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 Department of Health and Human Services
 AGENCY: Department of Health and Human Services, Office of the Secretary.
 ACTION: Request for public comment.
 SUMMARY: The U.S. Department of Health and Human Services is hereby giving notice that the National Biodefense Science Board (NBSB) Medical Countermeasure Markets and Sustainability Working Group is requesting public comment to their working document, “Inventory of Issues Constraining or Enabling Industry Involvement in Medical Countermeasure Efforts”. The inventory (or grid) includes factors that may discourage industry involvement or partnering with the U.S. Government in medical countermeasure development efforts, reported constraints to industry involvement, and potential solutions for relief from a particular constraint. The inventory has been catalogued by financial, legislative, scientific, human capital, regulatory, and societal elements. The Working Group wishes to solicit comment, feedback, and guidance from members of industry, other government agencies, and the public at large for consideration by the Working Group to strengthen and refine the document prior to its public presentation to the NBSB at the scheduled Fall 2009 public meeting of the Board.
 DATES: The public is asked to submit comments by October 30, 2009, to the NBSB e-mail box (
                        *NBSB@hhs.gov*) in order to be considered by the Working Group in preparing the final document.
 ADDRESSES:  *Availability of Materials:*
                         Requests for a copy of the Inventory and accompanying “Comment Revision Form” should be made to the NBSB's e-mail box at 
                        *NBSB@hhs.gov*
                         with “M&S-WG Inventory Request” in the subject line. All comments and/or recommendations for improvement to the Inventory should be made on the “Comment Revision Form” enclosed with the inventory document. *Procedures for Providing Public Input:*
                         Interested members of the public may submit written comments and/or suggestions, using the “Comment Revision Form,” to the NBSB's e-mail box at 
                        *NBSB@hhs.gov,*
                         with “M&S-WG Inventory Comments” in the subject line and should be received no later than October 30, 2009. Individuals providing comment or suggestions will be asked to provide their name, title, and organization. All comments received will be posted without change to 
                        *http://www.hhs.gov/​aspr/​omsph/​nbsb/​,*
                         including any personal or commercial information provided.
 FOR FURTHER INFORMATION, CONTACT: Donald Malinowski, M.Sc., HHS/ASPR/NBSB, 330 C St., SW., #5118, Washington, DC 20201, 202-205-4761, 
                        *donald.malinowski@hhs.gov.*


SUPPLEMENTARY INFORMATION: Pursuant to section 319M of the Public Health Service Act (42 U.S.C. 247d-7f) and section 222 of the Public Health Service Act (42 U.S.C. 217a), the Department of Health and Human Services established the National Biodefense Science Board. The Board shall provide expert advice and guidance to the Secretary on scientific, technical, and other matters of special interest to the Department of Health and Human Services regarding current and future chemical, biological, nuclear, and radiological agents, whether naturally occurring, accidental, or deliberate. The Board may also provide advice and guidance to the Secretary on other matters related to public health emergency preparedness and response. Dated: July 29, 2009. Nicole Lurie, Assistant Secretary for Preparedness and Response, Rear Admiral, U.S. Public Health Service.
 National Biodefense Science Board Markets & Sustainability Working Group Working Document “Inventory of Issues Constraining or Enabling Industrial Involvement With Medical Countermeasure Development” Request for Public Comment Published in 
                    **Federal Register**
                     June 1, 2009. Inventory of Issues Constraining or Enabling Industrial Involvement with Medical Countermeasure Development *Introduction:*
                     The National Biodefense Science Board (NBSB) Medical Countermeasure Markets and Sustainability Working Group (M&S-WG) has posted a request for public comment in the 
                    **Federal Register**
                     to solicit comment, feedback, and guidance from members of industry, other government agencies, and the public at large on their working document, 
                    *“Inventory of Issues Constraining or Enabling Industry Involvement in Medical Countermeasure Efforts.”*
                     Posting of the working document in the 
                    **Federal Register**
                     will serve to solicit and obtain public comment for consideration by the Working Group to strengthen and refine the document. The Working Group plans to present the document to the NBSB at the scheduled Fall 2009 public meeting of the Board. *Background:*
                     There exists a variety of limitations and barriers to biotechnology and pharmaceutical companies” involvement in the biosecurity and biodefense efforts of the U.S. Government (USG), most notably medical countermeasure advanced research and development programs coordinated by the Department of Defense (DoD) and the Department of Health and Human Services (DHHS). Make-up of the medical countermeasure development efforts has been called fragmented, with confusing approaches used. To delineate and simplify the complexities of USG endeavors in medical countermeasure development, and the interactions between government agencies and private industry, the NBSB Markets & Sustainability Working Group (M&S-WG) assembled the enclosed inventory (or grid) of issues. This inventory includes factors that may discourage industry involvement or partnering with the USG in medical countermeasure development efforts, reported constraints to industry involvement, and potential solutions for relief from a particular constraint. The inventory has been catalogued by financial, legislative, scientific, human capital, regulatory, and societal elements. The public is encouraged to consider submitting comments and/or recommendations on the content of this inventory. Requests for a copy of the inventory and accompanying Comment Revision Form should be sent to the NBSB's e-mail box at 
                    *NBSB@hhs.gov*
                     with “M&S-WG Inventory Request” in the subject line. All comments and/or recommendations for improvement to the inventory grid should be made on the Comment Revision Form enclosed with the inventory document. Comments and/or recommendations are to be submitted to the NBSB's e-mail box at 
                    *NBSB@hhs.gov*
                     with “M&S-WG Inventory Comments” in the subject line and should be received no later than October 30, 2009. NBSB Markets & Sustainability Work Group 18 May 09 Observations, Adapted From June 08 NBSB Meeting *Business Planning:* ■ Contracting with some portions of the USG can be slow, unwieldy, expensive, and opaque. ■ Lack of clarity increases industry risk. ■ Procurement size, warm-base requirements, length of review, etc. ■ Lack of transparency increases industry risk. ■ Contract review process, rate of issuance of new proposals, requirement generation. ■ With a contract in place, situation improves. ■ HHS viewed as cooperative, helpful, responsible and responsive. ■ Perceived lack of coordination between development activities and regulatory responsibilities remains a concern to industry. *Regulatory:* ■ Lack of clarity regarding usable product definitions, seeming differences in FDA approaches to providing guidance to industry. ■ Industry reliance upon USG for key components of licensure submissions can lead to lack of accountability. ■ Disease studies, toxicology reports, etc. *Funding, Stability, Reliability, Predictability:* ■ Advanced Development needs more dedicated funding, separate from BioShield funding. ■ BioShield remains a funded procurement device, not an advanced-development mechanism. 
                    ( print page 40191) ■ Advanced development efforts would benefit from contracting flexibility. ■ Cost-plus-fee contracting flexibility is appropriate for advanced development and would reduce risk. ■ Multiyear funding. ■ Drug development and corporate investment/planning is long-term process, multiyear funding with carry-over authority, with multi-year contracting authority would signal USG commitment and increase industry sense of long-term stability. ■ Project BioShield expires in 2013 and will need to be reauthorized and funded. ■ Five years not a long time in drug-development process. ■ BioShield funds should not be diverted to fund other initiatives. ■ Inadequate funding delays the journey to MCM licensure. ■ Initiate additional program against emerging diseases, modeled after pandemic program. *Next Steps for WG :* ■ Continue to identify obstacles to greater industry participation in MCM development. ■ Make recommendations where appropriate. ■ Identify incentives to encourage greater industry participation in MCM development. ■ Make recommendations where appropriate. ■ Consider alternative models for MCM development. ■ Do other models ensure national and public-health security while more efficiently using limited resources? *Barriers Hindering Partnership:*
                     Opportunity cost (distractions from commercial business), economics (e.g. margins, volumes), product liability, uncertainty over sustained funding, ambiguous governance, competing public-health alternatives (e.g., needs of developing world), finite human capital, complexity of working with USG, obligations during crisis. *Incentives Encouraging Partnership:*
                     Reliable access to excess capacity (e.g., for redundant capacity or developing-world projects), tax credits, patent-term extensions, grants, priority-review vouchers, preferred customer/vendor status with USG, product licensing rights, larger pool of scientists and engineers, public good, long-term contracts, intellectual-property development. Inventory of Issues Constraining or Enabling Industrial Involvement With Medical Countermeasure Development 18 May 09
Row #
Problem/category
Potential solution
Approach/ 
                             advantages/  
                             action
Problem/limitationColumn #1
Column #2
Column #3
Column #4**Financial Elements**1
Row 1; Column 1
Row 1; Column 2
Row 1; Column 3
Row 1; Column 4.Capital requirements to establish safety, efficacy, validated manufacture
Increase financial return after risking capital to industry-standard rates 
                             Reduce requirement for private capital for advanced development
Increased federal funding for advanced development, in the form of cost-reimbursement contracts and rewarding private-capital investments with milestone payments and at procurement
Risk of distraction of large industry partners from commercial mission or dilution of effort [potential conflict with fiduciary responsibility to shareholders of publicly traded companies].2
Row 2; Column 1
Row 2; Column 2a
Row 2; Column 3a
Row 2; Column 4.Risk of technical failure of vaccine development effort
Decentralized discovery/centralized development and manufacture
Reimbursement of development costs at cost +15%, with return-on-working-capital at 22%, and cost-of-money-for-capital at 15%
Lack of interest, given opportunity costs  Congressional tolerance for anticipatable frustrations is unknown.Row 2; Column 2b
Row 2; Column 3bEvaluation of whether indirect-cost reimbursement greater than 100% may be appropriate
Provides support early in processAssistance with calculating indirect cost rates (for companies that have never done so before).3
Row 3; Column 1
Row 3; Column 2a
Row 3; Column 3aTax incentives
Enhance current incremental R&D tax credit (increase, make refundable)
Currently, 20% for qualified R&D expenses and 50% for clinical-trial expensesRow 3; Column 2b
Row 3; Column 3b
Row 3; Column 4.New investment tax credit (20%) for construction of new R&D and manufacturing facilities for biosecurity and emerging-infectious disease purposes (with refundable and/or transferable provisions)
Enhance net revenue
Not yet authorized.4
Row 4; Column 1
Row 4; Column 2
Row 4; Column 3
Row 4; Column 4.( print page 40192)Revenue enhancements based on Intellectual Property
Enhance current product or use patent-term restoration and/or extension (revise formula) 
                             Allow full patent-term extension for licensed products that gain CBRN or emerging disease application (akin to adding pediatric indication) 
                             Allow transfer of patent-term extension to another product or company (“wildcard”)  
                             Market exclusivity: Increase term of market exclusivity to ~ 12-15 years and extend it to biologicals (as does Orphan Drug Act)
Current statutory formula: Patent extension supplemented by [
                            1/2
                             time from IND to filing BLA + full time from BLA filing to FDA approval/licensure] 
                             Currently, 5 years of market exclusivity is provided to New Chemical Entities (NCEs) but not biologicals via Hatch-Waxman Act and 7 years of market exclusivity is provided via Orphan Drug Act
Note: Orphan drug tax credit applies to vaccines only if less than 200,000 vaccinated recipients anticipated.5
Row 5; Column 1
Row 5; Column 2
Row 5; Column 3
Row 5; Column 4.Priority-Review Vouchers (PRV)
Make applicable to biosecurity products
A PRV is a tradable certificate awarded to a developer of a treatment for a neglected tropical disease that gains licensure from FDA. It entitles holder to a priority review (a speedier review time) for a future product of their choosing, potentially shortening the review process by 6 to 12 months
                             First PRV awarded to Novartis for Coartem malaria treatment (artemether and lumefantrine) in Apr 09
Predictability: Would a priority-review voucher simply accelerate a “no” or “not yet” response? 
                             
                                2007 law: Text at: 
                                *http://www.bvgh.org/​documents/​HR3580-CompromiseFDA-PDUFABill.pdf*
                                Draft FDA guidance: 
                                *http://www.fda.gov/​cber/​gdlns/​tropicaldisease.htm*.6
Row 6; Column 1
Row 6; Column 2a
Row 6; Column 3a
Row 6; Column 4a.Limited market size (development costs >> market potential)
Acquisition RFPs should state minimum quantities (total and to each successful awardee) to increase market certainty to potential bidders and their investors
Publication of requirements along with advanced-development RFPs. It may be possible to more widely describe procurement requirements, in contrast to the more sensitive value of treatment requirements
Requirements are not static and can be expected to change based on threat assessments and discoveries during product development. Requirements may signal USG threat recognition, so may not be appropriate for public release.Row 6; Column 2b
Row 6; Column 3b
Row 6; Column 4b.Contract terms allowing manufacturers access to allied foreign governments and other authorized customers outside the US, as well as civilian first responders, hospitals, and travel-vaccine providers within the US
Treaty allies represent additional markets
Allies have not made substantial independent purchases to date. Some may hope/expect USG to share stockpile when attack occurs.Row 6; Column 2c

Row 6; Column 4c.Add biodefense and other adult vaccines to Standardized Equipment List (SEL) and Authorized Equipment List (AEL), so state and local first-responders can use federal (DHS) grant funds to pay for vaccinations

Currently only drugs, antidotes, and various treatments are covered, but not vaccines for prophylaxis in the first place.7
Row 7; Column 1
Row 7; Column 2
Row 7; Column 3
Row 7; Column 4.( print page 40193)Surge issues
Compensation if commercial product(s) displaced during emergencies (
                            *e.g.*, lost sales, market share, delayed licensing)
Define “compensation” in initial contract or agree to a dispute-resolution mechanism
Potential compensation may need to include delay of a new product or loss of market share to a competitor. Level difficult to determine a priori.**Legislative Elements**8
Row 8; Column 1
Row 8; Column 2a
Row 8; Column 3a
Row 8; Column 4a.Predictability, consistency adequacy of Congressional appropriations
Increase annual NIAID appropriation increases for early-stage MCM development to offset flat funding since 2001 anthrax attacks. Insufficient funds now allocated for advanced development for CBRN
Multi-year contracting authority (for large molecules, due to complex manufacturing and limited use) and multi-year funding with carry-over authority for R&D and procurement initiatives
Limited track record. Partial analogies: 
                             Aerospace industry in early 1940s.  
                             Consistent procurement of aircraft carriers since 1940s.Increase BARDA appropriations for advanced development of CBRN MCMs and continued long-term funding for both CBRN and pandemic countermeasues, to offset recent funding shortfalls
Manage funding as a “national portfolio” that mitigates risk by a broad set of target products, with multiple MCMs per disease 
                             Base metrics on portfolio performance, rather than individual candidate countermeasures
Congressional long-term recognition of threat (natural and malicious) and tolerance for MCM technical failure unknown.Long-term funding and ongoing government procurement (10 years or longer) is essential to maintain warm-base MCM manufacturing and surge capacityRow 8; Column 2b
Row 8; Column 3bNeed significantly expanded federal funding under BioShield for advanced development and procurement activities (BioShield reauthorization and funding)
Solution: a blend of indefinite mandatory funding authority with caveats to assure good-faith performance and sufficient ongoing discretionary appropriationsStop and reverse Congressional diversion of BioShield Reserve Fund for other initiatives ($412M in FY09 = $137M for pandemic + $275M for PAHPA implementation),Need long-term funding for acquisition of FDA-approved/licensed MCMs for Strategic National Stockpile9
Row 9; Column 1
Row 9; Column 3
Row 9; Column 3
Row 9; Column 4.Funding stream
Provide for greater flexibility in milestone-driven payment schedules under PAHPA and BioShield, to account for the unpredictability of vaccine R&D technical difficulties and progress
PAHPA (2006) authorized $1B to BARDA for advanced development of MCMs, in addition to BioShield Reserve Fund 
                             Avoids rPA102 scenario (risk of repayment upon cancellation)
Would likely require BARDA to use Other Transaction Authority (OTA) (not used to date).10
Row 10; Column 1
Row 10; Column 2
Row 10; Column 3.( print page 40194)Untrodden development pathways
Cooperative R&D Agreements (CRADAs) allow collaboration with respect for intellectual property 
                             US Gov't and sponsor agree on defined development pathway at early stages to achieve a target product profile
Enhanced recognition that changes in product requirements can be expected to increase the cost and time required to achieve a useable product 
                             Requires enhanced integration of efforts by each USG entity (notably BARDA, NIAID, CDC, FDA, DoD, InterAgency Board)11
Row 11; Column 1
Row 11; Column 2
Row 11; Column 3
Row 11; Column 4.Facilitating technology transfer from basic to advanced development
Streamline process to support integration of disciplines needed for successful scale-up of manufacturing processes 
                             Increase U.S. Gov't funding for applied bioscience, material sciences and biopharmaceutical processes
Offer innovator an option of (a) a milestone payment (“prize”) as a single fee to license the intellectual property for further development or (b) continue involvement in development in exchange for the possibility of royalties after FDA licensure achieved
Milestone payments could be used on a multiple of private paid-in capital (variable) or a fixed amount per drug.**Human Capital Elements**12
Row 12; Column 1
Row 12; Column 2
Row 12; Column 3
Row 12; Column 4Human capital within industry
Grow the pool of science and engineering talent pool within industry needed to develop and manufacture MCMs within the US
Increased range of scientific programs offers additional career-development for industrial scientists and engineers 
                             DARPA model assumes industry-standard compensation rates
Additional flexibility needed in USG agency authority to provide competitive compensation to critical employees.Congress authorized large increases for NIH grants for researcher awards, but a long-term approach is needed to sustain the industrial base.13
Row 13; Column 1
Row 13; Column 2a
Row 13; Column 3aComplex, evolving regulatory requirements
Clarify expectations early in product development and minimize changes in expectations in application review (e.g., requirements under “animal rule”)
Spill-over benefits to commercial sphere via enhanced dialog with FDARow 13; Column 2b
Row 13; Column 3b
Row 13; Column 4b.Implement best practices for quality/regulatory systems for biosecurity products
Partner with experienced biopharma organization to gain access to either staff or quality systems
Companies with extensive FDA experience not currently engaged with MCM development or manufacture.Row 13; Column 2c
Row 13; Column 3cCollaboration with FDA to meet evolving (more stringent) standards for development, manufacture, clinical trials, and “animal-rule” pathways
Centralized advanced development and manufacturing to facilitate cross-product learning and system developmentRow 13; Column 2dAccelerated FDA review14
Row 14; Column 1
Row 14; Column 2
Row 14; Column 3
Row 14; Column 4Administrative requirements to comply with USG contracts
Contracting reform to relieve the regulatory and reporting burden
Waive nonessential accounting requirements and other components of the Federal Acquisition Regulation (FAR)
Familiarity with Federal Acquisition Regulations (FAR) (or relief from them).( print page 40195)BARDA should identify opportunities to use Other Transaction Authority (OTA) to enhance R&D contracts (akin to DARPA).Explore Cooperative R&D Agreement (CRADA) approaches15
Row 15; Column 1
Row 15; Column 2
Row 15; Column 3Adequacy of review and consultation resources at FDA
Increase appropriations to enhance FDA review and consultation
More medical reviewers needed, plus research and assay development within FDAIncrease percentage of personnel eligible for enhanced bonus payments or super-grades**Societal Elements**16
Row 16; Column 1
Row 16; Column 2
Row 16; Column 3
Row 16; Column 4Contribution to national security.
Exploration of biosecurity MCMs is likely to have spill-over benefits to “natural” infectious diseases as well
Enhanced corporate reputation.
Increased public attention during crisis.**Legal Elements**17
Row 17; Column 1
Row 17; Column 2
Row 17; Column 3
Row 17; Column 4.Product liability
Expand coverage of PREP Act to additional MCMs for which Material Threat Assessments (MTAs) exist
Indemnification via Public Readiness & Emergency Preparedness (PREP) Act of 2005 (PL 109-148, Dec 30, 2005)
Not tested in practice or litigated. 
                            *http://www.pandemicflu.gov/​plan/​federal/​prep_​act.html*Public Law 109-148. PHS Act Section 319(f)(3). 42 U.S.C. 247d-6d. 
                             [See also Support Antiterrorism by Fostering Effective Technologies (SAFE-T) Act of 2002 [within Homeland Security Act, Pub. L. 107-296].]18
Row 18; Column 1
Row 18; Column 2
Row 18; Column 3Antitrust Provisions
Assess need for, plan, and implement antitrust waiver authority under PAHPA 2006 for R&D and preparedness activities to allow nominally competing parties to collaborate during a public health emergency or to conduct contingency exercises before a public-health emergency. Involve DoJ and Attorney General in supervisory/compliance role
Need ability to develop contingency plans and preliminary communication and technical consultation 
                             Continue and expand efforts such as those underway with pandemic influenza vaccine and adjuvant “mix-and-match” studies to assess safety and efficacy**Corollary Elements**19
Row 19; Column 1
Row 19; Column 2
Row 19; Column 3( print page 40196)Attractiveness of commercial vaccine market for support of future R&D and manufacturing
Implement national policies to provide adequate reimbursement for vaccines and their administration in both the public and private sectors, to help underwrite and sustain the industrial base needed for biosecurity and global-health products
Consolidate Medicare coverage of all vaccines within Part B (not Part D)Increase administration reimbursement rates under Medicaid and Vaccines for Children (VFC) beneficiaries with federal subsidies to offset increased State costsThird-party payers to provide first-dollar coverage for FDA-licensed vaccines and their administration under healthcare reform20
Row 20; Column 1
Row 20; Column 2
Row 20; Column 3.Approaches suitable for developing-world situations (perhaps useful by analogy)
Advanced Market Commitments (AMC) separately for existing vaccines and global health vaccines at R&D stage
Examples: Guarantee a market in developing countries for pneumococcal vaccines to prevent deadly respiratory infections in children and as an incentive for development of vaccines that currently do not exist against infectious disease threats in those countries, but which may be imported into the U.S. or threaten global security**Other Benefits to Involvement With Biosecurity Initiative**21
Row 21; Column 1
Row 21; Column 2
Row 21; Column 3Competitive situation
Don't put all eggs in one basket, allow multiple technologies and product candidates to progress simultaneously through development pathways
Participation by manufacturer with U.S. Gov't withholds scientific, financial, and human-capital benefit to competitors22
Row 22; Column 1

Row 22; Column 3
Row 22; Column 4.New intellectual property

IP developed in course of government contract remains with discoverer
U.S. Gov't has step-in rights if patent arising from federal government-funded research not exploited [Bayh-Dole Act of 1980 (or University & Small Business Patent Procedures Act), codified in 35 U.S.C. 200-212[1], implemented by 37 CFR 401[2]].23
Row 23; Column 1

Row 23; Column 3
Row 23; Column 4.Staying abreast of advancing sciences

Access to state-of-art process analytics for wide variety of biological products
Need to understand exclusivity of access.
 *Citations:* Project BioShield Act of 2004: Public Law 108-276, 
                        *http://frwebgate.access.gpo.gov/​cgi-bin/​getdoc.cgi?​dbname=​108_​cong_​public_​laws&​docid=​f:publ276.108.pdf.* BioShield II (2005): PAHPA, PL 109-417, Dec 19, 2006. *Bibliography:* Matheny J, Mair M, Mulcahy A, Smith BT. Incentives for biodefense countermeasure 
                        ( print page 40197)
                        development. 
                        *Biosecur Bioterror*
                         2007 Sep;5(3):228-38. Animal Rule = U.S. Food and Drug Administration. New drug and biological drug products; evidence needed to demonstrate effectiveness of new drugs when human efficacy studies are not ethical or feasible. Final rule. 
                        *FR*
                         2002 May 31;67(105):37988-98. 
                        *http://frwebgate5.access.gpo.gov/​cgi-bin/​PDFgate.cgi?​WAISdocID=​483712496781+​5+​2+​0&​WAISaction=​retrieve.*


BILLING CODE 4150-37-C [FR Doc. E9-19199 Filed 8-10-09; 8:45 am]