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[Senate Hearing 111-970]
[From the U.S. Government Publishing Office]

                                                        S. Hrg. 111-970
 
                DEFENDING AGAINST PUBLIC HEALTH THREATS 

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

                                HEARING

                                before a

                          SUBCOMMITTEE OF THE

            COMMITTEE ON APPROPRIATIONS UNITED STATES SENATE

                     ONE HUNDRED ELEVENTH CONGRESS

                             SECOND SESSION

                               __________

                            SPECIAL HEARING

                   SEPTEMBER 29, 2010--WASHINGTON, DC

                               __________

         Printed for the use of the Committee on Appropriations

       Available via the World Wide Web: http://www.gpo.gov/fdsys

                               __________

                         U.S. GOVERNMENT PRINTING OFFICE 

61-561 PDF                       WASHINGTON : 2011 

For sale by the Superintendent of Documents, U.S. Government Printing 
Office Internet: bookstore.gpo.gov Phone: toll free (866) 512-1800; 
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Washington, DC 20402-0001 

                      COMMITTEE ON APPROPRIATIONS

                   DANIEL K. INOUYE, Hawaii, Chairman
PATRICK J. LEAHY, Vermont            THAD COCHRAN, Mississippi
TOM HARKIN, Iowa                     CHRISTOPHER S. BOND, Missouri
BARBARA A. MIKULSKI, Maryland        MITCH McCONNELL, Kentucky
HERB KOHL, Wisconsin                 RICHARD C. SHELBY, Alabama
PATTY MURRAY, Washington             JUDD GREGG, New Hampshire
BYRON L. DORGAN, North Dakota        ROBERT F. BENNETT, Utah
DIANNE FEINSTEIN, California         KAY BAILEY HUTCHISON, Texas
RICHARD J. DURBIN, Illinois          SAM BROWNBACK, Kansas
TIM JOHNSON, South Dakota            LAMAR ALEXANDER, Tennessee
MARY L. LANDRIEU, Louisiana          SUSAN COLLINS, Maine
JACK REED, Rhode Island              GEORGE V. VOINOVICH, Ohio
FRANK R. LAUTENBERG, New Jersey      LISA MURKOWSKI, Alaska
BEN NELSON, Nebraska
MARK PRYOR, Arkansas
JON TESTER, Montana
ARLEN SPECTER, Pennsylvania
SHERROD BROWN, Ohio

                    Charles J. Houy, Staff Director
                  Bruce Evans, Minority Staff Director
                                 ------                                

 Subcommittee on Departments of Labor, Health and Human Services, and 
                    Education, and Related Agencies

                       TOM HARKIN, Iowa, Chairman
DANIEL K. INOUYE, Hawaii             THAD COCHRAN, Mississippi
HERB KOHL, Wisconsin                 JUDD GREGG, New Hampshire
PATTY MURRAY, Washington             KAY BAILEY HUTCHISON, Texas
MARY L. LANDRIEU, Louisiana          RICHARD C. SHELBY, Alabama
RICHARD J. DURBIN, Illinois          LAMAR ALEXANDER, Tennessee
JACK REED, Rhode Island
MARK PRYOR, Arkansas
ARLEN SPECTER, Pennsylvania
                           Professional Staff

                              Erik Fatemi
                              Mark Laisch
                            Adrienne Hallett
                             Lisa Bernhardt
                            Michael Gentile
                          Alison Perkins-Cohen
                       Bettilou Taylor (Minority)
                      Sara Love Swaney (Minority)
                      Jennifer Castagna (Minority)

                         Administrative Support

                              Teri Curtin

                            C O N T E N T S

                              ----------                              
                                                                   Page

Opening Statement of Senator Tom Harkin..........................     1
Statement of Kathleen Sebelius, Secretary, Department of Health 
  and Human Services.............................................     4
    Prepared Statement of........................................     7
2009 H1N1 Pandemic Influenza.....................................     7
Medical Countermeasures (MCMs)...................................     7
MCM Review.......................................................     8
Recommendations..................................................     9
Implementation of the Recommendations............................    11
Strategic Investor Fund and Development Authority................    12
Pandemic Influenza Preparedness Activities.......................    13
MCM Spend Plan...................................................    15
H1N1 Vaccine.....................................................    16
Transferring Funds From HHS to DOD...............................    18
Statement of Colonel Randall J. Larsen, USAF (Ret.), Chief 
  Executive Officer, Weapons of Mass Destruction Center, 
  Washington, DC.................................................    19
    Prepared Statement of........................................    21
Statement of Eric A. Rose, M.D., Chief Executive Officer and 
  Chairman, Siga Technologies; Co-Chair, Alliance for 
  Biosecurity, Washington, DC....................................    25
    Prepared Statement of........................................    27
Statement of Andrew T. Pavia, M.D., FAAP, FIDSA, Chief, Division 
  of Pediatric Infectious Diseases, University of Utah; Chair, 
  Infectious Diseases Society of America's Pandemic Influenza 
  Task Force, Salt Lake City, 
  Utah...........................................................    30
    Prepared Statement of........................................    32

                DEFENDING AGAINST PUBLIC HEALTH THREATS

                              ----------                              

                     WEDNESDAY, SEPTEMBER 29, 2010

                           U.S. Senate,    
    Subcommittee on Labor, Health and Human
     Services, and Education, and Related Agencies,
                               Committee on Appropriations,
                                                    Washington, DC.
    The subcommittee met at 2:35 p.m., in room SD-124, Dirksen 
Senate Office Building, Hon. Tom Harkin (chairman) presiding.
    Present: Senators Harkin, Pryor, Specter, and Cochran.

                opening statement of senator tom harkin

    Senator Harkin. The Appropriations Subcommittee on Labor, 
Health, Human Services, and Education, and Related Agencies, 
will come to order.
    It's sometimes said that, while the Defense Appropriations 
Subcommittee defends America, this subcommittee actually 
defines America. For the most part, that's true. This 
subcommittee also defends America in one very important area, 
and that's public health. Funding provided by this subcommittee 
is what pays for the Nation's medical countermeasures (MCM), 
including the drugs, medicines, and devices that protect 
Americans against bioterrorism, pandemic influenza, and other 
emerging infections. This subcommittee has taken that 
responsibility very seriously, and we can point to important 
advances. But, America still remains vulnerable to an epidemic 
or a bioterrorism attack.
    A good example is pandemic flu. Since fiscal year 2006, 
this subcommittee has provided $15 billion--$15 billion--to 
improve pandemic preparedness in the United States. Many of 
these investments paid off during last year's H1N1 outbreak. 
For example, an improved surveillance system allowed us to 
detect the new strain very quickly. Second, State and local 
public health agencies had more capacity than ever to 
administer vaccines. Third, we stockpiled antivirals, such as 
Tamiflu, which allowed us to treat patients who'd already 
gotten sick with the flu.
    But, despite all those improvements, a continuing 
vulnerability is our dependence on egg-based technology to 
produce influenza vaccines. This contributed to serious delays 
in the development and manufacture of the H1N1 vaccine. Indeed, 
the vaccine didn't become widely available until after the flu 
season had already peaked. Fortunately for us, H1N1 was milder 
than expected. But, we may not be so lucky the next time.
    Another example is anthrax. It's been almost 10 years since 
letters laced with anthrax were sent through the U.S. mail. 
Future attacks remain a very real threat. Yet, we are still 
using the same anthrax vaccine that was developed 40 years ago.
    One reason that we've been slow to prepare for such threats 
is that we need a stronger partnership with biotech companies 
that could produce countermeasures such as the next-generation 
anthrax vaccine. There's a problem, and that is this: The 
Federal Government is the only buyer for these countermeasures. 
So, we have to work closely with small biotech companies to 
make sure they have the capacity to do what we're asking of 
them. Right now, this partnership doesn't seem to be working as 
well as it should.
    This summer, Secretary Sebelius released a plan--a very 
comprehensive plan--to address these various challenges and to 
take a comprehensive approach to improving our Nation's 
countermeasures. For that, Madam Secretary, we are all very 
grateful for your leadership in this area.
    Some of what the Secretary has proposed will require this 
subcommittee's approval, since it requires transferring or 
redirecting unobligated balances for pandemic flu and Project 
BioShield. This hearing, therefore, is an opportunity both to 
take stock of how prepared we are as a Nation to meet the 
threats that confront us in this area, and to evaluate the 
administration's plan for addressing these issues. We will hear 
from Secretary Sebelius, as well as a panel of experts from 
outside the Government.
    And before we begin, I'll turn to Senator Cochran for an 
opening statement.
    Senator Cochran. Mr. Chairman, thank you for convening this 
hearing to consider our Nation's important obligation of 
defending against threats to public health.
    The Department of Health and Human Services (HHS) monitors 
and recommends how we go about discharging this important 
responsibility to defend our country against bioterrorism and 
other public health threats. We're pleased to welcome the 
Secretary of HHS, Kathleen Sebelius, to the subcommittee 
hearing, and we look forward to working with her to help 
develop and implement plans to enhance this Nation's investment 
in MCM and public health preparedness.
    We have other witnesses, as well, who are coming before the 
subcommittee today, and we look forward to hearing the 
testimony of all of our witnesses.
    Thank you.
    Senator Harkin. Thank you, Senator Cochran.
    Senator Specter wanted to----
    Senator Specter. Well, thank you, Mr. Chairman. I had asked 
for an opportunity to say a few words, because, regrettably I 
cannot stay for the hearing.
    But, this is a very important project that will be 
discussed today, and something that you and I and many have 
worked on. But, flexible manufacturing has been high on my 
agenda for a long time, when I used to chair the subcommittee. 
And a portion of my concern is State-oriented, because UPMC is 
a major player, and seeks to engage in the competitive bidding. 
And we're just at the--really, at the second inning of a very 
long process here. But, I wanted to express a couple of 
concerns.
    One concern is over the $1.2 billion ceiling for funding 
over the next 25 years, because the analysis which I have seen 
indicates that will be insufficient. That goes to about $48 
million a year. And some people are talking about $300 million. 
I think that's probably too high, perhaps way too high. There 
have been some discussions about $100 million. But, I wanted to 
raise that issue, and would hope that would be addressed by the 
Secretary during the hearing today.
    The other subject of concern is the thrust of having the 
recipient of the contract to build a facility cooperate with 
other research entities to produce more vaccines with greater 
flexibility as these threats arise, and there's a concern that 
these entities will be in competition with one another and will 
not be interested in the high level of cooperation which would 
best suit the Government, best suit the public interest.
    So, I raise these two considerations at the outset.
    I thank the Secretary for the attention she has given to 
this matter. I have talked to her about it on several 
occasions. I even talked to two people who are higher up on the 
chain of command than is the Secretary about the matter. They 
call them the Vice President and the President. And I've talked 
to many people who are lower on the chain of the command. And 
I--the principle of equality is important, and very often 
somebody far down on the chain of command can be as influential 
as somebody at the top of the chain of command. Some say that 
the staffs run the Senate. I don't think they run all the 
Senators, but they are very, very influential.
    But, I wanted to call those couple of matters to the 
attention of the Secretary and the subcommittee. And, while 
I'll be working with Secretary Sebelius much more, because we 
have a very lengthy lame duck session--I heard it was going to 
last until December 15--but, I just want to thank her for what 
she's done, especially coming to Philadelphia on the first 
Sunday in August of the year 2009, when the first of the 
raucous town meetings occurred. And she and I were there that 
day, speaking to a group of lawyers. The organizer was a 
Philadelphia lawyer who asked me to speak. They finally got a 
better speaker, but I was second because the president of the 
association's from Kansas, and knew the Secretary, and was able 
to get a high-quality speaker without an honorarium. And since 
she was coming to town--when I say a ``high-quality speaker,'' 
Madam Secretary, that's because Senators don't charge 
honoraria; we're not permitted to. But, since she was coming to 
town, she decided to hold a town meeting. And since I was in 
town with her at the same lunch, I was asked to join her. And 
it was historic, and you were terrific.
    Thank you, Mr. Chairman.
    Senator Harkin. I have to get a video of that one, then.
    Thank you very much, Senator Specter.
    Secretary Kathleen Sebelius became the 21st Secretary of 
HHS on April 29, 2009. In 2003, she was elected as Governor of 
Kansas and served in that capacity until her appointment as 
Secretary. Prior to her election as Governor she served as the 
Kansas State insurance commissioner. She is a graduate of 
Trinity Washington University, just up the street from here, 
and the University of Kansas.
    Madam Secretary, welcome. And your statement will be made a 
part of the record in its entirety. Please proceed as you so 
desire.
STATEMENT OF KATHLEEN SEBELIUS, SECRETARY, DEPARTMENT 
            OF HEALTH AND HUMAN SERVICES
    Secretary Sebelius. Well, thank you so much, Chairman 
Harkin and Senator Cochran and Senator Pryor. I'm sorry that 
Senator Specter had to leave. He doesn't advertise it much, but 
he is also a Kansan. He was born and raised in Russell, Kansas, 
and was the debate champion of his high school. So, it was 
great to be with him at the town hall in Philadelphia. And I 
appreciate the opportunity to be here and talk a bit about our 
recent review of the MCM Enterprise and some recommendations we 
have about how we can move forward.
    As you all know well, we don't really know where the next 
public health crisis is going to come from. It could be a dirty 
bomb in a subway car, it could be a naturally occurring 
superbug that's resistant to all treatments, it could be a 
biological weapon that we've never seen before, assembled from 
the building blocks of life by a terrorist in a lab. And, as 
we've seen, it could be a naturally occurring novel strain of 
the influenza virus.
    So, I had my introduction to MCM less than an hour after I 
was sworn in on April 29, when I went and was briefed, by John 
Brennan in the situation room, on the rapidly expanding H1N1 
virus, which was beginning to appear, not only in the United 
States, but in other nations. And we had a rapid and 
coordinated response across government, made possible in large 
part by the efforts of this subcommittee, Mr. Chairman, who had 
been directing resources and planning and preparedness dollars 
over a series of years so that we would be ready to respond.
    So, with the first pandemic in 40 years, the good news is, 
we were able to develop and distribute a safe vaccine. The bad 
news is that our production peaked 3 weeks after the peak of 
the flu season, so we were still not able to respond in a 
timely fashion.
    So, we knew we needed to do better, and the President 
encouraged our Department to look at not only what occurred 
during the H1N1, but to use it as an opportunity to review the 
entire MCM Enterprise. And so, we launched that study in 
December 2009.
    As you know, countermeasures are vaccines, antivirals, 
antibiotics, pharmaceuticals, diagnostics, and the medical 
equipment that are the most direct and effective defense in any 
public health crisis. So, I asked Dr. Nicky Lurie, who's our 
ASPR--to lead the review. And we engaged not only all of our 
departments and entities in HHS, but also reached out to our 
local and State health departments, who had been great partners 
in the flu response, to industry groups, to venture capital 
experts, academics, scientists, and our partners in the 
Department of Defense (DOD), as well as biotech developers 
around the country, to help us analyze sort of where we are and 
where the glitches are in the system.
    And we found that the pipeline that we rely on to provide 
critical countermeasures is, unfortunately, full of leaks and 
chokepoints and dead-ends. And, in an age of new threats, where 
delays cost lives, we aren't developing and manufacturing new 
countermeasures fast enough. And, Mr. Chairman, you referred to 
both the flu and the anthrax situation as two examples of that. 
So, at a moment when the most dangerous threat may be something 
we've never seen before, we don't have the flexibility to 
adapt. And our challenge is to get from where we are today to 
the goal that the review laid out, a Nation with, and I quote, 
``The nimble, flexible capacity to produce MCM rapidly, in the 
face of any attack or threat, known or unknown, including a 
novel, previously unrecognized, naturally occurring, emerging 
infectious disease.'' That's where we need to be as a Nation. 
And our plan, which we have submitted to this subcommittee and 
to Congress, is a step to getting us there.
    We think it's important to focus on five major areas where 
we begin to act now to make big improvements in public health 
defenses:
    First, upgrade regulatory science at the Food and Drug 
Administration (FDA), to modernize product development and 
evaluation. By identifying and solving scientific problems 
earlier, we can take products across the finish line faster, 
confident in their safety and effectiveness. And I would say, 
Mr. Chairman, that we used some of these new techniques in the 
production of the H1N1 vaccine, brought the companies to the 
table at a much earlier stage, and I think it's one of the 
reasons we were able, in record time, to get that vaccine into 
the production lines.
    Second, want to work with highly experienced developers--
and this is what Senator Specter referenced--to establish 
facilities capable of providing core, advanced development and 
manufacturing services here in the United States. So, on 
September 15, we released a draft solicitation for new centers 
of innovation for advanced development and manufacturing 
facilities. These will be new plants, here in the United 
States, to develop flexible manufacturing platforms, giving us 
a dependable source of surge capacity for flu vaccine, as well 
as the ability to manufacture other MCM, so we don't have to 
rely on foreign producers, as we did during the H1N1 crisis.
    We released the draft for comment, and anticipate producing 
the final solicitation before the end of the year. And, in 
fact, next week we have interested parties coming in for 3 days 
of discussion so we can home in on what are the real strategies 
for the best possible request for proposal.
    The centers also can serve as a resource for small biotech 
companies with big ideas that can help them get the 
manufacturing and regulatory support they need to get the 
products to market. Just this week, we've awarded eight 
contracts to businesses, with the goal of developing innovative 
tools and techniques that improve numerous aspects of the MCM 
pipeline, from increasing the shelf life of the flu vaccine to 
advanced disease surveillance.
    The third area where we think we need to turn our focus is 
doing more to nurture the discoveries at their earliest stages 
by taking full advantage of the world-class resources and years 
of experience at the National Institutes of Health (NIH). We'll 
aggressively seek out those ideas and discoveries that have the 
best potential to fuel the product pipeline. And to assure that 
no breakthroughs sunset with the publication of a paper in a 
scientific journal, we want to be more proactive in harnessing 
the ideas and incubating new products.
    Fourth, reducing the time it takes to get flu vaccines to 
people by producing vaccine seed strains that grow better and 
by modernizing potency and sterility testing methods.
    These are some of the steps recommended in the President's 
Council of Advisors on Science and Technology report, and 
they'll ensure we're better prepared for flu seasons to come. 
The Centers for Disease Control and Prevention (CDC), FDA, 
Biomedical Advanced Research and Development Authority (BARDA), 
and NIH are already engaged in a planning framework to address 
each of these needs.
    And, again, Mr. Chairman, I want to recognize your 
leadership and support in this area. You have been a champion 
of this for years, and it's something we take very seriously.
    And finally, we're exploring the possibility of launching a 
nonprofit venture capital firm that can support critical 
financial and business planning to small companies with big 
ideas that have the potential to improve our public health 
preparedness. In the coming years, HHS will direct nearly $2 
billion in preparedness funds to these five areas, helping us 
build a MCM enterprise with a solid base of discovery, clear 
regulatory pathway, and the agile manufacturing that's 
necessary if we're going to be able to respond to any threat at 
any time.
    We've also submitted an amendment to the fiscal year 2011 
President's budget to provide the new authorities where they're 
needed.
    So, coming off this review, we hit the ground running. We 
just awarded a contract to a California company to create next-
generation ventilators for use during a potential health 
emergency or pandemic. And today we're announcing further 
investment in our ongoing international cooperative agreement 
with the World Health Organization to support global pandemic 
influenza vaccine preparedness, a partnership that improves 
health safety, both here and abroad.
    In the end, if a product fails to make it into our national 
stockpiles, it should only be based on its failure to meet our 
stringent standards for safety, efficacy, or quality, and not 
because we failed to provide the needed business, regulatory, 
and technical support for success.
    Mr. Chairman, there's an old saying in sports, that most 
victories are actually won on the practice field, when no one 
is watching. And we feel in the same way how successfully we 
respond to tomorrow's public health crisis when the spotlight's 
on actually determined by how hard we work behind the scenes to 
build a 21st century countermeasures enterprise that can 
respond quickly and effectively to any threat.

                           prepared statement

    So, we'll continue to look for ways to build, not just a 
stronger countermeasures enterprise, but a stronger end-to-end 
public health response, all the way from disease surveillance 
to administering MCM to people in our cities and towns.
    I look forward to working with you, Mr. Chairman, and your 
subcommittee, and again want to applaud this subcommittee for 
your focus and attention on this over the last number of years.
    [The statement follows:]
                Prepared Statement of Kathleen Sebelius
    Chairman Harkin, Senator Cochran, and members of the subcommittee, 
thank you for the opportunity to discuss the Department of Health and 
Human Services (HHS) recent review and recommended initiatives to 
improve our medical countermeasures enterprise.\1\
---------------------------------------------------------------------------
    \1\ The Public Health Emergency Medical Countermeasure Enterprise 
Review is available 
online at: http://www.phe.gov/Preparedness/mcm/enterprisereview/Pages/
default.aspx.
---------------------------------------------------------------------------
    Our greatest responsibility in Government is keeping the American 
people safe. We have always maintained a powerful military that can 
guard against conventional threats. But in today's world, the range of 
threats is ever-widening to include biological, chemical, nuclear, and 
radiological hazards in addition to the conventional threats. The next 
public health emergency could be a dirty bomb set off in a subway 
system. It could be a biological weapon we've never seen before, 
assembled by a terrorist in a lab. And, as we have seen, it could be 
naturally occurring novel strain of influenza virus.
                      2009 h1n1 pandemic influenza
    Right after I was sworn in as Secretary of HHS, I was briefed by 
John Brennan, the President's Advisor for Homeland Security and 
Counterterrorism, on 2009 H1N1 influenza, and immediately found myself 
immersed in the national need to respond to this new threat. 
Fortunately, HHS was already in the process of rapidly responding to 
2009 H1N1, working in close partnership with virtually every part of 
the Federal Government under a national preparedness and response 
framework. We characterized the new virus, disseminated the information 
to researchers and public health officials, and developed and began 
shipping to States a new test to diagnose cases of the infection. We 
distributed antiviral drugs to the States from the Strategic National 
Stockpile. We also completed key steps in the vaccine development 
process--preparing a virus strain for vaccine production, contracting 
with manufacturers for vaccine, performing necessary clinical trials, 
and licensing multiple 2009 H1N1 influenza vaccines. After close 
collaboration with State and local authorities and healthcare 
providers, we began the voluntary national vaccination program in 
October. HHS was in constant communication with State health officers 
and hospital administrators to monitor stress on the healthcare system 
and to be prepared in case Federal medical assets were necessary to 
augment State and local surge capabilities.
    We responded as quickly as possible to the H1N1 emergency, and the 
speed of these efforts was due in large part to the prior investments 
in pandemic preparedness. I would like to thank this subcommittee for 
its support in this area over the past 4 years. We did, however, 
experience challenges with the vaccine manufacturing and availability. 
No matter how quickly we responded, we were still dependent on vaccine 
technology from the 1950s, relying on the virus to grow in eggs. We 
also had to depend, in part, on foreign vaccine manufacturers, which 
meant there were two instances in which our vaccine deliveries were 
delayed in order to meet another country's vaccine needs first. HHS had 
already taken steps to expand domestic vaccine manufacturing with the 
opening of a new cell-based influenza vaccine manufacturing facility in 
North Carolina in November 2009. But, further action was needed to 
provide a more robust and nimble domestic manufacturing surge capacity. 
We continue the process of that investment today.
                     medical countermeasures (mcms)
    The success of a response to a public health crisis depends on many 
factors, including the expertise of our healthcare workforce, the 
capacity of our Nation's hospitals, the ability of Federal, State, 
local, tribal, and community partners to coordinate, and the engagement 
of the public. The success of a response also greatly depends on 
medical countermeasures. These are the medical treatments, vaccines, 
diagnostics, personal protective equipment, and nonpharmaceutical aids 
like ventilators that help reduce the spread of infections, reduce 
health consequences, and ultimately save lives. In a public health 
crisis, medical countermeasures are typically our most direct and often 
our most effective response.
    Medical countermeasures take years to develop, are very expensive, 
and must follow the rigorous development and regulatory pathway to 
demonstrate safety and efficacy. Unlike the drugs destined for everyday 
or frequent use, the countermeasures needed for biodefense threats in 
many cases may have greater development risks, due largely to the 
absence of significant commercial markets and the difficulty in 
demonstrating efficacy in the absence of human clinical trials.
    The Federal Government has invested considerable resources over the 
past 10 years in expediting the development of these products. However, 
it was apparent from both the 2009 H1N1 experience and the paucity of 
medical countermeasure candidates moving from early to advanced 
development that we needed a better understanding of how the Federal 
Government and industry are generating new products. We realized that 
the greatest danger we may face is a microbe that we have never seen 
before and for which we do not yet have a medical countermeasure. We 
clearly need the capacity to develop a medical countermeasure quickly.
                               mcm review
    Recognizing this need, with the encouragement and strong support of 
President Obama, I called for a comprehensive review of our entire 
medical countermeasure enterprise in order to transform these efforts 
into the highly responsive and flexible system we know we need. In 
order to get the 21st century products essential for our national 
security, we understood that we must invest in 21st century technical 
approaches as well as 21st century financial, legal, and regulatory 
frameworks that nurture a viable commercial sector and create 
incentives for companies to build these advanced countermeasures. In 
his 2009 State of the Union address, the President called for a renewal 
of our national capability to respond to bioterrorism and infectious 
disease.
    The review was led by HHS's Assistant Secretary for Preparedness 
and Response (ASPR), Dr. Nicole Lurie. She was joined by 
representatives from across HHS (the Office of the ASPR, the Centers 
for Disease Control and Prevention (CDC), the National Institutes of 
Health (NIH), the Food and Drug Administration (FDA), the Office of the 
Assistant Secretary for Financial Resources, the Office of the 
Assistant Secretary for Planning and Evaluation, the Office of the 
Assistant Secretary for Legislation, and the National Vaccine Program 
Office; Federal interagency partners (the Department of Agriculture, 
the Department of Defense (DOD), the Department of Homeland Security, 
and the Department of Veterans Affairs); and the Executive Office of 
the President to dissect the issues, identify critical gaps, and 
respond to the challenges that would be uncovered as the review 
proceeded.
    The review was conducted in multiple stages. First, we analyzed a 
large body of work on medical countermeasure development, financial and 
market incentives, and procurement of science. We looked at how the 
needs of the medical providers are considered in the design of MCM 
products, and which mechanisms are employed to get products to those 
providers. Second, the successes and failures of the MCM enterprise 
were examined in order to identify the critical components for success 
and impediments to realizing our goals. In addition, we interviewed 
numerous opinion leaders, representatives from the pharmaceutical and 
biotechnology industry, members of the investment community, and 
leaders in State and local public health for their views on the role of 
HHS in MCM development. A series of meetings and workshops were 
conducted, including: a 2-day workshop hosted by the Institute of 
Medicine's Forums on Public Health Preparedness and Drug Development, a 
town hall meeting at the National Association of County and City Health 
Officials Preparedness Summit, and a meeting with leaders of the 
President's Council of Advisors on Science and Technology. Finally, the 
ASPR, on my behalf, asked the National Biodefense Science Board, an HHS 
Federal Advisory Committee, to convene a workshop to review the overall 
strategic management, leadership, and accountability structure of the 
MCM enterprise.
    I released the review, The Public Health Emergency Medical 
Countermeasures Enterprise Review: Transforming the Enterprise to Meet 
Long-Range National Needs, last month. This review highlights the need 
for the MCM enterprise to adopt a new strategy that incorporates our 
ability to rapidly and flexibly respond to a new or unknown threat 
balanced against our longstanding requirements for producing MCMs to 
counter identified threats. This new strategy is articulated through 
the following vision statement: Our Nation must have the nimble, 
flexible capacity to produce MCMs rapidly in the face of any attack or 
threat, known or unknown, including a novel, previously unrecognized, 
naturally occurring emerging infectious disease.
    The principle at the heart of this strategy is that our public 
health response is only as strong as its weakest link. So, using it as 
a guide, we have worked to upgrade our entire end-to-end response, from 
how we assess and identify threats to how we distribute and administer 
products to counter those threats in cities and towns across the 
country. That is why we will continue to look for ways to build--not 
just a stronger countermeasures enterprise with a solid base of 
discovery, a clear regulatory pathway, and agile manufacturing--but 
also a stronger public health response all the way from disease 
surveillance to administering countermeasures to people in our cities 
and towns.
                            recommendations
    The MCM review recommends five new infrastructure initiatives as 
well as other enhancements to the MCM enterprise. The review found that 
the unique products required by the public health emergency medical 
countermeasure enterprise are not of general commercial interest to the 
major pharmaceutical companies, due to the risks and opportunity costs 
to produce and receive approval for products with very limited 
commercial market value. The Federal Government often partners with 
smaller pharmaceutical or biotechnology companies, many of whom would 
benefit from additional resource or management investments to become 
successful and reliable entities. We came to realize that we need to 
provide a variety of supports to ensure the viability of these 
partners. In the end, if a product fails to make it into our national 
response capability, it should only be based on its failure to meet our 
stringent standards for safety, efficacy or quality, and not because we 
failed to provide the needed business, regulatory, and technical 
support for success. We also realized that the approach to the threats 
of the future requires building a ``capability-based'' system that can 
quickly adapt to a rapidly emerging or sudden, novel threat.
21st Century Regulatory Science
    The first infrastructure investment, which enjoyed nearly universal 
support, is the strengthening of regulatory science at the FDA.
    We heard from stakeholders that one of the greatest risks to 
successfully developing a product was the uncertainty associated with 
the complex regulatory process that governs the approval of these 
particular drugs, vaccines, and diagnostics.
    FDA has been testing and producing cutting-edge products using 
science that's decades-old and it is prudent to invest in providing the 
FDA with the tools, models, methods, and knowledge necessary to 21st 
century technologies and assist industry in reviewing and regulating 
these new products.
    As part of this initiative, FDA is launching a new program 
entitled, Advancing Regulatory Science for Public Health, designed to 
augment the tools used to assess the safety, efficacy, and quality of 
medical products, with a particular focus on MCMs. The FDA will create 
new Action Teams to work with those manufacturers who are developing 
the high-priority products and platforms. This strategy is based on an 
approach that worked well several years ago when the United States 
licensed its vaccine for smallpox, ACAM 2000. The Action Teams, 
composed of experts from across the FDA, will work with sponsors to 
identify and help resolve scientific issues as early and efficiently as 
possible, and to facilitate more rapid evaluation of these high-
priority candidate products. Finally, the FDA will launch a 
collaborative project with other HHS and interdepartmental members of 
the MCM enterprise to resolve several of the real challenges that have 
been identified for these types of products. For example, one of these 
challenges is the difficulty in using the Animal Efficacy Rule. This 
rule allows appropriate studies in animals in certain cases to provide 
substantial evidence of effectiveness in humans of new MCMs against 
biological threats.
    These initiatives will both give our world-class FDA scientists the 
cutting-edge resources they need to analyze promising new discoveries 
faster as well as help industry navigate the complex regulatory 
processes to ensure that safe, effective, and high-quality products are 
ready for our use. The FDA has already begun to identify areas of 
needed scientific investment via internal discussions with science 
leaders from among its various centers, as well as the processes and 
metrics they will use to track return on this investment.
Flexible Manufacturing and Advanced Development Core Services 
        Partnerships
    The second initiative we are investing in is the development of 
flexible manufacturing capable of producing the next generation of 
medical countermeasures.
    As noted previously, the Federal Government often partners with 
smaller pharmaceutical or biotechnology companies in the development of 
medical countermeasures. Many of these companies would benefit from 
technical expertise and guidance in scaling up from small to large 
production and in the approval of an MCM product. Further, many of 
these innovators do not have the capital or experience to construct and 
operate commercial-scale manufacturing facilities.
    To fill this need, HHS will establish Centers for Innovation in 
Advanced Development and Manufacturing. These centers will provide a 
variety of core services to less-experienced innovator companies with 
federally supported medical countermeasure candidates through public-
private partnerships with fully integrated pharmaceutical partners. HHS 
will coordinate these core services with regulatory science assistance 
and other services already provided by the Federal Government, such as 
clinical studies and animal-challenge model development. In addition, 
these centers will be expected to fill the remaining gap in domestic 
pandemic influenza vaccine manufacturing and surge capacity, utilizing 
new recombinant and molecular platform technologies. Last, the 
manufacturing output from these centers will be coordinated by HHS with 
a domestic network of fill-finish manufacturers to ensure that the 
first and last doses of vaccine or other medical countermeasure become 
available as soon as possible. These centers are expected ultimately to 
aid in controlling the costs of developing and procuring medical 
countermeasures in emergencies and of stockpiling. The centers will 
provide development and pilot-manufacturing activities for vaccine 
candidates, allowing their associated costs to be absorbed into the 
center's operating budget and thereby reducing the total amount of the 
R&D contract. Similarly, the costs for commercial-scale manufacturing 
of MCMs destined for stockpiling in the Strategic National Stockpile 
will be lower than the costs under the current fixed-price contracts.
    The centers will be managed by the Biomedical Advanced Research and 
Development Authority (BARDA) within ASPR in coordination with other 
HHS agencies and the DOD. BARDA issued a draft solicitation earlier 
this month to seek public comment and engagement in this envisioned 
public-private partnership capability. We expect that the final 
solicitation will be available by the end of the year, and that 
competitive contracts will be awarded in 2011.
Accelerating Discovery and Translation of Product Concepts
    The third initiative we will invest in is nurturing discoveries in 
their earliest stages.
    The Federal Government has invested heavily in a strong, vibrant 
basic research and discovery program with the ultimate goal of 
translating important scientific discoveries into licensed medical 
countermeasures. However, most individual scientific discoveries do not 
lead directly to an identifiable product. Scientists may make a 
discovery without realizing that it could be turned into a useful 
countermeasure, or, if they do see its potential, they may have trouble 
attracting private investment with an uncertain commercial development 
path to market. The Conception Acceleration Program at NIH's National 
Institute of Allergy and Infectious Disease (NIAID) aims to change that 
dynamic.
    A key component of this initiative will be Early Development Teams, 
that will work closely with partner agencies and programs (NIH, CDC, 
DOD, ASPR/BARDA, and FDA) and with academic researchers, biotechnology 
companies, and large pharmaceutical companies. NIH, and especially 
NIAID, has a broad capability to scout the emerging science that comes 
from its investments. These teams will be responsible for scouring 
grant portfolios for discoveries that could have applicability to 
medical countermeasure development. They will be empowered to leverage 
both additional funding and access to a wide range of NIH core services 
to foster these potential solutions into promising medical 
countermeasure candidates. Where necessary, staff could even play a 
matchmaking function with other investment organizations, the Centers 
for Innovation in Advanced Development and Manufacturing, or 
biotechnology and pharmaceutical firms. Such an approach represents a 
new and potentially transformational model of advancing our science 
investments at NIH, and could enable benefits far beyond the realm of 
MCMs. NIAID is in the process of identifying the number and level of 
skilled personnel that need to be dedicated to this effort.
Modernizing Pandemic Influenza Vaccine Manufacturing
    Fourth, we will invest in our domestic manufacturing surge 
capacity.
    The emergence of a novel pandemic strain of influenza virus is a 
continuous threat to human health. In addition to the experiences of 
2009, we are ever vigilant to the possibility that avian influenza H5N1 
or other circulating virus strains may become highly transmissible and 
virulent in humans. Our experience with 2009 H1N1 taught us that we 
need to respond even faster to an emerging pandemic. Although we were 
able to manufacture and distribute a safe vaccine faster than in 
previous years, domestic manufacturing surge capacity needs to be 
expanded and accelerated.
    The MCM Enterprise review, along with a parallel study conducted by 
the President's Council of Advisors on Science and Technology to 
improve influenza vaccine manufacturing, identified immediate needs and 
opportunities to shorten vaccine production timelines. We need better 
methods for potency assays and sterility testing, optimized virus seed 
strains, additional development of diagnostic devices, and expanded 
capacity to fill and finish vaccine. The review also recommends that 
HHS support the development of at least three new influenza vaccine 
candidates whose manufacture does not depend on virus grown in eggs or 
cells. This initiative is already underway through collaborative 
efforts by ASPR/BARDA, NIH, FDA, CDC, and the industrial and academic 
communities.
Strategic Investor Fund
    The fifth initiative we have identified is a strategic investment 
fund for new medical countermeasure technologies.
    Biotechnology companies are often founded with a promising novel 
technology, but without the resources and business acumen necessary to 
fully develop and license their idea into a marketable product. As I 
described above, the large manufacturers in the private sector often 
choose to not invest the needed capital and management expertise in 
these entrepreneurial endeavors due to the many risks inherent in 
medical countermeasure development, especially with firms or 
technologies whose products have no market outside that currently 
needed for Federal Government stockpiles. We discovered that this same 
set of problems led the intelligence community and the Department of 
the Army to each establish ``strategic investor'' organizations, In-Q-
Tel and On Point, respectively, which help in partnering Federal 
Government needs with companies that are developing technical 
approaches that match those needs, and which are also capable of 
producing commercially viable spinoffs, or multi-use products, based on 
that technology.
    The administration's fiscal year 2011 budget amendment transmitted 
to Congress in August included authorization for HHS to use an 
independent strategic investor that would nurture biotechnology 
companies by providing the needed capital and business expertise to 
yield a successful product for Government needs. The mission of the 
envisioned MCM Strategic Investor (MCMSI) would be the development of 
novel technologies that have the potential for sustainable commercial 
applications to the commercial market and the MCM public health 
enterprise. In addition to its own investments, the MCMSI could 
potentially leverage other private capital, provide expert 
consultation, and link promising companies with potential partners in 
the private sector. The MCMSI is envisioned as a private, not-for-
profit corporation operating outside the Federal Government, but it 
would still work closely with NIH, BARDA, DOD, and our other Federal 
partners.
Management, Administration, and Accountability
    The review also found that while some program management components 
are working quite well, better management and administration would 
provide more clarity and predictability, as well as less risk to 
development partners. These include: improving coordination across the 
agencies involved in the MCM enterprise, speeding up the contracting 
process or using more flexible transaction authorities, clearly setting 
and prioritizing broad enterprise goals, and coordinating the process 
of product development itself, from initial concept development to 
product use.
                 implementation of the recommendations
    We have re-allocated $1.9 billion in funding already appropriated 
for pandemic influenza and the procurement of medical countermeasures 
under Project BioShield to begin implementing these recommendations. 
This includes:
  --$170 million to promote regulatory innovation and investment in 
        regulatory science at the FDA;
  --$678 million to build domestic flexible manufacturing 
        infrastructure and advanced development core services;
  --$33 million to support promising efforts and translation of 
        concepts and research at NIH;
  --$822 million to address immediate development needs related to 
        pandemic influenza vaccines, antiviral drugs, and diagnostics; 
        and
  --$200 million to explore alternative capital market mechanisms.
    The administration has submitted an amendment to the fiscal year 
2011 President's budget to provide new authorities where needed. 
Specifically, new authority is required to support the efforts at FDA, 
the efforts at DOD, and the MCMSI.
    HHS has begun developing implementation plans for each of the 
initiatives and enhancements described above. Some have progressed more 
than others, based on the complexity and novelty of the new efforts. 
The HHS senior leaders from CDC, FDA, NIAID and ASPR, working with 
colleagues at DOD, have conducted strategic reviews of our major 
product portfolios for smallpox, anthrax and radiological/nuclear 
threats. They have identified priority actions to further enhance the 
production and eventual distribution of these medical countermeasures, 
looking as well at economies that can be realized so we may be better 
stewards of the public funding for this capability. As previously 
noted, BARDA released a draft solicitation to support Centers of 
Innovation for Advanced Development and Manufacturing.
    BARDA has also awarded new contracts recently for the development 
of products that could be used as medical countermeasures to known or 
unknown threats as well as having a possible commercial market. BARDA 
awarded a contract to develop an antibiotic that could be used against 
two possible types of bioterrorism (plague and tularemia) as well as 
common infections that are becoming resistant to antibiotics. BARDA 
also awarded a contract to continue developing a new way to treat an 
illness caused by exposure to a nuclear blast; this treatment 
potentially could be used for other blood disorders and complications 
of cancer. BARDA is also expected to award a contract for the 
development of a next-generation ventilator as part of all-hazards 
preparedness generally, and pandemic influenza specifically.
    As we transition to this improved approach to medical 
countermeasure development, we see opportunities for advances in other 
areas of public health--new vaccines for neglected diseases, rapid 
response for emerging naturally occurring infectious diseases, and new 
approaches to treating drug-resistant bacteria in hospitals or other 
settings. This strategy aligns with our concepts under the National 
Health Security Strategy,\2\ which was developed to galvanize efforts 
to minimize the health consequences associated with significant health 
incidents and achieve a national vision of health security. The 
advances coming out of the medical countermeasure enterprise may 
ultimately address day-to-day needs as well as the ever-widening 
threats of biological, chemical, nuclear, and radiological hazards.
---------------------------------------------------------------------------
    \2\ Available online at: http://www.phe.gov/Preparedness/planning/
authority/nhss/Pages/default.aspx.
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                               conclusion
    I called for a review of the MCM enterprise recognizing that we 
need to incorporate 21st century technology along with 21st century 
financial, legal, and regulatory frameworks in order to have the 
medical countermeasures necessary to defend against the diverse threats 
we face. The review focused primarily on our ability to take an idea or 
concept in research and move it quickly to producing an approved 
medical countermeasure. But, we recognize that our ability to respond 
begins with the rapid identification of a new event through public 
health or medical surveillance and the ability to identify the 
requirements of an MCM--how much we will need, for what part or parts 
of the population. A medical countermeasure is successful only if it 
reaches the right population at the right time. We must rely on 
surveillance capabilities and feedback from end--users incorporated at 
the beginning of development cycle.
    The review identifies a variety of initiatives and opportunities to 
accomplish these intended goals with the ultimate vision of a nimble, 
flexible capacity that the nation can rely on to produce medical 
countermeasures rapidly in the face of any attack. As I mentioned 
earlier, in the end, if a product fails to make it into our national 
response capability, it should only be based on its failure to meet our 
stringent standards for safety, efficacy or quality, and not because we 
failed to provide the needed business, regulatory and technical support 
for success. By moving toward a 21st century countermeasures enterprise 
with a strong base of discovery, a clear regulatory pathway, and agile 
manufacturing, we will be able to respond faster and more effectively 
to public health threats.
    Thank you for this opportunity to speak with you today on this 
important subject. I look forward to answering your questions.

           STRATEGIC INVESTOR FUND AND DEVELOPMENT AUTHORITY

    Senator Harkin. Thank you, Madam Secretary, for that 
statement. And thank you for taking the lead in this endeavor.
    I think the plan is a good plan, from what I've been able 
to read about it and to take a look at it. I'll be anxious to 
follow its development to see what kind of input you get on 
your request for proposals that you've put out there.
    But, I do have some, kind of, concerns about a few elements 
of this. Help me think about this. We worked very hard to 
establish BARDA a few years ago, and this subcommittee has 
funded it to get it going. But, I don't understand how this 
fund--the Strategic Investor Fund----
    Secretary Sebelius. Sure.
    Senator Harkin [continuing]. I'm talking about--how that 
would work different from BARDA, because BARDA was basically 
set up to provide funds to small companies, promising companies 
with good ideas. That was a lot of talk, we had a lot of 
discussion about that. And so, it sounds like that's the same 
thing as this Strategic Investor Fund (SRF). So, who--how does 
it differ? And who runs it? Does BARDA run it, or does NIH run 
it? I can't quite get a handle on that one.
    Secretary Sebelius. Well, Mr. Chairman, the way that the 
strategic investor fund is envisioned is similar to some 
entities that exist in the national security realm, so the CIA 
has In-Q-Tel, and NASA has the Red Planet Capital Fund. And 
they are really to make capital investments at an earlier point 
in the process.
    BARDA will remain as the commitment to industry that there 
is a purchaser for the products that are going to be developed. 
I think the missing link--and Congress was wise to identify it 
and fill it--was that there's very little appetite in the 
commercial market for making a product unless there's some 
indication that somebody will buy the product.
    So, BARDA was funded and is still essential to demonstrate 
that the Government is a willing buyer, that there are 
resources set aside, that this won't be a commercial venture 
without some ability to actually sell the product. And--what we 
have found, though, is that some of these small companies 
actually can't--don't have the capital to get to the 
marketplace. They can't get the product idea all the way 
through the pipeline. And some have a great idea, but lack the 
business planning and strategy.
    So, with the capital in the strategic investor, with a kind 
of public-private partnership, using the assets of our NIH 
scientists, of FDA, we would be able to actually streamline the 
process, help move the ideas to the market, where BARDA could 
become a purchaser. So, I think they actually are 
complementary, not duplicative.
    Senator Harkin. Okay. I think I get that. BARDA would be 
the purchaser, but this fund would be the investor----
    Secretary Sebelius. Or at least help--yes--direct capital, 
business plans, ideas, marketing strategies.
    Senator Harkin. Hmmm. Hmmm.
    Secretary Sebelius. And, as I say, In-Q-Tel and a couple of 
the other national security enterprises have done that very 
successfully. The national security government officials 
identify a missing piece of equipment or strategy. In-Q-Tel 
helps to work with the private market to actually produce 
what's needed; and then, at the end of the day, you know, the 
DOD becomes the purchaser.

               PANDEMIC INFLUENZA PREPAREDNESS ACTIVITIES

    Senator Harkin. Let me just shift, a little bit, here, to 
pandemic flu. We don't--obviously, we don't know what some of 
these new strains of bugs that you mentioned in your 
testimony--I may have mentioned in mine, too--that might come 
down, or bioterrorism, or something. But, we do know flu is 
here. We have the common strain of flu, that happens every 
year, but we know there are a lot of other strains of flu out 
there: the bird flu, H5N1, and H1N1, and a lot of variations 
thereof. And we know they're floating around out there. So, 
we're going to have that. I mean, we just know that that's 
going to hit us. How big, we don't know. As I said, H1N1 wasn't 
as big as we thought it was going to be, fortunately. But, we 
don't know how big next--we know it's going to happen, we just 
don't know how big.
    Secretary Sebelius. Right.
    Senator Harkin. So, therefore--I'm concerned, because this 
subcommittee put a lot of money--$15 billion through this 
subcommittee, since fiscal year 2006--for pandemic preparedness 
activities. One-point-nine billion was used to develop cell-
based or recombinant vaccines. And I can remember visiting with 
people a few years ago about that, and moving ahead. We put--
HHS awarded $487 million to Novartis for a cell-based 
manufacturing facility in North Carolina. I thought--I heard 
the plant was open, but now I'm told it won't be ready to 
operate until 2013. Also, none of the influenza vaccines 
licensed for use in the United States are cell-based, but they 
are currently licensed in Europe.
    So, why--what's the problem with getting them licensed in 
the United States if they're licensed in Europe? And, why 
aren't we further along in the area of cell-based or 
recombinant-based vaccines, which can be turned around a lot 
more rapidly, of course, than egg-based vaccines?
    Secretary Sebelius. Well, Mr. Chairman, again, I think 
you're absolutely right, that the subcommittee has been focused 
on a series of investments, starting really in fiscal year 
2006. And we do have doses of H5N1 purchased and in the 
stockpile, knowing that that flu is still killing people, it is 
circulating. There still isn't human-to-human transfer, 
luckily, but we are very much aware that that's a very real 
threat. So, some of the funding is actually preparing, in case 
that were to be present here.
    And, in terms of the cell-based technology that we're 
moving ahead on currently, you're absolutely right, all of the 
flu vaccine up to date has been developed with egg-based 
technology. But, HHS did, with the pandemic funding that was 
provided, support the construction of the new Novartis cell-
based manufacturing facility in North Carolina. The ribbon was 
cut in November 2009. It is scheduled to be on line to apply 
for licensure early in 2011, we hope in the first quarter of 
next year, for cell-based, seasonal vaccine, and the licensed 
vaccine is expected to be manufactured and marketed for the 
2011-2012 flu season.
    So, we're actually very much on track. They got to get it 
up and running, they got to get it licensed. And it will be 
capable of producing 150 million doses of vaccine within 6 
months. So, this seriously ramps up our domestic capacity, and 
that's also very good.
    In terms of recombinant vaccine, we did issue a contract to 
Protein Sciences in September 2009 for advanced development of 
their recombinant protein vaccine, and the company is working 
towards licensure again in 2011. We think that is on track. 
They are expected to begin to manufacture and market their 
vaccine again for the 2011-2012 flu season. Right now they're 
saying they can produce 50 million doses in about 4 months.
    So, both of those entities are up and running. It takes a 
number of years in the pipeline, but your funding, several 
years ago, has gotten us to that place. And, as I said, we just 
issued a draft solicitation, this month, which will also come 
out of the preparedness funding, to have these new centers of 
innovation for advanced development and manufacturing that 
Senator Specter has indicated a great deal of interest in.
    What we find is that a flu-only facility is too limited. 
What we're talking about looking at in the future, in two to 
three centers, is what they call a ``flexible platform.'' So, 
it could be used as surge capacity for flu vaccine, should that 
be needed. It also could, essentially, begin with anthrax 
vaccine, to H5N1 vaccine, to have another MCM. So, it wouldn't 
be solely dedicated to the flu, but have the ability, really, 
to mix and match, give us the ability to respond to something 
that we don't really know is coming.
    So, we plan to award the contracts by the--have the request 
for proposal out by the end of this year. We want each of those 
facilities to produce at least 50 million doses of cell-based 
or recombinant vaccine within 4 months. So, that will be the 
criteria around which we're looking. So, we're leaping over 
egg-based to either cell, or ideally recombinant, and one is 
in--already looking at licensure next year, and the other two 
or three will be up and running, hopefully, fairly quickly.
    Senator Harkin. Very good. Thank you, Madam Secretary.
    Senator Cochran.

                             MCM SPEND PLAN

    Senator Cochran. Madam Secretary, I was looking at the 
funding amounts that this subcommittee has already recommended 
and have been approved by Congress, and looking then at how the 
funds have been used. You stated, in your testimony, that there 
may be unspent funds that you are now attempting to reallocate, 
or propose to reallocate.
    Have you come to some understanding, with the leadership in 
Congress, as to who goes first, who makes the decision? Do you 
have to get approval? Or do you have license just to start a 
program and start--sending this money out to beneficiaries or 
hospitals or public health officials?
    Secretary Sebelius. Senator Cochran, the plan that I just 
outlined is based on reprogramming about $2 billion of the 
preparedness funding which was dedicated to HHS by Congress and 
has already been approved for preparedness. And what we're 
doing, after our analysis of where the countermeasure pipeline 
glitches exist, is suggesting that we would be better served, 
rather than continuing to fund the traditional pipeline, to 
look at areas where there were real gaps. So, more 
manufacturing capacity in the United States regulatory science 
in FDA and NIH, the areas where I outlined.
    There are a couple of those areas, Senator, that we will 
need specific congressional approval, because we don't have the 
authorization; and that's the amendment that we requested as 
part of the 2011 budget. So, until Congress actually gives us 
the green light for the strategic investor or some of the new 
authorities within the FDA, we will not be able to direct the 
funds there. But, the rest of this funding is actually approved 
for preparedness, and we have notified the appropriate 
committees that that's the intent, and produced a spend plan to 
go along with that.

                              H1N1 VACCINE

    Senator Cochran. I'm curious, also, to know about how much 
money we spent in defending against an H1N1 virus that may have 
been over-advertised, in terms of its threat to general public 
health. Did we waste a lot of money by sending money out to 
State and local health authorities, or in letting them decide 
how to use the money? Or was there a national plan, with 
specifics included in the plan, as to how the funds were to be 
spent?
    Secretary Sebelius. Actually, Senator, I think that plan 
that allowed us to move vaccine to about 85 million people in a 
very rapid timeframe was based on years of planning that had 
been done. I--as a former Governor, I was one of the 
beneficiaries of preparedness funding, which allowed us to 
gather private industry and our public health officials 
together, and go through exercises: What if we had a pandemic? 
Little did I know that I would be sworn in as Secretary when we 
had the pandemic that I had been previously preparing for.
    So, our plan with H1N1 followed, really, the strategies. 
State and local health departments were major partners. And I 
would say that the new part of the strategy was how we rapidly 
enhanced the distribution system. We went from what was a 
fairly limited number of providers who were used to giving 
children vaccines in the past, to greatly enhancing that. 
Because one of the key targets were children.
    So, school-based clinics and mobile clinics and some of the 
open doors, I think, were not ones that had been typically 
planned for. But, there was definitely--at every point along 
the way, States, in order to draw down funds, had to provide to 
our Department very specific planning documents for what they 
would do with the money, where it was going to go. Providers 
had to be involved and included. We had weekly calls.
    I think the good news is that, in spite of the very 
alarming early days, where it appeared that, you know, this 
could mirror a 1918 situation, the virus itself proved to be, 
thank God, less lethal than it could have been. But, I don't 
think there's any question that those partnerships, that 
distribution system, the outreach network, was not only money 
well spent for H1N1, but really helped to rebuild an 
infrastructure for a public health system that will serve us 
well, the next hurricane, flood, fire, or disaster that we're 
going to have, because those are exactly the same folks who 
need to respond.
    Senator Cochran. I wonder, based on your experience so far 
as Secretary of HHS, and also your experience as Governor, do 
you have any recommendations to the subcommittee for language 
that might be included in an appropriations bill that would 
help improve the way we are using Federal dollars in an effort 
to defend against influenza outbreaks, or any other public 
health challenge that we may face?
    Secretary Sebelius. Well, Senator, I think that some of the 
strategies, that are outlined in some of the recommendations in 
the lengthier report that we presented, at least deals with the 
portion of the MCM response that is scientific discovery to 
stockpile. What we're continuing to do is really this end-to-
end look. Is our surveillance system up to speed? I mean, do we 
know about outbreaks quickly enough in the United States or 
around the world? How do we get that information? What is that 
public health infrastructure? All the way through to how we 
distribute the products. You know, what's the fastest way to 
get to people? I think that analysis is still going on.
    And we would love to work with you. We will look for that 
language and get it to you. Because I don't think there's any 
question that each time we go through one of these 
experiences--I mean, this was the first pandemic in 40 years--
that we need to be informed and make sure that we update all of 
our systems along the way.
    I can tell you, I am concerned, and continue to be 
concerned, and pleased that there are funds again for the State 
and local level. In this budget downturn, I don't think there's 
any question that there's been a real hit on the public health 
infrastructure around the country. A lot of State health 
departments have less staff than they did; a lot of emergency 
planners at the State and local level have been cut back. So, 
that is of concern. And we are trying to pay close attention to 
that as we anticipate what could come our way. Because--you 
know, we can have all the great products and ideas here, but, 
absent the ability to actually get them into communities across 
this country in a rapid and efficient fashion, there's still a 
real problem.
    Senator Cochran. What was the name of that book? We had the 
author of the book. Was it Barry who wrote about the influenza 
100 years ago, or whatever----
    Secretary Sebelius. Oh, the 1918? Yes.
    Senator Cochran. And it was interesting experience, 
learning from him, through his research and writing that book--
--
    Secretary Sebelius. You bet.
    Senator Cochran [continuing]. And everything, some of the 
things that had been overlooked, that you would think a 
civilized society, and advanced as we were, as wealthy as we 
were, would have learned from that experience better than we 
did. I wonder if you've had a chance to read that book. It's a 
few years old now.
    Secretary Sebelius. I have, and I've actually had a chance 
to meet a bit with the author. We also talked, at the beginning 
of the influenza outbreak, with a lot of the officials who were 
involved in the 1970s with what appeared to be--it was a novel 
strain of the flu. There was a major vaccination effort, and 
the disease never spread anywhere.
    So, to try and learn, again, how--you know, what they 
learned, and didn't learn, I think it's wise to make sure that, 
each time we have these experiences, we're better informed by 
it, and, you know, update our strategies. And that's what this 
is about, to use some of the money that had been appropriated 
and allocated for preparedness, study what went right and what 
went wrong, and try to redirect it to what we think are more 
appropriate and timely opportunities.
    Senator Cochran. Thank you very much.
    Secretary Sebelius. Sure.
    Senator Harkin. Well, Madam Secretary, thank you very much.
    Like I said, we have--I've gone over this with our staff. 
On your plan, it--there are a couple of things on which you do 
need signoff here. I think that we'd be very supportive of the 
plan, but, I must just tell you, forthrightly, so that you can 
go back and tell the Office of Management and Budget (OMB), 
that----
    Senator Cochran. Nobody can tell OMB.

                   TRANSFERRING FUNDS FROM HHS TO DOD

    Senator Harkin. Well--you can tell them this. You can tell 
them that I just--that this proposed transfer to the DOD is one 
exception, and that--I might as well just be up front with you, 
I'm not going to sign off on it. That's $200 million. I just--
in all my years here, I've never heard of anything like 
transferring money from HHS to DOD. I've heard it the other way 
around, maybe, once in a while. But, never that way. And with 
all of the demands that we have at NIH, at CDC, and all of the 
other demands that we have here--we're having a hard time with 
our budgets--I think DOD could come up with the $200 million. I 
really do, Madam Secretary. I don't expect you to respond to 
that, but I thought I would be fair and be up front with you so 
that they would know that they would have to do some further 
planning on that money.
    Secretary Sebelius. I will convey your message----
    Senator Harkin. I appreciate that----
    Secretary Sebelius [continuing]. Mr. Chairman.
    Senator Harkin [continuing]. Very much. Thank you very 
much, Madam Secretary.
    Secretary Sebelius. Thank you.
    Senator Harkin. And if you have anything else to add to----
    Secretary Sebelius. I just look forward to working with you 
as we move along. We will certainly, as we continue this 
review, continue to report back to the subcommittee. And again, 
look forward to working with you on the authorities that we may 
need for----
    Senator Harkin. Great.
    Secretary Sebelius [continuing]. Some of these----
    Senator Harkin. Great.
    Secretary Sebelius [continuing]. Novel ideas.
    Senator Harkin. Thank you very much.
    Secretary Sebelius. Thank you.
    Senator Harkin. Thank you, Madam Secretary.
    Now we'll move to our second panel. Colonel Randall Larsen, 
U.S. Air Force, Retired. Colonel Larsen is the CEO of the 
Weapons of Mass Destruction Center--a not-for-profit research 
organization that he founded, along with former Senators Bob 
Graham and Jim Talent. He previously served as the executive 
director of the Congressional Commission on the Prevention of 
Weapons of Mass Destruction, Proliferation, and Terrorism. 
Colonel Larsen served for 32 years in both the Army and Air 
Force; received his bachelor degree from Texas State University 
and his master degree in national security studies from the 
Naval Postgraduate School.
    We have Dr. Eric Rose, M.D. Dr. Rose is the CEO and 
chairman of Siga Technologies, which develops antivirals 
against possible bioterrorism agents. He is also the co-chair 
of the Alliance for Biosecurity. Dr. Rose received both his 
undergraduate and medical degrees from Columbia University.
    And Dr. Andrew T. Pavia is the Chief of the Division of 
Pediatric Infectious Diseases at the University of Utah Health 
Sciences Center. He's also the chair of the Pandemic Influenza 
Task Force of the Infectious Disease Society of America. Dr. 
Pavia received his B.A. and M.D. from Brown University.
    Welcome. Thank you all for being here. And your testimonies 
will be made a part of the record in their entirety. I ask if 
you could sum them up in 5 minutes or so. I would appreciate 
it. And we'll jut go in the order in which I said, here.
    We'll start with Colonel Larsen first. Welcome to the 
subcommittee. And thank you for all of your service.
    Colonel Larsen.
STATEMENT OF COLONEL RANDALL J. LARSEN, USAF (RET.), 
            CHIEF EXECUTIVE OFFICER, WEAPONS OF MASS 
            DESTRUCTION CENTER, WASHINGTON, DC
    Colonel Larsen. Mr. Chairman, vice chairman, you asked me 
to provide an assessment on the threat of bioterrorism. Let me 
be clear: Bioterrorism is a serious threat, and it will become 
even more so if we don't take appropriate actions.
    Senators Bob Graham, Jim Talent, and I agree with the 
assessment in the National Security Council document signed by 
President Obama in 2009. On page 1 of that document, it stated 
that bioterrorism could place at risk the lives of hundreds of 
thousands, and cause $1 trillion in economic disruption, per 
event. The details of that threat are contained in my prepared 
statement, so I won't focus on that in my oral testimony. But, 
my concern is, Mr. Chairman, that there are a lot of senior 
leaders--not this room--but there's a lot of senior leaders in 
the legislative and executive branch that do not understand 
this threat, that you and I know very well.
    And I accept part of the responsibility for that. I'm an 
educator, run a think tank, and that's what we're supposed to 
be doing, is educating senior leaders, and make sure you have 
the facts to make these very difficult decisions.
    I get a lot of senior leaders asking me, ``Why don't we 
just prevent this bioterrorism?'' Well, you and I know we can't 
do that. That is the proper strategy for nuclear terrorism, but 
it will not work against bioterrorism. The genie's out of the 
bottle. We've known that since Dr. Josh Lederberg and George 
Whiteside put out this report in 2001. This is nothing new. So, 
we must focus on what Senator Graham calls the response side of 
this equation. If Senator Graham was here, he'd have a big 
chart up here like this, with his links about what we need to 
do. He loves this chart and explains it very well.
    What we can do, if we properly fund these programs, and 
manage them, Mr. Chairman, vice chairman, we can push the 
decimal point to the left, is how Senator Graham describes it. 
We won't count casualties in hundreds of thousands, or tens of 
thousands, or even thousands. We can push it down to a level of 
what we lose on highways on 3-day weekends. Still be a tragedy 
for those families, but it will not be a weapon of mass 
destruction, and it won't change the course of history. That's 
a realistic goal that we can achieve.
    Now, let me give you two examples, since this is the 
Appropriations Committee, where Senator Graham, Talent, and I 
have a few problems with this. One of the things that Senator 
Graham loves to talk about here is environmental cleanup. Now, 
the reason that the President's document talked about $1 
trillion per event--you know, if they put a pound of dry 
powdered anthrax in New York City subway, we have no clue how 
long it'll take to clean it up. We know that the British tested 
anthrax weapons on the island of Gruinard, off the coast of 
Scotland, in 1944. Took four decades to clean up that island.
    Now, sir, do you know how much we're spending on clean-up 
research at the Environmental Protection Agency (EPA) to clean 
up anthrax? Half of what we will spend next year on Marine 
Corps marching bands. Sir, I think we need to think about 
priorities. Now sir, I'm a big fan of military bands, probably 
the reason I spent 32 years in the military is because I saw 
the Marine Corps Band when I was a young boy in the cornfields 
of Indiana. But, sir, think about that. Half of what we spend 
on Marine Corps marching bands is what we're going to spend to 
figure out how to clean up the New York City subway. I think 
it's 800 miles of subway up there.
    That's one problem. The other one is, the funding of this 
MCM. Now, we--you know, we gave an--WMD Commission gave an 
``F'' to bioresponse preparedness, in the report card that came 
out in January. The fact that we were using 60-year-old 
technologies to make important vaccines like H1N1 was one of 
the reasons that Senator Graham and Talent and the 
commissioners gave that ``F''.
    But, I have three questions about this initiative. Because 
we think the strategy is great, and Senator Graham, Talent, and 
I, we fully support it. But, three questions for you:
    First of all, who's in charge? I believe that was the 
question you asked the Secretary. I really would like to know. 
In fact, I have a bigger question. Who's in charge, Mr. 
Chairman, Mr. Vice Chairman, of the architecture, the 
enterprise of biodefense for America? To the best of my ability 
and study, there's about 24 presidentially appointed, Senate-
confirmed individuals with some responsibility for biodefense. 
Not one of them has it for a full-time job, and nobody's in 
charge.
    Now, maybe it's because I spent 32 years in the military. I 
like that authority, responsibility, and accountability. Kind 
of easy to define, so you can do the oversight of that. With no 
one in charge, I just don't know who's going to do that.
    My second problem is, we don't have an integrated plan. 
It's great strategy. And maybe they haven't had enough time, so 
we'll give them a break on that. We need that integrated plan 
to work with the private and public sector--there's a great 
model for how we developed penicillin, just before World War 
II, that made such a big difference in saving GIs' lives. We 
need to figure out how to do that better. I'm sure these 
gentlemen will talk about that.
    And third, are we going to properly fund this? Now, Senator 
Graham and Senator Talent, last year, sent letters to you, sent 
letters to a lot of congressional leaders, and the White House, 
saying, ``We think BARDA was only funded at 10 percent of what 
were realistic requirements.'' Now, there were some people who 
pushed back, and said, ``We know BARDA's doing--not doing a 
very good job. They're not delivering products.'' Well, our 
response to that was, ``If you funded the U.S. Air Force at 10 
percent of their requirements, they probably wouldn't deliver 
everything you wanted, either.''
    Sir, I make these statements, not as a scientist or a 
physician or as a public health expert--I spent many years, 
like you did, flying airplanes--but, I have studied national 
security for four decades. And, sir, the serious threats that 
we'll face in the coming decade are not going to come from 
missiles, tanks, or bullets, in my opinion; they're going to 
come from infectious disease, going to come from Mother Nature. 
We know that for a fact, and I think there's high probability 
we're going to see attacks, manmade attacks, that'll cause 
epidemics in our country.

                           PREPARED STATEMENT

    Preparing for these events means we must develop faster 
diagnostic capabilities, like the Secretary talked about, 
better, safer, less expensive, and more rapidly produced 
vaccines and therapeutics. Mr. Chairman, Mr. Vice Chairman, 
they're critically important for our children and 
grandchildren, whether we suffer a biological attack or not, 
from terrorists. These will be no-regret investments that you 
make in America.
    Thank you.
    [The statement follows:]
      Prepared Statement of Colonel Randall J. Larsen, USAF (Ret.)
    Mr. Chairman, I speak today on my own behalf, but based on 
knowledge I have acquired during the past decade. I previously served 
as the chairman, Department of Military Strategy and Operations at the 
National War College, and the founding director of the Institute for 
Homeland Security. Last year, I served as the executive director of the 
Congressional Commission on the Prevention of Weapons of Mass 
Destruction Proliferation and Terrorism, and currently serve as the CEO 
of The WMD Center, a not--for--profit research and education 
organization that former Senators Bob Graham (D-FL) and Jim Talent (R-
MO) created as a follow-on to continue the work of the WMD Commission--
and there is much work to do.
    Our first mission at the WMD Center is to ensure that senior 
leaders in both the public and private sectors understand the threat of 
21st century bioterrorism--a subject not well understood by many 
leaders in both the legislative and executive branches of Government. I 
have concluded this based upon the actions and inactions of the Federal 
Government.
    In the past year, there have been numerous attempts to raid the 
BioShield Strategic Reserve Fund for nondefense programs.
    Organizations, such as the Food and Drug Administration (FDA) are 
not seen as critical components on America's national security team. 
Considering the threats we face, both from both from bioterrorism and 
newly emerging diseases, FDA needs to be funded with the same vigor as 
the Pentagon's latest weapons systems. Unfortunately, it's not.
    No one is in charge of America's biodefense enterprise. No 
individual has responsibility, authority, and accountability for a 
program that is vital to America's long-term national security. To the 
best of my knowledge, there are more than two dozen presidentially 
appointed, Senate-confirmed individuals with some responsibility for 
biodefense. Yet, not one of them has it for a full-time job, they 
answer to no one in common, and no one is in charge. I do not think 
that is the organizational structure that will lead to success.
    Mr. Chairman, I am convinced that if senior leaders understood the 
threat we face today, and even more importantly, the threat we will 
face tomorrow, there would be someone in charge of America's biodefense 
enterprise, and a clear policy and sufficient funds would be available 
to properly defend America.
    The threat of bioterrorism we face today is far different than that 
of the 20th century. During the Cold War, only nation-states were 
capable of producing sophisticated biological weapons. However, as the 
biotechnical revolution began to accelerate in the latter days of the 
20th century, the Defense Science Board (DSB)recognized the national 
security implications of these rapid changes in the seminal DSB report, 
Biological Defense, June 2001. The technology that had once been 
limited to major powers was rapidly becoming available to small nations 
and some non-state actors.

    ``. . . major impediments to the development of biological 
weapons--strain availability, weaponization technology, and delivery 
technology--have been largely eliminated in the last decade by the 
rapid global spread of biotechnology. There is no way the United States 
can control the spread of rapidly advancing biotechonology.'' (page 18)

    What was unknown to the members of this DSB was the fact that while 
they were preparing their report al Qaeda terrorists in Afghanistan and 
Malaysia were in the process of developing anthrax weapons for use in 
the United States. Thankfully, al Qaeda did not complete their weapons 
development program before 9/11, and shortly after 9/11, U.S. troops 
discovered and dismantled the laboratories.
    Nobel Laureate, Dr. Joshua Lederberg and Dr. George Whitesides, the 
former chairman of the chemistry department at Harvard University, co-
chaired this DSB task force. More than 9 years have passed since they 
warned us about the national security implications of the rapid changes 
in biotechnology. Those 9 years represent several generations--a great 
leap forward in biotechnology. The vast majority of these new 
capabilities represent good news for our families and Nation in terms 
of medical care and public health; however, there is also a dark side 
to this rapid progress.
    Mr. Chairman, I am concerned that many leaders in the legislative 
and executive branches of the Federal Government do not understand the 
dark side of this progress--the nature of current and future threats of 
bioterrorism. There are four key issues that are not well understood:
  --history of biowarfare, including the former U.S. offensive 
        biowarfare program;
  --the current technologies available to non-state actors;
  --the interest of terrorist organizations in using biological 
        weapons; and
  --and the fact that this is not an intractable problem.
    For the past 11 years, I have provided briefings on bioterrorism in 
a course sponsored by the Joint Staff's Anti-Terrorism and Force 
Protection directorate (J-34) to more 3,500 senior military officers. 
More than 70 percent of these officers filled out the critiques at the 
end of my presentation, and by far, the most common statement on these 
critiques is: ``Why hasn't anyone told me about this?''
    Considering the fact that so many senior military officers are not 
well versed on this threat, it should be of no surprise that 
individuals outside the field of national security are even less well-
informed. To properly understand the threat of 21st century 
bioterrorism, it is essential to have a basic understanding of the 
history of the use of bioweapons.
    In virtually all cases, biological weapons have been used in a 
terroristic mode--to attack civilian populations. They are not reliable 
weapons on the battlefield. They would be of little value if there was 
a strong wind, bright sunlight, rain, or any combination thereof. 
However, if one's goal is to attack a city, and there is no specific 
date and time to do it, then they can become very effective tactical or 
strategic weapons.
    When I discuss 250 years of biological terrorism in my 
presentations, beginning with British soldiers giving Native Americans 
blankets contaminated with smallpox, to German agents attempting to 
infect horses and mules in our ports during World War I, and the 
Japanese dropping bombs filled with plague-infested fleas on Chinese 
cities, I say that the theories of these early day bioterrorists were 
sophisticated, but their technologies were not.
    During the early days of the Cold War the United States, the Soviet 
Union, Great Britain, and other nations reached a point where 
technology finally caught up with the level of theory. This was 
demonstrated in numerous tests in the United States, and by the fact 
that in the 1960s, many of America's war plans included the use of 
biological weapons.
    I find it surprising how few citizens, and even senior military 
officers, actually know that America had a powerful offensive 
biological warfare capability until Richard Nixon unilaterally shut 
down America's offensive of program on November 24, 1969.
    When America's offensive biological warfare program began in the 
1940s, it was low-tech and not capable of producing weapons of mass 
destruction. Major investments were made in the 1950s and significant 
advances were made in technical capabilities. By the late 1960s, 
America's capabilities for the use of biological warfare was rapidly 
approaching the equivalence of nuclear weapons (in terms of 
casualties).
    After America's unilateral disarmament in 1969, the United States 
led the effort to get all nations to sign the Biological Warfare and 
Toxin Convention. After signing this treaty, the Soviet Union then 
ramped up their offensive program, eventually re aching a level almost 
beyond imagination. With more than 50,000 scientists and engineers 
working across 11 time zones in scores of facilities the Soviets 
managed to hide most of this capability from Western intelligence 
agencies. While the U.S. offensive program had produced hundreds of 
pounds of weapons-grade pathogens, the Soviets were producing hundreds 
of metric tons.
    What is not well understood from this history is the fact that bio 
warfare is not just theory. Tests conducted in the United States, the 
Soviet Union and Great Britain confirmed beyond any doubt the 
capability of pathogens to serve as either tactical or strategic 
weapons against civilian targets--counter-value targets in Cold War 
terminology. There is no question that in the 1960s, 1970s, and 1980s 
this capability was only available to nation-states. What is not well 
understood, however, is the same capability is now available to 
virtually any nation, and for many terrorist organizations, both 
international and domestic.
    It was nearly a decade ago that Drs. Lederberg and Whitesides 
stated that the rapid advances in biotechnology had reached the point 
where non-State actors were capable of producing these terrible 
weapons. The briefings given by various Government agencies to the WMD 
Commission during the past 2 years made it clear that further advances 
in the biotechnical revolution have made the production of 
sophisticated biological weapons by non-State actors even less 
challenging than in 2001. Those who say that it is still too difficult 
for terrorists to produce and deliver sophisticated biological weapons 
are either unaware of the extraordinary advances in biotechnology and 
the recent Government studies that demonstrate these capabilities, or 
have some other agenda that they wish to champion.
    Mr. Chairman, four things must occur for a terrorist organization 
to develop and deliver a sophisticated biological weapon. First they 
must acquire a sample of the deadly pathogen such as anthrax or plague. 
How would a terrorist organization acquire such deadly pathogens? For 
the past few weeks there has been a naturally occurring outbreak of 
anthrax in humans and cattle in Bangladesh. This is not terribly 
uncommon in many developing countries. In fact, it even occurs in the 
United States. In the summer of 2008, Ted Turner lost 278 buffalo to 
anthrax on his ranch in Montana. The buffalo died because they ate 
grass in a pasture that contained anthrax spores in the soil. On 
Monday, a state of emergency was declared in a village in Southern 
Russia's Krasnodar Territory over an anthrax outbreak in dairy cattle. 
If terrorists wanted to find a sample of Yersinia pestis, the bacteria 
that causes plague, they would not have great difficulty finding it in 
many locations west of the Mississippi River in the United States. 
Prairie dogs in West Texas and rats above the 5,000-foot level in the 
Rocky Mountains often carry this deadly pathogen. Earlier this week, 
the Chinese reported an outbreak of plague in humans in southwestern 
Tibet.
    Obtaining samples of deadly pathogens is not particularly 
difficult. In fact, all but two of the 80+ pathogens on the Select 
Agent List exist in nature. Pathogens that cause anthrax, plague, 
tularemia, Ebola, Marburg, Venezuelan Equine Encephalitis, Q-Fever, and 
dozens of others can be obtained and isolated from diseased animals or 
humans.
    The second step in creating a terrorist bioweapon is production. 
Taking a small sample of one of these pathogens from nature and 
producing enough material suitable for use as a weapon is a standard 
process used in various industries including pharmaceutical, 
agriculture, and pesticide. All of the equipment and supplies required 
for production are available on various sites on the Internet at very 
reasonable prices.
    The third step, and the part that has always been most challenging 
in creating a biological weapon, is getting material to the proper 
particle size for airborne release. The most effective way to 
disseminate a biological weapon is to spray either a liquid or dry 
powdered form of a pathogen into the air. When in the proper particle 
size, the pathogen will enter the human respiratory system and then 
move directly into the blood stream where it leads to systemic illness.
    In the 1960s and 1970s it took superpower technology to create the 
proper particle size without causing harm to the bacteria or virus 
being disseminated. Today it is standard off-the-shelf technology used 
in the pharmaceutical and agriculture communities. Techniques far more 
sophisticated than what was used in the highly classified U.S. 
offensive program are now openly discussed in highly respected 
scientific publications such as Journal of Aerosol Medicine and 
Pulmonary Drug Delivery, and openly discussed at major conferences 
hosted by organizations such as the American Association for Aerosol 
Research (AAAR). The AAAR conference schedule for October in Portland, 
Oregon, will include tutorials on Aerosol Mechanics I & II (http://
aaar.conference2010.org/content/tutorials).
    These scientific publications and organizations are incredibly 
important to medical research. They are important aspects of the 
biotechnical revolution that will make the lives of our children and 
grandchildren healthier and better protected from both chronic and 
infectious diseases that plagued our parents and grandparents. But we 
must understand, this same technology can be used to make weapons. We 
must also remember what Drs. Lederberg and Whitesides told us in 2001: 
``There is no way the United States can control the spread of rapidly 
advancing biotechonology.'' (Nor should we try. It would only succeed 
in reducing our defensive capabilities, and cause serious, perhaps 
irreparable damage to our important biotech industries.)
    The fourth and final step is delivery. In October 2001, the U.S. 
Congress witnessed a very low-tech and generally ineffective method of 
disseminating a biological weapon--the U.S. Postal Service. On the 
other hand, using spray devices available in most agriculture stores, 
and also available for sale on the Internet, to disseminate a few 
pounds of dry-powdered anthrax, most particularly in an indoor 
environment such as the subway or indoor sports arena, would have the 
enormous consequences of a weapon of mass destruction.
    What are those consequences? They were best stated on page 1 of the 
November 2009 National Security Council document, National Strategy for 
Countering Biological Threats.

    ``The effective dissemination of a lethal biological agent within 
an unprotected population could place at risk the lives of hundreds of 
thousands of people. The unmitigated consequences of such an event 
could overwhelm our public health capabilities, potentially causing an 
untold number of deaths. The economic cost could exceed one trillion 
dollars for each such incident. In addition, there could be significant 
societal and political consequences that would derive from the 
incident's direct impact on our way of life and the public's trust in 
Government.''

    There are some who say terrorists prefer to use bombs, and point to 
such recent attempts as we witnessed on Christmas Day and in May in 
Times Square. Without question the vast majority of terrorists will 
continue to use conventional weapons. Those weapons are certainly 
capable of producing dramatic results for terrorists, such as what we 
all watched unfold in Mumbai; however, terrorist use of conventional 
weapons will not change course of history. An event, such as described 
in the November 2009 NSC report would change the course of history--not 
only for us, but for our children and grandchildren.
    For those who say terrorists have no interest in biological 
weapons, I guess they just ignore the Aum Shinrikyo attempts in 1994-
1995 to produce biological weapons in Japan and disregard the al Qaeda 
bioweapons program. For a recent terrorist perspective on bioweapons, I 
suggest you watch a short video at this Web site: http://
www.youtube.com/watch?v=M32M-2B2mz8. It was broadcast repeatedly on Al 
Jazeera TV in February 2009 and has been viewed on the Internet more 
than 80,000 times.
    Perhaps some of the confusion comes from assessments by the 
Intelligence Community (IC) on the bioterrorism threat. The IC will 
tell you they have little or no information of any terrorist group 
developing biological weapons capability. That should not be 
surprising.
    During 15 years of the Cold War, the IC failed to appropriately 
identify the massive Soviet biowarfare program that consisted of 50,000 
scientists and technicians working in scores of laboratories across 11 
time zones. (This was the size of the Soviet's offensive biowarfare 
program after they signed the Biological Warfare and Toxin Convention.) 
The IC also missed al Qaeda's anthrax programs in Afghanistan and 
Malaysia, and they missed the Aum Shinrikyo biowarfare and chemical 
weapons programs. Thankfully, both of the Aum's weapons programs were 
plagued with technical errors when they went from small-scale to large-
scale production.
    Do we really think there is a high probability the IC will find a 
half-dozen individuals working in a make-shift laboratory (standard bio 
lab equipment purchased on the Internet in a facility no larger than a 
two-car garage) in a remote village in the tribal regions of Pakistan 
or Sana, Yemen, or the suburbs of New York City? That is the size and 
scale of a facility required to produce bioweapons, according a study 
(BACUS) done by the Defense Threat Reduction Agency in 1999 that 
determined there would be no perceptible ``intelligence signature'' of 
such an operation.
    For the threat of bioterrorism, the IC can provide us with sound 
strategic intelligence information on intent, but little or no tactical 
level information: status of a bioweapons program of a specific 
terrorist organization or the time and location of a planned attack.
    I think we all understand that there are people and organizations 
out there that want to kill large numbers of Americans. The WMD 
Commission said there are two ways to do that, nuclear and biological, 
and by far, biological is easier. If the senior leaders in the Congress 
and administration understood the biological capabilities now 
available--and even more troubling, what will be available in the next 
couple of years--to small terrorist groups, there would be no 
requirement for hearings such as these. Biodefense would be a top 
priority, and we would be making rapid progress in defending our 
cities, communities, and families.
    I sometimes think the reason some leaders are hesitant to take the 
recommended actions, is that they believe the problem is intractable-it 
is so difficult and complex, that ``there is nothing we can do''. There 
is no question that biodefense in the 21st century is difficult and 
complex, but the fact is, there are actions we can take to remove 
bioterrorism from the category of weapons of mass destruction (WMD).
    We cannot realistically prevent bioterrorism, but if we develop 
robust response capabilities, we will effectively remove bioterrorism 
from the category of weapons of mass destruction. We will be able ``to 
move the decimal point to left'' in that number from the November 2009 
NSC report. We will not count casualties in the hundreds of thousands, 
or tens of thousands, or even in the thousands. We can move the 
casualty count down to the scale of what we lose on America's highway 
on a 3-day weekend--most certainly it would still be a tragedy, but not 
a WMD that would change the course of history.
    The threat of bioterrorism will not diminish in the years ahead 
unless we take the required actions to build a robust and nimble 
resilience capability that includes:
  --near real-time detection and diagnosis of disease outbreaks;
  --situational awareness and effective communication of actionable 
        information, rapid development, and production of medical 
        countermeasures;
  --timely countermeasure distribution and dispensing;
  --surge medical care delivery to treat the sick and protect the well; 
        and
  --environmental cleanup and remediation.
    If Senators Bob Graham and Jim Talent were here today, they would 
tell you that sufficient and continued funding in support of these 
programs will not only lead us to a point where bioterrorism can be 
removed from the category of WMD, it will also provide a deterrent 
against attack, and just as importantly, that these are all ``no-regret 
investments.'' Building a system that provides for rapid diagnosis of 
disease, whether naturally occurring or manmade; better, faster, and 
less expensive vaccines and therapeutics; and far greater capacity for 
surge operations in our hospitals and clinics are the types of 
investments we should be making for our children and grandchildren. On 
that, we can all agree.
    Last month the President recommended an initiative to improve our 
system for developing MCMs. It is, perhaps, the single most important 
factor for removing bioterrorism from the category of WMD, but to make 
it work we need to understand that organizations responsible for this 
new initiative--Health and Human Services/BARDA, National Institutes of 
Health, and the Food and Drug Administration are now critical elements 
of our national security community--no less important than the 
Department of Defense, the IC, and the Federal Bureau of Investigation.
    Mr. Chairman, the threat of bioterrorism is real and will only 
increase over time. As Drs. Lederberg and Whitesides wrote back in 
2001, there is no way to stop the biotechnical revolution that will 
place ever-increasing asymmetric power in the hands of terrorists. 
However, that same revolution in technology can be used by America to 
remove bioterrorism from the category of WMD. The decision will be 
yours.
    I look forward to your questions.

    Senator Harkin. Colonel Larsen, thank you very much. Very 
stimulating presentation.
    Dr. Rose.
STATEMENT OF ERIC A. ROSE, M.D., CHIEF EXECUTIVE 
            OFFICER AND CHAIRMAN, SIGA TECHNOLOGIES; 
            CO-CHAIR, ALLIANCE FOR BIOSECURITY, 
            WASHINGTON, DC
    Dr. Rose. Mr. Chairman, Mr. Vice Chairman, I'm Eric Rose. 
I'm the co-chair of the Alliance for Biosecurity and the CEO of 
Siga Technologies. It's a pleasure to be with you today to 
provide you with our impression of the HHS report on the PHEMCE 
Enterprise review.
    The Alliance for Biosecurity is a collaboration among 
pharmaceutical and biotechnology companies that are focused on 
biodefense countermeasures. My company, Siga Technologies, is 
in late-stage development of a smallpox antiviral drug, and 
therefore, I can give you a firsthand perspective of how well 
our Federal Government is working with small, private-sector 
biodefense companies like ours.
    I've submitted written testimony for the record. At the 
outset, I would like to make three simple points:
    First, the BARDA Advanced Development Program is bearing 
fruit. While many have criticized the perceived slow pace of 
development of needed novel biodefense countermeasure, our 
experience is that the Federal investment in biodefense is 
generating important novel countermeasures less than 7 years 
after BioShield enactment, and also just 4 years after the 
creation of BARDA. And that, I think, you should take in a 
context, that typical drug development now takes 10 to 15 years 
for a new drug or vaccine. So, there is a trickle, but that 
pipeline is beginning to flow. We, at Siga, are now producing 
commercial-scale validation batches of our smallpox antiviral 
drug candidate, which we hope will soon be added to the 
strategic national stockpile.
    Second, the administration's proposed enhancement of FDA 
regulatory science innovation and capacity, along with 
additional funding, is very welcome to our community. While the 
FDA is not within the jurisdiction of this subcommittee, we do 
want to note that we are particularly pleased with the emphasis 
placed on the review on enhancing FDA's essential role. 
Therefore, we strongly support the administration's August 20 
budget amendment request to transfer available balances from 
prior pandemic influenza appropriations to modernize FDA 
regulatory science.
    Third, full funding of the BioShield Strategic Reserve Fund 
ensures that there is an oasis, and not a mirage, on the other 
side of the valley of death of advanced development. And this 
is absolutely critical to the success of small biotech 
companies who rely on private investment to initiate product 
development.
    While we appreciate the need to find offsets for other new 
spending in order to reduce the Federal budget deficit, I can 
tell you that every time there is a proposal to transfer 
unobligated balances out of the SRF for other purposes, it 
sends shock waves through the private-sector companies involved 
in this arena, and it shakes our investors' confidence that we 
desperately rely upon to nurture these projects through the 
early phases of development.
    BARDA's rapidly growing advanced development pipeline is 
indicative of the strong interest that small companies have in 
biodefense. However, our success relies upon a reliable and a 
committed customer. We share and support the overall goal of 
the review, and the Alliance is thankful to have been consulted 
by the ASPR, Dr. Nicky Lurie throughout the process. We are 
particularly also pleased to see the review include plans for 
HHS to increase transparency, communication, and predictability 
within the contracting and procurement processes, and across 
agencies. Further, we were encouraged that the review included 
a commitment to develop a 5-year budget plan for the entire MCM 
enterprise, expand the advanced development program, and 
increase staff levels.
    There are also some elements of concern to us. We were 
disappointed that the review did not propose fully funding the 
advanced development program that Colonel Larsen just referred 
to--it's still grossly underfunded--nor outline a process for 
restoring funding to the SRF beyond 2013, or otherwise 
providing long-term and stable funding for the procurement of 
MCM.
    We support plans for the sustainability enterprise, but 
caution that investments must be made up front in order to 
guarantee success over the long term. In addition, to 
reiterate, the SRF should not be depleted for other uses, 
including proposals put forth in the review. For this reason 
we're concerned that the administration's August 20 budget 
amendment request included the transfer of $200 million to DOD 
that you referred to, and we're delighted to hear your candid 
and quick response.
    And also, the $200 million transfer from the SRF to 
establish a new countermeasures strategic investment firm. 
We're supportive of a technical center of excellence, but, as 
you've concluded, the transfer from DOD, we think, is just 
wrong.
    We think that an independent strategic investment firm for 
innovation in MCM may have some merit, although little concrete 
information has been provided to evaluate the value of this 
initiative, and I think the whole nature of early stage 
development of biological products, drugs, and vaccines is very 
different from information technologies and electronics 
technologies that are part of In-Q-Tel.
    It seems highly misguided, however, to create a strategic 
investment firm to incentivize entry into this space by de-
incentivizing private investment through depletion of the SRF. 
That combination just does not make sense.
    Particularly with the SRF, also, we were very pleased to 
see the bipartisan effort on the part of 17 Senators, over the 
summer, who wrote specifically to the Senate leadership about 
the multiple--essentially to counter the multiple efforts to 
raid the SRF, and we were very, very grateful for their 
support.

                           PREPARED STATEMENT

    Finally, we urge the subcommittee to work closely with the 
administration to clarify, execute, and adequately fund the 
programs needed to sustain the PHEMCE enterprise, and our 
Alliance is committed to working with the Congress, the 
administration, and others, of course, to make the 
countermeasures enterprise a success.
    We're very grateful for your attention and consideration, 
and appreciate the invitation here.
    [The statement follows:]
                   Prepared Statement of Eric A. Rose
                                summary
    The Alliance for Biosecurity respectfully submits testimony to the 
Senate Labor, Health and Human Services, and Education, and Related 
Agencies Appropriations Subcommittee regarding the Department of Health 
and Human Services' (HHS) report--Public Health Emergency Medical 
Countermeasures Enterprise Review: Transforming the Enterprise to Meet 
Long-Range National Needs (Countermeasure Enterprise Review) for the 
``Defending Against Public Health Threats'' hearing on September 29, 
2010.
    We very much appreciate being invited to appear today before the 
subcommittee to discuss this important report and thank you for the 
consideration of our views. The Alliance for Biosecurity is a 
collaboration among pharmaceutical and biotechnology companies that are 
working in the public interest to improve prevention and treatment of 
severe infectious diseases--particularly those diseases that present 
global security challenges. The Alliance promotes a stronger, more 
effective partnership between Government, the biopharmaceutical 
industry, and other stakeholders in order to advance their shared goal 
of developing critically needed medical countermeasures (MCMs).
    Bioterrorism and emerging infectious diseases present an 
extraordinary and potentially grave threat to public health and 
national security. One of the most effective ways to improve our 
national preparedness for these threats is through the development of 
drugs, vaccines, and diagnostics, called MCMs, that can be distributed 
in the event of an emergency. The Federal Government has a central role 
to play in developing these MCMs and the Alliance stands ready to work 
with the administration, Congress, industry, and other stakeholders in 
our shared mission to identify, create, and obtain MCMs to protect 
citizens against bioterrorist attacks and potentially destabilizing 
emerging infectious diseases.
Positive Elements of the Countermeasure Enterprise Review
    We share and support the goal of the Countermeasure Enterprise 
Review, which is ``a modernized countermeasure production process where 
we have more promising discoveries, more advanced development, more 
robust manufacturing, better stockpiling, and more advanced 
distribution practices.'' We support the intention of the Review and 
look forward to working with the subcommittee and the administration to 
further evaluate some of the initiatives included in the report as well 
as other ideas that will help to sustain and further develop the 
biodefense enterprise.
    The Alliance is thankful to have been consulted by the Assistant 
Secretary for Preparedness and Response, Dr. Nicole Lurie, throughout 
the course of this important review. In addition to in-person meetings, 
we submitted a White Paper on March 2, 2010, that incorporated a number 
of core recommendations, including the need to (i) improve the 
procurement and contracting process to more effectively promote 
development of MCMs; (ii) improve the speed and efficiency of 
regulatory interactions between private industry and the U.S. 
Government; and (iii) improve coordination among the Food and Drug 
Administration (FDA), Centers for Disease Control and Prevention, 
Biomedical Advanced Research and Development Authority (BARDA), and 
other relevant agencies around the development and approval of MCMs.
    Therefore, the Alliance was particularly pleased to see the 
Countermeasure Enterprise Review include plans for HHS to increase 
transparency, communication, and predictability within the contracting 
and procurement processes and across agencies. We hope that this 
includes transparency regarding setting requirements and specific 
information such as a target product profile as early as possible and 
is publicly disclosing allowable requirement and population threat 
analyses information.
    Further, we were encouraged that the Review included a commitment 
to develop a 5-year budget plan for the entire MCM enterprise, expand 
the advanced development program, and increase staff levels. We welcome 
these enhancements and feel strongly that the MCM enterprise and our 
Nation's preparedness will benefit from increased communication, 
development of a 5-year budget, continuity, and transparency. We hope 
the administration will include such a coordinated long-range budget 
plan as part of the 2012 President's budget.
    The Alliance was also pleased with the emphasis placed on enhancing 
FDA regulatory innovation, science, and capacity in the Review, as well 
as the recognition of the importance of optimizing the legal and policy 
framework for MCM oversight and approval. Therefore, we support the 
administration's August 20 budget amendment request to make available 
balances from prior pandemic influenza appropriations to modernize FDA 
``regulatory science.'' We believe that this new approach to regulatory 
science must focus on the agency's ``animal rule'' in order to make it 
an effective mechanism for the approval of needed countermeasures in 
the numerous instances where human testing of drugs and vaccines is 
unfeasible and/or unethical. This focus requires the addition of 
substantial manpower to the agency to meet the complex needs of this 
space, and the training of regulatory personnel to facilitate their 
understanding of the unique national security and public health issues 
that chemical, biological, and nuclear threats represent.
Elements of Concern Regarding the Countermeasure Enterprise Review
    The Alliance's March White Paper also included a core 
recommendation to ``improve predictability and ensure the availability 
of consistent, robust funding for the development of MCMs.'' Indeed, 
this is essential to ensuring that the MCM enterprise is successful. We 
were disappointed that the Countermeasure Enterprise Review did not 
propose fully funding the advanced development program at BARDA, nor 
outline a process for restoring funding to the Special Reserve Fund 
(SRF) beyond 2013 or otherwise providing long-term and stable funding 
for the procurement of MCMs. We support plans for the sustainability of 
the Enterprise, but caution that investments must be made up front in 
order to guarantee success over the long term.
    As you know, in 2004, Congress--recognizing that the country was 
relatively unprepared for the aftermath of an attack with CBRN agents--
passed the Project BioShield Act (Public Law 108-276), which 
established the SRF. In the Project BioShield Act, Congress described 
the purpose of the SRF as procuring products to ``treat, identify, or 
prevent harm from any biological, chemical, radiological, or nuclear 
agent that may cause a public health emergency affecting national 
security.'' Congress appropriated $5.6 billion for this purpose in 2004 
to remain available until 2013. Since that time several critical MCMs 
have been purchased and stored in the Strategic National Stockpile with 
SRF funds.
    Predictability and availability of robust funding for the advanced 
development and procurement of MCMs is one of the most important signs 
to industry and to private investors that the Government is serious 
about moving the MCM initiative forward. Although there are a number of 
initiatives listed in the Review that may help the MCM enterprise in 
the long term, there was little mentioned about immediate funding. 
Since advanced development is the most expensive part of MCM 
development, it must be funded at a higher level. In addition, the SRF 
should not be depleted for other uses, including proposals put forth in 
the Countermeasure Enterprise Review.
    Private sector firms cannot invest in product development, which 
requires 10 to 15 years and hundreds of millions of dollars, unless 
they are reasonably certain that a market will exist for their product 
when it is finished. The SRF serves as a concrete demonstration of the 
Federal Government's commitment to procuring MCMs. Diminishing or 
eliminating the SRF would call into question the credibility of that 
commitment, and by doing so make it difficult for the private sector to 
remain in the countermeasure business. While this would significantly 
affect these companies and their employees, it would be a much larger 
setback for the country as a whole.
    For this reason, we are concerned that the administration's August 
20 budget amendment request included the transfer of (i) $200 million 
from the SRF to the Department of Defense (DOD) in order to establish a 
Technical Center of Excellence for Advanced Development and 
Manufacturing; and (ii) $200 million from the SRF to establish a new 
MCM strategic investment firm.
    Establishment of a ``Technical Center of Excellence'' for advanced 
development and manufacturing of MCMs is a laudable goal. However, DOD 
intends to dedicate significant funding to the development of platform 
technologies and the advanced development and manufacturing of novel 
countermeasures. We support this initiative but oppose transferring SRF 
funds to support it. As previously stated, depleting the SRF now raises 
a number of concerns. Any flexible manufacturing initiative should be 
funded apart from the SRF with new resources, which do not compete with 
funding for advanced development at BARDA. Lastly, it is important to 
ensure that all existing manufacturing capacity is being effectively 
and efficiently deployed before investing in the creation of new 
capacity.
    Likewise an independent strategic investment firm for innovation in 
MCM, ``to provide necessary support for small innovators and increase 
the odds of moving innovation into successful development'' may have 
some merit although little concrete information has been provided to 
evaluate the value of this initiative. It seems somewhat paradoxical, 
however, to deplete the SRF--the primary signal of a Government market 
for MCMs--in order to create a strategic investment firm to promote 
innovation of MCMs. Such an action would send, at best, a confusing 
signal to industry and private investors, and could have the impact of 
discouraging further investment in MCMs under development. 
Additionally, it is premature to transfer funds to create a new 
investment firm when the administration has not decided on the model, 
structure, or objectives of such a firm.
    The Alliance urges the subcommittee to work closely with the 
administration to clarify, execute an adequately fund the programs 
needed to sustain the PHEMCE enterprise as the initiatives included in 
the Countermeasure Enterprise Report are further developed and 
implemented. The Alliance is committed to working with Congress, the 
administration, and others to make the countermeasure enterprise a 
success. We thank you for your attention and consideration.

    Senator Harkin. Thank you very much, Dr. Rose.
    And now we turn to Dr. Pavia.
    Dr. Pavia.
STATEMENT OF ANDREW T. PAVIA, M.D., FAAP, FIDSA, CHIEF, 
            DIVISION OF PEDIATRIC INFECTIOUS DISEASES, 
            UNIVERSITY OF UTAH; CHAIR, INFECTIOUS 
            DISEASES SOCIETY OF AMERICA'S PANDEMIC 
            INFLUENZA TASK FORCE, SALT LAKE CITY, UTAH
    Dr. Pavia. Senator Harkin, Senator Cochran, thank you very 
much for this opportunity to speak to you on behalf of the 
9,000 members of the Infectious Disease Society of America 
(ISDA).
    Unlike Colonel Larsen, I am an infectious disease 
physician, a scientist, and a pediatrician--not much of a 
pilot, but--I appreciate this opportunity to comment on the 
matters before us.
    IDSA commends Secretary Sebelius for undertaking the 
comprehensive review of our MCM Enterprise. As a final report 
makes abundantly clear, there are many components, 
organizations, factors, and barriers that are vital to the 
successful development of countermeasures, their deployment and 
use. And, although it was intentionally left out of the review 
because of its scope, investments in the U.S. public health 
system at the Federal, State, and local level are urgently 
needed.
    The recent H1N1 pandemic demonstrated the importance of 
being able to rapidly develop countermeasures--and these 
include vaccines, antimicrobial drugs, and diagnostics--and the 
importance that we be able to develop our responses to 
biological threats, whether those be the ones that we 
anticipate easily, such as pandemic influenza or anthrax, or 
new and unrecognized threats. And an example that I want to 
bring to your attention is the emergence of antimicrobial 
resistance, whether it be influenza that's resistant to 
Tamiflu, or bacteria that are resistant to all available 
antibiotics.
    There have been a number of recent reviews that have looked 
at the MCM Enterprise, in addition to that done by the 
Secretary. All have identified similar barriers and 
opportunities for improvements. Many of these recommendations 
mirror policy improvements that IDSA has suggested over the 
past several years. We've put before you our reports from 2004 
on ``Bad Bugs, No Drugs'' and on ``Pandemic Influenza''--
``Pandemic and Seasonal Influenza, Principles for Action,'' 
from 2007. Many of these recommendations will be critical if 
they can be accomplished, but the proof is in their actual 
implementation.
    We're pleased that HHS is taking a comprehensive approach. 
As you pointed out in your opening remarks, an effective 
countermeasure system is one that doesn't focus on individual 
agents, but that can flexibly respond to a variety of threats, 
and do so quickly and efficiently, with good stewardship of our 
resources.
    We've recently experienced an influenza pandemic, which 
was, thankfully, the mildest of the last 100 years. Part of why 
it was mild was because of the investments that were made in 
planning and preparation. We produced a vaccine in record time, 
let's not forget, and yet, that still was not enough, and it 
was not soon enough.
    This was a mild pandemic, by all measures, but that means 
that it only killed 9,000 to 18,000 Americans; it put some 
300,000 in the hospital; it killed 1,200 children, some of whom 
died in my hospital in front of my eyes.
    So, a mild pandemic is still a major threat. A moderate or 
severe pandemic is one that we have to be prepared for. And it 
is indeed inevitable, as people have already mentioned. What we 
don't know is when it will emerge and how severe it will be. 
And what we have in our power to do something about is whether 
or not we will be prepared for it.
    The threat of antimicrobial resistance is, in fact, 
intimately linked to the threat of pandemics and bioterrorism. 
In influenza pandemics, people die of secondary bacterial 
infections, not just of influenza virus; and in recent years, 
Methicillin-resistant Staphylococcus aureus, or MRSA, has been 
the major killer after influenza. Moreover, the antibiotic 
resistance genes that are emerging naturally can fairly easily 
be engineered into bioweapons, such as anthrax. And a 
moderately competent graduate student can do it with a modicum 
of funds and a decent laboratory.
    Several factors have resulted in the dearth of new MCM in 
development, and these include the lack of financial 
incentives; insufficient risk-sharing, because of the high rate 
of failure of new products; regulatory uncertainty; 
insufficient federally supported research; and lack of 
coordination across all components of the MCM measure, as 
Colonel Larsen has mentioned.
    To create sustainable MCM R&D, we have to determine the 
right combination of financial incentives and risk-balancing 
and -sharing that will allow industry to invest and to succeed. 
The strategic investment firm envisioned by the MCM report is 
one potential tool, and IDSA supports it. But, other mechanisms 
are also needed. We caution, however, that the initial funding 
level proposed for the strategic investment firm is unlikely to 
result in useful countermeasures. Other funding and additional 
mechanisms need to be integrated.
    All reviews identify potential barriers from regulatory 
uncertainty. FDA must develop clear and achievable regulatory 
pathways for review and approval of new MCM. This will require 
investment. While not the purview of this subcommittee, it's 
critical that Congress fund the desperately needed improvements 
in regulatory science and capacity for public health measures 
at FDA.
    The investments made over the past several years have 
limited the impact of pandemic flu, but large gaps remain. IDSA 
appreciates the generous funding that this subcommittee has 
provided over recent years, as it did in the supplemental 
appropriations bill. However, we strongly believe that 
preparedness for influenza and other public health emergencies 
requires a consistent and predictable stream of funding. We 
support at least $1.7 billion in multiyear appropriations for 
BARDA for fiscal year 2011 to fund the development of new 
countermeasures.
    We also recognize a need for a clinical-trials 
infrastructure that will allow the further clinical development 
of these MCM. Successful examples exist for HIV/AIDS and for 
cancer. We need to learn from these examples that have been 
successful, and integrate that into the MCM enterprise.
    Improved management structure has already been mentioned. 
It's featured in the Secretary's report. Some of the tools that 
are laid out, including the early development teams at NIH and 
the action teams proposed at FDA, are promising approaches, but 
there does need to be coordinated leadership.

                           PREPARED STATEMENT

    The danger posed to the United States by biological 
threats, including pandemic influenza, biologic weapons, 
emerging infections, is really very real and very great. 
Continued thoughtful, efficient investment in the science, in 
filling the pipeline, evaluating and licensing countermeasures, 
and efficient management of the enterprise, will provide 
Americans with the protection that they expect and deserve.
    Thank you, and I'll be happy to answer any questions.
    [The statement follows:]
                 Prepared Statement of Andrew T. Pavia
    The Infectious Diseases Society of America (IDSA) appreciates this 
opportunity to speak before the Senate Labor, Health and Human Services 
(HHS), and Education, and Related Agencies Appropriations Subcommittee 
as you examine our Nation's readiness and ability to deal with public 
health threats, particularly through the development of countermeasures 
to address biodefense, pandemic influenza, and emerging infectious 
diseases. My name is Andrew Pavia, MD, FIDSA, FAAP. I am an infectious 
diseases specialist and the George and Esther Gross Presidential 
Professor and Chief of the Division of Pediatric Infectious Diseases at 
the University of Utah. I am the chair of IDSA's Pandemic Influenza 
Task Force. I am also a member of the National Biodefense Science 
Board, which was created under the authority of the Pandemic and All-
Hazards Preparedness Act, to provide expert advice and guidance to the 
HHS Secretary and the HHS Assistant Secretary for Preparedness and 
Response (ASPR) to prepare for, and respond to, public health 
emergencies resulting from chemical, biological, nuclear, and 
radiological events, whether naturally occurring, accidental, or 
deliberate.
    IDSA represents more than 9,000 infectious diseases physicians and 
scientists devoted to patient care, prevention, public health, 
research, and education. Our members care for patients of all ages with 
serious infections, including meningitis, pneumonia, tuberculosis (TB) 
and HIV/AIDS, emerging infections like the 2009 H1N1 influenza virus, 
food-borne diseases caused by salmonella, campylobacter, and 
escherichia coli (E. coli), and diverse infections caused by 
antimicrobial-resistant bacteria, such as methicillin-resistant 
staphylococcus aureus (MRSA), enterococcus, E. coli, salmonella, 
pseudomonas aeruginosa, klebsiella pneumoniae, acinetobacter baumannii, 
and the newly emerging New Delhi metallo-beta-lactamase (NDM-1). NDM-1 
is an enzyme that makes bacteria resistant to a broad range of 
antibacterial drugs. It was first identified in December 2009 in a 
patient hospitalized in New Delhi with an infection caused by 
Klebsiella pneumoniae. It has since rapidly spread to other areas of 
the world, and three cases recently have been reported in the United 
States. IDSA's testimony will primarily focus on new medical 
countermeasures essential to address pandemic influenza and 
antimicrobial-resistant infections.
HHS' End-to-End Countermeasure Review
    IDSA commends HHS Secretary Kathleen Sebelius and the 
administration for undertaking the comprehensive end-to-end review of 
our medical countermeasures enterprise. As the final report (The Public 
Health Emergency Medical Countermeasure Enterprise Review: Transforming 
the Enterprise to Meet Long Range National Needs), prepared by the 
ASPR, Nicole Lurie, MD, MSPH and her staff, makes clear, there are many 
components and organizations which are critical to the development, 
deployment and use of medical countermeasures, including urgently 
needed investments in the U.S. public health system. The goal of an 
efficient and effective medical countermeasure enterprise is to be able 
to rapidly produce effective responses, not only to known threats or 
biologic attacks, but to previously unrecognized threats and emerging 
infectious diseases.
    We are pleased that the administration is taking a comprehensive 
approach to developing a medical countermeasure strategy. Many of the 
recommendations in HHS' end-to-end review mirror policy improvements 
IDSA has suggested over the past several years, including in our 2004 
report ``Bad Bugs, No Drugs: As Antibiotic Discovery Stagnates, a 
Public Health Crisis Brews'', which called attention to the dry 
antibacterial pipeline and the need for the U.S. Government to 
financially support and incentivize the development of novel 
antibacterial drugs. The administration's report also reflects several 
recommendations found in IDSA's 2007 report, ``Pandemic and Seasonal 
Influenza Principles for U.S. Action.'' In this report, IDSA 
recommended that HHS and ASPR move quickly to:
  --Strengthen pandemic vaccine efforts by establishing a Multinational 
        Pandemic Influenza Vaccine Master Program;
  --Strengthen anti-infective pharmaceutical research and development 
        and stockpiling efforts;
  --Improve quality and availability of diagnostic tools for influenza;
  --Accelerate development of countermeasures to prevent, treat, and 
        diagnose pandemic influenza through additional legislative 
        action and continue to streamline regulatory approval 
        processes;
  --Update plans for countermeasure distribution and prioritization of 
        use;
  --Expand vaccine uptake, stabilize vaccine manufacture, and test and 
        evaluate vaccine distribution plans during annual influenza 
        seasons;
  --Protect the healthcare workforce during a pandemic;
  --Build national, regional, and local healthcare systems capable of 
        responding to mass casualty events;
  --Develop and test community mitigation measures;
  --Improve and coordinate influenza surveillance;
  --Continue to strengthen leadership, international collaboration, and 
        communication; and
  --Allocate significant and sustainable funding for long-term planning 
        and action.
    The implementation of these policy improvements is essential to 
reduce the threat Americans and the world community faces from the 
public health threats of greatest concern. Copies of IDSA's Bad Bugs, 
No Drugs report and the Pandemic and Seasonal Influenza Principles for 
U.S. Action document are available through IDSA's Web site at: http://
www.idsociety.org/10x20.htm and http://www.idsociety.org/influenza.htm. 
Additionally, IDSA is hosting a meeting on January 27-28, 2011, 
``Seasonal and Pandemic Influenza 2011'', where the influenza 
principles will be reviewed and further updated to include lessons 
learned from the novel H1N1 influenza pandemic, with a focus on 
specific actions and timelines.
Pandemic Influenza and Antimicrobial Resistance
    Infectious diseases and public health experts believe that another 
influenza pandemic is inevitable. The key questions that remain are 
when it will occur, which influenza virus will cause the pandemic, how 
severe it will be, and whether the world will be ready. Experts also 
are extremely concerned about the growing threat of antimicrobial-
resistant infections. The need for novel products (drugs, diagnostics, 
and vaccines) to address these threats is urgent.
    There are three types of influenza viruses, classified as A, B, or 
C, based on their protein composition. Public health experts are most 
concerned with type A influenza virus. Pandemic influenza typically is 
a virulent new strain of human influenza that causes a global outbreak 
of serious illness. Four influenza pandemics have occurred during the 
past 100 years: the 1918-1919 ``Spanish flu,'' the 1957-1958 ``Asian 
flu,'' the 1968-69 pandemic or ``Hong Kong flu'' and the H1N1 pandemic 
from 2009-2010. The 2009 H1N1 influenza pandemic proved to be the 
mildest of these in overall deaths, killing an estimated 9,000 to 
18,000 Americans according to CDC estimates. The virus did not develop 
resistance to oseltamivir (Tamiflu), the only widely available 
antiviral to treat influenza. Focusing solely on the number of deaths, 
however, masks the overall impact of the H1N1 pandemic. More than 1,200 
children younger than 18 died of H1N1 influenza and between 200,000 and 
400,000 Americans were hospitalized.
    The 2009 H1N1 influenza pandemic was perhaps a best case scenario. 
If a pandemic similar in virulence to the 1918 influenza strain were to 
occur, up to 2 million Americans could die and the number of 
hospitalizations and need for intensive care unit beds would overwhelm 
our healthcare system and cripple our infrastructure.
    On the issue of antimicrobial-resistant infections, the CDC has 
described antimicrobial resistance as ``one of the world's most 
pressing health problems'', while the World Health Organization (WHO) 
calls it ``one of the three greatest threats to human health.'' 
Infectious diseases physicians agree. NDM-1, for example, poses a new 
threat of great concern and illustrates how antimicrobial-resistant 
infections will continue to emerge wherever antimicrobial drugs are 
used. NDM-1 also illustrates how a drug-resistant organism created in 
one area of the world can quickly threaten all regions. The costs due 
to antimicrobial resistance, both in the numbers of lives lost or 
devastated and in economic terms, are exceedingly high. Drug-resistant 
bacteria, such as MRSA-resistant E. coli, Acinetobacter baumannii and 
Clostridium difficile (c. diff.) currently affect many hospitalized 
patients and a growing number of people in the community, including 
healthy athletes, parents, working people, and children. CDC reports 
that nearly 2 million healthcare-associated infections (HAIs) and 
90,000 HAI-related deaths occur annually in the United States. Most of 
these infections and deaths involve antimicrobial-resistant bacteria. 
The direct and indirect economic costs associated with antimicrobial-
resistant infections are also enormous in terms of dollars spent, 
length of hospital stay, and loss of productivity. A recent study 
indicated that annually in the U.S. antimicrobial-resistant infections 
are responsible for more than $20 billion in excess healthcare costs, 
more than $35 billion in societal costs, and more than 8 million 
additional hospital days. Antimicrobial resistance is a critical issue 
in viral diseases as well. In 2008, the dominant circulating seasonal 
influenza strain had become resistant to oseltamivir (Tamiflu) leaving 
limited options for treatment. For now, this strain has largely 
disappeared, but if it re-emerges we have few drugs in the pipeline to 
deal with the threat.
    There also is an alarming connection between influenza and 
antimicrobial-resistant bacterial infections. In addition to the 
morbidity and mortality caused by the influenza virus itself, many 
people with influenza will develop life-threatening secondary bacterial 
infections, many of which are resistant to antibacterial drugs. In 
recent years, MRSA has been the most lethal cause of postinfluenza 
bacterial infections.
Re-engineering the Pandemic Influenza Vaccine Production Enterprise
    As we stated in our 2007 Pandemic and Seasonal Influenza Principles 
for U.S. Action, IDSA believes the widespread use of a pandemic vaccine 
should be the central strategy for protection of human health during a 
pandemic event. IDSA supports a coordinated effort led by the Federal 
Government working with public and private partners and the 
international community to outline a comprehensive approach that will 
coordinate, and strengthen vaccine research and development, increase 
production capacity, accelerate licensure, guarantee equitable global 
distribution, and monitor vaccine performance and safety.
    In August 2010, the President's Council of Advisors on Science and 
Technology (PCAST) issued a report focused on re-engineering the 
pandemic influenza vaccine production enterprise. In its report, the 
PCAST emphasized that existing technology for influenza vaccine will 
never deliver enough vaccine in time to respond to a pandemic. However, 
they said that targeted investments in key areas could shorten by weeks 
the time needed to produce enough doses. They found that the 
development of new types of influenza vaccines is of critical 
importance, and no single new technology has a high likelihood of 
success. To ensure success of one, we must pursue several potential 
vaccine strategies simultaneously. The PCAST recommendations provide a 
blueprint to significantly increase our Nation's ability to produce 
vaccine in a timely manner. The recommendations would speed up not only 
flu vaccines, but also a number of other medical countermeasures 
against infectious diseases that could emerge naturally or as the 
result of a bioterrorism attack.
    Although the PCAST did not determine anticipated costs for the 
projects required to make the improvements necessary to re-engineer the 
influenza vaccine production enterprise and has not attempted to 
allocate the share of financial responsibility to be borne by the 
governmental agencies or the companies, they did state that it is fair 
to assume an initial $1 billion in Federal funds--and at least similar 
sums over the subsequent few years--would be required to make the 
changes that will allow the Nation to mount a vigorous effort that can 
protect its population as well as possible in the event of another 
pandemic, an event that could have catastrophic consequences.
    On-going strong investment in pandemic vaccine technologies is 
justified on a cost-benefit basis, in part because large numbers of 
lives could be saved through relatively inexpensive improvements in 
current methodologies and in part because Federal investments in 
influenza pandemic response would speed development of technical 
platforms and production facilities that would support medical 
countermeasures against a variety of other dangerous pathogens.
Antimicrobial and Diagnostics Discovery and Development
    The development of both antiviral and antibacterial drugs as well 
as point-of-care diagnostics must be treated as priorities in the U.S. 
medical countermeasure development strategy. In IDSA's view, there is 
an urgent need to address the factors that have resulted in a dearth of 
new antimicrobials and other countermeasures in development. These 
include:
  --Lack of financial incentives of sufficient strength to make 
        companies choose to engage;
  --Regulatory uncertainty caused by the lack of consistent approval 
        pathways and limited regulatory scientific resources at the 
        Food and Drug Administration (FDA);
  --Insufficient federally supported research and development efforts; 
        and
  --Lack of a coordinated management structure.
    In addition, as pointed out in the end-to-end medical 
countermeasure review, lack of coordination between Federal agencies 
and complex contracting regulations add additional barriers.
    To create a sustainable, national and global medical 
countermeasures R&D enterprise, it is necessary to determine the right 
combination of financial incentives (``push'' and ``pull'' mechanisms) 
to entice industry to invest and to help companies, big and small, with 
innovative technology to succeed. Examples of the push incentives are 
grants, contracts, and tax credits. Examples of the pull incentives are 
milestone payments, guaranteed markets, liability protection, patent 
extensions or data exclusivity, and prizes. These incentives are 
intended to change the ``return on investment'' or net present value 
calculation of countermeasures to make them more competitive with other 
medical products. The strategic investment firm envisioned by the 
medical countermeasure review report also supports the development of 
high-priority products by sharing the risk of development with 
companies. The HHS report highlights the need for the strategic 
investment firm to first focus on novel antimicrobials to address drug-
resistant infections. IDSA wholeheartedly supports this effort. We 
caution, however, that the proposed initial funding level for the 
strategic investment firm is $200 million, which is wholly insufficient 
to increase the likelihood of bringing successful antimicrobial drugs 
and other medical countermeasures to the marketplace. We also strongly 
believe that additional ``push'' and ``pull'' incentives are needed, 
particularly to address the withering antibacterial pipeline, and urge 
Congress to act quickly to pass strong legislation in this area. Risk 
sharing and incentives that stimulate the development of new rapid 
diagnostics also should be adopted.
    FDA must quickly assure a clear regulatory pathway for the review 
and approval of new countermeasures. For many years, industry 
representatives have identified regulatory uncertainty as one of the 
primary obstacles to new antibacterial development, in particular. IDSA 
acknowledges the strong commitment expressed by current FDA leaders and 
staff to address the multi-faceted problem of regulatory uncertainty. 
Despite good faith meetings, workshops, and advisory committee 
meetings, the situation today for antibacterial review and approval 
appears no better than it was at this time last year. In some respects, 
the level of uncertainty has increased. In its medical countermeasure 
review report, HHS identified a critical need to upgrade FDA science 
and regulatory capacity. HHS hopes to make a significant investment to 
provide FDA scientists with the resources they need to develop faster 
ways to analyze promising new discoveries and give innovators a clear 
regulatory pathway to bring their products to market. This year, IDSA, 
FDA, the National Institute of Allergy and Infectious Diseases (NIAID), 
and pharmaceutical companies have begun to participate in an important 
effort being led by the Foundation of the National Institutes of Health 
(FNIH) to study new endpoints that will more easily demonstrate 
antibacterial effectiveness. The FNIH effort is promising, but to 
develop this knowledge and quickly implement changes in the regulatory 
process requires people and money. This spring, IDSA testified in 
support of additional funding to allow FDA to hire additional staff to 
develop much needed clinical trial guidance documents and to fund 
Critical Path Initiatives specific to antimicrobial drug development. 
We also requested $13.25 million to support a focus on new antibiotics 
within FDA's new regulatory science initiative with the National 
Institutes of Health.
    We recognize the strains on the Federal budget due to the economic 
crisis and the budget deficit, but significantly increased Federal 
research dollars are urgently needed to advance scientific knowledge 
about pandemic influenza and antimicrobial resistance, as well as to 
support countermeasure discovery and development. IDSA has for the past 
several years supported consistently strong funding for these 
activities throughout HHS. We appreciate that this subcommittee has 
provided substantial funding for pandemic influenza response, as it did 
last year in the supplemental appropriations bill. However, IDSA 
strongly believes that some pandemic preparedness efforts require 
funding over multiple years. For example, companies considering 
investing in countermeasures development need assurance that the 
financial commitment will be secure in future years or they will not 
engage.
    We strongly support significantly boosting funding for HHS' 
Biomedical Advanced Research and Development Authority (BARDA). This 
year, IDSA testified in support of at least $1.7 billion of multi-year 
appropriations for BARDA in fiscal year 2011 to fund the development of 
new therapeutics, diagnostics, vaccines, and other technologies, 
including antimicrobials. Such funding would significantly enhance 
BARDA's support of countermeasures through the advanced stages of 
development, as well as BARDA's flexibility to partner effectively with 
industry. IDSA also wishes to see BARDA take a much stronger role in 
advancing the development of new antimicrobials and related diagnostics 
to detect, identify, and treat pathogens that presently are affecting a 
significant number of Americans in hospitals annually. With modern 
molecular biology techniques, the resistance genes found in these 
highly resistant ``superbugs'' can be readily introduced into 
bioweapons such as anthrax or tularemia. Specific to NIAID research 
funding for antibacterial resistance and antibacterial discovery 
research, this year IDSA testified in support of a substantial funding 
increase in these areas for fiscal year 2011 to a total of $500 
million. Current NIAID funding levels in these areas are extremely 
limited in IDSA's view and do not match the threats we face from 
antibacterial-resistant infections.
    Moreover, to further strengthen the countermeasures pipeline, we 
must invest in appropriate infrastructure for clinical trials. Such 
clinical trials infrastructure should be flexible and agile, with the 
ability to rapidly respond to new or re-emerging infections as they 
arise. Further, it must balance both pediatric and adult unmet 
infectious diseases needs. We are gratified to see NIAID taking steps 
to achieve part of this goal, as NIAID is broadening its AIDS Clinical 
Trials Group (ACTG) to expand its tuberculosis and, likely, its 
hepatitis C clinical research portfolios. Earlier this year, IDSA urged 
NIAID to build clinical trials infrastructure in areas beyond HIV/AIDS 
including to address serious bacterial, viral (particularly influenza), 
and fungal infections. The creation of an NIAID-funded in-patient 
clinical trials network in these areas will help to create an 
environment supportive of high-quality research, incorporating 
experienced investigators and study sites, robust statistical support, 
specialized laboratories (e.g., pharmacokinetics, immunology) and 
organizational structures to support clinical trials. Such additional 
clinical trials infrastructure could contribute substantially to the 
critical need for advancements in the diagnosis and treatment of drug-
resistant bacterial infections, pandemic and seasonal influenza, and 
other serious infections. Furthermore, the clinical trial 
infrastructure we have proposed fits squarely within and is supportive 
of HHS' medical countermeasure review effort. IDSA believes such 
additional infrastructure is urgently needed.
    The global H1N1 pandemic is a striking reminder of the importance 
of making sustained investments in research as well as public health 
infrastructure. Investments made over the past several years in 
surveillance, vaccine capacity and preparedness clearly limited the 
impact of the H1N1 pandemic. However, in other areas the pandemic 
showed our continued vulnerabilities. These include early international 
detection, and rapid production and distribution of vaccines, and 
antivirals that are appropriate for critically ill patients. The threat 
of another pandemic remains. The Nation's public health system must 
maintain robust disease surveillance, epidemiologic investigation, 
education and outreach, and communications capacity.
Strengthening Leadership, Coordination, and Management Structure
    In 2007, IDSA called for strengthened leadership and collaboration 
in influenza preparedness. We called for HHS and the Federal Government 
to clarify lines of authority and key responsibilities, involve 
technical experts and stakeholders, issue and update national standards 
for planning, and continue to lead international collaborative efforts 
related to pandemic preparedness. HHS responded and many improvements 
were considered and implemented. The PCAST report recommends that the 
administration further strengthen its management structure by vesting 
authority with the ASPR at HHS to coordinate and task component 
agencies at HHS with supporting and implementing the influenza vaccine 
recommendations. In addition, it recommends that HHS create a small 
advisory committee comprised of representatives from the biotechnology, 
pharmaceutical and investment communities, to guide the HHS's 
engagement with industry. This coincides with the recommendation in 
HHS's end-to-end medical countermeasure review that changes are needed 
in how the enterprise is managed to greatly strengthen its 
decisionmaking. The review suggests that HHS identify a leader who 
would work with program leaders and managers across the span of medical 
countermeasure development activities as well as with commercial 
partners and other key stakeholders. The congruence of these three 
recommendations emphasizes the critical role of integrated and 
coordinated planning between all levels of government in pandemic 
preparedness and medical countermeasure development.
    Having the necessary infrastructure in place to both monitor and 
respond to current and emerging antimicrobial-resistant infections also 
will play a crucial role in ensuring that we are protecting the health 
and safety of our citizens. Congress began to address this need several 
years ago when it passed legislation that became section 319E, 
``Combating Antimicrobial Resistance'' of the Public Health Service 
Act. This law directed the Secretary to establish an Antimicrobial 
Resistance Task Force to coordinate Federal programs relating to 
antimicrobial resistance. This Task Force developed the Public Health 
Service Action Plan to Combat Antimicrobial Resistance, published in 
2001, which has not been sufficiently funded. Comprehensive legislation 
introduced in the Senate during the last Congress and in the House of 
Representatives in each of the last two Congresses, the Strategies to 
Address Antimicrobial Resistance (STAAR) Act (H.R. 2400 in the 111th 
Congress), will advance the key elements in the Federal Action Plan and 
authorize adequate funding for these strategies. The STAAR Act 
strengthens existing efforts by establishing within HHS an 
Antimicrobial Resistance Office (ARO). The director of this new office 
also will serve as the director of the existing interagency task force 
to facilitate the coordination of activities. The legislation also 
would establish a Public Health Antimicrobial Advisory Board comprised 
of infectious diseases and public health experts who will provide much-
needed advice to the ARO director and interagency task force.
    Finally, the bill, when enacted and sufficiently funded, will 
strengthen existing surveillance, data collection, and research 
activities as a means to reduce the inappropriate use of 
antimicrobials, develop and test new interventions to limit the spread 
of resistant organisms, and create new tools to detect, prevent, and 
treat drug-resistant ``bad bugs.''
Conclusion
    It is easy to dismiss hyperbolic news reports because of 
sensationalism and inaccuracies, but the danger posed to the United 
States by biological threats, including pandemic influenza, biologic 
weapons and emerging infections, including antimicrobial-resistant 
infections, is very real and very great. Continued thoughtful 
investment in science, filling the pipeline, evaluating and licensing 
countermeasures and efficient management of the enterprise will provide 
Americans with the protection they expect and deserve. IDSA stands 
ready to assist this subcommittee and the Federal Government in any way 
that we can, and we are grateful for this opportunity to express our 
views.
    Thank you.

    Senator Harkin. Thank you again, Dr. Pavia.
    And thank all of you for your testimonies, and for your 
work in this field, and your leadership in this field.
    Colonel Larsen, is anthrax the major threat that we have 
that we should be worried about with regard to bioterrorism? Is 
it anthrax, or is it something maybe we don't know about?
    Colonel Larsen. That's a very good question. It's very 
difficult to answer. I worry about anthrax. It's the only one 
that's really persistent.
    Senator Harkin. Because what you just told me----
    Colonel Larsen. We're going to have a hard time cleaning it 
up. We don't know how to----
    Senator Harkin [continuing]. About four decades, then----
    Colonel Larsen. We don't know how to do it.
    Senator Harkin. Yes.
    Colonel Larsen. It's deadly. But, it's not contagious. You 
know, Eric may tell you smallpox is the worst one, because--
I've run exercises that--with Senator Nunn, several years ago, 
looking at smallpox. The fact that it's contagious, we're a 
highly mobile society, unvaccinated; that is.
    April, I was up in J. Craig Ventner Institute, and they 
were showing me some of the amazing things they were doing up 
there just a month before they announced that--you know, a new 
organism that had a computer for a parent. I'm not worried 
about people in caves doing that now. Those are the best 
scientists in the world at the best laboratory. But, 5 years 
from now? And the decisions you're going to make, in this next 
year, are going to tell us what kind of defense we have in 5 
years. So, I would feel--I would sleep better tonight if I know 
we were ready for 1960-style bio-attacks, which is anthrax. Or 
plague.
    Senator Harkin. You can see that--obviously, the problem 
that confronts us is, there are a lot of threats out there. 
And, you know, you can't have 100 percent protection against 
everything. I mean, you just--it's impossible. So, we have to 
sort of think about what are the priority areas, knowing full 
well that we can't guarantee absolute, 100-percent protection 
against anything. But, we can try to lessen the possibility of 
a bioterrorist attack. We can lessen that, but we can't 
completely do away with it. And then we can do what we can to 
build up our responses to it. That's what you're talking about: 
how we respond to that.
    Colonel Larsen. I'll go back to what I call my bible, what 
Dr. Josh Lederberg, Nobel Prize winner, was talking about, 
``Bug to Drug in 24 Hours.'' When he wrote that, in 2001, that 
was science fiction. That does not have to remain science 
fiction.
    You know, when H1N1 was discovered in southern California, 
within 2 weeks they did genetic mapping and had an antiviral 
that was better than Tamiflu. In 2 weeks. That's a lot of 
progress we've made in the last decade.
    So, we can't build vaccines for everything that's out 
there, you're absolutely right. But, we've got to figure out 
how to respond quickly, and make vaccines and therapeutics a 
lot faster, which is why--the one little statement I left out 
here is, when it comes to national security, today the FDA, 
NIH, and BARDA are just as important as DOD and the 
intelligence community. And we need to understand that, and 
fund them appropriately.
    Senator Harkin. Yes. I----
    Colonel Larsen. Because the funding you're going to approve 
now is what kind of defense my kids and grandkids are going to 
have 5, 10 years from now, sir.
    Senator Harkin. Well, I agree with that. I--you know, we've 
tried to get BARDA going, and now we've got this. And I'm still 
wrestling with who's in charge.
    Now--you said that, too, but who do you think should be in 
charge?
    Colonel Larsen. I'll give you two answers. Because I work 
very closely with Senator Graham and Talent. They wrote a 
letter to President Obama, and they said, ``This is so 
important that the Vice President of the United States should 
be in charge of all WMD activities here.''
    I mentioned that in a hearing at the Judiciary Committee 
last month, and Senator Kyl said, ``Well, you know, the Vice 
President's a pretty busy guy.''
    I said, ``I know that, but tell me one thing more important 
than defending America against weapons of mass destruction.''
    He's the only person that can look--because there are so 
many Cabinet Secretaries involved in this enterprise of 
biodefense--he's the only person in this town--other than the 
President, and he is kind of busy--he's the only person that 
can look at Cabinet Secretaries and say, ``Do this,'' and they 
say, ``Yes, sir.'' Now, that's going a long way. He'd need more 
of a staff. That's Senator Graham and Senator Talent's answer, 
I thought I'd give you that, because they've written that 
several times.
    I would just like to see a special assistant for biodefense 
in the White House. We had that in the Clinton administration, 
we had that in the Bush administration. We don't have that 
today. There is no special assistant to the President for 
biodefense. That would be a good start. I'd be happy with that. 
Somebody to coordinate that interagency community.
    So, somewhere between Senator Graham and Senator Talent 
saying the Vice President, and my recommendation is at least a 
special assistant to the President.
    Senator Harkin. And was it special assistant for 
bioterrorism?
    Colonel Larsen. For biodefense, yes, sir.
    Senator Harkin. Oh, biodefense.
    Colonel Larsen. Yes, sir. That was Dr. Ken Bernard, back in 
the Clinton administration; Dr. Bob Kadlec, in the Bush 
administration. That position doesn't exist today.
    Senator Harkin. Okay.
    For all three of you, I have been in this subcommittee 
personally involved in trying to really promote cell-based and 
recombinant-based vaccine production. Well, I get frustrated at 
the slow pace of this, but I think things--they do take time. 
I'll just ask you. How do you feel--all three of you--feel 
about the state of our--right now, and where we are, in terms 
of moving to cell-based and recombinant-based vaccine 
production? Are we dragging our heels? Are we on track, sort 
of? Could we be faster? How about this idea that cell-based are 
licensed in Europe but not in the United States?
    So, Dr. Rose, go ahead.
    Dr. Rose. Yes. Sure. I think there's a disconnect between 
the pace of advancement of the technology, which is rapid, and 
the regulatory response to that technology, which I think has 
been relatively slow. And I think that pace is quickening.
    I visited a company in Israel, earlier this year, that has 
portable, disposable bioreactors, using carrot cells and 
tobacco cells, where they're making biological drugs in these 
kinds of incubators, at cost that's about one-tenth the 
production costs of similar agents made in mammalian cells.
    The particular advantage, too, is that mammalian viruses, 
animal viruses, don't contaminate vegetable cells. So, there's 
a safety advantage to it. But, when the regulators look at 
this, they still look at it from the perspective of safety 
issues with regard to animal cells.
    And the other issue is just with regard to safety, the 
necessary clinical trials. Protein Sciences firm was alluded to 
earlier by Secretary Sebelius. They've developed an insect-
cell-based flu vaccine that actually was rejected by a panel 
when it was presented for use in seasonal flu, on the argument 
that the several thousand patients in which it had been tested, 
without a safety problem, was just simply not enough to reach 
that conclusion. And I think--you know, licensure there, I 
think, arguably, would have sped up, for the next flu pandemic, 
the availability of the insect cell base, because it would have 
allowed it to establish itself that much earlier, commercially.
    Senator Harkin. Dr. Pavia?
    Dr. Pavia. Yes. So, I would agree with the points that Dr. 
Rose made about regulatory and clinical trials being a holdup. 
There's also scientific hurdles that emerge. One recombinant 
technology or another may sound terrific when it's first 
demonstrated as a proof of concept. But, attempts to scale up 
sometimes lead to antigen that doesn't work as well, difficulty 
with contamination, so that when we go after one candidate, it 
doesn't always deliver on the promise. Just like in drugs, 
there's a high failure rate.
    The other issues that we haven't really talked about are 
the economics. Influenza vaccine, while not perfect, and slow 
for seasonal use, is produced relatively efficiently. It's 
inexpensive. The capital investment to bring some of these new 
technologies to market is very large. The cost of a dose of 
vaccine with the new technologies is going to be higher. And 
the incentive hasn't always been there to bring out a somewhat 
improved influenza vaccine that's going to cost more, when the 
demand isn't clear, much as we need it for more rapid response 
and for pandemic capacity.
    Senator Harkin. Colonel Larsen.
    Colonel Larsen. Sir, you've heard from two scientists. All 
I can say is, the chief scientist at the WMD Commission last 
October was 8 months pregnant, and in the State of Maryland, 
she could not get an H1N1 vaccine, even though she was in the 
highest risk group. So, from my perspective, we are not where 
we need to be, sir.
    Senator Harkin. Why aren't they licensed here? I'm sorry, I 
should--why--what's the problem with licensure here? Someone--
--
    Dr. Pavia. One would hear, you know, this perhaps more 
clearly from the FDA, but when you produce a new vaccine in a 
new technology, it usually requires a different way to measure 
its potency. There are unanswered questions about the best way 
to prove safety. And we just don't know what measures need to 
be taken to look at the safety of something produced in insect 
cells. And so, these regulatory hurdles in the United States 
are set higher, perhaps for good reasons. But, FDA has not been 
able to respond to these as quickly as they should, and in 
part, as was pointed out in Secretary Sebelius's review, they 
lack some of the scientific basis for making these decisions 
right now.
    Senator Harkin. I'll think about that.
    Senator Cochran.
    Senator Cochran. Mr. Rose, in your testimony you mention 
that the Alliance for Biosecurity has been recommending to the 
ASPR to improve predictability and assure availability of 
funding for the development of MCM. What would be the impact of 
the successful development of such a--an entity if a stable 
funding stream is not provided by the Federal Government?
    Dr. Rose. Right now, there's no question that the free 
market is not enough of an incentive, or a funder, provider of 
either capital for starting up, or funds for advanced 
development, for companies to advance products in this space. I 
think BARDA is a splendid and very effective addition, but 
getting it started--it's not easy to spend $400 million a year 
on advanced development, and do it wisely. But, the--BARDA has 
a terrific leader, the size of the agency has grown 
exponentially in just the last few years, and the size of its 
research portfolio has increased dramatically.
    I think you shouldn't underestimate the quality of the work 
that you've already done to put this in motion. But, the nature 
of this is such that making a new antiviral drug or a new 
vaccine is not something that happens on a timeframe of weeks 
and even years. It's a multiyear process that requires the 
underlying science to be handled, the creation of new chemical 
entities--be they proteins, vaccines, small molecules, and the 
like--that target new targets that are abundant now, that have 
been identified with basic research at institutes like the 
NIAID. Then it requires setting up a manufacturing capability 
and clinical trials to document effectiveness, or not. And in 
the case of agents against things like smallpox and anthrax, 
you can't do human efficacy testing, because it's not ethical 
and it's not practical.
    So, it is very, very complicated, complex, long-leadtime 
work. And you've already, I think, had the good judgment to 
fund it. I think, repeatedly, we see that people want to pull 
the plug, thinking there's something wrong with this process 
because you're not seeing, you know, drugs for Ebola, drugs for 
some of the hemorrhagic fevers, and some of the newer vaccines, 
that you want to see. But, they're coming. And they're a lot 
further along than they were just a couple of years ago, 
because of this mechanism. And, if anything, I'd say, stay the 
course in that regard.
    Senator Cochran. Thank you very much for that analysis.
    Dr. Pavia, in your statement you mentioned the use of 
pandemic vaccine in a widespread way should be the central 
strategy, as I understood, it for the protection of human 
health during a pandemic. Do you think the Federal Government 
needs to be the lead on this, or should we create some other 
body to be in charge?
    Dr. Pavia. Senator, I think that--it's very clear that, in 
a severe pandemic, we would need to be able to vaccinate 
everyone in a rapid fashion, and that would require a very 
large manufacturing capacity, as well as the platforms, the new 
techniques that would produce the vaccine quickly enough. I 
don't think that, at present, market forces will either deliver 
a manufacturing capacity that would make 300 to 600 million 
doses available a year, nor is it clear that it--that, all by 
themselves, they will allow the development of these new 
technologies. So, I think there's a vital role that the Federal 
Government has to play in facilitating both the science that 
will allow new products to be developed, and then nurturing 
them along.
    And, at the other end, I think the Federal Government has a 
role in providing enough manufacturing capacity on U.S. soil 
that we're not dependent on foreign manufacturers in the event 
of an emergency. And you've already made investments in this. 
And you should realize that the investment in egg-based 
manufacturing, in Pennsylvania, paid off in a large way. 
Without that, most of the domestic production that we had 
during this last pandemic wouldn't have occurred. And two of 
the foreign manufacturers with whom the Government contracted 
did not deliver the full amount of vaccine that they contracted 
for.
    Senator Cochran. Colonel Larsen, what is your reaction to 
that question?
    Colonel Larsen. Well, sir, I--you know, I'm pretty 
conservative on the fiscal side, being a fourth-generation 
Indiana corn farmer, and--but, I tell you, how many B-2 bombers 
would we have built if we had relied on the private-sector 
free-market economy? There are certain things that are so 
important for national security that that's what we have to do 
up here. And I think we have to rely on the talent and the 
brainpower and some of the creativity, but this is a national 
security issue. We would never have built a single B-2 bomber 
if we'd a just told those companies, ``Well, you can just go 
out and do it all on your own, and if you get something the FAA 
approves and the Air Force likes, then we'll give you your 
first dollar.''
    So, this--I mean, that's my point--this is a national 
security issue. That's how I see it.
    Senator Cochran. Well, thank you.
    I think this was a very worthwhile hearing, and your 
contributions have been very helpful. And I think we'll--I 
hope--have some influence as we go about making the decisions 
on priorities for funding and carrying out our duty to help 
protect the security interests and the health of our American 
public.
    Thank you.
    Senator Harkin. I would also say thank you to the panel, 
and again for all the work that you do and the leadership you 
provide.
    I was reading your testimonies last night, and then 
following you today, and then--I just--I can't help but think 
that it's not streamlined enough, in terms of who's in charge, 
and who does what, and who reports to whom, and who gets the 
finances to do this. Kind of a mishmash of things. And, quite 
frankly, I just--I think we're relying too much on the FDA.
    Now, before all the press runs out of here and say, 
``Harkin wants to diss the FDA''--we're about to pass a new 
food safety bill. It's got great bipartisan support. It's being 
held up a little bit, but it's going to pass. It's got industry 
support and consumer support, and everybody, and it's long 
overdue. We haven't done--had a food--a change in our 
inspection systems--it's been over three decades. But, that job 
goes--a lot of that goes--to FDA. It's not agriculture, it's 
FDA. So, we're going to ask them to do more.
    And we're not going to give them the funds or the personnel 
to do that. It's--you know, we'll give them a little bit, 
maybe, but not much. And it just seems to me, FDA's got so much 
on their plate that they really can't give this the kind of 
focus that it should.
    So, I'm just--I'm just thinking out loud here--is it FDA, 
or do we need to take something out of the FDA, something, 
maybe, out of DOD, that would be put under BARDA, and let BARDA 
be the one, the lead agency? At least that's what I thought the 
concept was of BARDA, that they would be the lead agency, 
working with scientists, manufacturers, people like the 
colonel, and others, that think about all these things. And 
then they would then have line-item authority, in terms of 
looking at licensure, which I'm--still don't understand why we 
can't get over that, why we can't have it faster--and doing 
some of the things that FDA now is charged with the 
responsibility of doing. Because FDA just--institutionally, I 
don't know that they can do it. It's just--because they've got 
so much to do, and they have other responsibilities, and mostly 
they're focused on drugs that we take; you know, drug 
development for new drugs for illnesses and things like that. 
This is not the biggest thing on their plate. But, in terms of 
the country itself, it's probably one of the biggest things 
we've got confronting us right now.
    So, I don't know, I just keep thinking that we need some 
restructuring here--not for restructuring's sake, but to make 
it more efficient, to make the line items--make the line 
authority better, and to speed up some of the things that we 
have to--we just have to speed these things up faster than what 
we're doing.
    So, I don't mean to just pick on FDA, but just recognizing 
the reality that FDA simply can't do all the things we're 
asking them to do. They just can't do it. And that's why, I 
thought, we set up BARDA.
    And so, I will be looking at that, both from the standpoint 
of this subcommittee, but also the authorizing committee, in 
the next reauthorization bill that comes up. When is that? Aha, 
next year.
    Senator Harkin. So, next year we'll look at the 
reauthorization, because I just--I think now's time to take 
stock and think, on the reauthorization, do we need to do some 
realignment here? And I'll take into consideration the Vice 
President. I never thought about that, the--maybe we don't 
think about the Vice President that much. I mean, you know--
what's that old saw about----
    Senator Cochran. I don't think I'm going to get into this.
    Senator Harkin [continuing]. Some guy said that--he had two 
sons--one went off to the South Pacific, and the other became 
Vice President, and neither was heard from again.
    Dr. Rose. Can I comment on the FDA?
    Senator Harkin. Yes.
    Dr. Rose. Because I think that your comments are thoughtful 
and important, and where we are now is not working. But, I 
think that the proposal that HHS is making now is a very 
substantive and important change that they're proposing, 
particularly the funding issue.
    I mean, what we see, in our interactions with the FDA, is, 
they're just quite short-handed, and their ability to respond 
to real-time science is hampered by their lack of manpower. 
This whole issue of regulatory science, I think, is an 
important issue, but I think there's also an issue of 
regulatory culture, because there are some things--particularly 
if you're using things like the animal rule--the level of proof 
of efficacy of a drug for a measure that you can't test in 
humans is just not going to be the same standard of certainty. 
That doesn't mean you can't make a judgment based on a body of 
evidence. But, I think there's an enormous reluctance to 
recognize the limitations and still act. And that culture 
change, I think, needs to be part of the FDA change, as well.
    But, delaying that, I think, would be a big problem.
    Senator Harkin. See, now, you and I are coming at this a 
little differently. You want to change the culture at FDA. And 
I've been here long enough to think I'm not certain we can do 
that. I mean, it's just--it's just very difficult to do that, 
okay? It's just difficult.
    Yes.
    Colonel Larsen. Sir, I think leadership is one way to do 
that. And I know Dr. Peggy Hamburg has said we've got to stop 
looking at things in black and white and the various shades of 
gray, which is some of the things that Eric's talking about. 
And so, I have great confidence in what she's saying.
    I am intrigued about your comments, though, because I went 
through this, sir, with Goldwater Nichols, which is one of the 
finest things that ever came out of the U.S. Senate, in terms 
of national security. And we didn't do away with the Army, Air 
Force, Navy, and Marines, but we did build a structure where 
they could work together far better.
    Senator Harkin. That's right.
    Colonel Larsen. And maybe what FDA needs the most is enough 
money to do the job properly. They're too small today. And you 
said that yourself, sir.
    Senator Harkin. That's absolutely true. For all that we put 
on their plate.
    Colonel Larsen. Yes.
    Dr. Rose. I've proposed that the FDA actually create a 
center for biodefense, like CDER, like CBER, where there's 
actual leadership----
    Senator Harkin. Okay.
    Dr. Rose [continuing]. At a higher level. Because our 
experience is that, when you bring these complicated products 
to the FDA, by and large the review is done--I'm a surgeon by 
trade--before it's done by the intern, instead of having senior 
leadership engaged in the actual review early on, looking at 
the raw data. And I think that having a full-blown center, 
where there's a leader that is responsible for signing off and 
guiding this, I think, could be very helpful.
    Senator Harkin. Now, that's a good idea. I like that. You 
got anything more on paper on that at all, any suggestions? Or 
are you just----
    Dr. Rose. We'll make sure you get it.
    Senator Harkin. Or are you just thinking about that right 
now?
    Dr. Rose. No--well, I've proposed at the IOM in February, 
but--there, it got shot down, but I hear it's getting some 
traction.
    I still think it's a good idea.
    Senator Harkin. I kind of like it. Yes, get me some stuff 
on that, will you?
    Dr. Rose. Yes.
    Senator Harkin. Get it to my staff?
    Dr. Rose. Sure.
    Senator Harkin. Before our reauthorization comes up.
    Dr. Rose. Sure.
    Senator Harkin. I'd like to start thinking about it now, 
and looking at it.
    Dr. Rose. Yes.
    Senator Harkin. Yes. Okay. Well, anything else anybody want 
to add to what we've said?
    If not----
    Yes.
    Dr. Pavia. No, I'd echo what Eric Rose suggested, in that 
you can't have the same people evaluating a drug for high blood 
pressure that are evaluating a crucial drug for biodefense or 
for an influenza pandemic, and yet, we need professionals to 
look at the safety and efficacy. I think it can be done within 
FDA, but not in the current structure. And I think Dr. Hamburg 
has some very good ideas for redoing this. But, it may require 
some statutory and legislative changes to let them do that and 
to apply appropriate standards that match the risk that we're 
facing.

                         CONCLUSION OF HEARING

    Senator Harkin. Well, thank you all very much. I thought 
this was very interesting and intellectually challenging, and 
you gave us some good ideas and suggestions, and we appreciate 
it very much.
    And I look forward to getting that from you, Dr. Rose, 
about this new structure.
    So, thank you all very much.
    Anything else? No.
    The subcommittee will stand recessed.
    [Whereupon, at 4:03 p.m., Thursday, September 29, the 
hearing was concluded, and the subcommittee was recessed, to 
reconvene subject to the call of the Chair.]

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