three PRVs have been awarded.
    There has been significant interest from industry and 
others in expanding this programas a way to encourage 
development of medical countermeasures. While I believe 
weshould explore additional ways to incentivize medical 
countermeasure development, Ido not believe expanding the 
tropical disease PRV program is the answer. Not only could 
expansion decrease the value of a PRV and the incentive to 
develop drugs undersuch programs, but it also increases the 
burden on FDA to expedite review of additionalapplications that 
may not otherwise qualify for expedited review. This undermines 
theagency's public health mission.
    I'm concerned that expansion would only exacerbate known 
flaws in the currentprogram. For example, current law requires 
FDA to award vouchers to sponsors even ifa drug was previously 
approved in other countries. Additionally, there is no 
requirementthat a sponsor market a product approved under the 
program. Therefore, there is noguarantee that these drugs are 
actually helping the people Congress intended to help.
    I look forward to hearing from our Government witnesses on 
these issues. And, as the committee moves forward with this 
legislation, I hope there will be an opportunity forMembers to 
hear from additional stakeholders about these concerns and how 
they can best be addressed.
    Thank you.

    Mr. Pitts. The Chair thanks the gentleman.
    Mr. Pallone. Mr. Chairman, could I ask, I had three letters 
I would like to, unanimous consent, to enter into the record, 
one from Kids v Cancer, regarding added medical countermeasures 
to the Tropical Disease PRV Program; a letter from David 
Ridley, the architect of the Tropical Disease PRV Program and 
his Health Affairs article regarding the impact of expanding 
the program; and a third from Trust for America's Health.
    Mr. Pitts. And I would like to add to that one letter from 
the Blue Ribbon Study Panel on Defense.
    So, without objection, these are put into the record.
    [The letters appear at the conclusion of the hearing.]
    Mr. Pitts. As usual, all members' opening statements will 
be made a part of the record. And we will now introduce the 
panel. We have one panel today, and I will introduce them in 
the order of their presentation.
    First, we have Dr. Richard Hatchett, Acting Director, 
Biomedical Advanced Research and Development Authority, BARDA, 
and Acting Deputy Assistant Secretary in the Office of the 
Assistant Secretary for Preparedness and Response, ASPR, U.S. 
Department of Health and Human Services. Secondly, we have Mr. 
Michael Mair, Director of Strategic Operations, Office of 
Counterterrorism and Emerging Threats in the Food and Drug 
Administration; finally, Colonel Russ Coleman, Ph.D., Joint 
Project Manager, Medical Countermeasures Systems, Department of 
Defense.
    Thank you for coming today. Your written testimony will be 
made part of the record. You will each have 5 minutes to 
summarize your written testimony.
    So, Dr. Hatchett, you are recognized for 5 minutes for your 
summary.

    STATEMENTS OF RICHARD J. HATCHETT, M.D., ACTING DEPUTY 
  ASSISTANT SECRETARY, OFFICE OF THE ASSISTANT SECRETARY FOR 
PREPAREDNESS AND RESPONSE, ACTING DIRECTOR, BIOMEDICAL ADVANCED 
 RESEARCH AND DEVELOPMENT AUTHORITY, DEPARTMENT OF HEALTH AND 
HUMAN SERVICES; MICHAEL MAIR, DIRECTOR OF STRATEGIC OPERATIONS, 
OFFICE OF COUNTERTERRORISM AND EMERGING THREATS, FOOD AND DRUG 
 ADMINISTRATION; AND COLONEL RUSSELL E. COLEMAN, PH.D., JOINT 
  PROJECT MANAGER FOR MEDICAL COUNTERMEASURES SYSTEMS, JOINT 
 PROGRAM EXECUTIVE OFFICE FOR CHEMICAL AND BIOLOGICAL DEFENSE, 
         DEPARTMENT OF THE ARMY, DEPARTMENT OF DEFENSE

                STATEMENT OF RICHARD J. HATCHETT

    Dr. Hatchett. Chairman Pitts, Ranking Member Green, Mrs. 
Brooks, Ms. Eshoo, distinguished members of the House Energy 
and Commerce Committee, thank you for the opportunity to 
testify today regarding biosecurity issues and H.R. 3299, the 
Strengthening Public Health Emergency Response Act.
    I am Dr. Richard Hatchett, the Acting Director of BARDA, 
and I will focus on steps taken by ASPR to strengthen our 
Nation's health security and the contributions of my own office 
toward that end.
    We have made substantial progress in the past 10 years to 
advance the state of our national biodefense. Thanks to the 
support of this committee and others in Congress, we have 
established ASPR and BARDA and made critical investments in 
biodefense and our healthcare system. However, as highlighted 
by recent challenges, such as Ebola and Zika, there remain gaps 
in our preparedness.
    Where the civilian public health and medical response to 
such events is concerned, the ASPR is charged by statute to 
play a strong leadership role. The ASPR serves as a principal 
adviser to the Secretary of HHS on all matters related to 
Federal medical preparedness and response for public health 
emergencies.
    The ASPR is the author and custodian of the National Health 
Security Strategy, which focuses on protecting public health 
during an emergency. The ASPR chairs the Public Health 
Emergency Medical Countermeasures Enterprise, or PHEMCE, which 
coordinates medical countermeasure development efforts across 
the interagency. And the ASPR oversees the Hospital 
Preparedness Program, or HPP, which enhances medical 
preparedness and resiliency at the community level through its 
support of healthcare coalitions, which incentivize diverse and 
often competitive healthcare organizations to work together.
    The health of communities is deeply intertwined with the 
abilities of its institutions to provide care to all 
populations. And investments in HPP are critical to limiting 
the cascade of negative health effects caused by disasters. The 
PHEMCE promotes the development and acquisition of medical 
countermeasures for chemical, biological, radiological, and 
nuclear threats, pandemic influenza, and emerging infectious 
diseases. And it has achieved a record of success that is now 
being studied as a model for global preparedness.
    The strong and direct incentives we have put in place to 
support the development of medical countermeasures work. The 
PHEMCE has achieved technical success. BARDA has achieved 
technical success. Twenty three products that BARDA has 
supported have received FDA approval, licensure, or clearance. 
And the pace of success is accelerating. Fourteen of these 
approvals have occurred since 2011, and five have occurred in 
the last 14 months.
    Seventeen products, ranging from anthrax antitoxins to an 
array of products for the management of thermal burns, have 
been procured for the Strategic National Stockpile under 
Project BioShield, with another seven anticipated between now 
and the end of fiscal year 2018. Over the last decade, we have 
honed a model of public-private partnership that works. It 
depends on combining push-and-pull incentives in the form of 
nondiluted funding and guaranteed market commitments with 
access to subject-matter expertise and product development 
services. We thank you for your continued support and sustained 
commitment to these programs.
    To support BARDA's activities, ASPR has established a 
separate Office of Acquisitions, Management, Contracts, and 
Grants, or AMCG. AMCG is an award-winning and innovative 
contracting office that has led the Department in meeting 
contracting timelines, and its independent line of reporting 
mitigates potential conflicts of interest and ensures the 
highest standards of program integrity.
    AMCG can work fast. While the departmental benchmark for 
contract actions is 180 days, 70 percent of our Ebola contract 
actions were awarded within 60 days. And the median time for 
recent Project BioShield and other major acquisition awards was 
90 days from the publication of the RFP. And AMCG is fair. Last 
year, over 95 percent of ASPR's contract actions were competed, 
ensuring a level playing field for businesses capable of 
meeting HHS requirements. Fifty-one percent of eligible 
contract dollars were awarded to small businesses.
    These investments in preparedness have already paid 
dividends. Because of the workforce in capabilities ASPR has 
developed over the last 9 years, we and our Nation's 
communities are much better prepared to respond quickly to 
disasters and emerging threats.
    Thank you again for the invitation to speak with you, and I 
look forward to addressing your questions.
    [The prepared statement of Dr. Hatchett follows:]
    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
    
    Mr. Pitts. The Chair thanks the gentleman.
    I will recognize Mr. Mair, 5 minutes for your summary.

                   STATEMENT OF MICHAEL MAIR

    Mr. Mair. Good morning, Chairman Pitts, Ranking Member 
Green, and members of the subcommittee. Thank you for the 
opportunity to discuss FDA's perspective on H.R. 3299, the 
Strengthening Public Health Emergency Response Act, which 
contains provisions intended to help improve preparedness for a 
response to chemical, biological, radiological, and nuclear, or 
CBRN, threats.
    FDA plays a critical role in protecting the United States 
from deliberate CBRN threats and naturally incurring infectious 
diseases, such as Zika virus and pandemic influenza. FDA is 
responsible for ensuring that medical countermeasures, 
including drugs, vaccines, and diagnostic tests, to counter 
these threats are safe and effective.
    We work closely with our interagency partners, including 
our partners seated here with me today, as well as with product 
developers to facilitate to the development and availability of 
medical countermeasures. This collaboration has been extremely 
successful. For example, since 2000, FDA has approved 89 
medical countermeasures for CBRN threats and pandemic 
influenza, as well as 17 supplemental changes to already 
approved applications and 71 modifications to diagnostic 
devices. This success is in part due to the continuing support 
provided by Congress in establishing the programs and 
authorities necessary as well as providing the funding needed 
to create and sustain a robust Medical Countermeasures 
Enterprise.
    As you know, H.R. 3299 contains a provision intended to 
help incentivize medical countermeasure development by enabling 
product developers to receive a priority review voucher, or 
PRV, under FDA's Tropical Disease PRV Program provided certain 
criteria are met. The PRV may be used by the product developer 
who receives it or sold to another product developer who may 
then use it to obtain priority review for a product application 
that otherwise would not receive priority review.
    When a marketing application receives a priority review 
designation, FDA's goal is to take action on that application 
within 6 months, as compared to 10 months under standard 
review. Thus, the PRV enables the product developer to 
potentially bring a product to market sooner than it would 
under standard review time, which is valuable to product 
developers.
    While FDA fully supports the intent in H.R. 3299 to further 
incentivize the medical countermeasure development, we do not 
believe that adding CBRN threats to the Tropical Disease PRV 
Program is likely to achieve that goal. Only three PRVs have 
been awarded to date under the Tropical Disease PRV Program 
since its inception in 2007, and these were for products that 
had been in development prior to the creation of the PRV 
program. Thus, it remains unclear at this time how effective 
this program is in spurring product development, particularly 
for new product development.
    And even if PRV has ultimately proved successful in 
incentivizing product development, expanding the Tropical 
Disease PRV Program to CBRN threats has the potential to 
increase the number of PRVs that are issued over time, which 
could negatively affect the sales value of PRVs and thus the 
ability of the PRV program to do what it is intended to do: 
incentivize product development.
    As Dr. Hatchett noted, the U.S. Government already provides 
significant incentives to help facilitate medical 
countermeasure development, including funding for research and 
development, clinical trial costs, and procurement contracts, 
and extensive technical assistance throughout the development 
process. These incentives have been highly successful in 
facilitating the development of medical countermeasures 
required for emergency preparedness and response. Therefore, it 
is unclear that extending PRVs to CBRN threats is sufficient or 
even necessary to incentivize additional medical countermeasure 
development.
    FDA is also very concerned that adding CBRN threats to the 
Tropical Disease PRV Program will have a negative impact on 
FDA's ability to support product development. PRVs are redeemed 
for products that would not otherwise qualify for priority 
review, such as drugs to treat conditions for which safe and 
effective therapies often already exist: for example, elevated 
cholesterol or diabetes.
    The clinical trials for these applications are typically 
more numerous, involving thousands more patients, and more 
complex than for the types of products that would normally 
qualify for priority review. Reviewing such applications within 
the target 6-month priority review timeframe is very 
challenging and requires many more person-hours and a larger 
review team. Thus, managers and reviewers must refocus time and 
resources away from other important public health work.
    If there are more PRVs being issued and redeemed as a 
result of the proposed expansion of the Tropical Disease PRV 
Program, FDA will have fewer resources available to review 
other marketing applications, including for serious diseases 
for which no available therapies exist.
    These resource constraints will also undermine FDA's 
ability to conduct its portfolio of public health work from 
providing advice and guidance in the early stages to help 
facilitate product development, including for medical 
countermeasures, as well as to monitoring safety and approval. 
Given the uncertainty related to the utility of extending PRVs 
to CBRN threats and the potential negative unintended 
consequences associated with doing so, FDA believes Congress 
should approach the expansion of the PRV program to CBRN 
threats with caution.
    We suggest that it would be advantageous to conduct a full 
assessment of U.S. Government medical countermeasure programs 
to determine if additional incentives are needed, and if so, 
bring together key experts and stakeholders to explore the most 
appropriate incentives to add.
    Thank you, and I will be happy to answer any questions you 
may have.
    [The prepared statement of Mr. Mair follows:]
    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
    
    Mr. Pitts. The Chair thanks the gentleman.
    I recognize Colonel Coleman, 5 minutes for your summary.

                STATEMENT OF RUSSELL E. COLEMAN

    Colonel Coleman. Good morning. Chairman Pitts, Ranking 
Member Green, and distinguished members of the subcommittee, 
thank you for the opportunity to testify on Department of 
Defense efforts to partner with industry on the development of 
medical countermeasures that threaten our deployed military 
forces. I am talking about chemical, biological, radiological, 
and nuclear agents, CBRN.
    As the DOD Joint Project Manager for Medical 
Countermeasures Systems, my mission is the advanced 
development, procurement, and sustainment of FDA-approved 
diagnostics, vaccines, and therapeutics needed to protect the 
warfighters from these deadly hazards.
    I am one of five Joint Project Managers within the DOD's 
Joint Program Executive Office for Chemical and Biological 
Defense, which is the material developer for the Department of 
Defense Chemical and Biological Defense Program, providing 
full-spectrum capabilities against CBRN attacks. Today, 
available economic and regulatory incentives have not succeeded 
in encouraging the industry to partner with the Department of 
Defense on the development of medical countermeasures against 
CBRN hazards.
    In general, medical countermeasures against these threats 
for the military would be used in rare emergency situations. 
And the military market is small. We are talking, you know, a 
couple hundred thousand forces, not tens of millions or 
hundreds of millions. This market is small so that it is 
unlikely to yield an acceptable return on investment for our 
industry partners. And industry performers, in my talks with 
them, have indicated that return on investment is their top 
priority, and there is simply little or no benefit in targeting 
these low-likelihood, high-impact threats.
    I personally believe that incentives are needed to inspire 
additional innovation in this market. There are a variety of 
potential incentives that could be used to encourage this 
investment, and the Department of Defense recognizes that the 
development of incentives will require a careful assessment of 
the risks and benefits that extend well beyond just the 
Department of Defense.
    Please recognize that we are not idle in the face of the 
challenges we have. My organization is taking steps to increase 
the Department of Defense's ability to more rapidly develop and 
field medical countermeasures for the Joint Forces.
    We have recently announced the award of an other 
transaction authority consortium specific for the development 
of medical countermeasures in order to make it easier for 
nontraditional defense contractors, such as pharmaceutical 
industry, to partner with the Department of Defense. The OTA is 
a special contracting vehicle that has flexibility that is 
appealing to the pharmaceutical companies.
    Additionally, my office is standing up the DOD Medical 
Countermeasures, Advanced Development, and Manufacturing 
Capability, a dedicated and enduring capability to conduct 
advanced development and manufacturing of products for the 
warfighter. This facility will make it easier and more likely 
that small biopharmaceutical companies, with which the DOD 
already engages but who lack the necessary experience with the 
FDA and with manufacture and production, to actually succeed at 
filling our DOD role.
    The bottom line is that the DOD is determined to field and 
fully fulfill those validated warfighter requirements that will 
provide those urgently required capabilities against CBRN 
threats. I applaud the conversation now ongoing as to which 
incentives can best meet those requirements and generate 
innovation in this area.
    Thank you again for the opportunity to provide my 
perspective. I look forward to continued congressional efforts 
to achieve results for the warfighter and the taxpayer.
    [The prepared statement of Colonel Coleman follows:]
    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
    
    Mr. Pitts. The Chair thanks the gentleman.
    We are voting on the floor. We still have time to begin 
questioning, so I will begin the questioning. I recognize 
myself 5 minutes for that purpose.
    Colonel Coleman, the Department of Homeland Security has 
identified 13 material threats to U.S. national security. Would 
a PRV for threats on the material threat list help develop new 
MCMs for DOD? And why is it so important that we make sure 
these products are developed?
    Colonel Coleman. Thank you, sir. There is a Department of 
Homeland Security threat list, the material threat list, and a 
DOD threat list. They have many commonalities. So I believe 
that the availability of PRVs for agents on that material 
threat list would be of value to the Department of Defense.
    As to the second part of your question, why is this 
necessary for the Department of Defense? We face a myriad of 
threats on the battlefield. Our environment is fundamentally 
different from that face defending the homeland. We deploy our 
military forces to remote areas of the world where we have an 
austere environment, limited resources, difficult situations. 
And so the situation for the military is not the same as for 
the homeland.
    There are a myriad of threats that we face, and we don't 
have capabilities against many of them. We recognize the need, 
and we have ongoing problems and programs. The best example I 
can highlight is Ebola virus in the recent outbreak that is so 
fresh in our minds. I deployed to Zaire in 1995 as part of a 
small team dealing with an Ebola outbreak. At that time, I was 
given a thermometer. This was the medical countermeasure 
available. Take your temperature, and we will throw you in the 
isolation ward.
    Flash forward 20 years, and while the Government has been 
actively involved in developing countermeasures for Ebola 
virus, what did we have? We did not have FDA-approved products. 
Yes, we had experimental compounds that all of us worked to 
make available to help save lives, but we had not been able to 
get them over the finish line. From my personal perspective, 
again, for the military, it is the lack of industry interest 
just because of the lack of return on investment.
    We wish that, for our military needs, we would have a large 
enough guarantee that we would buy enough product to make it 
worthwhile. That is just not the case for the military. So 
alternative incentives, in my mind, could replace the return on 
investment. Now, I have to caveat, these are my personal 
perspectives and not a Department of Defense position. There is 
no real position from the Department of Defense on the value of 
priority review programs, but there is great interest in better 
understanding the incentives that could be made available.
    Thank you, sir.
    Mr. Pitts. Thank you.
    Mr. Mair, you said, in 2009, in an article that you 
authored, quote: ``Priority review vouchers are an innovative, 
high-impact, low-cost mechanism for encouraging the development 
of new medicines and vaccines for infectious diseases,'' end 
quote.
    In your testimony, you say that concern that extending the 
Tropical Disease PRV Program to CBRN threats may not 
effectively incentivize medical countermeasure development. 
Have you changed your position? Explain, you know, the change 
there.
    Mr. Mair. Thank you. So back when I wrote about the value--
potential value of PRVs for CBRN threats, I initially got--it 
was initially not even a program that was anything but an idea 
back in 2007 when I initially published on that. And at that 
time, PRVs were only an idea, and then since that time, 
Congress created the Tropical Disease PRV Program, and then we 
also have now a pediatric rare disease PRV program.
    So both of those programs now exist, and they have a lot of 
products that you could get through under that. So my concern 
at this point is twofold: One is that to continue to increase 
the program will reduce the value of the vouchers. And so it is 
unclear that to keep growing the program is going to undermine 
the program. And so there is that problem and also the issue of 
the effect on FDA's ability to conduct its work. At the time, I 
didn't appreciate that because I was not in Government. And it 
sounded at the time like it was reasonable that FDA could 
charge an extra user fee and they would be able to bring on 
extra staff to do the extra work associated with those PRV 
reviews. But it turns out that it doesn't work that way because 
we can't just staff up quickly because those fees are one time 
and unpredictable.
    And so the effect on FDA's ability to do its other work is 
sort of balanced against the value of the PRV. And also, at 
this time, it is not even clear that these PRVs are really 
valuable to the developers who might get them, especially if we 
continue to grow the program and they become less valuable.
    Mr. Pitts. Thank you.
    I have a question for you, Dr. Hatchett, but my time is 
expired for now, so I will recognize the ranking member.
    Mr. Green, 5 minutes for questions.
    Mr. Green. Thank you, Mr. Chairman.
    Dr. Hatchett, thank you for joining us today. I think it is 
important to understand each element of H.R. 3299. I would like 
to focus on the provision which would give BARDA its 
contracting authority. When BARDA was created in 2006, Congress 
gave the agency sole authority to negotiate and execute medical 
countermeasure contracts to ensure that it would react quickly 
to the development of vaccines and appropriate solutions.
    My understanding is that the contracting was moved from 
BARDA to AMCG in 2009 in order to streamline ASPR's internal 
process. However, I heard from stakeholders that this 
transition has several unintended consequences which serve to 
slow down the procurement process for medical countermeasures. 
For example, companies often respond to BARDA requests to 
submit proposals with a 24 to 48-hour turnaround only to have 
these proposals language in the AMCG's review process for 
multiple weeks or months.
    Countermeasure and development is critical to our national 
security and requires a more urgent and efficient contracting 
process than traditional grants at HHS. Though I am sure AMCG 
is well intended, they do not appear best suited to deal with 
the complexities of vaccine or medical countermeasures 
development the way BARDA does.
    Dr. Hatchett, I know you have only been on a job for a 
couple of months, but do you believe that we could achieve more 
efficiencies in the contracting process? If so, what 
recommendations would you have for this committee?
    Dr. Hatchett. Thank you, Mr. Green. Thank you for the 
question.
    Let me address the major part of the question first, which 
is whether I think that we should move the contracting activity 
within ASPR back into BARDA. And I actually do not think that 
we should do that. There were good reasons of policy, as 
opposed to just streamlining ASPR's contracting activity, that 
underlay the decision to move that contracting activity out of 
BARDA and to have it provide a separate line of reporting 
directly to the Assistant Secretary for Preparedness and 
Response.
    Having the independent contracting authority provides 
checks and balances, obviously. It helps ASPR conduct its 
business with autonomy, without either the perception or 
potentially the reality of undue influence by the BARDA 
Director. And it allows the Assistant Secretary, which is a 
Senate-approved Presidential appointment, to provide direct 
oversight of the contracting activity within ASPR.
    Mr. Green. I have got some other questions. And I 
understand the separation of powers and the checkpoints, but I 
also know that, if it is an emergency, you know, for the 
companies to submit the contract within 48 hours, why would it 
take months to do it if we actually had an emergency that we 
needed? And a good example is Zika, which we are experiencing 
right now.
    Dr. Hatchett. So Zika is a good example. Thank you for that 
question. When it is an emergency, our AMCG, our contracting 
office can act very, very rapidly. In fact, during the Zika 
crisis, there was an incident that was potentially going to 
turn into a medical crisis where FDA issued guidance about the 
collection of blood in areas where ongoing Zika transmission 
was occurring, and it was going to require blood collection in 
areas with active Zika transmission to be stopped.
    We learned about the impact that this was going to have on 
Puerto Rico, which could potentially produce a medical crisis 
there, on February 24, and within 6 business days, our 
contracting office had issued contracts to support the 
emergency delivery of blood to Puerto Rico. And 1 day after the 
contract was issued, blood supplies began to be moved to Puerto 
Rico. That was in Zika.
    During----
    Mr. Green. And I appreciate that, you know, but, again, we 
all have to be on our toes. Two years ago, it was Ebola, and 
now it is Zika. And, you know, where I come from in Texas, we 
have a lot of other challenges that--but I appreciate it.
    What other serious infectious disease threats is ASPR and 
BARDA monitoring and is concerned about the potential impact on 
public health? And what sustained approaches and questions and 
steps can be taken to prepare for emerging threats before they 
reach the level of being immediate and urgent public health 
concerns?
    Dr. Hatchett. So we are constantly scanning to act 
proactively if we detect emerging threats. We are, for example, 
paying very close attention to the yellow fever outbreak in 
Angola at present and monitoring the manufacturing capacity in 
status of yellow fever vaccine stockpiles. We certainly are 
continuing to monitor Ebola. We are working very closely with 
the international community. There is an ongoing effort right 
now to prioritize known emerging pathogens in terms of the 
potential threat they face.
    Mr. Green. OK. Mr. Chairman, thank you. I would like to ask 
unanimous consent to place in the record a letter from the 
Doctors Without Borders.
    Mr. Pitts. Without objection, so ordered.
    [The letter appears at the conclusion of the hearing.]
    Mr. Pitts. We are voting on the floor. We still have a 
couple of minutes left to vote. There are 11 votes, so we are 
going to stand in recess until the conclusion of those votes. 
It should be around 11:30.
    So, without objection, the committee stands in recess.
    [Recess.]
    Mr. Pitts. All right. Thank you for your patience. The time 
of recess having expired, we will reconvene the hearing.
    And the Chair now recognizes the gentlelady from Indiana, 
Mrs. Brooks, for 5 minutes of questions.
    Mrs. Brooks. Thank you, Mr. Chairman.
    And I would ask unanimous consent to provide to the record 
five letters of support for a bill, H.R. 3299: one from Douglas 
Bryce, Joint Program Executive Officer for Chemical and 
Biological Defense from the Department of the Army; one from 
the Alliance for Biosecurity; one from the California Life 
Sciences Association; one from the Biotechnology Innovation 
Organization; and one that is categorized from a number of 
venture capital firms.
    Mr. Pitts. Without objection, so ordered.
    [The letters appear at the conclusion of the hearing.]
    Mrs. Brooks. Thank you.
    Dr. Hatchett, I realize that you have only taken over very 
recently as the BARDA Director, as recently as last month, but 
I am curious, and I would like to share with you some 
statements that your predecessor, Dr. Robin Robinson, told this 
committee under oath last year in November of 2015.
    He was asked the question if he believed that additional 
incentives were needed to get the private sector involved in 
the medical countermeasures development, and he answered yes.
    He also, when asked if he believed that creation of a 
priority review voucher limited to the material threats 
identified by DHS would be a useful incentive for the private 
sector, he answered yes to that as well.
    And when asked if he believed Congress gave BARDA the 
unique contracting authority based on its unique national 
security mission, he answered originally yes.
    When asked if it would be helpful to further expedite the 
medical countermeasures contracting process, he answered yes.
    And, finally, he asked if it would be helpful, most 
directly, for BARDA to have direct control over its advance 
development and procurement contracts as it has in the past. 
And he indicated, whatever would be helpful, whatever we could 
do, yes.
    And so could you please explain the agency's and the leader 
of the agency's dramatic shift in thinking? And I appreciate 
your praise of, you know, ASPR's contracting authority and so 
forth, but how is it that the leader of BARDA previously has a 
180-degree different view than you do?
    Dr. Hatchett. Thank you for giving me the opportunity to 
address that. Would you like me to address the question about 
incentives in the priority review voucher first, or would you 
like me to tackle the contracting?
    Mrs. Brooks. Whichever you prefer.
    Dr. Hatchett. OK. Let me start with the incentives 
question.
    We are very concerned about ensuring that we have 
appropriate incentives in place to support medical 
countermeasure development. As you and the members of the 
committee know, most of the medical countermeasures do not have 
viable commercial markets that can justify their existence. And 
in the absence of an appropriate set of incentives--and I do 
think it is important that we have a set of incentives--that 
development just will not take place. And it has taken us over 
a decade to get a set of incentives in place that have begun to 
show results, as I mentioned in my original testimony.
    I believe, with respect to the priority review vouchers, 
that--I certainly also hear from our partners in industry about 
their interest in seeing the priority review voucher being 
extended into this space. My perception is that the reason they 
are interested in seeing a priority review voucher extended 
into this space--a priority review voucher is what we call a 
pull incentive. It is a prize for delivering, you know, the 
goods. It is not to help them perform research, but it is 
something that we give them when they succeed. We----
    Mrs. Brooks. But just, if I could clarify----
    Dr. Hatchett. Yes, ma'am.
    Mrs. Brooks [continuing]. This involves no taxpayer 
dollars. Is that correct?
    Dr. Hatchett. The priority review voucher does have costs. 
They are distributed differently. It is not a direct taxpayer-
dollar-funded incentive.
    But it is a pull incentive, because if a company can 
receive a priority review voucher, then they have this prize 
which they can trade on the open market, and it provides 
potentially a great deal of value to the company.
    My perception is that the companies that have expressed 
support for this are expressing support for a new pull 
incentive because of their concern about our collective 
commitment to the biodefense enterprise. Without a sustained, 
substantial commitment to supporting medical countermeasure 
development, they, I believe, view the addition of a new 
incentive as potentially valuable.
    I believe that the incentives that we have in place, if 
they are sustained and fully supported, are demonstrating that 
they can work. And that is why I differ with my predecessor 
about the value of a priority review voucher. I understand the 
interest in the priority review voucher. I am not denying that 
it serves as a pull incentive. But I believe there are more 
direct and less deleterious ways that we can achieve success.
    Mrs. Brooks. But would you agree with me, though, it is 
certainly not just the private-sector companies who engage in 
this space. It also was endorsed in a significant way by the 
National Blueprint for Biodefense by the blue-ribbon panel. And 
so a number of experts for a long period of time believed that 
this would be the way forward. In fact, it is a number of their 
recommendations.
    Dr. Hatchett. We are very interested in looking at all 
potential incentives that can be brought to the table.
    And the one other thing that I would say is that, in the 
various spaces that we work in, for CBRN threats, for pan flu, 
for antimicrobial resistance, and now for emerging diseases, 
the market failures for each of those areas differ, and I 
believe that they will require potentially different sets of 
incentives to achieve success against each of those threats.
    Mrs. Brooks. Thank you.
    Mr. Chairman, I failed to also ask if we could submit for 
the record--I know that you, I believe, in your questioning, 
mentioned prior articles written by Dr. Mair. And I have two 
articles with respect to the priority review vouchers and the 
value that I would like to submit for the record written, in 
part, by Dr. Mair.
    Mr. Pitts. Without objection, so ordered.
    [The articles appear at the conclusion of the hearing.]
    Mrs. Brooks. Thank you. My time has expired. I yield back.
    Mr. Pitts. The Chair thanks the gentlelady.
    I now recognize the vice chairman of the subcommittee, Mr. 
Guthrie, for 5 minutes.
    Mr. Guthrie. Thank you.
    Thank you all for being here and your patience. We 
appreciate it.
    Mr. Mair, I know that you have claimed that when a priority 
review voucher is redeemed, FDA has a harder time reviewing 
other priority review applications on time. However, in its 
most recent PDUFA performance report to Congress, the FDA 
stated that it met review goals for 100 percent of the 29 
priority review applications it received. And it appears, from 
FDA's own data, the use of priority review vouchers has not had 
any impact on review times for other priority applications.
    If the FDA doesn't support the priority review voucher 
incentive, then what other kind of incentives could be 
appropriate for developing countermeasures? I know you are not 
going to endorse any or ask for any, but what are other 
incentives that we could look at?
    Mr. Mair. Thank you for the question.
    So, with respect to the effect, I think--with respect to 
the effect of the vouchers, potential effect on our ability to 
do other reviews, I think our concern we are raising here is 
expanding the program. Well, there will be more vouchers out 
there that will eventually come in. And so this has the 
potential to affect our ability to do more of our other work 
down the road, especially if we continue to expand the program.
    So while, you know, one or two might by doable, if we end 
up getting, you know, 5, 10, 15 vouchers out there, it, you 
know, has the potential to grow to a point where it is----
    Mr. Guthrie. Are there other incentives that might be 
workable if we need priorities to move forward?
    Mr. Mair. You know, it is a difficult question and 
something we should look at, but there are--you know, it is a 
question of, you know, the incentives we currently have, can we 
treat them, can we hone them in some way, can we improve what 
is currently available, or can we add new incentives to the 
mix, and what is most valuable, and what can get us there in 
the best possible way with the most value to the taxpayer in 
terms of getting us there most efficiently. So it----
    Mr. Guthrie. OK. Thanks. I am going to try to get through a 
couple more questions. I appreciate that. Thanks a lot. I 
wasn't cutting you off to be rude, just to get to a couple more 
questions in my 5 minutes.
    Colonel Coleman, do you believe the Department of Defense 
has the requisite number of medical countermeasures developed, 
licensed, and available to protect our warfighters from 
biological agents? And, in your opinion, should Congress be 
doing more to encourage the development of medical 
countermeasures against these threats, like creating priority 
review vouchers for the medical countermeasures?
    Colonel Coleman. Yes, sir. Thank you for that question.
    So I can unequivocally say that we don't have the full 
array of medical countermeasures needed to combat weapons of 
mass destruction. Ergo, we have a robust program with funds 
provided by Congress for this express purpose. So, clearly, the 
needs continue, and we are a long way from where we ultimately 
need to be.
    In terms of any Department of Defense position, there is no 
position, as I stated earlier--I mean, there is a clear belief 
that we need an array of incentives. Personal opinion, which I 
think you asked, regarding priority review vouchers, I believe 
they could potentially be of great value.
    I will refer back to the Ebola virus outbreak. Post-
outbreak, I have engaged with conversations with many of the 
pharmaceutical companies that chose to engage at the time of 
the outbreak, and their interest is waning. And some of the 
companies have indicated that, when they choose to stay in, it 
is really for the priority review voucher, which was added to 
that neglected tropical disease threat list. So I am getting 
the feedback from commercial enterprises that they see the 
value to this.
    Mr. Guthrie. OK. Thank you.
    And, Dr. Hatchett, some claim that it is important that 
BARDA does not have contracting authority because of potential 
conflicts of interest or undue influence of the BARDA Director. 
Why was your contracting authority taken away? And did the 
BARDA office lack program integrity?
    Dr. Hatchett. Thank you for asking about the contracting 
authority again because I didn't get to answer Mrs. Brooks' 
question----
    Mr. Guthrie. OK.
    Dr. Hatchett [continuing]. And would like to address her 
question as well.
    The contracting authority was removed from BARDA, I 
believe, in 2009, which was prior to--I joined BARDA in 2011.
    Mr. Guthrie. Yes. There was no implication on you in there.
    Dr. Hatchett. Yes. And I believe the concern was 
legitimately that contracting is such an important activity, it 
manages the taxpayers' dollar, that it was extremely important 
that it be independent and that it represent the business 
function of Government independently in terms of negotiations 
with companies.
    Our contracting office is right down the hall from my 
office. The head of our contracting authority, retired 
Brigadier General Jeff Scarborough, is--you know, his office is 
less than 100 yards from mine. We talk every single day. Our 
staff interact with the contracting officer staff every single 
day. So, you know, there are no barriers to our working 
together. We work together on all contracting actions.
    And in point of fact, to answer Ms. Brooks' question about 
why I have a different opinion than my predecessor, I have 
looked at the data. I have looked at the data as to the 
timelines for individual contracting actions as well as 
aggregate timelines. And it is quite impressive that we are 
well below Federal and departmental benchmarks in terms of our 
performance. There are outliers, some that are large outliers 
that result in, you know, the average times being actually 
being lower than the median times. That happens.
    But, overall, I think our contracting office is providing a 
service to the American citizen by ensuring the integrity of 
our procurement process. And I am very comfortable with the 
system as it currently exists. I just have a different opinion 
than my predecessor.
    Mr. Guthrie. Thank you, Mr. Chairman. My time has expired, 
so I yield back.
    Mr. Pitts. The Chair thanks the gentleman.
    Without objection, we have a member of the Energy and 
Commerce Committee, not a member of the subcommittee, here, one 
of prime sponsors of legislation. I would like to yield to Ms. 
Eshoo 5 minutes for questioning.
    Ms. Eshoo. Thank you very much, Mr. Chairman, for your 
legislative courtesy.
    And I would like to thank the witnesses for their testimony 
today.
    I am very proud of the legislation that former Congressman 
Mike Rogers and myself shaped and shepherded to create the law 
that led to BARDA. We are both members of the Energy and 
Commerce Committee, but, very importantly, both members of the 
House Intelligence Committee. And we viewed this issue in many 
ways as the tip of the spear, that our national security is a 
portfolio that contains many items that must be addressed.
    And so it is a pleasure to work with Congresswoman Brooks 
to update BARDA, but the principles, the underlying principles 
still remain, and that is that we be effective, that we be 
limber, that we be timely, that we be able to identify, that we 
be able to attract those who are actually going to produce the 
stockpiles for our country so that we are indeed prepared.
    And I hear some back and forth here, the innards and some 
of the weeds and the whatever. I think we have to raise our 
vision and keep in front of us exactly what I just said.
    So, Mr. Mair, the FDA claims that allowing biodefense 
medical countermeasures to qualify for a priority review 
voucher would dramatically increase the number of PRVs awarded. 
Now, DHS has identified only 13 material threats to U.S. 
national security, and since the creation of BARDA in 2006, 12 
years ago, there have been 3 medical countermeasures.
    Now, it has been stated before, it is worth stating again, 
that this program is privately funded. There are no taxpayer 
dollars in it.
    How many medical countermeasures are you aware of in the 
pipeline that would qualify for a PRV under this bill?
    Mr. Mair. Thank you for the question. I might defer that to 
Richard to speak to----
    Ms. Eshoo. Yes, let's go quickly, because I only have 5 
minutes.
    Mr. Mair. Sorry--to Richard, what is in the BARDA pipeline.
    Ms. Eshoo. How many countermeasures are you aware of in the 
pipeline that would qualify?
    Dr. Hatchett. Ma'am, I don't have a specific number 
available to me. I would be happy to provide that information--
--
    Ms. Eshoo. That would be great.
    Dr. Hatchett [continuing]. To you and will do so.
    Ms. Eshoo. And would you please provide the committee with 
a list of those medical countermeasures, the candidates that 
you believe would qualify? All right?
    Dr. Hatchett. Uh-huh.
    Ms. Eshoo. Dr. Hatchett, how long does your average vaccine 
procurement take from solicitation to award?
    Dr. Hatchett. The most recent numbers that I have looked at 
are actually aggregate numbers of major acquisition programs. 
And so those include Project Bioshield procurement actions, the 
most recent four procurement actions, as well as three 
additional major acquisition----
    Ms. Eshoo. Yes, I just want to know how long does your 
average vaccine procurement take from solicitation to award.
    Dr. Hatchett. Sure.
    Ms. Eshoo. Because timeliness is of the essence in all of 
this. If we can't be timely--identify, target, be timely, bring 
it up, have these measures in place, then this is just a piece 
of paper with good ideas on it.
    Dr. Hatchett. So the four actions that I have data for 
immediately available, three of them took 90 days from 
solicitation to award.
    Ms. Eshoo. I am asking about vaccine procurement.
    Dr. Hatchett. OK. I will have to get back to you with 
definitive data.
    Ms. Eshoo. OK. I would appreciate that.
    Dr. Hatchett. OK.
    Ms. Eshoo. I really don't get your reason, your thinking, 
and what you have testified today, Dr. Hatchett, about 
contracting authority under BARDA. It is the way the 
legislation was written originally. The Commission--I mean, if 
there was ever a bipartisan commission of some of the most 
highlyregarded individuals in public service--they don't agree 
with you.
    How did you arrive at your thinking? I mean, does it make 
it faster? More effective? What is it that you don't like about 
it?
    Dr. Hatchett. First, in terms of how the Department of 
Health and Human Services handles contracting throughout the 
operating divisions----
    Ms. Eshoo. No, I am asking you. I am asking you.
    Dr. Hatchett. So I am trying to address your question, 
ma'am.
    The contracting activity at NIH, at FDA, at CDC report 
directly to the director of those agencies and provide services 
to the components of those agencies. The contracting activity 
within ASPR reports directly to the ASPR and provides----
    Ms. Eshoo. I think you are talking about an organization 
chart. I want to know, in terms of our national security and 
the import of what this law is about, why do you take the 
position that you do?
    Dr. Hatchett. I take the position that I do because I 
understand the complaints that have been articulated by our 
private-sector partners, and they have gone on to propose a 
solution, which is to move the contracting authority back into 
BARDA.
    Their complaints relate to concerns about the length of 
time it takes, about their interactions with the contracting 
authority. I believe there are other ways to address the 
complaints that they have articulated that preserve the 
integrity of our procurement process in a way that would be 
more effective than moving the contracting authority back into 
BARDA.
    Ms. Eshoo. Thank you.
    Thank you, Mr. Chairman.
    Mr. Pitts. The Chair thanks the gentlelady.
    Dr. Hatchett, I didn't get to ask my question of you, so I 
would like to do that and let the ranking member or anyone else 
ask a followup if they would like.
    I would like to read from a letter sent to Congress by a 
group of venture capital investors who have experience with 
MCMs. And they say, quote, ``We have watched the biodefense 
enterprise struggle to attract and sustain investment and 
participation from companies and financial partners. The lack 
of sustainable and predictable incentives for companies who 
have promising technologies for biodefense applications is the 
primary driver of this struggle. Quite simply, the decision to 
invest in the biodefense sector is infinitely more risky than 
any other portion of the biotech sector,'' end quote.
    So, Dr. Hatchett, I would like--and I will enter into the 
record this letter, without objection.
    Mr. Green. No objection.
    Mr. Pitts. With no objection, so ordered.
    [The letter appears at the conclusion of the hearing.]
    Mr. Pitts. Multiple developers have indicated that 
investors actually devalue the biodefense work they do with the 
U.S. Government because it is so risky and unpredictable. So my 
question is, if this is the case, why would anyone oppose this 
limited incentive for MCMs? What are your thoughts on this 
issue?
    Dr. Hatchett. Well, thank you, Mr. Chairman, for the 
question.
    I think you are actually making the same point that I was 
making earlier, which is that, in the absence of predictable 
and sustained incentives, it does become an extremely risky 
business to be in because of the absence of the commercial 
markets for the products at the end of the day.
    I believe if the administration, whatever that flavor is, 
and Congress agree to provide the sustained incentives and 
strong support, that we have demonstrated that the system can 
work technically. We can bring countermeasures forward; we can 
address the technical challenges.
    In terms of it being a risky and unpredictable business to 
be in, in 2010 we undertook an interagency review of the entire 
medical countermeasures enterprise specifically to address 
areas of risk that the Government had some control over that 
could reduce that risk and make the Government better partners 
with our private-sector partners.
    And I think the results of the last 6 years since that 
review was performed have demonstrated an acceleration in the 
delivery of countermeasures. And so many of the steps that we 
have undertaken have addressed the different risks--the 
financial risk, the technical risk, the regulatory risk, the 
risk of working with Government as a partner because of the way 
the political winds blow.
    We are extremely mindful of the risks that our partners 
face. We are working to address those risks, reduce those 
risks. And we certainly thank you for the support that you have 
provided so far. We ask for continued strong support for this 
effort because, without that support, the enterprise is 
jeopardized.
    Mr. Pitts. Thank you.
    The Ebola and Zika outbreaks have been lessons in the 
seriousness of the challenges we face in this space, and H.R. 
3299 was written to increase the efficiency of this program 
administratively and incentivize the product development. And I 
think you agree every minute is critical. It is important that 
we continue to work in a bipartisan manner to improve our 
emergency preparedness, incentivize medical countermeasures 
development.
    I will yield to the ranking member for any closing 
questions or thoughts.
    Mr. Green. Thank you, Mr. Chairman.
    I would like to ask unanimous consent to place an article 
from Health Affairs----
    Mr. Pitts. Without objection----
    Mr. Green [continuing]. Into the record.
    Mr. Pitts [continuing]. So ordered.
    Mr. Green. Thank you.
    [The article appears at the conclusion of the hearing.]
    Mr. Pitts. All right. We will have followup questions. We 
have been interrupted. We apologize for that. Thank you for 
your patience. But members do have followup questions, and 
other members have written questions. We will submit those to 
you in writing and ask that you would please respond.
    And I would remind members that they have 10 business days 
to submit questions for the record. Members should submit their 
questions by the close of business on Thursday, June the 2nd.
    Very, very important issue, very important hearing. Thank 
you. We look forward to continuing to work with you on this 
issue.
    Without objection, the hearing is adjourned.
    [Whereupon, at 12:31 p.m., the subcommittee was adjourned.]
    [Material submitted for inclusion in the record follows:]
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