[House Hearing, 109 Congress] [From the U.S. Government Publishing Office] ELUSIVE ANTIDOTES: PROGRESS DEVELOPING CHEMICAL, BIOLOGICAL, RADIOLOGICAL AND NUCLEAR COUNTERMEASURES ======================================================================= HEARING before the SUBCOMMITTEE ON NATIONAL SECURITY, EMERGING THREATS, AND INTERNATIONAL RELATIONS of the COMMITTEE ON GOVERNMENT REFORM HOUSE OF REPRESENTATIVES ONE HUNDRED NINTH CONGRESS FIRST SESSION __________ JUNE 14, 2005 __________ Serial No. 109-83 __________ Printed for the use of the Committee on Government Reform Available via the World Wide Web: http://www.gpoaccess.gov/congress/ index.html http://www.house.gov/reform ______ U.S. GOVERNMENT PRINTING OFFICE 24-084 WASHINGTON : 2005 _____________________________________________________________________________ For Sale by the Superintendent of Documents, U.S. Government Printing Office Internet: bookstore.gpo.gov Phone: toll free (866) 512-1800; (202) 512�091800 Fax: (202) 512�092250 Mail: Stop SSOP, Washington, DC 20402�090001 COMMITTEE ON GOVERNMENT REFORM TOM DAVIS, Virginia, Chairman CHRISTOPHER SHAYS, Connecticut HENRY A. WAXMAN, California DAN BURTON, Indiana TOM LANTOS, California ILEANA ROS-LEHTINEN, Florida MAJOR R. OWENS, New York JOHN M. McHUGH, New York EDOLPHUS TOWNS, New York JOHN L. MICA, Florida PAUL E. KANJORSKI, Pennsylvania GIL GUTKNECHT, Minnesota CAROLYN B. MALONEY, New York MARK E. SOUDER, Indiana ELIJAH E. CUMMINGS, Maryland STEVEN C. LaTOURETTE, Ohio DENNIS J. KUCINICH, Ohio TODD RUSSELL PLATTS, Pennsylvania DANNY K. DAVIS, Illinois CHRIS CANNON, Utah WM. LACY CLAY, Missouri JOHN J. DUNCAN, Jr., Tennessee DIANE E. WATSON, California CANDICE S. MILLER, Michigan STEPHEN F. LYNCH, Massachusetts MICHAEL R. TURNER, Ohio CHRIS VAN HOLLEN, Maryland DARRELL E. ISSA, California LINDA T. SANCHEZ, California GINNY BROWN-WAITE, Florida C.A. DUTCH RUPPERSBERGER, Maryland JON C. PORTER, Nevada BRIAN HIGGINS, New York KENNY MARCHANT, Texas ELEANOR HOLMES NORTON, District of LYNN A. WESTMORELAND, Georgia Columbia PATRICK T. McHENRY, North Carolina ------ CHARLES W. DENT, Pennsylvania BERNARD SANDERS, Vermont VIRGINIA FOXX, North Carolina (Independent) ------ ------ Melissa Wojciak, Staff Director David Marin, Deputy Staff Director/Communications Director Rob Borden, Parliamentarian Teresa Austin, Chief Clerk Phil Barnett, Minority Chief of Staff/Chief Counsel Subcommittee on National Security, Emerging Threats, and International Relations CHRISTOPHER SHAYS, Connecticut, Chairman KENNY MARCHANT, Texas DENNIS J. KUCINICH, Ohio DAN BURTON, Indiana TOM LANTOS, California ILEANA ROS-LEHTINEN, Florida BERNARD SANDERS, Vermont JOHN M. McHUGH, New York CAROLYN B. MALONEY, New York STEVEN C. LaTOURETTE, Ohio CHRIS VAN HOLLEN, Maryland TODD RUSSELL PLATTS, Pennsylvania LINDA T. SANCHEZ, California JOHN J. DUNCAN, Jr., Tennessee C.A. DUTCH RUPPERSBERGER, Maryland MICHAEL R. TURNER, Ohio STEPHEN F. LYNCH, Massachusetts JON C. PORTER, Nevada BRIAN HIGGINS, New York CHARLES W. DENT, Pennsylvania Ex Officio TOM DAVIS, Virginia HENRY A. WAXMAN, California Lawrence J. Halloran, Staff Director and Counsel Kristine Fiorentino, Professional Staff Member Robert A. Briggs, Clerk Andrew Su, Minority Professional Staff Member C O N T E N T S ---------- Page Hearing held on June 14, 2005.................................... 1 Statement of: Hanna, Dr. Michael G., Jr., Chief Scientific Officer, Intracel; and Dr. James H. Davis, executive vice president and general counsel, Human Genome Sciences, Inc............ 95 Davis, Dr. James H....................................... 102 Hanna, Dr. Michael G., Jr................................ 95 Klein, Dale, Assistant to the Secretary of Defense for Nuclear, Chemical and Biological Defense Programs, Department of Defense; Dr. Anthony S. Fauci, Director, National Institute of Allergy and Infectious Diseases, National Institute of Health; Stewart Simonson, Assistant Secretary for Public Health, Emergency Preparedness, Department of Health and Human Services; John Vitko, Jr., Director, Biological Countermeasures Portfolio, Science and Technology Directorate, Department of Homeland Security; and Ronald J. Saldarini, Scientific Consultant, Institute of Medicine................................................ 5 Fauci, Dr. Anthony S..................................... 21 Klein, Dale.............................................. 5 Saldarini, Ronald J...................................... 74 Simonson, Stewart........................................ 48 Vitko, John, Jr.,........................................ 65 Letters, statements, etc., submitted for the record by: Davis, Dr. James H., executive vice president and general counsel, Human Genome Sciences, Inc., prepared statement of 104 Fauci, Dr. Anthony S., Director, National Institute of Allergy and Infectious Diseases, National Institute of Health, prepared statement of.............................. 23 Hanna, Dr. Michael G., Jr., Chief Scientific Officer, Intracel, prepared statement of............................ 98 Klein, Dale, Assistant to the Secretary of Defense for Nuclear, Chemical and Biological Defense Programs, Department of Defense, prepared statement of............... 8 Kucinich, Hon. Dennis J., a Representative in Congress from the State of Ohio, prepared statement of................... 121 Ruppersberger, Hon. C.A. Dutch, a Representative in Congress from the State of Maryland, prepared statement of.......... 125 Saldarini, Ronald J., Scientific Consultant, Institute of Medicine, prepared statement of............................ 76 Sanders, Hon. Bernard, a Representative in Congress from the State of Vermont, prepared statement of.................... 129 Shays, Hon. Christopher, a Representative in Congress from the State of Connecticut, prepared statement of............ 3 Simonson, Stewart, Assistant Secretary for Public Health, Emergency Preparedness, Department of Health and Human Services, prepared statement of............................ 50 Vitko, John. Jr., Director, Biological Countermeasures Portfolio, Science and Technology Directorate, Department of Homeland Security, prepared statement of................ 67 ELUSIVE ANTIDOTES: PROGRESS DEVELOPING CHEMICAL, BIOLOGICAL, RADIOLOGICAL AND NUCLEAR COUNTERMEASURES ---------- TUESDAY, JUNE 14, 2005 House of Representatives, Subcommittee on National Security, Emerging Threats, and International Relations, Committee on Government Reform, Washington, DC. The subcommittee met, pursuant to notice, at 2:06 p.m., in room 2154, Rayburn House Office Building, Hon. Christopher Shays (chairman of the subcommittee) presiding. Present: Representatives: Shays, Marchant, Platts, Duncan, Turner, Kucinich, Van Hollen, Ruppersberger, and Higgins. Staff present: Lawrence Halloran, staff director and counsel; Kristine Fiorentino, professional staff member; Robert A. Briggs, clerk and professional staff member; Andrew Su, minority professional staff member; and Jean Gosa, minority assistant clerk. Mr. Shays. The Subcommittee on National Security, Emerging Threats, and International Relations' hearing entitled, ``Elusive Antidotes: Progress Developing Chemical, Biological, Radiological and Nuclear Countermeasures,'' is called to order. First, let me apologize for keeping you waiting. It is not my practice to keep any of you waiting, you have very important things to do. More than a decade after U.S. armed forces faced exposure to Saddam's chemical arsenal and 4 years after the anthrax attacks here at home, the development of medical countermeasures against unconventional weapons remains an elusive goal. A multitude of Federal offices and programs pursue separate, shifting, often competing priorities without disciplined linkage to a strategy to address the most pressing threats. By one count last year, 75 high level Federal officials in seven Cabinet departments were responsible for biodefense policies, program execution or budgets. The Department of Health and Human Services, the Department of Homeland Security, the Department of Defense, the Department of Agriculture, the Department of Commerce, the Department of State and the Environmental Protection Agency all have some responsibility for the Nation's defenses against chemical, biological, radiological assaults. To date, this littered landscape has not been fertile soil for the growth of needed countermeasures against the threats posed by the pathogens, toxins, chemicals and isotopes known to be within the grasp of terrorists. Five years ago, the Defense Science Board saw the need for 57 vaccines, drugs and diagnostics to meet the threat. Today, we have just two of those in hand, both based on old technologies. The Department of Defense specifically, the Joint Vaccine Acquisition Program, offers a sadly illustrative example of the difficulties plaguing the broader Federal effort. A 2004 study by the Institute of Medicine found the DOD biodefense program fragmented and often prey to competing priorities. Launched in 1997 with $322 million, the JVAP has spent that much and more. Yet lists of JVAP ``accomplishments'' provided to the subcommittee include just one recently licensed therapeutic, no completed vaccines and two target vaccine programs terminated after significant expenditures. Without question, countermeasure development is an expensive, technically challenging process that cannot be forced to yield results on an arbitrary timetable. The current approach lacks cohesiveness and urgency. Those trying to advance medical countermeasures face a torturous labyrinth of Federal fiefdoms into which billions disappear, yet very few antidotes have yet to emerge. In October 2001, this subcommittee held a field hearing on the development of medical countermeasures against biological warfare agents. We met across the street in the Department of Health and Human Services headquarters building, because the Capitol complex was closed for anthrax testing and remediation. We were told aggressive steps were being taken to defend both civilian and military personnel against anthrax, smallpox, botulinum toxin and other likely threats. Today we find the biodefense pipeline still producing little more than promises of cures to come. Project BioShield represents an essential mechanism to streamline the countermeasure development end game, acquisition, but it can do little to accelerate the glacial process of moving vaccines, drugs and other therapies from basic research to final formulation and licensure. That is a function of leadership, coordination and strict adherence to a threat-based strategy. We asked our witnesses to describe how greater focus and momentum can be brought to this complex process. They bring world class credentials and unmatched experience to our discussion and we look forward to their testimony and we thank them for their presence here today. At this time, the Chair would recognize Mr. Marchant. [The prepared statement of Hon. Christopher Shays follows:] [GRAPHIC] [TIFF OMITTED] T4084.001 [GRAPHIC] [TIFF OMITTED] T4084.002 Mr. Marchant. I don't have any opening statement. I am happy to be here. Mr. Shays. Thank you. I appreciate the gentleman's participation and his help with the work of this subcommittee. Let me now take care of some business. I ask unanimous consent, given that we have a quorum, that all members of the subcommittee be permitted to place an opening statement in the record and the record remain open for 3 days for that purpose. Without objection, so ordered. I ask further unanimous consent that all witnesses be permitted to include their written statements in the record and without objection, so ordered. At this time, I will introduce the first panel. We have Dr. Dale Klein, Assistant to the Secretary of Defense for Nuclear, Chemical and Biological Defense Programs, Department of Defense; Dr. Anthony S. Fauci, Director, National Institute of Allergy and Infectious Diseases, National Institute of Health; the Honorable Stewart Simonson, Assistant Secretary for Public Health, Emergency Preparedness, Department of Health and Human Services; Dr. John Vitko, Jr., Director, Biological Countermeasures Portfolio, Science and Technology Directorate, Department of Homeland Security; and Dr. Ronald J. Saldarini, Scientific Consultant, Institute of Medicine. As is the custom, we swear our witnesses and I would ask you to stand. [Witnesses sworn.] Mr. Shays. We prefer that your testimony be closer to 5 minutes but we will roll it over for another 5 minutes and would like you to stop within that time because we have a number of panelists. Dr. Klein. STATEMENTS OF DALE KLEIN, ASSISTANT TO THE SECRETARY OF DEFENSE FOR NUCLEAR, CHEMICAL AND BIOLOGICAL DEFENSE PROGRAMS, DEPARTMENT OF DEFENSE; DR. ANTHONY S. FAUCI, DIRECTOR, NATIONAL INSTITUTE OF ALLERGY AND INFECTIOUS DISEASES, NATIONAL INSTITUTE OF HEALTH; STEWART SIMONSON, ASSISTANT SECRETARY FOR PUBLIC HEALTH, EMERGENCY PREPAREDNESS, DEPARTMENT OF HEALTH AND HUMAN SERVICES; JOHN VITKO, JR., DIRECTOR, BIOLOGICAL COUNTERMEASURES PORTFOLIO, SCIENCE AND TECHNOLOGY DIRECTORATE, DEPARTMENT OF HOMELAND SECURITY; AND RONALD J. SALDARINI, SCIENTIFIC CONSULTANT, INSTITUTE OF MEDICINE STATEMENT OF DALE KLEIN Dr. Klein. Chairman Shays and members of the subcommittee, I am honored to appear before your subcommittee again to address your questions regarding the Department's efforts to develop and acquire countermeasures to chemical, biological, radiological and nuclear threats. As you indicated, I am the Assistant to the Secretary of Defense for Nuclear, Chemical and Biological Defense Programs. Today, I will address the Department's defense process to identify, prioritize, develop and acquire countermeasures to the threats we face today and future threats. I will also provide an update on some of the accomplishments of the medical research program and the Joint Vaccine Acquisition Program. Finally, I will highlight some of our interagency cooperative efforts and following my comments, I welcome questions the subcommittee might have and I will do the best I can to answer them. In accordance with congressional authority, I serve as the focal point, overseeing the Department's chemical and biological defense research, development and acquisition programs. The Secretary of Defense recently provided direction to enhance the chemical and biological defense posture. The resulting study generated several options for increased investment based on these new requirements and accompanying risk. Based on the study findings, senior leaders agreed to increase the investment for WMB countermeasures by $2.1 billion for the fiscal years 2006-2011. The increase included $1.3 billion for Chemical and Biological Defense Program. This investment strategy begins in fiscal year 2006 with $1.5 billion for the President's budget request. In addition to this study, the Director of Program Analysis and Evaluation identified an additional $100 million in fiscal year 2006 for the Chemical and Biological Defense Program to address biological warfare and medical countermeasure initiatives. These medical countermeasure initiatives will apply transformational approaches which leverage our genomics, proteomics consistent biology data exploitation. The Chemical and Biological Defense Program has made progress in several areas of medical defense. In 2003, the first successful application of the new animal efficacy rule occurred with Food and Drug Administration approval of pyridostigmine bromide to increase survival exposure to soman nerve agent poisoning. In March 2005, a contract award was made for development of a chemical agent bioscavenger for a pre or post-exposure treatment of nerve agent exposure. In February of this year, the FDA approved the DOD Vaccinia Immune Globulin used to treat adverse events following smallpox immunization. In early 2005, clinical trials began for both a multivalent botulinium vaccine for stereotypes A and B and a plague vaccine. In July clinical trials will begin for a Venezuelan Equine Encephalitis vaccine. The DOD Chemical and Biological Defense Program activities are informally coordinated with the Department of Health and Human Services. Stewart Simonson and I meet on a regular basis with the National Institute of Allergy and Infectious Diseases with Dr. Fauci and the Centers for Disease Control and Prevention. DOD and the DHS are currently working on an interagency agreement regarding cooperation on medical countermeasure development. It is important to note that some of the medical countermeasures currently being developed through NIAID for the national stockpile have their technology bases and programs which initially began in the Department of Defense. Examples of this are the next generation anthrax vaccine and self-culture derived smallpox vaccine. A critical aspect of interagency coordination is DOD's support for Project BioShield. The first product that DOD may be able to transition to the Department of Health and Human Services under Project BioShield is a plasma-derived, bioscavenger for pre and post-exposure treatment of nerve agent exposure. The DOD has awarded an initial contract for a Phase I clinical trial at which time DHHS would be expected to assume advanced development through FDA licensure under the BioShield authority. The joint project manager for the Chemical and Biological Medical System is responsible for systems acquisition, production and medical countermeasures against chemical and biological agents, including the Joint Vaccine Acquisition Program. In February of this year, the Under Secretary of Defense for Acquisition Technology and Logistics provided you with a detailed update on the JVAP acquisition program. The Chemical and Biological Events Program budget provides a balanced investment strategy which includes the procurement of capabilities to protect U.S. forces in the near term, investment in advanced development to protect U.S. forces in the mid term and investment in the science and technology base to protect U.S. forces in the far term and beyond. As we look to the future, our main concern is a bioengineered threat to our men and women in uniform. Our main task continues to be to provide the best technology to the war fighter in the most expeditious and efficient manner possible. Therefore, my office will continue to focus on providing the technology necessary to counter the threats posed by chemical and biological agents, especially the biological agents. Thank you for the opportunity to address these issues and I will attempt to answer any questions and concerns the committee might have. [The prepared statement of Dr. Klein follows:] [GRAPHIC] [TIFF OMITTED] T4084.003 [GRAPHIC] [TIFF OMITTED] T4084.004 [GRAPHIC] [TIFF OMITTED] T4084.005 [GRAPHIC] [TIFF OMITTED] T4084.006 [GRAPHIC] [TIFF OMITTED] T4084.007 [GRAPHIC] [TIFF OMITTED] T4084.008 [GRAPHIC] [TIFF OMITTED] T4084.009 [GRAPHIC] [TIFF OMITTED] T4084.010 [GRAPHIC] [TIFF OMITTED] T4084.011 [GRAPHIC] [TIFF OMITTED] T4084.012 [GRAPHIC] [TIFF OMITTED] T4084.013 [GRAPHIC] [TIFF OMITTED] T4084.014 [GRAPHIC] [TIFF OMITTED] T4084.015 Mr. Shays. Thank you, Dr. Klein. Dr. Fauci. STATEMENT OF DR. ANTHONY S. FAUCI Dr. Fauci. Thank you for giving me the opportunity to discuss with you this afternoon the NIH biomedical research effort in the development of countermeasures against three major threats, biological, mainly microbes and toxins; radiologic and nuclear countermeasures as well as chemical countermeasures. We began this endeavor over 3 years ago with the biological and the medical countermeasures including radiologic, nuclear and chemical based on the fundamental basic scientific approach that has been adapted at the NIH for decades in our research in other areas. This includes most recently an expansion of the research capacity, both intellectual capacity of individuals involved as well as physical structure and laboratories. All of these are directed at the development of countermeasures in the form of diagnostics, vaccines and therapeutics. The greatest success thus far has been in an area in which we have had decades of experience in confronting emerging and reemerging infectious diseases at our NIH programs. In the end of 2001 and early 2002, following the anthrax attacks, we developed a comprehensive, strategic plan and a research agenda for Category A as well as Category B and C agents. In addition, we have developed and published now for your perusal the progress reports for the Category A agents and most recently, we have included the progress reports for the Category B and C agents. I would like to spend just a moment or two summarizing some of these accomplishments that have occurred over the past 3 years. First, in the arena of smallpox, you may recall right after the anthrax attack when we examined our stockpile, we had about 15,000-18,000 doses which with dilution brought us up to 90,000. Now, with the techniques that were developed and Dr. Klein just mentioned, we have over 300 million doses of smallpox. In addition, we are working on clinical trials in the next generation, safer, modified vaccinia Ankara as well as antiviral drugs against smallpox. As was mentioned, the anthrax situation is based on research that is involved in the recombinant protective antigen which has now been contracted for the stockpile through Project BioShield. In addition, we are developing monoclonal and polyclonal antibodies. We have success with Ebola. The Ebola vaccine developed at NIH has proved 100 percent effective in monkeys in protecting them from a challenge. We have just completed a Phase I trial in humans showing it to be safe and immunogenic. Botulism toxin, we are accelerating the development of antibodies, particularly monoclonal antibodies and influenza, which is a Category C agent, we are now well into clinical trials for the H-5 N-1 pandemic flu threat that we now face in Asia. This work is built upon the decades of experience with emerging and a reemerging microbes. With regard to nuclear countermeasures, this is one that is not as mature in the sense of development of countermeasures from a new standpoint as has the microbes because of the fact this was fundamentally a cold war issue that was developed through the Department of Defense and over the last several years following the dissolution of the cold war threat, we have had to revitalize the program. We are doing that in collaboration with the Department of Defense. We have a strategic plan for radiologic and nuclear countermeasure development which will be available and was signed off just last night and will be available to you. It includes our intermediate as well as our long range goals. The low hanging fruit is to expand the licensure for material that is already in the strategic national stockpile as well as to develop centers of excellence. In addition, we are developing protectants as well as response agents and importantly a program to use adult stem cell reconstitution of bone marrow suppression following a radiologic attack. We are using the expertise that was developed in fighting cancer in which one gets exposed to radiation deliberately to kill cancer cells, there is the effect on the bone marrow which we are now using that expertise to try and develop reconstitution. The same can be said about chemical countermeasures. We have a strategic plan that is not as mature as the radio- biological one. This will likely be available at the end of this calendar year and it is based on the same situation as I mentioned in looking at what we already have in the strategic stockpile and trying to expand the FDA-approved usage of that. We are doing this in very strong partnership with the U.S. Army Medical Research Institute of Chemical Defense. Again, we have immediate, intermediate and long term goals. The long term goal is to ultimately develop countermeasures that can be used both to detect as well as to counter the effects of tissue damage due to chemical weapons. Finally, on this last poster, I want to mention the coordination and the collaboration among the various agencies to which the chairman alluded. At the NIH, we coordinate through my institute by a Biodefense Research Coordinating Committee. That is within the NIH institutes as a whole. Much, if not all of the biological microbial is done through the Infectious Disease Institute but when you get into chemical and radiologic, we have a number of the other Institutes at the NIH and we coordinate that through our committee. The coordination within HHS as you will hear from Assistant Secretary Stewart Simonson takes place in his office at the Office of Public Health Emergency Preparedness and the more global Federal Government coordination among agencies including DHS, DHHS, DOD and others takes place through the Homeland Security Council, particularly through the Weapons of Mass Destruction Medical Countermeasures Subcommittee. I am finished with the oral statement. I would be happy to answer questions later. [The prepared statement of Dr. Fauci follows:] [GRAPHIC] [TIFF OMITTED] T4084.016 [GRAPHIC] [TIFF OMITTED] T4084.017 [GRAPHIC] [TIFF OMITTED] T4084.018 [GRAPHIC] [TIFF OMITTED] T4084.019 [GRAPHIC] [TIFF OMITTED] T4084.020 [GRAPHIC] [TIFF OMITTED] T4084.021 [GRAPHIC] [TIFF OMITTED] T4084.022 [GRAPHIC] [TIFF OMITTED] T4084.023 [GRAPHIC] [TIFF OMITTED] T4084.024 [GRAPHIC] [TIFF OMITTED] T4084.025 [GRAPHIC] [TIFF OMITTED] T4084.026 [GRAPHIC] [TIFF OMITTED] T4084.027 [GRAPHIC] [TIFF OMITTED] T4084.028 [GRAPHIC] [TIFF OMITTED] T4084.029 [GRAPHIC] [TIFF OMITTED] T4084.030 [GRAPHIC] [TIFF OMITTED] T4084.031 [GRAPHIC] [TIFF OMITTED] T4084.032 [GRAPHIC] [TIFF OMITTED] T4084.033 [GRAPHIC] [TIFF OMITTED] T4084.034 [GRAPHIC] [TIFF OMITTED] T4084.035 [GRAPHIC] [TIFF OMITTED] T4084.036 [GRAPHIC] [TIFF OMITTED] T4084.037 [GRAPHIC] [TIFF OMITTED] T4084.038 [GRAPHIC] [TIFF OMITTED] T4084.039 [GRAPHIC] [TIFF OMITTED] T4084.040 Mr. Shays. Thank you. We have four doctors and an honorable. Mr. Secretary. STATEMENT OF STEWART SIMONSON Mr. Simonson. Thank you. Good afternoon. I am Stewart Simonson, Assistant Secretary at HHS for Public Health Emergency Preparedness. I appreciate the opportunity to share with you information on the Department's progress on research development and acquisition programs for medical countermeasures and specifically implementation of the Project BioShield Act of 2004. HHS shares the subcommittee's desire for an effective and efficient interagency process to identify, prioritize and acquire medical countermeasures to address chemical, biological, radiological and nuclear threat agents. We also share the subcommittee's concern that this process needs to be linked to validated threats. The events of September and October 2001 made it very clear that terrorism is a serious threat to our Nation and to the world. The Bush administration and Congress responded forcefully to this threat by strengthening our medical and public health capacities to protect our citizens from these attacks. To encourage the development of new medical countermeasures against threat agents and to speed their delivery, President Bush in his 2003 State of the Union Address proposed, and Congress enacted, Project BioShield. The $5.6 billion, 10 year, special reserve fund was created to assure developers of medical countermeasures that funds would be available for the Government to purchase critical products. Since enactment, my office has moved aggressively to fill immediate gaps in our countermeasures. A genuine sense of urgency informs all of our homeland security work at HHS but it is important to note that the successful development and manufacture of safe and effective countermeasures requires an investment of both money and time. No matter how hard we work or how much money we spend, some steps in the process cannot be rushed. There is a complex spectrum of efforts needed along the research and development pipeline to produce a usable medical product countermeasure. Defining specifications for a needed countermeasure often reveals few, if any, candidates in the pipeline. To date, we have been fortunate that some of our highest priority needs for medical countermeasures could be addressed using the available, advanced development products in the pipeline. However, research and early development efforts, even when robustly funded, often take years before a concept is mature enough for advanced development. It is only when a product has reached the advanced development stage that Project BioShield provides a meaningful incentive for manufacturers the product the rest of the way. In determining the requirements for and elaborating options on medical countermeasure acquisitions, the focal point for U.S. Government interagency efforts is the Weapons of Mass Destruction Countermeasures Subcommittee. HHS, along with representatives from the Department of Homeland Security and the Department of Defense, chair the WMD Subcommittee and stakeholders from throughout the Government are represented on its working groups. In setting priorities for medical countermeasure acquisitions under BioShield, the WMD Subcommittee considers a number of factors. The credibility and immediacy of the threat are driving factors and our informed by material threat assessments conducted by DHS. We also consider the current and projected availability of appropriate medical countermeasures as well as the target population for which the countermeasure would be used. In addition, logistical issues are considered such as the feasibility of deployment in public health emergencies, shelf life, storage and maintenance requirements. Project BioShield also requires a number of findings by the Secretaries of Homeland Security and HHS prior to an acquisition commencing. These findings include three determinations: first, that there is a material threat against the U.S. population sufficient to affect national security; second, that the medical countermeasures are necessary to protect the public health from the material threat; and third, that acquiring a specific quantity of a particular countermeasure, using the special reserve fund, is appropriate. These determinations are followed by a joint recommendation to the White House by the two Secretaries. If approved, Congress is notified and HHS executes the acquisition program. The process that I have outlined has been successfully implemented through contract award three times since the enactment of Project BioShield less than a year ago. HHS has completed contract awards for acquisitions of next generation recombinant protective antigen anthrax vaccine, the current generation licensed anthrax vaccine, and pediatric formulation of potassium iodide. Additionally, the acquisition process is in the final execution phases for several other needed medical countermeasures including anthrax therapeutics, botulinum antitoxin and next generation smallpox vaccine. This robust interagency process mines the expertise in the scientific and intelligence communities to define requirements for medical countermeasures and enables policymakers to identify and evaluate acquisition options to address immediate and future needs. In closing, let me say that HHS has a clear mandate from President Bush and Congress to lead the charge in medical countermeasure development. We have already made important strides to address the public health needs of the Nation but more needs to be done. I look forward to working with you and the subcommittee to address the challenges of CBRM preparedness and its importance to public health. I look forward to answering your questions. [The prepared statement of Mr. Simonson follows:] [GRAPHIC] [TIFF OMITTED] T4084.041 [GRAPHIC] [TIFF OMITTED] T4084.042 [GRAPHIC] [TIFF OMITTED] T4084.043 [GRAPHIC] [TIFF OMITTED] T4084.044 [GRAPHIC] [TIFF OMITTED] T4084.045 [GRAPHIC] [TIFF OMITTED] T4084.046 [GRAPHIC] [TIFF OMITTED] T4084.047 [GRAPHIC] [TIFF OMITTED] T4084.048 [GRAPHIC] [TIFF OMITTED] T4084.049 [GRAPHIC] [TIFF OMITTED] T4084.050 [GRAPHIC] [TIFF OMITTED] T4084.051 [GRAPHIC] [TIFF OMITTED] T4084.052 [GRAPHIC] [TIFF OMITTED] T4084.053 [GRAPHIC] [TIFF OMITTED] T4084.054 [GRAPHIC] [TIFF OMITTED] T4084.055 Mr. Marchant [presiding]. Thank you, Mr. Secretary. The chairman had to attend a Rules Committee meeting and I will be chairing for a while. At this time, I will recognize Dr. Vitko. STATEMENT OF JOHN VITKO, JR. Dr. Vitko. Good afternoon. Thank you very much for inviting me here to speak to you today on DHS's role in this process. We at DHS do not develop medical countermeasures but play a critical role in informing and guiding the prioritization of those medical countermeasures. I would like to cover four key steps in that process today: threat assessments and determinations conducted specifically to guide Project BioShield, a broader set of risk assessments, a strategy for addressing engineered threats in partnership with and led by the Department of Health and Human Services and scientific studies to better inform these assessments. As you know, the Project BioShield Act of 2004 charges the Secretary of Homeland Security with the responsibility to determine which biological, chemical, radiological or nuclear threats constitute a material threat to our Nation's security. To fulfill this responsibility, the Department of Homeland Security Science and Technology Directorate, in partnership with our Information Analysis and Infrastructure Protection Directorate, has been conducting formal threat assessments on the agents of greatest concern to establish plausible, high consequence scenarios. These assessments are then used by the Secretary of DHS in determining whether to issue material threat determination and by HHS and the Interagency Weapons of Mass Destruction Medical Countermeasures Subcommittee in determining the need for and the requirements of any new medical countermeasures. To date, the Secretary of the Department of Homeland Security has issued material threat determinations for four agents: anthrax, smallpox, botulinum toxin and radiological nuclear devices. Additional assessments are underway for plague, tularemia, viral hemorrhagic fevers and chemical nerve agents and will be completed this fiscal year. DHS has an even broader responsibility in the President's strategy for biodefense for the 21st century. In this strategy, we are charged with conducting formal, periodic risk assessments in coordination with other departments and agencies to guide the prioritization of the Nation's ongoing biodefense activities not just medical but also including such areas as surveillance and detection, decontamination and restoration and forensics. These risk assessments factor in technical feasibility of a broad range of biological threats. The vulnerability of different portions of our society to those threats and the resulting consequence of any such attacks. The first such formal risk assessment is due in the winter of 2006 and will address all Category A and B agents from the Centers of Disease Control Prevention and Threat List, some Category C agents and a number of potential engineered threats. Recognizing that the rapid advances in biotechnology demand that we also consider the possibility of engineered threats, we have partnered with HHS and others in formulating and implementing a strategy for anticipating and responding to such threats. Together, we have developed an informed estimate of the types of emerging threats that might be within the ability of a terrorist organization to develop over the near, mid and longer terms and have laid out a strategy for addressing them. The strategy emphasizes ongoing technology watch and risk assessments, rapid surveillance and detection capabilities for engineered threats and expanded range of medical countermeasures and an integrated concept of operations for identifying and responding to emerging or engineered threats. The threat or risk assessments described above are performed with the best available information. However, there are large uncertainties, sometimes factors of 10 to 100 in some of the key parameters and hence in the associated risks. In one case, it can be the minimum amount of agent needed to infect a person and in another case, it can be the time that such an agent remains viable, that is capable of causing an infection in the air, food or water; and in a third, it can be the effect of food processing or water treatment of the agent's viability. The Department of Homeland Security has established a National Biodefense Analysis and Countermeasure Center to conduct laboratory experiments needed to close these knowledge gaps. To support this and new facilities being designed and constructed on the National Interagency Biodefense Campus at Fort Detrick, MD. Pending completion of this facility in fiscal year 2008, we have established an interim capability with other Government and private laboratories to begin this vital work. In summary, the Department of Homeland Security Science and Technology Directorate, in coordination with its Federal partners is conducting a threat and risk assessment critical to prioritizing the Nation's near and long term medical countermeasure development. This concludes my prepared statement and I would be delighted to answer questions at the appropriate time. [The prepared statement of Dr. Vitko follows:] [GRAPHIC] [TIFF OMITTED] T4084.056 [GRAPHIC] [TIFF OMITTED] T4084.057 [GRAPHIC] [TIFF OMITTED] T4084.058 [GRAPHIC] [TIFF OMITTED] T4084.059 [GRAPHIC] [TIFF OMITTED] T4084.060 [GRAPHIC] [TIFF OMITTED] T4084.061 [GRAPHIC] [TIFF OMITTED] T4084.062 Mr. Marchant. Thank you, Dr. Vitko. I would like to acknowledge that we have been joined at this time by Representative Turner from Ohio, Representative Higgins from New York, and Mr. Van Hollen from Maryland. At this time, I will recognize Dr. Saldarini. STATEMENT DR. RONALD J. SALDARINI Dr. Saldarini. Good afternoon. My name is Ronald Saldarini. I am currently a scientific and business consultant to the vaccine and pharmaceutical industry. From 1986 to 1999, I was president of the global vaccine business of American Cyanamid and American Home Products. I am here today as a member of the Committee on Accelerating the Research, Development and Acquisition of Medical Countermeasures Against Biological Warfare Agents which was convened by the Institute of Medicine and the National Research Council. In my remarks this afternoon, I would like to draw attention to the committee's central findings and recommendations. First, let me note that the committee was convened in response to a congressional mandate and was charged with examining the DOD acquisition process for medical countermeasures to protect against biological warfare agents. We were asked to identify factors that were impeding the DOD acquisition process and to recommend strategies for accelerating the process. Our review was conducted throughout 2003. The scope of the committee's assessment covered early research and development through Food and Drug Administration approval. We did not examine production and procurement activities, the extent or nature of any biological warfare threat or to assess the value to DOD of developing medical countermeasures compared with pursuing other obligations. We worked from the premise that biological weapons pose a threat to the health of military personnel and that additional FDA approved countermeasures are needed. Under the best of circumstances, developing new vaccines and drugs is technically and financially challenging. Furthermore, developing biodefense products poses additional scientific, regulatory and ethical challenges because it is not always possible to test efficiency in humans. In our review of DOD's work on medical countermeasures, we have found fragmentation of responsibility and authority, changing strategies that had resulted in lost time and expertise, and a lack of financial commitment adequate to meet the requirements of the program's goals. The work was part of a program covering both medical and non-medical countermeasures against both chemical and biological warfare threats. Responsibility for centralized oversight of the program, for program planning and budgeting and for operational tasks was distributed across several different chains of command. We viewed the state of the program as an indication that DOD leaders lacked an adequate grasp of the commitment, time, scientific expertise, organizational structure and financial resources required for success in developing vaccines and drugs. We also saw it as an indication that DOD had not given the task sufficient priority to produce the desired result. In response, we recommended action in several areas. We first recommended making the DOD program a truly high priority which would include organizational, scientifically knowledgeable leadership, scientific infrastructure improvement and necessary funding to achieve program goals. We recommended accomplishing these changes through the creation in DOD of the Medical Biodefense Agency which would be a new agency with comprehensive responsibility for the research and development program for medical countermeasures against biological warfare agents. We proposed that this agency consolidate the functions and resources of several existing activities to overcome the competing lines of authority and multiple reporting relationships that the committee had found. In the committee's view, it was essential that the head of this agency have direct authority over budgeting and over the full range of agencies management and operational activities including managing candidate products from the science and technology stage into and through the DOD acquisition system. The committee also recommended giving the Medical Biodefense Agency responsibility for developing medical countermeasures against infectious diseases. We emphasized the agency should have a highly qualified director with strong experience in vaccine and drug research, development and manufacturing. In addition to strengthening the intramural research and development program, the committee encouraged building a strong extramural program to bring the expertise and creativity of industry and the academic community to the task. External oversight and accountability for performance were also seen as necessary. The committee recommended an annual, independent, external review by a standing group of experts from academia and the biotechnology and pharmaceutical industries. If DOD were not taking the steps necessary to establish an effective program and make appropriate progress, some or all of the responsibility should as a last resort be transferred from DOD to another appropriate Federal agency. Finally, the committee also pointed out the need for DOD to work with other Federal agencies and the broader scientific community to address other challenges which would include establishing effective collaborations with academia and industry and reducing administrative and legal barriers to such collaborations, meeting the special regulatory challenges in testing biodefense projects, overcoming current and potential bottlenecks from insufficient access to essential research resources, including specialized laboratory facilities, laboratory animals and ensuring the availability of a well trained work force. For many years, DOD researchers were among the very few pursuing the development of medical countermeasures against biowarfare agents. Despite the recent upsurge in interest, effort and funding aimed at protecting the civilian population against bioterrorism, the committee saw a need for a continuing and effective DOD program to ensure that unique military needs for battlefield protection receives sufficient attention. Thanks for the opportunity to testify and I am pleased to answer any questions you have. [The prepared statement of Dr. Saldarini follows:] [GRAPHIC] [TIFF OMITTED] T4084.063 [GRAPHIC] [TIFF OMITTED] T4084.064 [GRAPHIC] [TIFF OMITTED] T4084.065 [GRAPHIC] [TIFF OMITTED] T4084.066 [GRAPHIC] [TIFF OMITTED] T4084.067 [GRAPHIC] [TIFF OMITTED] T4084.068 [GRAPHIC] [TIFF OMITTED] T4084.069 [GRAPHIC] [TIFF OMITTED] T4084.070 [GRAPHIC] [TIFF OMITTED] T4084.071 [GRAPHIC] [TIFF OMITTED] T4084.072 [GRAPHIC] [TIFF OMITTED] T4084.073 Mr. Marchant. Thank you, Doctor. Mr. Platts is with us at this point and we will now begin questions. Mr. Turner and Mr. Platts, do you seek recognition for questions? The Chair recognizes Mr. Turner. Mr. Turner. Thank you, Mr. Chairman. I want to thank Chairman Shays for holding this hearing and continuing his efforts in ensuring that our country is prepared in the area of the terrorist threats that we are facing both in the area of first responders and in the areas of our Federal agencies that have responsibilities for coordinating their efforts as we plan and also restructure our assets to address these threats. Dr. Klein, in looking at your testimony and in light of the chairman's efforts for us to get an understanding of past and current approaches, how we are being flexible in transforming to meet the risk, at the top of page 3 I see your comparison of the past and current approaches and I get a little confused. The first sentence says, ``The current CBRN defense strategy, the current strategy, emphasizes a capabilities-based approach rather than the previous approach which provided greater emphasis on prioritizing threat agents and targeting budgetary resources based on validated intelligence.'' When you talk about the previous approach, you say the previous approach had a greater emphasis on prioritizing threat agents and targeting budgetary resources based on validated intelligence. If we are going away from that, it sounds to me like we are preparing for things that we know aren't likely to happen and diluting resources from things we know may happen but I am certain that is not what you mean. Going to the next one, it says ``Capabilities-based planning focuses more on how adversaries may challenge us than on whom these adversaries might be.'' You go on to emphasize the reduction of the dependence on intelligence data. Could you give us your thoughts separate from the testimony that is written here on what that contrast means? Dr. Klein. That is certainly a very good question. If you look at the way the Department of Defense is trying to transform, we are trying to go through a capabilities based approach as opposed to the specific threats. If you look at what we had done in the past, we looked at specific things like anthrax, botulism, what is happening in today's environment is we are now seeing a lot of engineered threats, genetic activities and things which we cannot pursue, for example, vaccines against everything the terrorists might throw at us. What we are trying to look at is a more broadbased generic approach so rather than saying, for example, that country x is developing a specific toxin be it chemical or biological, we are trying to have a more broadbased approach so that we are not having to rely specifically on intelligence. Hopefully we will be able to respond in a more quick and broad way. Certainly the issues facing our Nation, where civilians are being targeted as well, with our advances in genetic engineering, it is very difficult for us to come up with specific antidotes, pills, vaccines for everything the terrorists might throw at us. So therefore, we are going to a more broadbased approach. We still need actionable intelligence on how to perform but we are trying to do more on capabilities rather than a specific threat. Mr. Marchant. Mr. Platts, do you seek recognition? Mr. Platts. I apologize for my late arrival and do appreciate the written testimonies. There are a couple questions I would like to address. Dr. Klein, I think in your testimony you talked about the Joint Vaccine Acquisition Program. I am just trying to get an understanding of the $322 million committed in 1997 and where we are today. Am I understanding correctly that we are talking about fiscal years 2012, 2020 is when we expect to see results from this investment we are making? Dr. Klein. We hope we will see investments earlier. As you probably realize, getting a vaccine licensed is challenging at best. It takes a long time. Certainly HHS and DHS as well as Dr. Fauci have realized we have these challenges. We are doing now with the animal efficacy rule will let us speed up processes. DOD only uses licensed vaccines, so we have a requirement to go through a long and cumbersome process, but we certainly hope we will have these vaccines available prior to 2020. What I think is really changing our ability to license vaccines will be the animal rule and our understanding of genetic characteristics such as a better understanding of the DNA. Mr. Platts. From a funding standpoint, what are the current projections on the cost, the $322 million we have already invested? Dr. Klein. That is correct. During the building of our 5 year budget from 2006 to 2011, we added an additional $2 billion for our chemical-biological defense program. Probably $80 million of that will be directed toward vaccine development so that we can protect our men and women in uniform. Our mission is somewhat easier than the civilian side where they have a very large age group to be under consideration from infants to the elderly. In our case, we have men and women of very healthy, predictable ages. So we are optimistic that some of our applications will come out earlier than those that will be more broadbased for the entire population but we are investing a considerable amount of money for vaccine development. Mr. Platts. The $322 million investment is not a lost investment, that is laying a foundation? Dr. Klein. Yes, it is laying a foundation. It is absolutely not a lost investment. We had clinical trials, we had product development. So it was not money wasted by any means. Mr. Platts. I chair the Subcommittee on Financial Accountability so I am always looking at what we are investing, how we are investing and bottom line, what return are the taxpayers getting, so I understand this is a very complex process and it is multiyear, but I want to make sure that we are moving in the right direction. Dr. Fauci, on the actual investments or the research being done, how are we not competing with the private sector for the free market reasons for pursuing these projects with tax dollars? How are we guarding against that? Dr. Fauci. Actually, we don't want to compete, we want to totally synergize with them. We cannot make countermeasures ourselves. We are not manufacturers of countermeasures. We do the basic research and the clinical and applied research and partner with either biotech or pharmaceutical companies to ultimately develop a countermeasure. In fact, that is the whole purpose of the BioShield Project where the HHS in the form of NIH predominantly does the research that does the concept development, does the early Phase I, II and sometimes into more advanced development and then the companies partner with us to actually manufacture it and make the commitment which under the circumstances that we have now are being aided by the set aside money, the $5.6 billion in BioShield, to be able to then make a procurement of that. It really is a partnership. It is not at all a competition. Mr. Platts. Thank you. Mr. Marchant. Dr. Klein, in your testimony, you talk about the DOD Clinical and Biological Defense Program activities and state they are informally coordinated with the Department of Health and Human Services. Can you talk to us about the informal agreement and how it works? Dr. Klein. One of the things we do is we have a lot of interaction at the working level where the staff of the Department of Defense meets with Stewart Simonson's staff. We have a lot of technical exchanges, a lot of regular meetings scheduled and in addition, Mr. Simonson and I meet periodically to prioritize to make sure we are spending the taxpayers' dollars in the most effective way, that we are not duplicating. The current agreement we are trying to work between the two departments is where DOD's role and responsibility will be clearly defined on some of the screening and up to Phase 1, then we will transfer that work through the Department of HHS where they can take it through more of the clinical trials where they have greater expertise than DOD. So we are trying to utilize the expertise of both departments to the benefit of the taxpayer. Mr. Marchant. What steps has DOD taken to respond to the Institute of Medicine? Dr. Klein. We have taken several steps. I was confirmed in 2001 about the time a lot of activities were increasing, obviously the terrorist attack and subsequently the anthrax attacks. We have reorganized the Chemical and Biological Defense Program to have a Joint Requirements Office through the joint staff where they define our requirements; we have organized our science and technology development through the Defense Threat Reduction Agency; we have increased the technical competency of our staff where we have several professional medical staffs onboard; the Deputy for the Chemical and Biological Defense Program is a medical doctor, a former Assistant Surgeon General of the Air Force. We have taken a lot of the recommendations of the Institute of Medicine. Since then BioShield has been created in addition to the Department of Homeland Security. So there is a lot of activities created since the Institute of Medicine study. Mr. Marchant. Can you explain why the JVAP program should continue to receive funding in its present form? Dr. Klein. The JVAP Program is one which like all programs, it has successes, it has things we would like to occur at a more rapid rate but the program is responsible for the vaccine procurement as well as a lot of the science and technological development. Again we are focusing a lot of attention on that program. The Army is the executive agent for this activity. We have a joint program activity through the Army to coordinate those activities. So we are focusing our attention to hopefully increase the end result and that is to protect our men and women in uniform. Mr. Marchant. Secretary Simonson, you say in your testimony that HHS has defined a three stage development and acquisition strategy with open competition awards at each stage. How are you reaching out to companies who have developed or are in the process of developing countermeasures? Mr. Simonson. That is an important part of the operation of BioShield and our success I think will be contingent upon how well we are out there probing the market to bring firms in to propose on our various projects. One we do it is with request for information where we will actually send out a circular seeking sources to find out what is out there, what companies are making product or investing in products that might be useful to us. It is a way of doing market research and also assessing the state of science. We are also working very aggressively through the WMD Subcommittee to understand what is going on in other agencies. Dr. Klein mentioned the informal work that he and I are doing to bring our two agencies together. There is also a more formal process, this Weapons of Mass Destruction Subcommittee where you have all of the stakeholders in the Federal research community. That is a place where we can exchange information on who is funding what and try to elicit support for or interest in the projects we are trying to develop. I think those are two ways that we do it. We are also still learning. There are other ways of reaching out to industry, especially the smaller, biotech companies to keep them interested in BioShield. Mr. Marchant. Do you feel there is sufficient interest out in the biotech industry to try to address these issues? Do you think there is sufficient interest in that industry to stimulate the kind of research we probably need? Mr. Simonson. I think there is sufficient interest. I think the interest is more in the smaller biotech firms than it is in big pharma simply because of the tradeoffs that have to be made. Dr. Fauci talks about the relative tradeoff of cholesterol lowering agent as opposed to a biomedical countermeasure. There is no comparison. The whole vaccine market worldwide is less than one cholesterol lowering agent, so it is not as appealing to the big manufacturers so I think our future is with the small to medium sized biotech firms. There is a lot of work to bring this along but once you do, you are building an infrastructure, building something within the United States that can be useful to us in other ways. It is a very labor intensive and collaborative process between us and these biotechs. The ultimate result is one that makes the industrial base better in the United States, we think. We saw this with the company that produced the second generation smallpox vaccine. Mr. Marchant. Dr. Saldarini, your committee concluded biodefense efforts of DOD were poorly organized to develop and license vaccines, therapeutic drugs, and antitoxins to protect members of the armed forces against biological warfare agents. What can we expect from the JVAP Program it continues in its current form without implementing your committee's recommendations? Dr. Saldarini. First, while JVAP was the topic of conversation during the committee's deliberation, and while it was clear there were some issues with JVAP in terms of their activities for acquisition, it was the committee's conclusion that JVAP was not the sole source of the problem, in fact was a part of a larger problem where it was unclear who was in charge of the program and assessing priorities and how the entire thing was organized to get something done. If you look at the charts that we looked at as we tried to evaluate the different groups involved, it became very, very difficult to understand the distinction between each of these groups. It was an alphabet soup of acronyms for an outsider who doesn't live in the military or the DOD on a daily basis. It was very difficult to assess who was in charge of what and how things actually got done and how priorities were moved through the systems. So where JVAP did have some problems, JVAP was not the sole source of the problem. From our perspective, it was the overall organization with an inadequate priority infrastructure funding resource base that created the problem. This committee finished its activities in 2003, so it has been 18 months since we last, or certainly I looked at it and I don't believe any other of the former committee members have looked at it, so I don't know really what has transpired. There were changes. Apparently Dr. Klein mentioned something about changes with JVAP but I don't know what they are and I don't think any of our committee members do. We reported what we found at the time. Perhaps things have been streamlined but it is still unclear to me whether or not there is adequate authority available to make things happen in a committee fashion. Mr. Marchant. Thank you. The committee counsel would like to ask some questions. Mr. Halloran. First, Dr. Fauci, NIAID awarded a grant to the Dynport Vaccine Co. which is the prime integrator or contractor for the Joint Vaccine Acquisition Program. Could you tell us something about that grant and why it looked on the face to be a duplication of paying for an activity that JVAP is already being paid for. Dr. Fauci. It may appear that way but it actually is complementary. The grant that we are talking about was actually three grants and a contract to Dynport and the total was I think about $29 million. Two grants were to support development of a vaccine candidate for botulism toxin that complemented the activity that was going on in the Department of Defense. In addition, there was a grant for Phase II trial of the Venezuelan Equine Encephalitis. Again, although the DOD was also working on that, it was complementary and one was to support research on a vaccine candidate for tularemia which the DOD had responsibility for before but then handed that over to us and we are now working fundamentally on the tularemia. So if you look at the organisms and match them, you say, wait a minute, the DOD is really doing that but actually in one of them, they are no longer doing the tularemia and the other two are complementary working on aspects of it that the DOD is not. Mr. Halloran. Complementary in the sense of adding the population to the testing profile that Dr. Klein mentioned that the DOD doesn't have to cover? Dr. Fauci. There are two things, different scientific aspects but importantly geared toward and Dr. Klein mentioned this in his oral testimony, that they are fundamentally looking at forced protection and the warfighting individuals where we are looking at everything from children up through and including the elderly. It is much more for the civilian population, so a lot of the complementariness is due to the broader scope of people that we are responsible for in the civilian population. Dr. Klein. I think this is an example of the two departments working together very well where we complement to the benefit of the taxpayer rather than duplicate. When you look at just the headlines and don't dig into the technical aspects of it, one can see on paper it might have been duplication until you really look at the details. Mr. Halloran. Why did DOD hand over the tularemia work? Is that not a force protection threat? Dr. Klein. We felt that NIAID had better technical expertise than the Department of Defense. We took it up to a certain point and felt their technical expertise was better than ours. Mr. Halloran. Let us talk about botulism, where we are. The next panel has some testimony about some kind of halting and stumbling attempts to get botulism antitoxin, particularly outside the A and B serotypes. Where are we in that, both in terms of what we have in hand should an attack take place in the United States now or in the military theater and what is coming down the pipeline and when? Dr. Fauci. Botulism is a complex issue and is somewhat problematic for a number of reasons that I will briefly describe. There are seven, it is a heptavalent toxin and we are in the process now of making monoclonal antibodies which are antibodies against a particular component of a botulism toxin. The most common that are used are A, B and E but you really have to have sort of a cocktail of all of them. The difficulty that we face with transitioning from the horse sera botulism antitoxin which has been the standard that has been used both in the unusual occurrence of situations of natural infection with botulism in this country as well as what the DOD has been working on for years as a countermeasure for force protection. The transition from the polyclonal sera and plasma from the horses is taking a lot of time for the simple reason that relates to one of the things we have been saying in one way or another among all of us, the difficulty in engaging researchers and industry on the outside to get involved. We have one very good researcher that is superb at developing the initial monoclonal antibodies against the individual subtypes of botulism. The difficulty is that this is one group working alone so it takes about 6 months per subtype and then you hand it over to the more industrial related ones that go on do the actual manufacture and the clinical trial. So if you stagger them at 6 month periods, by the time we get a robust heptavalent polyclonal cocktail, it is going to take several years. It would be wonderful if we had 20 or 30 investigators on it but there just is not the interest that we would like to see for the reasons that people want to work on other things. That gets back to the principle of trying to incentivize not only individual investigators but also companies to get involved. Right now in an emergency we would have to rely on the polyclonal serum that we have had and are making more of but hopefully we will transition over to the monoclonal antibodies. Dr. Klein. One of the areas and what I am hoping is as we get a better understanding of our DNA structure, that the kinds of research activities that individuals are currently performing will be enhanced by genetic splicing, DNA splicing and things of that nature. So we are hopeful that we will be able to get products out quicker with our understanding of the basic fundamental responses under our DNA. Dr. Saldarini. I can talk about the current generation botulinum program. HHS picked up after September 11th a DOD program that began during the first Gulf war to hyperbenize horses against all seven serotypes and then to ferrice them and collect this hyperimmune plasma but it was never finished. They just had fairly substantial amount of hyperimmune plasma in storage. It was transferred to us I think at the end of 2002. HHS undertook to have that material processed. This was a process that hasn't been done in an awful long time, so the firm we engaged to do it had to spend a lot of time moving deliberately because of the risk of losing material if they made a mistake. In any event, that work is done. They finished processing the plasma. We had sort of mixed results on the yield because of the age of the plasma and so forth. I would be happy to come to your office give you more detail on exactly how much we have. We don't talk about it openly. We also have a program now where a whole new population of horses is being hyperimmunized against all seven serotypes. This is an example of where things can't be rushed beyond what science will allow. The horses have been immunized and then challenged with botulinum but it takes a period of time to get the titer up so you can actually begin to ferrice them. We expect some time in the fall that we will have enough hyperimmune plasma that we can begin processing the new material. We have an objective, an ultimate objective of 100,000 treatment courses of heptavalent antitoxin but it is a big operation, 200 horses over a few farms and it is also I have learned as much an art as it is a science. The current botulinum toxoid or vaccine is no longer licensed, it is in IND status and there is a cohort within the research community and at the Defense Department that has a need for botulinum vaccine and so we are looking at what options are available there. Dr. Vitko. It is an interesting term because I use capabilities with a slightly different meaning. Right now I believe that it still makes a lot of sense to look agent by agent in terms of the extent of the threat that they pose. So we look at the feasibility of a terrorist organization engineering that threat, producing that agent, disseminating it and look at the consequences associated with it and we do make use of intelligence information both on interest by known organizations, skills levels associated with those organizations to give some assessment of what could be done, but then we really do take a look at the scientific basis for producing that agent and disseminating it, irrespective of the threat group. We believe at this stage that is the best way of assessing what constitutes a material threat to this country. Material threat determination says if an organization can produce it, is it one. As you heard, we postulated and formulated working with HHS in an interagency forum a timeline for when we think certain engineered threats could come on and the general characteristics of those. We have developed a strategy for dealing with that as well as a hedge strategy in case our projections are off. I think in that sense it will be a while until we get to the goal where we can treat broad classes of agents as a class and until we have, as desirable as it is, sort of broadbased either vaccines or antibiotics for dealing with those. That doesn't take away from that being a desirable R&D goal but for near term strategy, I think it does have to focus on which agents pose the greatest risk in the current scenarios. Mr. Halloran. Thank you. Mr. Marchant. The Chair acknowledges that Mr. Duncan from Tennessee has joined us. Mr. Duncan, do you have any questions? Mr. Duncan. Thank you and since I just got here, I won't ask any questions but I will say this. I am disturbed about this statement or Chairman Shays' that says ``A 2004 study by the Institute of Medicine found that the Department of Defense Biodefense Program fragmented and often prey to competing priorities. Launched in 1997 with $322 million, the JVAP has spent that much and more. Yet lists of JVAP accomplishments provided to the subcommittee included just one recently licensed therapeutic, no completed vaccines and two target vaccine programs terminated after significant expenditures.'' I notice there is testimony from one of the witnesses on the next panel that says ``This procurement process which formally began on April 1, 2004 and has yet to be completed 14 months later is simply too long and too burdensome to sustain continued interest in participating in BioShield by companies such as Human Genome Sciences whose principal focus is not the Federal sector.'' I serve on three different committees and several different subcommittees and I read articles and columns all the time about what all these other committees and subcommittees do. It seems that every day we see examples of unbelievable waste and inefficiency here at the Federal level. It seems if we want something to cost 10 or 15 times more than it should and 10 or 15 times more than it would with fewer results than if the private sector did it or if State and local governments did it, just turn it over to the Federal Government. It gets pretty tiresome to hear this out of every department and agency. Everybody today, because we have a patriotic fervor going on wants to give the Department of Defense everything they ask for and more but the waste and inefficiency, we had a hearing in this committee last week which said the Department of Defense has blown $466 million in its ordinary procurement processes. We just gloss over things like that because I guess figures in the billions and $466 million are too big to comprehend but it gets pretty sad after a while. Thank you, Mr. Chairman. Mr. Marchant. Thank you, Mr. Duncan. I thank the panel today for its participation and we will recognize the next panel. Our next panel will be: Dr. Michael G. Hanna, Jr., Chief Scientific Officer, Intracel and Dr. James H. Davis, executive vice president and general counsel, Human Genome Sciences, Inc. [Witnesses sworn.] Mr. Marchant. At this time, the Chair will recognize Dr. Hanna for his testimony. STATEMENTS OF DR. MICHAEL G. HANNA, JR., CHIEF SCIENTIFIC OFFICER, INTRACEL; AND DR. JAMES H. DAVIS, EXECUTIVE VICE PRESIDENT AND GENERAL COUNSEL, HUMAN GENOME SCIENCES, INC. STATEMENT OF DR. MICHAEL G. HANNA, JR. Dr. Hanna. First of all, let me say how grateful I am for having the opportunity to address this congressional committee. As you, I am also concerned that such a committee meeting on the Elusive Antidotes of CBRN Countermeasures must be held in June 2005. I would like to tell you about a successful development of a unique therapy for botulinum toxin exposure. This story consists of scientific success and extreme frustration. There are seven serotypes of botulinum toxin. They have been identified as the most dangerous biological substances and the most likely biological weapons of mass destruction. The success is that my company, Intracel, through a Department of Defense contract, referred to earlier by one of you, between 1991 and 1996 was successfully able to develop a heptavalent equine antibody product that was efficacious in combating the seven serotypes of botulinum toxin, was safe in humans and was FDA-approved for emergency use. We made 5,000 therapeutic doses before the project was terminated by the Joint Program Office of the Department of Defense in 1996. It was terminated at this point because we had proof of principle and a botulinum crisis was improbable. Since September 11th, however, the improbable became probable. Today, Federal officials fear the world is vulnerable to such an attack and we are ill prepared if one were to occur. In fact, Tommy Thompson in his exit speech to HHS declared that he was surprised that such an attack had not already occurred, which also surprised me that he would say that. Dr. Anthony Fauci of NIAID was quoted that this is one of the Federal Government's top bioterrorism interests and ``we are marshaling all available resources.'' This statement was made in 2002; yet as far as I know, as of last year, we still had only the residual several thousand therapeutic doses left over from Intracel's previous effort. Today there was some discussion where they were not prepared to discuss what they have today generated from the new contract and I can tell you they have monoclonal product only not heptavalent product. I was at a meeting with the Department of Defense, the Army, when one of them mentioned that they had monoclonals to A and B and Congressman Dr. Roscoe Bartlett said, let us not let the terrorists know that because then all they have to worry about is C through G. This is my frustration. With our scientific success of overcoming the hurdles to produce such an important therapeutic product, we have not been successful in fulfilling our destiny of producing the hundreds of thousands of doses necessary to protect our military and civilian populations at risk. In Los Angeles, they had a simulated botulism attack which was very successfully carried out. They calculated they would have needed 600,000 doses to protect the population at risk. This was months ago. We are no where close to having that number of therapeutic doses. The NIH used considerable resources to fund grants to make recombinant vaccines for protection of botulinum infection and to develop drugs which would interfere with the enzymatic activity of the organism. These efforts however worthwhile are problematic 10 year endeavors. Today, Intracel holds the intellectual property, over 300 standard operating procedures and all the necessary equipment to produce the proven heptavalent equine therapeutic product and was willing and capable of generating through private funds to develop a subsidiary that would build a validated manufacturing facility and produce 50,000 therapeutic doses in 2 years. The yield would be more than 100,000 doses per year thereafter. We made this proposal in 2002. In addition, using our own moneys, Intracel offered to complete the research program and begin the next generation product using safer and more effective human monoclonal antibodies. We happen to be the only company that has ever made a licensed human monoclonal antibody. This second generation product could be prophylactically used and be safe for multiple injections for better protection of the troops after an exposure. Clearly, we thought we were the poster child of BioShield. However, in spite of who we contacted and how hard we tried, we could not get the Government to give us a written commitment to purchase the product based on our success in meeting the specifications that we had established for the DOD in 1997. We talked to everybody and anybody and we had Congressman Shays and Congressman Bartlett with us at many of the meetings. It seems that the Government agencies are not really marshaling efforts to deal with this problem. The agencies have relegated down to the ranks of the functionaries and contract and grants sections and if they have the urgency that this issue requires, it has not overcome the status quo. I would like to know what we would have done last year, this year or next year if such a botulinum toxic weapon was used in the United States in the real sense, not in a simulated sense as we did in Los Angeles a few months ago. Clearly the BioShield concept with all of its good intentions has not gained the strength to overcome the status quo. I would like to repeat, Intracel was not asking the Government to pay for the production of this important component of our medical armament for biodefense. Intracel was asking the Government to give us a commitment to buy the product if we met specifications already paid for by the Department of Defense. That probably was our mistake in not asking for money. To rapidly generate required antidotes and therapies for weapons of mass destruction requires a paradigm of built-in redundancies such as those employed in successful NASA goals and accomplishments after the Presidential mandate by President Kennedy. I would have thought that BioShield provided the capability to build in redundancies but it appears to me from people I have talked to, BioShield does not impart this kind of legislation. Thus, I recommend to this subcommittee that the BioShield legislation should be rewritten so that it funds multiple groups and creates competition of several companies up to Phase 1 trials, then let the survivor of the most competent prevail. With that type of competitions, you would have redundancies to better guarantee success and you can end up with the stockpiles that will save lives if such an emergency occurs. No longer should we rely on these products being generated by the low bidders as an independent agent for any agency. Second, I think what we saw this morning is that the stovepipe type of funding coming down through the agencies does not really bode well for interagency interactions which we are going to need both at the development level, the manufacturing level and mostly at the level of preparedness and defense out in the field, the States and the counties and the cities if such an attack ever occurs. Thank you. [The prepared statement of Dr. Hanna follows:] [GRAPHIC] [TIFF OMITTED] T4084.074 [GRAPHIC] [TIFF OMITTED] T4084.075 [GRAPHIC] [TIFF OMITTED] T4084.076 [GRAPHIC] [TIFF OMITTED] T4084.077 Mr. Marchant. Thank you, Dr. Hanna. Dr. Davis. STATEMENT OF JAMES H. DAVIS Dr. Davis. Mr. Chairman, members of the subcommittee, thank you for the invitation to appear before you today on behalf of Human Genome Sciences. I am Jim Davis, executive vice president and general counsel of HGS. In this capacity I have been extensively involved with the business development, regulatory approval process and Federal procurement issues related to the anticipated sale of our innovative, therapeutic treatment Abthrax for victims of anthrax exposure. We undertook this project on our own initiative and at our own expense. HGS is a biopharmaceutical company located in nearby Rockville, MD that discovers, develops and manufactures innovative drugs to treat and cure disease. Currently, we have seven drugs including Abthrax in clinical development, including six monoclonal antibodies. The primary focus of our company, however, is not the development of drugs to protect against attack by biological and chemical weapons. The principal focus of our company has been and will continue to be pursuit of innovative biopharmaceutical products for the commercial market. Nevertheless, just over 3 years ago we realized that our company had significant technology and capability to develop an effective, near term countermeasure against one of the Nation's most immediate and serious bioterrorism threats. Located just outside Washington, DC, we witnessed firsthand the potentially devastating effects of the use of anthrax as a terrorist weapon in late 2001. Using our own funds, we developed a fully human monoclonal antibody drug called Abthrax that can prevent and treat the lethal effects of anthrax infection. The drug can be given prior to or after exposure, can be used alone or in conjunction with the current vaccine and antibiotics. We have shown in animals that it is effective against high doses of anthrax, we have demonstrated initial safety in humans and we have been ready to manufacture this product and complete the final human safety trials for over a year and a half, but to move forward we need to bring to conclusion the lengthy procurement process now underway with the Federal Government. If a contract is signed with the Federal Government and a final commitment to acquire a fixed number of doses and the number of doses requested is of sufficient commercial quantity to make it worthwhile, this countermeasure could be available for emergency use as early as next year. While this is an exciting prospect for our company and of valuable benefit to the Nation, our frustration remains the Federal Government could have had this product in the stockpile already if the full authority of Project BioShield had been used as intended. The primary challenge of biopharmaceutical companies such as HGS in this field is the absence of a commercial market for bioterrorism countermeasures. The only valuable market is the Federal Government and perhaps our foreign allies. Without a clear and easily accessible market, the drug will not be developed. In its initial BioShield solicitation for anthrax therapies, HHS has not even specified the precise amount of quantity they wish to purchase. Rather, the solicitation requires bidders to pose pricing for a broad range of quantities ranging from 10,000 doses to 200,000 doses. It now appears that even if this contract is awarded and HHS decides to exercise its option for the manufacture, HHS is unlikely to purchase a full 200,000 doses as originally proposed. This is particularly frustrating since the manufacture of these compounds requires significant manufacturing capability and significant manufacturing startup costs. In short, the cost per dose of 200,000 doses is significantly less than the cost of 100,000 doses and astronomically less than the amount for 10,000 doses. Setting a firm commitment for the quantity to be purchased and making sure those quantities are large enough to be commercially viable is critical to advance BioShield's purpose of promoting the development of a biodefense industry. My written testimony raises additional concerns. There are several steps HHS could undertake to increase industry participation. In the interest of time, I will not enumerate them here. Let me say, however, that timing is critical. I applaud the subcommittee for its continued oversight of this critical biodefense program. Near term delays in evaluating and considering the production of viable countermeasures can disproportionately prolong the procurement of such drugs. To date, abthrax has been developed entirely with private funds but to move forward, we need a firm commitment from the Government to purchase this product. With sufficient Government support, HGS could begin producing significant quantities of Abthrax by the end of next year. We look forward to formalizing this commitment in a contract with HHS in the coming weeks and we would appreciate every effort to ensure that maximum quantities are purchased for the stockpile as soon as possible without any further delay. Thank you for this opportunity to testify and I look forward to answering your questions. [The prepared statement of Dr. Davis follows:] [GRAPHIC] [TIFF OMITTED] T4084.078 [GRAPHIC] [TIFF OMITTED] T4084.079 [GRAPHIC] [TIFF OMITTED] T4084.080 [GRAPHIC] [TIFF OMITTED] T4084.081 [GRAPHIC] [TIFF OMITTED] T4084.082 [GRAPHIC] [TIFF OMITTED] T4084.083 [GRAPHIC] [TIFF OMITTED] T4084.084 [GRAPHIC] [TIFF OMITTED] T4084.085 [GRAPHIC] [TIFF OMITTED] T4084.086 Mr. Marchant. Thank you, Dr. Davis. The Chair recognizes Chairman Shays. Mr. Shays. Gentlemen, thank you for being here today. I feel badly that I could not ask some questions of the previous panel because I wanted to get into the stovepiping and so on. I wanted to get into why DOD has one program and others have another and I wanted to get into the connection between them. What did you hear from the previous panel that you agreed with the most and that you would disagree with the most? I would ask that of each of you. Dr. Hanna. Dr. Hanna. I agreed with the statement made by HHS representatives that working with large pharmaceutical companies is not really going to work. They really could make much more money with a cardiovascular drug than they can with these types of vaccines. There are many vaccines that were made that were never used because they couldn't make any money selling them. The countries that were going to use them couldn't afford to pay for them. Working with the smaller, mid-size, biotechnology companies is probably clearly the way to go. Unfortunately, even those companies are not going to do some of this work on contracts or grants because they can't make a living at a 6 percent margin on the work they do but this is the way the legislation is written to allow them to fund their programs. I think the legislation needs to be changed to allow for multiple awards, grants or contracts or allow companies to come in and do it on their own but still let them compete. This is the way good science gets done in the major projects this country has launched. Mr. Shays. What statement did you disagree with the most by any of the previous panelists? Dr. Hanna. I disagreed with the fact that the vaccines in the JVAP Program and in some of the other programs are difficult to accomplish. We could have had an anthrax vaccine a couple of years ago, we could have had a couple hundred thousand botulinum antitoxin, polyclonal equine botulinum antitoxin in our repertoire. The urgency is there at the top level at the present and it is at the congressional level and the Senate level and at the top offices of these departments but when it filters down to the functionaries, the urgency is lost and the status quo steps in and this is demotivating to the small, medium or large pharmaceutical companies. Mr. Shays. Explain to me why we don't have progress in those two areas? Tell me specifically why. You are saying it is motivate up here but what specifically wasn't done that should have been done? Dr. Hanna. It is my understanding that the legislation doesn't allow them to think outside the envelope, that they have to function according to the legislation and the legislation allows them to award a contract to the lowest bidder and that contract is what they live with. If they would allow them to award several contracts simultaneously for the same project and let them compete to Phase 1 trials and the one that gets to the Phase 1 trials and can work with the FDA the fastest ends up with the purchase order is the way to go. Mr. Shays. You are saying that you would cover the research costs for the three or four that would get involved? Dr. Hanna. We offered to do it through private investment. We had investors. Mr. Shays. You were willing to compete privately in a contest because you believe you would have had a better product in the end? Dr. Hanna. We have already made it, we had already made it. We spent $25 million of DOD's money to make the first 5,000. Mr. Shays. I know that and that is why I am asking you why we don't have it? What in the law prevented them from moving forward with you? Dr. Hanna. I don't know. I spoke to somebody recently who is well known in this area and he said the law just prohibits a multiple contract or multiple awards for the same project. Mr. Shays. Why would they have had to do multiple awards? If you already had it, why couldn't they just contract to you? Dr. Hanna. They did. They contracted a foreign company. HHS contracted a foreign company to make it. Mr. Shays. Because you were a higher bidder? You weren't the lower bidder? Dr. Hanna. We didn't bid at all. Mr. Shays. Why? Dr. Hanna. We were offering to do it at our own costs. Mr. Shays. You are confusing me. This has not been a great day, so maybe it is my problem but be patient with me here. You had a product that DOD helped you develop? Dr. Hanna. They contracted with us to develop, yes. Mr. Shays. They gave you money to develop the product. You developed the product. Are they saying the product won't do the job? Dr. Hanna. No. Mr. Shays. Are they saying the product costs too much money? Dr. Hanna. No. The project ended in 1997 and there was no urgency and need for it. Mr. Shays. But the project ended then but you still had the capability to produce the product? Dr. Hanna. We have had the capability from 1997 to now. Mr. Shays. So why do you want me to be so confused here? Dr. Hanna. I am not trying to. Mr. Shays. There has to be a reason. Dr. Hanna. I don't have an answer. I can think of no reason. I thought there had to be a reason also. Mr. Shays. This is a conversation we had somewhat privately and I thought you would be able to publicly put on the record. Dr. Hanna. I did at the suggestion of NIAID, Tony Fauci's group, I did put in at their request an unsolicited proposal to the CDC to make this product and it was rejected. Mr. Shays. Did they give you a reason why? Dr. Hanna. No, but they turned around and awarded the contract to this foreign company which we heard today was having extreme difficulties getting geared up to make the product. Mr. Shays. Dr. Davis, can you enlighten me about this issue? Dr. Davis. I am not sure I can enlighten you about his issue, no. We have been facing a slightly different issue in that the Government clearly appears to have some interest in our product, it has been a long procurement process and as a consequence, our concern is that the delay makes it very difficult for us to plan and makes it very difficult for us and other companies to be willing to develop from their own funds products. There is a need for different procurement methods for different things. There are clearly some products where the Federal Government probably needs to fund the early research in order to get it done but there are also other products and other capabilities like ours where we have done the vast majority of the research and the development on our own. What we need is a commitment from the Government to buy the product and we need a commitment to buy it in sufficient quantities frankly to make it worthwhile. If somebody only wants a few thousand doses, we are not going to start a large scale manufacturing facility and dedicate 3 to 4 months of manufacturing capability to make a few thousand doses. If they want 100,000 doses, that starts to get economically reasonable. If they want 200,000 doses, it makes a lot of sense. For us to go into future products or other companies like us to go into future products, you need to state up front what is really the need of the Government. They have told us they want an anthrax antibody but never told us how many doses they really want, never told us what schedule they really want it on and so we are left in a quandary of how we develop this product. We have other pharmaceutical products competing. Mr. Shays. Do you think they have told other companies what they want? Dr. Davis. No, no. I don't think they are being disingenuous here, I think they are in a quandary about what they want or maybe they know and haven't specified. The RFP asks us to bid on prices for doses between 10,000 doses and 200,000 doses. That is a tremendous difference in how you manufacture. Mr. Shays. So you give them a bid at 10,000 and a bid at 50,000, a bid at 100,000, a bid at 15,000. Dr. Davis. That is exactly what we have done. Mr. Shays. So what is difficult about that? Dr. Davis. The problem is that the manufacturing needs to be planned 12 to 18 months ahead of time. Mr. Shays. That is another issue but the bidding issue isn't there. Dr. Davis. No, we can bid. It's very difficult to know, however, if you see that RFP and they are really only thinking about 10,000 doses, we may not want to play. It is simply not enough economic incentive even if we charge astronomical amounts for 10,000 doses. Mr. Shays. Is it that difficult to do a bid response? In other words, you price the 10,000 at such an extreme price that you are not in the running but you give them a price? Dr. Davis. And we have done that. Mr. Shays. So that is not really the issue. With all due respect, that is not the issue. Dr. Davis. It is an issue in terms of are we going to go after another project like this, are we going to use our own money to do the research and development on another project if we are not sure what the Government needs? Mr. Shays. Let me ask you, do you do the research before you do the bid or do you do the bid before you do the research? Dr. Davis. In this case, we did the research before the bid because we thought there would be a market. I think in the future, we are unlikely to do anything more in this area without a clear indication of what they want in terms of quantities. Mr. Shays. What is the statement you agreed with most and the statement you disagreed with the most and who made that statement? Dr. Davis. Dr. Fauci I think made the statement that I agree with the most that this does have to be a partnership between the Government and industry. The Government does not have the capability to do large scale manufacture of these products. It is very expensive, takes very specialized facilities but we do need a partner in the Government so we know what we are doing and when they want it and what it is. I think it is hard to say there is a single statement I disagree with. I think I am concerned that the procurement process for the BioShield as described is not going as smoothly as some may think. I think it still has a lot of work to be done to make it more efficient, there are a lot of contract provisions, a lot of indemnity and liability issues that are a hurdle for companies to be willing to go across in order to enter this market. Mr. Shays. Thank you. Mr. Marchant. I have a couple questions and they will be questions broached from a freshman in the Congress, just a couple of elementary questions. If the Government came to you tomorrow and said we want 200,000 doses of this, how long would it take you to produce them? Dr. Davis. We would be able to start production in approximately 12 to 18 months, but it would take us probably 6 months, maybe a year to produce all those doses but they would be in a rolling batch. We could have doses available. For example, if they told us today they wanted 200,000 doses, we could certainly have doses for them at the beginning of 2007 and all the doses by the end of 2007. Mr. Marchant. How much public knowledge would be available about the amount of doses and the antibody that was being produced? Dr. Davis. I would presume, and speak with a little ignorance here, that the contract would be public and the number of doses they requested would be specified. The precise structure of the antibody and the nature of the antibody we have been fairly careful not to make public for security reasons but some of that would depend on the Government's desire to keep it secret or not. Mr. Marchant. From someone that thinks the Government or some entity has an antibody for any of these diseases can be introduced in any form in the water system, through milk, etc., do you feel the American citizen has a security that there are vaccines, antibodies and things available immediately that can be introduced that can combat these things or are they aware that we are studying this? Dr. Davis. I think it depends on the particular agent you are talking about and the particular means of which the product is distributed and how you can treat it. In many cases, there are inadequate therapies today. In some cases, there are some therapies which may be adequate in some circumstances and not in others. Mr. Marchant. Obviously the general knowledge of the cure will make sure whatever entity decides to introduce this into society will not introduce that? Dr. Davis. There is a strong deterrent effect one would think from having stockpile of an efficient deterrent. Dr. Hanna. The best offense is a good defense in this case, clearly. Mr. Marchant. So if DOD or whatever entity decided they needed to have sufficient vaccine on hand to combat, how prepared are we at this moment for those diseases that could be introduced? Dr. Hanna. You are not. For most of them, you are not prepared. Mr. Marchant. You in your case were paid to develop one but you were not paid to produce the doses? Dr. Hanna. Let me try to clarify one thing. When we stopped making it, we closed down our manufacturing facility. We recognize one of the problems and why we might have been discriminated against is because our manufacturing facility didn't exist, so we went back and said, we will volunteer with private funds to build that manufacturing facility again and within 18 months we will deliver to you 50,000 doses that meet the specs, that would be FDA-approved again as we did previously for emergency use and we would get it fully licensed eventually. I think at that time, they decided it would be better to go to another contractor that had a facility and underestimated the degree of scientific capability required because you heard Simonson say that it is not only science, there is a bit of an art to it and it is, there is an art to it. It is not something that everybody can do. This contractor is working very hard, I am sure, but they are not able to accomplish it yet. They will eventually. Mr. Marchant. They own the formula? Dr. Hanna. We have the patent on the procedure. Mr. Marchant. So they have to deal with you? Dr. Hanna. We have not discussed that with them but my point is it would have been better, it would have been smarter to let them go and have the security of the contract they managed and release us with a commitment that if we did what we said, they would purchase from us at a fair price. Then you would have had both competing with each other. That would have been the smartest way to do it. Instead, they went the contract route, which is the one they know the best. All I am saying is we need to start some competition however we do it, whether we do it with multiple contracts, a contract versus an independent operation, with a commitment letter. We couldn't raise the money without the commitment letter. All we wanted was a letter saying if you do it, we will buy it at a fair price to be negotiated. Mr. Marchant. Mr. Counsel. Chairman Shays. Mr. Shays. If you both were running the program, how would you run the program? When I say program, we have agricultural needs, we have plant needs, animal needs, we have human needs, so it makes sense you would have three separate tracks, correct, for each of those? Dr. Hanna. Yes. Mr. Shays. How would you run the program differently? If you were in charge of this program, suppose the United States says, I want you to run this program, tell me how you are going to run it, what would you say? Dr. Hanna. I would do it basically as I described. Let us deal first with the biological. We know what the agents are. Smallpox is pretty well covered, we have plenty of vaccine for smallpox. What we don't have is vaccine for the other nine agents or some kind of a therapeutic. Mr. Shays. When you say agent versus therapeutic, with anthrax there is one element that prevents it from catching hold and another is you have it and now how you deal with it. Is that your difference when you talk about agent versus therapeutic? Dr. Hanna. I am talking about a vaccine that would protect you versus a therapeutic that you would take after you had contact and in some cases, there will be no vaccines. The botulism vaccine they were talking about was AB. Those are the two common forms. If anyone was going to use an agent, it wouldn't be AB. That is the most common and they know that. They would use C through G and those are the most difficult to defend against. I would rank them and I would do just what I said. I would set up multiple awards. I would either allow companies to come in and give them commitment letters that if they do it, we will purchase it or I would set up a contract and an award at the same time. I would do what we do in the pharmaceutical industry. Oftentimes, when new projects are started, we set up two, maybe three groups and let them compete. Mr. Shays. That sounds more expensive to me. Dr. Hanna. It is a lot more expensive to go with the low bitter and come up 7, 8 or 9 years later with the vaccines we have seen from JVAP. Mr. Shays. You are saying, get more companies and individuals involved, you will get a product sooner, it is going to cost you more, but we won't be where we are now with nothing? Dr. Hanna. How do you compare the cost when you have a situation where you have nothing and still the threat is equal to what it was 5 years ago? Mr. Shays. What I am hearing you say in a sense is that by doing it this way, it is taking longer which means we remain vulnerable when we don't have to remain vulnerable. Your view would be that we would get there sooner with a better product if we had multiple competition? Dr. Hanna. And build in redundancies. That is the thing missing here, redundancies. You have a JVAP program with no redundancies backing it. The one redundancy for the anthrax vaccine, they can't even award it yet. This would be a redundancy to what is in the JVAP program. You can't get them to make a decision. I think the problem is the legislation is written to favor the status quo which is to do it through grants and contracts, and grants and contracts allow you to give a contract for a particular project. I am saying set up competition. In NASA, they had a redundancy for everything, everything had a backup. That is how they got to the moon and got back but that was a Presidential mandate that said make it happen. We are doing it in the standard way and I think we have to start thinking out of the envelope. Mr. Shays. I hear you and I understand now what you were trying to tell me. It finally sunk in. Thank you. Dr. Davis. Dr. Davis. I think that is main thing I would change. Mr. Shays. You are running the program. Dr. Davis. I am running the program. I think the way I would set it up is one, I would be very clear and they have been, these are the agents, the terrorist weapons that we are most concerned about and I would then give a clear indication of what is the amount of need for product and then I would put out an RFP but I would streamline the bureaucratic process. I would use simplified contracting methods, I would try to bring pressure to get the time lines down to much less. Fourteen months for RFI to still have a contract negotiation is a long time and we have been waiting simply for the contract before we even begin our manufacturing. So if you can streamline that process, you will get these products on line sooner. If you have a clear, up front commitment, streamlined process, I think you will find more industry interest in participating in these sorts of programs because then you can do a real measure of the net present value of this project and understand whether it is worth your investment or not. Mr. Shays. The way counsel is responding to my question to him as you were talking about what you were saying was that you would use the more traditional system but make sure there was a pot of gold and incentive. Dr. Davis. Yes. Mr. Shays. You would have an incentive but you would have a competitive process and both of you would deal with speeding up the time process? Dr. Hanna. Of course. Dr. Davis. Yes. Mr. Shays. When you heard what was said today, is your emotion just disappointment, disgust? The reason I am asking is I am trying to figure out how I should feel about this. Is it just give me a break or is it something like, you know what, this is going to happen, we are vulnerable and you guys are at fault in the end. Tell me what level of feeling you have right now. Dr. Hanna. My level of feeling is disappointment. It has been a lot of energy. I think everybody at this table has done their darnedest to get the job done. I have known people in the agencies who came in thinking they could get the job done and then ran into so many obstacles that they ended up leaving. We walked away from it and decided we are not going to get involved and do this thing because we couldn't, we couldn't get it done. So it is disappointment. I think the disappointment is that while there was an urgency and while there was a concern, we didn't come up with enough creative mechanisms to get the job done and we allowed each agency to funnel through their own process, muddle through their own process individually. This is an interdisciplinary need. You need a lot of people to get this job done. You need industry, you need the Government agencies, and you need people who are highly motivated and have a reason for being motivated. I would say disappointment and encouragement that looking forward that you had this hearing and maybe we will get something done and something will come out of it. Mr. Shays. Let me say in regards to that, we may end up having a private meeting with the folks I didn't get to question but we know we need to do something different and we need to move this along more quickly. Dr. Davis, your emotion? Dr. Davis. I think my emotion continues to be a certain amount of frustration. I believe the agencies are very dedicated to getting this done. I think their hearts and their minds are in the right place. I think they have not been able to motivate the bureaucracy to move and we need to find a way to make this a more efficient process. Otherwise, you are going to end up with more companies like mine who are frustrated and simply aren't going to play. Mr. Shays. Thank you, Mr. Chairman. Thank you both very much. Mr. Marchant. The subcommittee is adjourned. [Whereupon, at 3:59 p.m., the subcommittee was adjourned.] [The prepared statements of Hon. Dennis J. Kucinich, Hon. C.A. Dutch Ruppersberger, and Hon. Bernard Sanders follow:] [GRAPHIC] [TIFF OMITTED] T4084.087 [GRAPHIC] [TIFF OMITTED] T4084.088 [GRAPHIC] [TIFF OMITTED] T4084.089 [GRAPHIC] [TIFF OMITTED] T4084.090 [GRAPHIC] [TIFF OMITTED] T4084.091 [GRAPHIC] [TIFF OMITTED] T4084.092 [GRAPHIC] [TIFF OMITTED] T4084.093 [GRAPHIC] [TIFF OMITTED] T4084.094 [GRAPHIC] [TIFF OMITTED] T4084.095 [GRAPHIC] [TIFF OMITTED] T4084.096 [GRAPHIC] [TIFF OMITTED] T4084.097