DEPARTMENT OF HEALTH AND HUMAN SERVICES

NATIONAL INSTITUTES OF HEALTH

Fiscal Year 2006 Budget Request

Witness appearing before the

House Subcommittee on Labor-HHS-Education Appropriations

Anthony S. Fauci, M.D., Director

National Institute of Allergy and Infectious Diseases

March 9, 2005

William Beldon, Deputy Assistant Secretary, Budget

Mr. Chairman and Members of the Committee:

I am pleased to present the Fiscal Year (FY) 2006 President\'s budget
request for the National Institute of Allergy and Infectious Diseases
(NIAID) of the National Institutes of Health (NIH). The FY 2006 budget
of \$4,459,395,000 includes an increase of \$56,554,000 over the FY 2005
enacted level of \$4,402,841,000, comparable for transfers proposed in
the President's request.

NIAID conducts research to understand, treat, and prevent infectious and
immune-related diseases. Infectious diseases include well-known killers
such as tuberculosis and malaria, emerging or re-emerging threats such
as HIV/AIDS, SARS, West Nile Virus and influenza, and "deliberately
emerging" threats from potential agents of bioterrorism such as those
that cause anthrax and smallpox. Examples of immune-related diseases
include autoimmune disorders such as type 1 diabetes, systemic lupus
erythematosus, rheumatoid arthritis, transplantation-related illnesses,
asthma, and allergies.

Historically, NIAID has accomplished its mission with a strong
commitment to basic and targeted research in immunology, microbiology,
and infectious disease. In the 57 years since NIAID was founded, this
approach has led directly to new therapies, vaccines, diagnostic tests,
and other technologies that have improved the health of millions of
people worldwide. In recent years, however, the growing realization that
the nation needs a stronger defense against both naturally and
deliberately emerging infectious diseases has led NIAID to adopt a new
research paradigm that accelerates the development of safe and effective
medical countermeasures. To accomplish this, we have sought creative
ways to modify our traditional process of research and development to
move potential products ahead more rapidly while continuing to preserve
the excellence in basic research that is a hallmark of NIAID, and all of
NIH. The result is that we now take a much more proactive role in
collaborating with academia, industry and other partners to move
promising concepts into advanced product development and clinical
testing.

**Biodefense Research**

In the wake of the 2001 terrorist attacks, NIAID substantially expanded
and accelerated its biodefense research program. The FY 2006 President's
budget request for NIAID includes \$1,664,505,000 for these biodefense
research and development activities. The [NIAID Strategic Plan for
Biodefense Research]{.underline} provides a blueprint for the
construction of three essential pillars of the NIAID biodefense research
program: *infrastructure* needed to safely conduct research on dangerous
pathogens (\$30,000,000 in FY 2006); *basic research* on microbes and
host immune defenses that serves as the foundation for applied research
(\$612,190,000 in FY 2006); and targeted, milestone-driven *research
and* *development of* *medical countermeasures* to create the vaccines,
therapeutics and diagnostics that we would need in the event of a
bioterror attack (\$1,022,315,000 in FY 2006).

The investment Congress has made in the NIAID biodefense research
program has already begun to return substantial dividends in all three
of these aspects of biodefense research. Dramatic advances have been
achieved in the development of medical countermeasures against an attack
with biological agents, and, although there is much more to be
accomplished, we are in a far stronger position today than we were only
a few years ago. In September 2001, we had 15.4 million doses of
smallpox vaccine available; today, we have more than 300 million doses.
A next-generation smallpox vaccine called modified vaccinia Ankara (MVA)
is in clinical testing and other vaccine candidates are in pre-clinical
development stages. A new oral form of the antiviral drug cidofovir is
in advanced product development for use in the event of a smallpox
attack, as well as to treat the rare but serious complications of the
classic smallpox vaccine. For anthrax, NIAID has aggressively pursued
development of a new vaccine called rPA; the Department of Health and
Human Services (DHHS) has contracted with VaxGen, Inc. to purchase 75
million doses of rPA under the BioShield legislation passed last year.
This vaccine is derived using molecular biological methodologies and is
produced using modern vaccine manufacturing techniques and may require
fewer doses than the currently licensed vaccine. New anthrax therapies
that can neutralize the anthrax toxin, such as monoclonal and polyclonal
antibodies, are being developed. Candidate antibody treatments for the
toxin that causes botulism are in development, as is a new vaccine to
prevent the disease. Finally, an Ebola recombinant DNA vaccine is in
initial human clinical trials at the NIAID Vaccine Research Center.

With regard to research infrastructure, many integrated research
facilities are under construction to safely contain and study pathogens,
including several new biodefense laboratories that will be owned and
operated by NIAID. In addition, sites have been selected for the
construction of two National Biocontainment Laboratories (NBLs) and nine
Regional Biocontainment Laboratories (RBLs) at major universities around
the United States. All of these research laboratories will provide the
secure facilities needed to carry out the nation\'s expanded biodefense
research program in settings that protect workers and the surrounding
communities. NIAID also has funded eight Regional Centers of Excellence
for Biodefense and Emerging Infectious Diseases Research (RCEs). This
nationwide network of multidisciplinary academic centers will conduct
wide-ranging research to better understand infectious agents that could
be used in bioterrorism, and will develop diagnostics, therapeutics and
vaccines needed for biodefense against these agents. In 2005, NIAID will
fund two additional RCEs and three to four additional RBLs. NIAID also
has developed and expanded contracts to screen new drugs against
bioterrorism threat agents, developed new animal models for bioterrorism
threat agents, and established a biodefense reagent and specimen
repository.

Advances in Medicine rest on a foundation of basic research into the
fundamental properties and mechanisms of life. In biodefense, these
basic studies include sequencing and understanding of microbial genomes
(genomics) and their products (proteomics), deciphering how microbes
cause disease (pathogenesis), and examining how the human immune system
and pathogens interact (immunology). NIAID-funded basic researchers have
made significant progress since 2001 in each of these areas. For
example, researchers have now determined the genetic sequence of at
least one strain of every pathogen identified as a potential bioterror
threat, and NIAID has established the Pathogen Functional Genomics
Resource Center to help researchers apply and analyze these new genome
sequence data. In pathogenesis, NIH researchers recently determined the
three-dimensional structure of the anthrax toxin bound tightly to a
target cell surface receptor. This finding has provided new leads for
the development of novel antitoxins that could save lives late in the
course of anthrax disease when large amounts of toxin are present and
antibiotics alone are no longer sufficient to save the patient. Finally,
basic molecular and cellular studies of the human innate immune system,
which is comprised of broadly active \"first responder\" cells and other
mechanisms that are the first line of defense against infection, have
been moving forward rapidly. These advances suggest it may be possible
to develop fast-acting countermeasures that boost innate immune
responses to mitigate the effects of a broad spectrum of bioterror
pathogens or toxins. Manipulation of the innate immune system also could
lead to the development of powerful adjuvants that can be used to
increase the effectiveness of vaccines.

The knowledge and products that will flow from the NIAID biodefense
research program, including research results, intellectual capital,
laboratory resources, and countermeasures in the form of diagnostics,
therapeutics, and vaccines, will help us cope with naturally emerging,
re-emerging, and deliberately released microbes alike. Recent experience
tells us that knowledge developed to understand one pathogen invariably
applies to others. For example, when HIV first emerged, antiviral drug
development was in its infancy. Now, new technologies have led to the
development of more than 20 antiretroviral drugs that can effectively
suppress HIV replication and dramatically reduce AIDS morbidity and
mortality. These same technologies, and the lessons learned about
antiviral drug development, are being applied to the development of new
generations of drugs against many viruses, including influenza, SARS,
smallpox, and Ebola. Even if we are never confronted with another
bioterror attack, the biodefense research and preparations being carried
out now will without question prove to be very valuable.

**HIV/AIDS Research**

Only a few statistics are needed to present a profoundly disturbing
picture of the still-emerging HIV/AIDS pandemic. Approximately 40
million people worldwide are living with HIV/AIDS, according to the
Joint United Nations Programme on HIV/AIDS (UNAIDS). Every year, more
than 5 million people worldwide are newly infected with the
virus---about 14,000 each day; more than 95 percent of these people live
in low and middle income countries. In the United States, nearly one
million people are living with HIV/AIDS, and approximately 40,000 new
infections occur annually, according to the Centers for Disease Control
and Prevention. The death toll continues to climb steadily; worldwide,
more than 20 million people with HIV have died since the pandemic began,
including more than 520,000 in the United States. In 2004, there were 3
million deaths due to HIV/AIDS. As shocking as these numbers are, they
do not adequately communicate the physical and emotional devastation to
individuals, families, and communities coping with HIV/AIDS, nor do they
capture the terrible impact of HIV/AIDS on the economies and security of
nations, and indeed on entire regions.

Even as the burden of HIV/AIDS continues to grow, recent progress in
research is providing reasons for optimism. For example, several new
antiretroviral drugs recently have entered the market, all of which were
built on NIAID-sponsored research and/or were tested in NIAID clinical
trials networks; many other new anti-HIV drugs are in clinical trials.
Other novel approaches to anti-HIV drugs are in the research "pipeline."
For example, NIAID scientists, in collaboration with extramural
colleagues and with industry, recently conducted a clinical trial to
test a product, anti-CCR5, that binds to a new therapeutic target, the
HIV co-receptor, thus preventing HIV infection of host cells.

The development of a safe and effective HIV vaccine is one of NIAID's
highest priorities. The scientific barriers to the creation of such a
vaccine are extraordinarily high, and better coordination, collaboration
and transparency of research worldwide would help to overcome them. To
facilitate such an approach, NIAID participated heavily in the creation
of a new initiative called the Global HIV/AIDS Vaccine Enterprise, which
was endorsed by President Bush and the other G8 countries at their June,
2004 Summit meeting in Sea Island, GA. The project creates a worldwide
consortium of people and organizations with a stake in HIV vaccine
research who agree to harmonize their individual HIV vaccine efforts by
following a unified Strategic Plan for HIV vaccine development. This
plan was published on a publicly-accessible website in February 2005.

Other measures to prevent HIV transmission also are being vigorously
pursued. For example, when I testified here last year I discussed our
efforts to develop topically applied microbicides that women could use
to protect themselves from HIV and other sexually transmitted pathogens.
More than 50 candidate agents have shown activity against HIV and other
sexually transmitted diseases in the laboratory, and several of these
have been shown to be safe and effective in animal models. In February
2005, a large international study, sponsored by NIAID and involving more
than 3,000 women at high risk of acquiring HIV in the United States and
five African countries, opened for enrollment. If these microbicides are
proven to be safe and effective, they likely will become a very
important means of slowing the pace of the HIV/AIDS epidemic.

**RESEARCH ON OTHER EMERGING AND RE-EMERGING**

**INFECTIOUS DISEASES**

Infectious diseases do not remain static, but continually and
dramatically change over time. New pathogens, such as the Severe Acute
Respiratory Syndrome (SARS) coronavirus, can emerge suddenly and
familiar ones, such as influenza virus and West Nile virus, can
re-emerge with new properties or in unfamiliar settings. We must always
be on guard for such changes and be prepared to react to them as quickly
as possible.

SARS is a prototypical example of a newly-emerging infectious disease.
When SARS first came to the world's attention in early 2003 as an
unknown, highly lethal and transmissible disease, researchers and public
health authorities the world over immediately began to collaborate to
understand it. In short order, NIAID-supported researchers and others in
Hong Kong showed that SARS was caused by a previously unrecognized
coronavirus, epidemiologists unraveled its modes of transmission, and
public health authorities were able to contain the initial outbreak.

Since then, NIAID has continued to pursue several approaches to the
development of SARS antiviral therapies. For example, NIAID screening
contracts have supported the evaluation of more than 20,000 chemicals
for anti-SARS coronavirus activity. More than 1,400 compounds with
activity against SARS coronavirus have been identified, including alpha
interferon, a drug already approved by the FDA for the treatment of
hepatitis B and C infections.

NIAID scientists and grantees also are working on several approaches to
a SARS vaccine, including one that entered human clinical testing in
December 2004. It is truly remarkable that two years ago we were facing
an unknown global health threat, and now we are already testing a
promising vaccine that may help us to counter that threat should it
re-emerge.

When West Nile virus (WNV) first appeared in the Western hemisphere in
1999, NIAID immediately increased its basic research on the virus and
undertook the development of new vaccines and treatments for the
disease. NIAID currently supports the development of three types of WNV
vaccine---one of which has entered initial clinical testing---and is
developing candidate WNV therapies. For example, in 2004, NIAID expanded
an ongoing clinical study in human volunteers that is evaluating the
safety and efficacy of the administration of antibodies against the
virus as a means of treating or preventing West Nile virus encephalitis.

Influenza is a classic example of a re-emerging disease. Because the
influenza virus continually changes, the U.S. influenza vaccine supply
must be renewed each year. Although the egg-based technology currently
in use has served us reasonably well for more than 40 years, it has
limitations in flexibility in that surges in the need for additional or
new vaccines cannot be readily accommodated due to the advance time that
is required to provide for the annual requirement for hundreds of
millions of fertilized chicken eggs to manufacture the vaccine. In
addition, there is the ever present risk of contamination and the
vicissitudes of yield of virus from this technique. The serious vaccine
shortage that occurred this flu season underscores the difficulties we
face in annually renewing the influenza vaccine supply, and highlights
the pressing need to move toward adoption of newer vaccine manufacturing
techniques to improve the flexibility and speed with which vaccines can
be made.

NIAID supports several research projects and other initiatives intended
to foster the development of new influenza vaccines and manufacturing
methods that are simpler and more reliable, yield products that work
against multiple influenza strains, and provide greater protection. DHHS
has requested \$120 million in FY 2006 to help shift vaccine manufacture
toward new cell-culture technologies, new production technologies, as
well as to provide for year-round availability of eggs to provide for a
secure supply and surge capacity. In addition, a technique developed by
NIAID-supported scientists called reverse genetics allows scientists to
manipulate the genomes of influenza viruses to make the process of
development of seed viruses for vaccines faster and more predictable.

Although the impact of influenza in a normal epidemic year is
substantial, influenza viruses from animals occasionally cross into
humans and, if the virus then acquires the ability to be easily
transmitted between people, can cause a much more serious influenza
pandemic. NIAID conducts a great deal of research to understand the
viral biology and epidemiology that underpinned past pandemics and funds
surveillance activities in Asia to detect the emergence of influenza
viruses with pandemic potential. In addition, the DHHS draft Pandemic
Influenza Response and Preparedness Plan directs NIAID to help develop
and produce an effective vaccine as rapidly as possible that could be
used should a pandemic alert be declared.

In recent years, avian influenza virus strains that can infect humans
have emerged; the most worrisome are known as H9N2 and H5N1. In 1999 and
2003, an H9N2 influenza strain caused illness in people in Hong Kong.
The H5N1 "bird flu" influenza strain was first detected in 1997 and has
spread widely among wild and domestic birds. This latter virus has
infected at least 55 people and killed 42 since January 2004, and there
has been at least one documented case of human-to-human transmission.

NIAID has taken several steps to develop vaccines against both of these
potential pandemic strains. NIAID contracted with Chiron Corporation to
produce investigational batches of an inactivated H9N2 vaccine, which
will be evaluated clinically by NIAID this year. For H5N1,
Aventis-Pasteur, Inc. and Chiron are both producing investigational lots
of inactivated H5N1 vaccine preparations; additionally, DHHS has
contracted with Aventis to produce up to 2 million doses to be
stockpiled for emergency use, if needed, to vaccinate health workers,
researchers, and, if indicated, the public in affected areas.
Development and evaluation of a combination antiviral regimen against
these potential pandemic influenza strains are also now under way.

**RESEARCH ON IMMUNE-MEDIATED DISEASES**

Immune-mediated diseases, including autoimmune diseases, allergic
diseases, and asthma are important health challenges in the United
States and abroad. One of the most promising strategies for developing
treatments for a wide variety of these disorders is known as immune
tolerance, in which researchers hope to selectively turn off injurious
immune responses while leaving intact the protective responses needed to
fight infection. To foster this research, NIAID sponsors the Immune
Tolerance Network (ITN), a consortium of more than 80 investigators in
the United States, Canada, Western Europe, and Australia dedicated to
the clinical evaluation of promising therapies that can induce immune
tolerance. The ITN will be recompeted in FY 2006.

Reducing the growing burden of asthma among inner-city minority children
is another NIAID priority. NIAID-supported investigators recently
reported the largest study of its kind, showing that an intervention to
reduce exposure to indoor allergens and tobacco smoke substantially
reduced asthma severity and healthcare utilization among inner-city
children. In 2004, NIAID\'s Inner-City Asthma Consortium launched a
large study to define and analyze immunological and environmental
influences upon the development of childhood asthma in a cohort of urban
children followed from birth.

In closing, Mr. Chairman, I would like to take a moment to remember John
R. La Montagne, Ph.D., the former deputy director of NIAID, who died
suddenly on November 2 while traveling to a meeting of the Pan American
Health Organization in Mexico City. Human infrastructure, in the form of
a highly trained and deeply committed work force, is a critical
component of any kind of medical research. Throughout John's almost 30
years at NIAID, his leadership and dedication to improving global
health, as well as his generosity, wit, even-handedness and kindness,
made him a cornerstone of the human infrastructure at NIAID. Personally,
he was a dear friend and one of the finest people I have ever known. He
is sorely missed.

Thank you, Mr. Chairman. I would be pleased to answer any questions that
the Committee might have.

#### ANTHONY S. FAUCI, M.D.

**Director, National Institute of Allergy and Infectious Diseases**

**National Institutes of Health**

Dr. Anthony S. Fauci, a native of Brooklyn, New York, received his M.D.
degree from Cornell University Medical College in 1966. He then
completed an internship and residency at The New York Hospital-Cornell
Medical Center. In 1968, Dr. Fauci came to the National Institutes of
Health (NIH) as a clinical associate in the Laboratory of Clinical
Investigation (LCI) at the National Institute of Allergy and Infectious
Diseases (NIAID). In 1974, he became Head of the Clinical Physiology
Section, LCI, and in 1980 was appointed Chief of the Laboratory of
Immunoregulation, a position he still holds. In 1984, Dr. Fauci became
Director of NIAID, where he oversees an extensive research portfolio of
basic and applied research to prevent, diagnose, and treat infectious
and immune-mediated illnesses, including HIV/AIDS and other sexually
transmitted diseases, illness from potential agents of bioterrorism,
tuberculosis, malaria, autoimmune disorders, asthma and allergies. Dr.
Fauci serves as one of the key advisors to the White House and
Department of Health and Human Services on global AIDS issues, and on
initiatives to bolster medical and public health preparedness against
possible future bioterrorist attacks.

Dr. Fauci has made many contributions to basic and clinical research on
the pathogenesis and treatment of immune-mediated diseases. He has
pioneered the field of human immunoregulation by making a number of
basic scientific observations that serve as the basis for current
understanding of the regulation of the human immune response. In
addition, Dr. Fauci is widely recognized for delineating the precise
mechanisms whereby immunosuppressive agents modulate the human immune
response. He has developed effective therapies for formerly fatal
diseases such as polyarteritis nodosa, Wegener\'s granulomatosis, and
lymphomatoid granulomatosis. A 1985 Stanford University Arthritis Center
Survey of the American Rheumatism Association membership ranked the work
of Dr. Fauci on the treatment of polyarteritis nodosa and Wegener\'s
granulomatosis as one of the most important advances in patient
management in rheumatology over the previous 20 years.

Dr. Fauci has made seminal contributions to the understanding of how the
AIDS virus destroys the body\'s defenses leading to its susceptibility
to deadly infections. He also has delineated the mechanisms of induction
of HIV expression by endogenous cytokines. Furthermore, he has been
instrumental in developing strategies for the therapy and immune
reconstitution of patients with this serious disease, as well as for a
vaccine to prevent HIV infection. He continues to devote much of his
research time to identifying the nature of the immunopathogenic
mechanisms of HIV infection and the scope of the body\'s immune
responses to the AIDS retrovirus.

In 2003, an Institute for Scientific Information study indicated that in
the twenty year period from 1983 to 2002, Dr. Fauci was the 13th
most-cited scientist among the 2.5 to 3 million authors in all
disciplines throughout the world who published articles in scientific
journals during that time frame. Dr. Fauci was the ninth most-cited
scientist in the field of immunology in the period from January 1993 to
June 30, 2003.

Through the years, Dr. Fauci has served as Visiting Professor at major
medical centers throughout the country. He has delivered many major
lectureships all over the world and is the recipient of numerous
prestigious awards for his scientific accomplishments, including 28
honorary doctorate degrees from universities in the United States and
abroad.

Dr. Fauci is a member of the National Academy of Sciences, the American
Philosophical Society, the Institute of Medicine of the National Academy
of Sciences (Council Member), the American Academy of Arts and Sciences,
and the Royal Danish Academy of Science and Letters, as well as a number
of other professional societies including the American College of
Physicians, the American Society for Clinical Investigation, the
Association of American Physicians, the Infectious Diseases Society of
America, the American Association of Immunologists, and the American
Academy of Allergy Asthma and Immunology. He serves on the editorial
boards of many scientific journals; as an editor of Harrison\'s
Principles of Internal Medicine; and as author, coauthor, or editor of
more than 1,000 scientific publications, including several textbooks.

Department of Health and Human Services

Office of Budget

William R. Beldon

Mr. Beldon is currently serving as Deputy Assistant Secretary, Budget in
the Department of Health and Human Services. He has been a Division
Director in the Budget Office for sixteen years, most recently as
Director of the Division of Discretionary Programs. Mr. Beldon started
in federal service as an auditor in the Health, Education and Welfare
Financial Management Intern program. Over the course of more than 30
years in the Budget Office, Mr. Beldon has held Program Analyst, Branch
Chief and Division Director positions. Mr. Beldon received a Bachelor's
Degree in History and Political Science from Marshall University and
attended the University of Pittsburgh where he studied Public
Administration. He resides in Fort Washington, Maryland.