19–006

108TH CONGRESS REPT 108–147 " HOUSE OF REPRESENTATIVES ! 1st Session Part 1

PROJECT BIOSHIELD ACT OF 2003

JUNE 10, 2003.—Ordered to be printed 

Mr. TAUZIN, from the Committee on Energy and Commerce, 

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 Energy and Commerce, 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 without 

amendment and recommend that the bill do pass. 

CONTENTS 

Page 

Purpose and Summary ............................................................................................ 1

Background and Need for Legislation .................................................................... 2

Hearings ................................................................................................................... 2

Committee Consideration ........................................................................................ 3

Committee Votes ...................................................................................................... 3

Committee Oversight Findings ............................................................................... 3

Statement of General Performance Goals and Objectives .................................... 3

New Budget Authority, Entitlement Authority, and Tax Expenditures ............. 3

Committee Cost Estimate ....................................................................................... 3

Congressional Budget Office Estimate ................................................................... 3

Federal Mandates Statement ................................................................................. 13

Advisory Committee Statement .............................................................................. 13

Constitutional Authority Statement ...................................................................... 13

Applicability to Legislative Branch ........................................................................ 13

Section-by-Section Analysis of the Legislation ...................................................... 13

Committee Correspondence .................................................................................... 20

Changes in Existing Law Made by the Bill, as Reported ..................................... 21

PURPOSE AND SUMMARY

The purpose of the Project BioShield Act of 2003 is to provide the 

Secretary of Health and Human Services with greater authority 

and flexibility to facilitate the research and development of bioVerDate Jan 31 2003 06:52 Jun 13, 2003 Jkt 019006 PO 00000 Frm 00001 Fmt 6659 Sfmt 6602 E:\HR\OC\HR147P1.XXX HR147P1
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medical countermeasures; to authorize the appropriation of funding 

for the procurement of security countermeasures through the creation of a special reserve fund; and to authorize the emergency use 

of unapproved drugs, devices, and biologics and the emergency unapproved use of approved drugs, devices, and biologics. 

BACKGROUND AND NEED FOR LEGISLATION

During times of nation, military, or public health emergency, the 

American people may be placed at risk of exposure to biological, 

chemical, radiological, or nuclear agents, and the diseases caused 

by such agents. Unfortunately, there may not be approved or available countermeasures to treat diseases or conditions caused by 

such agents. Currently, companies have little incentive to research, 

develop, or produce vaccines or other drugs simply for a possible 

one-time purchase by the Federal government for the Strategic National Stockpile. Most current private sector research and development dollars go for drugs or devices that will have continuous commercial application. In addition, some of the current generation of 

drugs or devices may have special uses as countermeasures to biological agents like Ebola, but there is little incentive to perform the 

research or development or production activities that might tailor 

the drug or drug approvals for such a purpose. 

Even if a product has been developed to treat such diseases or 

conditions, if the product has not yet been approved by the Food 

and Drug Administration (FDA), access to the therapy is greatly 

limited. Nothing in the Food and Drug Act allows the Secretary to 

suspend the approval requirements to ensure access to unapproved 

drugs and devices on a large-scale basis in times of emergency. 

Under present law, if a product is not approved by the FDA, then 

it is unlawful to provide that product to an individual, unless the 

product has been authorized for distribution under an investigational new drug (IND) application (for a drug and biologic) or an 

investigational device exemption (IDE). When a drug or device is 

available under such procedures, a number of conditions apply that 

make the use of an IND or IDE infeasible in times of national 

emergency, where drugs and devices may need to be deployed at 

rapid rates. Even if a drug, biologic, or device is highly promising 

in treating a disease or condition associated with biological chemical radiological or nuclear agents, and even if it is the only therapy available, current FDA law does not allow for rapid deployment of the product. 

The Project Bioshield Act is designed to help resolve these problems and make our nation more secure. Like the Public Health Security and Bioterrorism Preparedness and Response Act, the 

project Bioshield Act is designed to help the administration and the 

nation in public health emergency preparedness, but relies on the 

ingenuity and hard work of Americans in the private and public 

sector to achieve these goals. 

HEARINGS

The Subcommittee on Health held a joint hearing with the Subcommittee on Emergency Preparedness and Response of the Select 

Committee on Homeland Security on ‘‘Furthering Public Health Security: Project Bioshield’’ on March 27, 2003. The Subcommittee reVerDate Jan 31 2003 06:52 Jun 13, 2003 Jkt 019006 PO 00000 Frm 00002 Fmt 6659 Sfmt 6602 E:\HR\OC\HR147P1.XXX HR147P1
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ceived testimony from: The Honorable Tommy Thompson, Secretary, U.S. Department of Health and Human Services; Mr. Leighton Read M.D., General Partner, Alloy Ventures, on behalf of Biotechnology Industry Organization; Mr. Michael Friedman M.D., 

Chief Medical Officer for Biomedical Preparedness, PhRMA; Mr. 

James Baker Jr., Ruth Dow Doan Professor, Center for Biological 

Nanotechnology; and, Mr. Gary Noble M.D., Vice President of Medical and Public Affairs, Johnson & Johnson, on behalf of AdvaMed. 

COMMITTEE CONSIDERATION

On Thursday, May 15, 2003, the Full Committee met in open 

markup session and ordered a Committee Print reported to the 

House, as amended, by voice vote. A request by Mr. Tauzin to allow 

a report to be filed on a bill to be introduced by Mr. Tauzin, and 

that the actions of the Committee be deemed as actions on that 

bill, was agreed to by unanimous consent. 

COMMITTEE VOTES

Clause 3(b) of rule XIII of the Rules of the House of Representatives requires the Committee to list the record votes on the motion 

to report legislation and amendments thereto. There were no 

record votes taken in connection with ordering the Committee Print 

reported. A motion by Mr. Tauzin to order the Committee Print reported to the House, as amended, was agreed to by a voice vote. 

COMMITTEE OVERSIGHT FINDINGS

Pursuant to clause 3(c)(1) of rule XIII of the Rules of the House 

of Representatives, the Committee has held oversight hearings and 

made findings that are reflected in this report. 

STATEMENT OF GENERAL PERFORMANCE GOALS AND OBJECTIVES

The purpose of the Project BioShield Act of 2003 is to provide the 

Secretary of Health and Human Services with greater authority 

and flexibility to facilitate the research and development of biomedical countermeasures. 

NEW BUDGET AUTHORITY, ENTITLEMENT AUTHORITY, AND TAX

EXPENDITURES

In compliance with clause 3(c)(2) of rule XIII of the Rules of the 

House of Representatives, the Committee finds that H.R. 2212, the 

Project Bioshield Act of 2003, would result in no new or increased 

budget authority, entitlement authority, or tax expenditures or revenues. 

COMMITTEE COST ESTIMATE

The Committee adopts as its own the cost estimate prepared by 

the Director of the Congressional Budget Office pursuant to section 

402 of the Congressional Budget Act of 1974. 

CONGRESSIONAL BUDGET OFFICE ESTIMATE

Pursuant to clause 3(c)(3) of rule XIII of the Rules of the House 

of Representatives, the following is the cost estimate provided by 

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the Congressional Budget Office pursuant to section 402 of the 

Congressional Budget Act of 1974: 

U.S. CONGRESS, 

CONGRESSIONAL BUDGET OFFICE, 

Washington, DC, June 6, 2003. 

Hon. W. J. ‘‘BILLY’’ TAUZIN, 

Chairman, Committee on Energy and Commerce, 

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 

year 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 year 2004 

through 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. 

Assuming 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 

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of this legislation fall within budget function 550 (health). CBO assumes that H.R. 2112 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 Level ......... 890 2,528 0 0 0 2,175 0 0 0 0

Estimated Outlays ............................ 270 680 870 770 510 440 560 650 490 250

Administrative Costs: 

Estimated Authorization Level ......... 9 9 9 9 10 10 10 10 11 11

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 and 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. 2122 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 approval 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 priorVerDate Jan 31 2003 06:52 Jun 13, 2003 Jkt 019006 PO 00000 Frm 00005 Fmt 6659 Sfmt 6602 E:\HR\OC\HR147P1.XXX HR147P1
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ities. 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, radiological, 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 those 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 adVerDate Jan 31 2003 06:52 Jun 13, 2003 Jkt 019006 PO 00000 Frm 00006 Fmt 6659 Sfmt 6602 E:\HR\OC\HR147P1.XXX HR147P1
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vance 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 threeyear 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 antigent (rPA) vaccine, under Project BioShield. 

The rPA vaccine would 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 

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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. 

9

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 unforseen 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 fever (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 infecVerDate Jan 31 2003 06:52 Jun 13, 2003 Jkt 019006 PO 00000 Frm 00009 Fmt 6659 Sfmt 6602 E:\HR\OC\HR147P1.XXX HR147P1
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tion 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 

11

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 experts 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 would 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 biologics 

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 

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 

12

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 estimate: 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 fiveyear 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. 

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. 

13

FEDERAL MANDATES STATEMENT

The Committee adopts as its own estimate of Federal mandates 

prepared by the Director of the Congressional Budget Office pursuant to section 423 of the Unfunded Mandates Reform Act. 

ADVISORY COMMITTEE STATEMENT

No advisory committees within the meaning of section 5(b) of the 

Federal Advisory Committee Act were created by this legislation. 

CONSTITUTIONAL AUTHORITY STATEMENT

Pursuant to clause 3(d)(1) of rule XIII of the Rules of the House 

of Representatives, the Committee finds that the Constitutional authority for this legislation is provided in Article I, section 8, clause 

3, which grants Congress the power to regulate commerce with foreign nations, among the several States, and with the Indian tribes. 

APPLICABILITY TO LEGISLATIVE BRANCH

The Committee finds that the legislation does not relate to the 

terms and conditions of employment or access to public services or 

accommodations within the meaning of section 102(b)(3) of the Congressional Accountability Act. 

SECTION-BY-SECTION ANALYSIS OF THE LEGISLATION

Section 1. Short title 

Section 1 establishes the short title of the Act as the ‘‘Project BioShield Act of 2003.’’

Section 2. Biomedical countermeasure research and development 

authorities 

Section 2(a) of the Project BioShield Act of 2003 amends the Public Health Service Act to add a new section 319F–1. The section 

grants the Secretary of Health and Human Services (HHS) additional flexibility and authority in conducting research and development with respect to biomedical countermeasures against biological, chemical, nuclear and radiological agents that may affect national security. 

The Act defines the scope of the new authorities set forth in this 

section as applying to countermeasures against agents that ‘‘may 

cause a public health emergency affecting national security.’’ In 

making a determination about whether a potential public health 

emergency could affect national security, the Secretary of HHS 

may consider all information deemed pertinent and appropriate, 

and nothing in this Act requires that such Secretary of HHS consult with other executive branch officials prior to making such a 

determination. The Committee expects that the Secretary of HHS 

will consider the threat of use of such agents by terrorists against 

the U.S. population to be a significant factor in making scope determinations under these provisions. However, the Committee also 

recognizes and encourages the Secretary of HHS to consider the 

emerging threats to public health and national security that may 

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measures today. These threats may affect national security whether by terrorists or through natural conditions. The Secretary of 

HHS should consider such factors in determining whether to use 

these new authorities to promote research, development, and production of specific security countermeasures. 

Indeed, antimicrobial-resistant infectious microbes are viable biological agents that could be used by both domestic and foreign terrorists to wreak havoc and injury upon U.S. citizens. In addition, 

the emergency of drug resistance in one organism may have the effect of limiting that drug’s ability to treat other biological agents, 

as genetic material may be transferred naturally or purposefully 

from one infectious agent to another. Advancing the discovery of 

new antimicrobial drugs to treat resistant organisms, through Bioshield and other research and development initiatives, through Bioshield and other research and development initiatives, may well 

pay dividends for both national security and public health. 

New subsection 319F–1(b) provides general authority. Proposed 

subparagraph 319F–1(a)(4) makes the facilities of entities that 

enter into a grant or cooperative agreement with the Secretary of 

HHS under this section available as needed to such Secretary of 

HHS to respond to public health emergencies affecting national security. 

New subsection 319F–1(b) provides expedited authority for governmental procurements used to perform, administer, or support 

pressing research and development activities under this section, by 

(1) increasing the simplified acquisition threshold from $100,000 to 

$25 million; (2) authorizing the use of procedures providing for less 

than full and open competition when there are only a limited number of responsible sources and no other type of services will satisfy 

the Secretary of HHS needs; and (3) increasing the micropurchase 

threshold for such procurements to $15,000. 

New subsection 319F–1(c) authorizes the Secretary of HHS to 

use expedited peer-review procedures in lieu of otherwise applicable peer-review procedures in the case of grants and contracts for 

biomedical countermeasure research and development activity, if 

such grants and contracts do not exceed $1,500,000 and are necessary to respond to pressing research needs. 

New subsection 319F–1(d) provides additional flexibility to the 

Secretary of HHS with respect to the hiring of experts and consultants when necessary to respond to pressing qualified countermeasure research and development needs. Under paragraph 319F–

1(d)(2), such experts and consultants are deemed to be employees 

of HHS for purposes of the Federal Torts Claims Act, which provides the exclusive remedy against such personnel for claims relating to the performance of covered duties. 

New subsection 319F–1(e) provides streamlined personnel authority for the HHS Secretary to appoint up to 30 people to positions in the National Institutes of Health without regard to ordinary classification criteria, when necessary to respond to pressing 

qualified countermeasure research and development needs. 

New subsection 391F–1(f) provides that actions by the Secretary 

of HHS under the section are committed to agency discretion. 

Section 2(b) of the Project BioShield Act of 2003 amends section 

481A of the Public Health Service act to add the Director of the 

National Institute of Allergy and Infectious Diseases to that secVerDate Jan 31 2003 06:52 Jun 13, 2003 Jkt 019006 PO 00000 Frm 00014 Fmt 6659 Sfmt 6602 E:\HR\OC\HR147P1.XXX HR147P1
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tion, and thus provide to that Director certain authorities concerning modernization and construction of research facilities. Section 2(b) further authorizes such sums as may be necessary for 

such purposes. 

Section 3. Biomedical countermeasures procurement 

Section 3(a) of the Project BioShield Act of 2003 adds a new section 319F–2 to the Public Health Service Act. Several provisions of 

new section 319F–2 simply transfer existing provisions of law from 

the Public Health Security and Bioterrorism Preparedness and Response Act of 2002, as amended by the Homeland Security Act of 

2002. Proposed Subsection 319F–2(a) contains language from existing law establishing the Strategic National Stockpile. New section 

319F–2(b) contains language from existing law concerning authorizing procurement of smallpox vaccine for the National Strategic 

Stockpile. 

New section 319F–2(c) requires the Secretary of the Department 

of Homeland Security (DHS) to assess threats that may be posed 

by chemical, biological, radiological, and nuclear agents, and requires the HHS Secretary to assess the public health consequences 

of such agents and the availability and appropriateness of countermeasures for the threats identified. After these steps, the Secretaries jointly may determine and recommend to the President that 

funding for procurement of such a countermeasure for the nation’s 

stockpile is appropriate from the special reserve funds established 

by this Act. 

Under section 319F–2(c)(4), the Secretaries of HHS and DHS 

may recommend to the President a proposal to issue a call for the 

development of a security countermeasure. Such a call, at a minimum, includes a commitment from the Secretaries to make a recommendation for funding of such a countermeasure from the special reserve funds, if government specifications for the product are 

achieved. The Secretaries also may secure a Presidential approval 

for funding prior to, or without, conducting a call. 

New section 319F–2(c)(4)(B) provides that the Secretaries should 

include in any call for proposals for countermeasure production information that may be necessary to encourage or facilitate research 

and development into such countermeasures. The Committee recognizes that an important factor companies will consider in determining whether to invest scarce research and development dollars 

into security countermeasures is whether and to what extent they 

may face liability relating to the development or production of such 

countermeasures. The Committee thus encourages the Secretaries 

to indicate in any call for proposals the potential availability of indemnification or liability protections under other laws. 

Under section 319F–2(c)(7), if the President approves a recommendation for funding from the special reserve funds, DHS 

would then enter into an agreement with HHS under which HHS 

may procure the countermeasure for the stockpile using the DHS 

special reserve fund. Contracts under this paragraph are subject to 

certain conditions. The Secretary of HHS may use simplified acquisition procedures or procedures providing for less than full and 

open competition under certain circumstances. Certain determinations of the Secretary are committed to agency discretion. 

16

The Committee recognizes that existing procurement authorities 

may allow for a single agreement that provides for research and 

development as well as production of a countermeasure or vaccine. 

Nothing in this Act shall limit the use of these existing authorities 

where 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 contracting officer, including when a separate 

funding source is authorized and used for the research and development and it 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 may be necessary in order to encourage entities to 

enter the government market for countermeasures and vaccines in 

accordance with the authorities provided by Project Bioshield. 

Similarly, existing procurement authorities may allow the Secretaries to limit competition for a production contract under section 

3 of this Act to those entities that successfully competed for research and development contracts under section 2 of this Act or 

other provisions of law. However, the Committee emphasizes that 

the monies obligated from the special reserve fund created under 

section 3 of this Act may not be use to pay for research or development activities, but only for procurement of countermeasures paid 

upon substantial delivery of product—consistent with the express 

limitation contained in the Homeland Security Act of 2002 excluding from the DHS Secretary’s responsibilities the conduct or support of human health-related countermeasure research and development. 

Section 319F–2(d) contains prohibitions on disclosure of information transferred from existing law. Section 319F–3(e) contains definitions transferred from existing law. 

Section 319F–2(f) contains authorization of appropriations for the 

Strategic National Stockpile and smallpox vaccine development 

transferred from existing law with one addition. The new paragraph makes clear that such existing authorizations are in addition 

to amounts authorized under the special reserve fund. Nothing in 

the Act would restrict or alter the Secretaries’ existing authority to 

purchase items for the stockpile using existing discretionary appropriations for such purpose. 

Section 3(b) of the Project BioShield Act of 2003 adds a new section 510 to the Homeland Security Act of 2002. This new section 

authorizes appropriations for the special reserve fund referenced in 

the new section 319F–2(c) of the Public Health Service Act. The bill 

authorizes $890 million in FY 04 for such procurements, and aggregate amounts of $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. 

The act defines the scope of the new authorities set forth in this 

section as applying to countermeasures against agents that the 

Secretary of HHS believes ‘‘may cause a public health emergency 

affecting national security,’’ and about which the HHS and DHS 

Secretaries make certain additional findings. In making a determination about whether a potential public health emergency could 

affect national security, the Secretary of HHS may consider all inVerDate Jan 31 2003 06:52 Jun 13, 2003 Jkt 019006 PO 00000 Frm 00016 Fmt 6659 Sfmt 6602 E:\HR\OC\HR147P1.XXX HR147P1
17

formation deemed pertinent and appropriate, and nothing in this 

Act requires that such Secretary of HHS consult with other executive branch officials prior to making such a determination. The 

Committee expects that both Secretaries will consider the threat of 

use of such agents by terrorists against the U.S. population to be 

a significant factor in making their respective scope determinations 

under these provisions. However, the Committee also recognizes 

and encourages the Secretaries to consider the emerging threats to 

public health and national security that may be caused by the 

spread of antibiotic resistant organisms or dangerous viruses that 

may spread rapidly and lack effective countermeasures today. 

These threats may affect national security whether by terrorists or 

through natural conditions. The Secretaries should consider such 

factors in determining whether to use these new authorities to promote research, development, and production of specific security 

countermeasures. 

Section 4. Authorization for medical products for use in emergencies 

Section 4 adds a new section 564 to the Federal Food, Drug, and 

Cosmetic Act. New section 564(a) allows the Secretary of Health 

and Human Services to authorize for introduction into interstate 

commerce unapproved drugs, devices, and biological products or 

unapproved uses of approved drugs, approved/cleared devices, and 

biological products intended for use in an actual or potential emergency during the effective period of a declaration. 

New section 564(b) allows the Secretary of HHS to declare an 

emergency justifying an emergency use authorization based upon a 

determination by the Secretary of Homeland Security that there is 

a national emergency or the significant potential of one, or by a determination of the Secretary of Defense that there is a military 

emergency, or a significant potential of one. Such emergencies 

must involve a heightened risk of attack with biological, chemical, 

radiological, or nuclear agents. Similarly, an emergency use authorization can be based upon a determination of the Secretary of HHS 

that there is a public health emergency affecting national security 

and involving biological, chemical, radiological, or nuclear agents. 

In making a determination about whether a public health emergency under section 319 of the Public Health Service Act affects national security, the Secretary may consider all information he 

deems pertinent and appropriate, and nothing in this Act requires 

that the Secretary consult with other executive branch officials 

prior to making such a determination. 

Under this section, any declaration of emergency will last for one 

year, unless the Secretary of HHS terminates it at an earlier time. 

The Secretary of HHS may renew a declaration. The Secretary of 

HHS must publish all declarations, determinations, and renewals 

in the Federal Register, and the Secretary must provide reasonable 

advanced notice that declarations are to be terminated under this 

section. The Committee intends that, after a declaration is terminated, final disposition of labeling or intrastate disposition of a 

product may occur. Further, the Committee believes that the Commissioner of the Food and Drug Administration may exercise enforcement discretion not to object to interstate shipment of an unapproved product for return to a manufacturer. A determination of 

what is a ‘‘reasonable’’ period for advanced notice of termination 

18

should consider all factors, so in some cases notice immediately 

preceding termination may be reasonable, while in other circumstances it may not. 

Section 564(c) details the criteria for issuance of an emergency 

use authorization. Under this new section, the Secretary of HHS, 

acting through the Commissioner, may issue an authorization upon 

concluding (1) that a biological, chemical, radiological, or nuclear 

agent or agents can cause a serious or life-threatening disease or 

condition; (2) that the drug, device or biological product may be effective in detecting, diagnosing, treating, or preventing such disease or condition (or a serious disease or condition caused by taking 

a product already approved, licensed or cleared by FDA for treating 

or preventing such disease or condition), and the benefits of the 

product outweigh risks; (3) that there is no adequate, approved, 

and available alternative to the product; and (4) other criteria the 

Secretary may by regulation specify. The Commissioner should consult with the Directors of the National Institutes of Health and the 

Centers for Disease Control and Prevention prior to issuing an authorization, but such consultation is limited by considerations of 

feasibility and appropriateness given the circumstances of the 

emergency. 

Section 564(d) concerns the scope of an emergency use authorization. Under this section, the authorization shall state the disease 

or condition that the product may be used to detect, diagnose, prevent, or treat, as well as the Commissioner’s conclusions about 

known benefits and risks of the product and conclusions concerning 

safety and potential effectiveness. The Committee intends that before issuing an authorization under this section, the Commissioner 

will, where feasible given the nature and the extent of the emergency, notify the holder of any relevant application under this 

chapter or under section 351 of the Public Health Service Act. The 

purpose of such notification is to allow for discussion of the conditions of this authorization as required by subsection (e), as well as 

discussion of whether such product should be delivered pursuant to 

section 319F–2(c) of the Public Health Service Act. 

Section 564(e) pertains to products that have never been approved, licensed, or cleared by FDA. Under this subsection, conditions shall, to the extent feasible given the circumstances of the 

emergency, be applied to persons who choose to carry out an activity for which the authorization is issued. Such mandatory conditions include information to providers about the emergency use of 

the product as well as significant known potential risks and benefits, as well as appropriate conditions designed to ensure that to 

the maximum extent feasible given the circumstances of the emergency, individuals to whom the product is administered are informed of the emergency use of the product, risks and benefits of 

the product, and of the option to accept or refuse the product. Further, the Commissioner is given the authority to impose other conditions on those who carry out activities for which the authorization is issued. Such conditions imposed by the Commissioner 

should be designed to provide maximum flexibility to ensure that 

those who wish to take the product can indeed take the product, 

if made available by the manufacturer. 

Section 564(e) also applies to unapproved uses of approved products and the Commissioner may, for manufacturers who choose to 

19

carry out one or more activities pursuant to an emergency use authorization, apply certain conditions. This subsection makes clear 

that manufacturers do not have to avail themselves of the emergency use authorization for unapproved uses of approved products, 

and it makes clear that no individual may alter or obscure the labeling of already approved products. It does authorize, however, 

persons other than the manufacturer to provide information about 

the product concerning the emergency use of the product. 

Under section 564(e), the Commissioner may establish conditions 

regarding product labeling and information conveyance concerning 

unapproved products. Further, the Committee intends that the 

Commissioner may establish conditions regarding product labeling 

and information conveyance on manufacturers that carry out one 

or more activities pursuant to an emergency use authorization with 

respect to the emergency use of that product that is an unapproved 

use of an approved product. 

Subsection (f) makes clear that an emergency use authorization 

is effective until the declaration is terminated or revoked, but allows patients to continue using such products in certain instances. 

Nothing in this subsection is intended to require manufacturers or 

others to provide such products to patients. 

Subsection (g) makes clear that the Commissioner shall periodically review the appropriations of an authorization, and it provides 

the Commissioner needed flexibility to revoke an authorization if 

the criteria justifying the authorization are no longer met. 

Subsection (h) ensures that the Commissioner shall promptly 

publish in the Federal Register notices of all authorizations, terminations, and revocations, Subsection (i) makes clear that all determinations under this new section are committed to agency discretion. Subsection (j) is a rule of construction nothing that this new 

section does not impair or otherwise affect certain existing authorities. 

New section 564(k) pertains to members of the Armed Forces 

and, among other things, it specifies that the President may waive 

requirements designed to ensure that such members are informed 

of the option to accept or refuse administration of an emergency 

use product, upon certain findings (which are identical to the findings found in section 1107 of Title 10). Further, the subsection requires that if certain information is not provided to members of the 

Armed Forces prior to an emergency use product being administered to them, then information concerning the administration of 

the product shall be placed in the medical record of the member. 

Subsection (l) makes clear that if a product is authorized for 

emergency use under this new section, the investigational sections 

of the Act shall not apply to the products. 

Subsection (m) ensures that no authority in new section 564 can 

require a manufacturer of a drug, device, or biological product to 

perform any activity that becomes lawful pursuant to the new section. That is, the Commissioner in no way is goven the authority 

to, among other things, require a manufacturer to introduce into 

interstate commerce or deliver for introduction into interstate commerce any unapproved product or an approved product for an unapproved use under this section. Further, even if the Commissioner 

authorizes the emergency use of an already-approved, licensed or 

cleared product, a manufacturer can refuse to avail themselves of 

20

such emergency use authorization and continue introducing into 

interstate commerce its approved or cleared product under the Federal Food, Drug and Cosmetic Act, or licensed product pursuant to 

the Public Health Service Act. The only obligation in subsection (m) 

is that if the Commissioner authorizes the emergency use of a solesource unapproved product, then the manufacturer of such product 

must inform the Commissioner of its intention not to carry out any 

activity under the authorization within a reasonable period of time. 

Nothing in this section shall be construed as authorizing the Commissioner to establish conditions on the distribution, administration, or labeling of any other product in any other circumstance. 

Subsection (n) ensures that the present enforcement regime of 

the Federal Food, Drug, and Cosmetic Act will apply to individuals 

who carry out an activity or activities pursuant to an authorization, 

but fail to comply with applicable conditions. If any person carries 

out an activity pursuant to section 564, but violates a condition imposed by the Commissioner, then that person will be subject to 

Chapter III of the Act, where the ‘‘prohibited acts’’ are found. If a 

person is found to be in violation of a prohibited act found in section 301, then the Committee intends for that person to be subject 

to the enforcement provisions found in sections 302, 303, and 304. 

A violation of any condition applied to an emergency use product 

in no way alters or affects the emergency use status of the underlying product. 

The Committee intends that new section 564, as made clear in 

section 903(d)(2) of the Federal Food, Drug, and Cosmetic Act, the 

Secretary, through the Commissioner of Food and Drugs, shall be 

responsible for executing the Federal Food Drug, and Cosmetic Act 

as amended by the Project BioShield Act. 

Section 5. Reports 

Section 5(a) requires the Secretary of HHS to submit annual reports to Congress concerning the exercise of many of the new authorities under the Act. Section 5(b) requires a report from the National Academy of Sciences concerning whether and to what extent 

the research authorities granted under the Act have enhanced the 

development of biomedical countermeasures affecting national security. Section 5(c) requires the General Accounting Office to issue 

a report concerning the Secretary of HHS utilization of these new 

authorities. 

COMMITTEE CORRESPONDENCE

COMMITTEE ON THE JUDICIARY, Washington, DC, June 10, 2003. 

Hon. BILLY TAUZIN,

Chairman, Committee on Energy and Commerce, 

House of Representatives, Washington, DC 

DEAR CHAIRMAN TAUZIN: In recognition of the desire to expedite 

floor consideration of H.R. 2122, the ‘‘Project BioShield Act of 

2003,’’ the Committee on the Judiciary hereby waives consideration 

of the bill. Section 2 of the bill creates a new section 319F–1 of the 

Public Health Service Act. New subsection 319F–1(d) gives the Secretary of Health and Human Services new authority to enter into 

personal services contracts with scientists and consultants for limVerDate Jan 31 2003 06:52 Jun 13, 2003 Jkt 019006 PO 00000 Frm 00020 Fmt 6659 Sfmt 6602 E:\HR\OC\HR147P1.XXX HR147P1
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ited periods of time for the purposes of expedited research on countermeasures against biological weapons. New subsection 319F–1(d) 

further provides that scientists and consultants who receive contracts under this provision shall have the protections of the Federal 

Tort Claims Act as if they were regular federal employees. These 

FTCA provisions fall within the Committee on the Judiciary’s Rule 

X jurisdiction. However, given the need to expedite this legislation, 

I will not seek a sequential referral based on their inclusion. 

The Committee on the Judiciary takes this action with the understanding that the Committee’s jurisdiction over these provisions 

is in no way diminished or altered. I would appreciate your including this letter in the Congressional Record during consideration of 

H.R. 2122 on the House floor. 

Sincerely, 

F. JAMES SENSENBRENNER, Jr., 

Chairman. 

COMMITTEE ON ENERGY AND COMMERCE

Washington, DC, June 10, 2003. 

Hon. F. JAMES SENSENBRENNER, Jr., 

Chairman, Committee on the Judiciary, 

House of Representatives, Washington, DC. 

DEAR CHAIRMAN SENSENBRENNER: Thank you for your letter regarding H.R. 2122, the ‘‘Project BioShield Act of 2003.’’ As you 

noted, new subsection 319F–1(d) of the Public Health Service Act 

as added by the bill contains provisions that fall within the Rule 

X jurisdiction of the Committee on the Judiciary. 

I appreciate your willingness not to seek a referral on H.R. 2122. 

I agree that your decision to forego action on the bill will not prejudice the Committee on the Judiciary with respect to its jurisdictional prerogatives on this or similar legislation. 

I will include a copy of your letter and this response in the Congressional Record during consideration of H.R. 2122 of the House 

floor. 

Sincerely, 

W.J. ‘‘BILLY’’ TAUZIN, Chairman.

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 italics, 

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 

* * * * * * *

22

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. 

23

(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 AntiKickback 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) USE OF NONCOMPETITIVE PROCEDURES.—In addition to 

any other authority to use procedures other than competitive 

procedures, the Secretary may use such other procedures 

when—

(A) the procurement is as described by paragraph (1); 

and 

(B) the property or services needed by the Secretary are 

available from only one responsible source or only from a 

limited number of responsible sources, and no other type of 

property or services will satisfy the Secretary’s needs. 

(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 

24

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 

25

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. 

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; 

26

(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 

27

(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 consultaVerDate Jan 31 2003 06:52 Jun 13, 2003 Jkt 019006 PO 00000 Frm 00027 Fmt 6659 Sfmt 6603 E:\HR\OC\HR147P1.XXX HR147P1
28

tion 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, 

29

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 

30

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.—The amount of any 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)). 

31

(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) USE OF NONCOMPETITIVE PROCEDURES.—In addition to any other authority to use procedures other than 

competitive procedures, the Secretary may use such 

other procedures for a procurement under this subsection if the product is available from only one responsible source or only from a limited number of responsible sources, and no other type of product will satisfy 

the Secretary’s needs. 

(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 underVerDate Jan 31 2003 06:52 Jun 13, 2003 Jkt 019006 PO 00000 Frm 00031 Fmt 6659 Sfmt 6603 E:\HR\OC\HR147P1.XXX HR147P1
32

takings 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 conVerDate Jan 31 2003 06:52 Jun 13, 2003 Jkt 019006 PO 00000 Frm 00032 Fmt 6659 Sfmt 6602 E:\HR\OC\HR147P1.XXX HR147P1
33

struct 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 øsubsection (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 amendVerDate Jan 31 2003 06:52 Jun 13, 2003 Jkt 019006 PO 00000 Frm 00033 Fmt 6659 Sfmt 6602 E:\HR\OC\HR147P1.XXX HR147P1
34

ment 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 øAPPROPRIATIONS.—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 appro- priated $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 DIS- EASES.—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. 

35

(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.

SECTION 121 OF THE PUBLIC HEALTH SECURITY AND 

BIOTERRORISM PREPAREDNESS AND RESPONSE ACT 

OF 2002

øSEC. 121. STRATEGIC NATIONAL STOCKPILE. 

ø(a) STRATEGIC NATIONAL STOCKPILE.—

ø(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. 

ø(2) PROCEDURES.—The Secretary, in managing the stockpile 

under paragraph (1), shall—

ø(A) consult with the working group under section 

319F(a) of the Public Health Service Act; 

ø(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; 

ø(C) in consultation with Federal, State, and local officials, take into consideration the timing and location of 

special events; 

ø(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; 

ø(E) devise plans for the effective and timely supplychain management of the stockpile, in consultation with 

appropriate Federal, State and local agencies, and the public and private health care infrastructure; and 

36

ø(F) ensure the adequate physical security of the stockpile. 

ø(b) SMALLPOX VACCINE DEVELOPMENT.—

ø(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. 

ø(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). 

ø(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. 

ø(d) DEFINITION.—For purposes of subsection (a), the term 

‘‘stockpile’’ includes—

ø(1) a physical accumulation (at one or more locations) of the 

supplies described in subsection (a); or 

ø(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). 

ø(e) AUTHORIZATION OF APPROPRIATIONS.—

ø(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. 

ø(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 

37

(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—

38

(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 

39

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 

40

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.—

41

(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.

42

(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.

Æ

2

medical countermeasures; to authorize the appropriation of funding 

for the procurement of security countermeasures through the creation of a special reserve fund; and to authorize the emergency use 

of unapproved drugs, devices, and biologics and the emergency unapproved use of approved drugs, devices, and biologics. 

BACKGROUND AND NEED FOR LEGISLATION

During times of nation, military, or public health emergency, the 

American people may be placed at risk of exposure to biological, 

chemical, radiological, or nuclear agents, and the diseases caused 

by such agents. Unfortunately, there may not be approved or available countermeasures to treat diseases or conditions caused by 

such agents. Currently, companies have little incentive to research, 

develop, or produce vaccines or other drugs simply for a possible 

one-time purchase by the Federal government for the Strategic National Stockpile. Most current private sector research and development dollars go for drugs or devices that will have continuous commercial application. In addition, some of the current generation of 

drugs or devices may have special uses as countermeasures to biological agents like Ebola, but there is little incentive to perform the 

research or development or production activities that might tailor 

the drug or drug approvals for such a purpose. 

Even if a product has been developed to treat such diseases or 

conditions, if the product has not yet been approved by the Food 

and Drug Administration (FDA), access to the therapy is greatly 

limited. Nothing in the Food and Drug Act allows the Secretary to 

suspend the approval requirements to ensure access to unapproved 

drugs and devices on a large-scale basis in times of emergency. 

Under present law, if a product is not approved by the FDA, then 

it is unlawful to provide that product to an individual, unless the 

product has been authorized for distribution under an investigational new drug (IND) application (for a drug and biologic) or an 

investigational device exemption (IDE). When a drug or device is 

available under such procedures, a number of conditions apply that 

make the use of an IND or IDE infeasible in times of national 

emergency, where drugs and devices may need to be deployed at 

rapid rates. Even if a drug, biologic, or device is highly promising 

in treating a disease or condition associated with biological chemical radiological or nuclear agents, and even if it is the only therapy available, current FDA law does not allow for rapid deployment of the product. 

The Project Bioshield Act is designed to help resolve these problems and make our nation more secure. Like the Public Health Security and Bioterrorism Preparedness and Response Act, the 

project Bioshield Act is designed to help the administration and the 

nation in public health emergency preparedness, but relies on the 

ingenuity and hard work of Americans in the private and public 

sector to achieve these goals. 

HEARINGS

The Subcommittee on Health held a joint hearing with the Subcommittee on Emergency Preparedness and Response of the Select 

Committee on Homeland Security on ‘‘Furthering Public Health Security: Project Bioshield’’ on March 27, 2003. The Subcommittee reVerDate Jan 31 2003 16:03 Jun 12, 2003 Jkt 019006 PO 00000 Frm 00002 Fmt 6659 Sfmt 6602 E:\HR\OC\HR147P1.XXX HR147P1
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ceived testimony from: The Honorable Tommy Thompson, Secretary, U.S. Department of Health and Human Services; Mr. Leighton Read M.D., General Partner, Alloy Ventures, on behalf of Biotechnology Industry Organization; Mr. Michael Friedman M.D., 

Chief Medical Officer for Biomedical Preparedness, PhRMA; Mr. 

James Baker Jr., Ruth Dow Doan Professor, Center for Biological 

Nanotechnology; and, Mr. Gary Noble M.D., Vice President of Medical and Public Affairs, Johnson & Johnson, on behalf of AdvaMed. 

COMMITTEE CONSIDERATION

On Thursday, May 15, 2003, the Full Committee met in open 

markup session and ordered a Committee Print reported to the 

House, as amended, by voice vote. A request by Mr. Tauzin to allow 

a report to be filed on a bill to be introduced by Mr. Tauzin, and 

that the actions of the Committee be deemed as actions on that 

bill, was agreed to by unanimous consent. 

COMMITTEE VOTES

Clause 3(b) of rule XIII of the Rules of the House of Representatives requires the Committee to list the record votes on the motion 

to report legislation and amendments thereto. There were no 

record votes taken in connection with ordering the Committee Print 

reported. A motion by Mr. Tauzin to order the Committee Print reported to the House, as amended, was agreed to by a voice vote. 

COMMITTEE OVERSIGHT FINDINGS

Pursuant to clause 3(c)(1) of rule XIII of the Rules of the House 

of Representatives, the Committee has held oversight hearings and 

made findings that are reflected in this report. 

STATEMENT OF GENERAL PERFORMANCE GOALS AND OBJECTIVES

The purpose of the Project BioShield Act of 2003 is to provide the 

Secretary of Health and Human Services with greater authority 

and flexibility to facilitate the research and development of biomedical countermeasures. 

NEW BUDGET AUTHORITY, ENTITLEMENT AUTHORITY, AND TAX

EXPENDITURES

In compliance with clause 3(c)(2) of rule XIII of the Rules of the 

House of Representatives, the Committee finds that H.R. 2212, the 

Project Bioshield Act of 2003, would result in no new or increased 

budget authority, entitlement authority, or tax expenditures or revenues. 

COMMITTEE COST ESTIMATE

The Committee adopts as its own the cost estimate prepared by 

the Director of the Congressional Budget Office pursuant to section 

402 of the Congressional Budget Act of 1974. 

CONGRESSIONAL BUDGET OFFICE ESTIMATE

Pursuant to clause 3(c)(3) of rule XIII of the Rules of the House 

of Representatives, the following is the cost estimate provided by 

4

the Congressional Budget Office pursuant to section 402 of the 

Congressional Budget Act of 1974: 

U.S. CONGRESS, 

CONGRESSIONAL BUDGET OFFICE, 

Washington, DC, June 6, 2003. 

Hon. W. J. ‘‘BILLY’’ TAUZIN, 

Chairman, Committee on Energy and Commerce, 

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 

year 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 year 2004 

through 2008. Funding to buy these security countermeasures 

would be provide 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. 

Assuming 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 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. 2112 is shown in the following table. The costs 

5

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 Level ......... 890 2,528 0 0 0 2,175 0 0 0 0

Estimated Outlays ............................ 270 680 870 770 510 440 560 650 490 250

Administrative Costs: 

Estimated Authorization Level ......... 9 9 9 9 10 10 10 10 11 11

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 and 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. 2122 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 approval 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 priorVerDate Jan 31 2003 16:03 Jun 12, 2003 Jkt 019006 PO 00000 Frm 00005 Fmt 6659 Sfmt 6602 E:\HR\OC\HR147P1.XXX HR147P1
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ities. 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, radiological, 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 those 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 adVerDate Jan 31 2003 16:03 Jun 12, 2003 Jkt 019006 PO 00000 Frm 00006 Fmt 6659 Sfmt 6602 E:\HR\OC\HR147P1.XXX HR147P1
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vance 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 BioSheild, HHS plans to purchase 60 

million doses of the new vaccine at about $15 per dose over a threeyear 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 antigent (rPA) vaccine, under Project BioSheild. 

The rPA vaccine would 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 

8

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 

BioSheild. 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. 

9

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 unforseen 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 fever (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 infecVerDate Jan 31 2003 16:03 Jun 12, 2003 Jkt 019006 PO 00000 Frm 00009 Fmt 6659 Sfmt 6602 E:\HR\OC\HR147P1.XXX HR147P1
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tion 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 

11

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 

servcies of experts 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 would 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 biologics 

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 

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 

12

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 estimate: 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 fiveyear 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. 

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. 

13

FEDERAL MANDATES STATEMENT

The Committee adopts as its own estimate of Federal mandates 

prepared by the Director of the Congressional Budget Office pursuant to section 423 of the Unfunded Mandates Reform Act. 

ADVISORY COMMITTEE STATEMENT

No advisory committees within the meaning of section 5(b) of the 

Federal Advisory Committee Act were created by this legislation. 

CONSTITUTIONAL AUTHORITY STATEMENT

Pursuant to clause 3(d)(1) of rule XIII of the Rules of the House 

of Representatives, the Committee finds that the Constitutional authority for this legislation is provided in Article I, section 8, clause 

3, which grants Congress the power to regulate commerce with foreign nations, among the several States, and with the Indian tribes. 

APPLICABILITY TO LEGISLATIVE BRANCH

The Committee finds that the legislation does not relate to the 

terms and conditions of employment or access to public services or 

accommodations within the meaning of section 102(b)(3) of the Congressional Accountability Act. 

SECTION-BY-SECTION ANALYSIS OF THE LEGISLATION

Section 1. Short title 

Section 1 establishes the short title of the Act as the ‘‘Project BioShield Act of 2003.’’

Section 2. Biomedical countermeasure research and development 

authorities 

Section 2(a) of the Project BioShield Act of 2003 amends the Public Health Service Act to add a new section 319F–1. The section 

grants the Secretary of Health and Human Services (HHS) additional flexibility and authority in conducting research and development with respect to biomedical countermeasures against biological, chemical, nuclear and radiological agents that may affect national security. 

The Act defines the scope of the new authorities set forth in this 

section as applying to countermeasures against agents that ‘‘may 

cause a public health emergency affecting national security.’’ In 

making a determination about whether a potential public health 

emergency could affect national security, the Secretary of HHS 

may consider all information deemed pertinent and appropriate, 

and nothing in this Act requires that such Secretary of HHS consult with other executive branch officials prior to making such a 

determination. The Committee expects that the Secretary of HHS 

will consider the threat of use of such agents by terrorists against 

the U.S. population to be a significant factor in making scope determinations under these provisions. However, the Committee also 

recognizes and encourages the Secretary of HHS to consider the 

emerging threats to public health and national security that may 

be caused by the spread of antibiotic resistant organisms or dangerous viruses that may spread rapidly and lack effective counterVerDate Jan 31 2003 16:03 Jun 12, 2003 Jkt 019006 PO 00000 Frm 00013 Fmt 6659 Sfmt 6602 E:\HR\OC\HR147P1.XXX HR147P1
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measures today.These threats may affect national security whether 

by terrorists or through natural conditions. The Secretary of HHS 

should consider such factors in determining whether to use these 

new authorities to promote research, development, and production 

of specific security countermeasures. 

Indeed, antimicrobial-resistant infectious microbes are viable biological agents that could be used by both domestic and foreign terrorists to wreak havoc and injury upon U.S. citizens. In addition, 

the emergency of drug resistance in one organism may have the effect of limiting that drug’s ability to treat other biological agents, 

as genetic material may be transferred naturally or purposefully 

from one infectious agent to another. Advancing the discovery of 

new antimicrobial drugs to treat resistant organisms, through Bioshield and other research and development initiatives, through Bioshield and other research and development initiatives, may well 

pay dividends for both national security and public health. 

New subsection 319F–1(b) provides general authority. Proposed 

subparagraph 319F–1(a)(4) makes the facilities of entities that 

enter into a grant or cooperative agreement with the Secretary of 

HHS under this section available as needed to such Secretary of 

HHS to respond to public health emergencies affecting national security. 

New subsection 319F–1(b) provides expedited authority for governmental procurements used to perform, administer, or support 

pressing research and development activities under this section, by 

(1) increasing the simplified acquisition threshold from $100,000 to 

$25 million; (2) authorizing the use of procedures providing for less 

than full and open competition when there are only a limited number of responsible sources and no other type of services will satisfy 

the Secretary of HHS needs; and (3) increasing the micropurchase 

threshold for such procurements to $15,000. 

New subsection 319F–1(c) authorizes the Secretary of HHS to 

use expedited peer-review procedures in lieu of otherwise applicable peer-review procedures in the case of grants and contracts for 

biomedical countermeasure research and development activity, if 

such grants and contracts do not exceed $1,500,000 and are necessary to respond to pressing research needs. 

New subsection 319F–1(d) provides additional flexibility to the 

Secretary of HHS with respect to the hiring of experts and consultants when necessary to respond to pressing qualified countermeasure research and development needs. Under paragraph 319F–

1(d)(2), such experts and consultants are deemed to be employees 

of HHS for purposes of the Federal Torts Claims Act, which provides the exclusive remedy against such personnel for claims relating to the performance of covered duties. 

New subsection 319F–1(e) provides streamlined personnel authority for the HHS Secretary to appoint up to 30 people to positions in the National Institutes of Health without regard to ordinary classification criteria, when necessary to respond to pressing 

qualified countermeasure research and development needs. 

New subsection 391F–1(f) provides that actions by the Secretary 

of HHS under the section are committed to agency discretion. 

Section 2(b) of the Project BioShield Act of 2003 amends section 

481A of the Public Health Service act to add the Director of the 

National Institute of Allergy and infectious Diseases to that secVerDate Jan 31 2003 16:03 Jun 12, 2003 Jkt 019006 PO 00000 Frm 00014 Fmt 6659 Sfmt 6602 E:\HR\OC\HR147P1.XXX HR147P1
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tion, and thus provide to that Director certain authorities concerning modernization and construction of research facilities. Section 2(b) further authorizes such sums as may be necessary for 

such purposes. 

Section 3. Biomedical countermeasures procurement 

Section 3(a) of the Project BioShield Act of 2003 adds a new section 319F–2 to the Public Health Service Act. Several provisions of 

new section 319F–2 simply transfer existing provisions of law from 

the Public Health Security and Bioterrorism Preparedness and Response Act of 2002, as amended by the Homeland Security Act of 

2002. Proposed Subsection 319F–2(a) contains language from existing law establishing the Strategic National Stockpile. New section 

319F–2(b) contains language from existing law concerning authorizing procurement of smallpox vaccine for the National Strategic 

Stockpile. 

New section 319F–2(c) requires the Secretary of the Department 

of Homeland Security (DHS) to assess threats that may be posed 

by chemical, biological, radiological, and nuclear agents, and requires the HHS Secretary to assess the public health consequences 

such agents and the availability and appropriateness of countermeasures for the threats identified. After these steps, the Secretaries jointly may determine and recommend to the President that 

funding for procurement of such a countermeasure for the nation’s 

stockpile is appropriate from the special reserve funds established 

by this Act. 

Under section 319F–2(c)(4), the Secretaries of HHS and DHS 

may recommend to the President a proposal to issue a call for the 

development of a security countermeasure. Such a call, at a minimum, includes a commitment from the Secretaries to make a recommendation for funding of such a countermeasure from the special reserve funds, if government specifications for the product are 

achieved. The Secretaries also may secure a Presidential approval 

for funding prior to, or without, conducting a call. 

New section 319F–2(c)(4)(B) provides that the Secretaries should 

include in any call for proposals for countermeasure production information that may be necessary to encourage or facilitate research 

and development into such countermeasures. The Committee recognizes that an important factor companies will consider in determining whether to invest scarce research and development dollars 

into security countermeasures is whether and to what extent they 

may face liability relating to the development or production of such 

countermeasures. The Committee thus encourages the Secretaries 

to indicate in any call for proposals the potential availability of indemnification or liability protections under other laws. 

Under section 319F–2(c)(7), if the President approves a recommendation for funding from the special reserve funds, DHS 

would then enter into an agreement with HHS under which HHS 

may procure the countermeasure for the stockpile using the DHS 

special reserve fund. Contracts under this paragraph are subject to 

certain conditions. The Secretary of HHS may use simplified acquisition procedures or procedures providing for less than full and 

open competition under certain circumstances. Certain determinations of the Secretary are committed to agency discretion. 

16

The Committee recognizes that existing procurement authorities 

may allow for a single agreement that provides for research and 

development as well as production of a countermeasure or vaccine. 

Nothing in this Act shall limit the use of these existing authorities 

where 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 contracting officer, including when a separate 

funding source is authorized and used for the research and development and it 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 may be necessary in order to encourage entities to 

enter the government market for countermeasures and vaccines in 

accordance with the authorities provided by Project Bioshield. 

Similarly, existing procurement authorities may allow the Secretaries to limit competition for a production contract under section 

3 of this Act to those entities that successfully competed for research and development contracts under section 2 of this Act or 

other provisions of law. However, the Committee emphasizes that 

the monies obligated from the special reserve fund created under 

section 3 of this Act may not be use to pay for research or development activities, but only for procurement of countermeasures paid 

upon substantial delivery of product—consistent with the express 

limitation contained in the Homeland Security Act of 2002 excluding from the DHS Secretary’s responsibilities the conduct or support of human health-related countermeasure research and development. 

Section 319F–2(d) contains prohibitions on disclosure of information transferred from existing law. Section 319F–3(e) contains definitions transferred from existing law. 

Section 319F–2(f) contains authorization of appropriations for the 

Strategic National Stockpile and smallpox vaccine development 

transferred from existing law with one addition. The new paragraph makes clear that such existing authorizations are in addition 

to amounts authorized under the special reserve fund. Nothing in 

the Act would restrict or alter the Secretaries’ existing authority to 

purchase items for the stockpile using existing discretionary appropriations for such purpose. 

Section 3(b) of the Project BioShield Act of 2003 adds a new section 510 to the Homeland Security Act of 2002. This new section 

authorizes appropriations for the special reserve fund referenced in 

the new section 319F–2(c) of the Public Health Service Act. The bill 

authorizes $890 million in FY 04 for such procurements, and aggregate amounts of $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. 

The act defines the scope of the new authorities set forth in this 

section as applying to countermeasures against agents that the 

Secretary of HHS believes ‘‘may cause a public health emergency 

affecting national security,’’ and about which the HHS and DHS 

Secretaries make certain additional findings. In making a determination about whether a potential public health emergency could 

affect national security, the Secretary of HHS may consider all inVerDate Jan 31 2003 16:03 Jun 12, 2003 Jkt 019006 PO 00000 Frm 00016 Fmt 6659 Sfmt 6602 E:\HR\OC\HR147P1.XXX HR147P1
17

formation deemed pertinent and appropriate, and nothing in this 

Act requires that such Secretary of HHS consult with other executive branch officials prior to making such a determination. The 

Committee expects that both Secretaries will consider the threat of 

use of such agents by terrorists against the U.S. population to be 

a significant factor in making their respective scope determinations 

under these provisions. However, the Committee also recognizes 

and encourages the Secretaries to consider the emerging threats to 

public health and national security that may be caused by the 

spread of antibiotic resistant organisms or dangerous viruses that 

may spread rapidly and lack effective countermeasures today. 

These threats may affect national security whether by terrorists or 

through natural conditions. The Secretaries should consider such 

factors in determining whether to use these new authorities to promote research, development, and production of specific security 

countermeasures. 

Section 4. Authorization for medical products for use in emergencies 

Section 4 adds a new section 564 to the Federal Food, Drug, and 

Cosmetic Act. New section 564(a) allows the Secretary of Health 

and Human Services to authorize for introduction into interstate 

commerce unapproved drugs, devices, and biological products or 

unapproved uses of approved drugs, approved/cleared devices, and 

biological products intended for use in an actual or potential emergency during the effective period of a declaration. 

New section 564(b) allows the Secretary of HHS to declare an 

emergency justifying an emergency use authorization based upon a 

determination by the Secretary of Homeland Security that there is 

a national emergency or the significant potential of one, or by a determination of the Secretary of Defense that there is a military 

emergency, or a significant potential of one. Such emergencies 

must involve a heightened risk of attack with biological, chemical, 

radiological, or nuclear agents. Similarly, an emergency use authorization can be based upon a determination of the Secretary of HHS 

that there is a public health emergency affecting national security 

and involving biological, chemical, radiological, or nuclear agents. 

In making a determination about whether a public health emergency under section 319 of the Public Health Service Act affects national security, the Secretary may consider all information he 

deems pertinent and appropriate, and nothing in this Act requires 

that the Secretary consult with other executive branch officials 

prior to making such a determination. 

Under this section, any declaration of emergency will last for one 

year, unless the Secretary of HHS terminates it at an earlier time. 

The Secretary of HHS may renew a declaration. The Secretary of 

HHS must publish all declarations, determinations, and renewals 

in the Federal Register, and the Secretary must provide reasonable 

advanced notice that declarations are to be terminated under this 

section. The Committee intends that, after a declaration is terminated, final disposition of labeling or intrastate disposition of a 

product may occur. Further, the Committee believes that the Commissioner of the Food and Drug Administration may exercise enforcement discretion not to object to interstate shipment of an unapproved product for return to a manufacturer. A determination of 

what is a ‘‘reasonable’’ period for advanced notice of termination 

18

should consider all factors, so in some cases notice immediately 

preceding termination may be reasonable, while in other circumstances it may not. 

Section 564(c) details the criteria for issuance of an emergency 

use authorization. Under this new section, the Secretary of HHS, 

acting through the Commissioner, may issue an authorization upon 

concluding (1) that a biological, chemical, radiological, or nuclear 

agent or agents can cause a serious or life-threatening disease or 

condition; (2) that the drug, device or biological product may be effective in detecting, diagnosing, treating, or preventing such disease or condition (or a serious disease or condition caused by taking 

a product already approved, licensed or cleared by FDA for treating 

or preventing such disease or condition), and the benefits of the 

product outweigh risks; (3) that there is no adequate, approved, 

and available alternative to the product; and (4) other criteria the 

Secretary may by regulation specify. The Commissioner should consult with the Directors of the National Institutes of Health and the 

Centers for Disease Control and Prevention prior to issuing an authorization, but such consultation is limited by considerations of 

feasibility and appropriateness given the circumstances of the 

emergency. 

Section 564(d) concerns the scope of an emergency use authorization. Under this section, the authorization shall state the disease 

or condition that the product may be used to detect, diagnose, prevent, or treat, as well as the Commissioner’s conclusions about 

known benefits and risks of the product and conclusions concerning 

safety and potential effectiveness. The Committee intends that before issuing an authorization under this section, the Commissioner 

will, where feasible given the nature and the extent of the emergency, notify the holder of any relevant application under this 

chapter or under section 351 of the Public Health Service Act. The 

purpose of such notification is to allow for discussion of the conditions of this authorization as required by subsection (e), as well as 

discussion of whether such product should be delivered pursuant to 

section 319F–2(c) of the Public Health Service Act. 

Section 564(e) pertains to products that have never been approved, licensed, or cleared by FDA. Under this subsection, conditions shall, to the extent feasible given the circumstances of the 

emergency, be applied to persons who choose to carry out an activity for which the authorization is issued. Such mandatory conditions include information to providers about the emergency use of 

the product as well as significant known potential risks and benefits, as well as appropriate conditions designed to ensure that to 

the maximum extent feasible given the circumstances of the emergency, individuals to whom the product is administered are informed of the emergency use of the product, risks and benefits of 

the product, and of the option to accept or refuse the product. Further, the Commissioner is given the authority to impose other conditions on those who carry out activities for which the authorization is issued. Such conditions imposed by the Commissioner 

should be designed to provide maximum flexibility to ensure that 

those who wish to take the product can indeed take the product, 

if made available by the manufacturer. 

Section 564(e) also applies to unapproved uses of approved products and the Commissioner may, for manufacturers who choose to 

19

carry out one or more activities pursuant to an emergency use authorization, apply certain conditions. This subsection makes clear 

that manufacturers do not have to avail themselves of the emergency use authorization for unapproved uses of approved products, 

and it makes clear that no individual may alter or obscure the labeling of already approved products. It does authorize, however, 

persons other than the manufacturer to provide information about 

the product concerning the emergency use of the product. 

Under section 564(e), the Commissioner may establish conditions 

regarding product labeling and information conveyance concerning 

unapproved products. Further, the Committee intends that the 

Commissioner may establish conditions regarding product labeling 

and information conveyance on manufacturers that carry out one 

or more activities pursuant to an emergency use authorization with 

respect to the emergency use of that product that is an unapproved 

use of an approved product. 

Subsection (f) makes clear that an emergency use authorization 

is effective until the declaration is terminated or revoked, but allows patients to continue using such products in certain instances. 

Nothing in this subsection is intended to require manufacturers or 

others to provide such products to patients. 

Subsection (g) makes clear that the Commissioner shall periodically review the appropriations of an authorization, and it provides 

the Commissioner needed flexibility to revoke an authorization if 

the criteria justifying the authorization are no longer met. 

Subsection (h) ensures that the Commissioner shall promptly 

publish in the Federal Register notices of all authorizations, terminations, and revocations, Subsection (i) makes clear that all determinations under this new section are committed to agency discretion. Subsection (j) is a rule of construction nothing that this new 

section does not impair or otherwise affect certain existing authorities. 

New section 564(k) pertains to members of the Armed Forces 

and, among other things, it specifies that the President may waive 

requirements designed to ensure that such members are informed 

of the option to accept or refuse administration of an emergency 

use product, upon certain findings (which are identical to the findings found in section 1107 of Title 10). Further, the subsection requires that if certain information is not provided to members of the 

Armed Forces prior to an emergency use product being administered to them, then information concerning the administration of 

the product shall be placed in the medical record of the member. 

Subsection (l) makes clear that if a product is authorized for 

emergency use under this new section, the investigational sections 

of the Act shall not apply to the products. 

Subsection (m) ensures that no authority in new section 564 can 

require a manufacturer of a drug, device, or biological product to 

perform any activity that becomes lawful pursuant to the new section. That is, the Commissioner in no way is goven the authority 

to, among other things, require a manufacturer to introduce into 

interstate commerce or deliver for introduction into interstate commerce any unapproved product or an approved product for an unapproved use under this section. Further, even if the Commissioner 

authorizes the emergency use of an already-approved, licensed or 

cleared product, a manufacturer can refuse to avail themselves of 

20

such emergency use authorization and continue introducing into 

interstate commerce its approved or cleared product under the Federal Food, Drug and Cosmetic Act, or licensed product pursuant to 

the Public Health Service Act. The only obligation in subsection (m) 

is that if the Commissioner authorizes the emergency use of a solesource unapproved product, then the manufacturer of such product 

must inform the Commissioner of its intention not to carry out any 

activity under the authorization within a reasonable period of time. 

Nothing in this section shall be construed as authorizing the Commissioner to establish conditions on the distribution, administration, or labeling of any other product in any other circumstance. 

Subsection (n) ensures that the present enforcement regime of 

the Federal Food, Drug, and Cosmetic Act will apply to individuals 

who carry out an activity or activities pursuant to an authorization, 

but fail to comply with applicable conditions. If any person carries 

out an activity pursuant to section 564, but violates a condition imposed by the Commissioner, then that person will be subject to 

Chapter III of the Act, where the ‘‘prohibited acts’’ are found. If a 

person is found to be in violation of a prohibited act found in section 301, then the Committee intends for that person to be subject 

to the enforcement provisions found in sections 302, 303, and 304. 

A violation of any condition applied to an emergency use product 

in no way alters or affects the emergency use status of the underlying product. 

The Committee intends that new section 564, as made clear in 

section 903(d)(2) of the Federal Food, Drug, and Cosmetic Act, the 

Secretary, through the Commissioner of Food and Drugs, shall be 

responsible for executing the Federal Food Drug, and Cosmetic Act 

as amended by the Project BioShield Act. 

Section 5. Reports 

Section 5(a) requires the Secretary of HHS to submit annual reports to Congress concerning the exercise of many of the new authorities under the Act. Section 5(b) requires a report from the National Academy of Sciences concerning whether and to what extent 

the research authorities granted under the Act have enhanced the 

development of biomedical countermeasures affecting national security. Section 5(c) requires the General Accounting Office to issue 

a report concerning the Secretary of HHS utilization of these new 

authorities. 

COMMITTEE CORRESPONDENCE

COMMITTE ON THE JUDICIARY

Washington, DC, June 10, 2003. 

Hon. BILLY TAUZIN,

Chairman, Committee on Energy and Commerce, 

House of Representatives, Washington, DC 

DEAR CHAIRMAN TAUZIN: In recognition of the desire to expedite 

floor consideration of H.R. 2122, the ‘‘Project BioShield Act of 

2003,’’ the Committee on the Judiciary hereby waives consideration 

of the bill. Section 2 of the bill creates a new section 319F–1 of the 

Public Health Service Act. New subsection 319F–1(d) gives the Secretary of Health and Human Services new authority to enter into 

personal services contracts with scientists and consultants for limVerDate Jan 31 2003 16:03 Jun 12, 2003 Jkt 019006 PO 00000 Frm 00020 Fmt 6659 Sfmt 6602 E:\HR\OC\HR147P1.XXX HR147P1
21

ited periods of time for the purposes of expedited research on countermeasures against biological weapons. New subsection 319F–1(d) 

further provides that scientists and consultants who receive contracts under this provision shall have the protections of the Federal 

Tort Claims Act as if they were regular federal employees. These 

FTCA provisions fall within the Committee on the Judiciary’s Rule 

X jurisdiction. However, given the need to expedite this legislation, 

I will not seek a sequential referral based on their inclusion. 

The Committee on the Judiciary takes this action with the understanding that the Committee’s jurisdiction over these provisions 

is in no way diminished or altered. I would appreciate your including this letter in the Congressional Record during consideration of 

H.R. 211 of the House floor. 

Sincerely, 

F. JAMES SENSENBRENNER, Jr., 

Chairman. 

COMMITTEE ON ENERGY AND COMMERCE

Washington, DC, June 10, 2003. 

Hon. F. JAMES SENSENBRENNER, Jr., 

Chairman, Committee on the Judiciary, 

House of Representatives, Washington, DC. 

DEAR CHAIRMAN SENSENBRENNER: Thank you for your letter regarding H.R. 2122, the ‘‘Project BioShield Act of 2003.’’ As you 

noted, new subsection 319F–1(d) of the Public Health Service Act 

as added by the bill contains provisions that fall within the Rule 

X jurisdiction of the Committee on the Judiciary. 

I appreciate your willingness not to seek a referral on H.R. 2122. 

I agree that your decision to forego action on the bill will not prejudice the Committee on the Judiciary with respect to its jurisdictional prerogatives on this or similar legislation. 

I will include a copy of your letter and this response in the Congressional Record during consideration of H.R. 2122 of the House 

floor. 

Sincerely, 

W.J. ‘‘BILLY’’ TAUZIN, Chairman.

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 italics, 

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 

* * * * * * *

22

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. 

23

(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 AntiKickback 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) USE OF NONCOMPETITIVE PROCEDURES.—In addition to 

any other authority to use procedures other than competitive 

procedures, the Secretary may use such other procedures 

when—

(A) the procurement is as described by paragraph (1); 

and 

(B) the property or services needed by the Secretary are 

available from only one responsible source or only from a 

limited number of responsible sources, and no other type of 

property or services will satisfy the Secretary’s needs. 

(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 

24

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 

25

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. 

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; 

26

(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 

27

(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 consultaVerDate Jan 31 2003 16:03 Jun 12, 2003 Jkt 019006 PO 00000 Frm 00027 Fmt 6659 Sfmt 6603 E:\HR\OC\HR147P1.XXX HR147P1
28

tion 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, 

29

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 

30

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.—The amount of any 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)). 

31

(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) USE OF NONCOMPETITIVE PROCEDURES.—In addition to any other authority to use procedures other than 

competitive procedures, the Secretary may use such 

other procedures for a procurement under this subsection if the product is available from only one responsible source or only from a limited number of responsible sources, and no other type of product will satisfy 

the Secretary’s needs. 

(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 underVerDate Jan 31 2003 16:03 Jun 12, 2003 Jkt 019006 PO 00000 Frm 00031 Fmt 6659 Sfmt 6603 E:\HR\OC\HR147P1.XXX HR147P1
32

takings 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 conVerDate Jan 31 2003 16:03 Jun 12, 2003 Jkt 019006 PO 00000 Frm 00032 Fmt 6659 Sfmt 6602 E:\HR\OC\HR147P1.XXX HR147P1
33

struct 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 øsubsection (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 amendVerDate Jan 31 2003 16:03 Jun 12, 2003 Jkt 019006 PO 00000 Frm 00033 Fmt 6659 Sfmt 6602 E:\HR\OC\HR147P1.XXX HR147P1
34

ment 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 øAPPROPRIATIONS.—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 appro- priated $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 DIS- EASES.—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. 

35

(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.

SECTION 121 OF THE PUBLIC HEALTH SECURITY AND 

BIOTERRORISM PREPAREDNESS AND RESPONSE ACT 

OF 2002

øSEC. 121. STRATEGIC NATIONAL STOCKPILE. 

ø(a) STRATEGIC NATIONAL STOCKPILE.—

ø(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. 

ø(2) PROCEDURES.—The Secretary, in managing the stockpile 

under paragraph (1), shall—

ø(A) consult with the working group under section 

319F(a) of the Public Health Service Act; 

ø(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; 

ø(C) in consultation with Federal, State, and local officials, take into consideration the timing and location of 

special events; 

ø(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; 

ø(E) devise plans for the effective and timely supplychain management of the stockpile, in consultation with 

appropriate Federal, State and local agencies, and the public and private health care infrastructure; and 

36

ø(F) ensure the adequate physical security of the stockpile. 

ø(b) SMALLPOX VACCINE DEVELOPMENT.—

ø(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. 

ø(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). 

ø(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. 

ø(d) DEFINITION.—For purposes of subsection (a), the term 

‘‘stockpile’’ includes—

ø(1) a physical accumulation (at one or more locations) of the 

supplies described in subsection (a); or 

ø(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). 

ø(e) AUTHORIZATION OF APPROPRIATIONS.—

ø(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. 

ø(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 

37

(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—

38

(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 

39

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 

40

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.—

41

(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.

42

(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.

Æ