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[House Report 108-147]
[From the U.S. Government Publishing Office]

108th Congress                                            Rept. 108-147
                        HOUSE OF REPRESENTATIVES
 1st Session                                                     Part 2

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

 
                     PROJECT BIOSHIELD ACT OF 2003

                                _______
                                

                 June 12, 2003.--Ordered to be printed

                                _______
                                

  Mr. Tom Davis of Virginia, from the Committee on Government Reform, 
                        submitted the following

                              R E P O R T

                        [To accompany H.R. 2122]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on Government Reform, to whom was referred 
the bill (H.R. 2122) to enhance research, development, 
procurement, and use of biomedical countermeasures to respond 
to public health threats affecting national security, and for 
other purposes, having considered the same, report favorably 
thereon with an amendment and recommend that the bill as 
amended do pass.

                                CONTENTS

                                                                   Page
Committee Statement and Views....................................    15
Section-by-Section Analysis......................................    18
Explanation of Amendments........................................    22
Committee Consideration..........................................    22
Application of Law to the Legislative Branch.....................    23
Statement of Oversight Findings and Recommendations of the 
  Committee......................................................    23
Statement of General Performance Goals and Objectives............    23
Constitutional Authority Statement...............................    23
Unfunded Mandate Statement.......................................    23
Committee Estimate...............................................    23
Budget Authority and Congressional Budget Office Cost Estimate...    24
Changes in Existing Law Made by the Bill as Reported.............    33

    The amendment is as follows:
  Strike all after the enacting clause and insert the following:

SECTION 1. SHORT TITLE.

  This Act may be cited as the ``Project BioShield Act of 2003''.

SEC. 2. BIOMEDICAL COUNTERMEASURE RESEARCH AND DEVELOPMENT AUTHORITIES.

  (a) In General.--Part B of title III of the Public Health Service Act 
(42 U.S.C. 243 et seq.) is amended by inserting after section 319F the 
following section:

``SEC. 319F-1. AUTHORITY FOR USE OF CERTAIN PROCEDURES REGARDING 
                    BIOMEDICAL COUNTERMEASURE RESEARCH AND DEVELOPMENT 
                    ACTIVITIES.

  ``(a) In General.--
          ``(1) Authority.--In conducting and supporting research and 
        development activities regarding biomedical countermeasures 
        under section 319F(h), the Secretary may conduct and support 
        such activities in accordance with this section if the 
        activities concern qualified countermeasures.
          ``(2) Qualified countermeasure.--For purposes of this 
        section, the term `qualified countermeasure' means a priority 
        countermeasure (as defined in section 319F(h)) that affects 
        national security.
          ``(3) Interagency cooperation.--
                  ``(A) In general.--In carrying out activities under 
                this section, the Secretary is authorized, subject to 
                subparagraph (B), to enter into interagency agreements 
                and other collaborative undertakings with other 
                agencies of the United States Government.
                  ``(B) Limitation.--An agreement or undertaking under 
                this paragraph shall not authorize another agency to 
                exercise the authorities provided by this section.
          ``(4) Availability of facilities to the secretary.--In any 
        grant or cooperative agreement entered into under the authority 
        provided in this section with respect to a biocontainment 
        laboratory or other related or ancillary specialized research 
        facility that the Secretary determines necessary for the 
        purpose of performing, administering, and supporting qualified 
        countermeasure research and development, the Secretary may 
        provide that the facility that is the object of such grant or 
        cooperative agreement shall be available as needed to the 
        Secretary to respond to public health emergencies affecting 
        national security.
  ``(b) Expedited Procurement Authority.--
          ``(1) Increased simplified acquisition threshold for 
        biomedical countermeasure procurements.--
                  ``(A) In general.--For any procurement by the 
                Secretary of property or services for use (as 
                determined by the Secretary) in performing, 
                administering, or supporting qualified countermeasure 
                research or development activities under this section 
                that the Secretary determines necessary to respond to 
                pressing research and development needs under this 
                section, the amount specified in section 4(11) of the 
                Office of Federal Procurement Policy Act (41 U.S.C. 
                403(11)), as applicable pursuant to section 302A(a) of 
                the Federal Property and Administrative Services Act of 
                1949 (41 U.S.C. 252a(a)), shall be deemed to be 
                $25,000,000 in the administration, with respect to such 
                procurement, of--
                          ``(i) section 303(g)(1)(A) of the Federal 
                        Property and Administrative Services Act of 
                        1949 (41 U.S.C. 253(g)(1)(A)) and its 
                        implementing regulations; and
                          ``(ii) section 302A(b) of such Act (41 U.S.C. 
                        252a(b)) and its implementing regulations.
                  ``(B) Application of certain provisions.--
                Notwithstanding subparagraph (A) and the provision of 
                law and regulations referred to in such subparagraph, 
                each of the following provisions shall apply to 
                procurements described in this paragraph to the same 
                extent that such provisions would apply to such 
                procurements in the absence of subparagraph (A):
                          ``(i) Chapter 37 of title 40, United States 
                        Code (relating to contract work hours and 
                        safety standards).
                          ``(ii) Subsections (a) and (b) of section 7 
                        of the Anti-Kickback Act of 1986 (41 U.S.C. 
                        57(a) and (b)).
                          ``(iii) Section 304C of the Federal Property 
                        and Administrative Services Act of 1949 (41 
                        U.S.C. 254d) (relating to the examination of 
                        contractor records).
                  ``(C) Internal controls to be instituted.--The 
                Secretary shall institute appropriate internal controls 
                for procurements that are under this paragraph, 
                including requirements with regard to documenting the 
                justification for use of the authority in this 
                paragraph.
          ``(2) Other than full and open competition.--(A) In using the 
        authority provided in section 303(c)(1) of title III of the 
        Federal Property and Administrative Services Act of 1949 (41 
        U.S.C. 253(c)(1)) to use procedures other than competitive 
        procedures in the case of a procurement described in paragraph 
        (1) of this subsection, the phrase `available from only one 
        responsible source' in such section 303(c)(1) shall be deemed 
        to mean `available from only one responsible source or only 
        from a limited number of responsible sources'.
          ``(B) The authority under subparagraph (A) is in addition to 
        any other authority to use procedures other than competitive 
        procedures.
          ``(C) The Secretary shall implement this paragraph in 
        accordance with applicable government-wide regulations, 
        including requirements that offers be solicited from as many 
        potential sources as is practicable under the circumstances, 
        that required notices be published, and that submitted offers 
        be considered.
          ``(3) Increased micropurchase threshold.--
                  ``(A) In general.--For a procurement described by 
                paragraph (1), the amount specified in subsections (c), 
                (d), and (f) of section 32 of the Office of Federal 
                Procurement Policy Act (41 U.S.C. 428) shall be deemed 
                to be $15,000 in the administration of that section 
                with respect to such procurement.
                  ``(B) Internal controls to be instituted.--The 
                Secretary shall institute appropriate internal controls 
                for purchases that are under this paragraph and that 
                are greater than $2,500.
                  ``(C) Exception to preference for purchase card 
                mechanism.--No provision of law establishing a 
                preference for using a Government purchase card method 
                for purchases shall apply to purchases that are under 
                this paragraph and that are greater than $2,500.
  ``(c) Authority To Expedite Peer Review.--
          ``(1) In general.--The Secretary may, as the Secretary 
        determines necessary to respond to pressing qualified 
        countermeasure research and development needs under this 
        section, employ such expedited peer review procedures 
        (including consultation with appropriate scientific experts) as 
        the Secretary, in consultation with the Director of NIH, deems 
        appropriate to obtain assessment of scientific and technical 
        merit and likely contribution to the field of qualified 
        countermeasure research, in place of the peer review and 
        advisory council review procedures that would be required under 
        sections 301(a)(3), 405(b)(1)(B), 405(b)(2), 406(a)(3)(A), 492, 
        and 494, as applicable to a grant, contract, or cooperative 
        agreement--
                  ``(A) that is for performing, administering, or 
                supporting qualified countermeasure research and 
                development activities; and
                  ``(B) the amount of which is not greater than 
                $1,500,000.
          ``(2) Subsequent phases of research.--The Secretary's 
        determination of whether to employ expedited peer review with 
        respect to subsequent phases of a research grant or cooperative 
        agreement under this section shall be determined without regard 
        to the peer review procedures used for any prior peer review of 
        that same grant or cooperative agreement.
  ``(d) Authority for Personal Services Contracts.--
          ``(1) In general.--For the purpose of performing, 
        administering, and supporting qualified countermeasure research 
        and development activities, the Secretary may, as the Secretary 
        determines necessary to respond to pressing qualified 
        countermeasure research and development needs under this 
        section, obtain by contract (in accordance with section 3109 of 
        title 5, United States Code, but without regard to the 
        limitations in such section on the period of service and on 
        pay) the personal services of experts or consultants who have 
        scientific or other professional qualifications, except that in 
        no case shall the compensation provided to any such expert or 
        consultant exceed the daily equivalent of the annual rate of 
        compensation for the President.
          ``(2) Federal tort claims act coverage.--
                  ``(A) In general.--A person carrying out a contract 
                under paragraph (1), and an officer, employee, or 
                governing board member of such person, shall be deemed 
                to be an employee of the Department of Health and Human 
                Services for purposes of claims under sections 1346(b) 
                and 2672 of title 28, United States Code, for money 
                damages for personal injury, including death, resulting 
                from performance of functions under such contract.
                  ``(B) Exclusivity of remedy.--The remedy provided by 
                subparagraph (A) shall be exclusive of any other civil 
                action or proceeding by reason of the same subject 
                matter against the person, officer, employee, or 
                governing board member.
          ``(3) Internal controls to be instituted.--
                  ``(A) In general.--The Secretary shall institute 
                appropriate internal controls for contracts under this 
                subsection, including procedures for the Secretary to 
                make a determination of whether a person, or an 
                officer, employee, or governing board member of a 
                person, is deemed to be an employee of the Department 
                of Health and Human Services pursuant to paragraph (2).
                  ``(B) Determination of employee status to be final.--
                A determination by the Secretary under subparagraph (A) 
                that a person, or an officer, employee, or governing 
                board member of a person, is or is not deemed to be an 
                employee of the Department of Health and Human Services 
                shall be final and binding on the Secretary and the 
                Attorney General and other parties to any civil action 
                or proceeding.
          ``(4) Number of personal services contracts limited.--The 
        number of experts and consultants whose personal services are 
        obtained under paragraph (1) shall not exceed 30 at any time.
  ``(e) Streamlined Personnel Authority.--
          ``(1) In general.--In addition to any other personnel 
        authorities, the Secretary may, as the Secretary determines 
        necessary to respond to pressing qualified countermeasure 
        research and development needs under this section, without 
        regard to such provisions of title 5, United States Code, 
        governing appointments in the competitive service, and without 
        regard to the provisions of chapter 51 and subchapter III of 
        chapter 53 of such title relating to classification and General 
        Schedule pay rates, appoint professional and technical 
        employees, not to exceed 30 such employees at any time, to 
        positions in the National Institutes of Health to perform, 
        administer, or support qualified countermeasure research and 
        development activities in carrying out this section.
          ``(2) Internal controls to be instituted.--The Secretary 
        shall institute appropriate internal controls for appointments 
        under this subsection.
  ``(f) Actions Committed to Agency Discretion.--Actions by the 
Secretary under the authority of this section are committed to agency 
discretion.
  ``(g) Effect on Right To File Protest.--Nothing in this section shall 
affect the right of an interested party to file a protest with the 
contracting agency, to file a protest with the Comptroller General 
under subchapter V of chapter 35 of title 31, United States Code, or to 
file an action in the United States Court of Federal Claims under 
section 1491(b) of title 28, United States Code.''.
  (b) Technical Amendment.--Section 481A of the Public Health Service 
Act (42 U.S.C. 287a-2) is amended--
          (1) in subsection (a)(1), by inserting ``or the Director of 
        the National Institute of Allergy and Infectious Diseases'' 
        after ``Director of the Center'';
          (2) in subsection (c)--
                  (A) in paragraph (1), by inserting ``or the Director 
                of the National Institute of Allergy and Infectious 
                Diseases'' after ``Director of the Center''; and
                  (B) in paragraph (2), in the matter preceding 
                subparagraph (A), by striking ``subsection (i)'' and 
                inserting ``subsection (i)(1)'';
          (3) in subsection (d), by inserting ``or the Director of the 
        National Institute of Allergy and Infectious Diseases'' after 
        ``Director of the Center'';
          (4) in subsection (e)--
                  (A) in paragraph (1)--
                          (i) in the matter preceding subparagraph (A), 
                        by inserting ``or the Director of the National 
                        Institute of Allergy and Infectious Diseases'' 
                        after ``Director of the Center'';
                          (ii) in subparagraph (A), by inserting ``(or, 
                        in the case of the Institute, 75 percent)'' 
                        after ``50 percent''; and
                          (iii) in subparagraph (B), by inserting 
                        ``(or, in the case of the Institute, 75 
                        percent)'' after ``40 percent'';
                  (B) in paragraph (2), by inserting ``or the Director 
                of the National Institute of Allergy and Infectious 
                Diseases'' after ``Director of the Center''; and
                  (C) in paragraph (4), by inserting ``of the Center or 
                the Director of the National Institute of Allergy and 
                Infectious Diseases'' after ``Director'';
          (5) in subsection (f)--
                  (A) in paragraph (1), by inserting ``in the case of 
                an award by the Director of the Center,'' before ``the 
                applicant''; and
                  (B) in paragraph (2), by inserting ``of the Center or 
                the Director of the National Institute of Allergy and 
                Infectious Diseases'' after ``Director''; and
          (6) in subsection (i)--
                  (A) by striking ``Appropriations.--For the purpose of 
                carrying out this section,'' and inserting the 
                following: ``Appropriations.--
          ``(1) Center.--For the purpose of carrying out this section 
        with respect to the Center,''; and
                  (B) by adding at the end the following:
          ``(2) National institute of allergy and infectious 
        diseases.--For the purpose of carrying out this section with 
        respect to the National Institute of Allergy and Infectious 
        Diseases, there are authorized to be appropriated such sums as 
        may be necessary for fiscal year 2003.''.

SEC. 3. BIOMEDICAL COUNTERMEASURES PROCUREMENT.

  (a) In General.--Part B of title III of the Public Health Service 
Act, as amended by section 2 of this Act, is amended by inserting after 
section 319F-1 the following section:

``SEC. 319F-2. STRATEGIC NATIONAL STOCKPILE.

  ``(a) Strategic National Stockpile.--
          ``(1) In general.--The Secretary of Homeland Security 
        (referred to in this section as the `Homeland Security 
        Secretary'), in coordination with the Secretary and the 
        Secretary of Veterans Affairs, shall maintain a stockpile or 
        stockpiles of drugs, vaccines and other biological products, 
        medical devices, and other supplies in such numbers, types, and 
        amounts as are determined by the Secretary to be appropriate 
        and practicable, taking into account other available sources, 
        to provide for the emergency health security of the United 
        States, including the emergency health security of children and 
        other vulnerable populations, in the event of a bioterrorist 
        attack or other public health emergency.
          ``(2) Procedures.--The Secretary, in managing the stockpile 
        under paragraph (1), shall--
                  ``(A) consult with the working group under section 
                319F(a);
                  ``(B) ensure that adequate procedures are followed 
                with respect to such stockpile for inventory management 
                and accounting, and for the physical security of the 
                stockpile;
                  ``(C) in consultation with Federal, State, and local 
                officials, take into consideration the timing and 
                location of special events;
                  ``(D) review and revise, as appropriate, the contents 
                of the stockpile on a regular basis to ensure that 
                emerging threats, advanced technologies, and new 
                countermeasures are adequately considered;
                  ``(E) devise plans for the effective and timely 
                supply-chain management of the stockpile, in 
                consultation with appropriate Federal, State and local 
                agencies, and the public and private health care 
                infrastructure; and
                  ``(F) ensure the adequate physical security of the 
                stockpile.
  ``(b) Smallpox Vaccine Development.--
          ``(1) In general.--The Secretary shall award contracts, enter 
        into cooperative agreements, or carry out such other activities 
        as may reasonably be required in order to ensure that the 
        stockpile under subsection (a) includes an amount of vaccine 
        against smallpox as determined by such Secretary to be 
        sufficient to meet the health security needs of the United 
        States.
          ``(2) Rule of construction.--Nothing in this section shall be 
        construed to limit the private distribution, purchase, or sale 
        of vaccines from sources other than the stockpile described in 
        subsection (a).
  ``(c) Additional Authority Regarding Procurement of Certain 
Biomedical Countermeasures; Availability of Special Reserve Fund.--
          ``(1) In general.--
                  ``(A) Use of fund.--A security countermeasure may, in 
                accordance with this subsection, be procured with 
                amounts in the special reserve fund under paragraph 
                (10).
                  ``(B) Security countermeasure.--For purposes of this 
                subsection, the term `security countermeasure' means a 
                priority countermeasure (as defined in section 
                319F(h))--
                          ``(i) that affects national security;
                          ``(ii) that is determined under paragraph 
                        (2)(B)(ii) to be a necessary countermeasure; 
                        and
                          ``(iii)(I) that is approved or cleared under 
                        chapter V of the Federal Food, Drug, and 
                        Cosmetic Act, or licensed under section 351 of 
                        this Act, for use as a countermeasure to a 
                        chemical, biological, radiological, or nuclear 
                        agent identified as a material threat under 
                        paragraph (2)(A)(ii); or
                          ``(II) for which the Secretary determines 
                        that sufficient and satisfactory clinical 
                        experience or research data (including data, if 
                        available, from pre-clinical and clinical 
                        trials) support a reasonable conclusion that 
                        the countermeasure will qualify for approval or 
                        licensing after the date of a determination 
                        under paragraph (5).
          ``(2) Determination of material threats.--
                  ``(A) Material threat.--The Homeland Security 
                Secretary, in consultation with the heads of other 
                agencies as appropriate, shall on an ongoing basis--
                          ``(i) assess current and emerging threats of 
                        chemical, biological, radiological, and nuclear 
                        agents; and
                          ``(ii) determine which of such agents present 
                        a material threat against the United States 
                        population.
                  ``(B) Public health impact; necessary 
                countermeasures.--The Secretary shall on an ongoing 
                basis--
                          ``(i) assess the potential public health 
                        consequences of use against the United States 
                        population of agents identified under 
                        subparagraph (A)(ii); and
                          ``(ii) determine, on the basis of such 
                        assessment, the agents for which priority 
                        countermeasures are necessary to protect the 
                        public health from a material threat.
          ``(3) Assessment of availability and appropriateness of 
        countermeasures.--The Secretary, in consultation with the 
        Homeland Security Secretary, shall assess on an ongoing basis 
        the availability and appropriateness of specific 
        countermeasures to address specific threats identified under 
        paragraph (2).
          ``(4) Call for security countermeasures; commitment for 
        recommendation for procurement.--
                  ``(A) Proposal to the president.--If, pursuant to an 
                assessment under paragraph (3), the Homeland Security 
                Secretary and the Secretary make a determination that a 
                security countermeasure would be appropriate, such 
                Secretaries may jointly submit to the President a 
                proposal to--
                          ``(i) issue a call for the development of 
                        such security countermeasure; and
                          ``(ii) make a commitment that, upon the first 
                        development of such security countermeasure 
                        that meets the conditions for procurement under 
                        paragraph (5), the Secretaries will, based in 
                        part on information obtained pursuant to such 
                        call, make a recommendation under paragraph (6) 
                        that the special reserve fund under paragraph 
                        (10) be made available for the procurement of 
                        such security countermeasure.
                  ``(B) Countermeasure specifications.--The Homeland 
                Security Secretary and the Secretary shall, to the 
                extent practicable, include in the proposal under 
                subparagraph (A)--
                          ``(i) estimated quantity of purchase (in the 
                        form of number of doses or number of effective 
                        courses of treatments regardless of dosage 
                        form);
                          ``(ii) necessary measures of minimum safety 
                        and effectiveness;
                          ``(iii) estimated price for each dose or 
                        effective course of treatment regardless of 
                        dosage form; and
                          ``(iv) other information that may be 
                        necessary to encourage and facilitate research, 
                        development, and manufacture of the 
                        countermeasure or to provide specifications for 
                        the countermeasure.
                  ``(C) Presidential approval.--If the President 
                approves a proposal under subparagraph (A), the 
                Homeland Security Secretary and the Secretary shall 
                make known to persons who may respond to a call for the 
                security countermeasure involved--
                          ``(i) the call for the countermeasure;
                          ``(ii) specifications for the countermeasure 
                        under subparagraph (B); and
                          ``(iii) a commitment described in 
                        subparagraph (A)(ii).
          ``(5) Secretary's determination of countermeasures 
        appropriate for funding from special reserve fund.--
                  ``(A) In general.--The Secretary, in accordance with 
                the provisions of this paragraph, shall identify 
                specific security countermeasures that the Secretary 
                determines, in consultation with the Homeland Security 
                Secretary, to be appropriate for inclusion in the 
                stockpile under subsection (a) pursuant to procurements 
                made with amounts in the special reserve fund under 
                paragraph (10) (referred to in this subsection 
                individually as a `procurement under this subsection').
                  ``(B) Requirements.--In making a determination under 
                subparagraph (A) with respect to a security 
                countermeasure, the Secretary shall determine and 
                consider the following:
                          ``(i) The quantities of the product that will 
                        be needed to meet the needs of the stockpile.
                          ``(ii) The feasibility of production and 
                        delivery within five years of sufficient 
                        quantities of the product.
                          ``(iii) Whether there is a lack of a 
                        significant commercial market for the product 
                        at the time of procurement, other than as a 
                        security countermeasure.
          ``(6) Recommendation for president's approval.--
                  ``(A) Recommendation for procurement.--In the case of 
                a security countermeasure that the Secretary has, in 
                accordance with paragraphs (2), (3), and (5), 
                determined to be appropriate for procurement under this 
                subsection, the Homeland Security Secretary and the 
                Secretary shall jointly submit to the President, in 
                coordination with the Director of the Office of 
                Management and Budget, a recommendation that the 
                special reserve fund under paragraph (10) be made 
                available for the procurement of such countermeasure.
                  ``(B) Presidential approval.--The special reserve 
                fund under paragraph (10) is available for a 
                procurement of a security countermeasure only if the 
                President has approved a recommendation under 
                subparagraph (A) regarding the countermeasure.
                  ``(C) Notice to congress.--The Secretary and the 
                Homeland Security Secretary shall notify the Congress 
                of each decision of the President to approve a 
                recommendation under subparagraph (A). Such notice 
                shall include an explanation of the decision to make 
                available the special reserve fund under paragraph (10) 
                for procurement of such a countermeasure, including, 
                where available, the identification of the potential 
                supplier or suppliers of such countermeasure, and 
                whether other potential suppliers of the same or 
                similar countermeasures were considered and rejected 
                for procurement under this section and the reasons 
                therefor.
                  ``(D) Subsequent specific countermeasures.--
                Procurement under this subsection of a security 
                countermeasure for a particular purpose does not 
                preclude the subsequent procurement under this 
                subsection of any other security countermeasure for 
                such purpose if the Secretary has determined under 
                paragraph (5)(A) that such countermeasure is 
                appropriate for inclusion in the stockpile and if, as 
                determined by the Secretary, such countermeasure 
                provides improved safety or effectiveness, or for other 
                reasons enhances preparedness to respond to threats of 
                use of a biological, chemical, radiological, or nuclear 
                agent. Such a determination by the Secretary is 
                committed to agency discretion.
                  ``(E) Rule of construction.--Recommendations and 
                approvals under this paragraph apply solely to 
                determinations that the special reserve fund under 
                paragraph (10) will be made available for a procurement 
                of a security countermeasure, and not to the substance 
                of contracts for such procurement or other matters 
                relating to awards of such contracts.
          ``(7) Procurement.--
                  ``(A) In general.--For purposes of a procurement 
                under this subsection that is approved by the President 
                under paragraph (6), the Homeland Security Secretary 
                and the Secretary shall have responsibilities in 
                accordance with subparagraphs (B) and (C).
                  ``(B) Interagency agreements.--
                          ``(i) For procurement.--The Homeland Security 
                        Secretary shall enter into an agreement with 
                        the Secretary for procurement of a security 
                        countermeasure in accordance with the 
                        provisions of this paragraph. The special 
                        reserve fund under paragraph (10) shall be 
                        available for the Secretary's costs of such 
                        procurement, other than as provided in clause 
                        (ii).
                          ``(ii) For administrative costs.--The 
                        agreement entered into between the Homeland 
                        Security Secretary and the Secretary for 
                        managing the stockpile under subsection (a) 
                        shall provide for reimbursement of the 
                        Secretary's administrative costs relating to 
                        procurements under this subsection.
                  ``(C) Procurement.--
                          ``(i) In general.--The Secretary shall be 
                        responsible for--
                                  ``(I) arranging for procurement of a 
                                security countermeasure, including 
                                negotiating terms (including quantity, 
                                production schedule, and price) of, and 
                                entering into, contracts and 
                                cooperative agreements, and for 
                                carrying out such other activities as 
                                may reasonably be required, in 
                                accordance with the provisions of this 
                                subparagraph; and
                                  ``(II) promulgating regulations to 
                                implement clauses (v), (vi), and (vii), 
                                and any other provisions of this 
                                subsection.
                          ``(ii) Contract terms.--A contract for 
                        procurements under this subsection shall (or, 
                        as specified below, may) include the following 
                        terms:
                                  ``(I) Payment conditioned on 
                                substantial delivery.--The contract 
                                shall provide that no payment may be 
                                made until delivery has been made of a 
                                substantial portion (as determined by 
                                the Secretary) of the total number of 
                                units contracted for, except that, 
                                notwithstanding any other provision of 
                                law, the contract may provide that, if 
                                the Secretary determines (in the 
                                Secretary's discretion) that an advance 
                                payment is necessary to ensure success 
                                of a project, the Secretary may pay an 
                                amount, not to exceed 10 percent of the 
                                contract amount, in advance of 
                                delivery. The contract shall provide 
                                that such advance payment is required 
                                to be repaid if there is a failure to 
                                perform under the contract, except in 
                                special circumstances as determined by 
                                the Secretary on a contract by contract 
                                basis.
                                  ``(II) Contract duration.--The 
                                contract shall be for a period not to 
                                exceed five years, except that, in 
                                first awarding the contract, the 
                                Secretary may provide for a longer 
                                duration, not exceeding eight years, if 
                                the Secretary determines that 
                                complexities or other difficulties in 
                                performance under the contract justify 
                                such a period. The contract shall be 
                                renewable for additional periods, none 
                                of which shall exceed five years.
                                  ``(III) Storage by vendor.--The 
                                contract may provide that the vendor 
                                will provide storage for stocks of a 
                                product delivered to the ownership of 
                                the Federal Government under the 
                                contract, for such period and under 
                                such terms and conditions as the 
                                Secretary may specify, and in such case 
                                amounts from the special reserve fund 
                                under paragraph (10) shall be available 
                                for costs of shipping, handling, 
                                storage, and related costs for such 
                                product.
                          ``(iii) Availability of simplified 
                        acquisition procedures.--
                                  ``(I) In general.--If the Secretary 
                                determines that there is a pressing 
                                need for a procurement of a specific 
                                countermeasure, the amount of the 
                                procurement under this subsection shall 
                                be deemed to be below the threshold 
                                amount specified in section 4(11) of 
                                the Office of Federal Procurement 
                                Policy Act (41 U.S.C. 403(11)), for 
                                purposes of application to such 
                                procurement, pursuant to section 
                                302A(a) of the Federal Property and 
                                Administrative Services Act of 1949 (41 
                                U.S.C. 252a(a)), of--
                                          ``(aa) section 303(g)(1)(A) 
                                        of the Federal Property and 
                                        Administrative Services Act of 
                                        1949 (41 U.S.C. 253(g)(1)(A)) 
                                        and its implementing 
                                        regulations; and
                                          ``(bb) section 302A(b) of 
                                        such Act (41 U.S.C. 252a(b)) 
                                        and its implementing 
                                        regulations.
                                  ``(II) Application of certain 
                                provisions.--Notwithstanding subclause 
                                (I) and the provision of law and 
                                regulations referred to in such clause, 
                                each of the following provisions shall 
                                apply to procurements described in this 
                                clause to the same extent that such 
                                provisions would apply to such 
                                procurements in the absence of 
                                subclause (I):
                                          ``(aa) Chapter 37 of title 
                                        40, United States Code 
                                        (relating to contract work 
                                        hours and safety standards).
                                          ``(bb) Subsections (a) and 
                                        (b) of section 7 of the Anti-
                                        Kickback Act of 1986 (41 U.S.C. 
                                        57(a) and (b)).
                                          ``(cc) Section 304C of the 
                                        Federal Property and 
                                        Administrative Services Act of 
                                        1949 (41 U.S.C. 254d) (relating 
                                        to the examination of 
                                        contractor records).
                          ``(iv) Other than full and open 
                        competition.--(I) In using the authority 
                        provided in section 303(c)(1) of title III of 
                        the Federal Property and Administrative 
                        Services Act of 1949 (41 U.S.C. 253(c)(1)) to 
                        use procedures other than competitive 
                        procedures in the case of a procurement under 
                        this subsection, the phrase `available from 
                        only one responsible source' in such section 
                        303(c)(1) shall be deemed to mean `available 
                        from only one responsible source or only from a 
                        limited number of responsible sources'.
                          ``(II) The authority under subclause (I) is 
                        in addition to any other authority to use 
                        procedures other than competitive procedures.
                          ``(III) The Secretary shall implement this 
                        clause in accordance with applicable 
                        government-wide regulations, including 
                        requirements that offers be solicited from as 
                        many potential sources as is practicable under 
                        the circumstances, that required notices be 
                        published, and that submitted offers be 
                        considered.
                          ``(v) Premium provision in multiple award 
                        contracts.--
                                  ``(I) In general.--If, under this 
                                subsection, the Secretary enters into 
                                contracts with more than one vendor to 
                                procure a security countermeasure, such 
                                Secretary may, notwithstanding any 
                                other provision of law, include in each 
                                of such contracts a provision that--
                                          ``(aa) identifies an 
                                        increment of the total quantity 
                                        of security countermeasure 
                                        required, whether by percentage 
                                        or by numbers of units; and
                                          ``(bb) promises to pay one or 
                                        more specified premiums based 
                                        on the priority of such 
                                        vendors' production and 
                                        delivery of the increment 
                                        identified under item (aa), in 
                                        accordance with the terms and 
                                        conditions of the contract.
                                  ``(II) Determination of government's 
                                requirement not reviewable.--If the 
                                Secretary includes in each of a set of 
                                contracts a provision as described in 
                                subclause (I), such Secretary's 
                                determination of the total quantity of 
                                security countermeasure required, and 
                                any amendment of such determination, is 
                                committed to agency discretion.
                          ``(vi) Extension of closing date for receipt 
                        of proposals not reviewable.--A decision by the 
                        Secretary to extend the closing date for 
                        receipt of proposals for a procurement under 
                        this subsection is committed to agency 
                        discretion.
                          ``(vii) Limiting competition to sources 
                        responding to request for information.--In 
                        conducting a procurement under this subsection, 
                        the Secretary may exclude a source that has not 
                        responded to a request for information under 
                        section 303A(a)(1)(B) of the Federal Property 
                        and Administrative Services Act of 1949 (41 
                        U.S.C. 253a(a)(1)(B)) if such request has given 
                        notice that the Secretary may so exclude such a 
                        source.
          ``(8) Interagency cooperation.--
                  ``(A) In general.--In carrying out activities under 
                this section, the Homeland Security Secretary and the 
                Secretary are authorized, subject to subparagraph (B), 
                to enter into interagency agreements and other 
                collaborative undertakings with other agencies of the 
                United States Government.
                  ``(B) Limitation.--An agreement or undertaking under 
                this paragraph shall not authorize another agency to 
                exercise the authorities provided by this section to 
                the Homeland Security Secretary or to the Secretary.
          ``(9) Restrictions on use of funds.--Amounts in the special 
        reserve fund under paragraph (10) shall not be used to pay--
                  ``(A) costs for the purchase of vaccines under 
                procurement contracts entered into before the date of 
                the enactment of the Project BioShield Act of 2003; or
                  ``(B) administrative costs.
          ``(10) Special reserve fund.--For purposes of this 
        subsection, the term `special reserve fund' has the meaning 
        given such term in section 510 of the Homeland Security Act of 
        2002.
  ``(d) Disclosures.--No Federal agency shall disclose under section 
552, United States Code, any information identifying the location at 
which materials in the stockpile under subsection (a) are stored.
  ``(e) Definition.--For purposes of subsection (a), the term 
`stockpile' includes--
          ``(1) a physical accumulation (at one or more locations) of 
        the supplies described in subsection (a); or
          ``(2) a contractual agreement between the Homeland Security 
        Secretary and a vendor or vendors under which such vendor or 
        vendors agree to provide to such Secretary supplies described 
        in subsection (a).
  ``(f) Authorization of Appropriations.--
          ``(1) Strategic national stockpile.--For the purpose of 
        carrying out subsection (a), there are authorized to be 
        appropriated $640,000,000 for fiscal year 2002, and such sums 
        as may be necessary for each of fiscal years 2003 through 2006. 
        Such authorization is in addition to amounts in the special 
        reserve fund under subsection (c)(10).
          ``(2) Smallpox vaccine development.--For the purpose of 
        carrying out subsection (b), there are authorized to be 
        appropriated $509,000,000 for fiscal year 2002, and such sums 
        as may be necessary for each of fiscal years 2003 through 
        2006.''.
  (b) Amendment to Homeland Security Act of 2002.--Title V of the 
Homeland Security Act of 2002 (116 Stat. 2212; 6 U.S.C. 311 et seq.) is 
amended by adding at the end the following:

``SEC. 510. PROCUREMENT OF SECURITY COUNTERMEASURES FOR STRATEGIC 
                    NATIONAL STOCKPILE.

  ``(a) Authorization of Appropriations.--For procurement of security 
countermeasures under section 319F-2(c) of the Public Health Service 
Act (referred to in this section as the `security countermeasures 
program'), there is authorized to be appropriated up to $5,593,000,000 
for the fiscal years 2004 through 2013. Of the amounts appropriated 
under the preceding sentence, not to exceed $3,418,000,000 may be 
obligated during the fiscal years 2004 through 2008, of which not to 
exceed $890,000,000 may be obligated during fiscal year 2004.
  ``(b) Special Reserve Fund.--For purposes of the security 
countermeasures program, the term `special reserve fund' means the 
appropriations account established as a result of any appropriations 
made under subsection (a).
  ``(c) Availability.--
          ``(1) Duration of availability for obligation.--Subject to 
        paragraph (2), all amounts appropriated under subsection (a) 
        are available for obligation through the end of fiscal year 
        2013, provided that any portion of such amount that remains 
        unobligated for such purposes on the expiration of such term 
        shall be returned to the United States Treasury and shall not 
        be available for subsequent obligation for any purpose.
          ``(2) Initial availability for particular procurements.--
        Amounts appropriated under subsection (a) become available for 
        a procurement under the security countermeasures program only 
        upon the approval by the President of such availability for the 
        procurement in accordance with paragraph (6)(B) of such 
        program.''.
  (c) Conforming Amendments.--(1) Section 121 of the Public Health 
Security and Bioterrorism Preparedness and Response Act of 2002 (116 
Stat. 611; 42 U.S.C. 300hh-12) is repealed.
  (2) The item relating to section 121 in the table of contents 
(contained in section 1(b)) of such Act is repealed.
  (3) With respect to the program established under former section 121 
of such Act, the repeal of such section under paragraph (1) applies as 
a modification of the program in accordance with the amendment made by 
subsection (a) of this section, and not as the termination of the 
program and the establishment of a different program.

SEC. 4. AUTHORIZATION FOR MEDICAL PRODUCTS FOR USE IN EMERGENCIES.

  Subchapter E of chapter V of the Federal Food, Drug, and Cosmetic Act 
(21 U.S.C. 360bbb et seq.) is amended by adding at the end the 
following section:

``SEC. 564. AUTHORIZATION FOR MEDICAL PRODUCTS FOR USE IN EMERGENCIES.

  ``(a) In General.--
          ``(1) Emergency uses.--Notwithstanding sections 505, 510(k), 
        and 515 of this Act and section 351 of the Public Health 
        Service Act, and subject to the provisions of this section, the 
        Secretary may authorize the introduction into interstate 
        commerce, during the effective period of a declaration under 
        subsection (b), of a drug or device intended for use in an 
        actual or potential emergency (referred to in this section as 
        an `emergency use').
          ``(2) Approval status of product.--An authorization under 
        paragraph (1) may authorize an emergency use of a product 
        that--
                  ``(A) is not approved, licensed, or cleared for 
                commercial distribution under a provision of law 
                referred to in such paragraph (referred to in this 
                section as an `unapproved product'); or
                  ``(B) is approved, licensed, or cleared under such a 
                provision, but which use is not under such provision an 
                approved, licensed, or cleared use of the product 
                (referred to in this section as an `unapproved use of 
                an approved product').
          ``(3) Relation to other uses.--An emergency use authorized 
        under paragraph (1) for a product is in addition to any other 
        use that is authorized for the product under a provision of law 
        referred to in such paragraph.
          ``(4) Definitions.--For purposes of this section:
                  ``(A) The term `emergency use' has the meaning 
                indicated for such term in paragraph (1).
                  ``(B) The term `product' means a drug or device.
                  ``(C) The term `unapproved product' has the meaning 
                indicated for such term in paragraph (2)(A).
                  ``(D) The term `unapproved use of an approved 
                product' has the meaning indicated for such term in 
                paragraph (2)(B).
  ``(b) Declaration of Emergency.--
          ``(1) In general.--The Secretary may declare an emergency 
        justifying the authorization under this subsection for a 
        product on the basis of--
                  ``(A) a determination by the Secretary of Homeland 
                Security that there is a national emergency, or a 
                significant potential for a national emergency, 
                involving a heightened risk of attack with a specified 
                biological, chemical, radiological, or nuclear agent or 
                agents;
                  ``(B) a determination by the Secretary of Defense 
                that there is a military emergency, or a significant 
                potential for a military emergency, involving a 
                heightened risk to United States military forces of 
                attack with a biological, chemical, radiological, or 
                nuclear agent or agents; or
                  ``(C) a determination by the Secretary of a public 
                health emergency under section 319 of the Public Health 
                Service Act, affecting national security and involving 
                a specified biological, chemical, radiological, or 
                nuclear agent or agents, or a specified disease or 
                condition that may be attributable to such agent or 
                agents.
          ``(2) Termination of declaration.--
                  ``(A) In general.--A declaration under this 
                subsection shall terminate upon the earlier of--
                          ``(i) a determination by the Secretary, in 
                        consultation as appropriate with the Secretary 
                        of Homeland Security or the Secretary of 
                        Defense, that the circumstances described in 
                        paragraph (1) have ceased to exist; or
                          ``(ii) the expiration of the one-year period 
                        beginning on the date on which the declaration 
                        is made.
                  ``(B) Renewal.--Notwithstanding subparagraph (A), the 
                Secretary may renew a declaration under this 
                subsection, and this paragraph shall apply to any such 
                renewal.
          ``(3) Advance notice of termination.--In terminating a 
        declaration under this section, the Secretary shall provide 
        advance notice that the declaration will be terminated. The 
        period of advance notice shall be a period reasonably 
        determined to provide--
                  ``(A) in the case of an unapproved product, a 
                sufficient period for disposition of shipments of the 
                product, including the return of such shipments to the 
                manufacturer (in the case of a manufacturer that 
                chooses to have the shipments returned); and
                  ``(B) in the case of unapproved uses of approved 
                products, a sufficient period for the disposition of 
                any labeling that was provided with respect to the 
                emergency use involved.
          ``(4) Publication.--The Secretary shall promptly publish in 
        the Federal Register each declaration, determination, and 
        renewal under this subsection.
  ``(c) Criteria for Issuance of Authorization.--The Secretary may 
issue an authorization under this section with respect to the emergency 
use of a product only if, after consultation with the Director of the 
National Institutes of Health and the Director of the Centers for 
Disease Control and Prevention, to the extent feasible and appropriate 
given the circumstances of the emergency involved, the Secretary 
concludes--
          ``(1) that an agent specified in a declaration under 
        subsection (b) can cause a serious or life-threatening disease 
        or condition;
          ``(2) that, based on the totality of scientific evidence 
        available to the Secretary, including data from adequate and 
        well-controlled clinical trials, if available, it is reasonable 
        to believe that--
                  ``(A) the product may be effective in detecting, 
                diagnosing, treating, or preventing--
                          ``(i) such disease or condition; or
                          ``(ii) a serious or life-threatening disease 
                        or condition caused by a product authorized 
                        under this section or approved under this Act 
                        or the Public Health Service Act, for 
                        detecting, diagnosing, treating, or preventing 
                        such a disease or condition caused by such an 
                        agent; and
                  ``(B) the known and potential benefits of the 
                product, when used to detect, diagnose, prevent, or 
                treat such disease or condition, outweigh the known and 
                potential risks of the product;
          ``(3) that there is no adequate, approved, and available 
        alternative to the product for detecting, diagnosing, 
        preventing, or treating such disease or condition; and
          ``(4) that such other criteria as the Secretary may by 
        regulation prescribe are satisfied.
  ``(d) Scope of Authorization.--
          ``(1) In general.--An authorization of a product under this 
        section shall state--
                  ``(A) each disease or condition that the product may 
                be used to detect, diagnose, prevent, or treat within 
                the scope of the authorization;
                  ``(B) the Secretary's conclusions, made under 
                subsection (c)(2)(B), that the known and potential 
                benefits of the product, when used to detect, diagnose, 
                prevent, or treat such disease or condition, outweigh 
                the known and potential risks of the product; and
                  ``(C) the Secretary's conclusions, made under 
                subsection (c), concerning the safety and potential 
                effectiveness of the product in detecting, diagnosing, 
                preventing, or treating such diseases or conditions, 
                including an assessment of the available scientific 
                evidence.
          ``(2) Confidential information.--Nothing in this section 
        alters or amends section 1905 of title 18, United States Code, 
        or section 552(b)(4) of title 5 of such Code.
  ``(e) Conditions of Authorization.--
          ``(1) Unapproved product.--
                  ``(A) Required conditions.--With respect to the 
                emergency use of an unapproved product, the Secretary, 
                to the extent feasible given the circumstances of the 
                emergency, shall, for persons who choose to carry out 
                one or more activities for which the authorization is 
                issued, establish such conditions on an authorization 
                under this section as the Secretary finds necessary or 
                appropriate to protect the public health, including the 
                following:
                          ``(i) Appropriate conditions designed to 
                        ensure that, to the extent feasible given the 
                        circumstances of the emergency, health care 
                        professionals administering the product are 
                        informed--
                                  ``(I) that the Secretary has 
                                authorized the emergency use of the 
                                product;
                                  ``(II) of the significant known and 
                                potential benefits and risks of the 
                                emergency use of the product, and of 
                                the extent to which such benefits and 
                                risks are unknown; and
                                  ``(III) of the alternatives to the 
                                product that are available, and of 
                                their benefits and risks.
                          ``(ii) Appropriate conditions designed to 
                        ensure that, to the extent feasible given the 
                        circumstances of the emergency, individuals to 
                        whom the product is administered are informed--
                                  ``(I) that the Secretary has 
                                authorized the emergency use of the 
                                product;
                                  ``(II) of the significant known and 
                                potential benefits and risks of such 
                                use, and of the extent to which such 
                                benefits and risks are unknown; and
                                  ``(III) of the option to accept or 
                                refuse administration of the product, 
                                of the consequences, if any, of 
                                refusing administration of the product, 
                                and of the alternatives to the product 
                                that are available and of their 
                                benefits and risks.
                          ``(iii) Appropriate conditions for the 
                        monitoring and reporting of adverse events 
                        associated with the emergency use of the 
                        product.
                          ``(iv) For manufacturers of the product, 
                        appropriate conditions concerning recordkeeping 
                        and reporting, including records access by the 
                        Secretary, with respect to the emergency use of 
                        the product.
                  ``(B) Authority for additional conditions.--With 
                respect to the emergency use of an unapproved product, 
                the Secretary, to the extent feasible given the 
                circumstances of the emergency, may, for persons who 
                choose to carry out one or more activities for which 
                the authorization is issued, establish such conditions 
                on an authorization under this section as the Secretary 
                finds necessary or appropriate to protect the public 
                health, including the following:
                          ``(i) Appropriate conditions on which 
                        entities may distribute the product with 
                        respect to the emergency use of the product 
                        (including limitation to distribution by 
                        government entities), and on how distribution 
                        is to be performed.
                          ``(ii) Appropriate conditions on who may 
                        administer the product with respect to the 
                        emergency use of the product, and on the 
                        categories of individuals to whom, and the 
                        circumstances under which, the product may be 
                        administered with respect to such use.
                          ``(iii) For persons other than manufacturers 
                        of the product, appropriate conditions 
                        concerning recordkeeping and reporting, 
                        including records access by the Secretary, with 
                        respect to the emergency use of the product.
                          ``(iv) With respect to the emergency use of 
                        the product, waive or limit, to the extent 
                        appropriate given the circumstances of the 
                        emergency, conditions regarding current good 
                        manufacturing practice otherwise applicable to 
                        the manufacture, processing, packing, or 
                        holding of products subject to regulation under 
                        this Act, including such requirements 
                        established in section 501.
          ``(2) Unapproved use.--With respect to the emergency use of a 
        product that is an unapproved use of an approved product:
                  ``(A) The Secretary may, for manufacturers of the 
                product who choose to carry out one or more activities 
                for which the authorization is issued, establish any of 
                the conditions described in clauses (i) through (iv) of 
                paragraph (1)(A).
                  ``(B)(i) If the authorization under this section 
                regarding the emergency use authorizes a change in the 
                labeling of the product, but the manufacturer of the 
                product chooses not to make such change, such 
                authorization may not authorize distributors of the 
                product or any other person to alter or obscure the 
                labeling provided by the manufacturer.
                  ``(ii) In the circumstances described in clause (i), 
                an authorization under this section regarding the 
                emergency use may, for persons who do not manufacture 
                the product and who choose to act under this clause, 
                authorize such persons to provide information on the 
                product in addition to the labeling provided by the 
                manufacturer, subject to compliance with clause (i). 
                Such additional information shall not be considered 
                labeling for purposes of section 502.
  ``(f) Duration of Authorization.--
          ``(1) In general.--Except as provided in paragraph (2), an 
        authorization under this section shall be effective until the 
        earlier of the termination of the declaration under subsection 
        (b) or a revocation under subsection (g).
          ``(2) Continued use after end of effective period.--An 
        authorization shall continue to be effective for continued use 
        with respect to patients to whom it was administered during the 
        period described by paragraph (1), to the extent found 
        necessary by such patients' attending physicians.
  ``(g) Revocation of Authorization.--
          ``(1) Review.--The Secretary shall periodically review the 
        circumstances and the appropriateness of an authorization under 
        this section.
          ``(2) Revocation.--The Secretary may revoke an authorization 
        under this section if, in the Secretary's unreviewable 
        discretion, the criteria under subsection (c) for issuance of 
        such authorization are no longer met.
  ``(h) Publication.--The Secretary shall promptly publish in the 
Federal Register a notice of each authorization, and each termination 
or revocation of an authorization, and an explanation of the reasons 
therefor, under this section.
  ``(i) Actions Committed to Agency Discretion.--Actions under the 
authority of this section by the Secretary, by the Secretary of 
Defense, or by the Secretary of Homeland Security are committed to 
agency discretion.
  ``(j) Rules of Construction.--Nothing in this section shall be 
construed to impair or otherwise affect--
          ``(1) the authority of the President as Commander in Chief of 
        the Armed Forces of the United States under article II, section 
        2 of the United States Constitution;
          ``(2) the authority of the Secretary of Defense with respect 
        to the Department of Defense, including the armed forces, under 
        other provisions of Federal law; or
          ``(3) the authority of the Secretary under section 319F-2 to 
        manage the stockpile under such section.
  ``(k) Application to Members of Armed Forces.--
          ``(1) Waiver of requirement relating to option to refuse.--In 
        the case of administration of a countermeasure to members of 
        the armed forces, a requirement, under subsection 
        (e)(1)(A)(ii)(III), designed to ensure that individuals are 
        informed of an option to accept or refuse administration of a 
        product, may be waived by the President if the President 
        determines, in writing, that complying with such requirement is 
        not feasible, is contrary to the best interests of the members 
        affected, or is not in the interests of national security.
          ``(2) Provision of information to member of the armed 
        forces.--If the Secretary makes a determination that it is not 
        feasible for the information required by subsection 
        (e)(1)(A)(ii) to be provided to a member of the armed forces 
        prior to the administration of the product, such information 
        shall be provided to such member of the armed forces (or next-
        of-kin in the case of the death of a member) to whom the 
        product was administered as soon as possible, but not later 
        than 30 days, after such administration. Information concerning 
        the administration of the product shall be recorded in the 
        medical record of the member.
          ``(3) Effect on statute pertaining to investigational new 
        drugs.--In the case of an authorization based on a 
        determination by the Secretary of Defense under subsection 
        (b)(1)(B), section 1107 of title 10, United States Code, shall 
        not apply to use of a product that is the subject of such 
        authorization, within the scope of such authorization and while 
        such authorization is effective.
  ``(l) Relation to Other Provisions.--If a product is the subject of 
an authorization under this section, the use of such product within the 
scope of the author-
ization--
          ``(1) shall not be subject to any requirements pursuant to 
        section 505(i) or 520(g); and
          ``(2) shall not be subject to any requirements otherwise 
        applicable to clinical investigations pursuant to other 
        provisions of this Act.
  ``(m) Discretion Regarding Use of Authorization.--Nothing in this 
section provides the Secretary any authority to require any person to 
carry out any activity that becomes lawful pursuant to an authorization 
under this section, and no person is required to inform the Secretary 
that the person will not be carrying out such activity, except that a 
manufacturer of a sole-source unapproved product authorized for 
emergency use shall notify the Secretary within a reasonable period of 
time after the issuance by the Secretary of such authorization if such 
manufacturer does not intend to carry out an activity or activities 
under the authorization. This section does not have any legal effect on 
a person who does not carry out any activity for which an authorization 
under this section is issued, or who carries out such an activity 
pursuant to other provisions of this Act or section 351 of the Public 
Health Service Act.
  ``(n) Enforcement.--A person who carries out an activity pursuant to 
an authorization under this section, but who fails to comply with 
applicable conditions under subsection (e), is with respect to that act 
of noncompliance subject to the provisions of law specified in 
subsection (a) and to the enforcement of such provisions under section 
301.''.

SEC. 5. REPORTS REGARDING AUTHORITIES UNDER THIS ACT.

  (a) Secretary of Health and Human Services.--
          (1) Annual reports on particular exercises of authority.--
                  (A) Relevant authorities.--The Secretary of Health 
                and Human Services (referred to in this subsection as 
                the ``Secretary'') shall submit reports in accordance 
                with subparagraph (B) regarding the exercise of 
                authority under the following provisions of law:
                          (i) With respect to section 319F-1 of the 
                        Public Health Service Act (as added by section 
                        2 of this Act):
                                  (I) Subsection (b)(1) (relating to 
                                increased simplified acquisition 
                                threshold).
                                  (II) Subsection (b)(2) (relating to 
                                use of noncompetitive procedures).
                                  (III) Subsection (c) (relating to 
                                expedited peer review procedures).
                          (ii) With respect to section 319F-2 of the 
                        Public Health Service Act (as added by section 
                        3 of this Act):
                                  (I) Subsection (c)(7)(C)(iii) 
                                (relating to simplified acquisition 
                                procedures).
                                  (II) Subsection (c)(7)(C)(iv) 
                                (relating to use of noncompetitive 
                                procedures).
                                  (III) Subsection (c)(7)(C)(v) 
                                (relating to premium provision in 
                                multiple-award contracts).
                          (iii) With respect to section 564 of the 
                        Federal Food, Drug, and Cosmetic Act (as added 
                        by section 4 of this Act):
                                  (I) Subsection (a)(1) (relating to 
                                emergency uses of certain drugs and 
                                devices).
                                  (II) Subsection (b)(1) (relating to a 
                                declaration of an emergency).
                                  (III) Subsection (e) (relating to 
                                conditions on authorization).
                  (B) Contents of reports.--The Secretary shall 
                annually submit to the Congress a report that 
                summarizes--
                          (i) the particular actions that were taken 
                        under the authorities specified in subparagraph 
                        (A), including, as applicable, the 
                        identification of the threat agent, emergency, 
                        or the biomedical countermeasure with respect 
                        to which the authority was used;
                          (ii) the reasons underlying the decision to 
                        use such authorities, including, as applicable, 
                        the options that were considered and rejected 
                        with respect to the use of such authorities; 
                        and
                          (iii) the identification of each person or 
                        entity that received, or was considered and 
                        rejected for, grants, cooperative agreements, 
                        or contracts pursuant to the use of such 
                        authorities.
          (2) Annual summaries regarding certain activity.--The 
        Secretary shall annually submit to the Congress a report that 
        summarizes the activity undertaken pursuant to the following 
        authorities under section 319F-1 of the Public Health Service 
        Act (as added by section 2 of this Act):
                  (A) Subsection (b)(3) (relating to increased 
                micropurchase threshold).
                  (B) Subsection (d) (relating to authority for 
                personal services contracts).
                  (C) Subsection (e) (relating to streamlined personnel 
                authority).
        With respect to subparagraph (B), the report shall include a 
        provision specifying, for the one-year period for which the 
        report is submitted, the number of persons who were paid 
        amounts greater than $100,000 and the number of persons who 
        were paid amounts between $50,000 and $100,000.
  (b) National Academy of Sciences Review.--Not later than three years 
after the date of the enactment of this Act, the Secretary of Health 
and Human Services shall request the National Academy of Sciences to 
enter into an agreement for a review of the biomedical countermeasure 
research and development authorities established in this Act to 
determine whether and to what extent activities undertaken pursuant to 
such authorities have enhanced the development of biomedical 
countermeasures affecting national security, and to recommend any 
legislative or administrative changes necessary to improve the ability 
of the Secretary to carry out these activities in the future. The 
Secretary shall ensure that the results of the study are submitted to 
the Congress not later than five years after such date of enactment.
  (c) General Accounting Office Review.--Four years after the date of 
the enactment of this Act, the Comptroller General of the United States 
shall initiate a study--
          (1)(A) to review the Secretary of Health and Human Services' 
        utilization of the authorities granted under this Act with 
        respect to simplified acquisition procedures, use of 
        noncompetitive procedures, increased micropurchase thresholds, 
        personal services contracts, streamlined personnel authority, 
        and the purchase of security countermeasures under the special 
        reserve fund; and
          (B) to recommend any legislative or administrative changes 
        necessary to improve the utilization or effectiveness of such 
        authorities in the future;
          (2)(A) to review the internal controls instituted by such 
        Secretary with respect to such authorities, where required by 
        this Act; and
          (B) to recommend any legislative or administrative changes 
        necessary to improve the effectiveness of such controls; and
          (3)(A) to review such Secretary's utilization of the 
        authority granted under this Act to authorize an emergency use 
        of a biomedical countermeasure, including the means by which 
        the Secretary determines whether and under what conditions any 
        such authorizations should be granted and the benefits and 
        adverse impacts, if any, resulting from the use of such 
        authority; and
          (B) to recommend any legislative or administrative changes 
        necessary to improve the utilization or effectiveness of such 
        authority and to enhance protection of the public health.
The results of the study shall be submitted to the Congress not later 
than five years after the date of the enactment of this Act.

                     Committee Statement and Views

                                PURPOSE

    The purpose of H.R. 2122, the ``Project Bioshield Act of 
2003,'' is to accelerate the research, development, purchase, 
and availability of countermeasures to combat bioterrorist 
threats that could cause public health emergencies affecting 
national security. While recent decades have yielded rapid 
progress in the treatment of many serious naturally occurring 
diseases, there has been little improvement in the medical 
treatments available to combat potential bioterrioist threats. 
Many countermeasures for potential agents of terrorism, 
including smallpox, anthrax, botulinum toxin, ebola and the 
plague, realistically have no market other than the government 
and, thus, have not generated significant manufacturer 
interest. However, should the United States be attacked with 
these deadly pathogens, the need for vaccines and antitoxins 
would be great and immediate.

                  BACKGROUND AND NEED FOR LEGISLATION

    The anthrax attacks that occurred in October 2001 
highlighted the nation's vulnerability to bioterrorism. Letters 
laced with anthrax caused the deaths of five individuals and 
thousands more received treatment. The death toll could have 
been higher if there had not been effective countermeasures to 
treat that particular form of anthrax. However, no such 
countermeasures currently exist for many of the biological 
threats that are considered the most dangerous by the Centers 
for Disease Control and Prevention. For example, botulinum 
toxin, plague, tularemia, and many viral hermorrhagic fevers 
lack licensed vaccines.\1\
---------------------------------------------------------------------------
    \1\ NIAID Biodefense Research Agenda for CDC Category A Agents, 
Responding through Research, National Institute of Allergy and 
Infectious Diseases, National Institutes of Health, Department of 
Health and Human Services (February 2002).
---------------------------------------------------------------------------
    The scarcity of countermeasures to combat bioterrorism can 
be attributed to the lack of a significant commercial 
market.\2\ Because these diseases occur infrequently, there has 
been little economic incentive for pharmaceutical and biotech 
companies to make the significant investment required to bring 
new treatments to market. To promote the development of new 
countermeasures to combat bioterrorism, President Bush proposed 
Project Bioshield in his 2003 State of the Union address. H.R. 
2122 is modeled after this proposal and would provide expedited 
procedures for bioterrorism-related procurement and research 
and development.
---------------------------------------------------------------------------
    \2\ Project Bioshield: Contracting for the Health and Security of 
the American Public: Committee on Government Reform, 108th Congress 
(April 4, 2003) (Statement of Dr. Mark B. McClellan, Commissioner, Food 
and Drug Administration and Dr. Anthony S. Fauci, Director, National 
Institute of Allergy and Infectious Diseases, National Institutes of 
Health).
---------------------------------------------------------------------------
    The bill has three main provisions. First, it would provide 
the Secretary of the Department of Health and Human Services 
(HHS) with streamlined authorities to promote the research and 
development of drugs and other products needed to protect 
Americans in the event of a bioterrorist attack. As a result, 
should the Secretary determine that there is pressing need to 
develop these products, the Secretary would be able to use 
simplified acquisition tools for research and development 
projects and would have expedited authorities to award research 
grants and to hire technical experts and consultants.
    Second, the bill authorizes the procurement of biomedical 
countermeasures for the nation's stockpile using a special 
reserve fund. The bill authorizes $5.93 billion for fiscal 
years 2004 to 2013 for this fund. The Secretary of HHS and the 
Secretary of the Department of Homeland Security would be 
required to work together to recommend to the President the 
countermeasures that are needed for the stockpile. Procurements 
of countermeasures using the special reserve fund could only be 
made with the approval of the President. If the Secretary of 
HHS determines there is a pressing need to acquire certain 
products, the Secretary could use simplified acquisition 
procedures for the procurement of biomedical countermeasures.
    Nothing in these provisions would limit the use of existing 
authorities of the Secretary of HHS and the Secretary of the 
Department of Homeland Security to enter into an agreement that 
provides for research and development as well as production of 
a countermeasure or vaccine under a single procurement, where 
such a single agreement (including a contract, grant, 
cooperative agreement, or other acquisition instrument) for 
research, development, and production of a countermeasure or 
vaccine is deemed appropriate by the proper official. This 
would include instances when a separate funding source is 
authorized and used for the research and development and that 
funding is different than the funding source authorized and 
used for production. The Committee recognizes that such 
agreements providing express linkage between research, 
development, and production are likely to encourage entities to 
enter the government market for countermeasures and vaccines in 
accordance with the authorities provided by the ``Project 
Bioshield Act'' and urges their use where appropriate.
    The Committee notes that the authorities that can be used 
by the Secretary of HHS in title XIV, Section 1451 of H.R. 1588 
and provided to the Secretary of the Department of Homeland 
Security in title VIII, Section 831 of the Homeland Security 
Act of 2002 are applicable to research and development 
(including the development of a prototype) conducted under this 
Act.\3\
---------------------------------------------------------------------------
    \3\ The Homeland Security Act of 2002, Public Law 107-296; 116 
Stat. 2224.
---------------------------------------------------------------------------
    The third provision of the bill provides that in the event 
of a national emergence, the government would be authorized to 
make available new and promising treatments prior to approval 
by the Food and Drug Administration (FDA). The government may 
exercise this authority if the product is in the approval 
process and is urgently needed because no adequate alternatives 
exist. There also must be a reasonable basis to conclude that 
the countermeasure will be effective and that the benefits of 
the product outweigh the risks. Although this provision would 
permit the avoidance of the FDA approval process, its use 
should be limited to dire circumstances.
    The Committee is aware of the growing problem of naturally 
occurring infections becoming increasingly resistant to 
existing antimicrobial drug products. Antimicrobial resistance 
is the phenomenon whereby infectious microbes mutate and become 
less susceptible to treatment with currently approved drugs.\4\ 
In the hands of bioterrorists, these organisms can be used to 
affect national security and accordingly should be considered a 
material threat under Project Bioshield. For example, published 
documents describe how the Russians produced antibiotic-
resistant anthrax.\5\ However, the Committee understands that 
there has been limited progress in the development of 
countermeasures to combat the emergence of antimicrobial-
resistant organisms.\6\ One reason may be that the market for 
the few cases of multi-drug resistant bacteria is currently 
quite small. Success in developing appropriate countermeasures 
to treat emerging antibiotic resistant organisms could thwart 
attempts to use these organisms for bioterrorism. Inclusion of 
organisms with emerging antibiotic resistance within the list 
of biological threats contemplated by Project Bioshield should 
permit acceleration of research for and government procurement 
of new drugs and vaccines to treat or prevent infections caused 
by these agents.
---------------------------------------------------------------------------
    \4\ Project Bioshield: Contracting for the Health and Security of 
the American Public: Committee on Government Reform, 108th Congress 
(April 4, 2003) (Statement of Dr. John E. Edwards on behalf of the 
Infectious Diseases Society of America).
    \5\ AV Stepanov, LI Marinin, AP Pomerantsev, NA Staritsin, 
Development of Novel Vaccines Against Anthrax in Man, J Biotechnol, 
Jan. 26, 1996.
    \6\ Microbial Threats to Health Emergence, Detection, and Response, 
Committee on Emerging Microbial Threats to Health in the 21st Century, 
Board on Global Health, (Mark S. Smolinski et al. eds., The National 
Academies Press forthcoming 2003). According to this publication, in 
the past three decades, only two new classes of antibiotics have been 
developed, and resistance to one class emerged even before the drugs 
entered the commercial marketplace. Only four large pharmaceutical 
companies with antibiotic research programs remained in existence in 
2002 and not one new class of antibiotics is in advanced development.
---------------------------------------------------------------------------

                    COMMITTEE HEARINGS AND TESTIMONY

    The Committee on Government Reform held a hearing to 
consider the ``Project Bioshield Act'' on April 4, 2003. The 
committee heard testimony from the following witnesses: Dr. 
Anthony Fauci, Director, National Institute of Allergy and 
Infectious Diseases, National Institutes of Health; Dr. Mark 
McClellan. Commissioner, Food and Drug Administration; Michael 
Brown, Under Secretary for Emergency Preparedness and Response, 
Department of Homeland Security; Dr. Dale Klein, Assistant to 
the Secretary of Defense for Nuclear, Chemical and Biological 
Defense Programs, Department of Defense. The Committee also 
heard from experts representing the pharmaceutical and biotech 
industries. These witnesses included Frank Rapoport, attorney 
at law, representing Aventis Pasteur; Dr. Michael Friedman, 
Chief Medical Officer for Biomedical Preparedness, 
Pharmaceutical Research and Manufacturers of America; Dr. Una 
Ryan, President, AVANT Immunotherapeutics, Inc.; Katherine 
Bowdish, Ph.D., President, Alexion Antibody Technologies; and 
Dr. John Edwards, Chief of Infectious Diseases, Harbor-UCLA 
Medical Center, on behalf of the Infectious Diseases Society of 
America.
    The witnesses were supportive of the bill. They generally 
agreed with the need to create incentives for manufacturers to 
develop biomedical countermeasures through the creation of a 
government market. The witnesses from the pharmaceutical and 
biotech industries offered suggestions to amend the bill. 
Specifically, Mr. Rapoport suggested including language to 
clarify that the government is authorized to enter into single 
procurement contracts for research, development and production. 
He also suggested including additional contracting flexibility 
through ``other transaction'' authority for research and 
development contracts similar to the authority that is used by 
the Department of Defense. Witnesses also discussed the need 
for the bill to include liability protection for manufacturers 
to further encourage companies to develop countermeasures. Dr. 
Edwards testified about the need for the bill to cover the 
development of countermeasures to combat naturally occurring 
diseases that have become resistant to antimicrobial products.

                      Section-by-Section Analysis

Section 1. Short title

    The short title of the bill is the ``Project Bioshield Act 
of 2003.''

Section 2. Biomedical countermeasure research and development 
        authorities

    This section would amend the Public Health Service Act to 
grant the Secretary of Health and Human Services (HHS) 
additional flexibility and authority to conduct research and 
development of drugs, vaccines and other products to combat 
biological, chemical, nuclear, and radiological agents that may 
affect national security.

            Expedited procurement authority

    This section provides the Secretary of HHS with enhanced 
procurement authorities to perform, administer, or support 
biomedical countermeasure research and development. The 
simplified acquisition threshold would be increased from 
$100,000 to $25 million for the purchase of property or 
services the Secretary determines are needed to perform 
pressing biomedical countermeasure research and development. 
The simplified acquisition procedures have been in law since 
the mid-1990s and are designed to promote efficiency and 
economy in contracting and to avoid unnecessary burdens for 
agencies and contractors. Procurements by the Secretary of HHS 
of products or services under the simplified acquisition 
threshold would be subject to contract work hours and safety 
standards, anti-kickback rules, and provisions authorizing the 
examination of contractor records. Additionally, the Secretary 
would be required to institute internal controls for 
procurements made under this authority, including documenting 
the justification for use of the simplified procedures.
    After making the required determination of pressing need, 
the Secretary of HHS would also be authorized to use other than 
competitive procedures for procurements of biomedical 
countermeasures when there are only a limited number of 
responsible sources and no other type of property or services 
will satisfy the Secretary's needs. For the purposes of using 
other than competitive procedures in this section, the phrase 
in section 303(c)(1) of title III of the Federal Property and 
Administrative Services Act of 1949, ``available from only one 
responsible source'' shall be deemed to mean ``available from 
only one responsible source or only from a limited number of 
responsible sources.'' The other than competitive procedures 
authorized under this section are to be implemented in 
accordance with the justification and approval provisions of 41 
U.S.C. 253(f) and the notice provisions of 41 U.S.C. 416. This 
expanded authority would be in addition to any other authority 
to use procedures other than competitive procedures.
    This section also increases the micropurchase threshold 
from $2,500 to $15,000 for the procurement of property or 
services that are determined to be necessary for pressing 
countermeasure research and development. The Secretary would be 
required to institute internal controls for purchases greater 
than $2,500.

            Authority to expedite peer review

    The Secretary would be authorized to expedite the award 
process for grants, contracts, and cooperative agreements for 
biomedical countermeasure research and development if the 
Secretary deems there is a pressing need for the expedited 
award. This authority would be limited to awards of not more 
than $1.5 million and would give the Secretary greater 
flexibility to determine which research projects would be 
funded. Peer review is designed to maximize the chances that 
only proposals with the greatest scientific merit receive 
funding. The normal peer review process to consider grant 
proposals may take up to one year.

            Authority for personal services contracts and streamlined 
                    personnel authority

    This section would also give the Secretary streamlined and 
flexible personnel authorities for the purpose of performing, 
administering, and supporting qualified countermeasure research 
and development. Under these authorities, the Secretary could 
hire experts or consultants, without regard to limitations on 
service or pay. The Secretary could also appoint professional 
or technical employees to perform pressing countermeasure 
research and development without regard to provisions in Title 
5 of the U.S. Code governing classification, pay rates, and 
appointments in the competitive service.
    The authorities in this section would be committed to 
agency discretion. However, interested parties would have the 
authority to protest contracting decisions to the contracting 
agency, the General Accounting Office or the Federal Court of 
Claims.

Section 3. Biomedical countermeasures procurement

            Procurement of certain biomedical countermeasures and 
                    availability of special reserve fund

    Section 3 addresses the procurement of biomedical 
countermeasures for inclusion in the National stockpile. The 
section would require the government to follow certain 
procedures to determine whether to buy biomedical 
countermeasures from a special reserve fund created by the Act. 
The Secretary of the Department of Homeland Security (DHS) 
would be required to assess threats to the U.S. population that 
are posed by the use of chemical, biological, radiological, and 
nuclear agents. The Secretary of HHS would be required to 
assess the public health consequences of the use of such agents 
and the availability and appropriateness of countermeasures to 
combat the threats. After performing this analysis, both the 
Secretary of HHS and DHS could jointly recommend that the 
President procure countermeasures for the Nation's stockpile, 
using the special reserve fund. Nothing in the Act would 
restrict or alter existing authority to purchase items for the 
stockpile using existing discretionary appropriations for such 
purpose.
    If the President approves the recommendation to procure a 
countermeasure from the special reserve fund, the Secretaries 
would enter into an agreement under which the Secretary of HHS 
would procure the countermeasure for the stockpile using the 
special reserve fund maintained by the Department of Homeland 
Security. The Secretaries would be required to notify Congress 
of decisions to procure a countermeasure.
    Under the Act, contractors could generally not be paid 
until a substantial portion of the countermeasure is delivered. 
However, the Secretary of HHS could make an advance payment of 
up to 10 percent, if necessary, to ensure success of a project. 
Contracts for biomedical countermeasures could last for five 
years, but could be extended for up to eight years, if the 
Secretary of HHS determines that a longer period is justified 
because of complexities or other performance difficulties. The 
contract can be renewed for additional periods not to exceed 
five years. This section also contains a number of provisions 
concerning contractor storage of stockpile items, payment of 
premiums where there are multiple contractors, extension of 
closing dates for receipt of proposals, and the exclusion of 
sources for failure to respond to a request for information.
    The Secretary of HHS would have enhanced procurement 
authorities for the purchase of biomedical countermeasures if 
the Secretary determines that there is a pressing need. The 
Secretary could use simplified acquisition procedures to 
procure any biomedical countermeasure. Contractor work hours 
and safety standards, anti-kickback rules, and provisions 
authorizing examination of contractor records would apply to 
the contracts. Additionally, after a determination of pressing 
need, the Secretary of HHS could use other than competitive 
procedures if the product is available from only one 
responsible source or from a limited number of responsible 
sources and no other type of product will satisfy the 
Secretary's needs.
    The Secretary of HHS would be authorized to use other than 
competitive procedures for procurements of biomedical 
countermeasures when there are only a limited number of 
responsible sources and no other type of property or services 
will satisfy the Secretary's needs. For the purposes of using 
other than competitive procedures in this section, the phrase 
in section 303(c)(1) of title III of the Federal Property and 
Administrative Services Act of 1949, ``available from only one 
responsible source'' shall be deemed to mean ``available from 
only one responsible source or only from a limited number of 
responsible sources.'' The other than competitive procedures 
authorized under this section are to be implemented in 
accordance with the justification and approval provisions of 41 
U.S.C. 253(f) and the notice provisions of 41 U.S.C. 416. This 
expanded authority would be in addition to any other authority 
to use procedures other than competitive procedures.

            Authorization of appropriations

    For procurements of biomedical countermeasures from the 
special reserve fund, the bill authorizes $890 million in FY 
2004 and $3.4 billion and $5.6 billion over the next five and 
ten fiscal years respectively. All amounts appropriated under 
this authorization would be available for obligation through 
the end of FY 2013.

Section 4. Authorization for medical produces for use in emergencies

    Section 4 of the Act amends the Food, Drug, and Cosmetic 
Act by permitting the Secretary of HHS to authorize the 
emergency use of drugs, devices, or biological products prior 
to approval, clearance or license by the FDA. The emergency use 
of unapproved products could only be performed during times of 
military, national, or public health emergencies. To exercise 
this authority the Secretary of HHS must conclude that:
          (1) A biological, chemical, radiological or nuclear 
        agent can cause a serious or life-threatening disease;
          (2) Based on scientific evidence, the product may be 
        effective in detecting, diagnosing, treating, or 
        preventing the disease;
          (3) The known and potential benefits of the product 
        outweigh the known or potential risks;
          (4) There is no adequate alternative to the product 
        that is already approved and available; and
          (5) Any other criteria specified by the Secretary of 
        HHS.
    A declaration of an emergency can last for a maximum of one 
year unless the Secretary of HHS renews it. If the Secretary 
authorizes the use of an unapproved product, the Secretary 
shall place certain conditions on such authorization (including 
conditions intended to provide information to both health care 
professionals administering the product and the recipients of 
the product) and may place other conditions on the 
authorization at the Secretary's discretion.
    The Secretary of HHS may authorize a new, emergency dual 
use for existing FDA approved products to treat alternate 
diseases. Manufacturers that wish to avail themselves of such 
an emergency use authorization may be subjected to certain 
conditions.
    Nothing in Section 4 requires any manufacturer, 
distributor, physician, pharmacist, or other person to make a 
product available under the emergency use authorization. 
However, if a person chooses to provide an emergency use 
product, he or she must follow conditions imposed by the 
Secretary of HHS. Persons failing to comply with applicable 
conditions under this provision will be treated as if they are 
providing an unapproved drug or device and could be subject to 
enforcement actions.

Section 5. Reports regarding authorities under this Act

    The Secretary of HHS must submit an annual report to 
Congress detailing and summarizing the Secretary's exercise of 
the new authorities authorized in the previous sections of the 
bill. Studies by the National Academy of Sciences and the 
General Accounting Office concerning implementation of this Act 
would be required as well.

                       Explanation of Amendments

    The provisions of the substitute are explained in this 
report.

                        Committee Consideration

    H.R. 2122 was introduced by Representative W.J. (Billy) 
Tauzin (LA) on May 15, 2003, and was cosponsored by Rep. John 
Dingell (MI), Rep. Tom Davis (VA), Rep. Christopher Cox (CA), 
Rep. Ed Markey (MA), Rep. Mike Bilirakis (FL), Rep. Jim Davis 
(FL), Rep. Fred Upton (MI), Rep. Cliff Stearns (FL), Rep. John 
Shadegg (AZ), Rep. Darrell Issa (CA), Rep. Lincoln Diaz-Balart 
(FL), and Rep. Anna Eshoo (CA). The bill was referred to the 
Committee on Energy and Commerce, the Committee on Government 
Reform, and the Select Committee on Homeland Security.
    On May 22, 2003, the Committee on Government Reform met in 
open session to consider H.R. 2122 along with seven other 
bills. The committee favorably approved the bill as amended by 
voice vote and reported it to the House of Representatives. The 
Energy and Commerce Committee approved H.R. 2122 by a voice 
vote on May 15, 2003.
    At the full committee business meeting, an amendment in the 
nature of substitute offered by Government Reform Committee 
Chairman Tom Davis (VA) was approved by a voice vote. The 
amendment makes three changes to the bill. First, the amendment 
applies the ``pressing need'' standard used for research and 
development procurement in section 2, to biomedical 
countermeasure procurements in section 3. Second, section 2 of 
the bill would commit decisions about research and development 
projects to the HHS Secretary's discretion. The amendment would 
permit interested parties to protest research and development 
contracting decisions to the contracting agency, the 
Comptroller General, or the United States Court of Federal 
Claims. The amendment also makes technical changes in sections 
2 and 3 to clarify the circumstances when the Secretary of HHS 
could use other than competitive procedures for research and 
development and production contracts.

              Application of Law to the Legislative Branch

    Section 102(b)(3) of Public Law 104-1 requires a 
description of the application of this bill to the legislative 
branch. This bill accelerates the research, development, 
purchase, and availability of countermeasures to combat 
bioterrorist threats that could cause public health emergencies 
affecting national security. The benefits of this bill apply 
equally to employees of the legislative branch.

  Statement of Oversight Findings and Recommendations of the Committee

    In compliance with clause 3(c)(2) of rule XIII and clause 
(2)(b)(1) of rule X of the Rules of the House of 
Representatives, the Committee's oversight findings and 
recommendations are reflected in the descriptive portions of 
this report.

         Statement of General Performance Goals and Objectives

    In accordance with clause 3(c)(4) of rule XIII of the Rules 
of the House of Representatives, the Committee's performance 
goals and objectives are reflected in the descriptive portions 
of the report.

                   Constitutional Authority Statement

    Under clause 3(d)(1) of rule XIII of the Rules of the House 
of Representatives, the Committee must include a statement 
citing the specific powers granted to Congress to enact the law 
proposed by H.R. 2122. The constitutional authority to enact 
this law lies within the General Welfare and Necessary and 
Proper clauses of Article I, Section Eight of the United States 
Constitution.

                       Unfunded Mandate Statement

    Section 423 of the Congressional Budget and Impoundment 
Control Act (as amended by Section 101(a)(2) of the Unfunded 
Mandate Reform Act, P.L. 104-4) requires a statement whether 
the provisions of the reported include unfunded mandates. In 
compliance with this requirement the Committee has received a 
letter from the Congressional Budget Office included herein.

                           Committee Estimate

    Clause 3(d)(2) of rule XIII of the Rules of the House of 
Representatives requires an estimate and a comparison by the 
Committee of the costs that would be incurred in carrying out 
H.R. 2122. However, clause 3(d)(3)(B) of that rule provides 
that this requirement does not apply when the Committee has 
included in its report a timely submitted cost estimate of the 
bill prepared by the Director of the Congressional Budget 
Office under section 402 of the Congressional Budget Act.

     Budget Authority and Congressional Budget Office Cost Estimate

    With respect to the requirements of clause 3(c)(2) of rule 
XIII of the Rules of the House of Representatives and section 
308(a) of the Congressional Budget Act of 1974 and with respect 
to requirement of clause (3)(c)(3) rule XIII of the Rules of 
the House of Representatives and section 402 of the 
Congressional Budget Act of 1974, the Committee has received 
the following cost estimate for H.R. 2122 from the Director of 
Congressional Budget Office.

                                     U.S. Congress,
                               Congressional Budget Office,
                                      Washington, DC, June 6, 2003.
Hon. Tom Davis,
Chairman, Committee on Government Reform,
House of Representatives, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for H.R. 2122, the Project 
BioShield Act of 2003.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contacts are Jeanne De 
Sa and Sam Papenfuss.
            Sincerely,
                                       Douglas Holtz-Eakin,
                                                          Director.
    Enclosure.

H.R. 2122--Project BioShield Act of 2003

    Summary: H.R. 2122 would amend the Public Health Service 
Act (PHSA) to authorize appropriations of up to $5.6 billion 
for fiscal years 2004 through 2013 for procurement of certain 
security countermeasures (drugs, devices, and biological 
products to treat, identify, and prevent the public health 
consequences of terrorism). Of that amount, $890 million could 
be obligated in fiscal year 2004 and up to $3.4 billion could 
be obligated during fiscal years 2004 though 2008. Funding to 
buy these security countermeasures would be provided to the 
Department of Homeland Security (DHS), but the Department of 
Health and Human Services (HHS) would be responsible for 
procuring and stockpiling the countermeasures.
    Assming appropriation of authorized amount and including 
administrative costs, CBO estimates that implementing H.R. 2122 
would increase discretionary spending by $0.3 billion in 2004, 
$3.1 billion for fiscal years 2004 through 2008, and $5.6 
billion over the 2004-2013 period. In addition, H.R. 2122 would 
relax certain requirements for federal agencies related to the 
development and approval of countermeasures. The bill would 
provide HHS with increased authority and flexibility to award 
contracts and grants for research and development of qualified 
countermeasures, hire technical experts, and procure items 
necessary for research. Those provisions might result in higher 
discretionary spending, but CBO does not have sufficient 
information to estimate their budgetary effect.
    The bill also would authorize the Food and Drug 
Administration (FDA) to approve the use of certain security 
countermeasures during emergencies designated by the Secretary 
of HHS. CBO estimates this provision would have no budgetary 
effect.
    H.R. 2122 contains no intergovernmental or private-sector 
mandates as defined in the Unfunded Mandates Reform Act (UMRA) 
and would impose no costs on state, local, or tribal 
governments.
    Estimated cost to the Federal Government: The estimated 
budgetary impact of H.R. 2122 is shown in the following table. 
The costs of this legislation fall within budget function 550 
(health). CBO assumes that H.R. 2122 would be enacted by 
October 1, 2003.

----------------------------------------------------------------------------------------------------------------
                                                     By fiscal year, in millions of dollars--
                                 -------------------------------------------------------------------------------
                                   2004    2005    2006    2007    2008    2009    2010    2011    2012    2013
----------------------------------------------------------------------------------------------------------------
                                        CHANGES IN DISCRETIONARY SPENDING

Project BioShield:
    Estimated authorization          890   2,528       0       0       0   2,175       0       0       0       0
     level......................
    Estimated outlays...........     270     680     870     770     510     440     560     650     490     250
Administrative costs:
    Estimated authorization            9       9       9       9      10      10      10      10      11      11
     level......................
    Estimated outlays...........       7       8       9       9      10      10      10      10      11      11
----------------------------------------------------------------------------------------------------------------

Basis of estimate

    CBO assumes that this bill will be enacted during fiscal 
year 2003 and will take effect in October 2003.
            Procurement of security countermeasures: Project BioShield
    Under current law, HHS administers the Strategic National 
Stockpile (SNS), which contains drugs diagnostic devices, 
vaccines, and other biological products to combat the public 
health consequences of a terrorist attack or other public 
health emergencies. DHS currently provides the financing for 
those efforts, which include the procurement of a new smallpox 
vaccine and stockpiling of that vaccine and older versions of 
the vaccine. Authorization for those programs was established 
in the Public Health Security and Bioterrorism Preparedness 
Response Act of 2002 (Public Law 107-88). That act authorized 
appropriations of $640 million in 2002 and such sums as may be 
necessary for fiscal years 2003 through 2006 for the SNS and 
$509 million in 2002 and such sums as may be necessary for 
fiscal years 2003 through 2006 for the development of the 
smallpox vaccine. About $400 million was appropriated in 2003 
for those activities.
    H.R. 2122 would modify the existing authorizations for the 
SNS and for the development of the smallpox vaccine by 
codifying the provision in the PHSA instead of in Public Law 
107-88. CBO estimates that this modification would have no 
budgetary effect.
    H.R. 2112 also would authorize DHS to augment the SNS with 
certain additional products. That effort, called Project 
BioShield, would allow the federal government to enter into 
contracts to procure security countermeasures, which are 
defined in the bill as drugs, devices, biological products, 
vaccines, vaccine adjuvants, antivirals, or diagnostic tests 
used to treat, identify, or prevent harm from an agent that the 
Secretary determines may cause a public health emergency 
affecting national security. Such drugs, devices, or biological 
products would have to be licensed or approved by the FDA, or 
otherwise determined by the Secretary of HHS to have the 
potential to be licensed or approved by the FDA. The federal 
government also could acquire products used to treat the 
adverse effects of drugs or biologic products used as security 
countermeasures.
    The rate at which the funding authorized by the bill would 
be appropriated and spent would depend upon many factors, 
including the nature of advances in biotechnology, the degree 
of industry interest and capacity, the threat environment, and 
government priorities. Assuming appropriation of the authorized 
amounts, current and future Administrations would have the 
discretion to enter into multiple contracts for the manufacture 
of security countermeasures or to cease contracting altogether 
for a period of years.
    To estimate spending under H.R. 2122, CBO consulted with 
Administration officials about activities they are planning or 
would consider if Project BioShield were enacted. Officials 
described plans to acquire and maintain stockpiles of seven 
security countermeasures to combat five biological agents. The 
Administration estimates that the cost of procuring, storing, 
and replacing those countermeasures would be about $5.6 billion 
over the 2004-2013 period if there were no constraints on 
funding.
    Those currently planned acquisitions do not include any 
countermeasures for chemical, readiological, or nuclear agents, 
and they address only a subset of the threats for which 
research and development activities on countermeasures is being 
conducted or funded by HHS, the Department of Defense (DoD), 
and the private sector. Based on information provided by 
government officials and in consultation with outside experts, 
CBO has concluded that it is likely that drugs, devices, or 
biological products addressing some of those other threats will 
be developed in the coming decade and that some of those 
countermeasures would be stockpiled under Project Bioshield if 
funds were appropriated for that purpose. CBO's estimate does 
not assume that any specific product would be developed and 
procured at any specific time. It does, however, account for a 
range of possibilities that would be available to the 
government if the authorized funds are appropriated.
    Authorities and Requirements Under H.R. 2122. H.R. 2122 
would authorize appropriations of up to $5.6 billion for fiscal 
years 2004 through 2013 for the federal government to enter 
into contracts to procure security countermeasures. Of that 
amount, $890 million could be obligated in fiscal year 2004 and 
up to $3.4 billion could be obligated during fiscal years 2004 
through 2008.
    Decisions regarding what types of security countermeasures 
to procure would be made by the President after reviewing 
recommendations of the Secretaries of DHS and HHS. Subject to 
Presidential approval and a determination that inclusion of 
certain countermeasures in the stockpile is appropriate, the 
Secretaries of DHS and HHS would seek potential vendors to 
produce the countermeasures and enter into contracts to buy the 
countermeasures from these vendors. In making that 
determination, the Secretary would determine and consider 
several factors, including the quantity of the product 
necessary for the stockpile, the feasibility of obtaining 
sufficient quantities of the product within five years, and 
whether there is a significant commercial market for the 
product other than as a security countermeasure. Those factors 
would not be requirements for procurement, but considerations 
in determining the appropriateness for inclusion of the 
countermeasure in the stockpile.
    The Secretary of HHS would be responsible for arranging the 
procurement, including negotiating the quantity, price, and 
production schedule in five-year contracts or cooperative 
agreements, though eight-year contracts would be permitted for 
first awards. Payment would be conditioned on the delivery of a 
substantial portion of promised units. However, the Secretary 
could provide an advance payment of not to exceed 10 percent of 
the contract if the Secretary determines such payment is 
necessary to the project's success. The Secretary could pay 
vendors for storage, shipping, and handling and would be 
permitted to use noncompetitive procedures if the product is 
available only from a limited number of sources. Additional 
countermeasures for the same threat also could be procured, if 
they were to provide improved safety or effectiveness or 
otherwise enhance public health preparedness.
    The authorized funds could not be used for the purchase of 
vaccines under contracts entered into prior to enactment, or 
for administrative costs. Based on information from 
Administration officials, CBO expects that funding would not be 
available specifically for research and development, although 
the price for the completed products would probably cover some 
development costs.
    The Administration's Plans To Implement Project BioShield. 
Based on existing science and a current assessment of potential 
threats to public health, the Administration has identified 
several agents for which countermeasures are needed to protect 
the public health and could be included in Project BioShield. 
Those agents are smallpox, anthrax, botulinum toxin, plague, 
and Ebola. The Administration estimates that spending for 
countermeasures under Project BioShield, including purchase, 
storage, and replacement costs, would total about $5.6 billion 
over the 2004-2013 period, assuming the successful development 
of those countermeasures and no constraints on funding. More 
than half of those costs would be for the improved smallpox and 
anthrax vaccines. A brief description follows of the security 
countermeasures the Administration plans to acquire and 
stockpile.
    Smallpox. Under Project BioShield, the Administration plans 
to procure a next-generation version of the smallpox vaccine 
called modified vaccinia Ankara (MVA). This new vaccine is an 
attenuated version of the existing vaccine and may be used to 
safely vaccinate about 30 million individuals with compromised 
immune systems, eczema, or certain other high-risk conditions. 
Under the authority provided for Project BioShield, HHS plans 
to purchase 60 million doses of the new vaccine at about $15 
per dose over a three-year period for a cost of about $900 
million. The Administration expects to be able to enter into 
contracts and begin acquiring the vaccine in 2004. Additional 
costs for inventory management and replacement of expired 
stocks over the 2007-2013 period would likely add another $1 
billion, according to Administration estimates, but could be 
lower if long-term refrigerated storage proves to be effective.
    Anthrax. The Administration also expects to purchase about 
60 million doses of a next-generation anthrax vaccine, called a 
recombinant protective antigen (rPA) vaccine, under Project 
BioShield. The rPA vaccine require fewer doses per person than 
the current vaccine, and potentially could be effective for 
people who have already been exposed to anthrax, giving the 
government the ability to vaccinate about 20 million people. 
The Administration anticipates beginning the procurement 
process in the next few years and spending about $700 million 
on the vaccine over a three-year period. Because the rPA 
anthrax vaccine has an expected shelf life of five to six 
years, additional costs would be incurred for inventory 
management and replacement. The Administration estimates that 
costs for the rPA vaccine could total $1.4 billion over the 
2004-2013 period.
    Botulinum Toxin. Under current law, HHS has stockpiled some 
antitoxins to treat botulism, a paralytic and often fatal 
illness caused by a nerve toxin produced by the botulinum 
bacteria. However, those antitoxins are no longer manufactured, 
and the manufacturing process, which requires horse serum, is 
complicated and time intensive. After identifying a 
manufacturer, the Administration plans to spend about $800 
million acquiring newly produced antitoxin at a cost of about 
$2,000 per dose as part of Project BioShield. Acquisition would 
be spread over a three-year period, beginning in the next few 
years. This antitoxin would require specialized storage and 
refrigeration.
    In addition, the Administration has indicated that it would 
like to purchase both a vaccine that would protect against 
botulism and monoclonal antibodies to neutralize the effects of 
the toxin. (Monoclonal antibodies are engineered proteins that 
can neutralize and destroy certain pathogens and toxins.) The 
Administration anticipates buying vaccine and monoclonal 
antibodies by 2007 or 2008, at a cost of about $140 million for 
750,000 doses of the vaccine and $750 million for monoclonal 
antibodies. The Administration estimates that spending for 
botulinum countermeasures, including the cost of storage and 
inventory management, would total $1.8 billion over the 2004-
2013 period.
    Plague. Plague is an infectious disease caused by a 
bacterium. Plague has several forms--pneumonic, bubonic, and 
septicemic--and can be treated by existing antibiotics. A 
vaccine for the plague is currently in the research and 
development phase, with the expectation that a product 
potentially could reach the advanced development phase next 
year. Beginning in 2005, the Administration expects to procure 
about 2 million doses (enough to treat people in areas 
surrounding any outbreak) at an estimated cost of about $40 per 
dose--for a total cost of about $80 million. With additional 
costs related to the acquisition of the vaccine, the 
Administration estimates spending on plague countermeasures 
would total about $220 million over the 2004-2013 period.
    Ebola. There is no current treatment for Ebola, one of 
several viral hemorrhagic fevers, but the National Institutes 
of Health (NIH) is conducting research on a vaccine that the 
Administration would be interested in purchasing when it 
reaches an advanced development stage. Under current plans, the 
Administration intends to purchase enough vaccine for 3 million 
individuals to prevent the spread of an outbreak. Because this 
vaccine is still in the research and development phase, when 
the vaccine would become available and the potential cost per 
dose are unclear. The Administration assumes the vaccine will 
become available in 2005, and estimates the price to be about 
$30 per dose, for a total acquisition cost of $90 million. 
Combined with other costs related to the Ebola vaccine, 
including storage and replacement, the Administration 
anticipates spending would total about $260 million over the 
2004-2013 period for this aspect of Project BioShield.
    CBO's Estimate of the Potential Cost of Project BioShield. 
CBO has estimated both the cost of implementing the 
Administration's plan and the potential cost of acquiring other 
products not encompassed by that plan.
    CBO's Estimate of the Administration's Plan. Without any 
funding constraints, CBO expects that the Administration's 
plans for MVA smallpox vaccine, the anthrax rPA vaccine, and 
the botulism antitoxins would likely take shape as described, 
albeit more slowly than the Administration estimates. CBO 
estimates that spending for vaccines and monoclonal antibodies 
for botulism and vaccines for plague and Ebola would likely be 
lower than the Administration estimates, even without funding 
constraints. CBO's lower estimate reflects the possibility that 
development of those vaccines and monoclonal antibodies might 
not succeed as quickly as the Administration's estimate 
assumes. It also reflects the possibility that Project 
BioShield would spend less on some of the botulism 
countermeasures if all three countermeasures (vaccine, 
antitoxins, and monoclonal antibodies) became available.
    CBO estimates that about $5.2 billion would be required to 
procure products identified by the Administration over the 
2004-2013 period.
    Estimated Spending for Products Not Listed in the 
Administration's Plan. Under the bill, other countermeasures 
not in the Administration's plan could be purchased with 
appropriations provided through Project BioShield. 
Consequently, the specific security countermeasures that would 
be acquired under H.R. 2122 are likely to evolve over time as 
the result of many factors, including scientific advances, the 
interest and cooperation of biotech and other manufacturing 
companies, the emergence of new threats, and changes in this 
and future Administrations' assessments of which potential 
countermeasures should be a priority. Barriers to technological 
advance such as restricted laboratory space or shortage of 
primates for testing could slow development of countermeasures 
for certain agents. At the same time, rapid advances in 
products currently in the early-stage research and development 
could present the government with unforeseen countermeasure 
options. Acquisition of countermeasures would also be affected 
by whether this and future Administrations decide to procure 
products that require more than five years to be licensed or 
have a significant commercial market.
    Acquisitions under the bill might include additional 
countermeasures for agents addressed by the Administration's 
plan. For instance, potential emerging treatments include the 
use of monoclonal antibodies. This technology has had initial 
application in the treatment of cancer, and possibly could be 
applied to anthrax, the plague, or viral hemorrhagic fevers in 
the coming years. Other potential countermeasures include new 
antiviral drugs to treat smallpox and viral hemorrhagic fevers 
(both biodefense research priorities for NIH) and a narrow-
spectrum antibiotic for anthrax.
    In addition, CBO's research indicates there are numerous 
other biological agents for which countermeasures ultimately 
could be purchased under Project BioShield. HHS has established 
three classes of biological agents that pose significant risks 
to national security and the public health. Category A agents 
pose the greatest risk due to their ease of transmission, 
mortality rates, and overall risk to the public. All of the 
agents included in the Administration's plan are considered 
Category A agents, but that initial plan does not address such 
Category A agents as tularemia, a bacterial infection affecting 
the respiratory system, and viral hemorrhagic fevers other than 
Ebola. Vaccines for both of those agents are biodefense 
research priorities of NIH. Further, the government might seek 
countermeasures for some Category B and C agents, including 
toxins such as ricin, certain bacteria such as brucellosis, and 
several forms of viral encephalitis.
    Also, under the authority provided by the bill, the 
government could procure countermeasures against chemical 
agents (nerve, blister, blood, and pulmonary agents) and 
radiological and nuclear agents. The Administration currently 
does not plan to use the bill's authority to purchase agents 
that could mitigate threats from these sources, but it could do 
so if the perceived threat from these agents changed or if 
certain treatments became scientifically feasible. 
Countermeasures that could be acquired under Project BioShield 
include existing treatments for many nerve gases (including VX, 
Sarin, and Soman gas), Prussian Blue (a treatment for certain 
types of radiation poisoning), and hydroxycobalamin (a 
treatment for cyanide poisoning that is in an advanced stage of 
development).
    Finally, under H.R. 2122, Project BioShield would be able 
to purchase devices to detect and diagnose pathogens and other 
agents. Costs for such devices are also not included in the 
Administration's estimate.
    To estimate potential spending for additional 
countermeasures not mentioned in the Administration's plan, CBO 
identified several category A, B, and C biological agents and 
chemical and radiological agents for which countermeasures 
exist or are under development. The set of selected agents and 
countermeasures is not intended as a prediction of which 
countermeasures would be acquired by Project BioShield. Rather, 
it is intended to be representative of the countermeasures that 
would be eligible for acquisition if current research and 
development activities succeed in producing qualified 
countermeasures during the coming decade.
    For each of the representative biological agents, CBO 
determined whether the countermeasure is likely to be a 
vaccine, an antitoxin or antiviral, or a monoclonal antibody, 
the dosage and method of delivery (intravenously or in pill 
form), and the amount necessary to treat the population that 
could potentially be affected. The estimate assumes that 
vaccines would cost $30 to $40 per dose, on average, with 
Project BioShield acquiring 500,000 to 2 million doses of 
qualified vaccines, depending on whether the agent is 
infectious. CBO estimates that monoclonal antibodies would cost 
$5,000 per treatment, and that Project Bioshield would acquire 
enough to treat several hundred thousand people if qualified 
products became available. The estimate assumes that, if other 
types of qualified antivirals or antitoxins became available, 
Project BioShield would acquire enough to treat 500,000 people, 
at costs ranging from $2,000 to $5,000 per person for certain 
intravenously-administered forms. Other countermeasures could 
be less expensive on a per-person basis. For example, certain 
antivirals or narrow-spectrum antibiotics in pill form could 
cost about $100 per treatment, CBO estimates. Additionally, CBO 
estimates that per-person costs would average $50 for Prussian 
Blue, $100 for intravenous treatments for hydrogen cyanide, and 
$300 per treatment for countermeasures for certain radiological 
and nuclear agents. If Project BioShield acquired those types 
of countermeasures, CBO assumes that the quantity procured 
would be sufficient to respond to simultaneous events in 
several large cities.
    Under optimistic assumptions about when countermeasures for 
the representative agents would become available, the cost of 
acquiring, storing, and replacing all qualified countermeasures 
for those agents could total $10 billion to $20 billion during 
the 2004-2013 period. However, CBO assumes that research and 
development efforts for some countermeasures will proceed 
slowly or be unsuccessful, and that the Administration would 
not acquire all products that could be designated as security 
countermeasures.
    Assuming appropriation of the authorized amount, CBO 
estimates that discretionary spending to acquire and store 
BioShield products would total $0.3 billion in 2004 and $5.5 
billion over the 2004-2013 period. Acquisition costs would 
comprise 70 percent to 80 percent of that amount, while 
inventory management and replacement costs would make up the 
balance.
    CBO also estimates that implementing Project BioShield 
would add to the administrative costs of HHS and DHS, both for 
the contracting process and managing the stockpile. Funding for 
those costs would come from appropriated funds. Based on 
current spending for program support services for bioterrorism-
related activities (including the SNS) at the Centers for 
Disease Control and Prevention, CBO estimates that 
administrative costs would be about $10 million a year. Subject 
to the appropriation of necessary amounts, CBO estimates that 
discretionary spending for such costs would increase by $7 
million in 2004 and $0.1 billion over the 2004-2013 period.

            Research and development into qualified countermeasures

    H.R. 2122 would authorize the Secretary of HHS to expedite 
procurement and peer review for research related to qualified 
countermeasures. The bill also would allow the Secretary to 
secure the services of expects or consultants with relevant 
expertise. Implementation of these measures could increase the 
resources required by the agency, accelerate spending, or both. 
CBO does not have sufficient information to estimate the 
additional resources that might be required by the agency or 
the rate at which spending might accelerate under the bill. 
Such spending could come from appropriated funds.

            Authorization for medical products for use in emergencies

    The FDA's regulatory process allows for expedited approval 
of security countermeasures under current law. Pursuant to the 
Public Health Security and Bioterrorism Preparedness and 
Response Act of 2002, the FDA may allow certain drugs, devices, 
and bioligics defined as priority countermeasures to move more 
quickly through the agency's regulatory process. To further 
expedite the development of security countermeasures, the FDA 
has implemented a rule that allows approval of certain drugs 
based on tests in animals.
    H.R. 2122 would allow the Secretary of HHS to authorize the 
FDA to approve the use of certain drugs or devices for use 
during periods designated as emergencies by the Secretary of 
HHS, DHS, or Defense. The authorization would remain in effect 
for no more than one year, unless the Secretary determines 
otherwise based on the nature of the emergency. When the 
Secretary authorizes the emergency use of a product that is an 
unapproved use of an approved product, the bill would provide 
some flexibility to manufacturers in carrying out activities 
under the emergency use authorization.
    Based on information from Administration officials, CBO 
expects that implementing this provision in H.R. 2122 would not 
increase costs to the FDA. Over the past year, the FDA has 
hired about 100 people to review drug applications and provide 
assistance to companies engaged in research and development 
into security countermeasures. Thus, the agency already has the 
infrastructure to handle the additional authority related to 
the proposed emergency-use authorization and would not require 
additional resources. Therefore, CBO estimates that this 
provision of H.R. 2122 would have no budgetary effect.
    Previous CBO estimates: S. 15, the Project BioShield Act of 
2003, as reported by the Senate Committee on Health, Education, 
Labor and Pensions on March 25, 2003, would amend the Public 
Health Service Act (PHSA) to create permanent, indefinite 
funding authority for the procurement of certain biomedical 
countermeasures. In its cost estimate dated May 7, 2003, CBO 
estimated that enacting S. 15 would increase direct spending by 
$270 million in 2004 and $8.1 billion over the 2004-2013 
period.
    Although both H.R. 2122 and S. 15 would authorize programs 
to procure countermeasures to protect the public health against 
terrorism, H.R. 2122 would not have an effect on direct 
spending; instead, the bill would authorize appropriations of 
up to $5.6 billion over the 2004-2013 period. Estimated 
spending under H.R. 2122 is less than under S. 15 because the 
House bill would authorize a set amount of appropriations, 
whereas the Senate bill would provide unlimited direct spending 
authority.
    In several areas, H.R. 2122 would allow the Secretary more 
flexibility in terms of what products could be procured and how 
contracts would be structured. H.R. 2122 would allow the 
procurement of countermeasures even if they have a significant 
commercial application, while S. 15 would restrict the 
procurement authority to those without such application. While 
S. 15 would require the Secretary to determine that a 
countermeasure is likely to be approved by the FDA within five 
years as a condition of procurement, H.R. 2122 would require 
only that the Secretary consider whether a five-year limit is 
feasible. H.R. 2122 would provide additional flexibility in 
contracting by permitting the Secretary to extend first-time 
contracts to eight years (versus five in S. 15) and would allow 
the Secretary discretion to provide a 10 percent advance to 
companies developing new products. Those provisions would 
accelerate spending relative to S. 15.
    On June 6, 2003, CBO transmitted a cost estimate for H.R. 
2122 as ordered reported by the House Committee on Energy and 
Commerce on May 15, 2003. That version of H.R. 2122 is nearly 
identical to the version of H.R. 2122 approved by the Committee 
on Government Reform. CBO's estimates of the costs of the two 
versions of H.R. 2122 are identical.
    Intergovernmental and private-sector impact: H.R. 2122 
contains no intergovernmental or private-sector mandates as 
defined in UMRA and would impose no costs on state, local, or 
tribal governments.
    Estimate prepared by: Federal costs: Jeanne De Sa and Sam 
Papenfuss; impact on state, local, and tribal governments: Leo 
Lex; Impact on the private sector: Samuel Kina.
    Estimate approved by: Robert A. Sunshine, Assistant 
Director for Budget Analysis.

         Changes in Existing Law Made by the Bill, as Reported

  In compliance with clause 3(e) of rule XIII of the Rules of 
the House of Representatives, changes in existing law made by 
the bill, as reported, are shown as follows (existing law 
proposed to be omitted is enclosed in black brackets, new 
matter is printed in italic, existing law in which no change is 
proposed is shown in roman):

PUBLIC HEALTH SERVICE ACT

           *       *       *       *       *       *       *

TITLE III--GENERAL POWERS AND DUTIES OF PUBLIC HEALTH SERVICE

           *       *       *       *       *       *       *

Part B--Federal-State Cooperation

           *       *       *       *       *       *       *

SEC. 319F-1. AUTHORITY FOR USE OF CERTAIN PROCEDURES REGARDING 
                    BIOMEDICAL COUNTERMEASURE RESEARCH AND DEVELOPMENT 
                    ACTIVITIES.

  (a) In General.--
          (1) Authority.--In conducting and supporting research 
        and development activities regarding biomedical 
        countermeasures under section 319F(h), the Secretary 
        may conduct and support such activities in accordance 
        with this section if the activities concern qualified 
        countermeasures.
          (2) Qualified countermeasure.--For purposes of this 
        section, the term ``qualified countermeasure'' means a 
        priority countermeasure (as defined in section 319F(h)) 
        that affects national security.
          (3) Interagency cooperation.--
                  (A) In general.--In carrying out activities 
                under this section, the Secretary is 
                authorized, subject to subparagraph (B), to 
                enter into interagency agreements and other 
                collaborative undertakings with other agencies 
                of the United States Government.
                  (B) Limitation.--An agreement or undertaking 
                under this paragraph shall not authorize 
                another agency to exercise the authorities 
                provided by this section.
          (4) Availability of facilities to the secretary.--In 
        any grant or cooperative agreement entered into under 
        the authority provided in this section with respect to 
        a biocontainment laboratory or other related or 
        ancillary specialized research facility that the 
        Secretary determines necessary for the purpose of 
        performing, administering, and supporting qualified 
        countermeasure research and development, the Secretary 
        may provide that the facility that is the object of 
        such grant or cooperative agreement shall be available 
        as needed to the Secretary to respond to public health 
        emergencies affecting national security.
  (b) Expedited Procurement Authority.--
          (1) Increased simplified acquisition threshold for 
        biomedical countermeasure procurements.--
                  (A) In general.--For any procurement by the 
                Secretary of property or services for use (as 
                determined by the Secretary) in performing, 
                administering, or supporting qualified 
                countermeasure research or development 
                activities under this section that the 
                Secretary determines necessary to respond to 
                pressing research and development needs under 
                this section, the amount specified in section 
                4(11) of the Office of Federal Procurement 
                Policy Act (41 U.S.C. 403(11)), as applicable 
                pursuant to section 302A(a) of the Federal 
                Property and Administrative Services Act of 
                1949 (41 U.S.C. 252a(a)), shall be deemed to be 
                $25,000,000 in the administration, with respect 
                to such procurement, of--
                          (i) section 303(g)(1)(A) of the 
                        Federal Property and Administrative 
                        Services Act of 1949 (41 U.S.C. 
                        253(g)(1)(A)) and its implementing 
                        regulations; and
                          (ii) section 302A(b) of such Act (41 
                        U.S.C. 252a(b)) and its implementing 
                        regulations.
                  (B) Application of certain provisions.--
                Notwithstanding subparagraph (A) and the 
                provision of law and regulations referred to in 
                such subparagraph, each of the following 
                provisions shall apply to procurements 
                described in this paragraph to the same extent 
                that such provisions would apply to such 
                procurements in the absence of subparagraph 
                (A):
                          (i) Chapter 37 of title 40, United 
                        States Code (relating to contract work 
                        hours and safety standards).
                          (ii) Subsections (a) and (b) of 
                        section 7 of the Anti-Kickback Act of 
                        1986 (41 U.S.C. 57(a) and (b)).
                          (iii) Section 304C of the Federal 
                        Property and Administrative Services 
                        Act of 1949 (41 U.S.C. 254d) (relating 
                        to the examination of contractor 
                        records).
                  (C) Internal controls to be instituted.--The 
                Secretary shall institute appropriate internal 
                controls for procurements that are under this 
                paragraph, including requirements with regard 
                to documenting the justification for use of the 
                authority in this paragraph.
          (2) Other than full and open competition.--(A) In 
        using the authority provided in section 303(c)(1) of 
        title III of the Federal Property and Administrative 
        Services Act of 1949 (41 U.S.C. 253(c)(1)) to use 
        procedures other than competitive procedures in the 
        case of a procurement described in paragraph (1) of 
        this subsection, the phrase ``available from only one 
        responsible source'' in such section 303(c)(1) shall be 
        deemed to mean ``available from only one responsible 
        source or only from a limited number of responsible 
        sources''.
          (B) The authority under subparagraph (A) is in 
        addition to any other authority to use procedures other 
        than competitive procedures.
          (C) The Secretary shall implement this paragraph in 
        accordance with applicable government-wide regulations, 
        including requirements that offers be solicited from as 
        many potential sources as is practicable under the 
        circumstances, that required notices be published, and 
        that submitted offers be considered.
          (3) Increased micropurchase threshold.--
                  (A) In general.--For a procurement described 
                by paragraph (1), the amount specified in 
                subsections (c), (d), and (f) of section 32 of 
                the Office of Federal Procurement Policy Act 
                (41 U.S.C. 428) shall be deemed to be $15,000 
                in the administration of that section with 
                respect to such procurement.
                  (B) Internal controls to be instituted.--The 
                Secretary shall institute appropriate internal 
                controls for purchases that are under this 
                paragraph and that are greater than $2,500.
                  (C) Exception to preference for purchase card 
                mechanism.--No provision of law establishing a 
                preference for using a Government purchase card 
                method for purchases shall apply to purchases 
                that are under this paragraph and that are 
                greater than $2,500.
  (c) Authority To Expedite Peer Review.--
          (1) In general.--The Secretary may, as the Secretary 
        determines necessary to respond to pressing qualified 
        countermeasure research and development needs under 
        this section, employ such expedited peer review 
        procedures (including consultation with appropriate 
        scientific experts) as the Secretary, in consultation 
        with the Director of NIH, deems appropriate to obtain 
        assessment of scientific and technical merit and likely 
        contribution to the field of qualified countermeasure 
        research, in place of the peer review and advisory 
        council review procedures that would be required under 
        sections 301(a)(3), 405(b)(1)(B), 405(b)(2), 
        406(a)(3)(A), 492, and 494, as applicable to a grant, 
        contract, or cooperative agreement--
                  (A) that is for performing, administering, or 
                supporting qualified countermeasure research 
                and development activities; and
                  (B) the amount of which is not greater than 
                $1,500,000.
          (2) Subsequent phases of research.--The Secretary's 
        determination of whether to employ expedited peer 
        review with respect to subsequent phases of a research 
        grant or cooperative agreement under this section shall 
        be determined without regard to the peer review 
        procedures used for any prior peer review of that same 
        grant or cooperative agreement.
  (d) Authority for Personal Services Contracts.--
          (1) In general.--For the purpose of performing, 
        administering, and supporting qualified countermeasure 
        research and development activities, the Secretary may, 
        as the Secretary determines necessary to respond to 
        pressing qualified countermeasure research and 
        development needs under this section, obtain by 
        contract (in accordance with section 3109 of title 5, 
        United States Code, but without regard to the 
        limitations in such section on the period of service 
        and on pay) the personal services of experts or 
        consultants who have scientific or other professional 
        qualifications, except that in no case shall the 
        compensation provided to any such expert or consultant 
        exceed the daily equivalent of the annual rate of 
        compensation for the President.
          (2) Federal tort claims act coverage.--
                  (A) In general.--A person carrying out a 
                contract under paragraph (1), and an officer, 
                employee, or governing board member of such 
                person, shall be deemed to be an employee of 
                the Department of Health and Human Services for 
                purposes of claims under sections 1346(b) and 
                2672 of title 28, United States Code, for money 
                damages for personal injury, including death, 
                resulting from performance of functions under 
                such contract.
                  (B) Exclusivity of remedy.--The remedy 
                provided by subparagraph (A) shall be exclusive 
                of any other civil action or proceeding by 
                reason of the same subject matter against the 
                person, officer, employee, or governing board 
                member.
          (3) Internal controls to be instituted.--
                  (A) In general.--The Secretary shall 
                institute appropriate internal controls for 
                contracts under this subsection, including 
                procedures for the Secretary to make a 
                determination of whether a person, or an 
                officer, employee, or governing board member of 
                a person, is deemed to be an employee of the 
                Department of Health and Human Services 
                pursuant to paragraph (2).
                  (B) Determination of employee status to be 
                final.--A determination by the Secretary under 
                subparagraph (A) that a person, or an officer, 
                employee, or governing board member of a 
                person, is or is not deemed to be an employee 
                of the Department of Health and Human Services 
                shall be final and binding on the Secretary and 
                the Attorney General and other parties to any 
                civil action or proceeding.
          (4) Number of personal services contracts limited.--
        The number of experts and consultants whose personal 
        services are obtained under paragraph (1) shall not 
        exceed 30 at any time.
  (e) Streamlined Personnel Authority.--
          (1) In general.--In addition to any other personnel 
        authorities, the Secretary may, as the Secretary 
        determines necessary to respond to pressing qualified 
        countermeasure research and development needs under 
        this section, without regard to such provisions of 
        title 5, United States Code, governing appointments in 
        the competitive service, and without regard to the 
        provisions of chapter 51 and subchapter III of chapter 
        53 of such title relating to classification and General 
        Schedule pay rates, appoint professional and technical 
        employees, not to exceed 30 such employees at any time, 
        to positions in the National Institutes of Health to 
        perform, administer, or support qualified 
        countermeasure research and development activities in 
        carrying out this section.
          (2) Internal controls to be instituted.--The 
        Secretary shall institute appropriate internal controls 
        for appointments under this subsection.
  (f) Actions Committed to Agency Discretion.--Actions by the 
Secretary under the authority of this section are committed to 
agency discretion.
  (g) Effect on Right To File Protest.--Nothing in this section 
shall affect the right of an interested party to file a protest 
with the contracting agency, to file a protest with the 
Comptroller General under subchapter V of chapter 35 of title 
31, United States Code, or to file an action in the United 
States Court of Federal Claims under section 1491(b) of title 
28, United States Code.

SEC. 319F-2. STRATEGIC NATIONAL STOCKPILE.

  (a) Strategic National Stockpile.--
          (1) In general.--The Secretary of Homeland Security 
        (referred to in this section as the ``Homeland Security 
        Secretary''), in coordination with the Secretary and 
        the Secretary of Veterans Affairs, shall maintain a 
        stockpile or stockpiles of drugs, vaccines and other 
        biological products, medical devices, and other 
        supplies in such numbers, types, and amounts as are 
        determined by the Secretary to be appropriate and 
        practicable, taking into account other available 
        sources, to provide for the emergency health security 
        of the United States, including the emergency health 
        security of children and other vulnerable populations, 
        in the event of a bioterrorist attack or other public 
        health emergency.
          (2) Procedures.--The Secretary, in managing the 
        stockpile under paragraph (1), shall--
                  (A) consult with the working group under 
                section 319F(a);
                  (B) ensure that adequate procedures are 
                followed with respect to such stockpile for 
                inventory management and accounting, and for 
                the physical security of the stockpile;
                  (C) in consultation with Federal, State, and 
                local officials, take into consideration the 
                timing and location of special events;
                  (D) review and revise, as appropriate, the 
                contents of the stockpile on a regular basis to 
                ensure that emerging threats, advanced 
                technologies, and new countermeasures are 
                adequately considered;
                  (E) devise plans for the effective and timely 
                supply-chain management of the stockpile, in 
                consultation with appropriate Federal, State 
                and local agencies, and the public and private 
                health care infrastructure; and
                  (F) ensure the adequate physical security of 
                the stockpile.
  (b) Smallpox Vaccine Development.--
          (1) In general.--The Secretary shall award contracts, 
        enter into cooperative agreements, or carry out such 
        other activities as may reasonably be required in order 
        to ensure that the stockpile under subsection (a) 
        includes an amount of vaccine against smallpox as 
        determined by such Secretary to be sufficient to meet 
        the health security needs of the United States.
          (2) Rule of construction.--Nothing in this section 
        shall be construed to limit the private distribution, 
        purchase, or sale of vaccines from sources other than 
        the stockpile described in subsection (a).
  (c) Additional Authority Regarding Procurement of Certain 
Biomedical Countermeasures; Availability of Special Reserve 
Fund.--
          (1) In general.--
                  (A) Use of fund.--A security countermeasure 
                may, in accordance with this subsection, be 
                procured with amounts in the special reserve 
                fund under paragraph (10).
                  (B) Security countermeasure.--For purposes of 
                this subsection, the term ``security 
                countermeasure'' means a priority 
                countermeasure (as defined in section 
                319F(h))--
                          (i) that affects national security;
                          (ii) that is determined under 
                        paragraph (2)(B)(ii) to be a necessary 
                        countermeasure; and
                          (iii)(I) that is approved or cleared 
                        under chapter V of the Federal Food, 
                        Drug, and Cosmetic Act, or licensed 
                        under section 351 of this Act, for use 
                        as a countermeasure to a chemical, 
                        biological, radiological, or nuclear 
                        agent identified as a material threat 
                        under paragraph (2)(A)(ii); or
                          (II) for which the Secretary 
                        determines that sufficient and 
                        satisfactory clinical experience or 
                        research data (including data, if 
                        available, from pre-clinical and 
                        clinical trials) support a reasonable 
                        conclusion that the countermeasure will 
                        qualify for approval or licensing after 
                        the date of a determination under 
                        paragraph (5).
          (2) Determination of material threats.--
                  (A) Material threat.--The Homeland Security 
                Secretary, in consultation with the heads of 
                other agencies as appropriate, shall on an 
                ongoing basis--
                          (i) assess current and emerging 
                        threats of chemical, biological, 
                        radiological, and nuclear agents; and
                          (ii) determine which of such agents 
                        present a material threat against the 
                        United States population.
                  (B) Public health impact; necessary 
                countermeasures.--The Secretary shall on an 
                ongoing basis--
                          (i) assess the potential public 
                        health consequences of use against the 
                        United States population of agents 
                        identified under subparagraph (A)(ii); 
                        and
                          (ii) determine, on the basis of such 
                        assessment, the agents for which 
                        priority countermeasures are necessary 
                        to protect the public health from a 
                        material threat.
          (3) Assessment of availability and appropriateness of 
        countermeasures.--The Secretary, in consultation with 
        the Homeland Security Secretary, shall assess on an 
        ongoing basis the availability and appropriateness of 
        specific countermeasures to address specific threats 
        identified under paragraph (2).
          (4) Call for security countermeasures; commitment for 
        recommendation for procurement.--
                  (A) Proposal to the president.--If, pursuant 
                to an assessment under paragraph (3), the 
                Homeland Security Secretary and the Secretary 
                make a determination that a security 
                countermeasure would be appropriate, such 
                Secretaries may jointly submit to the President 
                a proposal to--
                          (i) issue a call for the development 
                        of such security countermeasure; and
                          (ii) make a commitment that, upon the 
                        first development of such security 
                        countermeasure that meets the 
                        conditions for procurement under 
                        paragraph (5), the Secretaries will, 
                        based in part on information obtained 
                        pursuant to such call, make a 
                        recommendation under paragraph (6) that 
                        the special reserve fund under 
                        paragraph (10) be made available for 
                        the procurement of such security 
                        countermeasure.
                  (B) Countermeasure specifications.--The 
                Homeland Security Secretary and the Secretary 
                shall, to the extent practicable, include in 
                the proposal under subparagraph (A)--
                          (i) estimated quantity of purchase 
                        (in the form of number of doses or 
                        number of effective courses of 
                        treatments regardless of dosage form);
                          (ii) necessary measures of minimum 
                        safety and effectiveness;
                          (iii) estimated price for each dose 
                        or effective course of treatment 
                        regardless of dosage form; and
                          (iv) other information that may be 
                        necessary to encourage and facilitate 
                        research, development, and manufacture 
                        of the countermeasure or to provide 
                        specifications for the countermeasure.
                  (C) Presidential approval.--If the President 
                approves a proposal under subparagraph (A), the 
                Homeland Security Secretary and the Secretary 
                shall make known to persons who may respond to 
                a call for the security countermeasure 
                involved--
                          (i) the call for the countermeasure;
                          (ii) specifications for the 
                        countermeasure under subparagraph (B); 
                        and
                          (iii) a commitment described in 
                        subparagraph (A)(ii).
          (5) Secretary's determination of countermeasures 
        appropriate for funding from special reserve fund.--
                  (A) In general.--The Secretary, in accordance 
                with the provisions of this paragraph, shall 
                identify specific security countermeasures that 
                the Secretary determines, in consultation with 
                the Homeland Security Secretary, to be 
                appropriate for inclusion in the stockpile 
                under subsection (a) pursuant to procurements 
                made with amounts in the special reserve fund 
                under paragraph (10) (referred to in this 
                subsection individually as a ``procurement 
                under this subsection'').
                  (B) Requirements.--In making a determination 
                under subparagraph (A) with respect to a 
                security countermeasure, the Secretary shall 
                determine and consider the following:
                          (i) The quantities of the product 
                        that will be needed to meet the needs 
                        of the stockpile.
                          (ii) The feasibility of production 
                        and delivery within five years of 
                        sufficient quantities of the product.
                          (iii) Whether there is a lack of a 
                        significant commercial market for the 
                        product at the time of procurement, 
                        other than as a security 
                        countermeasure.
          (6) Recommendation for president's approval.--
                  (A) Recommendation for procurement.--In the 
                case of a security countermeasure that the 
                Secretary has, in accordance with paragraphs 
                (2), (3), and (5), determined to be appropriate 
                for procurement under this subsection, the 
                Homeland Security Secretary and the Secretary 
                shall jointly submit to the President, in 
                coordination with the Director of the Office of 
                Management and Budget, a recommendation that 
                the special reserve fund under paragraph (10) 
                be made available for the procurement of such 
                countermeasure.
                  (B) Presidential approval.--The special 
                reserve fund under paragraph (10) is available 
                for a procurement of a security countermeasure 
                only if the President has approved a 
                recommendation under subparagraph (A) regarding 
                the countermeasure.
                  (C) Notice to congress.--The Secretary and 
                the Homeland Security Secretary shall notify 
                the Congress of each decision of the President 
                to approve a recommendation under subparagraph 
                (A). Such notice shall include an explanation 
                of the decision to make available the special 
                reserve fund under paragraph (10) for 
                procurement of such a countermeasure, 
                including, where available, the identification 
                of the potential supplier or suppliers of such 
                countermeasure, and whether other potential 
                suppliers of the same or similar 
                countermeasures were considered and rejected 
                for procurement under this section and the 
                reasons therefor.
                  (D) Subsequent specific countermeasures.--
                Procurement under this subsection of a security 
                countermeasure for a particular purpose does 
                not preclude the subsequent procurement under 
                this subsection of any other security 
                countermeasure for such purpose if the 
                Secretary has determined under paragraph (5)(A) 
                that such countermeasure is appropriate for 
                inclusion in the stockpile and if, as 
                determined by the Secretary, such 
                countermeasure provides improved safety or 
                effectiveness, or for other reasons enhances 
                preparedness to respond to threats of use of a 
                biological, chemical, radiological, or nuclear 
                agent. Such a determination by the Secretary is 
                committed to agency discretion.
                  (E) Rule of construction.--Recommendations 
                and approvals under this paragraph apply solely 
                to determinations that the special reserve fund 
                under paragraph (10) will be made available for 
                a procurement of a security countermeasure, and 
                not to the substance of contracts for such 
                procurement or other matters relating to awards 
                of such contracts.
          (7) Procurement.--
                  (A) In general.--For purposes of a 
                procurement under this subsection that is 
                approved by the President under paragraph (6), 
                the Homeland Security Secretary and the 
                Secretary shall have responsibilities in 
                accordance with subparagraphs (B) and (C).
                  (B) Interagency agreements.--
                          (i) For procurement.--The Homeland 
                        Security Secretary shall enter into an 
                        agreement with the Secretary for 
                        procurement of a security 
                        countermeasure in accordance with the 
                        provisions of this paragraph. The 
                        special reserve fund under paragraph 
                        (10) shall be available for the 
                        Secretary's costs of such procurement, 
                        other than as provided in clause (ii).
                          (ii) For administrative costs.--The 
                        agreement entered into between the 
                        Homeland Security Secretary and the 
                        Secretary for managing the stockpile 
                        under subsection (a) shall provide for 
                        reimbursement of the Secretary's 
                        administrative costs relating to 
                        procurements under this subsection.
                  (C) Procurement.--
                          (i) In general.--The Secretary shall 
                        be responsible for--
                                  (I) arranging for procurement 
                                of a security countermeasure, 
                                including negotiating terms 
                                (including quantity, production 
                                schedule, and price) of, and 
                                entering into, contracts and 
                                cooperative agreements, and for 
                                carrying out such other 
                                activities as may reasonably be 
                                required, in accordance with 
                                the provisions of this 
                                subparagraph; and
                                  (II) promulgating regulations 
                                to implement clauses (v), (vi), 
                                and (vii), and any other 
                                provisions of this subsection.
                          (ii) Contract terms.--A contract for 
                        procurements under this subsection 
                        shall (or, as specified below, may) 
                        include the following terms:
                                  (I) Payment conditioned on 
                                substantial delivery.--The 
                                contract shall provide that no 
                                payment may be made until 
                                delivery has been made of a 
                                substantial portion (as 
                                determined by the Secretary) of 
                                the total number of units 
                                contracted for, except that, 
                                notwithstanding any other 
                                provision of law, the contract 
                                may provide that, if the 
                                Secretary determines (in the 
                                Secretary's discretion) that an 
                                advance payment is necessary to 
                                ensure success of a project, 
                                the Secretary may pay an 
                                amount, not to exceed 10 
                                percent of the contract amount, 
                                in advance of delivery. The 
                                contract shall provide that 
                                such advance payment is 
                                required to be repaid if there 
                                is a failure to perform under 
                                the contract, except in special 
                                circumstances as determined by 
                                the Secretary on a contract by 
                                contract basis.
                                  (II) Contract duration.--The 
                                contract shall be for a period 
                                not to exceed five years, 
                                except that, in first awarding 
                                the contract, the Secretary may 
                                provide for a longer duration, 
                                not exceeding eight years, if 
                                the Secretary determines that 
                                complexities or other 
                                difficulties in performance 
                                under the contract justify such 
                                a period. The contract shall be 
                                renewable for additional 
                                periods, none of which shall 
                                exceed five years.
                                  (III) Storage by vendor.--The 
                                contract may provide that the 
                                vendor will provide storage for 
                                stocks of a product delivered 
                                to the ownership of the Federal 
                                Government under the contract, 
                                for such period and under such 
                                terms and conditions as the 
                                Secretary may specify, and in 
                                such case amounts from the 
                                special reserve fund under 
                                paragraph (10) shall be 
                                available for costs of 
                                shipping, handling, storage, 
                                and related costs for such 
                                product.
                          (iii) Availability of simplified 
                        acquisition procedures.--
                                  (I) In general.--If the 
                                Secretary determines that there 
                                is a pressing need for a 
                                procurement of a specific 
                                countermeasure, the amount of 
                                the procurement under this 
                                subsection shall be deemed to 
                                be below the threshold amount 
                                specified in section 4(11) of 
                                the Office of Federal 
                                Procurement Policy Act (41 
                                U.S.C. 403(11)), for purposes 
                                of application to such 
                                procurement, pursuant to 
                                section 302A(a) of the Federal 
                                Property and Administrative 
                                Services Act of 1949 (41 U.S.C. 
                                252a(a)), of--
                                          (aa) section 
                                        303(g)(1)(A) of the 
                                        Federal Property and 
                                        Administrative Services 
                                        Act of 1949 (41 U.S.C. 
                                        253(g)(1)(A)) and its 
                                        implementing 
                                        regulations; and
                                          (bb) section 302A(b) 
                                        of such Act (41 U.S.C. 
                                        252a(b)) and its 
                                        implementing 
                                        regulations.
                                  (II) Application of certain 
                                provisions.--Notwithstanding 
                                subclause (I) and the provision 
                                of law and regulations referred 
                                to in such clause, each of the 
                                following provisions shall 
                                apply to procurements described 
                                in this clause to the same 
                                extent that such provisions 
                                would apply to such 
                                procurements in the absence of 
                                subclause (I):
                                          (aa) Chapter 37 of 
                                        title 40, United States 
                                        Code (relating to 
                                        contract work hours and 
                                        safety standards).
                                          (bb) Subsections (a) 
                                        and (b) of section 7 of 
                                        the Anti-Kickback Act 
                                        of 1986 (41 U.S.C. 
                                        57(a) and (b)).
                                          (cc) Section 304C of 
                                        the Federal Property 
                                        and Administrative 
                                        Services Act of 1949 
                                        (41 U.S.C. 254d) 
                                        (relating to the 
                                        examination of 
                                        contractor records).
                          (iv) Other than full and open 
                        competition.--(I) In using the 
                        authority provided in section 303(c)(1) 
                        of title III of the Federal Property 
                        and Administrative Services Act of 1949 
                        (41 U.S.C. 253(c)(1)) to use procedures 
                        other than competitive procedures in 
                        the case of a procurement under this 
                        subsection, the phrase ``available from 
                        only one responsible source'' in such 
                        section 303(c)(1) shall be deemed to 
                        mean ``available from only one 
                        responsible source or only from a 
                        limited number of responsible 
                        sources''.
                          (II) The authority under subclause 
                        (I) is in addition to any other 
                        authority to use procedures other than 
                        competitive procedures.
                          (III) The Secretary shall implement 
                        this clause in accordance with 
                        applicable government-wide regulations, 
                        including requirements that offers be 
                        solicited from as many potential 
                        sources as is practicable under the 
                        circumstances, that required notices be 
                        published, and that submitted offers be 
                        considered.
                          (v) Premium provision in multiple 
                        award contracts.--
                                  (I) In general.--If, under 
                                this subsection, the Secretary 
                                enters into contracts with more 
                                than one vendor to procure a 
                                security countermeasure, such 
                                Secretary may, notwithstanding 
                                any other provision of law, 
                                include in each of such 
                                contracts a provision that--
                                          (aa) identifies an 
                                        increment of the total 
                                        quantity of security 
                                        countermeasure 
                                        required, whether by 
                                        percentage or by 
                                        numbers of units; and
                                          (bb) promises to pay 
                                        one or more specified 
                                        premiums based on the 
                                        priority of such 
                                        vendors' production and 
                                        delivery of the 
                                        increment identified 
                                        under item (aa), in 
                                        accordance with the 
                                        terms and conditions of 
                                        the contract.
                                  (II) Determination of 
                                government's requirement not 
                                reviewable.--If the Secretary 
                                includes in each of a set of 
                                contracts a provision as 
                                described in subclause (I), 
                                such Secretary's determination 
                                of the total quantity of 
                                security countermeasure 
                                required, and any amendment of 
                                such determination, is 
                                committed to agency discretion.
                          (vi) Extension of closing date for 
                        receipt of proposals not reviewable.--A 
                        decision by the Secretary to extend the 
                        closing date for receipt of proposals 
                        for a procurement under this subsection 
                        is committed to agency discretion.
                          (vii) Limiting competition to sources 
                        responding to request for 
                        information.--In conducting a 
                        procurement under this subsection, the 
                        Secretary may exclude a source that has 
                        not responded to a request for 
                        information under section 303A(a)(1)(B) 
                        of the Federal Property and 
                        Administrative Services Act of 1949 (41 
                        U.S.C. 253a(a)(1)(B)) if such request 
                        has given notice that the Secretary may 
                        so exclude such a source.
          (8) Interagency cooperation.--
                  (A) In general.--In carrying out activities 
                under this section, the Homeland Security 
                Secretary and the Secretary are authorized, 
                subject to subparagraph (B), to enter into 
                interagency agreements and other collaborative 
                undertakings with other agencies of the United 
                States Government.
                  (B) Limitation.--An agreement or undertaking 
                under this paragraph shall not authorize 
                another agency to exercise the authorities 
                provided by this section to the Homeland 
                Security Secretary or to the Secretary.
          (9) Restrictions on use of funds.--Amounts in the 
        special reserve fund under paragraph (10) shall not be 
        used to pay--
                  (A) costs for the purchase of vaccines under 
                procurement contracts entered into before the 
                date of the enactment of the Project BioShield 
                Act of 2003; or
                  (B) administrative costs.
          (10) Special reserve fund.--For purposes of this 
        subsection, the term ``special reserve fund'' has the 
        meaning given such term in section 510 of the Homeland 
        Security Act of 2002.
  (d) Disclosures.--No Federal agency shall disclose under 
section 552, United States Code, any information identifying 
the location at which materials in the stockpile under 
subsection (a) are stored.
  (e) Definition.--For purposes of subsection (a), the term 
``stockpile'' includes--
          (1) a physical accumulation (at one or more 
        locations) of the supplies described in subsection (a); 
        or
          (2) a contractual agreement between the Homeland 
        Security Secretary and a vendor or vendors under which 
        such vendor or vendors agree to provide to such 
        Secretary supplies described in subsection (a).
  (f) Authorization of Appropriations.--
          (1) Strategic national stockpile.--For the purpose of 
        carrying out subsection (a), there are authorized to be 
        appropriated $640,000,000 for fiscal year 2002, and 
        such sums as may be necessary for each of fiscal years 
        2003 through 2006. Such authorization is in addition to 
        amounts in the special reserve fund under subsection 
        (c)(10).
          (2) Smallpox vaccine development.--For the purpose of 
        carrying out subsection (b), there are authorized to be 
        appropriated $509,000,000 for fiscal year 2002, and 
        such sums as may be necessary for each of fiscal years 
        2003 through 2006.

TITLE IV--NATIONAL RESEARCH INSTITUTES

           *       *       *       *       *       *       *

Part E--Other Agencies of NIH

           *       *       *       *       *       *       *

SEC. 481A. BIOMEDICAL AND BEHAVIORAL RESEARCH FACILITIES.

  (a) Modernization and Construction of Facilities.--
          (1) In general.--The Director of NIH, acting through 
        the Director of the Center or the Director of the 
        National Institute of Allergy and Infectious Diseases, 
        may make grants or contracts to public and nonprofit 
        private entities to expand, remodel, renovate, or alter 
        existing research facilities or construct new research 
        facilities, subject to the provisions of this section.

           *       *       *       *       *       *       *

  (c) Requirements for Grants.--
          (1) In general.--The Director of the Center or the 
        Director of the National Institute of Allergy and 
        Infectious Diseases may make a grant under subsection 
        (a) only if the applicant for the grant meets the 
        following conditions:
                  (A) * * *

           *       *       *       *       *       *       *

          (2) Institutions of emerging excellence.--From the 
        amount appropriated under [subsection (i)] subsection 
        (i)(1) for a fiscal year up to $50,000,000, the 
        Director of the Center shall make available 25 percent 
        of such amount, and from the amount appropriated under 
        such subsection for a fiscal year that is over 
        $50,000,000, the Director of the Center shall make 
        available up to 25 percent of such amount, for grants 
        under subsection (a) to applicants that in addition to 
        meeting the requirements established in paragraph (1), 
        have demonstrated emerging excellence in biomedical or 
        behavioral research, as follows:
                  (A) * * *

           *       *       *       *       *       *       *

  (d) Requirement of Application.--The Director of the Center 
or the Director of the National Institute of Allergy and 
Infectious Diseases may make a grant under subsection (a) only 
if an application for the grant is submitted to the Director 
and the application is in such form, is made in such manner, 
and contains such agreements, assurances, and information as 
the Director determines to be necessary to carry out this 
section.
  (e) Amount of Grant; Payments.--
          (1) Amount.--The amount of any grant awarded under 
        subsection (a) shall be determined by the Director of 
        the Center or the Director of the National Institute of 
        Allergy and Infectious Diseases, except that such 
        amount shall not exceed--
                  (A) 50 percent (or, in the case of the 
                Institute, 75 percent) of the necessary cost of 
                the construction of a proposed facility as 
                determined by the Director; or
                  (B) in the case of a multipurpose facility, 
                40 percent (or, in the case of the Institute, 
                75 percent) of that part of the necessary cost 
                of construction that the Director determines to 
                be proportionate to the contemplated use of the 
                facility.
          (2) Reservation of amounts.--On the approval of any 
        application for a grant under subsection (a), the 
        Director of the Center or the Director of the National 
        Institute of Allergy and Infectious Diseases shall 
        reserve, from any appropriation available for such 
        grants, the amount of such grant, and shall pay such 
        amount, in advance or by way of reimbursement, and in 
        such installments consistent with the construction 
        progress, as the Director may determine appropriate. 
        The reservation of any amount by the Director under 
        this paragraph may be amended by the Director, either 
        on the approval of an amendment of the application or 
        on the revision of the estimated cost of construction 
        of the facility.

           *       *       *       *       *       *       *

          (4) Waiver of limitations.--The limitations imposed 
        under paragraph (1) may be waived at the discretion of 
        the Director of the Center or the Director of the 
        National Institute of Allergy and Infectious Diseases 
        for applicants meeting the conditions described in 
        subsection (c).
  (f ) Recapture of Payments.--If, not later than 20 years 
after the completion of construction for which a grant has been 
awarded under subsection (a)--
          (1) in the case of an award by the Director of the 
        Center, the applicant or other owner of the facility 
        shall cease to be a public or non profit private 
        entity; or
          (2) the facility shall cease to be used for the 
        research purposes for which it was constructed (unless 
        the Director of the Center or the Director of the 
        National Institute of Allergy and Infectious Diseases 
        determines, in accordance with regulations, that there 
        is good cause for releasing the applicant or other 
        owner from obligation to do so),
the United States shall be entitled to recover from the 
applicant or other owner of the facility the amount bearing the 
same ratio to the current value (as determined by an agreement 
between the parties or by action brought in the United States 
District Court for the district in which such facility is 
situated) of the facility as the amount of the Federal 
participation bore to the cost of the construction of such 
facility.

           *       *       *       *       *       *       *

  (i) Authorization of [Appropriations.--For the purpose of 
carrying out this section,] Appropriations.--
          (1) Center.--For the purpose of carrying out this 
        section with respect to the Center, there are 
        authorized to be appropriated $250,000,000 for fiscal 
        year 2001, and such sums as may be necessary for each 
        of the fiscal years 2002 and 2003.
          (2) National institute of allergy and infectious 
        diseases.--For the purpose of carrying out this section 
        with respect to the National Institute of Allergy and 
        Infectious Diseases, there are authorized to be 
        appropriated such sums as may be necessary for fiscal 
        year 2003.
                              ----------                              

            SECTION 510 OF THE HOMELAND SECURITY ACT OF 2002

SEC. 510. PROCUREMENT OF SECURITY COUNTERMEASURES FOR STRATEGIC 
                    NATIONAL STOCKPILE.

  (a) Authorization of Appropriations.--For procurement of 
security countermeasures under section 319F-2(c) of the Public 
Health Service Act (referred to in this section as the 
``security countermeasures program''), there is authorized to 
be appropriated up to $5,593,000,000 for the fiscal years 2004 
through 2013. Of the amounts appropriated under the preceding 
sentence, not to exceed $3,418,000,000 may be obligated during 
the fiscal years 2004 through 2008, of which not to exceed 
$890,000,000 may be obligated during fiscal year 2004.
  (b) Special Reserve Fund.--For purposes of the security 
countermeasures program, the term ``special reserve fund'' 
means the appropriations account established as a result of any 
appropriations made under subsection (a).
  (c) Availability.--
          (1) Duration of availability for obligation.--Subject 
        to paragraph (2), all amounts appropriated under 
        subsection (a) are available for obligation through the 
        end of fiscal year 2013, provided that any portion of 
        such amount that remains unobligated for such purposes 
        on the expiration of such term shall be returned to the 
        United States Treasury and shall not be available for 
        subsequent obligation for any purpose.
          (2) Initial availability for particular 
        procurements.--Amounts appropriated under subsection 
        (a) become available for a procurement under the 
        security countermeasures program only upon the approval 
        by the President of such availability for the 
        procurement in accordance with paragraph (6)(B) of such 
        program.
                              ----------                              

 PUBLIC HEALTH SECURITY AND BIOTERRORISM PREPAREDNESS AND RESPONSE ACT 
                                OF 2002

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

  (a) * * *
  (b) Table of Contents.--The table of contents of the Act is 
as follows:

Sec. 1. Short title; table of contents.

TITLE I--NATIONAL PREPAREDNESS FOR BIOTERRORISM AND OTHER PUBLIC HEALTH 
                               EMERGENCIES

     * * * * * * *

   Subtitle B--Strategic National Stockpile; Development of Priority 
                             Countermeasures

[Sec. 121. Strategic national stockpile.]
     * * * * * * *

[SEC. 121. STRATEGIC NATIONAL STOCKPILE.

  [(a) Strategic National Stockpile.--
          [(1) In general.--The Secretary of Health and Human 
        Services (referred to in this section as the 
        ``Secretary''), in coordination with the Secretary of 
        Veterans Affairs, shall maintain a stockpile or 
        stockpiles of drugs, vaccines and other biological 
        products, medical devices, and other supplies in such 
        numbers, types, and amounts as are determined by the 
        Secretary to be appropriate and practicable, taking 
        into account other available sources, to provide for 
        the emergency health security of the United States, 
        including the emergency health security of children and 
        other vulnerable populations, in the event of a 
        bioterrorist attack or other public health emergency.
          [(2) Procedures.--The Secretary, in managing the 
        stockpile under paragraph (1), shall--
                  [(A) consult with the working group under 
                section 319F(a) of the Public Health Service 
                Act;
                  [(B) ensure that adequate procedures are 
                followed with respect to such stockpile for 
                inventory management and accounting, and for 
                the physical security of the stockpile;
                  [(C) in consultation with Federal, State, and 
                local officials, take into consideration the 
                timing and location of special events;
                  [(D) review and revise, as appropriate, the 
                contents of the stockpile on a regular basis to 
                ensure that emerging threats, advanced 
                technologies, and new countermeasures are 
                adequately considered;
                  [(E) devise plans for the effective and 
                timely supply-chain management of the 
                stockpile, in consultation with appropriate 
                Federal, State and local agencies, and the 
                public and private health care infrastructure; 
                and
                  [(F) ensure the adequate physical security of 
                the stockpile.
  [(b) Smallpox Vaccine Development.--
          [(1) In general.--The Secretary shall award 
        contracts, enter into cooperative agreements, or carry 
        out such other activities as may reasonably be required 
        in order to ensure that the stockpile under subsection 
        (a) includes an amount of vaccine against smallpox as 
        determined by the Secretary to be sufficient to meet 
        the health security needs of the United States.
          [(2) Rule of construction.--Nothing in this section 
        shall be construed to limit the private distribution, 
        purchase, or sale of vaccines from sources other than 
        the stockpile described in subsection (a).
  [(c) Disclosures.--No Federal agency shall disclose under 
section 552, United States Code, any information identifying 
the location at which materials in the stockpile under 
subsection (a) are stored.
  [(d) Definition.--For purposes of subsection (a), the term 
``stockpile'' includes--
          [(1) a physical accumulation (at one or more 
        locations) of the supplies described in subsection (a); 
        or
          [(2) a contractual agreement between the Secretary 
        and a vendor or vendors under which such vendor or 
        vendors agree to provide to the Secretary supplies 
        described in subsection (a).
  [(e) Authorization of Appropriations.--
          [(1) Strategic national stockpile.--For the purpose 
        of carrying out subsection (a), there are authorized to 
        be appropriated $640,000,000 for fiscal year 2002, and 
        such sums as may be necessary for each of fiscal years 
        2003 through 2006.
          [(2) Smallpox vaccine development.--For the purpose 
        of carrying out subsection (b), there are authorized to 
        be appropriated $509,000,000 for fiscal year 2002, and 
        such sums as may be necessary for each of fiscal years 
        2003 through 2006.]
                              ----------                              

        SECTION 564 OF THE FEDERAL FOOD, DRUG, AND COSMETIC ACT

SEC. 564. AUTHORIZATION FOR MEDICAL PRODUCTS FOR USE IN EMERGENCIES.

  (a) In General.--
          (1) Emergency uses.--Notwithstanding sections 505, 
        510(k), and 515 of this Act and section 351 of the 
        Public Health Service Act, and subject to the 
        provisions of this section, the Secretary may authorize 
        the introduction into interstate commerce, during the 
        effective period of a declaration under subsection (b), 
        of a drug or device intended for use in an actual or 
        potential emergency (referred to in this section as an 
        ``emergency use'').
          (2) Approval status of product.--An authorization 
        under paragraph (1) may authorize an emergency use of a 
        product that--
                  (A) is not approved, licensed, or cleared for 
                commercial distribution under a provision of 
                law referred to in such paragraph (referred to 
                in this section as an ``unapproved product''); 
                or
                  (B) is approved, licensed, or cleared under 
                such a provision, but which use is not under 
                such provision an approved, licensed, or 
                cleared use of the product (referred to in this 
                section as an ``unapproved use of an approved 
                product'').
          (3) Relation to other uses.--An emergency use 
        authorized under paragraph (1) for a product is in 
        addition to any other use that is authorized for the 
        product under a provision of law referred to in such 
        paragraph.
          (4) Definitions.--For purposes of this section:
                  (A) The term ``emergency use'' has the 
                meaning indicated for such term in paragraph 
                (1).
                  (B) The term ``product'' means a drug or 
                device.
                  (C) The term ``unapproved product'' has the 
                meaning indicated for such term in paragraph 
                (2)(A).
                  (D) The term ``unapproved use of an approved 
                product'' has the meaning indicated for such 
                term in paragraph (2)(B).
  (b) Declaration of Emergency.--
          (1) In general.--The Secretary may declare an 
        emergency justifying the authorization under this 
        subsection for a product on the basis of--
                  (A) a determination by the Secretary of 
                Homeland Security that there is a national 
                emergency, or a significant potential for a 
                national emergency, involving a heightened risk 
                of attack with a specified biological, 
                chemical, radiological, or nuclear agent or 
                agents;
                  (B) a determination by the Secretary of 
                Defense that there is a military emergency, or 
                a significant potential for a military 
                emergency, involving a heightened risk to 
                United States military forces of attack with a 
                biological, chemical, radiological, or nuclear 
                agent or agents; or
                  (C) a determination by the Secretary of a 
                public health emergency under section 319 of 
                the Public Health Service Act, affecting 
                national security and involving a specified 
                biological, chemical, radiological, or nuclear 
                agent or agents, or a specified disease or 
                condition that may be attributable to such 
                agent or agents.
          (2) Termination of declaration.--
                  (A) In general.--A declaration under this 
                subsection shall terminate upon the earlier 
                of--
                          (i) a determination by the Secretary, 
                        in consultation as appropriate with the 
                        Secretary of Homeland Security or the 
                        Secretary of Defense, that the 
                        circumstances described in paragraph 
                        (1) have ceased to exist; or
                          (ii) the expiration of the one-year 
                        period beginning on the date on which 
                        the declaration is made.
                  (B) Renewal.--Notwithstanding subparagraph 
                (A), the Secretary may renew a declaration 
                under this subsection, and this paragraph shall 
                apply to any such renewal.
          (3) Advance notice of termination.--In terminating a 
        declaration under this section, the Secretary shall 
        provide advance notice that the declaration will be 
        terminated. The period of advance notice shall be a 
        period reasonably determined to provide--
                  (A) in the case of an unapproved product, a 
                sufficient period for disposition of shipments 
                of the product, including the return of such 
                shipments to the manufacturer (in the case of a 
                manufacturer that chooses to have the shipments 
                returned); and
                  (B) in the case of unapproved uses of 
                approved products, a sufficient period for the 
                disposition of any labeling that was provided 
                with respect to the emergency use involved.
          (4) Publication.--The Secretary shall promptly 
        publish in the Federal Register each declaration, 
        determination, and renewal under this subsection.
  (c) Criteria for Issuance of Authorization.--The Secretary 
may issue an authorization under this section with respect to 
the emergency use of a product only if, after consultation with 
the Director of the National Institutes of Health and the 
Director of the Centers for Disease Control and Prevention, to 
the extent feasible and appropriate given the circumstances of 
the emergency involved, the Secretary concludes--
          (1) that an agent specified in a declaration under 
        subsection (b) can cause a serious or life-threatening 
        disease or condition;
          (2) that, based on the totality of scientific 
        evidence available to the Secretary, including data 
        from adequate and well-controlled clinical trials, if 
        available, it is reasonable to believe that--
                  (A) the product may be effective in 
                detecting, diagnosing, treating, or 
                preventing--
                          (i) such disease or condition; or
                          (ii) a serious or life-threatening 
                        disease or condition caused by a 
                        product authorized under this section 
                        or approved under this Act or the 
                        Public Health Service Act, for 
                        detecting, diagnosing, treating, or 
                        preventing such a disease or condition 
                        caused by such an agent; and
                  (B) the known and potential benefits of the 
                product, when used to detect, diagnose, 
                prevent, or treat such disease or condition, 
                outweigh the known and potential risks of the 
                product;
          (3) that there is no adequate, approved, and 
        available alternative to the product for detecting, 
        diagnosing, preventing, or treating such disease or 
        condition; and
          (4) that such other criteria as the Secretary may by 
        regulation prescribe are satisfied.
  (d) Scope of Authorization.--
          (1) In general.--An authorization of a product under 
        this section shall state--
                  (A) each disease or condition that the 
                product may be used to detect, diagnose, 
                prevent, or treat within the scope of the 
                authorization;
                  (B) the Secretary's conclusions, made under 
                subsection (c)(2)(B), that the known and 
                potential benefits of the product, when used to 
                detect, diagnose, prevent, or treat such 
                disease or condition, outweigh the known and 
                potential risks of the product; and
                  (C) the Secretary's conclusions, made under 
                subsection (c), concerning the safety and 
                potential effectiveness of the product in 
                detecting, diagnosing, preventing, or treating 
                such diseases or conditions, including an 
                assessment of the available scientific 
                evidence.
          (2) Confidential information.--Nothing in this 
        section alters or amends section 1905 of title 18, 
        United States Code, or section 552(b)(4) of title 5 of 
        such Code.
  (e) Conditions of Authorization.--
          (1) Unapproved product.--
                  (A) Required conditions.--With respect to the 
                emergency use of an unapproved product, the 
                Secretary, to the extent feasible given the 
                circumstances of the emergency, shall, for 
                persons who choose to carry out one or more 
                activities for which the authorization is 
                issued, establish such conditions on an 
                authorization under this section as the 
                Secretary finds necessary or appropriate to 
                protect the public health, including the 
                following:
                          (i) Appropriate conditions designed 
                        to ensure that, to the extent feasible 
                        given the circumstances of the 
                        emergency, health care professionals 
                        administering the product are 
                        informed--
                                  (I) that the Secretary has 
                                authorized the emergency use of 
                                the product;
                                  (II) of the significant known 
                                and potential benefits and 
                                risks of the emergency use of 
                                the product, and of the extent 
                                to which such benefits and 
                                risks are unknown; and
                                  (III) of the alternatives to 
                                the product that are available, 
                                and of their benefits and 
                                risks.
                          (ii) Appropriate conditions designed 
                        to ensure that, to the extent feasible 
                        given the circumstances of the 
                        emergency, individuals to whom the 
                        product is administered are informed--
                                  (I) that the Secretary has 
                                authorized the emergency use of 
                                the product;
                                  (II) of the significant known 
                                and potential benefits and 
                                risks of such use, and of the 
                                extent to which such benefits 
                                and risks are unknown; and
                                  (III) of the option to accept 
                                or refuse administration of the 
                                product, of the consequences, 
                                if any, of refusing 
                                administration of the product, 
                                and of the alternatives to the 
                                product that are available and 
                                of their benefits and risks.
                          (iii) Appropriate conditions for the 
                        monitoring and reporting of adverse 
                        events associated with the emergency 
                        use of the product.
                          (iv) For manufacturers of the 
                        product, appropriate conditions 
                        concerning recordkeeping and reporting, 
                        including records access by the 
                        Secretary, with respect to the 
                        emergency use of the product.
                  (B) Authority for additional conditions.--
                With respect to the emergency use of an 
                unapproved product, the Secretary, to the 
                extent feasible given the circumstances of the 
                emergency, may, for persons who choose to carry 
                out one or more activities for which the 
                authorization is issued, establish such 
                conditions on an authorization under this 
                section as the Secretary finds necessary or 
                appropriate to protect the public health, 
                including the following:
                          (i) Appropriate conditions on which 
                        entities may distribute the product 
                        with respect to the emergency use of 
                        the product (including limitation to 
                        distribution by government entities), 
                        and on how distribution is to be 
                        performed.
                          (ii) Appropriate conditions on who 
                        may administer the product with respect 
                        to the emergency use of the product, 
                        and on the categories of individuals to 
                        whom, and the circumstances under 
                        which, the product may be administered 
                        with respect to such use.
                          (iii) For persons other than 
                        manufacturers of the product, 
                        appropriate conditions concerning 
                        recordkeeping and reporting, including 
                        records access by the Secretary, with 
                        respect to the emergency use of the 
                        product.
                          (iv) With respect to the emergency 
                        use of the product, waive or limit, to 
                        the extent appropriate given the 
                        circumstances of the emergency, 
                        conditions regarding current good 
                        manufacturing practice otherwise 
                        applicable to the manufacture, 
                        processing, packing, or holding of 
                        products subject to regulation under 
                        this Act, including such requirements 
                        established in section 501.
          (2) Unapproved use.--With respect to the emergency 
        use of a product that is an unapproved use of an 
        approved product:
                  (A) The Secretary may, for manufacturers of 
                the product who choose to carry out one or more 
                activities for which the authorization is 
                issued, establish any of the conditions 
                described in clauses (i) through (iv) of 
                paragraph (1)(A).
                  (B)(i) If the authorization under this 
                section regarding the emergency use authorizes 
                a change in the labeling of the product, but 
                the manufacturer of the product chooses not to 
                make such change, such authorization may not 
                authorize distributors of the product or any 
                other person to alter or obscure the labeling 
                provided by the manufacturer.
                  (ii) In the circumstances described in clause 
                (i), an authorization under this section 
                regarding the emergency use may, for persons 
                who do not manufacture the product and who 
                choose to act under this clause, authorize such 
                persons to provide information on the product 
                in addition to the labeling provided by the 
                manufacturer, subject to compliance with clause 
                (i). Such additional information shall not be 
                considered labeling for purposes of section 
                502.
  (f) Duration of Authorization.--
          (1) In general.--Except as provided in paragraph (2), 
        an authorization under this section shall be effective 
        until the earlier of the termination of the declaration 
        under subsection (b) or a revocation under subsection 
        (g).
          (2) Continued use after end of effective period.--An 
        authorization shall continue to be effective for 
        continued use with respect to patients to whom it was 
        administered during the period described by paragraph 
        (1), to the extent found necessary by such patients' 
        attending physicians.
  (g) Revocation of Authorization.--
          (1) Review.--The Secretary shall periodically review 
        the circumstances and the appropriateness of an 
        authorization under this section.
          (2) Revocation.--The Secretary may revoke an 
        authorization under this section if, in the Secretary's 
        unreviewable discretion, the criteria under subsection 
        (c) for issuance of such authorization are no longer 
        met.
  (h) Publication.--The Secretary shall promptly publish in the 
Federal Register a notice of each authorization, and each 
termination or revocation of an authorization, and an 
explanation of the reasons therefor, under this section.
  (i) Actions Committed to Agency Discretion.--Actions under 
the authority of this section by the Secretary, by the 
Secretary of Defense, or by the Secretary of Homeland Security 
are committed to agency discretion.
  (j) Rules of Construction.--Nothing in this section shall be 
construed to impair or otherwise affect--
          (1) the authority of the President as Commander in 
        Chief of the Armed Forces of the United States under 
        article II, section 2 of the United States 
        Constitution;
          (2) the authority of the Secretary of Defense with 
        respect to the Department of Defense, including the 
        armed forces, under other provisions of Federal law; or
          (3) the authority of the Secretary under section 
        319F-2 to manage the stockpile under such section.
  (k) Application to Members of Armed Forces.--
          (1) Waiver of requirement relating to option to 
        refuse.--In the case of administration of a 
        countermeasure to members of the armed forces, a 
        requirement, under subsection (e)(1)(A)(ii)(III), 
        designed to ensure that individuals are informed of an 
        option to accept or refuse administration of a product, 
        may be waived by the President if the President 
        determines, in writing, that complying with such 
        requirement is not feasible, is contrary to the best 
        interests of the members affected, or is not in the 
        interests of national security.
          (2) Provision of information to member of the armed 
        forces.--If the Secretary makes a determination that it 
        is not feasible for the information required by 
        subsection (e)(1)(A)(ii) to be provided to a member of 
        the armed forces prior to the administration of the 
        product, such information shall be provided to such 
        member of the armed forces (or next-of-kin in the case 
        of the death of a member) to whom the product was 
        administered as soon as possible, but not later than 30 
        days, after such administration. Information concerning 
        the administration of the product shall be recorded in 
        the medical record of the member.
          (3) Effect on statute pertaining to investigational 
        new drugs.--In the case of an authorization based on a 
        determination by the Secretary of Defense under 
        subsection (b)(1)(B), section 1107 of title 10, United 
        States Code, shall not apply to use of a product that 
        is the subject of such authorization, within the scope 
        of such authorization and while such authorization is 
        effective.
  (l) Relation to Other Provisions.--If a product is the 
subject of an authorization under this section, the use of such 
product within the scope of the authorization --
          (1) shall not be subject to any requirements pursuant 
        to section 505(i) or 520(g); and
          (2) shall not be subject to any requirements 
        otherwise applicable to clinical investigations 
        pursuant to other provisions of this Act.
  (m) Discretion Regarding Use of Authorization.--Nothing in 
this section provides the Secretary any authority to require 
any person to carry out any activity that becomes lawful 
pursuant to an authorization under this section, and no person 
is required to inform the Secretary that the person will not be 
carrying out such activity, except that a manufacturer of a 
sole-source unapproved product authorized for emergency use 
shall notify the Secretary within a reasonable period of time 
after the issuance by the Secretary of such authorization if 
such manufacturer does not intend to carry out an activity or 
activities under the authorization. This section does not have 
any legal effect on a person who does not carry out any 
activity for which an authorization under this section is 
issued, or who carries out such an activity pursuant to other 
provisions of this Act or section 351 of the Public Health 
Service Act.
  (n) Enforcement.--A person who carries out an activity 
pursuant to an authorization under this section, but who fails 
to comply with applicable conditions under subsection (e), is 
with respect to that act of noncompliance subject to the 
provisions of law specified in subsection (a) and to the 
enforcement of such provisions under section 301.

                                
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