```

[House Hearing, 109 Congress]
[From the U.S. Government Publishing Office]

              THE THREAT OF AND PLANNING FOR PANDEMIC FLU

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

                                HEARING

                               before the

                         SUBCOMMITTEE ON HEALTH

                                 of the

                    COMMITTEE ON ENERGY AND COMMERCE
                        HOUSE OF REPRESENTATIVES

                       ONE HUNDRED NINTH CONGRESS

                             FIRST SESSION

                               __________

                              MAY 26, 2005

                               __________

                           Serial No. 109-21

                               __________

      Printed for the use of the Committee on Energy and Commerce

 Available via the World Wide Web: http://www.access.gpo.gov/congress/
                                 house

                               __________

                    U.S. GOVERNMENT PRINTING OFFICE
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_____________________________________________________________________________
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                    COMMITTEE ON ENERGY AND COMMERCE

                      JOE BARTON, Texas, Chairman

RALPH M. HALL, Texas                 JOHN D. DINGELL, Michigan
MICHAEL BILIRAKIS, Florida             Ranking Member
  Vice Chairman                      HENRY A. WAXMAN, California
FRED UPTON, Michigan                 EDWARD J. MARKEY, Massachusetts
CLIFF STEARNS, Florida               RICK BOUCHER, Virginia
PAUL E. GILLMOR, Ohio                EDOLPHUS TOWNS, New York
NATHAN DEAL, Georgia                 FRANK PALLONE, Jr., New Jersey
ED WHITFIELD, Kentucky               SHERROD BROWN, Ohio
CHARLIE NORWOOD, Georgia             BART GORDON, Tennessee
BARBARA CUBIN, Wyoming               BOBBY L. RUSH, Illinois
JOHN SHIMKUS, Illinois               ANNA G. ESHOO, California
HEATHER WILSON, New Mexico           BART STUPAK, Michigan
JOHN B. SHADEGG, Arizona             ELIOT L. ENGEL, New York
CHARLES W. ``CHIP'' PICKERING,       ALBERT R. WYNN, Maryland
Mississippi, Vice Chairman           GENE GREEN, Texas
VITO FOSSELLA, New York              TED STRICKLAND, Ohio
ROY BLUNT, Missouri                  DIANA DeGETTE, Colorado
STEVE BUYER, Indiana                 LOIS CAPPS, California
GEORGE RADANOVICH, California        MIKE DOYLE, Pennsylvania
CHARLES F. BASS, New Hampshire       TOM ALLEN, Maine
JOSEPH R. PITTS, Pennsylvania        JIM DAVIS, Florida
MARY BONO, California                JAN SCHAKOWSKY, Illinois
GREG WALDEN, Oregon                  HILDA L. SOLIS, California
LEE TERRY, Nebraska                  CHARLES A. GONZALEZ, Texas
MIKE FERGUSON, New Jersey            JAY INSLEE, Washington
MIKE ROGERS, Michigan                TAMMY BALDWIN, Wisconsin
C.L. ``BUTCH'' OTTER, Idaho          MIKE ROSS, Arkansas
SUE MYRICK, North Carolina
JOHN SULLIVAN, Oklahoma
TIM MURPHY, Pennsylvania
MICHAEL C. BURGESS, Texas
MARSHA BLACKBURN, Tennessee

                      Bud Albright, Staff Director

        David Cavicke, Deputy Staff Director and General Counsel

      Reid P.F. Stuntz, Minority Staff Director and Chief Counsel

                                 ______

                         Subcommittee on Health

                     NATHAN DEAL, Georgia, Chairman

RALPH M. HALL, Texas                 SHERROD BROWN, Ohio
MICHAEL BILIRAKIS, Florida             Ranking Member
FRED UPTON, Michigan                 HENRY A. WAXMAN, California
PAUL E. GILLMOR, Ohio                EDOLPHUS TOWNS, New York
CHARLIE NORWOOD, Georgia             FRANK PALLONE, Jr., New Jersey
BARBARA CUBIN, Wyoming               BART GORDON, Tennessee
JOHN SHIMKUS, Illinois               BOBBY L. RUSH, Illinois
JOHN B. SHADEGG, Arizona             ANNA G. ESHOO, California
CHARLES W. ``CHIP'' PICKERING,       GENE GREEN, Texas
Mississippi                          TED STRICKLAND, Ohio
STEVE BUYER, Indiana                 DIANA DeGETTE, Colorado
JOSEPH R. PITTS, Pennsylvania        LOIS CAPPS, California
MARY BONO, California                TOM ALLEN, Maine
MIKE FERGUSON, New Jersey            JIM DAVIS, Florida
MIKE ROGERS, Michigan                TAMMY BALDWIN, Wisconsin
SUE MYRICK, North Carolina           JOHN D. DINGELL, Michigan,
MICHAEL C. BURGESS, Texas              (Ex Officio)
JOE BARTON, Texas,
  (Ex Officio)

                                  (ii)

                            C O N T E N T S

                               __________
                                                                   Page

Testimony of:
    Crosse, Marcia, Director, Health Care Issues, United States 
      G.overnment Accountability Office..........................    47
    Fauci, Anthony S., Director, National Institute of Allergy 
      and Infectious Diseases, National Institutes of Health, 
      Department of Health and Human Services....................    21
    Gellin, Bruce G., Director, National Vaccine Program Office, 
      Department of Health and Human Services....................    26
    Gerberding, Julie L., Director, Centers for Disease Control 
      and Prevention, Department of Health and Human Services....    15
    Hosbach, Phillip, Vice President, Immunization Policy and 
      Government Relations, sanofi-pasteur.......................    65
    Iacuzio, Dominick A., Medical Director, Hoffmann-La Roche....    70
    Pavia, Andrew T., Chairman, Taskforce on Pandemic Influenza, 
      Infectious Diseases Society of America, and Professor and 
      Chief, Division of Pediatric Infectious Diseases, 
      University of Utah Medical Center..........................    59
    Tripp, Ralph A., Chairman, Georgia Research Alliance, and 
      Professor, Department of Infectious Diseases, University of 
      Georgia, College of Veterinary Medicine....................    75

                                 (iii)

  

 
              THE THREAT OF AND PLANNING FOR PANDEMIC FLU

                              ----------                              

                         THURSDAY, MAY 26, 2005

                  House of Representatives,
                  Committee on Energy and Commerce,
                                    Subcommittee on Health,
                                                    Washington, DC.
    The subcommittee met, pursuant to notice, at 10:05 a.m., in 
room 2123 of the Rayburn House Office Building, Hon. Nathan 
Deal (chairman) presiding.
    Members present: Representatives Deal, Hall, Shadegg, 
Pitts, Bono, Ferguson, Burgess, Barton (ex officio), Brown, 
Waxman, Eshoo, Green, DeGette, Allen, and Baldwin.
    Staff present: Chuck Clapton, chief health counsel; Ryan 
Long, professional staff; Nandan Kenkermath, majority counsel; 
Eugenia Edwards, legislative clerk; Brandon Clark, health 
policy coordinator; John Ford, minority counsel; and Jessica 
McNiece, research assistant.
    Mr. Deal. Call to order. Please close the doors in the back 
and we will get started. The Chair recognizes himself for an 
opening statement.
    I certainly want to welcome everyone to this hearing today 
and our distinguished panel members. We have two panels that 
you are going to hear from, and they will give various 
perspectives on this issue of pandemic flu. And certainly it is 
an issue that everybody, I suppose, has their own point of view 
on. And we will hear several points of view, I am sure, during 
the course of this hearing today.
    Our first panel of witnesses contain some faces and names 
that are familiar to many of the members of this subcommittee. 
First of all, Dr. Julie Gerberding, who is now a fellow North 
Georgian, and I was going to brag about that until I heard from 
Mr. Brown as to where you graduated from medical school, so he 
is going to claim some credit for you as well. But being from 
the CDC in Atlanta and the director of that facility, I am 
certainly pleased to have you here today. Dr. Bruce Gellin, who 
is the director of the National Vaccine Program Office within 
the Department of Health and Human Services, pleased to have 
you, Dr. Gellin. And Dr. Anthony Fauci, who is the director of 
the National Institute of Allergy and Infectious Diseases 
within NIH. We are certainly pleased to have all three of you 
here today.
    I am going to go ahead and introduce at this point the 
second panel, and I have to extend an apology probably that I 
won't be here for all of the second panel's testimony, but I 
might if I don't have too many long-winded opening statements 
here. I do have an engagement that is going to take me out for 
a while, but our vice-chairman will be presiding at that time.
    Dr. Marcia Crosse, who is the director of Health Care 
Issues for the U.S. Government Accountability Office; Dr. Ralph 
Tripp, who is the director for the Center for Disease 
Intervention at the University of Georgia College of Veterinary 
Medicine and the Georgia Research Alliance Chair of the Animal 
Health Vaccine Development, and the second Georgian who is in 
the panel group today; Dr. Andrew Pavia, who is chair of the 
Taskforce on Pandemic Influenza at the Infectious Diseases 
Society of America; and professor and chief of the Division of 
Pediatric Infectious Diseases at University of Utah Health 
Services Center and Primary Children's Hospital; Dr. Dominick 
Iacuzio, close I am sure, medical director of the Hoffmann-La 
Roche, Incorporated; Mr. Phillip Hosbach, who is vice president 
of the Immunization Policy and Government Relations for sanofi 
pasteur, which is the world's largest influenza vaccine 
manufacturers.
    So as you can see from the titles and the positions of the 
members of these two panels, we certainly represent, I think, a 
cross-section of the experts on this issue that we are facing 
today.
    All of us, I think, can attest to the fact that the fear of 
a global influenza epidemic or a flu pandemic is certainly one 
of the greater health challenges and threats that our country 
faces and our world faces. All of us have different 
perspectives on this. I have heard people, as we have talked 
about having a hearing like this, saying that they remembered 
the Asian Flu, they remembered the flu epidemics when they were 
in college, and all of these things.
    I have a resource that goes far beyond that, so I decided 
to ask my 98-year-old mother and my soon-to-be 92-year-old 
father-in-law what they remember about flu epidemics. And 
remarkably, my mother, who was a young teenager in the 1918 flu 
epidemic, recalls that she lost two aunts during that time. And 
those of you who know the history of all this, this was a 
serious flu that affected our country and affected the world.
    My father-in-law went back even further than that. He 
remembered a flu epidemic of the late 1800's and recalled that 
there is a cemetery in our area where it is practically filled 
with the victims of a flu from the late 1800's. So the idea 
that this is something that is new is certainly not appropriate 
because it is a threat that has hit our country and the world 
in the past and is certainly a threat that we want to be sure 
that we are as prepared as we possibly can be.
    You might ask why the linkage with the veterinary 
testimony. Part of it is the fact that my hometown calls itself 
the poultry capital of the world, and we have for many, many 
years, of course, been concerned with Avian Flu and the effects 
on the poultry industry here and across the world. But there is 
a direct linkage, as you will hear, in the threat and trying to 
eliminate the threat within the poultry and fowl of the world 
so that there is no transmission. So there is a linkage and we 
certainly want to hear about that today.
    With that, again, I welcome all of you and we look forward 
to your testimony. And I will recognize my good friend, Mr. 
Brown.
    [The prepared statement of Hon. Nathan Deal follows:]

   Prepared Statement of Hon. Nathan Deal, Chairman, Subcommittee on 
                                 Health

    The Committee will come to order, and the Chair recognizes himself 
for an opening statement.
    I am proud to say that we have two expert panels of witnesses 
appearing before us today that I believe will fairly represent the 
different perspectives on this complex issue. We look forward to 
hearing your testimony, and we are grateful for your cooperation and 
attendance at today's hearing.
    Our first panel of witnesses contains a few familiar faces to this 
Committee:

 Dr. Julie Gerberding, fellow North Georgia resident and Director of 
        the Centers for Disease Control and Prevention.
 Dr. Bruce Gellin, Director of the National Vaccine Program Office 
        within the Department of Health and Human Services
 Dr. Anthony Fauci, Director of the National Institute of Allergy and 
        Infectious Diseases within National Institutes of Health
    Our second panel comes to us largely from outside of the federal 
government and contains five experts witnesses:

 Dr. Marcia Crosse, Director of Health Care Issues for the U.S. 
        Government Accountability Office
 Dr. Ralph Tripp, Director of the Center for Disease Intervention at 
        the University of Georgia College of Veterinary Medicine and 
        Georgia Research Alliance Chair of Animal Health Vaccine 
        Development and our second witness hailing from North Georgia.
 Dr. Andrew Pavia, Chair of the Task Force on Pandemic Influenza at 
        the Infectious Diseases Society of America and professor and 
        chief of the Division of Pediatric Infectious Diseases at the 
        University of Utah Health Sciences Center and Primary 
        Children's Hospital
 Dr. Dominick Iacuzio, Medical Director for Hoffmann-La Roche, Inc.
 Mr. Phillip Hosbach, Vice President of Immunization Policy and 
        Government Relations for Sanofi Pasteur, which is the world's 
        largest influenza vaccine manufacturer
    As all of our witnesses today will attest, the threat of a global 
influenza epidemic, or ``flu pandemic,'' is one of the greatest public 
health threats we face today. From speaking to the experts in this 
field, I truly believe that it is not a matter of ``if'' a flu pandemic 
hits but ``when,'' and I believe that is our responsibility as Members 
of Congress to ensure that the public is as protected from this threat 
as possible. This, of course, is no simple matter and there is no 
silver-bullet solution to this problem.
    Protecting the public from the threat of a global flu pandemic 
takes awareness of the potential threat as well as dedication and 
cooperation from all of the involved organizations in both the public 
and private sectors. Unfortunately, I believe we have ignored the 
lessons of history and science and that we remain under prepared for 
the emergence of a global flu pandemic that could potentially kill 
millions of people over a short period of time and have irreparable 
harm to our economy.
    As most of you know, I live in Gainesville, Georgia, which is 
considered to be the ``Poultry Capital of the World,'' and each year my 
Congressional district produces over $915 million in farmgate value 
from the poultry industry. If we were struck by a virulent strain of 
the avian influenza virus, this entire industry would be completely 
wiped out in matter of weeks.
    Clearly, we have too much at stake to continue to largely ignore 
this serious threat facing our society, and that is why I am excited 
about the opportunity we have before us today to further explore the 
potential threat of a pandemic flu and how we can better prepare to 
ourselves to face this problem.
    I am a great believer in the potential of science and human 
determination and I firmly believe that if we dedicate ourselves and 
our resources to solving this problem that we can overcome this 
significant threat looming on our horizon.
    Again, I welcome our witnesses and thank them for their 
participation. I now recognize my friend from Ohio, Mr. Brown, for five 
minutes for his opening statement.

    Mr. Brown. Thank you, Mr. Chairman. Thank you to all three 
witnesses, frankly, three of the most important people in our 
government and our country. We welcome you to share your wisdom 
with us and to thank you for your public service and the 
terrific work you do for our healthcare system and especially 
for our public health infrastructure.
    In March, during a hearing on the National Institutes of 
Health, the director showed the committee a slide charting the 
increase and life expectancy in the United States over the last 
century. That slide illustrated a number of things, including 
the progress our country made in developing our public health 
infrastructure and expanding healthcare coverage and access, 
especially for seniors, and in fostering breakthroughs in 
biomedical research.
    Perhaps the most notable thing on the chart--other than the 
30-year growth in life expectancy brought on mostly by public 
health, secondarily by major high-tech medical breakthroughs--
but perhaps the most notable thing on the chart was the 
downward spike in the year 1918. The last major pandemic flu 
infected 28 percent of Americans, caused the deaths of nearly 
700,000 people, as we know; worldwide killed in excess of 25 
million people; some estimate as high as 50 million, more than 
the first World War that ended that same year. Life expectancy 
in our country dropped 12 years in 12 months. The example of 
the early 20th century remains relevant today as a warning to 
public health experts, to government officials, including 
Members of this Congress who have absolutely inadequately 
funded public health.
    1918 shows how the spread of a flu strain that evades 
available treatment lurks as one of the most serious risks to 
our Nation's health. Our Nation and the international community 
of which we remain vulnerable to flu strains that evade 
available treatment and, as I said, can potentially wreak havoc 
on the Nation's public health, obviously there are important 
differences between 1918 and 2005. Many of those differences 
are reflected in the makeup of our two panels today because of 
the coordination and research led by CDC and NIH, our ability 
to identify, prevent, and fight potentially harmful infection 
is far superior to where we were early last century.
    But along with this progress we face new challenges--a 
world with seamless and constant global travel makes an 
outbreak in the remotest corner of the world a threat to every 
corner. When infection travels to Hong Kong to Hartford in a 
matter of hours, it becomes significantly harder, obviously, to 
contain.
    Manmade treatments save millions but inadequate and 
misapplied therapies have fostered new drug-resistant strains 
of infection, especially a disease like tuberculosis. We have 
seen a number of potential vaccine suppliers dwindle into the 
single digits, and without adequate funding at the Federal, 
State, and local level in large part because of decisions on 
tax cuts and spending priorities made in this Congress, our 
public health infrastructure is woefully unprepared to fight a 
major outbreak and to deal with daily problems in public 
health, in the deaths and the illnesses of people who most of 
us on this panel, frankly, don't know--people in the inner 
city, people afflicted by rural poverty.
    These challenges resonated loudly last fall when it was 
announced the U.S. would short nearly half of our expected flu 
vaccine. I admire the word done by HHS and CDC to inform the 
public and develop guidelines in the face of that shortage, but 
we must apply the lessons learned last year and do it now. We 
don't know whether we will face a pandemic, but we do know that 
countless lives could be loss of a pandemic takes hold.
    Epidemiologists and other public health experts are 
currently tracking several potential flu pandemics, the Avian 
Influenza, or Bird Flu, appears to pose the most lethal threat. 
As of March, Avian Flu had killed 74 people in Asian and tens 
of millions of birds. The global threat is a potential for the 
virus to mutate and spread from human to human. The World 
Health Organization has said that because of that possibility 
the world is ``closer to an influenza pandemic than in any time 
since 1968.'' WHO further points out similarities that suggest 
Avian Flu could follow the same patterns as the strain that 
caused the 1918 pandemic. The threat posed by Avian Flu is 
great, but with the right investment and collaboration from 
industry, academia, and government, a pandemic can be averted. 
This committee should consider how best to ensure the 
development, stockpile, and distribution of vaccine and 
antiviral treatments. It must examine the avenues government 
can take to bring competition and diversity back into the 
vaccine market, ideally before a pandemic strain could hit our 
shores. We should continue to work with partners like WHO to 
fight infection where it exists and prevent worldwide 
transmission. We should examine our Nation's investment in 
basic research and better understand how that commitment 
translates into more effective remedies for potential pandemic. 
We should go beyond a discussion of pandemic flu and talk about 
how and how much and how we should fund our public health 
infrastructure, not just for major outbreaks that will affect 
everyone, but the kind of day-to-day public health that, 
frankly, the public health problems that our Congress and our 
government, frankly, have so far been unwilling to address. 
Thank you, Mr. Chairman.
    Mr. Deal. We are pleased to have the chairman of our full 
committee, Mr. Barton from Texas, and I recognize him at this 
time for an opening statement.
    Chairman Barton. Thank you, Mr. Chairman. I want to commend 
you for holding this hearing. I want to commend both of our 
panels of witnesses, the first panel and the second panel, for 
being here on this important subject.
    There are experts that say another killer flu epidemic is 
inevitable. We don't know when or where it will begin or 
exactly how many million that it will kill; we only know that a 
pandemic flu has happened before, and we think that it almost 
surely will happen again. Historically, influenza pandemics 
have been deadly. With a world population of six-and-a-half 
billion, even a relatively mild pandemic could kill millions of 
people. In the United States the risk varies from tens of 
thousands to hundreds of thousands. Put it like this: a bad flu 
outbreak could kill more Americans than either or both of the 
last two World Wars. It is probably fair to expect that some of 
us in this room today would be sick and possibly a handful of 
the people in this room would even die.
    Right now we are monitoring some serious developments in 
Asia concerning the recent Avian Flu strain. Both the World 
Health Organization and the Department of Health and Human 
Services has expressed serious concerns over these strains 
developing into a global pandemic. Organizations around the 
world and Health and Human Services in our country have taken 
significant steps to mitigate the potential effects of 
influenza pandemic.
    That is the purpose of the hearing today is to do oversight 
on those steps. I want to applaud the efforts in this country 
in both the private sector and the public sector. I also want 
to applaud the Secretary of Health and Human Services for his 
emphasis on planning and preparedness for a pandemic flu and 
his cooperation with international organizations.
    In many other ways we do remain vulnerable. The global 
vaccine industry is fragile. The capacity to gear up and 
produce the necessary vaccines in the event of a pandemic is 
limited. Liability concerns may hinder production and 
distribution of any new vaccine. With ordinary flu vaccine 
production already so low, the amounts that we can produce in 
the face of a global pandemic are probably insufficient. 
Moreover, the timeframes for development, production, and 
approvals leave millions and millions of people vulnerable. 
Antivirals may also be a countermeasure. We can place such 
countermeasures in the national strategic stockpile, and I am 
glad that we have done so with over two millions courses of 
treatment so far.
    But one question that we need to try to get an answer for 
today is whether this is sufficient in the face of the apparent 
threat. The amount in relation to population would appear to be 
much less than what other countries are doing. I would also 
note that many similar planning and preparedness activities 
will be relevant in the face of bioterrorism and other emerging 
threats. We need to work aggressively and cooperatively on all 
of these issues.
    Again, Mr. Chairman, thank you for the hearing. I look 
forward to hearing from our witnesses today. And with that I 
yield back.
    [The prepared statement of Hon. Joe Barton follows:]

 Prepared Statement of Hon. Joe Barton, Chairman, Committee on Energy 
                              and Commerce

    Thank you, Mr. Chairman. I commend you for holding this hearing on 
this important public health issue.
    Experts say another killer flu is inevitable. We don't know when or 
where it will begin, or exactly how many millions it may kill. We only 
know that a pandemic flu has happened before and it must surely come 
again. Historically, influenza pandemics have been deadly. With a world 
population of 6.5 billion, even a relatively mild pandemic could kill 
many millions of people. In the United States the risk varies from tens 
of thousands to hundreds of thousands. Think of it like this--a bad flu 
outbreak could kill more Americans than either or both of the last 
century's world wars. It is probably fair to expect that some of us in 
this room today would be sick, and a handful of us would die.
    Right now we are monitoring some serious developments in Asia 
concerning a recent avian flu strain. Both the World Health 
Organization and the Department of Health and Human Services has 
expressed serious concern over these strains developing into a global 
pandemic.
    Organizations around the world and HHS have taken significant steps 
to mitigate the potential effects of influenza pandemic. I applaud the 
efforts that both the private sector and public sector are making to 
address the potential need for different means of vaccine production. I 
also applaud the Secretary of HHS for the emphasis on planning and 
preparedness for pandemic flu and cooperation with international 
organizations.
    In many other ways, however, we remain very vulnerable. The global 
vaccine industry is fragile and sparse. The capacity to gear up and 
produce necessary vaccines in the event of a pandemic is limited. 
Liability concerns may hinder production and distribution of any new 
vaccine. With ordinary flu vaccine production so low, the amounts we 
can produce in the face of a global pandemic are insufficient. 
Moreover, the time frames for development, production, and approvals 
leave millions vulnerable.
    Antivirals may also be a useful countermeasure. We can place such 
countermeasures in the National Strategic Stockpile. I am glad we have 
done so for over 2 million courses of treatment, but I want to ask 
whether this is sufficient in the face of the threat. The amount in 
relation to the population appears to be much less than what other 
countries are doing.
    I note that many similar planning and preparedness activities will 
be relevant in the face of bioterrorism and other emerging threats. We 
will need to aggressively work on these issues. I look forward to 
hearing from today's witnesses on this timely and important topic.

    Mr. Deal. Thank you, Mr. Chairman. I am pleased to 
recognize the gentlelady from California, Ms. Eshoo, for an 
opening statement.
    Ms. Eshoo. Thank you, Mr. Chairman, and good morning to you 
and welcome to our very distinguished panel. It is always a 
pleasure when you come to the committee to testify and I salute 
you for your work on behalf of the American people. I think you 
always distinguish yourselves.
    The World Health Organization has warned that a pandemic 
flu could occur at any time, which could cause deaths--as has 
been stated by some of my colleagues already--in a range of two 
to seven million people. Those are staggering numbers. I can't 
help but think of--I don't know whether it was in the 1970's or 
1980's--we saw something very common on people's desks, and it 
said ``plan''--and then ``ahead'' kind of just fell off the 
edge. So I think that today we are trying to plan ahead and be 
wise, be prudent, and understand the factors that really didn't 
come into play with the flu epidemic that we had in our own 
country, the shortcomings that occurred, the lurch that people 
found themselves in. And the best question that people asked 
from senior centers and medical centers across the country was 
why were we not prepared for this? Why hasn't this worked?
    The Avian Flu, known as the Bird Flu, is the latest strain 
of concern. Should it adapt fully to humans and be capable of 
easy person-to-person transmission, it would probably spread 
worldwide in 3 to 6 months.
    Right now only about a dozen companies in the world make 
flu vaccines. Many of these manufacturers are based overseas. 
This is a serious problem for the United States if and when a 
pandemic hits. In a pandemic, overseas manufacturers may be 
reluctant to provide the United States with their stockpile, 
and if they do agree to provide us with the vaccines, the FDA 
will need the ability to rapidly evaluate the vaccine or agree 
to let them in automatically once they are approved.
    We also know that it is financially risky for manufacturers 
to invest in research and development because the pandemic 
strain that emerges may be substantially different from any 
vaccine in development. There could likely be an investment 
without any return.
    So the Congress has to take steps to ensure that there is a 
robust infrastructure for developing and providing vaccines and 
treatments. We have to address the barriers that manufacturers 
face. Today, I hope HHS will explain why their draft pandemic 
flu plan is still not final, and I hope that the CDC can 
explain why there has been a delay in stockpiling antivirals, 
which, if taken within 2 days of getting sick, can reduce the 
symptoms of the flu and shorten the time that one is sick by 1 
or 2 days. Antivirals can make one less contagious to others.
    So I look forward to the testimony from our expert panels 
on this issue, and I hope that this committee will act quickly 
and appropriately to prepare for pandemic flu. The American 
people are counting on us to do that. Thank you, Mr. Chairman, 
for holding this important hearing.
    Mr. Deal. Thank you. I recognize the vice-chairman of the 
subcommittee, Mr. Ferguson, for an opening statement.
    Mr. Ferguson. Thank you, Mr. Chairman. Thank you for 
holding this hearing and I thank our two panels of 
distinguished guests today. I am looking forward to hearing 
their testimony.
    Mr. Chairman, we are staring down the barrel of a loaded 
gun, and that gun is ready to fire. Expert after expert, 
including the esteemed witnesses that we will hear from today, 
have said that we must not ask if but when. When will we face 
the strain of influenza virus that will cause a pandemic? And 
when that happens, will we be ready?
    We have heard these figures before but they are important 
to repeat. In 1918 an influenza pandemic claimed the lives of 
almost 600,000 Americans and more than 20 million people 
worldwide. A little known fact to most people is that in a 
regular flu season today kills about 36,000 Americans. Today, 
public health experts at HHS and CDC estimate that an influenza 
pandemic could cause 90,000 to 300,000 or more deaths in the 
U.S. and tens of millions of people worldwide. Pandemic 
influenza is nature's weapon of mass destruction. Even the 
Homeland Security Department has weighed in on a flu pandemic's 
effects, pegging the cost of a pandemic influenza outbreak in 
just four cities in the United States at $70 billion to $160 
billion.
    Dr. Michael Osterholm, head of University of Minnesota's 
Center for Infectious Disease Research and Police stated in the 
``Wall Street Journal'' just this week that a pandemic flu 
could trigger an economic crisis. Dr. Osterholm noted that the 
2003 outbreak of SARS paralyzed cities and cost billions of 
dollars even though its toll, 8,000 sick and 800 dead, was 
relatively light. Pandemic flu could change the world 
overnight, Dr. Osterholm stated, reducing or even ending 
foreign travel and trade.
    This problem demands our full attention and the full 
commitment of our resources to counter a looming catastrophe. 
Last November this Health Subcommittee held hearings as last 
year's flu season was underway. Just a few weeks ago the 
Oversight and Investigations Subcommittee held a perspective 
hearing on the upcoming flu season and what we are doing to 
ramp up vaccine production. But this hearing will be looking at 
the threat of pandemic flu and our vital surveillance efforts 
of Avian Flu strains in Asia, what is being done to ramp up 
vaccine capacity once a pandemic strain is identified, and what 
the response plan is while a pandemic is occurring, 
specifically preparedness through stockpiling antivirals.
    In each of the hearings we have had on the flu I have 
stressed the importance of stockpiling antivirals to treat 
those who are infected with the flu. Antivirals are a potent 
way to combat a flu outbreak and are unique compared to 
vaccines because they can be stockpiled for between 5 to 7 
years, or perhaps more.
    I look forward to hearing from our distinguished panels 
today. I look forward to hearing their insight on how we can be 
best prepared when the feared pandemic does in fact strike. 
Thank you, Mr. Chairman. I yield back.
    Mr. Deal. Thank you. Pleased to recognize gentlelady from 
Colorado, Ms. DeGette, for an opening statement.
    Ms. DeGette. Thank you, Mr. Chairman. Simply to say how 
much I appreciate you having this important hearing. I will 
submit my opening statement for the record and reserve my time 
for questions.
    Mr. Deal. I thank the gentlelady. Chair recognizes Dr. 
Burgess for an opening statement.
    Mr. Burgess. Thank you, Mr. Chairman, and I too want to 
thank you for calling this hearing and thank the full committee 
chairman and the ranking member for holding this hearing.
    Looking at the historical significance of pandemic flu, it 
is almost overwhelming to think about the challenges of 
preventing a devastating outbreak of influenza and dealing with 
the aftermath. The numbers are significant. In the last century 
it is estimated that over 53 million people died from periodic 
outbreaks of pandemic flu strains. Considering the world's 
population is much more mobile today than at any time in our 
history, I think the public health officials are right in 
making the fight against communicable disease one of their 
highest priorities. If we factor in the adaptability of the 
influenza virus and the fact that an airplane makes a pretty 
good way to communicate an illness like the flu, it is 
understandable to see why we cannot consign the pandemic flu 
outbreaks of the last century to the will-not-recur file.
    There are tools available to us to confront a possible 
outbreak, but the coordination, the surveillance, and the 
prevention of a containment strategy are going to affect us at 
the State, Federal, and, yes, at the global levels. The 
severity of the next pandemic cannot be predicted, but even a 
medium-level pandemic could cause between 100,000 and 200,000 
deaths, almost three-quarters of a million hospitalizations, 
and millions and millions of people in doctors' offices, 
outpatient visits, and missing work. An estimated economic 
impact would be well over $150 billion for a medium outbreak.
    Not too long ago we were concerned about another 
communicable disease, SARS virus. The SARS outbreak of 2003 
exposed the capability of global surveillance and the 
containment infrastructure as to how an outbreak of an unknown 
disease can impact human interaction and commerce. And, Dr. 
Gerberding, I thank you for tolerating my many phone calls over 
that period. But even though the severity of the outbreak was 
largely isolated to East and South Asian countries, it did 
impact my district, which at the time was the home to the 
Dallas/Fort Worth Airport. At the local level at least, the 
SARS outbreak brought into sharp focus how fear can drive a 
containment response to an illness in the absence of a workable 
containment strategy.
    The chairman brought up about the issue of liability and 
the ranking member brought up about how we can assure the 
development and availability of vaccines, and I too believe 
that somehow controlling liability in the manufacture and 
production of vaccines is going to be critical in our ability 
to provide this on a larger scale.
    But I look forward to hearing our panel today, and I 
understand that our current capabilities of our public health 
institutions and the vaccine industry will help improve our 
response to any further pandemic outbreaks. Mr. Chairman, thank 
you again, and I will yield back my time.
    Mr. Deal. Thank you. Recognize the gentleman from Maine, 
Mr. Allen.
    Mr. Allen. Thank you, Mr. Chairman. I appreciate your 
calling this hearing to examine the level of U.S. preparedness 
for a possible flu pandemic. I look forward to hearing from our 
expert witnesses on our current level of preparedness.
    Unlike past flu pandemics, the relatively gradual emergence 
of the Avian Bird Flu has given us time to ensure that we have 
adequate resources to fight this deadly virus. At this point we 
don't know when or if the current strain of Avian Bird Flu will 
reach the U.S., but we do know that the epidemiology of the 
H5N1 virus is more virulent and has already passed directly 
from human to human. We know that this particular flu strain 
has infected at least 92 adults in Vietnam, Thailand, and 
Cambodia killing 52 people. We also know that there is 
currently no vaccine for Avian Flu and no known cure.
    I am concerned about our country's ability to develop, 
approve, and secure adequate vaccine supplies. Today the U.S. 
has one domestic source of flu vaccine. America has been a 
world leader in developing life-saving medicines and 
spearheading countless global health efforts. April 12, 2005 
marked the 50th anniversary of the first polio vaccine. Polio 
was eliminated in the U.S. because protecting the public's 
health was perceived as a simple necessity, and every effort 
was made to see that the vaccine would be freely distributed 
and polio would be eradicated. Without diligent efforts to 
maintain immunization programs here and strengthen them 
worldwide, we would not be able to keep such deadly diseases at 
bay.
    The spread of the H5N1 virus poses a new challenge to the 
U.S. scientific community and vaccine manufacturers. Many 
experts have stated that we need a more reliable and flexible 
vaccine production system, as well as improved surveillance and 
public communication. Last year the license suspension of the 
Chiron Company's vaccine manufacturing plant in the U.K. served 
as a wake-up call. In addition to a shortage of supply, we were 
faced with trying to educate the public about appropriate 
distribution and who should be vaccinated first.
    It is my understanding that countries such as Canada, 
Japan, Australia, and New Zealand are stockpiling antiviral 
treatments against pandemic flu for up to one-quarter of their 
nation's population. The U.S. stockpile is currently maintained 
for only 1 percent of our population, and I believe this 
strategy needs to be reexamined.
    I hope the witnesses will help us understand what went 
wrong last year and what we can do to strengthen our domestic 
vaccine supply, speed research and development, and establish 
better distribution channels. Thank you again, Mr. Chairman, 
and I yield back.
    Mr. Deal. I thank the gentleman. Chair recognizes Mr. 
Shadegg for an opening statement.
    Mr. Shadegg. Thank you, Mr. Chairman, and thank you for 
holding this important hearing on this topic. As my colleagues 
have already noted, a pandemic flu could pose a very serious 
health threat to not only our country but to the world. But it 
should also be noted that it could also lead to an economic 
crisis. Just yesterday a ``Wall Street Journal'' article noted 
that ``A pandemic flu could sicken more than a billion people 
and single-handedly stop travel and trade throughout the world, 
resulting in untold economic losses.'' We have spent 
considerable time and resources over the past few years 
preparing for an attack of bioterrorism. Now, the lessons 
learned from that experience should be used to address pandemic 
flu.
    The first and foremost of these lessons is that our best 
defense is a strong offense. Preventing outbreaks through 
vaccine development will ensure that a flu eruption fails to 
reach pandemic status. I want to thank our witnesses for their 
work and for their efforts to ensure that vaccines prevent 
pandemic flu outbreaks, as well as for their testimony on what 
we can do to meet the goals that we have set.
    We also must be prepared, however, for an outbreak that 
cannot be addressed through vaccination. In such an instance we 
must have adequate surveillance systems to ensure early 
recognition, sufficient communication tools, and networks to 
enable response, and antiviral providers able to respond.
    Again, Mr. Chairman, I thank you for sponsoring this 
hearing and for your efforts in this regard. And I thank our 
witnesses for their testimony and their work in this area.
    Mr. Deal. Thank you. Recognize Ms. Baldwin for an opening 
statement.
    Ms. Baldwin. Thank you, Mr. Chairman. I too want to commend 
you for holding this hearing today. I was wondering last night 
as I began to read through the materials whether I would be 
kept up all night by the dire threats. And as many of my 
colleagues have noted, pandemic flu poses a serious threat to 
our Nation and the world. A recent article in the science 
publication ``Nature'' notes that a flu pandemic could cause 20 
percent of the world's population to become sick, almost 30 
million may need to be hospitalized, and a quarter of those 
infected would die. And perhaps the most shocking aspect of 
that article was that experts cited considered those numbers 
optimistic.
    Many experts are now saying that a pandemic flu occurring 
in the United States is not a question of if but when. And in 
our day of globalization when it takes mere hours to cross 
continents, the old ways of containing an infectious disease 
are no longer applicable.
    While I am glad that the Department of Health and Human 
Services has produced a draft of the Pandemic Influenza 
Preparedness and Response Plan, I remain concerned about the 
lack of progress on finalizing the report, and particularly, in 
light of our crisis last fall when the delivery of vaccine for 
seasonal flu was severely curtailed and only guidelines and 
voluntary opting out by more healthy individuals helped us 
address that crisis. It is imperative, I think, that we move 
quickly and decisively, and we have some catching up to do.
    I also note that experts stress again and again that our 
planning efforts must be international in scope and look 
forward to hearing from witnesses today on that aspect of our 
planning efforts. There are several other aspects of our 
preparedness that I hope to hear you address through your 
testimony this morning. For example, I think we need to start 
educating Americans, not just healthcare providers, but 
American citizens need to know what to do in the case of an 
outbreak, what their treatment and prevent options are, which 
authorities to go to for information and what medications could 
be available to them should an outbreak occur.
    I also hope to hear your thoughts on the importance of 
seamless communication, information sharing, and access to 
resources among our healthcare professionals. The chain will be 
only as strong as our weakest length and a public health nurse 
in a rural county in Wisconsin must have the same access to 
resources as a public health nurse in midtown Manhattan. Groups 
and regions ought not to be place in competition with each 
other.
    If a pandemic flu should occur in the U.S., there will be a 
terrific strain on our ability to provide medications as well 
as treatments in our clinics and hospitals. If high numbers of 
people get sick, who will decide who gets care in a hospital 
when all the beds are full? Who gets placed in the ICU? Who 
gets the last dose of an antiviral medication?
    I look forward to hearing the witnesses today tackle some 
of these very challenging questions. Thank you, Mr. Chairman. I 
yield back.
    Mr. Deal. Thank you. I too share the lady's concern. These 
are rather frightening statistics. And from this point forward 
nobody in the audience is allowed to cough, and if you do, the 
hypochondriacs in our midst are going to leave the room. So I 
am pleased to recognize Mr. Hall for an opening statement.
    Mr. Hall. Mr. Chairman, thank you. And you would never get 
Howard Hughes to shake hands with any of us here today, would 
you? I thank you and I join the accolades of the other members 
here to the Chair for holding this hearing and for other 
hearings that he is very capable of holding and has held for 
this committee and for this Congress.
    You know, listening to the opening statements, and I will 
be very brief because I don't have that much to say about it, 
my children think I remember that 1918 Spanish Flu pandemic, 
but I do remember and was affected by it because I knew people 
that had lost children during that time. And when you lose 
three-quarters of a million people in this country at a day and 
time when we didn't have that many people in this country, that 
was quite a loss and quite a huge percentage of people that 
were affected by it.
    I have said here and as I hear this I thought of a hearing 
I held in the Science Committee some 4, 5, or 6 years ago on 
asteroids. And we were all surprised to find out that an 
asteroid had just missed the United States by about 15 minutes 
in 1988, one the size of maybe Delaware or one of the other 
States. We were a little surprised at that. We might also have 
some surprises when we hear your testimony, because we don't 
know by how much we have missed epidemics and what has been 
done about it.
    But I think we are very fortunate to have learned people 
like you with your years of study and your research on vaccines 
and for things to do for it, that you have prepared yourself 
for prevention, and if not prevention, control. I thank you for 
giving your time and I think that it is a timely thing that we 
need to hear and need to know more about. Mr. Chairman, I thank 
you for having it. I yield back my time.
    Mr. Deal. I thank the gentleman. Recognize the gentleman 
from California, Mr. Waxman, for an opening statement.
    Mr. Waxman. Mr. Chairman, I thank you for calling this 
hearing today and drawing attention to this very important 
issue. Many leading scientists believe that it is not a matter 
of if but when the next flu pandemic will hit. It has been 
estimated that even a medium-level pandemic could cause up to 
200,000 deaths in the United States and 734,000 
hospitalizations at a cost of up to $166 billion. Pandemic flu 
is a grave public health threat, and we must do all we can to 
get ready for it.
    There are many unknowns surrounding the pandemic flu. It is 
unknown which strain of the flu virus would cause the pandemic, 
so production of an effective vaccine must wait until the 
pandemic begins. It is unknown how long it will take to produce 
a vaccine. It is also an unknown whether or how well antiviral 
medications will work. With so many unknowns it is easy to 
become very anxious about this topic. Fortunately, there are 
some things we do know, and these are some steps we can take 
now to be prepared no matter what the strain of the pandemic 
virus, no matter how long it takes to make a vaccine, no matter 
how well antiviral medications work, our core public health 
system must be strong. We must have a way to deliver vaccines 
to those most at risk quickly and efficiently.
    This year's flu shortage illustrated how far away we are 
from this capability. Many chronically ill and elderly 
Americans were forced to wait for hours just to get their 
vaccines. We must do better than this. We also must have the 
ability to maintain core public health functions in the event 
of a pandemic. One major vaccine manufacturer has told us that 
in order to produce the necessary vaccines to combat a flu 
pandemic, the company would have to dramatically curtail 
production of its childhood vaccines. This would be a 
particularly dangerous situation given that stockpiles of many 
childhood vaccines do not exist. It would be a disaster if our 
preparation for flu pandemic led to outbreak of childhood 
diseases. But that could happen.
    That is why today we must do more than ask our expert 
witnesses to speculate about uncertainties. We must also ask 
some tough questions about the administration's response to the 
challenges as plain as day. We also must ask why the 
administration has proposed major cuts in funding for key 
programs in State and local preparedness. These are the very 
programs that allow our communities to prepare for 
bioterrorism, natural disasters, and a flu pandemic. We must 
also ask why the administration has yet again failed to provide 
adequate funding for States for vaccines against preventable 
diseases. If we cannot even stop bacterial meningitis from 
spreading in our communities even when we have vaccines, how 
will we stop the flu virus? And we must ask why it has taken so 
long to get senior administration officials to focus their 
attention on lack of stockpiles for routine pediatric illness. 
These stockpiles were promised 3 years ago, and yet a letter 
asking about the holdup was sent to vaccine manufacturers just 
2 days ago.
    After we ask these tough questions it will be time to get 
back to work, and I hope we can join together across party 
lines to support major improvements in our public health 
system. I thank the witnesses for attending and look forward to 
their testimony.
    Mr. Deal. Recognize the gentlelady from California, Ms. 
Bono, for opening statement.
    Ms. Bono. Thank you, Mr. Chairman. I will waive my opening 
statement.
    Mr. Deal. Recognize Mr. Green from Texas for an opening 
statement.
    Mr. Green. Thank you, Mr. Chairman, and thank you and the 
ranking member for holding the hearing on the threat of 
pandemic flu and the steps we are taking to protect Americans 
from the outbreak. Hopefully, we will get ahead of the curve. I 
also want to thank our panelists this morning who--as a lot of 
us feel like--listen to us give our statements, but oftentimes 
it is the only time members on the committee can do anything 
except vote.
    I have a personal interest in this issue because my 
daughter has been accepted in a medical fellowship on 
infectious diseases, and so I am particularly thankful that I 
can gain some knowledge in one of the issues that she certainly 
is working with now in the forefront of her medical work. I 
tell her I don't want to be treated for anything she studies.
    The 20th century was a witness to three flu pandemics, so 
we know what kind of destruction these outbreaks can cause. And 
recent press reports suggest we are dangerously close to 
witnessing another. According to the World Health Organization, 
the next pandemic flu would likely result in 1 to 2.3 million 
hospitalizations and 300 to 650,000 deaths in developed 
countries alone. We can only imagine the kind of havoc that a 
pandemic flu would wreak on developing nations which do not 
have the healthcare infrastructure surveillance capabilities to 
protect their citizens from infectious disease.
    Where I ought to know this is to be the case is poor 
countries facing the threat of the Bird Flu since the current 
outbreak in 2003 have been unable to successfully detect and 
respond to individual cases of Bird Flu. The influenza strain 
that most concerns infectious disease specialists is the H5N1 
strain has jumped from animals to human and to date has killed 
36 people in Vietnam, 12 in Thailand, and four in Cambodia. And 
while the Bird Flu has thus far been contained in Asia, the WHO 
influenza specialists recognize this can't last that long with 
the amount of contact we have literally in our very small world 
now.
    We know that human flu pandemic will consist of three 
elements in tandem. The Bird Flu has already presented us with 
a virus to which humans have little or no immunity. The deaths 
in Asia have proven that this virus can replicate itself in 
humans causing serious illness, if not death. The virus may 
also be transmittable from human to human. Since this current 
outbreak in 2003, the third element has not been met. However, 
Dr. Fauci's testimony today indicates a high probability where 
they not have witnessed at least once case of human-to-human 
transmission in H5N1 virus. Given this news, the hearing is 
particularly timely. The subcommittee has held hearings in the 
past about our supply of flu vaccine in this country and the 
challenges that face both the government and the vaccine 
manufacturers. This hearing, I hope, will build on previous 
knowledge we gained from our subcommittee's activities and shed 
light on steps we must take to ensure an adequate and effective 
vaccine supply to protect Americans from the deadly flu 
pandemic.
    And, again, I would like to thank our witnesses for being 
here and for what you do every day to protect our constituents. 
Thank you, Mr. Chairman.
    Mr. Deal. I thank the gentleman. We are ready now for our 
first panel and--well, I have another member. Mr. Pitts, do you 
wish to make an opening statement? All right. You have already 
heard everything that we know about this issue. Now we are 
looking forward to hearing what you know about it. I would 
remind you we have your written testimony, which is a part of 
the record. And, Dr. Gerberding, we will start with you.

    STATEMENTS OF JULIE L. GERBERDING, DIRECTOR, CENTERS FOR 
DISEASE CONTROL AND PREVENTION, DEPARTMENT OF HEALTH AND HUMAN 
  SERVICES; ANTHONY S. FAUCI, DIRECTOR, NATIONAL INSTITUTE OF 
ALLERGY AND INFECTIOUS DISEASES, NATIONAL INSTITUTES OF HEALTH, 
 DEPARTMENT OF HEALTH AND HUMAN SERVICES; AND BRUCE G. GELLIN, 
DIRECTOR, NATIONAL VACCINE PROGRAM OFFICE, DEPARTMENT OF HEALTH 
                       AND HUMAN SERVICES

    Ms. Gerberding. Thank you. I am absolutely grateful to the 
committee for having this hearing. I think the more we shine a 
bright light on this problem, the more we will be able to be 
prepared to handle it. Your eloquence in describing both the 
severity of the threat as well as the impact is heartening. And 
I think I speak for all of us in the Department of Health and 
Human Services and Secretary Leavitt, we know this is a high 
priority for the agency. Secretary Leavitt has been meeting 
with us almost every day on flu since he took office. And at 
the World Health Assembly last week where all of the leaders of 
the health community around the globe assembled in Geneva, the 
secretary convened several discussions on influenza pandemic 
planning and how we could assist.
    What I am going to try to do today is two things in my 
brief remarks: one is just give a capsule situation report on 
the flu in Asia, and second, describe in brief some of the 
important steps that we are already taking. We are not waiting 
for that final preparedness plan to get approved. We are acting 
now to get the show on the road.
    Just as a reminder for those who aren't familiar with 
influenza, you will be hearing us talking about H5N1 or H3N2. 
Flu is a simple little virus with just a few genes. One of them 
codes for something called ``H'' or hemagglutinin and the other 
codes for ``N'', neuraminidase. But despite its simplicity, 
this is a very sinister virus, and it changes all the time. 
When the changes in H and N are little or small in genetic 
context, it is called a drift, and that is what happens every 
year and why we need to get a new flu shot every year. 
Sometimes we see a shift, which is a major change. Usually the 
virus exchanges genes with some other strain of flu and you see 
a big jump in the composition in the H or the N, and that is 
the change that is usually associated with pandemics.
    [Chart]
    Ms. Gerberding. This is a map of the prior influenza 
pandemics that have occurred throughout the last 100 years, and 
you can see that each time there is a big shift in the H gene 
from H1 to H2; the Asian Flu appeared when H2 came on the 
horizon. When H3 appeared we saw the Hong Kong Flu pandemic.
    And what you are seeing in upper corner here are H7, H5, 
and H9, which are Avian isolates not yet transmitted in broad 
scale to people in pandemics, but certainly on the horizon and 
very ominous because we, of course, have no population immunity 
to any of those H's. And so because we are seeing right now H5 
and 1 in Asia, we are particularly concerned about the 
emergence of the virus in a world that has absolutely no 
immunity.
    How do these big jumps occur? Well, it is a complicated 
story, but often what happens is that a virus from a bird 
host--in this case an asymptomatic duck, or in Asia right now, 
the poultry that are infected--can commingle in a pig usually 
with a human virus and exchange those big genes resulting in a 
completely new virus that then gets transmitted to people. But 
in this context in Asia today, we are also concerned about the 
direct transfer of the poultry virus to humans. And this, we 
know, has occurred a number of times.
    The reason this is so critical and why we are focusing so 
much on Asia is that in China alone there are 1.3 billion 
people, but there are 13 billion chickens and about 508 million 
pigs. So in that area of the world if you multiply that by the 
incredible density of population, we are sitting on the 
cauldron of flu virus incubation, and the threat is certainly 
one that we are taking very seriously.
    These are the numbers of people so far who have been 
reported to the World Health Organization with this H5N1 Avian 
Flu: 97 people in total with a fatality rate of 55 percent. 
This may be the tip of the iceberg; we don't know. But it 
certainly is a cause of concern. And recently there has been 
some suggestion of more clustering in at least one region of 
Vietnam and perhaps the suggestion that the virus is slowly 
becoming more adaptable to humans. Of course, that remains to 
be seen.
    This map shows some of the indicators of poultry virus 
activity in this region. I have occluded status: unknown here 
as China because just this week we learned about the migratory 
bird die-off in Western China, which was related to a species 
of geese called the Bar-headed Goose that migrates up from 
India and the Tibetan Plateau, and a reliable laboratory in 
China has indicated that that indeed was H5N1 virus.
    So we are seeing mass populations of poultry throughout 
Asia infected. And all of the activities that we are doing 
right now at HHS are targeting, first and foremost, 
preparedness in that region. We are very pleased with the 
recent supplemental appropriation from Congress for CDC and 
USAID to receive $25 million to step up activities in Asia and 
another $58 million to augment our supplies in preparation for 
the stockpile.
    But we are doing a lot of other things at CDC and HHS as 
well. We are utilizing all of our laboratory networks, we are 
developing rapid diagnostic tests, we are working on expanding 
our capacity for vaccine seed development, our virus genomic 
activities to characterize these strains and their drug 
susceptibility, and certainly Dr. Fauci will talk about how all 
that feeds into vaccine development.
    Last, just let me mention that this map of the various 
teams of people at CDC is just a microcosm of what is gong on 
throughout HHS and the entire public health system. We are 
working with all sectors, including public health, healthcare, 
business, and communications experts, but we are also taking 
advantage of the $287 million in appropriation that we did 
receive this year to support flu activities in our agency. 
Those appropriations are being used to purchase influenza 
vaccine, to purchase antivirals for influenza from the 
department, to support improvements in the vaccine 
manufacturing and science, as well as many other investments to 
help speed and accelerate our preparedness for this very 
uncertain virus.
    So we look forward to answering specific questions about 
the steps that we are taking, the preparedness, but I wanted to 
assure that, again, we are not waiting for a written plan; we 
are acting now to do everything we can with the resources that 
we do have. And we are particularly focusing those resources on 
Asia where we feel the imminence of the situation is probably 
deserving of our greatest attention. Thank you.
    [The prepared statement of Julie L. Gerberding follows:]

   Prepared Statement of Julie L. Gerberding, Director, Centers for 
  Disease Control and Prevention, U.S. Department of Health and Human 
                                Services

    Mr. Chairman and members of the Subcommittee, I am pleased to be 
here today to describe planning and preparedness for an influenza 
pandemic, including the potential threat posed by the H5N1 avian 
influenza virus currently in Asia. Department of Health and Human 
Services Secretary Mike Leavitt has made influenza pandemic planning 
and preparedness one of his top priorities; and each agency within the 
Department is working together to prepare the United States for a 
potential threat to the health of our nation.
    I will discuss steps the Centers for Disease Control and Prevention 
(CDC) is taking with many partners both domestically and globally. The 
strength and flexibility of CDC and other components of the public 
health system are vital assets as the United States sharpens its 
readiness for an influenza pandemic. Although we have made significant 
progress, more work is needed, particularly in the areas of 
surveillance capacity and response, and the development of potential 
vaccines. Increased public awareness and understanding about infection 
control, containment, and other actions also are important in 
preparation for an influenza pandemic.

                        PANDEMICS IN PERSPECTIVE

    Seasonal influenza causes an average of 36,000 deaths each year in 
the United States, mostly among the elderly and nearly 200,000 
hospitalizations. In contrast, the actual severity and impact of the 
next pandemic, whether from H5N1 or another influenza virus, cannot be 
predicted. However, modeling studies suggest that, in the absence of 
any control measures, such as vaccination, a ``medium-level'' pandemic 
in the United States could result in 89,000 to 207,000 deaths, between 
314,000 and 734,000 hospitalizations, 18 to 42 million outpatient 
visits, and another 20 to 47 million people being sick. Between 15 
percent and 35 percent of the United States population could be 
affected by an influenza pandemic, and the economic impact in our 
country alone could range between $71.3 and $166.5 billion.
    A public health response to a disease of this magnitude involves 
numerous challenges.

 A pandemic can occur any time during the year and can last much 
        longer than seasonal influenza.
 In more advanced pandemic phases, the capacity to prevent or control 
        transmission of the virus can become extremely difficult.
 Although the primary concern at present is the H5N1 avian influenza 
        strain in Asia, an outbreak leading to a pandemic can occur 
        anywhere in the world and may derive from viral strains of 
        influenza other than H5N1.
 Comparing the onset and spread of the next pandemic to those of the 
        20th century is problematic for many reasons, including changes 
        in population and social structures, medical and technological 
        advances, and the increase in international travel.
 With zoonotic diseases such as avian influenza, there is a need for 
        coordination with the animal health community.

                     THE CURRENT SITUATION IN ASIA

    For an influenza virus to cause a pandemic, it must meet three 
major criteria: (1) possess a new surface protein to which there is 
little or no pre-existing immunity in the human population; (2) be able 
to cause illness in humans; and (3) have the ability for sustained 
transmission from person to person. So far, the H5N1 virus has met two 
of these three criteria, but it has not yet shown the capability for 
sustained transmission from person to person.
    Concerning this third point, it is important to keep in mind the 
close relationship of viral infections in animal hosts and those in 
humans. Ongoing dialogue between agricultural and public health 
officials is extremely important for the careful, consistent 
surveillance necessary in both animal and human populations. Although 
the present avian influenza H5N1 strain in Asia does not yet have the 
capability of sustained person-to-person transmission, chicken-to-human 
transmission has occurred, and in at least one cluster, limited person-
to-person transmission has been identified. As of May 19, 2005 the 
World Health Organization (WHO) had confirmed 97 cases of H5N1 
influenza in humans since January 28, 2004, with a case fatality rate 
of 55 percent. The World Organization for Animal Health (OIE) 
confirmed, as of May 13, 2005, that H5N1 had been found in animals from 
nine Asian countries in 2004 and 2005, with especially large outbreaks 
among animals in Vietnam and Thailand. Millions of domestic birds have 
been culled in attempts to stop the spread of the virus among animal 
populations.
    Although human case fatality rates seem to have gone down somewhat 
since February 2005, CDC, WHO, and other partners are still quite 
concerned for several reasons. The H5N1 strain now appears to be 
endemic in poultry and other birds in a number of Asian countries, 
signaling a potential long-term threat of mutation and reassortment 
with other viral strains. Recent studies have found that ducks carry 
the H5N1 strain asymptomatically, making it difficult to monitor the 
magnitude of transmission from ducks to other species. Confirmation 
that H5N1 also has been transmitted to mammals is a particular concern, 
because of the increased potential of the strain to reassort with other 
strains already common to humans and other mammals. Studies have 
documented highly pathogenic H5N1 in pigs, tigers, and leopards in 
Asia. Difficulties in implementing effective in-country surveillance, 
including enhancing the training of laboratorians, epidemiologists, 
veterinarians, and other professionals, inhibit the type of 
comprehensive reporting that is essential to monitor H5N1 and other 
strains of highly pathogenic avian influenza. Finally, changes in the 
epidemiology of the infections, such as decreasing mortality rates, 
could indicate changes that make the viruses better adapted to humans. 
Additional studies and research are needed to better understand the 
current situation and how the viruses may be changing.

                        RESPONDING TO A PANDEMIC

    An effective response to an influenza pandemic requires highly 
collaborative planning, implementation, and flexibility in resolving 
issues at many levels. The Department of Health and Human Services 
(DHHS) is leading the coordination of preparedness efforts through its 
Pandemic Influenza Response and Preparedness Plan, which was released 
in draft form in August 2004 for public comment and is under revision. 
In addition, states are either developing pandemic influenza plans or 
revising existing plans to reflect new information and data. Key 
elements of these plans include surveillance, infection control, use of 
antiviral medications, community containment measures, vaccination 
procedures, communications, and ability to sustain essential services 
in times of widespread illness. Similar elements inform a plan that CDC 
is developing, that will provide detailed guidance and materials to 
states and localities and will complement the DHHS plan. CDC also will 
take the lead in working with the Advisory Committee on Immunization 
Practices and the National Vaccine Advisory Committee to prioritize 
recommended target groups for use of antiviral medications and vaccines 
during a pandemic when supplies are limited.
    Once a pandemic strain starts circulating in the United States, 
isolation precautions for persons who are ill and quarantine for 
persons exposed may need to be considered to limit the early spread of 
pandemic influenza, particularly before a vaccine becomes available. 
Measures such as these will require a multi-level, multifaceted, staged 
process, such as evaluating all ill travelers arriving from affected 
areas. On April 1, 2005 the President amended Executive Order 13295, 
adding influenza caused by novel or reemergent influenza viruses that 
are causing, or have the potential to cause, a pandemic to the list of 
quarantinable diseases. CDC has implemented a series of travel notices 
to minimize the potential for outbreaks to extend to wider geographic 
areas. CDC also has expanded the number and capacity of its quarantine 
stations at major ports of entry into the United States. As with any 
quarantine, such activities need to be undertaken judiciously to 
minimize adverse impacts on civil liberties.
    Vaccination is the best long-term strategy for influenza prevention 
and control, both during annual outbreaks and a pandemic; antiviral 
medications provide an earlier, secondary line of defense. Other 
measures may help control the spread of influenza in a pandemic 
situation, such as isolation of ill persons and quarantine of healthy 
exposed persons. Comprehensive preparedness for annual influenza 
outbreaks is a vital component of an effective response to pandemic 
influenza, although pandemic planning will require additional 
preparation activities.

                              SURVEILLANCE

    The United States, working domestically and with global partners, 
needs to expand the scope of early-warning surveillance activities used 
to detect the next pandemic. We cannot estimate the amount of time from 
first detection in another country to peak disease in the United 
States, but it could be a matter of months or less. Time will be of the 
essence in making sure we can produce, test, and administer vaccine as 
quickly as possible. It will take several months for the first dose of 
pandemic vaccine to be ready and longer to manufacture enough to 
vaccinate the entire U.S. population. Therefore, vaccine will be in 
short supply at the start of the pandemic. Under the most favorable 
conditions, by the time the first dose of vaccine would be given to the 
first person, many others will have already become ill or died. For 
this reason, surveillance to monitor ongoing changes in the H5N1 strain 
of avian influenza currently causing human infections and to monitor 
for other viruses with pandemic potential is needed to develop 
prototype vaccine candidates as quickly as possible. Further, because 
such a pandemic strain can arise anywhere, at any time, expanded global 
surveillance capacity is needed.
    The outbreaks of avian influenza in Asia have highlighted several 
gaps in disease surveillance globally that the United States must help 
address to improve our ability to prepare for an influenza pandemic. 
These challenges include: (1) lack of infrastructure in many countries 
for in-country surveillance networks; (2) need for increased training 
of laboratory, epidemiologic, and veterinary staff; and (3) resolution 
of longstanding obstacles to rapid and open sharing of surveillance 
information, specimens, and viruses among agriculture and human health 
authorities in affected countries and the international community. CDC 
and HHS have made significant progress in the past year toward 
enhancing surveillance in Southeast Asia. This initiative needs to 
continue at both national and international levels if we are to expand 
geographic coverage and develop an adequate capacity to conduct 
effective surveillance. These efforts, in turn, will increase our 
ability to detect new variants earlier, make more informed vaccine 
decisions for yearly epidemics, and build an ``early warning system'' 
for new viruses that may cause a pandemic. With the ever-present threat 
of the emergence of a new pandemic strain, we need to know what is 
happening in the backyards of Southeast Asia, as well as elsewhere 
throughout the world. Year-round, world-wide surveillance for 
infections of humans with new strains of influenza is essential for us 
to prepare for the next pandemic, as well as for next year's epidemic. 
Recently, the Congress passed and the President signed an FY 2005 
Emergency Supplemental Appropriations Act for Defense, the Global War 
on Terror, and Tsunami Relief, which included $25 million in 
international assistance funds to prevent and control the spread of 
avian influenza in Southeast Asia. These funds will support human 
surveillance, laboratory capacity, and enhanced knowledge of state-of-
the-art avian influenza laboratory and field techniques in Southeast 
Asia.
    In the past year, CDC has considerably improved domestic 
surveillance, adding two new major components to our surveillance 
system. We worked with the Council for State and Territorial 
Epidemiologists (CSTE) to make confirmed pediatric deaths from 
influenza nationally notifiable, and we implemented hospital-based 
surveillance for influenza in children at selected sites. To further 
improve our understanding of the impact of influenza on severe 
outcomes, such as hospitalization, we are working with the CSTE to make 
all laboratory confirmed influenza hospitalizations notifiable. We have 
issued interim guidelines to states and hospitals to enhance 
surveillance for potential cases of people infected by avian influenza 
on several occasions and these enhancements continue. CDC also set up 
special laboratory training courses for identification of avian 
influenza using rapid molecular techniques. So far, professionals from 
48 states and Washington D.C. have been trained.
    However, to be as prepared as possible for a pandemic, we are 
working to do much more in the domestic surveillance arena. The United 
States is working to: (1) ensure that states have sufficient 
epidemiologic and laboratory capacity both to identify novel viruses 
throughout the year and to sustain surveillance during a pandemic; (2) 
improve reporting systems so that information needed to make public 
health decisions is available quickly; (3) enhance systems for 
identifying and reporting severe cases of influenza; (4) develop 
population-based surveillance among adults hospitalized with influenza 
and (5) enhance monitoring of resistance to current antiviral drugs, to 
guide policy for use of scarce antiviral drugs.

                      MANAGING THE VACCINE SUPPLY

    During an influenza pandemic, the presence of U.S.-based 
manufacturing facilities will be critically important. The pandemic 
influenza vaccines produced in other countries will likely not be 
available to the US market as those governments may prohibit export of 
the vaccines produced in their countries until their domestic needs are 
met. However, the vaccine manufacturing system in the United States is 
fragile. Currently, there are only three influenza vaccine 
manufacturers producing vaccines for the US market, and only one 
produces its vaccine entirely in the United States.
    During the past several years, CDC and other DHHS agencies have 
developed several new strategies to address annual influenza outbreaks, 
including the support of enhanced vaccine production, and have worked 
to ensure a better match of vaccine distribution to the populations in 
greatest need. Public demand for influenza vaccine on a yearly basis 
needs to be both stabilized and increased, so that companies will have 
a growing market to provide an incentive to increase production. These 
strategies include $40 million for purchasing influenza vaccine for the 
pediatric stockpile to protect against annual outbreaks of influenza, 
and $30 million will be used for contracts to expand the production of 
bulk single-strain influenza vaccine for use if needed during annual 
influenza season or possibly in a pandemic situation. In addition, the 
President is requesting $120--million in fiscal year 2006, an increase 
of $21 million, to encourage greater production capacity that will 
enhance the U.S.-based vaccine manufacturing surge capacity to help 
prepare for a pandemic and further guard against annual shortages.
    The Department also appreciates the inclusion of $58 million in the 
FY 2005 Emergency Supplemental to procure additional influenza 
countermeasures for the CDC Strategic National Stockpile (SNS) in FY 
2005. Currently, the SNS has enough oseltamivir (Tamiflu) capsules to 
treat approximately 2.26 million adults and oseltamivir (Tamiflu) 
suspension to treat more than 100,000 children. In addition, SNS 
contains enough rimantadine tablets to treat up to 4.25 million people 
and enough rimantadine suspension to treat up to 750,000. It should be 
noted, however, that oseltamivir is the only antiviral at this time 
shown to be effective against the H5N1 avian influenza virus in Asia. 
In addition, SNS funds have been used to purchase approximately 2 
million bulk doses of unfinished, unfilled H5N1 vaccine, although it is 
not yet formulated into vials nor is the vaccine licensed. Clinical 
testing to determine dosage and schedule for this vaccine began in 
April 2005 with funding from the National Institutes of Health.
    DHHS also is supporting the development and testing of potential 
dose-sparing strategies to extend a given quantity of vaccine stock.
    Regarding annual influenza vaccination, there is an emerging 
consensus that it is desirable to expand vaccine coverage beyond the 
high priority groups for whom routine vaccination is already 
recommended. Discussions are under way to review the data that would be 
needed to consider broadening recommendations for influenza 
vaccination. CDC is developing strategies to increase informed demand 
for, and access to, influenza vaccine for persons who are currently 
recommended to be vaccinated each year. For example, according to a 
2003 Institute of Medicine report, an estimated 8.2 million additional 
high-risk uninsured adults 18-64 years old warrant annual vaccination. 
We recognize that these at-risk persons need better access to vaccine 
during a pandemic as well as for seasonal influenza.
    Additionally, CDC, in conjunction with the Advisory Committee on 
Immunization Practices, is developing an internal set of possible 
influenza vaccine supply scenarios that may occur in future influenza 
seasons and during a pandemic. These scenarios range from worst-case to 
best-case situations and are an important part of CDC planning efforts. 
We are preparing recommendations, plans, and communication messages for 
any of the possible situations.

                               CONCLUSION

    Although the present avian influenza H5N1 strain in Southeast Asia 
does not yet have the capability of sustained person-to-person 
transmission, we are concerned that it could. CDC is closely monitoring 
the situation in collaboration with the World Health Organization. CDC 
is using its extensive network of partnerships with other federal 
agencies, provider groups, non-profit organizations, vaccine and 
antiviral manufacturers, and state and local health departments to 
enhance pandemic influenza planning. Our responses to the annual 
domestic influenza seasons also will inform the nation's planning and 
preparedness for pandemic influenza. The same laboratories, health care 
providers, surveillance systems, and health department plans and 
personnel guide both responses. These actions, in conjunction with 
increased public understanding about influenza, will help us all 
prepare for an influenza pandemic.
    Thank you for this opportunity to share this information with you. 
I am happy to answer any questions.

    Mr. Deal. Thank you. Dr. Fauci.

                  STATEMENT OF ANTHONY S. FAUCI

    Mr. Fauci. Thank you very much, Mr. Chairman, and thank you 
for giving me the opportunity to address this committee on the 
research component of the department's effort in preparedness 
against pandemic flu.
    [Slide]
    Mr. Fauci. I would like to put this into perspective by 
showing you first this initial slide, which shows the 
complimentary roles of the sister agencies within HHS regarding 
how we approach pandemic flu preparedness. Dr. Gerberding has 
explained to you the CDC's role. The FDA plays an important 
regulatory role, particularly with regard to the countermeasure 
that are used, both therapeutics and vaccines. I am going to 
spend my couple of minutes describing for you some of the 
research endeavors that range from fundamental basic science up 
through and including the development of countermeasures. All 
of this, of course, is coordinated under the office of Public 
Health Emergency Preparedness at the department.
    This slide illustrates the multifaceted component of the 
research endeavor. You see on the lower-left we refer to a 
surveillance and epidemiology, which is really fundamentally 
the CDC's role. We play a very small role in that, and that is 
at the molecular level to try and characterize the evolving, 
changing viruses, particularly those that occur in animal 
species, as just described by Dr. Gerberding.
    In addition, we train and provide both physical and 
intellectual capacity and, importantly, the basic research 
understanding of the virus and how it works helps us in our 
endeavor to make vaccines, therapeutics, and diagnostics.
    I am going to spend just a moment describing two examples 
of some of the basic approaches toward influenza which have 
helped us in the development of vaccines. Some of you may have 
heard of the terminology ``reverse genetics.'' What that is is 
a molecular sophisticated way to take away some of the 
uncertainty of providing that seed virus that you need to make 
a vaccine. What it does is deliberately take the genes from a 
virus that we know grows very well in our egg cultures and then 
ultimately, hopefully, some day in cell-based cultures, as well 
as the important genes from the index virus in question--in 
this case it is an H5N1--and deliberately put them together to 
predictably get the seed virus that will be used for the 
vaccine. And in fact this is just what we did with the H5N1 
that is currently in clinical trials, as I will describe to you 
in a moment.
    Another research endeavor is that which we are doing in 
collaboration with the CDC and industry is to provide a 
consistent way to get cell-based cultures to ultimately 
transition and replace the egg-based cultures. And the reason 
for that is that the surge capacity of having the ability to 
grow cells in culture all year round so that if you either have 
to change direction or surge up in numbers, that system is much 
more adaptable than the egg-based system, which has its very 
good, positive points.
    Having said all of this, and I hope we get into the 
discussion, that despite the effort, despite the research, the 
capacity globally to make vaccines for H5N1, as several of the 
members have alluded to, is really one of the great limiting 
issues that we have to face, and I hope we get back to that.
    Let me just spend a moment talking about the influenza 
vaccine trials. Dr. Gerberding mentioned and I want to 
underscore that we are not waiting for anything to move ahead 
to address this problem. We have an H5N1 from Vietnam and we 
have a trial that has already yielded data. There are two major 
trials. The inactivated vaccine trial began on April 4, 2005 in 
three medical centers in the United States. It is in multiple 
stages involving four doses, a prime initial vaccine, followed 
by a boost. The reason we have to do that when we don't 
generally have to do that with the seasonal vaccine that we 
change a bit every year is that our population, or the 
population of the world, has never experienced an H5N1. So we 
don't really know what the proper dose is or whether or not we 
are going to need, and we likely will need, a prime and a 
boost. So we have divided the trial into stages. We fully 
enrolled the first 118 adults in Stage 1; we fully enrolled the 
second stage for a total of 450. By early to mid-summer we will 
have safety data and data about how to use that, what is the 
right dose, and then we will move onto the elderly--greater 
than 65--and then we will go to children.
    There is also an H9N2 trial going as well as attenuated 
vaccine trials. So there are multiple things going ahead, and 
we are clearly ahead of any other country in the trial of the 
relevant H5N1 right now.
    Again, just a word on antiviral therapy. We know that H5N1 
is sensitive to oseltamivir and relatively resistant to the 
other class of drugs. We are doing research both in 
understanding how best to use the existing drugs alone or in 
combination in adults and in children, as well as targeting 
other targets of the influenza replication cycle so that we 
will have a pipeline of drugs should resistance emerge.
    And finally, just to recapitulate and underscore that the 
NIH research effort is fundamentally based on basic research 
but is rapidly applying that to the development of 
countermeasures, particularly in the form of vaccines and 
therapeutics that will be part of the broad Department of 
Health and Human Services Pandemic Preparedness Plan. I would 
be happy to answer your questions later. Thank you very much, 
Mr. Chairman.
    [The prepared statement of Anthony S. Fauci follows:]

Prepared Statement of Anthony S. Fauci, Director, National Institute of 
    Allergy and Infectious Diseases, National Institutes of Health, 
                Department of Health and Human Services

                              INTRODUCTION

    Mr. Chairman and Members of the Committee, thank you for the 
opportunity to discuss with you the role of the National Institutes of 
Health (NIH) in preparing the Nation for the next influenza pandemic. 
The Department of Health and Human Services (DHHS) Draft Pandemic 
Influenza Preparedness and Response Plan outlines a coordinated 
national strategy to prepare for and respond to an influenza pandemic, 
and assigns specific roles to various Federal agencies; the National 
Institute of Allergy and Infectious Diseases (NIAID) holds the primary 
responsibility for carrying out those duties assigned to NIH.
    In this capacity, NIAID provides the scientific input required to 
facilitate the development of both new influenza vaccine technologies 
and novel antiviral drugs against influenza viruses. Under this 
Administration, we have made extraordinary progress. DHHS began 
investing in new technologies, securing more vaccines and medicines, 
and preparing stronger response plans. Total NIH funding for influenza 
research has grown more than five-fold in recent years, from $20.6 
million in FY 2001 to an estimated $119 million in FY 2005. This is 
part of the largest investment ever made by the Federal government in 
protecting against influenza.
    Influenza epidemics typically occur during the winter months in the 
United States and other temperate regions of the world and cause 
significant morbidity and mortality. On average, 36,000 people in this 
country die each year and 200,000 are hospitalized due to influenza and 
influenza-related complications. Each year, influenza viruses undergo 
small changes in their surface proteins as they circulate through the 
human population. As these small changes accumulate, the influenza 
virus gains the ability to overcome immunity created by prior exposure 
to older circulating influenza viruses or by vaccination. This 
phenomenon, called ``antigenic drift,'' is the basis for the well-
recognized patterns of influenza disease that occur every year, and is 
the reason that influenza vaccines must be updated each year.
    Influenza viruses can also change more dramatically; viruses may 
emerge that can jump species from natural reservoirs such as wild ducks 
to infect domestic poultry, farm animals, or humans. This type of 
significant change in the antigenic makeup of the virus that infects 
humans is referred to as ``antigenic shift.''
    In most instances when influenza virus jumps species from an animal 
such as a chicken to infect a human, the result is a ``dead end'' 
infection that cannot readily be transmitted further from human to 
human. Mutations in the virus, however, could increase the efficiency 
of human-to-human transmission. Furthermore, if an avian influenza 
virus and another human influenza virus were to simultaneously co-
infect a person, the genes of the two viruses might reassort, resulting 
in a virus that is readily transmissible between humans and against 
which the population would have no natural immunity. In addition, the 
reassortant virus could reflect the virulence of the avian virus. Such 
a virus could potentially cause an influenza pandemic.
    Historically, pandemic influenza is a proven threat. Three 
influenza pandemics have occurred in the 20th century: in 1918, 1957, 
and 1968. The 1918-1919 pandemic was by far the most severe, killing 
approximately 500,000 people in the United States and 20-40 million 
people worldwide--almost two percent of the global population at that 
time. Worldwide, the pandemics that began in 1957 and 1968 killed 
approximately 2 million and 700,000 people, respectively.
    H9N2 and H5N1 influenza are two avian viruses that have jumped 
directly from birds to humans and have significant pandemic potential. 
In 1999 and 2003, H9N2 influenza caused illness in three people in Hong 
Kong and in five individuals elsewhere in China, but the virus did not 
spread from human to human. H5N1 influenza, often referred to as ``bird 
flu,'' appears to be a significantly greater threat than H9N2. This 
virus was first detected in humans in Hong Kong in 1997. Since January 
2004, it has spread widely among wild and domestic birds and has 
infected at least 97 people in Vietnam, Thailand, and Cambodia; 53 of 
these people have died of the disease. Ominously, H5N1 viruses are 
evolving in ways that increasingly favor the start of a pandemic, 
including becoming more stable in the environment and expanding their 
host species range. Moreover, there has been at least one highly 
probable case of human-to-human transmission of the H5N1 virus, and it 
is possible that other such transmissions have occurred recently.
    The deadly experience with past influenza pandemics explains our 
current high level of concern about the appearance of virulent H5N1 
avian influenza viruses in Asia, which by a variety of mechanisms could 
adapt themselves to efficiently spread from human to human and result 
in the next pandemic. Given the poor condition of public health systems 
in many underdeveloped regions and the speed of modern air travel, the 
consequences of such an event, should it result in an influenza 
pandemic, would be severe.

                   NIH INFLUENZA RESEARCH ACTIVITIES

    Between influenza pandemics, when influenza activity occurs 
regularly on a seasonal basis, the role of NIAID is to conduct basic 
research into the viral biology, pathogenesis, and epidemiology of 
influenza viruses and to study host immune responses to these agents. 
Concomitant with these basic research studies, NIAID conducts applied 
research to develop new or improved influenza vaccines and production 
methods; to identify new anti-influenza drugs; and to support 
surveillance for previously unknown influenza viruses in animals and 
characterize any that are found. When a new influenza virus begins to 
infect humans (and thereby gains the potential to cause a pandemic), 
NIAID's role is to develop and clinically evaluate specific candidate 
vaccines against the emergent strain, test the activity of antiviral 
drugs, and, in some cases, supply vaccine manufacturers and the 
research community with viral reference strains and other reagents to 
speed vaccine development.

                             BASIC RESEARCH

    NIAID supports many basic research projects intended to increase 
our understanding of how influenza viruses replicate, interact with 
their hosts, stimulate immune responses, and evolve into new strains. 
Results from these studies lay the foundation for the design of new 
antiviral drugs, diagnostics, and vaccines, and are applicable to 
seasonal epidemic and pandemic strains alike.
    NIAID also supports two special research programs to better 
understand the diversity of influenza viruses. The Influenza Genome 
Sequencing Project, launched in the fall of 2004, is a collaboration 
between NIAID, the Centers for Disease Control and Prevention (CDC) and 
several other organizations to determine the complete genetic sequences 
of thousands of influenza virus isolates and to rapidly provide these 
sequence data to the scientific community. This program will enable 
scientists to better understand the emergence of influenza epidemics 
and pandemics by observing how influenza viruses evolve as they spread 
through the population and by matching viral genetic characteristics 
with virulence, ease of transmissibility, and other properties. As of 
May 24, 2005, 182 genomic sequences of influenza viruses had been made 
available through this program to researchers via the NIH website, and 
many more are in the pipeline.
    NIAID also supports a long-standing program based in Hong Kong to 
detect the emergence of influenza viruses with pandemic potential. This 
program, led by Dr. Robert Webster of St. Jude Children's Research 
Hospital in Memphis, Tennessee, conducts extensive surveillance of 
influenza viruses in animals in Hong Kong, analyzes new influenza 
viruses when they are found, and helps to generate candidate vaccines 
against them. In January, the scope of this surveillance program was 
expanded to include Vietnam, Thailand, and Indonesia.

Vaccines
    Vaccines are essential tools for the control of influenza. NIAID 
supports numerous research projects and other initiatives to foster the 
development of new influenza vaccine candidates and manufacturing 
methods that are simpler, more reliable, yield more broadly cross-
protective products, and provide alternatives to the egg-based 
technology currently used to grow the vaccine viruses.
    In the Fiscal Year 2006 budget request, DHHS has requested $120 
million to support pandemic influenza preparedness activities. These 
activities build on previous initiatives that include making chicken 
eggs available year round to provide for a secure supply and surge 
capacity for vaccine production and supporting efforts to shift vaccine 
manufacture to new cell-culture technologies. Moreover, a technique 
developed by NIAID-supported scientists called reverse genetics allows 
scientists to manipulate the genomes of influenza viruses and to 
transfer genes between viral strains. This technique allows the rapid 
generation of vaccine candidate strains that precisely match a selected 
epidemic strain. By removing or modifying certain virulence genes, 
reverse genetics also can be used to convert highly pathogenic 
influenza viruses into vaccine candidates that are safer for vaccine 
manufacturers to handle. Other vaccine strategies for influenza, 
including protein subunit and gene-based vaccines, are also being 
actively pursued. On the NIH campus in Bethesda, the NIAID Vaccine 
Research Center (VRC) has initiated a program to develop gene-based 
vaccines against influenza. Should proof-of-concept studies prove 
successful, the VRC expects to expand and accelerate the development of 
gene-based and recombinant influenza vaccines.
    In addition to supporting the development of new vaccine 
strategies, NIAID maintains an extensive capacity for evaluating 
candidate vaccines in clinical trials. For example, NIAID's Vaccine and 
Treatment Evaluation Units (VTEUs) comprise a network of university-
based research medical centers across the United States that conduct 
clinical trials to test candidate vaccines for many infectious 
diseases. These units support both academic and industrial vaccine 
evaluation, including safety, immunogenicity, and ultimately, efficacy 
of candidate vaccines.
    Although a pandemic alert has not yet been declared, NIAID has 
taken a number of steps to develop and clinically test vaccines against 
H5N1 and H9N2 influenza, two specific avian viruses that have 
significant pandemic potential. For example, in August 2004, NIAID 
contracted with Chiron Corporation for the production of 40,000 doses 
of an inactivated H9N2 vaccine. A Phase I clinical trial of this 
vaccine began on March 31, 2005, and is fully enrolled.
    In January 2004, researchers at St. Jude Children's Research 
Hospital obtained a clinical isolate of the highly virulent H5N1 virus 
that was fatal to humans in Vietnam in late 2003 and early 2004 and 
used reverse genetics to create an H5N1 candidate vaccine from this 
strain. Immediately after NIAID received this vaccine last June, it was 
sent to two companies, Sanofi-Pasteur (formerly Aventis-Pasteur) and 
Chiron, which have NIAID contracts to manufacture pilot lots of eight 
and ten thousand vaccine doses, respectively. The vaccines will be 
tested in Phase I and II clinical trials that will assess safety and 
the appropriate dose to optimize immunogenicity, as well as provide 
information about how the immune system responds to this vaccine. The 
Sanofi-Pasteur trial, which began on April 4, 2004, will test the 
vaccine in approximately 450 healthy adults between the ages of 18 and 
64. This trial is already fully enrolled and the safety data are being 
analyzed. If data from this study indicate the vaccine is safe and able 
to stimulate a certain immune response, NIAID expects to test the 
vaccine in other populations, such as the elderly and children, in late 
summer 2005. Trials of the Chiron-produced vaccines are expected to 
begin later this year.
    In addition to these relatively small pilot lots, DHHS contracted 
with Sanofi-Pasteur to produce two million doses of its H5N1 vaccine, 
in order to ensure that the manufacturing techniques, procedures, and 
conditions that would be used for large-scale production will yield a 
satisfactory product. Moving to large-scale production of the vaccine 
in parallel with clinical testing of pilot lots is an indication of the 
urgency with which we have determined that H5N1 vaccine development 
must be addressed. Waiting for the results of the initial clinical 
trials, which would be the normal procedure, would delay our ability to 
make large quantities of vaccine by at least six months. These doses, 
which have now been delivered, could be used to vaccinate health 
workers, researchers, and, if indicated, the public in affected areas.
    From the mid 1970s to the early 1990s, researchers in the NIAID 
Laboratory of Infectious Diseases developed a cold-adapted, live 
attenuated influenza vaccine strain that later became the FDA-licensed 
influenza vaccine marketed as FluMist. Building on their experience 
with attenuated influenza vaccines, researchers from the same 
laboratory recently made three candidate attenuated H5N1 vaccine 
strains and an attenuated H9N2 vaccine strain that are now in advanced 
development. NIAID plans to start the clinical trial of the attenuated 
H9N2 candidate vaccine this summer. These researchers also hope to test 
one of the candidate attenuated H5N1 vaccines in a Phase I study this 
year.

Antiviral Therapies
    Antiviral medications are an important counterpart to vaccines as a 
means of controlling influenza outbreaks, both to prevent illness after 
exposure and to treat infection after it occurs. Four drugs are 
currently available for the treatment of influenza, three of which are 
also licensed for prevention of illness. NIAID actively supports 
identification of new anti-influenza drugs through the screening of new 
drug candidates in cell culture systems and in animal models. In the 
past year, seven promising candidates have been identified. Efforts to 
design drugs that precisely target viral proteins and inhibit their 
functions also are under way. In addition, NIAID is developing novel, 
broad-spectrum therapeutics that might work against many influenza 
virus strains. Some of these target viral entry into human cells, while 
others specifically attack and degrade the viral genome.
    Efforts also are underway to test and improve antiviral drugs to 
prevent or treat H5N1 influenza. Last year, researchers determined that 
although H5N1 viruses are resistant to two older drugs--rimantadine and 
amantadine--they are sensitive to a newer class of drugs called 
neuraminidase inhibitors, including oseltamivir, which is marketed as 
Tamiflu. DHHS has stockpiled approximately 2.3 million treatment 
courses of oseltamivir, which is approved for use in individuals older 
than one year. Scientists are planning to conduct studies to further 
characterize the safety profile of oseltamivir in infants; and studies 
are also in progress to evaluate novel drug targets, as well as long-
acting next-generation neuraminidase inhibitors. In addition, 
development and testing in animals of a combination antiviral regimen 
against H5N1 and other potential pandemic influenza strains are under 
way.

                               CONCLUSION

    In closing, Mr. Chairman, I would like to emphasize that although 
we cannot be certain exactly when the next influenza pandemic will 
occur, we can be virtually certain that one will occur and that the 
resulting morbidity, mortality, and economic disruption will present 
extraordinary challenges to public health authorities around the world. 
We are working diligently in close coordination with our colleagues at 
CDC, FDA, other federal agencies, and in industry to ensure that we can 
meet these challenges in the most successful manner possible.
    Thank you for this opportunity to appear before you today, and I 
would be pleased to answer any questions you may have.

    Mr. Deal. Thank you, Doctor. Dr. Gellin.
    Mr. Gellin. Thank you. I want to join my colleagues in 
thanking you for having this hearing.
    Mr. Deal. Can you pull that one a little closer?

                  STATEMENT OF BRUCE G. GELLIN

    Mr. Gellin. I want to thank you for holding this hearing 
because it is something that you and we and all the Americans 
really need to know about, as Ms. Baldwin mentioned. I am the 
Director of the National Vaccine Program Office, which sits in 
the Office of the Secretary of the Department of Health and 
Human Services. And I want to join my colleagues here to thank 
you for this.
    As we have heard and you have been aware, the ecology of 
the disease and the behavior of the virus changing now offers 
multiple opportunities that could provide fertile ground for a 
pandemic virus to emerge. And while we are all keeping a 
watchful eye on the current situation in Asia, we recognize 
that there are other strains of the influenza virus that could 
perform similar tricks. And therefore, in addition to our focus 
on this virus, we acknowledge that a pandemic could be 
triggered by another influenza virus subtype and could 
originate in any country.
    Secretary Leavitt has made pandemic influenza preparedness 
a priority area, and it is a critical component of his 500-day 
plan for the department. As Dr. Gerberding mentioned, just last 
week at the World Health Assembly in Geneva, the annual meeting 
of the ministers of health from around the world, he emphasized 
his concern about the situation in Asia and our department's 
and our government's commitment to preparedness. He encouraged 
global transparency, expanded surveillance, and timely sharing 
of information and clinical specimens, the importance that all 
nations have pandemic preparedness plans. He also urged 
international collaboration among developed and developing 
countries to control the spread of this virus and recognize the 
important role of the human-animal interface.
    On the home front last summer, as we have heard and will 
discuss later, we released our draft plan last summer. The plan 
described a coordinated strategy to prepare for and respond to 
an influenza pandemic. It also provides guidance to State and 
local health departments and the healthcare system to enhance 
planning and preparedness at levels where the primary response 
activities in the U.S. will be implemented.
    When we posted our plan, we sought public input before 
developing final guidance, and therefore allow the 60-day 
comment period for that. In addition, the National Vaccine 
Advisory Committee and CDC's Advisory Committee on Immunization 
Practices are currently discussing with a number of 
stakeholders to provide the department with recommendations on 
some key policy issues that are outstanding.
    As a complement to the plant, CDC is also finalizing a 
series of specific guidance documents for State and local 
health departments, communities, and the healthcare system. We 
expect the updated plan and the related implementation guidance 
documents will be available in the coming months, but also 
recognize that plans like these will continue to evolve as we 
learn more. Therefore, we expect that we will regularly and 
continually review and revise the plan that incorporates new 
research, changing influenza strains, the changing 
epidemiology, lessons learned from the influenza season, and 
other infections disease threats.
    In addition, we also recognize the importance that all 
Americans become aware of the threat of a pandemic and have 
begun to engage a number of public engagement and education 
projects because we seek the public's input into some of these 
decisions that we are making as well.
    Moving ahead with our preparedness isn't waiting for the 
final drafting of the plan, as we have heard from both Dr. 
Fauci and Dr. Gerberding. And given the central role that 
vaccines play in preventing influenza, one of the critical 
elements of our plan is to develop a strategy for sufficient 
domestic surge capacity for vaccine production.
    Our planning assumptions acknowledge that in a pandemic 
emergency, there is likely to be worldwide demand for vaccine, 
and vaccine produced outside the United States might not be 
available for our use. One of the base assumptions that we have 
in our planning is that the population has never be exposed to 
a virus or anything like this, and therefore, all may be 
susceptible, and therefore, all may need to be vaccinated.
    And perhaps most importantly from a preparedness 
perspective, because it is the nature of the virus to evolve 
and re-assort with other influenza viruses, the perfect vaccine 
cannot be prepared far in advance and stockpiled since that 
vaccine is one that needs to be tailored to match the 
circulating strain.
    As Dr. Fauci has mentioned with his discussion of the NIH 
clinical trials, HHS has developed a number of influenza 
vaccine supply initiatives to address pandemic preparedness 
needs, but will also be critical to achieving our annual 
influenza prevention goal. The objectives of these initiatives 
are to secure and expand U.S. influenza vaccine supply, 
diversify our production methodology, and establish emergency 
surge capacity. To support these activities HHS received $50 
million in fiscal year 2004 and $99 million in fiscal year 
2005. The 2006 budget includes an additional $120 million to 
further strengthen this component of our overall pandemic 
preparedness efforts.
    To assure that vaccines can be produced at full 
manufacturing capacity at any time of the year, we also need to 
assure that we had an egg supply that could be available at any 
time of the year. And last year HHS issued a contract with 
sanofi pasteur that assures that they can manufacture influenza 
vaccine at their full capacity all year long.
    But diversifying influenza vaccine production methods will 
also strengthen our system. As Dr. Fauci has mentioned, the 
cell-culture technology is a well-established vaccine 
production method for other vaccines and one that we hope can 
be applied effectively to influenza vaccine production. This 
technology does not require eggs as a substrate for growth and 
therefore avoids some of the vulnerabilities that are 
associated with that. And it also may be more amenable to surge 
production for emergency vaccine production.
    Because of this the secretary announced last month that the 
Department of Health had issued a 5-year contract with sanofi 
pasteur for $97.1 million to develop a cell culture vaccine. 
The goal is to accelerate the efforts to bring such a vaccine 
to the United States, that have the vaccine licensed by the 
FDA, and to have it produced within the borders of the United 
States.
    These important steps to strengthen our influenza vaccine 
supply, for assuring the egg supply, and diversifying our 
expanding production capacity are to be followed this year by 
additional measures to increase influenza vaccine capacity and 
expand the number of vaccine doses and the number of 
manufacturers that could supply vaccine to the United States.
    Supported by the influenza vaccine initiative in the fiscal 
year 2006 budget in our request for $120 million, our goals are 
to build on our cell culture efforts and encourage additional 
manufacturers to accelerate the development of cell culture 
vaccines, to develop new vaccines such as recombinant vaccines, 
to improve the efficiency of the existing manufacturing 
processes, which could increase the overall yield of vaccines 
and the amount produced, and to support research and 
development of strategies that will stretch the number of doses 
produced by decreasing the amount of virus antigen in each 
dose, therefore making more vaccine from the same amount of 
antigen.
    Finally, I need to mention that coupled with the effort 
that Dr. Fauci mentioned, last year we went ahead and had two 
million doses of H5N1 vaccine produced, and we did in a time in 
the fall that wouldn't interfere with seasonal production. We 
wanted to make sure that a company was familiar with making 
such a vaccine in full-scale facilities, and it was the first 
project like this in the world. We are awaiting the results of 
the clinical trials to know best how to use and formulate such 
a vaccine.
    We also recognize the important role of antiviral drugs in 
stemming a pandemic. We have ordered and have already received 
delivery of over two million doses of Tamiflu, and we are 
currently in discussions with the manufacturer, Roche, who you 
will hear from later today, to increase our national reserve of 
this antiviral drug.
    Stemming the spread of an epidemic will require close 
coordination between agriculture and health sectors and among 
effected countries, donor nations, and international 
organizations. To that end we have a planning effort underway 
to develop a plan for the $25 million that was included in the 
fiscal year 2005 emergency supplemental to the Department of 
State with the HHS focusing on health projects, and USAID, our 
partner, focusing on projects on animal health.
    Last week Dr. Gerberding and I were part of the U.S. 
delegation accompanying Secretary Leavitt to the World Health 
Assembly. Of the many discussions there, the one that best 
captures the concern and common purpose that we all have is 
summarized in Mr. Leavitt's remarks to his fellow ministers of 
health: ``There is a time in the life of every problem when it 
is big enough to see and small enough to solve. For pandemic 
influenza preparedness, that time is now.'' Thank you.
    [The prepared statement of Bruce G. Gellin follows:]

   Prepared Statement of Bruce G. Gellin, Director, National Vaccine 
  Program Office, Office of Public Health and Science, Office of the 
  Assistant Secretary for Health, U.S. Department of Health and Human 
                                Services

    Mr. Chairman and Members of the Subcommittee, I am pleased to 
appear before you today to discuss pandemic influenza and the measures 
the Department of Health and Human Service is taking to prepare for the 
next pandemic. As you may have heard from reports from last week's 
World Health Assembly, many public health experts believe the threat of 
a pandemic is now greater than it has been in decades. A report issued 
by the World Health Organization warns that the virus may be evolving 
in ways that increasingly favor the start of a pandemic. In addition 
the ecology of the disease and behavior of the virus have changed and 
are creating multiple opportunities for a pandemic virus to emerge. 
This is in large part because of the bird flu that is established and 
now endemic in many different species of birds across Asia. As these 
bird viruses continue to evolve and spread in animals, the possibility 
increases that an avian virus will mix with a human virus to cause a 
novel and easily transmitted influenza strain in humans. Since 1997, 
the avian flu has continued to evolve and has become increasingly 
lethal for an expanding number of species, including mammals, not just 
birds. Over the past year and a half, there have been 97 confirmed 
human cases of influenza in Asia (Vietnam, Thailand and Cambodia) cause 
by the H5N1 virus and over half of these people have died from their 
infection.
    Secretary Leavitt has made pandemic influenza a priority area. Just 
last week, at the World Health Assembly--the annual meeting of 
Ministers of Health from around the world--he emphasized his concern 
about the situation in Asia and the Department's commitment to 
preparedness. He encouraged global transparency, expanded surveillance, 
and timely sharing of information and clinical specimens as part of our 
global preparedness. Secretary Leavitt also urged international 
collaboration among developed and developing countries to control the 
spread of this virus among humans and animals. Further, the Assembly 
considered a resolution on pandemic preparedness that was offered by 
the U.S. as a blueprint for action.
    In addition, on the national front, the Department has been 
actively developing and formulating a Pandemic Influenza Preparedness 
and Response Plan. This Plan describes a coordinated strategy to 
prepare for and respond to an influenza pandemic. It also provides 
guidance to state and local health departments and the health care 
system to enhance planning and preparedness at the levels where the 
primary response activities in the U.S. will be implemented.
    This Plan was released for public comment last summer and, as with 
all preparedness planning, the specifics of this plan will continue to 
evolve. HHS will continually be revising and reworking the plan to 
respond to events such as new research, changing influenza virus 
strains, and discussions with the many stakeholders--state and local 
health departments, the health care system, industry and the public.
    Given the central role that vaccines play in preventing influenza, 
one of the critical elements of this Plan is to develop a strategy for 
sufficient domestic surge capacity for influenza vaccine production. 
This will require an ongoing and sustained commitment by HHS.
    Because a pandemic is by definition the introduction and spread of 
an influenza virus to which humans have not previously been exposed, 
this has major implications for vaccine development and supply. In the 
setting of a pandemic, it is assumed that the pandemic virus will be a 
novel strain. First, the majority of the population is likely to be 
susceptible; immunologic naivety with the pandemic strain is likely to 
result in the need for a two-dose regimen for effective immunity. 
Unlike seasonal influenza epidemics, a pandemic could come at any time 
during the year, and may last longer than a single season such that 
booster dose(s) may be required to sustain immunity. Perhaps most 
importantly from a preparedness perspective, the perfect vaccine cannot 
be prepared far in advance and stockpiled, since the ideal vaccine is 
one that should be tailored to match the circulating virus
    Further, as highlighted by the SARS experience, modern 
transportation and trade are likely to rapidly accelerate the global 
spread of influenza. As a consequence, our planning assumptions 
acknowledge that in a pandemic emergency, there will be worldwide 
demand for vaccine and vaccine produced outside of the United States 
may not be available for our use.
    We are all keeping a watchful eye on the current situation in Asia 
while at the same time recognizing that, in recent years, there have 
also been outbreaks of avian influenza infections in Europe and in 
Canada associated with human infections cases caused by other influenza 
subtypes. Therefore, in addition to our concerns about the H5N1 virus 
in Asia, we acknowledge that a pandemic could be caused by another 
influenza virus subtype could originate in any country.
    Though scientists in 1918 had very little idea of what was 
happening until it was too late, we have time--and still have time--to 
prepare for the next global pandemic, and we should consider ourselves 
warned. As Secretary Leavitt stated at the World Health Assembly, ``We 
are working on pandemic preparedness on borrowed time. When this event 
occurs, our response has got to be immediate, comprehensive and 
effective.''
    I want to assure you that the Department has made this one of its 
highest priorities and it is a critical component of the Secretary's 
500-day plan. Ensuring the ability to meet current annual demand for 
influenza vaccine, to improve the prevention of influenza disease, and 
to prepare for an influenza pandemic all require strengthening the 
influenza vaccine supply in the U.S. Building on the response to the 
influenza vaccine shortage in the 2004-05 season NIH and FDA have 
worked to facilitate the clinical evaluation in U.S. populations of an 
influenza vaccine produced by GSK, and efforts are underway to 
expeditiously consider a licensure application such that this influenza 
vaccine may be licensed in the U.S. for the upcoming season.
    Several HHS influenza vaccine supply initiatives have a longer 
timeline and were developed to address pandemic preparedness needs but 
which also will be critical to achieving annual influenza prevention 
goals. The objectives of these initiatives are to secure and expand 
U.S. influenza vaccine supply, diversify production methods, and 
establish emergency surge capacity. To support these activities, HHS 
received $50 million in FY2004 and $99 million in FY2005. The 
President's Budget for FY2006 includes an additional $120 million to 
further strengthen this component of the overall pandemic influenza 
preparedness efforts.
    Because influenza vaccine is produced to meet the seasonal demand 
in the fall, production also is seasonal and embryonated eggs have not 
been available to manufacturers year-round. Moreover, although some 
excess supply of eggs may be available to support additional influenza 
vaccine production or provide security if the flocks that produce eggs 
for vaccine production are affected by avian influenza or other 
illness, this excess is limited creating vulnerability to supply 
disruption. To enhance influenza vaccine supply security, HHS issued a 
five-year contract to Sanofi-Pasteur of Swiftwater, Pennsylvania, on 
September 30, 2004 for $40.1 million. Under this contract, Sanofi-
Pasteur has begun to change its flock management strategy to provide a 
secure, year-round supply of eggs suitable for influenza vaccine 
production at full manufacturing capacity. It also will increase the 
number of egg-laying flocks by 25% to provide contingency flocks in 
case of an emergency. These eggs may be used to support additional 
production of annual influenza vaccine in the event of a vaccine 
shortage. Additionally, this contract provides for production of annual 
investigational lots of prototype pandemic influenza vaccines, e.g., 
this summer, Sanofi-Pasteur will manufacture an H7N7 virus vaccine for 
clinical evaluation.
    Diversification of influenza vaccine production methods also will 
help strengthen the system. Cell culture technology is a well-
established vaccine production method for other vaccines such as the 
inactivated poliovirus vaccine and two companies have registered their 
cell-culture based influenza vaccine technology in Europe. This 
production technology does not require eggs as a substrate for growth 
of vaccine virus, thereby avoiding the vulnerabilities associated with 
an egg-based production system. It also may be more amenable to surge 
capacity production when influenza vaccine supply needs to be expanded 
rapidly such as at the time of a pandemic. Finally, influenza vaccines 
produced in cell cultures rather than eggs will provide an option for 
people who are allergic to eggs and therefore unable to receive the 
currently licensed vaccines.
    Secretary Leavitt announced last month that the Department of 
Health and Human Services issued a five-year contract on March 31, 2005 
to Sanofi-Pasteur for $97.1 million to develop cell culture influenza 
vaccine technology and conduct clinical trials, with the goal of 
obtaining an FDA license for this vaccine. Under this advanced 
development contract, the company has also committed to manufacturing 
this vaccine at a U.S.-based facility with a capacity to manufacture 
300 million doses of monovalent pandemic vaccine over a one-year 
period. However, given timelines for vaccine development and clinical 
trials, and for construction and validation of manufacturing 
facilities, additional influenza vaccine supply from this source is 
unlikely to be available for at least five years.
    These important steps to strengthen our national influenza vaccine 
supply through assuring the egg-supply and diversifying and expanding 
production capacity will be followed this year by additional measures 
to increase influenza vaccine production capacity and expand the number 
of influenza vaccine doses made using that capacity. Supported by the 
pandemic influenza vaccine initiative in the FY 2006 budget request for 
$120 M, we posted synopses of three additional areas where we believe 
strategic investments move us toward achieving annual and pandemic 
influenza vaccine supply goals in the March 17, 2005 edition of 
FedBizOpps. On April 29, 2005, the first of these requests for 
proposals was posted, providing support for the development of cell-
culture based and recombinant pandemic influenza vaccines.
    Whereas building new influenza vaccine production facilities is one 
approach to expand the influenza vaccine supply, other strategies also 
can increase the number of influenza vaccine doses produced. Influenza 
vaccine is manufactured in a series of steps--developing an influenza 
virus master seed for vaccine production, inoculating the virus into 
eggs, growing, harvesting, purifying, splitting, formulating, and 
filling it into vials or syringes. Improving efficiency at any step in 
this process can increase the eventual yield and number of vaccine 
doses produced. Thus, a second area of emphasis will be to support 
improvements of the manufacturing process to increase overall influenza 
vaccine production at current manufacturing facilities.
    The third area of emphasis will provide support for research and 
development, leading to licensure of strategies that will stretch the 
number of vaccine doses produced by decreasing the amount of influenza 
virus antigen that is needed in each dose. The concept underlying these 
``dose-stretching'' strategies is that by changing either the influenza 
vaccine or the way its administered, one can improve the immune 
response to vaccination and provide protection while using less of the 
vaccine antigen. By using less antigen in each vaccine dose, the number 
of doses that can be made at any level of production capacity can be 
multiplied. The two most promising antigen-sparing approaches are 
either to add an adjuvant--a substance that stimulates the immune 
response to a vaccine formulation, or administering the vaccine into 
the skin (similar to the approach used in a skin test for Tb) where 
large numbers of potent immune cells are located. Both strategies have 
been evaluated in several clinical trials and have the potential to 
expand influenza vaccine supply several-fold if they prove effective in 
further clinical trials and are approved for licensure.
    The increases in the FY 2006 President's Budget request will 
support ongoing activities to ensure that the Nation will have an 
adequate influenza vaccine supply to respond better to yearly epidemics 
and to influenza pandemics. While issuing the requests for proposals 
and completing the contracts is only the first step toward the 
development of an expanded, diversified, and strengthened influenza 
vaccine supply, the U.S. is leading the global effort to develop 
vaccines and vaccine technologies to meet this challenge.
    We also recognize the important role of antiviral drugs in stemming 
a pandemic and for treating patients. The United States has ordered and 
received delivery of 2.3 million treatment courses of Tamiflu. We are 
in discussions with Roche, the maker of Tamiflu ', to 
increase our national reserve of this antiviral. Unfortunately, the 
H5N1 virus is resistant to the adamantine drugs, the only other class 
of anti-influenza drugs.
    Stemming the spread of the epidemic will require close coordination 
between the agriculture and health sectors and among affected 
countries, donor nations and international organizations dedicated to 
promoting the health of humans, livestock and wildlife. Detailed joint 
planning is already underway to develop the proposed budget plan for 
the $25 million that was included in the FY 2005 emergency supplemental 
with the Department of State with HHS focusing on human health projects 
and USAID focusing on projects on animal health and related issues. In 
this way, the two agencies' plans will be complementary, not 
duplicative.
    I was part of the U.S. delegation that attended last week's World 
Health Assembly and want you to know that this administration and the 
global health community are working together on this public health 
threat in anticipation of the next pandemic, be it tomorrow or ten 
years from now. As Secretary Leavitt told the assembled in Geneva, 
``There is a time in the life of every problem when it is big enough to 
see and small enough to solve. For pandemic influenza preparedness, 
that time is now.''
    Thank you for your attention to my remarks this morning--and more 
importantly to the attention that you are paying to this important 
global public health issue.
    I would be happy to answer any questions from the Committee.

    Mr. Deal. Thank you. I recognize myself for some opening 
questions. It appears that we are now sort of focusing on the 
H5N1 as the flu that we think might be the one most likely to 
occur in pandemic form. Suppose we are wrong and it is the H9. 
Will vaccines that are developed for the H5 be effective for 
H9? Let me go ahead and ask a few series of questions and then 
I will let whoever wants to respond. That is the first question 
I have.
    Second, are there antivirals that are being developed for 
this H5N1 or are antivirals somewhat generic in nature? Can 
they be used for any variation of strains or must they likewise 
be specific to the strain that we are facing?
    The last two questions are is HHS contemplating stockpiling 
injection devices that would be needed in the event of a 
pandemic?
    And last, I understand that there were some conditions in 
trying to trace the SARS issue that CDC faced in terms of being 
able to obtain passenger contact information. Have we overcome 
those administrative difficulties so that HHS or any other 
Federal agency would be able to provide the information 
necessary to trace someone who potentially has the H5 or any 
other variation of that virus coming into our country? I know 
that is a lot of questions and I will let you start.
    Mr. Gellin. Well, actually, you have a question for each of 
us.
    Mr. Deal. Okay.
    Mr. Gellin. Let me attack the vaccine and antiviral 
development one. You ask a very good question. The short answer 
to the question if you have an H5N1 vaccine, and, for example, 
an H9N2 virus circulating, the degree of protection would be 
minimal if none at all. So that is a clear answer to that 
question. I would point out in relationship to that question 
that for that very reason we are not just doing the trial with 
an H5N1. We have already started an H9N2 trial in much the same 
philosophy of looking at safety and proper doses of the H9N2.
    Having said all that, if it is something else that is not 
H9N2 or not H5N1, the very fact of getting more experience with 
how the body responds to an antigen like an H5 or an H9 to 
which there have not been previous exposure will give us a lot 
of important information to more rapidly respond to whatever 
evolving Bird Flu, whatever the subtype is. So that is the 
answer to the question, but it also--the two million doses of 
the H5N1 allowed us to be able to make this kind of a vaccine 
in scale-up quality. So even though we are doing things now 
that might not be precisely matched to the ultimate pandemic 
flu virus, everything we are doing is going to helpful for 
that.
    With regard to the antivirals, Tamiflu is the antiviral to 
which H5N1 is sensitive. The issue of developing antiviruses 
that have a broad range of capability is part of the research 
plan, as is developing vaccines that have broader capability, 
not to be only effective against one but against another. That 
is something that is difficult scientifically to do, but it is 
very high on our research agenda to do that.
    And finally, with regard to the antiviral ability to block 
the influenza, we have to be very careful that there is not a 
perception that this is like an antibiotic that you treat 
pneumonia. You give it and the pneumonia is gone. This will 
maybe decrease some of the days of illness and be very, very 
useful, but we don't want you to get the impression that this 
is a knockout drop for the virus. It is not. And we have other 
questions that Dr. Gerberding will be able----
    Ms. Gerberding. The question about syringes is one that is 
easy to answer. We have a supply of a lot of medical equipment 
in the stockpile, and we are not concerned about shortages of 
syringes limiting immunization. The exact contents of the 
entire medical stockpile is something that we consider 
sensitive, so we would be happy to discuss with you in chambers 
the very specific contents of the stockpile.
    And with respect to the issues around contacting 
passengers, our Division of Global Migration and Quarantine has 
been working with leaders at HHS and the administration to come 
up with some policies and procedures that would improve that 
process. Right now we are engaged in a pilot project with one 
major international airline to see if the data systems protect 
the confidentiality of the passengers but do allow this kind of 
reconnection. And we have already had one, I think, small event 
where it has been tested. It looks very promising. So we are 
taking an evidence-based approach to this. Find out a) does it 
work, b) is it acceptable to passengers, and c) can we do it at 
a cost that makes it a worthwhile investment. And we will know 
more about that probably later this year.
    Mr. Deal. Thank you. Mr. Brown.
    Mr. Brown. Thank you, Mr. Chairman. Dr. Gerberding, GO 
testified that insufficient hospital and health workforce 
capacity is a substantial area of concern. If you would, share 
with us your characterization of the adequacy of our hospital 
and health workforce capacity to deal with a potential 
pandemic, and if you think there are gaps, would you point us 
to specific provisions in the fiscal 2006 budget that are aimed 
at addressing these gaps?
    Ms. Gerberding. I will do my best to address that, and I 
may have to call upon Dr. Gellin to add perspective from the 
other agency that is involved in that, which is HRSA. I think 
we appreciate that our entire healthcare system lacks surge 
capacity for any kind of a major health issue. Workforce 
retention, development, recruitment, and training are issues 
that we all have a generic concern about. Since the terrorism 
preparedness investments have been made by HHS, we have been 
able to target some specific preparedness activities to support 
surge capacity, and this year proposed in the stockpile funding 
is money for portable hospital facilities of a variety of 
levels of care so that we could bring portable facilities to a 
site of a major event. And I will ask Mr. Gellin to add any 
information from the HRSA perspective.
    Mr. Gellin. I think I will defer that and provide you that 
information in writing from HRSA so we are precise about it.
    Mr. Brown. Okay. Could you fill us in on your discussions 
with the administration and their responses when you talk about 
the gaps or the inadequacies of public health structure's 
ability to deal with a pandemic outbreak?
    Ms. Gerberding. I can summarize all of this by saying I 
think Secretary Leavitt represents the administrative position 
very well and the high priority he has put on this, as well as 
the investments that are proposed in the President's 2006 
budget to increase the Vaccines for Children Program, increase 
the purchase of vaccines in the 317 Program to allow CDC to buy 
a backfill--sort of an insurance policy by buying bulk 
monovalent and vaccine in worst-case scenario, to increase the 
ability of the States to purchase vaccine, as well as to change 
the Vaccines for Children Program to increase access for 
underinsured children to receive vaccines. So all of these are 
plus ups in the budget.
    I just mention that this year CDC's influenza budget is 
$197 million, and that is about a log larger than it was just a 
few years ago. So we are seeing proposed investments that I 
think augment and buildupon the investments that we are making 
for terrorism preparedness in the States. The capacities, as 
you know, are part and parcel of the same--detection, 
surveillance, investigation, communication, informatics, and 
alerting. So it is my experience that the entire department, as 
well as the rest of the administration, is engaged in influenza 
and working very hard to come up with a cogent approach that 
would serve as well and to do it as fast as we can.
    Mr. Brown. You argue or suggest that support from our 
government is adequate--from Congress, appropriations are 
adequate, perhaps, for what you do specifically at CDC on that 
level. What do you see when you look at hospitals and hospital 
infrastructure and its abilities? Do you see funding gaps there 
and funding problems there? Or do you see an adequate amount of 
resources that they are getting from State and local and 
Federal Governments?
    Ms. Gerberding. I am concerned, but I don't have data to 
answer your question. Again, this is a part of HRSA 
responsibility that we can provide you a factual representation 
of the degree of support and where the gaps might lie.
    Mr. Brown. Do the other two of you want to comment on that 
or just simply something written? Okay. Thank you, Mr. 
Chairman.
    Mr. Deal. Thank you. Mr. Ferguson.
    Mr. Ferguson. Thank you, Mr. Chairman. Dr. Gerberding, I am 
interested that in your statement or just your comments this 
morning that you didn't talk about antivirals really. You were 
talking about vaccines. But can you talk a little about the 
role that antivirals will play in an Avian Flu outbreak and in 
any kind of a pandemic flu outbreak?
    Ms. Gerberding. I think it is important to distinguish the 
H5N1 situation that we are looking at right now in Asia with 
the realm of possible influenza outbreaks that may occur. This 
particular virus strain happens to be resistant to the 
inexpensive, easily produced drugs. So if our only goal was to 
protect against this specific strain, stockpiling the other 
drugs doesn't make sense. But there are many other strains of 
flu that are susceptible to the inexpensive drugs. So we have 
made the decision to stockpile both categories of drugs. We are 
emphasizing oseltamivir right now because it is the drug most 
likely to be useful if this particular strain breaks. But we 
also have a stockpile of about four million treatment courses 
of rimantadine, which could be used for seasonal flu of a 
susceptible nature, or even an Avian strain that proved to be 
susceptible.
    The problem with this antiviral stockpiling and capability 
can be summarized in the phrase ``lack of evidence.'' We know 
that antiviral drugs, as Dr. Fauci said, can reduce the 
severity of illness as characterized by days of hospitalization 
and can benefit people if they are taken within 2 days of the 
onset of illness, which is very, very hard to do. You know, 
when you start getting the flu it is hard to distinguish it 
from any other upper respiratory infection, so most people 
don't realize they have flu until it is past the 48-hour 
window.
    But in addition, we do not have evidence that even 
oseltamivir actually reduces mortality from influenza. The 
studies simply haven't been done. We are concerned at some of 
the things we are seeing in Vietnam where some patients who 
apparently were started early on the drug have not done well 
and have gone on to die despite treatment. So we need the 
scientific evidence to tell us how should the drug be used? 
Does it actually reduce mortality? What is its role in a 
pandemic? We are working with WHO and others in the department, 
including the FDA. We have been having regular conversations on 
how we might be able to conduct such trials in a situation 
where cases right now are still sporadic.
    But until we actually know how to use the drugs, making 
enormous purchases in stockpiling may be a premature decision. 
And that is why we are scaling up our purchase as we feel we 
can define an effective role, but we have more work to do to 
really look at all the information and make the best possible 
long-term decision.
    One other point I should make is that this right now is an 
oral drug. It is taken by mouth. And some of the patients with 
severe influenza in Asia have an illness that is not just 
respiratory in nature. It involves the GI tract and all other 
organs, and so we have to be concerned could this drug even get 
absorbed from the intestinal tract if people are ill with 
influenza. So we have a lot of work to do to be able to define 
the appropriate role for saving lives during flu and that work 
needs to be a high priority.
    Mr. Ferguson. But clearly our government is placing some 
new importance on the role of antiviral. We are going to hear 
more about antivirals in our next----
    Ms. Gerberding. Absolutely.
    Mr. Ferguson. [continuing] panel.
    Ms. Gerberding. Absolutely.
    Mr. Ferguson. And we are beginning to order millions and 
millions of doses I am told by some of the companies. To me it 
highlights that there is an increased awareness and 
appreciation for the role that antivirals can play.
    Ms. Gerberding. Yes, we have a stockpile right now of more 
than two million treatment courses of the oseltamivir, and with 
the supplemental appropriation we just received through the 
defense funding, the $58 million will be looking at what we 
might do with that resource to augment our stockpile also.
    Mr. Ferguson. I am sure you would agree with me that two 
million doses is a pittance. I mean that is nothing compared to 
what we would need were we to have some sort of a pandemic flu 
outbreak. But let me just--because my time is running short. I 
mean I think last year's vaccine shortage highlighted the 
question of the distribution--partnership that is going to be 
necessary, and even if we are stockpiling vaccines, stockpiling 
antivirals, what kind of a plan is in place and who is 
ultimately responsible for making sure the plan works to make 
sure that--I mean it could be because you are talking--I think 
the necessity of a 2-day window for someone to take an 
antiviral if they are showing signs of a flu, that I think 
highlights to me the necessity of having a distribution plan in 
place where these products are available and around the 
country. They are not all kind of sitting in one storehouse 
somewhere in one city or one part of the country that that--I 
mean it highlights to me that we need to have a real 
distribution plan in place. Can you shed some light on that?
    Ms. Gerberding. Any doctor can prescribe oseltamivir today, 
and it is available. We inventoried during last flu season. It 
is available in most pharmacies and could be readily available 
up to the amount that the manufacturer produces. So right now 
the commercial distribution system does a very good job of 
covering the United States. If we have stockpile drug and we 
need to allocate it in a setting of a flu pandemic, we would 
have some time to do that. We wouldn't expect instantaneously 
everyone in the country to be ill at the same time. So we would 
be able to distribute drugs in collaboration with the State 
health departments and others who have that primary 
responsibility depending on where the need was the greatest.
    But that is part of the reason why we would like to have a 
larger stockpile, because the more pre-deployment we have in 
the system, the easier it is to handle that when people are 
frightened and upset.
    I should also say that we are evaluating a number of 
options to support or augment distribution, including options 
that have been explored for terrorism events where 
countermeasures have to be delivered very quickly. One of those 
mechanisms involves working with the U.S. Postal Service to 
deliver products to people's homes. Another option might even 
include the idea of having the drugs forward-deployed at the 
community level or even the household level. So these are all 
things that are on the table right now, and we are working with 
experts inside and outside of government to come up with some 
evidence and some protocols to see which really will be the 
best approach.
    Mr. Ferguson. Mr. Chairman, I know my time is up, but just 
for me to close, I think it is important that we not 
underestimate the importance of antivirals in this process. And 
some of your comments suggest that perhaps you don't have the 
same appreciation that I might have or some folks at the World 
Health Organization. Their recommendation has been that, you 
know, countries have the ability to treat 25 to 50 percent of 
their population with antivirals. If we are talking about two 
million--even if we were talking about 50 million doses, that 
would not be enough. That would not be meeting the World Health 
Organization's recommendation so----
    Ms. Gerberding. But let----
    Mr. Ferguson. [continuing] I would urge you to look closer 
at some of those recommendations and perhaps take them to 
heart.
    Ms. Gerberding. Let me just be very clear. We do support 
stockpiling antivirals; we do think they have a role. We have 
defined the role of antivirals right now as one for treating 
affected people, and in certain situations, as a preventative 
for mission-critical personnel. We know the drug is effective 
at preventing seasonal flu, but obviously no one can treat the 
entire world with oseltamivir during the many, many months of a 
pandemic. So prophylaxis for the population is not sensible.
    But I also wanted to emphasize, even those who are making 
projections about the proportion of population that should be 
covered are not doing that from a data base perspective or 
for--in some cases even credible models of how the drug would 
be used and distributed. So we have a lot of work to do to 
create a frame and a plan that includes antivirals in the 
context of other measures that must play a role, including 
isolation of cases and quarantine of exposed people.
    Mr. Ferguson. Thank you, Mr. Chairman.
    Mr. Deal. Thank you. As you know from the bells, we have a 
vote that is going on on the floor, and I want to commend the 
audience; I don't think I have heard a cough yet. We will 
resume as soon as these votes are concluded, and there are a 
series of votes, so we will be gone--yes.
    Ms. Eshoo. If I could just ask my question, and I think I 
am next because I have another hearing of----
    Mr. Deal. Can you do it quickly?
    Ms. Eshoo. I can do it very quickly.
    Mr. Deal. Okay.
    Ms. Eshoo. To Dr. Gerberding, the GAO requested a plan, as 
I understand it, in 2000. And what I heard you say in your 
opening statement is that even though there has been a 
temporary report that has been issues, that you are just going 
to move ahead without doing a final report? I mean, I think 
that there is a little bit of a--I sense a conflict between 
what we need, what has been requested, a temporary report, all 
the needs that have been stated today, and how these conflicts 
or the differences or the gaps between a temporary report and a 
final report to the Congress, I am concerned about that because 
it really comes under the umbrella of a plan for our country. 
So you can either respond now or respond in writing.
    And, Dr. Fauci, your testimony today, again, represents a 
great deal of hope, very exciting research and I think that it 
is good news for our country and that we are moving ahead. So 
if you----
    Ms. Gerberding. I would like to answer----
    Ms. Eshoo. [continuing] address yourself----
    Ms. Gerberding. [continuing] your question quickly----
    Ms. Eshoo. [continuing] to this because I am concerned 
about the, you know, the stated commitment but the lack of a 
plan and a timeframe for it.
    Ms. Gerberding. I think it is very important to understand 
how preparedness works. A plan would not necessarily be a good 
idea because look at all of the things that have happened in 
the last----
    Ms. Eshoo. Well, why----
    Ms. Gerberding. [continuing] year----
    Ms. Eshoo. [continuing] wasn't that stated when the GAO 
requested one?
    Ms. Gerberding. Well, I am not sure what the GAO is 
thinking, but we are intent on having a framework so that we 
can continuously update and improve. And I will ask Dr. Gellin 
because this plan right now is in his hands. And we are very 
intent on getting the stakeholders who have to execute the 
plan----
    Ms. Eshoo. So there is a----
    Ms. Gerberding. [continuing] to have a voice in that 
process.
    Ms. Eshoo. [continuing] temporary plan now and you are 
moving toward a final plan? And is that----
    Ms. Gerberding. There are elements of the plan that we 
already all agree on, and we are acting on those elements. 
There----
    Ms. Eshoo. Will there be----
    Ms. Gerberding. [continuing] are some elements----
    Ms. Eshoo. [continuing] a final plan?
    Ms. Gerberding. [continuing] that still have to be worked 
out. One of them----
    Ms. Eshoo. Will there be a final plan----
    Ms. Gerberding. [continuing] was mentioned----
    Ms. Eshoo. --Dr. Gellin, which will then be brought back 
and reported to the Congress, and if so, when?
    Mr. Gellin. Well, there will be a final plan in the sense 
that these plans are evergreen and that we know that they will 
continue to be revised. That said, I think the distinction 
between the moving ahead versus the final plan is more of how 
we are addressing the pandemic threats. You have heard from Dr. 
Gerberding and Dr. Fauci many of the specifics going into 
things that we are doing now because we are so concerned about 
the threat of the H5N1 virus and the bubbling up of other 
viruses around the world.
    But the plan itself, as I mentioned, was lacking a few key 
policy decisions, but we put it out for public comment and we 
were seeking the input from others because we felt this was so 
important and it could affect every American, we wanted 
everyone potentially engaged in that. So while a large part of 
that framework is completed, some of those components, the 
distribution and control of vaccines, as we were just talking 
about----
    Ms. Eshoo. But do you have a plan for a final plan? When do 
you anticipate----
    Mr. Gellin. Plan for----
    Ms. Eshoo. [continuing] bringing back----
    Mr. Gellin. This summer.
    Ms. Eshoo. [continuing] something that is----
    Mr. Gellin. This summer.
    Ms. Eshoo. [continuing] rounded out----
    Mr. Gellin. As I mentioned there are a number----
    Ms. Eshoo. [continuing] but perhaps to this committee----
    Mr. Gellin. Sure.
    Ms. Eshoo. [continuing] which has jurisdiction.
    Mr. Gellin. Well, we would be happy--we will post it for 
the world on our website and we will share with the World 
Health Organization when it is available. We would be glad to 
come and talk to you about it as well. We expect it will be 
completed----
    Ms. Eshoo. Do you anticipate approximately----
    Mr. Gellin. This summer.
    Ms. Eshoo. [continuing] when?
    Mr. Gellin. This summer.
    Ms. Eshoo. I mean is it 2 years from now or a year----
    Mr. Gellin. This summer.
    Ms. Eshoo. This summer?
    Mr. Gellin. This summer. As I said, there are a number of 
moving parts that are going to funnel into it, and we are 
hopeful that they are all going to be completed. The CDC is 
working on some, various advisory committees are working on 
them, and they are all anticipated to funnel in to fill the few 
gaps that were in the plan from last year this summer.
    Ms. Eshoo. Thank you. Thank you, Mr. Chairman.
    Mr. Deal. Thank you. The committee stands in recess.
    [Brief recess]
    Mr. Deal. The subcommittee will come back to order. I 
recognize Dr. Burgess for questions.
    Mr. Burgess. Thank you, Mr. Chairman. Dr. Gellin, on the 
issue of liability that inevitably comes up in a discussion 
like this, have you got any thoughts on the issue of liability 
and protection from liability that may enter into this 
discussion?
    Mr. Gellin. Well, specifically for this discussion, I think 
it is worth highlighting that the National Vaccine Injury 
Compensation Program that added the influenza vaccine to their 
compensation table this year added a trivalent vaccine, the 
current annual vaccine of three strains. And I believe that 
probably gives us some indication that a pandemic vaccine, 
which we all believe would likely be a monovalent strain of the 
pandemic strain wouldn't be covered by the compensation 
program. In my reading of the history of the Swine Flu epidemic 
in 1976, the manufacturers--I believe, and they will probably 
tell you about that--but produced vaccine but wouldn't release 
it until the liability question was solved. I think among the 
pieces of the preparedness plan, at least that have been 
highlighted as one that needs to be solved, is the one that is 
being worked on, but clearly needs to be solved before we can 
move forward. And a large response is that issue.
    Mr. Burgess. Thank you. And, Dr. Gellin, the vaccine 
shortage from last year, the utilization of information, 
lessons learned from that vaccine shortage, has that in any way 
helped us nationally plan for the pandemic flu response?
    Mr. Gellin. Absolutely. And I think that what your question 
really highlights is really the inseparable link between our 
annual influenza program and our preparedness for a pandemic. 
And that speaks probably to every component of that from 
communications to vaccine distribution to vaccine availability. 
So we learned many lessons last year. And I think that one of 
the other questions that needs to be addressed and is one of 
those key policy decisions that was intentionally left out of 
the plan because we wanted a larger discussion was the 
procurement and distribution and essentially the control of 
vaccine in a pandemic.
    It is worth highlighting that while we all think about flu 
shots and public health and therefore you think that this must 
be a public commodity, 85 percent, I believe, of the flu shots 
that are distributed annually are in the private sector. And I 
think that what we saw some last year is that the control of 
vaccine was really an impairment to the distribution of 
vaccine. Therefore, I think we need a vigorous discussion that 
goes into our policy decisions about procurement and control of 
a pandemic vaccine.
    Mr. Burgess. Thank you. Dr. Gerberding, Dr. Fauci talked 
about fast science and how good we are now at identifying 
things. The concept of syndromic surveillances is something 
that comes up from time to time. Are we making any effort to 
tie into any of the large drugstore chains to see when the 
sales of Kleenex and aspirin spike so that we could even be a 
little bit faster about trying to identify these outbreaks?
    Ms. Gerberding. Thank you. During this past flu season we 
did test out our system called BioSense, which allows us to 
import information from pharmacies as well as clinical visits 
in the VA and the Department of Defense sites across the 
country, of course, anonymously without revealing patient 
identifiers and a number of other related, surrogate health 
data short of actual patient visits to the hospital or 
clinician for influenza. And what we found was that our 
inputted information from over-the-counter purchases of flu-
type medications in conjunction with clinic visits in the 
Department of Defense and VA medical facilities allowed us in 
some jurisdictions to see the arrival of flu earlier than our 
conventional surveillance and with more precision at the local 
level than our conventional surveillance. For seasonal flu that 
is probably not particularly helpful to the public health and 
the doctors making the decisions, but in the case of something 
like exotic Avian Influenza or pandemic strain or SARS, the 
sooner we know that at the most local level, the sooner we can 
initiate isolation, quarantine, and other control measures. So 
we think this is definitely an investment that has proved its 
use, and we continue to evaluate it and improve it over the 
next year. So we actually appreciate the support that Congress 
has given us for the BioSense initiative.
    Mr. Burgess. Well, and also, of course, most of the agents 
that are discussed as far as Homeland Security, the 
bioterrorism agents would present with the same symptoms as an 
influenza outbreak?
    Ms. Gerberding. That is correct. There is always a dual 
purpose. Everything we do with flu helps us with terrorism 
preparedness and vice versa.
    Mr. Burgess. I guess, Dr. Gellin, Mr. Brown asked you about 
surge capacity in the provider market, and has there been any 
thought given to--you know, there are physicians out there who 
are licensed and capable but no longer insured because they 
might be retired, serving in Congress, any number of other 
occupations. And has there been any thought given to a limited 
liability protection during a crisis that would provide some of 
that surge capacity that you say we lack?
    Mr. Gellin. Well, I can't speak to that, but specifically 
for a pandemic response I don't know if that has been addressed 
in bioterrorism, but clearly we recognize that the kinds of 
numbers that you all have been aware of and have discussed with 
us, it would rapidly overwhelm the healthcare system and need 
to try to think of alternative levels of care and what it would 
take to allow that to happen.
    Mr. Burgess. Thank you. This has been a fascinating 
discussion this morning. I hope I can get continuing education 
hours. Thank you, Mr. Chairman.
    Mr. Deal. The gentleman from California, Mr. Waxman.
    Mr. Waxman. My colleague wants not only continuing 
education but a legal liability protection if he is called into 
service. Not unreasonable. Not unreasonable at all. Dr. 
Gerberding, we are going to hear on the next panel from sanofi-
aventis, the only company with a plant licensed to produce flu 
vaccine in the United States, and they also make several 
childhood vaccines, including vaccines to prevent polio, 
tetanus, and whooping cough. And the company is going to tell 
us that in the event of a pandemic, virtually all of their 
efforts would be directed toward a flu vaccine and production 
of other vaccines would plummet. Now, that might not be a 
problem if we have a stockpile of all the pediatric vaccines. 
Three years ago CDC pledged to fill this stockpile, but as the 
``Washington Post'' recently reported, very little progress has 
been made. Over 2 years ago sanofi-aventis raised the concern 
with CDC that an obscure accounting rule of the Securities and 
Exchange Commission was an obstacle to participation. The SEC 
issue has since been discussed in advisory committee meetings 
and CDC presentations and scholarly publications, yet for all 
this talk, very little action. And I just learned that 2 days 
ago, the SEC sent its first letter to the vaccine companies 
asking for more information. The SEC is hoping the companies 
will call by June 7 in order to schedule a conference call or a 
meeting.
    Now, if CDC was aware of the problem 2 years ago, why does 
it seem to be stuck at square one in May 2005, and what are you 
doing to express the urgency of this situation to Secretary 
Leavitt at HHS and Chairman Donaldson at SEC? When do you 
foresee this problem will be resolved? When can we expect the 
stockpile to be filled? This is not a complicated problem. We 
need vaccines for a stockpile so that we can protect children's 
lives. But the stockpile is now virtually empty and children 
are at risk, and if a high enough priority is placed on 
children's health by this administration, this problem should 
be able to be resolved I would think immediately. I know it is 
not your problem alone, but it is others' within the 
administration. When are we going to see action on this?
    Ms. Gerberding. This is a frustrating situation. For 20 
years we have been purchasing drugs for the pediatric supply 
using a method that served us very well, and suddenly a couple 
of years ago, as you mentioned, the accounting rule was noticed 
or interpreted differently than it had in the past, and some 
companies are concerned enough to no longer want to stockpile 
drugs and vaccines using the old methodology.
    We had a very difficult time getting an accountant with 
objectivity to help us because most of the accountants that we 
approached for contractual relationships have conflicts of 
interest because they also do work for PhRMA. So the process of 
getting the external advice and help that we needed took longer 
than you can imagine. It was a very frustrating situation, but 
the accountant is on board. We do have an objective accountant 
that I think we would all agree does not have a conflict of 
interest in how to arbitrate and negotiate a decision.
    I will be frank with you; I am not an expert in Securities 
and Exchange law, but I know that Secretary Leavitt and the 
department have been working hard to try to find some 
alternative strategy. The reason that we have managed the 
stockpile in this way is because we don't want to purchase 
vaccine and have it expire and not use it----
    Mr. Waxman. No, I understand that and----
    Ms. Gerberding. [continuing] so it is----
    Mr. Waxman. [continuing] it must be----
    Ms. Gerberding. The solution is expensive----
    Mr. Waxman. Yes.
    Ms. Gerberding. [continuing] and we are looking----
    Mr. Waxman. Well, it must be----
    Ms. Gerberding. Isn't there some----
    Mr. Waxman. [continuing] frustrating to you----
    Ms. Gerberding. [continuing] third way----
    Mr. Waxman. [continuing] and it is frustrating to everybody 
involved. One person suggesting putting people in the room and 
not letting them out until they have resolved it. I want to 
express to you on my behalf, and maybe I speak for other 
members as well, if you need a special exemption in the law on 
this one issue in order to give comfort to the companies to 
produce the stockpile, if that is what it comes to, I would 
certainly support such an effort. So I just want to encourage 
you to push the secretary, who has so many other things on his 
mind, to not forget this one because it could blow up in our 
face.
    The key Federal program that supports State immunization 
activities is the 317 Program. It supports basic childhood 
immunization as well as resources and training directly related 
to pandemic flu preparedness, and for years States have raised 
concerns about Federal support. They say 317 is inadequate. 
Spending for vaccine planning staff has remained flat even 
though costs have risen. More than 15 States say they don't 
have the resources to provide routinely recommended vaccines 
such as a vaccine against the most common cause of meningitis 
to all children who need it.
    Last year Congress provided an extra $6 million for the 317 
Program, but then that money had to be diverted when we had the 
flu crisis. States have said they are not seeing the increase 
in funding even though they were told they would get it. Is 
this extra funding going for vaccine purchase, and if not, 
where it is going? I assume that is where it is going. Last 
fall CDC took money from the 317 Program to purchase flu 
vaccine. Has all the funding been restored to the 317 Program? 
Can you pledge that it will be fully restored?
    Ms. Gerberding. No, let me first say that use of 317 money 
for the IND vaccine has been fully restored, so we did not 
borrow from 317 on a permanent basis to pay for the vaccine. We 
reprogrammed through Congressional action to pay for those 
expenses through non-317 dollars. And overall there is a net 
increase in 317 support. I would also mention that we have 
record high immunization records of children across our Nation. 
So whatever difficulties the States are having, they have been 
able to get the best-ever vaccination rates in very difficult 
times, which I think is a testament to their incredible 
innovation and creativity under some pretty high pressure 
circumstances.
    Mr. Waxman. So it is your position that there really has 
not been a decline in 317 funds? The money has been restored 
and it is available?
    Ms. Gerberding. There is an actual, absolute increase in 
the funding for 317. But the other part of this that hasn't 
been resolved yet is the change in the Vaccine for Children 
Program that would allow a population of children that right 
now experience a coverage gap. Uninsured children in the 
country cannot get vaccine through the 317 Program in the 
locations where we would like them to be able to access it. And 
we are supporting a change in vaccines for children that would 
cover those children under the mandatory vaccination program so 
they would no longer be relying on 317 funds. That should help 
improve coverage.
    Mr. Waxman. Thanks. Well, it is an important program, and I 
just want to urge you to make sure that we have enough funds in 
there for the States to do their job.
    Ms. Gerberding. Thank you.
    Mr. Waxman. Thank you. Thank you, Mr. Chairman.
    Mr. Ferguson [presiding]. As we are waiting for members of 
the majority side to come back we will go to Mr. Allen.
    Mr. Allen. Thank you, Mr. Chairman. This is a question for 
the whole panel really. I am just wondering what your estimate 
is of the time it would take between identification of a 
pandemic strain and full-scale production of a vaccine against 
that strain? I know some assumption is built in there, but I 
wondered if you could give us your thoughts on that question.
    Ms. Gerberding. We face a similar situation every year 
because we see season flu emerge at the end of the regular flu 
season, and we have got to scale everything up to be able to 
produce the next vaccine for the fall. So 6 months is the best 
we can do right now under our current manufacturing processes. 
And part of the reason that the vaccine, the H5 vaccine, the 
two million doses is so important is because some of the 
regulatory steps to allow for good manufacturing practice 
approval, those hurdles have already been solved. And if we 
have to suddenly use the slightly different H5 strain or scale 
up the production of this one, we have cutoff a little bit of 
the regulatory barrier to the time. But egg production takes 
time. It takes time to get a seed virus and it takes time to 
grow it in eggs; it takes time to harvest it; it takes time to 
package it and test it and then distribute it. So we would have 
to count on a 6-month window before we would have full-scale 
global production.
    Mr. Fauci. Yes, I agree completely with Dr. Gerberding's 
estimate of the timeframe, Mr. Allen, but I would like to take 
the opportunity just for a few seconds to emphasize something I 
mentioned early on. And that is we should not assume that if we 
have a 6-month lead, if the virus evolves in a rather less-
than-abrupt but more gradual way, which is likely that it 
would, and we press the button and say we are going to go full-
scale now, even with that, the capacity for the number of doses 
we would have is still an important limiting factor. So it 
isn't as if overnight we are going to be able to get a vaccine 
for everyone who would need a vaccine. That is very important. 
The reason I bring it up--that is the bad news. The news that 
should spur us to do what we have spoken certainly to members 
of this committee before is by linking our preparedness for the 
regular, seasonal influenza with the preparedness for pandemic 
flu so that gradually we increase the usage of, the consistency 
of demand for, and the capacity for influenza vaccine such that 
we have a situation that on a regular year we are making 150 
million, 180 million. That would put us in much better stead to 
be able to respond in a very quick way if we indeed have to 
respond to a pandemic flu. That is extremely important.
    Mr. Allen. Okay. Thank you. Dr. Gellin, any difference of 
opinion?
    Mr. Gellin. No difference of opinion, but I want to sort of 
qualify and add a few things to what Drs. Gerberding and Fauci 
said. I think it is important to think about the entire 
timeframe. You signaled when it starts and when we have 
something. I think that really reinforces the importance of 
surveillance, to have the eyes, ears, and hands, and labs out 
there that can find that virus soon. And I think that we have 
gone ahead with this H5 projects, the several H5 projects 
really are evidence of that.
    The other piece is recognizing that when vaccine starts to 
come off the line that it is going to take a while for it to 
come off, which is again why a system other than eggs where you 
can have multiple things going on in parallel so the time to 
the first dose may be the same, but the number of doses you get 
subsequently may be greatly increased.
    Mr. Allen. Thank you. Let me do a related question. Because 
of concerns about how long it might take to develop a pandemic 
strain vaccine, the U.K. and France among other countries have 
already ordered sufficient supply of Tamiflu for about one-
fourth of their population. And according to press reports, the 
U.S. has only ordered for 1 percent of the population. Should 
we create a larger stockpile of Tamiflu? What is the timetable 
for ordering more supply? And sort of what level of funding 
would be necessary to do that?
    Ms. Gerberding. We have made the decision to increase our 
stockpile. Again, part of the resources that came through the 
supplement just recently, the last couple of weeks, may be used 
to do that. And we also intend to purchase more stockpile 
materials to combat flu and----
    Mr. Allen. Is there a number? About how much more do you 
think?
    Ms. Gerberding. I am not ready to give you an exact number 
today.
    Mr. Gellin. Let me make a distinction, which is important, 
because of what you have cited in the press. The difference 
between orders and actual what you have in stock, we have been 
worried about this for some period of time and went ahead and 
have secured the over two million treatment courses, enough to 
treat over two million people. And while other countries have 
signaled their intent to purchase more, it is going to be 
several years until that is delivered. I am sure the companies 
can fill you in on that. And in the meantime few are going to 
have to have a strategy to be able to prioritize those who 
would be first in line in a limited supply. But I think that is 
where our--we have actually emphasized both the antivirals and 
the vaccine, recognizing that these are the only two medical 
countermeasures that we might have, neither of them perfect, 
but we need to do what we could with both of them.
    Mr. Allen. Thank you all.
    Mr. Ferguson. Ms. Baldwin.
    Ms. Baldwin. Thank you, Mr. Chairman. I wanted to further 
pursue two of the questions that I raised in my opening 
statement. First, regarding planning and preparedness on a 
global scale--and I was pleased to hear in your testimony about 
Secretary Leavitt addressing the World Health Assembly and 
elevating this issue.
    Some of the experts at home and abroad have even gone as 
far as describing what a formalized global flu pandemic effort 
should look like, including some sort of global taskforce, 
outbreak management teams with some sort of centralized 
management. Is anything happening to achieve these right now, 
and does anything like what I have just described exist?
    Ms. Gerberding. Thank you. I attended the World Health 
Assembly with Dr. Gellin and Secretary Leavitt and others this 
year. I also attended the assembly last year, and I can tell 
you that there has been a sea change of interest and focus on 
influenza in the last year. The meetings were incredibly well-
attended and some very specific actions, steps, and subsequent 
plans were laid out that I think will lead to action.
    But what we are doing, in addition to what the World Health 
Organization is doing, is to use the supplemental resources 
that we were provided, $15 million this past week to CDC and 
another $10 million to USAID to specifically focus right now on 
Southeast Asia. And we are in the process of developing very 
specific capabilities that would include improving the local 
ability to identify cases and to get the frontline lab test 
done, as well as augmenting the training of the many health 
aids and clinicians and public health officials that would need 
to engage to improve the infrastructure, particularly in the 
Mekong Delta countries.
    So we haven't finalized that plan; we are still working on 
it because we are working in collaboration with USAID and the 
Department of Defense as well as the Ministers of Health and 
the World Health Organization. But I think this is going to 
give us a giant step forward in our ability to do something 
right now in the region to really do exactly what you are 
suggesting needs to be done.
    Mr. Gellin. And if I could, I will just speak to that in a 
different way. The World Health Organization in 1999 put out 
the first Pandemic Influenza Preparedness Plan framework and 
asked that all countries follow that. As you can imagine, that 
would ease communication when people would have a similar 
understanding of where they were in a pandemic. They regionally 
revised that, and I think it was last December or January, 
which again forces us to change our plan, which speaks again to 
the fact that these plans will continue to evolve. But again 
the one that will come out this summer will follow the WHO 
framework.
    I think it does speak to what Dr. Gerberding mentioned and 
reinforced that people recognize the definition of a pandemic 
is a global problem, and all the countries, those affected and 
those who might be affected, are in this together.
    Ms. Gerberding. I got the International Health Regulations 
approved at the World Health Assembly so member nations voted 
approval of new requirements that would mandate countries to 
report any condition that could pose an international health 
threat with specific mention of influenza and SARS-like 
illness.
    Ms. Baldwin. Thank you. The other issue that I wanted to 
pursue in greater depth--this question is for you, Dr. Gellin--
is the component of public education preparedness in that 
sense. And I think back to how information was disseminated 
when we had the anthrax attacks, what level of preparation 
there was for that in terms of public awareness. And obviously 
there was certainly some elements of panic, et cetera. Tell me 
if you will--and you alluded to this in your testimony that 
there are elements in place and moving forward--what are they? 
What sort of strategies do you have to educate the public and 
maybe also working with the media?
    Mr. Gellin. Well, I think there is a lot that has begun to 
be put in place, and I guess I would actually put it in terms 
of a two-way discussion. Education sounds like we are going to 
tell you what we know, but we also want to have that as a 
discussion that goes both ways. So there are a number of things 
that are now being developed. There are going to be some--I 
mean I don't know if they are precisely town hall meetings, but 
ways to go out and have discussion with representatives of the 
public. I think part of the challenge is going to be the 
separation of pandemic influenza from regular influenza, 
recognizing the challenges of that every year.
    And I think it was ironic that last year, when we put out 
our draft plan on August 26, it was the day that Chiron first 
announced that they were having trouble. So our intention to 
put that plan out away from the flu season specifically to try 
to separate pandemic influenza from influenza changed. But I 
think that we are probably all living with the fact that 
influenza and pandemic influenza seem to be everyday 
discussions.
    Ms. Baldwin. Have these town hall meetings begun to happen 
or are they in the pipeline? What----
    Mr. Gellin. In the pipeline. The----
    Ms. Gerberding. There are other things that have been going 
on as well. We have ongoing focus groups, particularly in 
follow-up to last year's flu vaccine. One critical question we 
need to know is will clinicians still want to offer flu 
vaccine. So we have been doing surveys to get answers to what 
will target audiences do under various circumstances of supply 
or severity of flu.
    We have also, through out preparedness investments in the 
States, created a whole curriculum on risk communication, and 
all States now have risk communicators in the State Health 
Department or the Governor's office who are experienced at 
explaining things to the public in times of high stress and 
emotional conduct. And we have exercised those.
    Unfortunately, many times in the last several months 
through the many non-flu-related outbreaks and tsunamis and 
hurricanes that we have experienced, but we are finding that 
capacity has grown dramatically since anthrax. We know from 
that kind of formative research that although government 
leaders are very important in setting the stage for the 
communication, the person that people most want to hear 
information from is their own doctor. And so targeting the 
clinicians as a component of the educational--it is absolutely 
critical at the local level.
    Mr. Ferguson. With that we will conclude our first panel. I 
want to thank our witnesses, Dr. Gerberding, Dr. Fauci, Dr. 
Gellin, thank you very much for being here today. Thank you for 
the work that you do on behalf of the healthcare of the 
American people. And I will invite the witnesses for our second 
panel to come to the witness table. I know Chairman Deal had 
introduced our second panel earlier in the hearing but very 
briefly by way of introduction, our second panel includes Dr. 
Marcia Crosse, the Director of Health Care Issues at GAO; Mr. 
Phillip Hosbach, Vice President of Immunization Policy and 
Government Relations at sanofi pasteur; Dr. Ralph Tripp, 
Professor and GRA Chair at the University of Georgia College of 
Veterinary Medicine, Department of Infectious Diseases; Dr. 
Andrew Pavia, Infectious Diseases Society of America; and Dr. 
Dominick Iacuzio, Medical Director at Hoffmann-La Roche. Thank 
you all very much for being here. We appreciate your presence. 
Dr. Crosse, we will begin with you. Just turn on your 
microphone if you would. Thank you.

  STATEMENTS OF MARCIA CROSSE, DIRECTOR, HEALTH CARE ISSUES, 
   UNITED STATES GOVERNMENT ACCOUNTABILITY OFFICE; ANDREW T. 
 PAVIA, CHAIRMAN, TASKFORCE ON PANDEMIC INFLUENZA, INFECTIOUS 
DISEASES SOCIETY OF AMERICA, AND PROFESSOR AND CHIEF, DIVISION 
 OF PEDIATRIC INFECTIOUS DISEASES, UNIVERSITY OF UTAH MEDICAL 
 CENTER; PHILLIP HOSBACH, VICE PRESIDENT, IMMUNIZATION POLICY 
AND GOVERNMENT RELATIONS, SANOFI-PASTEUR; DOMINICK A. IACUZIO, 
   MEDICAL DIRECTOR, HOFFMANN-LA ROCHE; AND RALPH A. TRIPP, 
CHAIRMAN, GEORGIA RESEARCH ALLIANCE, AND PROFESSOR, DEPARTMENT 
   OF INFECTIOUS DISEASES, UNIVERSITY OF GEORGIA, COLLEGE OF 
                      VETERINARY MEDICINE

    Ms. Crosse. I am pleased to be here today as you discuss 
issues regarding our preparedness to respond to an influenza 
pandemic. We have heard today already about the threat posed by 
Avian Influenza. As many members noted, while the extent of the 
next pandemic cannot be predicted, modeling studies suggest 
that its effects in the United States could be severe.
    You asked us to provide our perspective on the Nation's 
ability to conduct disease surveillance for an influenza 
pandemic, as well as preparedness for such a pandemic. In my 
testimony I will briefly discuss surveillance systems and the 
challenges that remain in preparedness and response.
    There are a number of systems in place to identify 
influenza outbreaks abroad, to alert us to a pandemic, and 
these systems generally appear to be working well. HHS has 
taken important steps to enhance surveillance. Given the global 
nature of disease, a pandemic that begins abroad could quickly 
spread to this country. Public health officials plan to rely on 
the Nation's existing influenza surveillance system and recent 
enhancements to identify an influenza pandemic. CDC currently 
collaborates with multiple public health partners, as we heard, 
including WHO to obtain data that provide national and 
international pictures of influenza activity.
    Public health officials and healthcare organizations have 
undertaken several initiatives that may be expected to enhance 
influenza surveillance. While some of these initiatives are 
focused more generally on increasing preparedness for 
bioterrorism and emerging infectious diseases, others have been 
undertaken specifically in preparation for an influenza 
pandemic. For example, in response to concerns over the past 
few years about Avian Influenza, CDC implemented an initiative 
in cooperation with WHO to improve influenza surveillance in 
Asia, which Dr. Gerberding discussed.
    CDC has also implemented initiatives to improve public 
health communications systems it uses to collect and 
disseminate surveillance information for many diseases. In 
addition, CDC, FDA, and the Department of Agriculture have made 
efforts to enhance their coordination of surveillance efforts 
for animal diseases that can be transferred to humans such as 
SARS and certain strains of influenza.
    While public health officials have undertaken several 
initiatives to enhance influenza surveillance capabilities, 
challenges remain with regard to other aspects of preparedness 
and response. The steps HHS is taking to address these 
challenges may not be in place in time to fill the current gaps 
in preparedness should an influenza pandemic occur in the next 
several years.
    One area of concern is the supply of vaccine and antiviral 
drugs. As we learned in the 2004-2005 influenza season, the 
vaccine supply is fragile. It takes many months to produce 
vaccine and problems with even a single manufacturer can result 
in vaccine shortages.
    Further, as was extensively discussed in the first panel, 
our current stockpile of antiviral drugs is insufficient to 
meet the likely demand in a pandemic. HHS is working to expand 
vaccine production capacity and to stockpile vaccine and 
antiviral drugs, but it will be years before these preparations 
are in place.
    Other challenges in preparedness and response exist across 
the public and private sectors. Regulatory, privacy, and 
procedural issues surrounding measures to control the spread of 
disease must be addressed. And both the public and private 
sectors must resolve issues related to an insufficient hospital 
capacity and health workforce for responding to a large-scale 
outbreak such as an influenza pandemic. A pandemic would have 
major impacts on the ability of communities to respond, 
businesses to function, and public safety to be maintained.
    Finally, since 2000 we have been urging the department to 
complete its pandemic plan. A draft plan was issued in August 
2004, but the plan has not been finalized. Our concern is not 
whether the plan is modified and updated on the basis of 
experience or events, but absent a completed Federal plan, key 
questions remain unanswered. Some decisions yet to be made 
include: determining the Federal role and the public versus 
private sector role in the purchase, distribution, and 
administration of vaccines and antiviral drugs; how population 
groups will be prioritized for vaccination; what quarantine 
authorities or travel restrictions may need to be invoked; and 
how Federal resources should be deployed during a pandemic. It 
is important for the Federal Government and the States to work 
through these issues before we are in a time of crisis.
    Mr. Chairman, this concludes my prepared statement. I would 
be happy to answer any questions you or other members of the 
subcommittee may have. Thank you.
    [The prepared statement of Marcia Crosse follows:]

Prepared Statement of Maria Crosse, Director, Health Care, Uited States 
                    Government Accountability Office

    Mr. Chairman and Members of the Subcommittee: I am pleased to be 
here today as you discuss issues regarding the nation's preparedness to 
respond to a worldwide influenza epidemic, or influenza 
pandemic.1 The emergence of new diseases such as severe 
acute respiratory syndrome (SARS) has raised concerns about our ability 
to respond to other infectious disease outbreaks such as an influenza 
pandemic,2 which many experts believe to be inevitable. 
Vaccine shortages and distribution problems during the 2004-2005 
influenza season add to these concerns.
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    \1\ An influenza pandemic is defined by the emergence of a novel 
influenza virus, to which much or all of the population is susceptible, 
that is readily transmitted person-to-person and causes outbreaks in 
multiple countries.
    \2\ See GAO, SARS Outbreak: Improvements to Public Health Capacity 
Are Needed for Responding to Bioterrorism and Emerging Infectious 
Diseases, GAO-03-769T (Washington, D.C.: May 7, 2003).
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    Influenza pandemics arise periodically but unpredictably from a 
major genetic change in the virus that results in a new 
strain.3 Some experts believe that the next pandemic could 
be spawned by the recurring avian influenza in Asia. As of May 19, 
2005, 97 people, mostly young and otherwise healthy, have been 
confirmed by the World Health Organization (WHO) to have been infected 
with avian influenza since 2003, and 53 of them have died. Recent 
studies suggest that avian influenza strains are increasingly capable 
of causing severe disease in humans and suggest that these strains have 
become endemic in some wild birds. If these avian influenza strains 
directly infect humans and acquire the ability to be readily 
transmitted between people, a pandemic could occur.
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    \3\ Influenza pandemics can have successive ``waves'' of disease 
and last for up to 3 years. Three pandemics occurred in the 20th 
century: the ``Spanish flu'' of 1918, which killed 500,000 people in 
the United States; the ``Asian flu'' of 1957, which caused 70,000 
deaths in the United States; and the ``Hong Kong flu'' of 1968, which 
caused 34,000 deaths in the United States.
---------------------------------------------------------------------------
    While the severity of the next pandemic cannot be predicted, 
modeling studies suggest that its effect in the United States could be 
severe. The Centers for Disease Control and Prevention (CDC) estimates 
that if a ``medium-level'' influenza pandemic were to occur in the 
United States, in the absence of any control measures (e.g., 
vaccination and drugs), it could cause 89,000 to 207,000 deaths, 
314,000 to 734,000 hospitalizations, 18 million to 42 million 
outpatient visits, and another 20 million to 47 million cases of the 
illness.4 From 15 percent to 35 percent of the U.S. 
population could be affected by an influenza pandemic, with associated 
costs ranging from $71 billion to $167 billion.
---------------------------------------------------------------------------
    \4\ See CDC, Fact Sheet, Information about Influenza Pandemics, 3, 
www.cdc.gov/flu, downloaded May 12, 2005.
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    You asked us to provide our perspective on the nation's ability to 
conduct disease surveillance 5 for an influenza pandemic, as 
well as the public health system's preparedness for an influenza 
pandemic. In this testimony, I will discuss (1) surveillance systems in 
place to identify and monitor an influenza pandemic and (2) challenges 
in preparedness and response to an influenza pandemic.
---------------------------------------------------------------------------
    \5\ Disease surveillance is the process of reporting, collecting, 
analyzing, and exchanging information related to cases of infectious 
diseases.
---------------------------------------------------------------------------
    My testimony today is based largely on our 2004 report on disease 
surveillance 6 as well as reports and testimony on influenza 
outbreaks, influenza vaccine supply, pandemic planning, and the SARS 
outbreak that we have issued since October 2000 7 and work 
we have conducted to update key information. Our prior work on disease 
surveillance and influenza pandemics included analysis of information 
provided by multiple federal departments and agencies, including the 
Department of Health and Human Services (HHS)--specifically from CDC 
and the Food and Drug Administration (FDA)--and the Departments of 
Agriculture, Defense, and Homeland Security, as well as interviews with 
officials of those departments and agencies. We also interviewed public 
health department officials from 11 states,8 vaccine 
manufacturers, and vaccine distributors and surveyed physician group 
practices. To learn about pandemic planning efforts, we interviewed HHS 
officials in the National Vaccine Program Office and reviewed HHS's 
August 2004 draft ``Pandemic Influenza Preparedness and Response 
Plan.'' Our prior work on the SARS outbreak included analysis of 
information provided by U.S. agencies, WHO, and Asian governments, as 
well as interviews with officials from those entities. We also 
conducted fieldwork on SARS in Beijing; Hong Kong; Guangdong Province, 
China; and Taipei, Taiwan. In May 2005, we updated our information to 
include issues that arose during the 2004-2005 influenza season and to 
verify the current status of HHS efforts on surveillance, planning, and 
preparedness activities. We conducted all of our work in accordance 
with generally accepted government auditing standards.
---------------------------------------------------------------------------
    \6\ See GAO, Emerging Infectious Diseases: Review of State and 
Federal Disease Surveillance Efforts, GAO-04-877 (Washington, D.C.: 
Sept. 30, 2004).
    \7\ See ``Related GAO Products'' at the end of this testimony for a 
list of our earlier work related to emerging infectious diseases and 
influenza pandemic planning.
    \8\ These states--California, Colorado, Indiana, Louisiana, 
Minnesota, New York, Pennsylvania, Tennessee, Texas, Washington, and 
Wisconsin--were selected based on their participation in CDC's Emerging 
Infections Program, each state's most recent infectious disease 
outbreak, and their geographic location.
---------------------------------------------------------------------------
    In summary, federal public health officials plan to rely on the 
nation's existing influenza surveillance system and enhancements to 
identify an influenza pandemic. CDC currently collaborates with 
multiple public health partners, including WHO, to obtain data that 
provide national and international pictures of influenza activity. 
Federal public health officials and health care organizations have 
undertaken several initiatives that are intended to enhance influenza 
surveillance capabilities. While some of these initiatives are focused 
more generally on increasing preparedness for bioterrorism and other 
emerging infectious disease health threats, others were undertaken in 
preparation for an influenza pandemic. For example, in response to 
concerns over the past few years about the potential for avian 
influenza to become the next influenza pandemic, CDC implemented an 
initiative in cooperation with WHO to improve influenza surveillance in 
Asia. CDC has also implemented initiatives to improve the 
communications systems it uses to collect and disseminate surveillance 
information. In addition, CDC, USDA, and FDA have made efforts to 
enhance their coordination of surveillance efforts for diseases that 
arise in animals and can be transferred to humans, such as SARS and 
certain strains of influenza with the potential to become pandemic.
    While public health officials have undertaken several initiatives 
to enhance influenza surveillance capabilities, challenges remain with 
regard to other aspects of preparedness for and response to an 
influenza pandemic. In particular, HHS has not finalized planning for 
an influenza pandemic. In 2000, we recommended that HHS complete the 
national plan for responding to an influenza pandemic, but the plan has 
been in draft format since August 2004. Absent a completed federal 
plan, key questions about the federal role in the purchase, 
distribution, and administration of vaccines and antiviral drugs during 
a pandemic remain unanswered. Other challenges with regard to 
preparedness for and response to an influenza pandemic exist across the 
public and private sectors, including challenges in ensuring an 
adequate and timely influenza vaccine and antiviral supply; addressing 
regulatory, privacy, and procedural issues surrounding measures to 
control the spread of disease, for example, across national borders; 
and resolving issues related to an insufficient hospital and health 
workforce capacity for responding to a large-scale outbreak such as an 
influenza pandemic.

                               BACKGROUND

    To be prepared for major public health threats such as an influenza 
pandemic, public health agencies need several basic capabilities, 
including disease surveillance systems. Specifically, to detect cases 
of pandemic influenza, especially before they develop into widespread 
outbreaks, local, state, and federal public health officials as well as 
international organizations collect, analyze, and share information 
related to cases of the disease. When effective, surveillance can 
facilitate timely action to control outbreaks and promote informed 
allocation of resources to meet changing disease conditions.
Influenza
    Influenza is more severe than some other viral respiratory 
infections, such as the common cold. Most people who get influenza 
recover completely in 1 to 2 weeks, but some develop serious and 
potentially life-threatening medical complications, such as pneumonia. 
People aged 65 and older, people of any age with chronic medical 
conditions, children younger than 2 years, and pregnant women are more 
likely than other people to develop severe complications from 
influenza. Influenza and pneumonia rank as the fifth leading cause of 
death among persons aged 65 and older.
    Influenza viruses undergo minor but continuous genetic changes from 
year to year. Almost every year, an influenza virus causes acute 
respiratory disease in epidemic proportions somewhere in the world. 
Vaccination is the primary method for preventing influenza and its more 
severe complications. Influenza vaccine is produced and administered 
annually to provide protection against particular influenza strains 
expected to be prevalent that year. Influenza vaccine takes several 
months to produce. Deciding which viral strains to include in the 
annual influenza vaccine depends on data collected from domestic and 
international surveillance systems that identify prevalent strains and 
characterize their effect on human health. FDA decides which strains to 
include in the vaccine and also licenses and regulates the 
manufacturers that produce the vaccine.9 HHS has limited 
authority, however, to directly control influenza vaccine production 
and distribution.10
---------------------------------------------------------------------------
    \9\ FDA decides which strains to include in the annual influenza 
vaccine based on the recommendations of its Vaccines and Related 
Biological Products Advisory Committee.
    \10\ Under the Federal, Food, Drug and Cosmetic Act, FDA ensures 
compliance with good manufacturing practices and has limited authority 
to regulate the resale of prescription drugs, including influenza 
vaccine, that have been purchased by health care entities, such as 
public or private hospitals. The term ``health care entity'' does not 
include wholesale distributors. This authority would not extend to 
resale of the vaccine for emergency medical reasons. CDC also has a 
role in encouraging appropriate public health actions.
---------------------------------------------------------------------------
    FDA has approved four antiviral medications (amantadine, 
rimantadine, oseltamivir, and zanamivir) for prevention and treatment 
of influenza. However, influenza virus strains can become resistant to 
one or more of these drugs, and so they may not always be effective.
Disease Surveillance and Response
    In the United States, responsibility for disease surveillance is 
shared--involving health care providers; more than 3,000 local health 
departments, including county, city, and tribal health departments; 59 
state and territorial health departments; more than 180,000 public and 
private laboratories; and public health officials from multiple federal 
departments and agencies.
    States, through the use of their state and local health 
departments, have principal responsibility for protecting the public's 
health and therefore take the lead in conducting disease surveillance 
and supporting response efforts. According to the Institute of Medicine 
(IOM), most states require health care providers to report any unusual 
illnesses or deaths--especially those for which a cause cannot be 
readily established--to their local and/or state health 
department.11 Generally, local health departments are 
responsible for conducting initial investigations into reports of 
infectious diseases. Laboratory personnel test clinical and 
environmental samples for possible exposures and identification of 
illnesses. Epidemiologists in health departments use disease 
surveillance systems to detect clusters of suspicious symptoms or 
diseases in order to facilitate early detection and treatment. Local 
and state health departments monitor disease trends. Local health 
departments are also responsible for sharing information they obtain 
from providers or other sources with their state departments of health. 
State health departments are responsible for collecting surveillance 
information--which they share on a voluntary basis with CDC and 
others--from across their state and for coordinating investigations and 
response efforts. Public health officials provide needed information to 
the clinical community and the public.
---------------------------------------------------------------------------
    \11\ The requirement to report clinically anomalous symptoms is 
particularly important for the detection of emerging infectious 
diseases, many of which may be unfamiliar to health care providers.
---------------------------------------------------------------------------
    At the federal level, several departments and agencies are involved 
in disease surveillance and response. For example,

 HHS has primary responsibility for coordinating the nation's response 
        to public health emergencies. As part of its mission, the 
        department has a role in planning to prepare for and respond to 
        an influenza pandemic. One action the department has taken is 
        the development of a draft national pandemic influenza plan, 
        titled ``Pandemic Influenza Preparedness and Response Plan.''
 CDC is charged with protecting the nation's public health by 
        directing efforts to prevent and control diseases and 
        responding to public health emergencies. It has primary 
        responsibility for conducting national disease surveillance and 
        developing epidemiological and laboratory tools to enhance 
        disease surveillance. CDC also provides an array of technical 
        and financial support for state infectious disease surveillance 
        efforts. In addition, CDC participates in international disease 
        and laboratory surveillance sponsored by WHO.
 FDA is responsible for ensuring that new vaccines and drugs are safe 
        and effective and for conducting research on diagnostic tools 
        and treatment of disease outbreaks. The agency also regulates 
        and licenses vaccines and antiviral agents through the Center 
        for Biologics Evaluation and Research and the Center for Drug 
        Evaluation and Research, respectively. FDA also develops 
        influenza viral reference strains and reagents and makes them 
        available to manufacturers for vaccine development and 
        evaluation.
 The Department of Defense (DOD) contributes to global disease 
        surveillance, training, research, and response to emerging 
        infectious disease threats. DOD maintains the DOD Influenza 
        Surveillance Program, a laboratory-based surveillance program. 
        DOD maintains multiple sites throughout the world that serve as 
        sentinels for disease outbreaks, where it collects and analyzes 
        viral specimens.
 The Department of Agriculture (USDA) is responsible for protecting 
        and improving the health and marketability of animals and 
        animal products by preventing, controlling, and eliminating 
        animal diseases. USDA undertakes disease surveillance and 
        response activities to protect U.S. livestock, ensure the 
        safety of international trade, and contribute to the national 
        zoonotic disease 12 surveillance effort.
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    \12\ Zoonotic diseases are those diseases that are transmitted from 
animals to humans.
---------------------------------------------------------------------------
    The United States is a member of WHO, which is responsible for 
coordinating international disease surveillance and response efforts. 
An agency of the United Nations, WHO administers the International 
Health Regulations, which outline WHO's role and the responsibility of 
member countries and regions in preventing the global spread of 
infectious diseases. WHO also helps marshal resources from its members 
to control outbreaks within individual countries or regions. In 
addition, WHO works with national governments to improve their 
surveillance capacities through--for example--assessing and redesigning 
national surveillance strategies, offering training in epidemiologic 
and laboratory techniques, and emphasizing more efficient communication 
systems.

 EXISTING INFLUENZA SURVEILLANCE SYSTEM AND ENHANCEMENTS WOULD BE USED 
                   TO IDENTIFY AN INFLUENZA PANDEMIC

    Surveillance is a key component in planning for an influenza 
pandemic, and federal public health officials plan to rely on the 
nation's existing annual influenza surveillance system and enhancements 
to identify an influenza pandemic. Federal public health officials have 
undertaken several initiatives that are intended to enhance influenza 
surveillance capabilities. These initiatives have been undertaken both 
through programs specific to influenza as well as through programs 
focused more generally on increasing preparedness for bioterrorism and 
other emerging infectious disease health threats. Federal officials 
have implemented and expanded syndromic surveillance systems 
13 in order to detect outbreaks more quickly, but there are 
concerns that these systems are costly to run and still largely 
untested. Federal officials have also implemented initiatives designed 
to improve public health communications and have undertaken initiatives 
intended to improve the coordination of zoonotic surveillance efforts.
---------------------------------------------------------------------------
    \13\ Many syndromic surveillance systems currently in use in the 
United States were developed in response to the September 11, 2001, 
attacks on the World Trade Center and Pentagon and to the anthrax 
outbreaks that occurred shortly afterwards. The fundamental objective 
of syndromic surveillance is to identify illness clusters early, before 
diagnoses are confirmed and reported to public health agencies.
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Systems Are in Place to Routinely Monitor for Influenza
    Current U.S. surveillance for identifying annual influenza 
outbreaks as well as an influenza pandemic involves multiple public 
health partners at all levels of government and relies on several data 
sources. At the federal level, CDC's Influenza Branch leads the 
national influenza surveillance effort, monitoring disease and viral 
trends using data submitted each week from October through May. These 
surveillance data are collected at the local and state levels and 
voluntarily submitted to CDC. Data submitted on influenza activity in 
the United States include data from more than 120 laboratories and 
2,000 health care providers and mortality reports from 122 cities. In 
addition, influenza data are collected from all 50 state health 
departments and the health departments in the District of Columbia and 
New York City. CDC also receives data that are specifically focused on 
influenza in pediatric patients. When the data are used collectively, 
they provide a national picture of influenza activity. Specifically, 
they allow CDC to (1) identify when and where influenza activity is 
occurring, (2) determine what strains of the influenza virus are in 
circulation, (3) detect changes in the influenza virus, (4) monitor 
flu-related illnesses, and (5) measure the impact influenza is having 
on deaths in the United States.
    DOD also plays a role in national and international influenza 
surveillance. Specifically, DOD's Influenza Surveillance Program, under 
the direction of the Air Force, collects viral specimens from its 
active duty personnel and their dependents at military facilities 
around the world. DOD's program also sends specimens to CDC for further 
analysis and contributes to the determination of which viral strains 
FDA includes in the nation's annual influenza vaccine. Internationally, 
DOD provides viral specimens to WHO and assists in identifying emerging 
influenza strains.
    In countries throughout the world, infectious disease surveillance 
is a national responsibility, but WHO assists its members' efforts 
through its Global Influenza Surveillance Network. WHO's Network is 
composed of 112 institutions, called National Influenza Centres, from 
83 countries. Collectively, these Centres monitor influenza activity 
and annually gather more than 175,000 viral specimens for analysis from 
patients with influenza-like illnesses throughout the world. Selected 
influenza isolates--an estimated 2,000 viruses--may also be sent to one 
of four WHO Collaborating Centres 14 for further, more 
specific genetic analysis. The additional analysis conducted by the WHO 
Collaborating Centers is used for the annual WHO recommendations on 
which strains to include in the influenza vaccine for the northern and 
southern hemispheres. In addition to making recommendations on the 
components of the influenza vaccine, this Global Influenza Surveillance 
Network also serves as a global alert mechanism for the emergence of 
influenza viruses with pandemic potential.
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    \14\ A WHO Collaborating Centre is a national institution 
designated by WHO to form part of an international collaborative 
network that contributes to implementing WHO's program priorities and 
to strengthening institutional capacity in countries and regions. 
Collaborating Centre activities include collection and dissemination of 
information, education and training, and participation in collaborative 
research developed under WHO's leadership. The four Collaborating 
Centres that are part of WHO's Global Influenza Surveillance Network 
are located in the United States, Australia, Japan, and the United 
Kingdom.
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Federal Agencies Have Undertaken Initiatives to Enhance Influenza 
        Surveillance
    CDC has undertaken several initiatives that are intended to enhance 
influenza surveillance capabilities in preparation for an influenza 
pandemic. CDC works with its international partners to improve global 
surveillance for influenza. For example, CDC participates in 
international disease and laboratory surveillance sponsored by WHO. 
Also, when concerns were raised over recent influenza seasons that the 
avian influenza A (H5N1) could become the next influenza pandemic, CDC 
led a variety of efforts with its international partners to plan for 
and address threats of increased influenza activity worldwide. For 
example, CDC worked collaboratively with WHO to conduct investigations 
of avian influenza A in Vietnam and to provide laboratory testing. CDC 
also provided training assistance and has implemented an initiative to 
improve influenza surveillance in Asia.
    CDC also supports several domestic initiatives to improve 
surveillance capabilities for influenza. For example, CDC supports 
enhanced influenza surveillance activities through its Epidemiology and 
Laboratory Capacity (ELC) Grants. Established in 1997, this program 
provides funding to state and local influenza programs. Grants have 
steadily increased from the first awards in 1997, when less than 
$100,000 was provided to five states through August 2004, with funding 
totaling more than $2 million being given to about 47 states or major 
metropolitan areas. States and cities receiving ELC-influenza funding 
are encouraged to achieve three highlighted influenza epidemiology and 
laboratory surveillance capacities: sentinel physician surveillance, 
viral isolation and subtyping, and year-round surveillance. Each state 
targets funding to meet one or more of these three priorities and uses 
funding for support of improvements that include the assignment or 
hiring of an influenza coordinator, recruitment of sentinel physicians 
to collect influenza specimens and report influenza-like illness to the 
state, laboratory infrastructure enhancements to increase influenza 
testing capabilities for viral isolation and subtyping, and expansion 
of influenza surveillance activities to year-round.
    In an effort to enhance the ability to detect infectious disease 
outbreaks, particularly in their early stages, federal funding has 
supported state efforts to implement numerous syndromic surveillance 
systems. These systems collect information on syndromes from a variety 
of sources. For example, the National Retail Data Monitor (NRDM) 
collects data from retail sources instead of hospitals. As of February 
2004,--NRDM collected sales data from about 19,000 stores, including 
pharmacies, in order to monitor sales patterns in such items as over-
the-counter influenza medications for signs of a developing infectious 
disease outbreak.
    CDC is taking steps to enhance its two public health communications 
systems, the Health Alert Network (HAN) 15 and the Epidemic 
Information Exchange (Epi-X),16 which are used in disease 
surveillance and response efforts. For example, CDC is working to 
increase the number of HAN participants who receive assistance with 
their communication capacities. In addition, following reports of human 
deaths from avian influenza A in Vietnam in August 2004, CDC issued a 
HAN message reiterating criteria for domestic surveillance, diagnostic 
evaluation, and infection control precautions. CDC also issued detailed 
laboratory testing procedures for avian influenza through HAN. 
Similarly, CDC has expanded Epi-X by giving officials at other federal 
agencies and departments, such as DOD, the ability to use the system. 
CDC is also adding users to Epi-X from local health departments, giving 
access to CDC staff in other countries, and making the system available 
to Field Epidemiology Training Programs (FETP) located in 21 
countries.17 Finally, CDC is facilitating Epi-X's interface 
with other data sources by allowing users to access the Global Public 
Health Intelligence Network (GPHIN), the system that searches Web-based 
media for information on infectious disease outbreaks worldwide.
---------------------------------------------------------------------------
    \15\ The Health Alert Network (HAN) is an early-warning and 
response system operated by CDC that is designed to ensure that state 
and local health departments as well as other federal agencies and 
departments have timely access to emerging health information.
    \16\ The Epidemic Information Exchange (Epi-X) is a secure, Web-
based communication system operating in all 50 states. CDC uses this 
system primarily to share information relevant to disease outbreaks 
with state and local public health officials and with other federal 
officials. Epi-X also serves as a forum for routine professional 
discussions and nonemergency inquiries.
    \17\ In selected foreign locations, CDC operates international 
training programs, such as FETP. Through FETP, each year CDC trains 
approximately 50 to 60 physicians and social scientists in applied 
public health, integrating disease surveillance, applied research, 
prevention, and control activities. Graduates of the FETP program serve 
in their native country and provide links between CDC and their 
respective ministries of health. CDC officials said that trainees from 
its international programs have frequently provided important 
information on disease outbreaks.
---------------------------------------------------------------------------
    In addition to the efforts to enhance communication systems, 
federal public health officials also have enhanced federal coordination 
for zoonotic disease surveillance and expanded training programs. 
According to CDC, nearly 70 percent of emerging infectious disease 
episodes during the past 10 years have been zoonotic diseases. 
Moreover, recent outbreaks of human disease caused by avian influenza 
strains in Asia and Europe highlight the potential for new strains to 
be introduced into the population. Surveillance for zoonotic diseases 
requires collaboration between animal and human disease specialists. 
CDC, USDA, and FDA have made efforts to enhance their coordination of 
zoonotic disease surveillance. For example, CDC and UDSA are working 
with two national laboratory associations to add veterinary diagnostic 
laboratories to the Laboratory Response Network (LRN).18 As 
of May 2004, 10 veterinary laboratories had been added to LRN, and CDC 
officials told us that they had plans to add more veterinary 
laboratories in the future. In addition, CDC officials told us the 
agency has appointed a staff person whose responsibility, in part, is 
to assist in finding ways to enhance zoonotic disease coordination 
efforts among federal agencies and departments and with other 
organizations. This person is helping CDC develop a working group of 
officials from CDC, USDA, and FDA to coordinate zoonotic disease 
surveillance.19 According to CDC officials, the goal of this 
working group is to explore ways to link existing surveillance systems 
to better coordinate and integrate surveillance for wildlife, domestic 
animal, and human diseases. CDC officials also said that the agency is 
exploring the feasibility of a pilot project to demonstrate this 
proposed integrated zoonotic disease surveillance system. In addition, 
USDA officials told us that they hired 23 wildlife biologists in fall 
2003 to coordinate disease surveillance, monitoring, and management 
activities among USDA, CDC, states, and other federal agencies. While 
each of these initiatives is intended to enhance the surveillance of 
zoonotic diseases, each is still in the planning stage or the very 
early stages of implementation.
---------------------------------------------------------------------------
    \18\ To strengthen the nation's capacity to rapidly detect 
biological and chemical agents that could be used as a terrorist 
weapon, CDC, in partnership with the Federal Bureau of Investigation 
and the Association of Public Health Laboratories, created LRN in 1999. 
According to CDC, LRN leverages the resources of 126 laboratories to 
maintain an integrated national and international network of 
laboratories that are fully equipped to respond quickly to acts of 
chemical or biological terrorism, emerging infectious diseases, and 
other public health threats and emergencies. The network includes 
federal, state and local public health, military, and international 
laboratories, as well as laboratories that specialize in food, 
environmental, and veterinary testing. LRN laboratories have been used 
in several public health emergencies. For example, in 2001, a Florida 
LRN laboratory discovered the presence of Bacillus anthracis, the 
pathogen that causes anthrax, in a clinical specimen it tested.
    \19\ This working group was created in response to a congressional 
mandate that the Secretary of Health and Human Services, through FDA 
and CDC, and USDA, coordinate the surveillance of zoonotic diseases. 
Public Health Security and Bioterrorism Preparedness and Response Act 
of 2002, Pub. L. No. 107-188,  313, 116 Stat. 594, 674 (2002).
---------------------------------------------------------------------------
    USDA also conducts influenza surveillance in domestic animals. 
Coordination with USDA is important because a pandemic strain is likely 
to arise from genetic mixing of animal and human influenza viruses. 
Recent outbreaks in domestic poultry in Asia and Europe associated with 
cases of human disease highlight the importance of coordinating 
surveillance activities. Surveillance for influenza viruses in poultry 
in the United States has increased substantially since the outbreak of 
highly pathogenic avian influenza (HPAI) in Pennsylvania and 
surrounding states in 1983 and 1984. However, individual states are 
generally responsible for the development and implementation of 
surveillance programs that are consistent with the size and complexity 
of the resident poultry industry.

   DESPITE EFFORTS BY FEDERAL OFFICIALS, CHALLENGES REMAIN REGARDING 
         PREPAREDNESS FOR AND RESPONSE TO AN INFLUENZA PANDEMIC

    Challenges regarding the nation's preparedness for and response to 
an influenza pandemic remain. Specifically, our prior work has found 
that although CDC participated in an interagency working group that 
developed the U.S. plan for pandemic preparedness that was posted for 
public comment in August 2004, as of May 23, 2005, the plan had not 
been finalized. Further, we found that the draft plan does not address 
certain critical issues, including how vaccine for an influenza 
pandemic will be purchased, distributed, and administered; how 
population groups will be prioritized for vaccination; what quarantine 
authorities or travel restrictions may need to be invoked; and how 
federal resources should be deployed. At the state level, we found that 
most hospitals across the country lack the capacity to respond to 
large-scale infectious disease outbreaks.

HHS's Pandemic Influenza Plan Remains in Draft and Leaves Many 
        Important Issues Unresolved
    In August 2004, HHS released its national pandemic influenza plan 
for comment. The draft ``Pandemic Influenza Preparedness and Response 
Plan'' describes HHS's role in coordinating a national response to an 
influenza pandemic and provides guidance and tools to promote pandemic 
preparedness planning and coordination at the federal, state, and local 
levels, including both the public and the private sectors. However, as 
of May 23, 2005, this document remained in draft form. Further, 
although the plan is comprehensive in scope, it leaves many important 
decisions unresolved about the purchase, distribution, and 
administration of vaccines. For example, some decisions yet to be made 
include determining the public- versus private-sector roles in the 
purchase and distribution of pandemic influenza vaccines; the division 
of responsibility between the federal government and the states for 
vaccine distribution; and how population groups will be prioritized and 
targeted to receive limited supplies of vaccines. Until these key 
decisions are made, public health officials at all levels may find it 
difficult to plan for an influenza pandemic, and the timeliness and 
adequacy of response efforts may be compromised.
    The draft plan does not establish a definitive federal role in the 
purchase and distribution of vaccines during an influenza pandemic. 
Instead, HHS provides options for vaccine purchase and distribution 
that include public-sector purchase and distribution of all pandemic 
influenza vaccine; a mixed public-private system where public-sector 
supply may be targeted to specific priority groups; and maintenance of 
the current largely private system. In its draft plan, HHS does not 
recommend a specific alternative.
    Furthermore, the draft plan delegates to the states responsibility 
for distribution of vaccine. The lack of a clearly defined federal role 
in distribution complicates pandemic planning for the states. 
Furthermore, among the current state pandemic influenza plans, there is 
no consistency in terms of their procurement and distribution of 
vaccine and the relative role of the federal government. Approximately 
half of the states handle procurement and distribution of the annual 
influenza vaccine through the state health agency. The remainder either 
operate through a third-party contractor for distribution to providers 
or use a combination of these two approaches.

Challenges Persist in Ensuring an Adequate and Timely Influenza Vaccine 
        Supply
    Challenges persist in ensuring an adequate and timely influenza 
vaccine supply. The number of producers remains limited, and the 
potential for manufacturing problems such as those experienced during 
the 2004-2005 influenza season is still present. When one 
manufacturer's production is affected, providers who order vaccine from 
that manufacturer can experience shortages, while providers who receive 
supplies from another manufacturer may have all the vaccine they need. 
The allocation plan CDC developed for this past season's shortage was 
dependent upon voluntary compliance by the private sector and 
individuals to forgo vaccination. Most annual influenza vaccine 
distribution and administration are accomplished within the private 
sector, with relatively small amounts of vaccine purchased and 
distributed by CDC or by state and local health departments. In the 
United States, 85 percent of vaccine doses are purchased by the private 
sector, such as private physicians and pharmacies. HHS has not yet 
determined how influenza vaccine will be distributed and administered 
during an influenza pandemic.
    There are many issues surrounding the production of influenza 
vaccine, which will only become exacerbated during an influenza 
pandemic. Vaccines, which are considered the first line of defense to 
prevent or reduce influenza-related illness and death, may be 
unavailable or in short supply. Producing the vaccine is a complex 
process that involves growing viruses in millions of fertilized chicken 
eggs. Experience has shown that the vaccine production cycle takes at 
least 6 to 8 months after a virus strain has been identified, and 
vaccines for some influenza strains have been difficult to mass-
produce, causing further delay. The lengthy process for developing a 
vaccine may mean that a vaccine would not be available during the 
initial stages of a pandemic.
    Vaccine shortages during the 2004-2005 influenza season have 
highlighted the fragility of the influenza vaccine market and the need 
for its expansion and stabilization. Currently only two manufacturers 
are licensed to sell their vaccine in the United States.20 
Maintaining an influenza vaccine supply is critically important for 
protecting the public's health and improving our preparedness for an 
influenza pandemic. As a result, according to CDC officials, the agency 
plans to alleviate the impact of next year's influenza season by taking 
aggressive steps to ensure an expanded influenza supply to protect the 
nation. To this end, the agency's fiscal year 2006 budget request 
includes an increase of $30 million for CDC to enter into guaranteed 
purchase contracts with vaccine manufacturers to ensure the production 
of bulk monovalent influenza vaccine. If supplies fall short, this bulk 
product can be turned into a finished trivalent influenza vaccine 
product for annual distribution. If supplies are sufficient, the bulk 
vaccine can be held until the following year's influenza season and 
developed into vaccines if the circulating strains remain the same. In 
addition, according to CDC, this guarantee will help to expand the 
influenza market by providing an incentive to manufacturers to expand 
capacity and possibly encourage additional manufacturers to enter the 
market. In addition, the fiscal year 2006 budget request includes an 
increase of $20 million to support influenza vaccine purchase 
activities.
---------------------------------------------------------------------------
    \20\ During the 2004-2005 influenza season, the license for a third 
manufacturer was suspended by British regulatory authorities due to 
safety concerns with the vaccine.
---------------------------------------------------------------------------
    Even if sufficient quantities of the vaccine are produced in time, 
vaccines against various strains differ in their ability to produce the 
immune response necessary to provide effective protection against the 
disease. Studies show that it is uncertain how effective a vaccine will 
be in preventing or controlling the spread of a pandemic influenza 
virus.

Challenges Persist in Ensuring an Adequate Supply of Antiviral Drugs
    Early in an influenza pandemic, especially before a vaccine is 
available or during a period of limited vaccine supply, use of 
antiviral drugs may have a significant effect. Specifically, antiviral 
drugs can help prevent or mitigate the number of influenza-related 
deaths until an influenza vaccine becomes available. They can be used 
against all strains of pandemic influenza and have immediate 
availability as both a prophylactic to prevent illness and as a 
treatment if administered within 48 hours of the onset of symptoms. 
According to HHS, analysis is ongoing to define optimal antiviral use 
strategies, potential health impacts, and cost-effectiveness of 
antiviral drugs in the setting of a pandemic.
    The United States has a limited supply of influenza antiviral 
medications stored for an influenza pandemic. HHS officials expect the 
amount produced will be below demand during a pandemic. This 
assumption, supported by drug manufacturers, is based on the fact that 
current production levels of antiviral drugs are set in response to 
current demand, whereas demand in a pandemic is expected to increase 
significantly if vaccines are unavailable. In addition, the production 
of antiviral medications cannot be rapidly expanded and involves a long 
production process--at least 6 to 9 months. Moreover, sometimes 
influenza virus strains can become resistant to one or more of the four 
approved influenza antiviral drugs, and thus the drugs may not always 
work. For example, the influenza A (H5N1) viruses identified in human 
patients in Asia in 2004 and 2005 have been resistant to two of the 
four antiviral drugs, amantadine and rimantadine.

Implementation of Control Measures to Prevent Spread of Pandemic 
        Influenza Present Difficulties
    Another challenge in responding to an influenza pandemic involves 
implementing certain control measures to prevent the spread of the 
disease. These control measures--case identification and contact 
tracing, transmission control, and exposure management--are well-
established and have proved effective in both health care and community 
settings.21 Federal attempts to limit the spread of SARS 
into the United States by advising passengers who traveled to infected 
countries faced multiple obstacles. For example, due to airline 
concerns over authority and privacy, as well as procedural constraints, 
CDC was unable to obtain passenger contact information it needed to 
trace travelers. Although HHS has statutory authority to prevent the 
introduction, transmission, or spread of communicable diseases from 
foreign countries into the United States,22 HHS regulations 
implementing the statute do not specifically provide for HHS to obtain 
passenger manifests or other passenger contact information from 
airlines and shipping companies for disease outbreak control 
purposes.23
---------------------------------------------------------------------------
    \21\ In the United States, the Healthcare Infection Control 
Practices Advisory Committee, a federal advisory committee made up of 
14 infection control experts, develops recommendations and guidelines 
regarding general infectious disease control measures for CDC. Expert 
recommendations include (1) case identification and contact tracing, 
which involves defining what symptoms, laboratory results, and medical 
histories constitute a positive case in a patient and tracing and 
tracking individuals who may have been exposed to these patients; (2) 
transmission control, which involves controlling the transmission of 
disease-producing microorganisms through use of proper hand hygiene and 
personal protective equipment, such as masks, gowns, and gloves; and 
(3) exposure management, which involves separating infected and 
noninfected individuals.
    \22\  Section 361 of the Public Health Service Act, 42 U.S.C.  
264.
    \23\ See 42 C.F.R pts 70 and 71; 21 C.F.R. pts 1240 and 1250.
---------------------------------------------------------------------------
Most Hospitals Lack the Capacity to Respond to Large-Scale Infectious 
        Disease Outbreaks
    A challenge identified during the SARS outbreak that may also 
affect response efforts during an influenza pandemic is lack of 
sufficient hospital and workforce capacity. This lack could be 
exacerbated during an influenza pandemic, compared to other natural 
disasters, such as a tornado or hurricane, or an intentional release of 
a bioterrorist agent, because it is likely that a pandemic would result 
in both widespread and sustained effects.
    Public health officials we spoke with said a large-scale outbreak, 
such as an influenza pandemic, could strain the available capacity of 
hospitals by requiring the use of entire hospital sections (along with 
their staff) to be used as isolation facilities. As we have reported 
earlier, most states lack ``surge capacity,'' that is, the capacity to 
respond to the large influx of patients that could occur during a large 
public health emergency.24 For example, few states reported 
that they had the capacity to evaluate, diagnose, and treat 500 or more 
patients involved in a single incident. In addition, few states 
reported having the capacity to rapidly establish clinics to immunize 
or provide treatment to large numbers of patients. Moreover, a shortage 
in workforce could increase during an influenza pandemic because higher 
disease rates could result in high rates of absenteeism among health 
care workers who are likely to be at increased risk of exposure and 
illness.
---------------------------------------------------------------------------
    \24\ See GAO, Public Health Preparedness: Response Capacity 
Improving, but Much Remains to be Accomplished, GAO-04-458T 
(Washington, D.C.: Feb. 12, 2004).
---------------------------------------------------------------------------
                        CONCLUDING OBSERVATIONS

    There are a number of systems in place to identify influenza 
outbreaks abroad, to alert us to a pandemic, and these systems 
generally appear to be working well. HHS has taken important steps to 
enhance surveillance and to fund initiatives for preparedness and 
response, including steps to increase the vaccine supply.
    However, important challenges remain in our preparedness to 
respond, should an influenza pandemic occur in the United States. The 
steps HHS is taking to address vaccine production capacity and 
stockpiling of antiviral drugs may not be in place in time to fill the 
current gaps in preparedness should an influenza pandemic occur in the 
next several years. As we learned in the 2004-2005 influenza season, 
problems affecting even a single manufacturer can produce major 
shortages. Once a pandemic influenza strain is identified, a vaccine 
will take many months to produce, and our current stockpile of 
antiviral drugs is insufficient to meet the likely demand. Pandemic 
influenza would have major impacts on the ability of communities to 
respond, businesses to function, and public safety to be maintained 
when communities across the country are simultaneously impacted and 
hospital capacity is overwhelmed.
    Since 2000, we have been urging the department to complete its 
pandemic plan. A draft plan was issued in August 2004, with a 60-day 
period for public comment, but as of this week, the plan had not been 
finalized. It is important for the federal government and the states to 
work through issues such as how vaccine will be purchased, distributed, 
and administered, how population groups will be prioritized for 
vaccination, what quarantine authorities or travel restrictions may 
need to be invoked, and how federal resources should be deployed before 
we are in a time of crisis.
    Mr. Chairman, this concludes my prepared statement. I would be 
happy to respond to any questions you or other Members of the 
Subcommittee may have at this time.
Contact and Staff Acknowledgments
    For further information about this testimony, please contact Marcia 
Crosse at (202) 512-7119. Gloria E. Taylor, Gay Hee Lee, Elizabeth T. 
Morrison, and Roseanne Price made key contributions to this statement.

                          RELATED GAO PRODUCTS

    Emerging Infectious Diseases: Review of State and Federal Disease 
Surveillance Efforts. GAO-04-877. Washington, D.C.: September 30, 2004.
    Infectious Disease Preparedness: Federal Challenges in Responding 
to Influenza Outbreaks. GAO-04-1100T. Washington, D.C.: September 28, 
2004.
    Emerging Infectious Diseases: Asian SARS Outbreak Challenged 
International and National Responses. GAO-04-564. Washington, D.C.: 
April 28, 2004.
    Public Health Preparedness: Response Capacity Improving, but Much 
Remains to Be Accomplished. GAO-04-458T. Washington, D.C.: February 12, 
2004.
    Infectious Diseases: Gaps Remain in Surveillance Capabilities of 
State and Local Agencies. GAO-03-1176T. Washington, D.C.: September 24, 
2003.
    Severe Acute Respiratory Syndrome: Established Infectious Disease 
Control Measures Helped Contain Spread, But a Large-Scale Resurgence 
May Pose Challenges. GAO-03-1058T. Washington, D.C.: July 30, 2003.
    SARS Outbreak: Improvements to Public Health Capacity Are Needed 
for Responding to Bioterrorism and Emerging Infectious Diseases. GAO-
03-769T. Washington, D.C.: May 7, 2003.
    Infectious Disease Outbreaks: Bioterrorism Preparedness Efforts 
Have Improved Public Health Response Capacity, but Gaps Remain. GAO-03-
654T. Washington, D.C.: April 9, 2003.
    Global Health: Challenges in Improving Infectious Disease 
Surveillance Systems. GAO-01-722. Washington, D.C.: August 31, 2001.
    Flu Vaccine: Steps Are Needed to Better Prepare for Possible Future 
Shortages. GAO-01-786T. Washington, D.C.: May 30, 2001.
    Flu Vaccine: Supply Problems Heighten Need to Ensure Access for 
High-Risk People. GAO-01-624. Washington, D.C.: May 15, 2001.
    Influenza Pandemic: Plan Needed for Federal and State Response. 
GAO-01-4. Washington, D.C.: October 27, 2000.
    West Nile Virus Outbreak: Lessons for Public Health Preparedness. 
GAO/HEHS-00-180. Washington, D.C.: September 11, 2000.
    Global Health: Framework for Infectious Disease Surveillance. GAO/
NSIAD-00-205R. Washington, D.C.: July 20, 2000.

    Mr. Ferguson. Thank you very much. Dr. Pavia.

                  STATEMENT OF ANDREW T. PAVIA

    Mr. Pavia. Yes. Mr. Chairman, members of the committee, 
thank you very much for inviting the IDSA to make its opinion 
felt and heard about pandemic influenza. I am Andrew Pavia. I 
am Chair of the Infectious Diseases Society of America's 
Taskforce on Pandemic Influenza and also professor of Pediatric 
Infectious Disease and chief at the University of Utah.
    IDSA, so that you know, represents over 8,000 infectious 
disease experts, including all three of the members of the 
first panel and soon to be Mr. Green's daughter, who work in 
taking care of patients with the most severe infectious disease 
and conducting laboratory research and in public health. And 
let me be very clear that although this is a mixed panel, I am 
speaking on behalf of the physicians, our patients, and the 
public health.
    Like everyone else who has spoken today, IDSA believes that 
the next pandemic is inevitable, but more importantly, we 
believe that the evidence suggests that it may be imminent. We 
don't know whether H5N1, Avian Flu, will be the next pandemic 
strain. We don't know how severe the next pandemic will be. We 
do know, however, that it will occur, and we know that the 
severity is going to be somewhere between severe and 
catastrophic.
    For all that you have heard it is hard to overemphasize or 
exaggerate the potential impact of a pandemic. You heard the 
figures for CDC's estimate of the mortality and impact of a 
moderate pandemic. Their same estimates suggest that if we have 
a pandemic with a virus that has the severity equivalent to 
1918, that it would result in between .9 and 2.2 million deaths 
and four to ten million hospitalizations. Now, imagine the 
economic impact of paying for four to ten million 
hospitalizations. And I am going to come back to the economics 
a little bit because some of the countermeasures require 
sufficient funding.
    As we think about the economic impact, these figures have 
not been fully worked out, but as was pointed out in 
yesterday's ``Wall Street Journal'' editorial and by several 
analysts, it is likely that even a mild pandemic would bring 
global economies to a halt, it would devastate the agriculture, 
and it would probably pose a grave threat to national security. 
If you think about the costs that we have seen from relatively 
mild epidemics before, consider SARS. Fewer than 8,000 people 
were sickened and about 800 died, and yet the estimate is that 
for countries affected in Southeast Asia, the cost ranged 
between .2 and 1.8 percent of their GDP. The city of Toronto 
lost over $1 billion alone. These are the kind of figures that 
you need to think about when you think about the cost of the 
countermeasures.
    Now, I want to be very clear that pandemic influenza has 
received a great deal of attention from the government, from 
Congress, and we are very grateful. And you have heard a great 
deal about what is being done at the Federal Government level 
in the earlier panel. And I want to point out that NVPO in 
particular has taken a leadership position in this, and that is 
very, very important. However, as of today, the IDSA believes 
that the United States is woefully unprepared for a pandemic 
that might occur in the next few years.
    We have many recommendations in our written testimony, and 
I am going to focus my remaining comments on areas where 
scientists alone can't deal with the problem, and it requires 
activity by policymakers. The first and foremost is adequate 
funding of our public health efforts. And IDSA has recommended 
not only restoring the cuts in the CDC budget, but appropriate 
increases. And I think that that goes across the board for our 
public health infrastructure.
    Many have pointed out the fragility of our vaccine supply 
as highlighted by the events of last fall. But I think what we 
haven't emphasized is that the capacity to produce vaccine is 
really the critical issue. And the same holds true for 
antivirals. It is assumed by most experts in the event of a 
crisis we are going to be totally dependent on what can be 
produced domestically. And if we look at the capacity to 
produce vaccine domestically, we can make between 60 and 70 
million doses of trivalent vaccine. That means that perhaps 
with a monovalent vaccine we could produce 180 million doses 
after a lag time of about 6 months and a year to produce that 
180 million doses. The estimate is we would need two doses for 
every man, woman, and child in the United States, or 600 
million doses. Clearly, we are either going to have to 
dramatically increase the capacity to produce vaccine or the 
efficiency with which it can be produced or the number of 
people we can immunize with a given amount of vaccine.
    To that end a great deal of progress has been made. You 
have heard from HHS and from NIH about the beginnings of 
programs to fund improvements in the efficacy of vaccine 
production and ways to look at antigen-sparing techniques that 
would use less vaccine. I think that if we look at it 
objectively, when my question, whether it is too little and 
whether it might be too late, but in order to have a robust 
response we need more capacity to produce vaccine domestically. 
That means we need a dramatically greater use of vaccine year-
in, year-out. And to that end I think that Congress can have a 
role in increasing incentives for companies to enter the 
vaccine market so that we have a more diverse production and 
that we use more vaccine in every year.
    Now, I think it is also worth pointing out that every 
dollar we spend on countermeasures for pandemic flu--I promise 
this isn't Avian Influenza--no coughing--that every dollar we 
spend on pandemic flu will yield an annual benefit in 
preventing lives lost for our yearly flu epidemics.
    I want to turn our attention for a moment to stockpile. 
That has come up before. And I have to respectfully disagree 
with what Dr. Gerberding said earlier. An expert panel that is 
advising the National Vaccine Advisory Committee that will go 
into the pandemic plan feels that in the first 6 months of an 
epidemic the use of antivirals will be a major tool that we 
have, if not the only tool, to decrease morbidity and mortality 
and to allow the vital functions of government and of the 
healthcare system to continue.
    To that end we need to have an adequate stockpile. IDSA's 
leadership, perhaps as a strawman, has suggested that we 
purchase enough antivirals to treat 50 percent of the United 
States population. Now, we know that our allies in Europe have 
planned on purchasing enough to treat between 20 and 25 
percent. All of these numbers are crudely derived. There are 
more scientific efforts underway to figure out what the actual 
need would be. But it will likely range between 60 million and 
150 million doses. The 2.3 million doses we have in the U.S. 
stockpile currently are clearly inadequate.
    The cost of purchasing antivirals for the stockpile is 
going to be considerable. It can't be redirected from existing 
health resources. It can't be redirected from within HHS. And 
it is going to require considerable outside appropriation. But 
as I hope I have made clear, the costs of not doing something 
will far exceed the cost of developing a stockpile.
    Another issue that is important is that the entire 
production of oseltamivir or Tamiflu, as of today, is made in 
Switzerland. And as I mentioned earlier, it may not be 
available to the United States in a time of crisis.
    A question was asked about indemnification earlier. We have 
learned from past experiences that in 1976 that the 
manufacturers were reluctant to release vaccine in the absence 
of liability productions. We learned 2 years ago in the 
attempts to provide small pox immunization that hospitals and 
providers were reluctant to give small pox vaccine without 
having some form of indemnification against problems that 
arose.
    And a third problem is how are we going to compensate 
people who might be injured by an experimental vaccine? 
Clearly, we need to have some sort of vaccine injury 
compensation coverage for a pandemic vaccine.
    Mr. Ferguson. Dr. Pavia, I am just going to ask you to 
summarize, please.
    Mr. Pavia. Very good. I am going to stop my comments there. 
You can tell that I am a professor and used to having the 
floor. Only slightly worse, I suppose, than being a member. But 
thank you very much for having us and for the attention and the 
expertise that you bring today.
    [The prepared statement of Andrew T. Pavia follows:]

 Prepared Statement of Andrew T. Pavia, Infectious Diseases Society of 
                                America

    Chairman Deal, Ranking Member Brown, and Members of the House 
Energy and Commerce Health Subcommittee, thank you for inviting the 
Infectious Diseases Society of America (IDSA) to present our views on 
the U.S. preparedness for pandemic influenza and to allow us to share 
with you our perspective on activities needed to strengthen the 
nation's current approach. I am Dr. Andrew T. Pavia, chair of IDSA's 
Task Force on Pandemic Influenza, and professor and chief of the 
Division of Pediatric Infectious Diseases at the University of Utah 
Health Sciences Center and Primary Children's Hospital.
    IDSA represents nearly 8,000 infectious disease (ID) experts, many 
of whom administer the flu vaccine to patients, treat life-threatening 
complications of influenza, conduct vaccine and antiviral research, and 
implement influenza surveillance activities and other important 
influenza public health programs at the local, state, and federal 
levels. Let me be very clear from the onset: Although we are speaking 
on the same panel as our industry colleagues, our testimony is provided 
strictly for the good of public health and the patients whom we treat. 
IDSA is not here on behalf of the pharmaceutical or biotechnology 
industries nor is our advocacy financed in any way by industry.
     idsa is seriously concerned about the next influenza pandemic
    Like our colleagues in federal government, we believe that the next 
influenza pandemic is imminent. These predictions are primarily based 
upon the historic intervals between outbreaks as well as the increased 
spread and ominous behavior of the H5N1 avian influenza virus, which 
now is endemic among birds in much of Asia. We are very concerned that 
the H5N1 avian virus has shown the ability to mutate and has become 
capable of infecting mammals, including pigs, tigers, cats, and humans 
as well as birds. At least 97 confirmed human cases of H5N1 infections 
have been documented by the World Health Organization (WHO) since 
January 2004 with 53 deaths. A recent WHO consultants meeting found 
evidence of further mutation and a suggestion that person-to-person 
transmission might be occurring in Northern Vietnam. Should the virus 
become readily transmissible from human to human, the disease could 
easily spread beyond Asia's borders and initiate a global pandemic. The 
U.S. population has no immunity and therefore no protection against 
this deadly virus. Implications of Pandemic Influenza for the United 
States
    The impact of a pandemic influenza outbreak cannot be 
overemphasized. During the past century, influenza pandemics occurred 
in 1918, 1957, and 1968, with significant morbidity and mortality in 
both high-risk and healthy children and adults. These outbreaks cost 
the lives of hundreds of thousands of Americans. Historians now 
estimate that between 50 million and 100 million people died as a 
result of the 1918 influenza pandemic alone. More than half a million 
Americans died, many of them young adults in the prime of life. 
Although the 1956 and 1968 pandemics were not as severe, the current 
mortality rate among patients with H5N1 influenza is more than 50 
percent compared with 2.5 to 5 percent for the disastrous 1918 pandemic 
virus. The Centers for Disease Control and Prevention (CDC) has 
estimated that a pandemic as severe as the 1918 pandemic would cause 
between 0.9 and 2.2 million deaths and 4 million to 10 million 
hospitalizations in the United States.
    The next pandemic will cause much economic and social chaos. There 
will be a dramatic impact on the U.S. and global economies, and 
potentially on civil order and international security. Consider the 
billions of dollars of economic impact of the severe acute respiratory 
syndrome (SARS) epidemic. SARS was trivial in size and scope compared 
with even a modest flu pandemic.

                UNITED STATES IS NOT ADEQUATELY PREPARED

    Congress and the Administration have begun to realize the real 
threat that influenza poses to the United States as evident by the 
allocation of additional monies for influenza activities in recent 
years. The Administration has proposed an additional $120 million for 
influenza preparedness activities in the fiscal year 2006 budget to 
further strengthen pandemic influenza preparedness efforts. While 
welcome, this is a small investment. Additionally, the Department of 
Health and Human Services (HHS) recently proposed a thoughtful and 
scientifically based draft pandemic preparedness and response plan that 
lays out public health measures to counter a sudden worldwide influenza 
epidemic. IDSA has provided extensive comments on the plan and 
currently is participating on an HHS workgroup to develop specific 
policies and improve preparedness. CDC has worked to strengthen its 
scientific and epidemiologic capacity to respond. The National 
Institutes of Health (NIH) has begun efforts to develop vaccine for 
avian influenza and has increased support for other basic research.
    IDSA recognizes and appreciates the increasing level of federal 
support for U.S. preparedness efforts. However, IDSA agrees with the 
Institute of Medicine and virtually all experts who have concluded that 
the United States is at present woefully unprepared to respond to the 
next flu pandemic.
    Two promising strategies can decrease the impact of a flu pandemic. 
Vaccination is the primary strategy to prevent influenza during normal 
years and during a pandemic. The recent shortage of flu vaccine 
highlights the fragility of our nation's vaccine supply. We clearly 
need a greater capacity to produce vaccine. This means we must attract 
more vaccine manufacturers to produce influenza vaccine within our 
borders. It has been estimated that vaccinating the U.S. population 
against a pandemic flu strain might require 600 million doses of 
vaccine (two doses for each person might be needed). Even in a normal 
year, only 50 million to 60 million doses of vaccine can be 
manufactured in the United States. Counting doses of vaccine imported 
from abroad, about 90 million doses are used. In the best case, it will 
take four to six months to begin to produce a pandemic influenza 
vaccine. Unfortunately, only three influenza vaccine manufacturers 
currently produce flu vaccines for the U.S. market; only one of them 
produces its vaccine within the United States.
    Antiviral drugs would be the only available agents for treatment 
and prevention in the early phase of a pandemic. However, adequate 
supplies will not be available unless decisive action is taken. Global 
production of these agents is modest. If antivirals are to be available 
in an emergency they would need to be stockpiled in advance.
    Strengthening our pandemic influenza preparedness activities also 
will provide significant benefits during the typical ``interpandemic'' 
flu season when 36,000 American lives are lost and 200,000 are 
hospitalized each year. The same cannot be said for preparedness 
activities for intentional biological emergencies such as smallpox, 
which does not exist in nature, or anthrax, which is an extremely rare 
disease.

           POTENTIAL LEGISLATIVE AND ADMINISTRATIVE SOLUTIONS

    Considering the significance of the threat, IDSA has identified the 
following short and long term strategies to strengthen the U.S. level 
of preparedness and response to both interpandemic and pandemic 
influenza.

Secure vaccine and antiviral supplies.
    Adequate supplies of antivirals and if possible vaccine, need to be 
in place before a pandemic strikes, along with a plan to distribute 
them. More must be done to bring additional manufacturers into the 
vaccine business, particularly to develop domestic based companies so 
that the United States is not dependent on foreign suppliers. Increased 
use of vaccine during interpandemic years is needed to increase the 
manufacturing capacity. Without this strengthened capacity, we will be 
unable to meet the high demand that will occur during an influenza 
pandemic.
    Stockpiles of antiviral drugs are also essential. IDSA has proposed 
a stockpile of antivirals sufficient to treat 50 percent of the U.S. 
population. This stockpile will help to reduce mortality and allow 
vital services such as medical care and emergency services to continue. 
Clearly, the current stockpile, which could treat less than 2 percent 
of the U.S. population, is inadequate. The cost of developing an 
adequate stockpile cannot be paid for by shifting funds within HHS 
agencies; it will require a separate appropriation. Given the enormous 
burden of illness and death anticipated in a pandemic, however, this 
investment promises an excellent return. In addition, the entire 
production capacity for oseltamivir is located in Switzerland. As with 
influenza vaccines, IDSA fully supports the development of antiviral 
production capacities within the United States.
    It is essential that we develop a specific strategy to distribute 
antiviral drugs and vaccines to states, local health departments, and 
points-of-care. We support the effort currently underway by the 
Pandemic Influenza Working Group of the National Vaccine Advisory 
Committee (NVAC) to provide detailed estimates of the priorities for 
use of antivirals and the amount of drug needed to reach different 
target groups. This will provide more precise estimates of the size and 
cost of a stockpile needed to provide a specific level of benefit.
Advance Research and Development of Antivirals and Vaccines.
    Current manufacturing of influenza vaccine depends on egg-based 
technology that is 60 years old. It imposes limits on the ability to 
ramp up production and to work with strains that are lethal to eggs. 
Research and development of newer vaccines is vital. NIH has recently 
outlined funding for work on cell-culture based vaccine and for 
antigen-sparing approaches. These are vital efforts and should be 
accelerated. Equal attention needs to be paid to our ability to rapidly 
and safely license new technologies to produce new vaccines for 
widespread use. Truly innovative vaccines could be developed that do 
not need to be redesigned each year. Investment in this research could 
be extremely important but will take many years to realize a benefit.
    Research also is needed to develop new antivirals with anti-
influenza activity. We are currently dependent on a single agent, 
oseltamavir (also known as Tamiflu, an antiviral produced by Roche 
Pharmaceuticals). In the event H5N1 becomes a pandemic strain, this 
vulnerability will be dangerous.

Create tax incentives for U.S. vaccine and antiviral manufacturers.
    The United States does not have the manufacturing capacity to 
produce enough vaccine and antivirals to meet its needs in a pandemic. 
Tax credits should be offered to encourage companies to build new 
manufacturing facilities in this country so that the United States is 
not dependent on foreign suppliers. Tax incentives and patent 
extensions should be available for companies that conduct research and 
develop new anti-flu therapies.

Guarantee a market for influenza vaccines.
    Most pharmaceutical companies have left the vaccine business 
because demand is extremely unpredictable. Even last season, when there 
was a severe shortage of vaccine, millions of doses of flu vaccine went 
unused. To secure vaccine supplies for future influenza outbreaks, the 
government needs to guarantee it will buy a set amount of vaccine each 
season, and buy back a percentage of unsold vaccine at the end of each 
season.
    The Centers for Medicare and Medicaid Services (CMS) also has a 
critical role to play. The recent increase in the Medicare 
reimbursement for administration of flu vaccine, although long overdue, 
was a positive step. However, the current system still places 
physicians at financial risk, which may have consequences for patient 
access to vaccine. Physicians must purchase vaccine annually in advance 
of the flu season. Unused vaccine is then discarded at the end of the 
flu season. Physicians are not compensated for the unused product, 
which, of course, may make them less inclined to purchase vaccine in 
advance in future years. As all Medicare beneficiaries should receive 
annual influenza vaccine, CMS should consider how to purchase enough 
vaccine for Medicare patients in a manner that does not place 
physicians at risk.

Strengthen liability protection during emergency outbreak response.
    In case of a declared influenza emergency, it will be vital to 
immunize and treat large numbers of people. Even rare adverse reactions 
following vaccination and treatment would become more common when 
hundreds of millions are treated, and accelerated approval of new 
vaccines and treatments might not uncover all rare adverse events. 
Health care workers and medical facilities administering vaccines or 
treatments, as well as the companies that make them, should be 
protected from lawsuits stemming from adverse events so long as they 
follow standard medical and manufacturing procedures. A compensation 
fund similar in structure to the Vaccine Injury Compensation Fund 
should be established to cover the medical costs and lost earnings of 
anyone who develops complications due to vaccination or treatment.

Improve coordination, communication, and planning.
    Many federal, state, and local agencies have vital roles in 
preparedness, planning, and response. HHS should develop a detailed 
plan to coordinate pandemic response at all levels, from local to 
national to international, including links between federal authorities 
and clinicians throughout the country. HHS should also define CDC as 
the coordinating authority within the department. Moreover, there needs 
to be a clear ability to coordinate efforts between departments, 
including not only HHS, but also Defense, Agriculture (USDA), Homeland 
Security, and State.

Require health care workers to be vaccinated.
    Unfortunately, health care workers caring for sick people often 
spread patients' infections. In 2002, only 36 percent of U.S. health 
care workers received influenza vaccine. To improve patient safety, 
prevent unnecessary deaths and disease, and provide an example to 
patients, we believe that annual flu vaccination should be required for 
all health care workers who have contact with patients, with options to 
waive vaccination after signing an appropriate waiver.

Strengthen education.
    Health care workers and the public need to better understand the 
seriousness and potential impact of an influenza pandemic, as well as 
how to prevent and treat it.

Commit to international pandemic preparedness.
    A coordinated international effort is vital. The United States 
should work with other countries, particularly those most vulnerable, 
on plans to ensure that they have sufficient antiviral and vaccine 
supplies to protect their populations.

Strengthen the response of federal agencies.
    The Food and Drug Administration should ``fast-track'' vaccine and 
antiviral review, and streamline regulation of the manufacturing 
process. Congress should increase the CDC's budget for global 
surveillance to detect influenza strains with pandemic potential. The 
NIH budget also should be increased for research to identify and 
evaluate new methods to accelerate vaccine research and development. 
USDA should develop a plan for culling poultry or other livestock and 
compensating farmers in the event of a pandemic, if necessary.

                               CONCLUSION

    The United States remains unprepared for pandemic influenza that 
could kill millions of Americans over a short period of time with 
little warning. We may not have much time. The United States needs a 
rational, integrated, and comprehensive plan that will ensure an 
effective response. We also need a better-coordinated approach, both 
domestically and globally. If IDSA's recommendations are implemented, 
our nation will be better prepared for both the next pandemic and for 
influenza outbreaks that occur every year. As Winston Churchill said: 
``It is not enough to say, `We are doing our best.' You have got to 
succeed in doing what is necessary.''
    IDSA appreciates the opportunity to testify before the House Energy 
and Commerce Health Subcommittee today. We look forward to working with 
you in the coming months to develop federal legislation needed to 
strengthen U.S. efforts to prepare for the next influenza pandemic.
    Thank you. I will be happy to answer any questions.

    Mr. Ferguson. You are definitely in the right room. Mr. 
Hosbach.

                  STATEMENT OF PHILLIP HOSBACH

    Mr. Hosbach. Mr. Chairman, members of the committee, I 
would like to thank you for the opportunity to speak with you 
today and more importantly, for holding this critically 
important hearing.
    Sanofi pasteur is committed to working with the Federal 
Government to develop a safe and effective pandemic vaccine to 
protect the American public. Today I would like to outline four 
necessary steps to develop and administer a pandemic influenza 
vaccine.
    Sanofi pasteur is the world's largest influenza vaccine 
manufacturer. We produce vaccines against more than 20 
diseases. Worldwide we distribute almost one billion doses of 
vaccine annually. Our U.S. operations are located in 
Swiftwater, Pennsylvania where influenza vaccine has been 
produced for more than 30 years. Approximately 95 percent of 
that influenza vaccine that is made in Swiftwater is used 
exclusively in the United States.
    In the past decade sanofi pasteur has steadily increased 
U.S. production of influenza vaccine. Last year we produced 58 
million doses. We are in the final design stages of our 
influenza vaccine facility expansion and we also recently 
invested in a new expanded filling and packaging facility. Both 
of these projects will significantly expand our U.S. influenza 
vaccine production and capacity.
    As most of you know, vaccines by their very nature are 
challenging to develop, produce, and distribute. We believe the 
expertise of vaccine manufacturers, particularly those with a 
track record in influenza vaccine production and distribution 
should be utilized early in the planning process.
    The enormous public health threat posed by a pandemic 
prompted sanofi pasteur to take specific steps for a 
comprehensive pandemic strategy, including the formation of a 
global working group to examine preparedness, production, 
distribution, and communication issues. We have cooperated with 
HHS exchanging ideas on how best to prepare for and respond to 
a pandemic.
    In addition, we entered into several contracts with the 
Federal Government. We received two H5N1 pandemic influenza 
vaccine contracts, as mentioned by Dr. Fauci. In accordance 
with these agreements, we delivered 8,000 investigational doses 
of H5N1 vaccine to NIH for the clinical trials that have 
already started. We also produced two million H5N1 bulk doses 
at large scale.
    Sanofi pasteur also received a contract to establish and 
maintain flocks of egg-laying hens on a year-round basis. As 
you know, eggs are utilized early in the stages of vaccine 
production, and prior to this agreement, were only available on 
a seasonal basis. Finally, sanofi pasteur was awarded a 
contract to speed development of a cell culture influenza 
vaccine in the United States.
    Mr. Chairman, we are encouraged by the increased attention 
pandemic planning is receiving from the government, industry, 
international agencies, and key stakeholders. However, the 
failure to address critical challenges could aversely affect 
our ability to respond to a pandemic. I would like to outline 
four steps necessary to develop and administer a pandemic 
influenza vaccine.
    First, we need to steadily increase inter-pandemic 
immunization rates. Manufacturers will produce additional 
vaccine to meet predicatble demand. Steady and sustained 
increase in inter-pandemic demand will give manufacturers the 
confidence to continue expansion plans and new companies an 
incentive to enter the marketplace. To achieve this all key 
stakeholders need to work together to encourage higher 
influenza immunization rates. As a Nation, we have never 
immunized more than 85 million people in any given year. We can 
and must do better.
    Second, we need to ensure proper combination of private and 
public sector distribution of a vaccine in a pandemic. While it 
will be important to establish mechanisms for mass 
immunizations in public clinics, private physicians' offices 
will also play a key role in a pandemic. During a typical 
influenza season, the private sector distributes over 85 
percent of the Nation's supply. The private market itself 
provides maximum flexibility in vaccine distribution.
    Last year's influenza vaccine shortage illustrated sanofi 
pasteur's unique expertise in shipping product to any U.S. 
location within 24 to 48 hours. We ship vaccines to any users 
in accordance with the CDC's recommendations and distribution 
plan. Our unprecedented collaboration with the CDC underscores 
our commitment to America's public health.
    Third, vaccine liability protection is another critical 
issue in pandemic preparedness. A special compensation 
liability protection program will need to be established 
similar to the 1976 Swine Flu and 2002 small pox models. The 
pandemic liability program should be distinct and separate from 
the existing Vaccine Injury Compensation Program and should 
focus exclusively on a monovalent influenza vaccine. Failure to 
offer liability protection could have profound implications for 
the development, testing, and subsequent licensure and 
administration of doses of vaccine. It is important to address 
liability before a health emergency arises. We urge Congress to 
establish liability protections as strong as those afforded 
providers of small pox vaccine under the Homeland Security Act 
of 2002. Strong and effective vaccine liability provisions 
ensure that manufacturers can bring a pandemic vaccine to 
market as quickly as possible.
    Finally, CDC must continue to build a pediatric vaccine 
stockpile. I think many of the members of the panel have 
already spoken about that. Let me reiterate, when an influenza 
pandemic strikes the United States, sanofi pasteur will have to 
shift personnel and other resources away from routine vaccine 
production to optimize production of a monovalent pandemic 
influenza vaccine. Congress has appropriated funds to establish 
stockpiles of routine childhood vaccines to be used in case of 
a disruption in supply, but most funds remain unused. And I 
won't go into any further detail because I think we have 
further details there.
    But finally, sanofi pasteur is committed to protecting 
America's public health in the fight against influenza through 
immunization. We want to commend Congress and the 
administration for dedicating time and resources to this 
critical area. Thank you.
    [The prepared statement of Phillip Hosbach follows:]

  Prepared Statement of Philip Hosbach, Vice President, Immunization 
             Policy and Government Affairs, Sanofi Pasteur

    On behalf of sanofi pasteur, thank you for the opportunity to 
testify today before the Energy and Commerce Subcommittee on Health. 
Sanofi pasteur is committed to working with the federal government to 
develop a safe and effective vaccine to protect the American public in 
the event of an influenza pandemic. Our common goal is to provide 
sufficient vaccine for 300 million Americans within the first 12- to 
18-month period of a pandemic, and we welcome the chance to provide the 
committee with our perspective on this important public health issue.
    Sanofi pasteur, the world's largest influenza vaccine manufacturer, 
also manufactures vaccines against more than 20 different diseases. 
Worldwide, we produce almost 1 billion doses of vaccines annually. The 
company, which employs more than 9,000 employees worldwide, is 
headquartered in Lyon, France. Sanofi pasteur's US operations are 
located in the Pocono Mountains in Swiftwater, Pa., at a site where 
vaccine has been produced for more than 100 years. Influenza vaccine 
has been produced in this facility for more than 30 years and 95% of 
this vaccine is used exclusively to supply the United States. Sanofi 
pasteur also has an influenza vaccine production facility in France 
that supplies other markets.
    During the past decade, sanofi pasteur has reliably and 
consistently increased production of influenza vaccine in the US. Last 
year, we produced 58 million doses for the US market. We continue to 
expand our vaccine manufacturing capacity in Pennsylvania and have 
embarked on the largest infrastructure investment in the company's 
history, spending almost $80 million to build a new formulation and 
filling facility. We are also in the final design phases of our 
influenza vaccine facility expansion, which will significantly increase 
our US production capabilities.

                           PANDEMIC OVERVIEW

    An influenza pandemic is a global epidemic that has the potential 
for severe morbidity and mortality.
    Three influenza pandemics occurred during the 20th century: the 
1918-1919 Spanish flu pandemic, the 1957 Asian flu pandemic and the 
1968 Hong Kong flu pandemic. The Spanish flu pandemic was the most 
severe, causing over 500,000 deaths in the US and an estimated 20 to 40 
million deaths worldwide.
    The prospect of a pandemic is taking on increasing urgency because 
of the emergence of an H5N1 avian influenza strain in Southeast Asia 17 
months ago. It continues to circulate and has the potential to mutate 
and become a human pandemic strain. To date, it has infected at least 
97 people and killed more than half of its victims.1 This is 
a completely new strain and epidemiologists believe the American 
population would be at risk if it spreads between humans.
---------------------------------------------------------------------------
    \1\ Remarks to the 58th World Health Assembly Plenary Session, Mike 
Leavitt. U.S. Department of Health and Human Services. Numbers updated 
on 5/23/05. Accessed May 17, 2005 at: http://www.hhs.gov/news/speech/
2005/050516.html
---------------------------------------------------------------------------
    Many experts believe that if this H5N1 virus sparks the next 
pandemic, it would most closely resemble the 1918 pandemic in terms of 
morbidity and mortality.2
---------------------------------------------------------------------------
    \2\ Osterholm MT. Preparing for the next pandemic. N Engl J Med. 
2005 May 5;352(18):1839-42
---------------------------------------------------------------------------
    According to the World Health Organization (WHO), the next pandemic 
is likely to result in 1 to 2.3 million hospitalizations and 280,000 to 
650,000 deaths in industrialized nations alone. The US Centers for 
Disease Control and Prevention (CDC) estimated that as many as 207,000 
Americans could die and up to 734,000 could be hospitalized during the 
next pandemic. Other estimates are even higher. Studies have estimated 
the costs of an influenza pandemic in the US between $71 billion and 
$166.5 billion. These estimates include only direct costs of medical 
care and indirect costs of lost productivity and mortality rates. Some 
experts have predicted that a major pandemic could bring the global 
economy to a halt.3
---------------------------------------------------------------------------
    \3\ Osterholm MT. Preparing for the next pandemic. N Engl J Med. 
2005 May 5;352(18):1839-42
---------------------------------------------------------------------------
    Sanofi pasteur recognizes the urgency of adequate preparation for a 
pandemic event and is taking steps to be ready.

                            PROGRESS TO DATE

    We believe the expertise of vaccine manufacturers, particularly 
those with a track record in influenza vaccine production and 
distribution, should be utilized early in the planning process. 
Vaccines, by their very nature, are challenging to develop, produce and 
distribute. Manufacturers have a unique understanding of these 
challenges and can provide valuable process and policy input. Our 
knowledge and experience with the complexities of vaccine supply make 
industry an essential partner in pandemic planning and policy 
formulation.
    The enormous public health threat posed by a potential pandemic 
prompted sanofi pasteur to re-examine our internal pandemic planning 
process. We have taken specific and deliberate steps toward a 
comprehensive pandemic strategy. We formed a global working group to 
examine preparedness, development, communications and legal issues. In 
the US, we have worked in cooperation with the US Department of Health 
and Human Services (HHS) to exchange ideas on how best to prepare for 
and respond to a pandemic influenza outbreak, and have provided 
significant input into the initial draft of its pandemic plan.
    We have moved forward with clinical research and vaccine production 
because of important funding provided by Congress and the 
Administration. In May 2004, sanofi pasteur entered into the first of 
four pandemic agreements with the US government. The National Institute 
of Allergy and Infectious Diseases (NIAID) contracted with us to 
produce an investigational influenza vaccine based on the currently 
circulating H5N1 avian influenza virus strain. On March 10, 2005, in 
accordance with that agreement, sanofi pasteur delivered more than 
8,000 investigational doses, which currently are being used in NIH-
conducted clinical trials.
    In September 2004, the company was awarded a second contract by HHS 
to produce two million bulk doses of an attenuated version of the same 
H5N1 avian influenza virus strain of vaccine. This contract represents 
an important step in gaining experience producing pandemic influenza 
vaccine on a large scale. This is critical because scale-up presents 
unique challenges in vaccine production. Part of our agreement is to 
determine the stability of this vaccine, which is important for 
understanding our ability to establish an H5N1 reserve.
    Sanofi pasteur subsequently entered into a third agreement with HHS 
to establish and maintain flocks of egg-laying hens and to maintain 
other essential supplies. The goal is to ensure our ability to 
manufacture pandemic influenza vaccine at current full capacity levels 
on a year-round basis. Until now, egg availability has existed only on 
a seasonal basis to support normal influenza vaccine production. The 
agreement also calls for sanofi pasteur to manufacture, on an annual 
basis, investigational influenza vaccine of a candidate pandemic-like 
strain. Each year, HHS will identify the strain to be used in the 
investigational lot and will provide the reference virus on which each 
investigational lot will be based. This will enable us to gain 
experience working with various viral strains that might be similar to 
the next pandemic strain.
    Finally, in April 2005, sanofi pasteur was awarded a fourth 
contract from HHS. This was to speed the development process for new 
cell culture influenza vaccines in the US and to design a US-based cell 
culture influenza vaccine manufacturing facility.
Required Action:
    We are encouraged by the increased attention pandemic planning is 
receiving from the US government, industry, international agencies and 
key stakeholders. However, unresolved critical issues remain. The 
failure to address these challenges could adversely affect our 
country's ability to respond to a pandemic event.
    I would like to briefly outline steps that should be taken to help 
the country better prepare for a pandemic and minimize the effects 
should one occur.
    A first step is to steadily increase interpandemic influenza 
immunization rates. Manufacturers will respond to increased and 
predictable demand by producing additional vaccine to fulfill this 
demand.
    This is important because our ability to produce and administer 
large quantities of influenza vaccine during interpandemic periods will 
enable a more rapid response during a pandemic. Increasing capacity in 
dedicated influenza vaccine production facilities and establishing an 
infrastructure that can deliver vaccine and immunize large numbers of 
people in a short period of time is a key component of pandemic 
preparedness.
    To that end, Congress, industry and stakeholders need to work 
together to encourage higher influenza immunization rates in accordance 
with HHS' Healthy People 2010 immunization goals. The objective is to 
immunize approximately 180 million Americans. However, as a nation, we 
have never immunized more than 85 million people in any given year. 
This is unacceptable. A steady and sustained increase in interpandemic 
demand would give current manufacturers the confidence to continue 
expansion plans and new companies the incentive to enter the market.
    Second, we need to ensure a proper combination of private and 
public sector distribution of vaccine in the event of a pandemic. We 
believe that while it will be important to establish mechanisms for 
mass immunizations and clinics, the private physicians' offices will 
continue to play a vital role as well. During a typical influenza 
season, the private sector distributes more than 85% of the nation's 
influenza supply. The private market provides maximum flexibility in 
vaccine distribution and allows us to reach large segments of the US 
population in their ``medical homes.'' This includes the elderly, who 
should not stand in long lines and may be more comfortable with their 
personal physicians.
    Last year's influenza vaccine shortage illustrated sanofi pasteur's 
unique expertise in processing and shipping product to virtually any 
location in the United States within 24-48 hours. We shipped vaccines 
to end-users in accordance with the CDC's recommendations and 
distribution plan. Further, the unprecedented degree of collaboration 
between sanofi pasteur and the CDC underscores our willingness to work 
with public agencies to protect America's public health. This year, 
sanofi pasteur has modified our ordering process to provide that, in 
the event of another shortage, available vaccine reaches high-risk 
people first. All of our ``pre-book'' customers are being asked to 
estimate what percentage of the vaccine they are requesting will be 
used for priority patients. The systems utilized to collect these data 
and the ability to easily identify priority recipients, as specified by 
federal, state and local governments, will be key in protecting the 
public health in the event of a pandemic. We also believe that there 
should be greater funding for coordinating communications between 
federal and state agencies and the private sector regarding vaccine 
allocation issues.
    A third challenge is to continue to build pediatric stockpiles of 
all routinely recommended pediatric vaccines. When pandemic influenza 
strikes the United States, sanofi pasteur will have to slow down 
routine production, filling, and packaging for all other vaccines. We 
would have to shift personnel and other resources to optimize 
production and release of a monovalent pandemic influenza vaccine. 
Thus, it is essential that we resolve problems associated with the 
pediatric vaccine stockpile. HHS has appropriated funds but they have 
not been spent.
    You may have read The Washington Post article on April 17, 2005 
entitled ``Pediatric Vaccine Stockpile at Risk.'' It pointed out that 
only 13 million of the requested 41 million doses of pediatric vaccine 
have been stockpiled due to a Securities and Exchange Commission rule 
that clarified standard accounting practices for a bill and hold sale. 
As a result, what had been a 20-year routine practice of stockpiling 
vaccines is no longer an option for sanofi pasteur. Over the last two 
years, we have been actively engaged in discussions with the CDC to 
address the issue. We encourage the Committee to help resolve the 
issues that surround the establishment of routine pediatric stockpiles 
in advance of a pandemic.
    Pandemic influenza vaccine liability protection is another critical 
issue in pandemic preparedness. A special compensation and liability 
protection program will need to be established similar to the 1976 
swine flu and 2002 smallpox model. Liability protection for companies 
is essential to ensure that manufacturers are able to fully participate 
in the development and licensure of a pandemic vaccine. This is of 
paramount importance. The new program should be completely distinct and 
separate from the existing Vaccine Injury Compensation Program (VICP). 
It should focus exclusively on liability protection for a monovalent 
influenza pandemic vaccine, precisely the type of vaccine that will be 
produced in a pandemic event. The failure to offer liability protection 
on a timely basis could have profound implications for the actual 
testing and development of large-scale production of vaccine, leaving 
the nation unprepared. It is important to address liability issues 
before a health emergency arises. This ensures that pandemic vaccines 
will be developed, economic costs will be mitigated, and the potential 
for needless and costly litigation will be curtailed.
    We strongly urge Congress to consider--and establish--liability 
protections that are as strong as those afforded providers of smallpox 
vaccine under the Homeland Security Act of 2002. Vaccine liability 
provisions ensure that we can bring a pandemic influenza vaccine to 
market as quickly as possible.
    Sanofi pasteur is committed to protecting America's public health 
in the fight against influenza through vaccinations. We want to commend 
Congress and the Administration for dedicating time and resources to 
this critical area. Thank you for giving us the opportunity to express 
our views on this important issue.

    Mr. Ferguson. Thank you very much. Dr. Iacuzio.

                STATEMENT OF DOMINICK A. IACUZIO

    Mr. Iacuzio. Mr. Chairman and the members of the 
subcommittee, I am Dr. Dominick Iacuzio, Medical Director for 
Tamiflu at Hoffmann-La Roche, a research-based pharmaceutical 
company. Prior to joining Roche, I worked at the NIH National 
Institute of Allergy and Infectious Diseases where I served as 
the Respiratory Diseases Branch Principal Technical Advisor for 
the Influenza Program. I am grateful for this opportunity to 
discuss the role of antiviral drugs and pandemic influenza 
preparedness and response, and I request that my full written 
testimony be submitted for the record.
    As you have heard from the other witnesses today, pandemic 
influenza is one of our greatest public health threats. 
According to the Department of Homeland Security, a potential 
consequence for even a limited influenza pandemic could result 
in economic disruption, hospitalizations, and deaths far in 
excess of most terror attack scenarios.
    Efforts to prepare for the pandemic threat cannot rely on 
vaccines alone. It is widely recognized that antiviral drug 
stockpiling is an important component of pandemic influenza 
preparedness. The Infectious Diseases Society of America has 
recommended, as you heard this morning, that the U.S. stockpile 
enough antiviral, up to 50 percent of the U.S. population.
    Roche's Tamiflu is the leading prescription oral antiviral 
drug for influenza. Tamiflu was approved by the Food and Drug 
Administration in 1999 for treatment of Type A and B influenza 
and in 2000 for influenza prophylaxis or prevention. 
Fortunately, Tamiflu is well-tolerated with nausea and vomiting 
being most frequently reported as the adverse events. The 
efficacy of Tamiflu against Avian Influenza has been 
demonstrated by leading researchers and animal studies, in 
vitro data, and practical experience during the 2003 Avian 
Influenza outbreak in the Netherlands of H7N7. According to the 
World Health Organization, they have recommended use of Tamiflu 
to control the Avian Flu outbreaks in Asia.
    Although the potential for resistance must be monitored 
carefully, no transmission of a Tamiflu-resistant virus in 
humans has been detected to date. It is imperative that Tamiflu 
be stockpiled in advance of a pandemic since inherent 
complexities in production severely limit our capability, our 
ability, to rapidly meet large-scale, unanticipated demand. The 
manufacturing process for Tamiflu takes 8 to 12 months from raw 
materials to finished product. The process involves many inputs 
and steps, including a unique starting material and a 
potentially explosive production step that can be carried out 
only in specialized and very costly facilities.
    Historically, Roche has not produced the levels of Tamiflu 
required for global stockpiling. However, since 2003 we have 
increased total Tamiflu production capacity nearly eight-fold. 
Most importantly, early in our discussion HHS made several 
requests to Roche, all of which have been fulfilled. First, 
Roche has developed a U.S.-based supply chain. Second, Roche 
developed special U.S. packaging for stockpiled Tamiflu in 
order to extend dating and ease distribution and 
administration. Roche undertook these efforts in good faith and 
at great economic risk.
    Roche is also developing a synthetic process for 
manufacturing the chemical used in the initial production step. 
This will ultimately reduce reliance on natural sources. Roche 
has received and is filing on schedule pandemic stockpile 
orders for Tamiflu from 25 countries worldwide. Discussions are 
underway for the U.S. Government to purchase significantly 
greater amounts of Tamiflu. However, HHS stockpile purchases to 
date are sufficient to treat less than 1 percent of the U.S. 
population. We have also received a non-bonding letter of 
intent for HHS to purchase additional treatments to cover under 
2 percent of the population.
    In contrast, countries such as the United Kingdom, France, 
Finland, Norway, Switzerland, and New Zealand are ordering 
enough Tamiflu to cover between 20 and 40 percent of their 
populations. Unfortunately, given the complexities I have 
described, the increasing global demand, any government that 
does not stockpile sufficient quantities of Tamiflu in advance 
cannot be assured of an adequate supply at the outbreak of an 
influenza pandemic.
    If I can leave you with three messages from my testimony 
today, they are the following: first, there is a consensus by 
global health authorities that Tamiflu is effective and an 
important tool in pandemic influenza preparedness and response; 
second, that other nations are currently well ahead of the 
United States in Tamiflu stockpiling; and finally, the U.S. has 
to make commitment now to ensure a timely and adequate supply 
of Tamiflu. We at Roche want to continue to work closely with 
the subcommittee and HHS to assist the U.S. in ensuring 
pandemic preparedness. On behalf of Roche, thank you for 
highlighting this critical issue, and I will be pleased to 
answer any questions that you may have.
    [The prepared statement of Dominick A. Iacuzio follows:]

 Prepared Statement of Dominick A. Iacuzio, Medical Director, Hoffmann-
                             La Roche Inc.

    Mr. Chairman and Members of the Subcommittee, I am Dr. Dominick 
Iacuzio, Medical Director at Hoffmann-La Roche Inc. (``che''), a 
research-based pharmaceutical company. Since joining Roche, I have been 
the medical officer responsible for Tamiflu ' (oseltamivir 
phosphate), the world's first oral medication effective against the 
type A and B strains of the influenza virus. Prior to joining Roche, I 
worked at the National Institute of Allergy and Infectious Diseases, 
National Institutes of Health, where I served as the Respiratory 
Disease Branch's principal technical advisor for the Influenza Program. 
I am grateful for this opportunity to discuss with you the role of 
antiviral drugs in pandemic influenza preparedness and response, and I 
commend the Subcommittee for its efforts to protect the American people 
against this very real public health threat.

                     THE PANDEMIC INFLUENZA THREAT

    Every year, seasonal influenza causes an average of 36,000 deaths 
and 114,000 hospitalizations.1 In addition to the annual 
influenza seasons, three influenza pandemics took place during the 20th 
century. In 1918, approximately 500,000 people died from the so-called 
``Spanish Flu,'' and up to 50 million may have died worldwide. The 
1957-58 ``Asian flu'' killed 70,000 Americans, and the 1968-69 ``Hong 
Kong flu'' caused over 34,000 deaths in this country.2
---------------------------------------------------------------------------
    \1\ Department of Health and Human Services, Draft Pandemic 
Influenza Response and Preparedness Plan, Core Document, 14 (Aug. 
2004), available at http://www.hhs.gov/nvpo/pandemicplan/
finalpandemiccore.pdf.
    \2\ Centers for Disease Control and Prevention, Fact Sheet: 
Information About Influenza Pandemics (March 8, 2005).
---------------------------------------------------------------------------
    An influenza pandemic occurs when an existing influenza strain 
mutates. The emergence of such a new viral strain, the lack of previous 
exposure and immunity to the virus, and the lack of a vaccine that can 
protect against the new strain can ignite a global influenza epidemic, 
i.e., a pandemic. It has been 36 years since the last influenza 
pandemic, thanks in large part to the development of influenza 
vaccinations, as well as methods to predict influenza strains and 
redesign vaccines annually to include the strains predicted to affect 
the population in a given year.
    However, it appears that the factors associated with a pandemic are 
now moving into place. First, we have a highly pathogenic strain of 
avian influenza circulating widely in Asia. Second, this avian strain 
appears to be increasingly capable of causing deadly disease in humans 
and animals. In fact, the avian virus has been fatal in approximately 
60 percent of people infected by it.3 While efficient human-
to-human transmission of the virus--the final barrier to an influenza 
pandemic--has yet to occur, it is possible--if not probable--that 
persons harboring both human and avian influenza viruses could become 
``mixing vessels'' from which a new virus emerges that is easily 
transmitted among humans. Indeed, a recent World Health Organization 
(WHO) assessment noted that new epidemiological findings in Asia 
indicate that the virus may be becoming more capable of human-to-human 
transmission.4
---------------------------------------------------------------------------
    \3\ World Health Organization, Cumulative Number of Confirmed Human 
Cases of Avian Influenza A/(H5N1) Reported to WHO (May 19, 2005), 
available at http://www.who.int/csr/disease/avian_influenza/country/
cases_table_2005_05_19/en/print.html.
    \4\ World Health Organization, Inter-country Consultation, 
Influenza A/H5N1 in Humans in Asia (May 6-7, 2005).
---------------------------------------------------------------------------
    Make no mistake: should an influenza pandemic occur, the threat to 
the U.S. public would be great. In its draft Pandemic Influenza 
Preparedness and Response Plan (Plan), the U.S. Department of Health 
and Human Services (HHS) recognizes an influenza pandemic as having ``a 
greater potential to cause rapid increases in death and illness than 
virtually any other natural health threat.5 Health experts 
estimate that if the virus is passed efficiently between humans, avian 
flu could result in a pandemic causing over 50 million deaths 
worldwide.6 Studies cited recently by the Centers for 
Disease Control and Prevention (CDC) estimate that, without vaccines or 
drugs, a ``medium level'' pandemic would kill between 89,000 and 
207,000 Americans, and sicken another 20 to 47 million--causing up to 
42 million outpatient visits and 734,000 hospitalizations.7 
In fact, according to the Department of Homeland Security, the 
potential consequences of even a limited influenza pandemic could 
result in deaths, hospitalizations and economic disruption far in 
excess of most terror attack scenarios.8 In addition to the 
human toll, the economic cost of such a pandemic has been estimated at 
$71 to $167 billion.9 Without a doubt, planning for such a 
global health crisis must be a major public health priority.
---------------------------------------------------------------------------
    \5\ Department of Health and Human Services, Draft Pandemic 
Influenza Response and Preparedness Plan, Executive Summary 3, (Aug. 
2004), available at http://www.hhs.gov/nvpo/pandemicplan.
    \6\ World Health Organization, Estimating the Impact of the Next 
Influenza Pandemic: Enhancing Preparedness (Dec. 8, 2004), available at 
http://www.who.int/csr/disease/influenza/preparedness2004_12_08/en/
index.html.
    \7\ Centers for Disease Control and Prevention, Influenza Pandemic 
Fact Sheet (Mar. 8, 2005), available at http://www.cdc.gov/flu/avian/
gen-info/pandemics.htm.
    \8\ 15 Nightmares for Disaster Planning, N.Y. Times (March 16, 
2005).
    \9\ CDC, Influenza Pandemic Fact Sheet.
---------------------------------------------------------------------------
    Both the HHS Plan and the WHO Global Influenza Preparedness Plan 
emphasize that adequately addressing the threat of a pandemic influenza 
outbreak will require availability of both an influenza vaccine and 
antiviral drugs.10 If available, vaccines, which typically 
are administered before an outbreak of influenza, can provide an 
effective defense against developing seasonal or pandemic influenza, as 
well as in slowing transmission among humans.
---------------------------------------------------------------------------
    \10\ Department of Health and Human Services, Draft Pandemic 
Influenza Response and Preparedness Plan, Core Document 23 (Aug. 2004), 
available at http://www.hhs.gov/nvpo/pandemicplan/
finalpandemiccore.pdf; World Health Organization, WHO Global Influenza 
Preparedness Plan 13 (2005), available at http://www.who.int/csr/
resources/publications /influenza/WHO_CDS_CSR_GIP_2005_5.pdf.
---------------------------------------------------------------------------
    However, vaccines have important limitations. First, accurately 
predicting the specific viral strain or strains that ultimately may 
cause an influenza pandemic cannot be assured. Consequently, effective 
vaccines may not be available at the time a pandemic outbreak is first 
detected. Second, the propensity of viruses to mutate can lead to the 
rapid generation of new strains. Thus, there is a possibility that a 
vaccine effective against the viral strain accountable for the outbreak 
may be impotent against the virus' mutated progeny. This is one reason 
why unique vaccines to guard against seasonal influenza must be 
produced, licensed, and distributed each year, and thus, cannot be 
stockpiled for use against multiple outbreaks. Finally, given the pace 
of an outbreak of pandemic influenza, initial reliance on vaccines may 
not be feasible. For example, the WHO estimates it will take six to 
nine months to develop a vaccine effective against the circulating 
pandemic virus strain.11 Of course, producing and 
distributing the vaccine on a large scale also will take considerable 
time, and a vaccine, once administered, may take several weeks to 
trigger immunity, or require multiple administrations.
---------------------------------------------------------------------------
    \11\ World Health Organization (WHO) Global Influenza Preparedness 
Plan: The Role of WHO and Recommendations for National Measures Before 
and During Pandemics (Apr. 2005), available at http://www.who.int/ csr/
resources/publications/influenza/WHO_CDS_CSR_EDC_99_
1/en/print.html.
---------------------------------------------------------------------------
    For all of these reasons, HHS and the WHO have recommended that 
efforts to prepare for an influenza pandemic not rely on vaccines 
alone. As stated in a recent WHO report, ``[p]ending the availability 
of vaccines, antiviral agents will be the principal medical 
intervention for reducing morbidity and mortality, which becomes the 
most important priority once a pandemic is underway.12 
Notably, certain antiviral drugs can be used either to treat the flu or 
as a prophylactic to prevent those at risk from becoming infected. 
Recently published models suggest that an influenza pandemic could be 
contained if 80 percent of those exposed to the virus used targeted 
antiviral drugs prophylactically.13
---------------------------------------------------------------------------
    \12\ World Health Organization, Avian Influenza: Assessing the 
Pandemic Threat (Jan. 2005), available at http://www.who.int/csr/
disease/influenza/H5N1-9reduit.pdf.
    \13\ N.M. Ferguson et al., A Population-Dynamic Model for 
Evaluating the Potential Spread of Drug-Resistant Influenza Virus 
Infections During Community-Based Use of Antivirals, 51 Journal of 
Antimicrobial Chemotherapy 977 (2003); I.M. Longini et al., Containing 
Pandemic Influenza with Antiviral Agents, 159 Am. J. Epidemiology 623 
(2004).
---------------------------------------------------------------------------
    Finally, antivirals have four additional characteristics that 
warrant their inclusion in any influenza pandemic plan: (1) antivirals 
have a long shelf-life, permitting them to be stockpiled for several 
years, and thus immediately available when an outbreak occurs; (2) 
antiviral drugs begin to work immediately after they are administered; 
(3) certain antivirals work against multiple types of influenza; and 
(4) utilization of antivirals does not interfere with immunologic 
response.

       THE ROLE OF TAMIFLU ' IN AN INFLUENZA PANDEMIC

    Roche's Tamiflu ' (oseltamivir phosphate) is the leading 
prescription oral antiviral drug. Tamiflu ' was approved by 
the Food and Drug Administration (FDA) in 1999 for the treatment of 
type A and B influenza. Specifically, Tamiflu ', a 
neuraminidase inhibitor, works by attacking the influenza virus and its 
ability to replicate, rather than simply addressing influenza symptoms. 
Tamiflu ' is indicated for treatment of patients one year 
and older, and, if taken within forty-eight hours of the onset of 
symptoms, can help patients recover from the flu faster. As a 
prophylactic, an indication approved in 2000, Tamiflu ' is 
labeled for use by adults and adolescents 13 years of age and older, 
although data on children one year of age and older have recently been 
submitted to FDA for review. Tamiflu ' has a low likelihood 
of clinically significant drug interactions and is generally well-
tolerated, with nausea and vomiting being the most frequently reported 
adverse events. Tamiflu ' is available in both capsule and 
pediatric suspension form.
    As CDC Director Dr. Julie Gerberding informed this Subcommittee in 
a November 2004 hearing, Tamiflu ' ``is the only antiviral 
drug known to be effective against avian influenza.14 The 
efficacy of Tamiflu ' against avian influenza has been 
demonstrated in animal studies by leading researchers, in vitro data, 
and practical experience during an avian influenza outbreak in the 
Netherlands.15 Accordingly, the WHO has recommended use of 
Tamiflu ' in those potentially exposed to avian flu in 
Asia.16 Additionally, while a possibility exists for an 
influenza virus to emerge with decreased sensitivity to any antiviral 
drug, the Tamiflu '-resistant viruses isolated in humans to 
date do not appear to be effectively transmissible.17
---------------------------------------------------------------------------
    \14\ Flu Vaccine and Protecting High-Risk Individuals: Hearing 
Before the Subcomm. on Health of the House Comm. on Energy & Commerce 
108th Cong. (Nov. 18, 2004) (Statement of Dr. Julie Gerberding).
    \15\ I.A. Leneva et al., The Neuraminidase Inhibitor GS4104 
(Oseltamivir Phosphate) is Efficacious Against A/Hong Kong/156/97 
(H5N1) and A/Hong Kong/1074/99 (H9N2) Influenza Viruses, 48 Antiviral 
Res 101 (2000).
    \16\ World Health Organization, WHO Interim Guidelines for Health 
Monitoring of Persons Involved in Culling of Animals Potentially 
Infected with Highly Pathogenic Avian Influenza Viruses (Mar. 22, 
2004), available at http://www.wpro.who.int/avian_flu/docs/Health_
monitor_person.asp.
    \17\ Data collected from patients treated with Tamiflu 
', at its approved dose and for the approved treatment 
duration, demonstrate an overall incidence of resistant virus of only 
0.4 percent in adults and four percent in children aged one to 12. All 
of the resistant virus strains were found unlikely to spread within a 
community, even under conditions of widespread Tamiflu ' use 
for both treatment and prevention of influenza. N. Roberts, Treatment 
of Influenza with Neuraminidase Inhibitors: Virological Implications, 
356 Philosophical Transactions of the Royal Society 1895 (2001).
---------------------------------------------------------------------------
    For the prevention of influenza in those 13 years or older, Tamiflu 
' is administered following close contact with an infected 
individual who demonstrates characteristic symptoms of influenza, and 
based on knowledge that influenza is circulating in the area for 10 
days, or up to six weeks for seasonal prophylaxis. The approved dose 
and duration of treatment--75mg twice daily for five days--is expected 
to represent the minimum required for the management of an influenza 
pandemic. To ensure Tamiflu ' remains effective against the 
influenza virus, Roche does not recommend strategies which may utilize 
lower doses or shorter duration of therapy compared with the 
recommended dose.

    ALTHOUGH ROCHE IS TAKING STEPS TO INCREASE TAMIFLU ' 
    PRODUCTION, THE U.S. GOVERNMENT MUST MAKE CONTRACTUAL STOCKPILE 
       COMMITMENTS TO ENSURE A ROBUST U.S. ANTIVIRAL DRUG SUPPLY

    As noted, both HHS and the WHO include stockpiling of antiviral 
drugs as a central component of their developing plans for influenza 
pandemic preparedness. Both the Infectious Diseases Society of America 
(IDSA) and the WHO have recently acknowledged that Tamiflu 
', in particular, is uniquely suited to pandemic 
stockpiling, for several reasons: (1) its efficacy against influenza 
types A and B; (2) the absence of a known Tamiflu '-
resistant virus transmissible in humans; and (3) the product's five-
year shelf life.
    It is imperative that Tamiflu ' be stockpiled in advance 
of the outbreak of a pandemic because inherent complexities in 
production severely limit capacity to rapidly meet large-scale, 
unanticipated demand. The manufacturing process for Tamiflu 
' is complex, and takes 8-12 months from raw materials to 
finished product. The process involves many intermediate steps, 
including a unique starting material, and a potentially explosive 
production step that can be carried out only in specialized and costly 
facilities. Given these complexities, significant lead time is needed 
to increase production capacity and build stockpiles of the quantity 
required for an influenza pandemic.
    Historically, Roche has produced enough Tamiflu ' to 
meet the seasonal influenza demand. For example, just over one million 
prescriptions for Tamiflu ' were written in 2003 in the 
United States, while preceding years averaged 600,000 to 700,000 
prescriptions. In contrast, the IDSA has recommended that the 
government stockpile enough antiviral drugs to treat up to 50 percent 
of the U.S. population.18
---------------------------------------------------------------------------
    \18\ World Health Organization, Governments in a Dilemma Over Bird 
Flu: Uncertainty Over the Risk Posed by Bird Flu to Human Health Has 
Left Policymakers in a Dilemma (May 1, 2005), available at http://
www.who.int/bulletin/volumes/83/5/infocus0505/en/index1.html; 
Infectious Diseases Society of America IDSA's Principles For Action 
Needed to Prepare the U.S. to Effectively Respond to Interpandemic/
Pandemic Influenza (Mar. 10, 2005), available at http://
www.idsociety.org/Template.cfm?Section=Search & 
CONTENTID=10445&TEMPLATE=/Content
Management/ContentDisplay.cfm.
---------------------------------------------------------------------------
    Despite the obstacles I have described, the company doubled 
production capacity at our European facility from 2003 to 2004, and we 
are doing so again during 2005. Roche plans additional expansion of 
production capacity for Tamiflu ' in 2006. Most importantly, 
early in our discussions HHS made several requests to Roche, all of 
which we have fulfilled. First, Roche has developed a U.S.-based supply 
chain. When that supply chain is launched later this year, total 
Tamiflu ' active pharmaceutical ingredient and capsule 
production capacity will have increased globally by nearly eight-fold 
over production capacity in 2003. Second, Roche developed special U.S. 
packaging for stockpiled Tamiflu in order to extend dating and ease 
distribution and administration. Roche undertook these efforts in good 
faith and at great economic risk. Moreover, Roche is developing a 
synthetic process for manufacturing the chemical used in the initial 
production step, which will ultimately reduce reliance on natural 
sources.
    Roche has received and is filling--on schedule--pandemic stockpile 
orders for Tamiflu ' from 25 countries worldwide. 
Discussions are underway for the U.S. government to purchase for its 
stockpile significantly greater amounts of Tamiflu ' for 
this year and beyond. However, HHS stockpile purchases to date total 
approximately 2.3 million courses of treatment, or enough to treat less 
than one percent of the U.S. population. We have also received a non-
binding letter of intent for HHS to purchase an additional three 
million courses of treatment, or enough to cover under two percent of 
the population. In contrast, countries such as the United Kingdom, 
France, Finland, Norway, Switzerland and New Zealand are ordering 
enough Tamiflu ' to cover between 20 to 40 percent of their 
populations.
    Unfortunately, given the complexities I have described, any 
government that does not stockpile sufficient quantities of Tamiflu 
' in advance cannot be assured an adequate supply at the 
outbreak of an influenza pandemic. We are greatly concerned that with 
the continually increasing global demand for Tamiflu ', and 
in the absence of a long-term U.S. commitment to stockpile the product, 
U.S.-manufactured Tamiflu ' may have to be exported to 
countries with committed orders. While Roche commends HHS for its 
efforts to date, we cannot emphasize enough the immediate need for the 
United States government to make the contractual commitments necessary 
to ensure that an adequate stockpile is developed to meet the looming 
pandemic threat.
    Alerted to the pandemic threat, governments now have an 
unprecedented opportunity to attempt to minimize the catastrophic loss 
of life, debilitating illness, and enormous economic costs that a 
pandemic could wreak on the United States and the world. If I can leave 
you with three messages from my testimony today, they are the 
following. First, there is a consensus by leading global health 
authorities that Tamiflu ' is effective and an important 
tool in pandemic preparedness and response. Second, other nations are 
currently well ahead of the United States in Tamiflu ' 
stockpiling. Finally, there are important practical constraints on the 
production of Tamiflu ' that make immediate U.S. contractual 
commitments for future pandemic supplies a necessity.
    We at Roche want to continue to work closely with this 
Subcommittee, HHS, and governments around the world to assist in 
ensuring our pandemic preparedness. On behalf of Roche, thank you for 
highlighting the importance of this critical issue, and I will be 
pleased to answer any questions you may have.

    Mr. Ferguson. Thank you very much. Dr. Tripp.

                   STATEMENT OF RALPH A. TRIPP

    Mr. Tripp. Mr. Chairman and members of the subcommittee, I 
am here today to tell you about the emerging pandemic threat of 
Avian Influenza and how scientists at the University of Georgia 
in collaboration with Alnylam Pharmaceuticals in Cambridge, 
Massachusetts are developing novel and proven therapeutics to 
prevent Avian Influenza virus and other important respiratory 
virus infections. My comments today echo those concerns of the 
CDC, World Health Organization, and Institute of Medicine, and 
others about the need for preparing for pandemic flu.
    I am keenly aware of the threat that mankind faces by 
influenza and other important respiratory viruses having worked 
at the Center for Disease Control for 7 years in the 
Respiratory and Enteric Viruses Branch before moving to the 
University of Georgia to become the Georgia Research Alliance 
Eminent Scholar in vaccine development, as well as the director 
of the Center for Disease Intervention there. And I must 
reemphasize the imminent threat of an influenza pandemic.
    As we are all aware, pandemic flu spreads rapidly and 
during the pandemics of 1957 and 1968, those viruses took less 
than 3 to 4 months to go from the site of origin in Southeast 
Asia to North America and Europe. Clearly, the conditions are 
more favorable for spread these days with the air travel 
possibilities so an outbreak could occur in a matter of days 
around cities throughout the world. Once a pandemic flu 
emerges, we probably won't be able to prevent the global 
spread, but if we are prepared with things such as antivirals, 
it can significantly reduce its impact.
    The current outbreak of flu in Asia known as H5N1 is 
thought to have significantly heightened the risk of another 
flu pandemic as reported by the World Health Organization. 
Since the emergence of H5N1 in poultry in mid-December 2003, 
this strain has devastated the poultry industry in nine 
different countries in Southeast Asia. Clearly, it would have a 
similar impact if it came to the United States.
    There has also been numerous reports of human infection by 
this strain, as has been described by the witnesses today. 
Scientists at the University in Georgia, in collaboration with 
investigators at the Center for Disease Control and Alnylam 
Pharmaceuticals, recognize that multiple approaches are going 
to be necessary to protect the human population from the newly 
emerging virus strains such as H5N1.
    Vaccines are obviously the mainstay of prophylaxis against 
influenza, but there are technical and safety issues that we 
have all heard about that must be overcome. These include 
difficulty in predicting which strains of virus may emerge, 
difficulty in preparing sufficient quantities of the vaccine to 
meet the global demand, and clearly in storage and distribution 
of these vaccines.
    Antivirals have been shown to be very effective in treating 
common influenza. However, as you have heard, H5N1, Avian Flu 
is resistant to two of the most common drugs, rimantadine and 
amantadine and now they is some evidence and literature that 
the virus may be developing resistance to a newly developed 
drug Tamiflu or oseltamivir. The evidence for viral resistance 
to antiviral drugs indicates that more than one drug is going 
to be necessary to combat emerging flu and new, novel 
approaches are going to be necessary to enhance effectiveness 
of these drugs, as well as to prevent viral resistance to the 
existing drugs.
    In my laboratory at the University of Georgia we are 
working with new, breakthrough technology with Alnylam 
Pharmaceuticals called RNA interference. RNA interference is a 
natural process. It occurs in all the cells of our body. The 
process is meted by activity of short strands of RNA that 
silence host genes and control development. We have been able 
to harness that power to actually generally RNA-interfering 
drugs that prevent respiratory virus infection, particularly 
for respiratory syncytial virus. And now we have shown that 
with these same RNA interference drugs are useful in preventing 
infection by highly pathogenic H5N1 and H7 strains of flu.
    We have also shown these RNA interference drugs are useful 
both prophylactically and therapeutically to prevent 
respiratory syncytial virus, and this is a virus that is the 
leading cause of series lower respiratory tract illness in 
infants and young children worldwide for which there is no 
vaccine and treatments are limited.
    So the studies from my laboratory at the University of 
Georgia have shown the potential to create powerful 
therapeutics that meet the demand for new drugs with higher 
potency, lower toxicity, and having a much higher degree of 
specificity in that they only attack the cells that are 
affected by the virus.
    So given the pending threat of influenza, it is absolutely 
necessary that our disease intervention strategies move beyond 
the standard vaccine and into a new class of proven 
preventative and therapeutic treatments. With RNA interference, 
the creation of a safer and more accurate antiviral is 
certainly within reach and on the horizon. These specific 
antiviral therapeutics can be developed rapidly, they can 
produce the high levels, and they can be stockpiled or stored 
as needed.
    So I am here today to urge the Members of Congress to bring 
universities like the University of Georgia together with 
private sector companies like Alnylam Pharmaceuticals to 
develop breakthrough solutions to address the important human 
diseases like pandemic flu and provide alternatives to 
antiviral drugs, certainly which some have become resistant to.
    Support for this new and proven technology will provide an 
unprecedented means to control pandemic flu, as well as address 
other important viral infections. And clearly, without support 
for this type of a robust research program, we are destined to 
relive the pandemics of the past. And in developing these RNA-
interfering drugs, we are developing new tools to address any 
emerging infectious virus. And I would like to thank you for 
your time.
    [The prepared statement of Ralph A. Tripp follows:]

  Prepared Statement of Ralph A. Tripp, Director, Center for Disease 
                              Intervention

                                SUMMARY

    The World Health Organization (WHO) and influenza experts worldwide 
warn that an influenza virus (flu) pandemic is inevitable and imminent 
and will likely be caused by widespread distribution of an avian 
influenza virus, e.g. avian flu.
    Vaccines are the mainstay of prophylaxis against influenza, but 
there is currently no vaccine capable of protecting humans from 
infection with avian flu.Currently approved anti-viral drugs may be 
useful to treat pandemic flu but their effectiveness is limited by 
development of resistance.
    Novel and new anti-viral approaches are required to enhance the 
effectiveness of existing anti-viral drugs, prevent viral resistance to 
existing drugs, and to provide a strategy to combat avian flu and other 
important respiratory viral diseases.
    The discovery of RNA interference, or RNAi has revolutionized our 
ability to offer new, potent and specific viral disease intervention. 
RNAi is a natural biological process that occurs in all of our cells. 
The process is mediated by the activity of short strands of RNA that 
specifically silence the targeted gene of interest.
    We have harnessed the power of RNAi to silence respiratory virus 
infection and disease by targeting viral genes. We have shown that RNAi 
is very potent, specific, and reactive for all strains of virus 
targeted.
    RNAi is a new breakthrough solution to address pandemic flu that is 
on the horizon. Support for this new and proven technology will provide 
an unprecedented means to control pandemic flu and other important 
respiratory virus infections that carry a high disease burden on 
mankind.

Pandemic Influenza (flu):
    A pandemic is an epidemic that spreads rapidly around the world 
with high rates of illness and death. While people are exposed to 
different strains of the flu virus many times in their lives, about 
three or four times every century a radically different strain of flu 
causes a pandemic.
    Such warnings by the World Health Organization, Centers for Disease 
Control, National Institutes of Health and Institute of Medice have 
been fueled by the persistence of a highly virulent strain of avian 
influenza virus in Asia that experts fear could trigger another 
influenza pandemic.
    Influenza pandemics are not new. In the 20th century, mankind has 
faced three influenza pandemics. The first was the devastating 1918 
``Spanish Flu'' pandemic, as well as two less severe influenza 
pandemics in 1957 and 1968.

Key facts of pandemic flu:
    Pandemic flu occurs every few decades and spreads rapidly to affect 
most countries and regions around the world. Unlike the ``ordinary'' 
flu that usually occurs every winter, pandemic flu can occur at any 
time of year
    Pandemic flu is much more serious than ``ordinary'' flu--as much as 
a quarter of the population may be affected--maybe more.
    A serious pandemic is also likely to cause many deaths, disrupt the 
daily life of many people and cause intense pressure on health, poultry 
and other industries.

What is pandemic flu caused by?
    The emergence of a new flu virus which is markedly different from 
recently circulating strains and to which few people have any immunity.
Strategies to protect against pandemic flu:
    Vaccines are the mainstay of prophylaxis against influenza, but 
there are technical and safety issues that must be overcome, and 
problems in producing sufficient vaccine to meet global requirements. 
There is no vaccine ready to protect against pandemic flu.
    Currently approved anti-viral drugs can be used to treat pandemic 
flu but their effectiveness is limited by development of drug 

resistance.
The nature of the next pandemic flu: Avian Influenza:
    WHO and influenza experts worldwide are concerned that the recent 
appearance and widespread distribution of an avian influenza virus, 
influenza A/H5N1 (H5N1) ``has the potential to ignite the next 
pandemic'', World Health Organization, December 2004.

What is Avian Influenza?
    Avian influenza is a contagious disease of birds and poultry caused 
by influenza A viruses. All bird species are susceptible to infection, 
but domestic poultry flocks are especially vulnerable. Infection can 
cause epidemics associated with severe illness, high death rates, and 
economic devastation.

Where does Avian Influenza occur?
    Avian flu occurs worldwide. The current outbreak of highly 
pathogenic avian flu (H5N1) began in Asia and has to date affected 
poultry in nine countries in Asia. In three of these countries, H5N1 
strain has also infected people.

How does Avian Influenza spread?
    Avian flu is spread in poultry flocks either via respiratory 
secretions or contact with contaminated droppings. People are usually 
infected through close contact with infected birds or their feces. 
Person-to-person spread, so far appears to difficult.

Protecting the human population from Avian Influenza:
    There is currently no vaccine capable of protecting humans from 
infection, and effectiveness of existing anti-virals is not well 
understood.

Why I am here today:
    I am here today to tell you about the emerging pandemic threat from 
avian influenza virus and how scientists at the University of Georgia 
are developing novel therapeutics with Alnylam Pharmaceuticals, 
Cambridge, MA to treat and prevent avian influenza and other important 
respiratory viral infections.
    My concerns echo those of the Centers for Disease Control, National 
Institutes of Health, the World Health Organization, and Institute of 
Medicine which all warn of the need for pandemic flu preparedness, 
particularly for avian influenza.

What is the potential impact of Avian Influenza?
    The emergence of new influenza A virus subtypes have caused all 
three known flu pandemics, all of which spread around the world within 
1 year of being detected.
    1918-19, ``Spanish flu'', [H1N1]: caused the highest number of 
known influenza deaths: more than 500,000 people died in the United 
States, and up to 50 million people may have died worldwide. Nearly 
half of those who died were young, healthy adults. Influenza A (H1N1) 
viruses still circulate today after being introduced again into the 
human population in the 1970s.
    1957-58, ``Asian flu,'' [H2N2], caused about 70,000 deaths in the 
United States. First identified in China in late February 1957, the 
Asian flu spread to the United States by June 1957.
    1968-69, ``Hong Kong flu,'' [H3N2), caused about 34,000 deaths in 
the United States. This virus was first detected in Hong Kong in early 
1968 and spread to the United States later that year. Influenza A 
(H3N2) viruses still circulate today.

Historical patterns and influenza:
    Influenza pandemics can be expected to occur, on average, three to 
four times each century when new virus subtypes emerge and are readily 
transmitted from person-to-person.
    Pandemic flu spreads rapidly. During the pandemics of 1957 and 
1968, the viruses took only 3-4 months to spread from southeast Asia--
where they were first identified--to Europe and North America.
    Today, conditions are far more favorable to the spread flu. With 
high population density, and ease of air travel around the world, an 
outbreak could spread to virtually every city in the world in a matter 
of a few days.
Influenza virus disease intervention strategies:
    Multiple approaches will be required to protect the human 
population from newly emerging influenza virus strains such as H5N1 and 
others.
    Vaccines are the mainstay of prophylaxis against influenza, but 
there are technical and safety issues that must be overcome.
    Anti-viral agents have been shown to be effective toward treating 
influenza subtypes; however, avian flu (H5N1) is resistant to two 
common influenza drugs, rimantadine and amantadine, but newly developed 
drugs such as Tamiflu and Relenza appear to be somewhat effective.
    The evidence for viral resistance to anti-viral agents indicates 
that more than one drug will be necessary to combat influenza.

Novel new anti-viral approaches--RNA Interference (RNAi):
    New anti-viral drugs are required to enhance the effectiveness of 
current drugs and prevent drug resistance.
    In my laboratory at the University of Georgia, we are working with 
new breakthrough technology called RNA interference, or RNAi. RNAi is a 
natural biological process that occurs in all of our cells to control 
development. RNAi is mediated by the activity of short strands of RNA 
that specifically silence the targeted gene of interest.
    We have harnessed the power of RNAi to silence respiratory virus 
infection and disease by targeting viral genes. We have shown that RNAi 
is very potent, specific, and reactive for all strains of virus 
targeted. We have shown that RNAi prophylaxis and therapeutic treatment 
can be used to effectively silence respiratory syncytial virus (RSV) 
which is the leading cause of serious lower respiratory tract in 
infants and young children worldwide.
    RNAi has the potential to create powerful therapeutics that meet 
the demand for new drugs with higher potency, lower toxicity, and have 
a high degree of specificity, i.e. only attack their target and do so 
very efficiently.

RNAi and the pending threat of pandemic flu:
    It is absolutely necessary that our disease intervention strategies 
move beyond the standard vaccine and into a new class of proven 
preventative and therapeutic treatments. With RNAi, the creation of a 
safer, more accurate and efficient anti-viral treatment for pandemic 
influenza is closer in reach.
    Specific anti-viral RNAi therapeutics can be developed rapidly, 
i.e. within several months, produced at high levels, and stock piled or 
stored as needed.
    RNAi is a new breakthrough solution to address pandemic flu that is 
on the horizon. Support for this new and proven technology will provide 
an unprecedented means to control pandemic flu and other important 
respiratory virus infections that carry a high disease burden on 
mankind.
    Clearly, without support for this robust research program that can 
prevent respiratory virus disease burden, and silence virus replication 
and spread, we are doomed to relive the pandemics of the past. In 
developing the RNAi disease intervention strategies, we are developing 
tools to respond to any novel virus that may emerge.

    Mr. Ferguson. Thank you very much to all of you, and with 
that we will begin some questioning. The Chair recognizes 
himself for the purpose of some questions.
    Dr. Iacuzio, Dr. Gerberding in the testimony in the first 
panel talked about Tamiflu when I was asking her questions 
about antivirals, which seemed to be at odds with some 
testimony that she had given last November. And I know that, 
Dr. Pavia, you said you had some disagreements with some things 
that Dr. Gerberding said earlier today. Specifically about the 
effectiveness of Tamiflu with some strains of the Avian Flu, 
Dr. Tripp just referenced that as well. How does what Dr. 
Gerberding was saying square with your knowledge--I mean, you 
make it--how does that square with your understanding of the 
effectiveness of Tamiflu with regard to various strains of the 
Avian Flu?
    Mr. Iacuzio. There is scientifically published literature 
that oseltamivir, Tamiflu, has been tested in the lab against 
all known subtypes of Type A influenza, including all Avian 
strains, N1 through the N9, which basically--you know, they 
cover all the Type A viruses, and it is effective against all 
those in the laboratory.
    In addition, we have talked with officials, Klaus Stohr at 
the World Health Organization about the latest data that he is 
aware of from the Asian outbreak of Avian Flu out there, and 
according to the notes that I have is that no deaths from any 
individuals who have taken Tamiflu within the first 48 hours 
have been reported to his knowledge. So this is what the WHO is 
aware of as of this point in time.
    Mr. Ferguson. I just want to make sure that there isn't 
some new data, new information since last November when Dr. 
Gerberding testified in front of Congress. She said she 
believed Tamiflu was highly effective for strains that were 
known. Is there anything new in the last several months that 
would challenge that notion?
    Mr. Iacuzio. No, there really isn't. There had been reports 
of increased resistance reported in one paper in Japan, but the 
data was from a study where children are one, underdosed; two, 
they are not given the dose at the long enough duration; and 
three, the isolates were isolated through a highly 
sophisticated laboratory technology, which we don't know what 
that means. I mean they were basically laboratory curiosities. 
We don't believe that these are infectious strains.
    Mr. Ferguson. So given that the data that you have and 
published studies that you cited----
    Mr. Iacuzio. Right.
    Mr. Ferguson. [continuing] there seems to be a consensus 
that Tamiflu is effective for Avian Flu, yet we have heard from 
GAO and others that it seems to be inadequate, I guess, to put 
it mildly. Our efforts to stockpile antivirals to prepare for 
this--what everyone seems to think is an eventuality--seems to 
be not the most aggressive course of action that we could be 
taking. You have been in discussions--Roche has been in 
discussions with the U.S. Government for 2 years or so to 
negotiate the production of more Tamiflu for stockpiling 
purposes. Obviously, negotiations that take 2 years or more, 
every day that is lost is precious time when additional 
antivirals could be being produced and stockpiled. Given that, 
we are where we are.
    If an order were placed tomorrow--we have heard World 
Health Organization and others have recommended 25 to 50 
percent of the population should have the ability to be 
covered. You mentioned a number of countries which have already 
placed orders or have begun stockpiling orders to cover 20 to 
40 percent of their population. If the United States placed an 
order for Tamiflu tomorrow to cover 25 percent of our 
population, perhaps on the conservative side of what many of 
these other countries are doing, what would be the timeline for 
production? How would that affect your production capacity? 
What would be the timeline for your ability to produce that? 
And is there any way, if that is not real fast, that you would 
be able to make investments or to be able to streamline that or 
advance that timeline any quicker?
    Mr. Iacuzio. Since we began the conversations with public 
health officials in 2003, Roche globally has increased 
production capability eight-fold. Since locally we were--a year 
ago, February 2004 we were requested for considering a U.S. 
production facility. Roche has, as I said in my statement, has 
taken that initiative and that production facility we expect to 
up and running by the third quarter of 2005, this year. With 
that increased capacity both globally and the U.S. we would be 
able to produce--because of existing orders that already have 
been booked--about three million doses this fiscal year, by the 
end of this year; 13 million doses that are remaining for 2006; 
and by the end of 2007, another additional 70 million doses. So 
by the end of 2007 we should be able to provide approximately 
enough for 25 percent of the U.S. population.
    Mr. Ferguson. That is your capacity? That is what you would 
be able to do?
    Mr. Iacuzio. If orders came in now because every day that 
goes by additional countries are placing orders----
    Mr. Ferguson. What has been ordered--what has the United 
States ordered thus far?
    Mr. Iacuzio. Right now we have firm commitment--well, the 
U.S. has purchased 2.3 million doses, and there is a non-
binding letter of agreement for an additional, I believe, three 
million doses.
    Mr. Ferguson. So we are talking about less than six million 
doses----
    Mr. Iacuzio. Right.
    Mr. Ferguson. [continuing] that the U.S. would be 
stockpiling?
    Mr. Iacuzio. At this point in time.
    Mr. Ferguson. Is that enough?
    Mr. Iacuzio. I think that is a question really for public 
health officials.
    Mr. Ferguson. Dr. Pavia, is that enough?
    Mr. Pavia. It is clearly not enough. I think to find the 
right number using good epidemiologic techniques is something 
we haven't done yet----
    Mr. Ferguson. Yes, but we can all agree that----
    Mr. Pavia. [continuing] but the current amount----
    Mr. Ferguson. [continuing] this is imperfect--estimating 
what we would need is an imperfect science, but I think 
something that we could probably all agree on is that six 
million doses doesn't come close to being able to prepare us 
for what we all agree is the eventuality of this catastrophe.
    Mr. Pavia. It is a painfully small amount to have to use.
    Mr. Ferguson. I am over my time. Mr. Allen.
    Mr. Allen. Thank you. Thank you, Mr. Chairman. And I want 
to thank all members of the panel.
    Mr. Hosbach, I wanted to ask you about what incentives 
industry needs to increase production capacity in the U.S. but 
I think you pretty much answered that. I mean you said increase 
vaccination rates for annual flus, get a public and private 
distribution system in place, do vaccine liability protection, 
and four, CDC would have to build the capacity to increase 
stockpiles. Is there anything you would add to those four? Is 
there anything you want to elaborate on that? Because, you 
know, how do we get--obviously there is not enough 
manufacturing capacity out there, and you are in Pennsylvania 
and we thank you for that. But I wondered if there is anything 
other than those four points that you would like to make on 
this?
    Mr. Hosbach. Well, I would really probably like to 
emphasize the need to get every American to understand the 
importance of influenza vaccine, being vaccinated. Increasing 
those inter-pandemic immunization rates will continue to 
encourage us to expand, as I had mentioned, others to enter the 
marketplace, and I think you are already seeing some interest 
from other players. But I think that it is important for 
several reasons: one, not only for our expansion but that 
people get used to being immunized; they know who to go to to 
get immunized, that this becomes a routine and part of their 
every effort to protect themselves against flu. I think that 
will help us prepare in the long run for a pandemic.
    Mr. Allen. Second question, can you talk about how the 
regulatory process regarding vaccine development and production 
differs between the U.S. and the E.U.? And part of that 
question is whether or not more could be done to harmonize the 
approval processes in the two continents--countries----
    Mr. Hosbach. I am not truly a regulatory expert, and I 
don't know the specific differences between the E.U. and the 
U.S., but I do know that there are efforts to harmonize, that 
much of what they do is similar, and I do know that there is a 
continuous dialog between the FDA and European Union officials.
    Mr. Allen. Just one more question for you. Could you 
elaborate a little bit on the SEC issue? Dr. Gerberding 
referred to it. I think you mentioned it in your testimony. We 
are up here trying to figure out what that is all about.
    Mr. Hosbach. Well, you know, it comes from a staff 
accounting bulletin, which our accounting firms and several 
accounting firms have interpreted in one way wouldn't allow us 
to participate or recognize the revenue from the stockpile, so 
that becomes an issue for us because we would like to have our 
revenue match our activity.
    Mr. Allen. So you would only recognize the revenue from the 
vaccine when the vaccines were used? Is that the----
    Mr. Hosbach. That is correct. And I think this all stems 
from some of the issues in other larger industries that have 
had some accounting problems. And so I think that this is a 
very conservative interpretation, and certainly we need some 
assistance in clarifying that or perhaps even modifying 
contracts with CDC that might be able to get around the issue.
    Mr. Allen. Okay. Thank you. Dr. Crosse, you testified that 
insufficient hospital and health workforce capacity is an area 
of concern. Could you give us your characterization of the 
adequacy of our hospital and health workforce capacity to deal 
with the next pandemic? And if you can and you think there are 
gaps--I am sure there are gaps--could you point to specific 
provisions in the fiscal 2006 budget that are aimed at 
addressing those gaps?
    Ms. Crosse. I can't give you numbers, but certainly 
healthcare workforce shortages is a persisting problem. One 
concern that is especially problematic in a pandemic is that 
the healthcare workforce would be a highly exposed population 
and they might themselves become ill or have family members who 
were ill that they would need to care for. So you might 
exacerbate any shortages. In this past winter's vaccine 
shortages, healthcare workforce was not among the priority 
groups for vaccination, so that would need to be an issue that 
was considered if you had widespread outbreaks.
    There are constant shortages in areas of the country of the 
nursing workforce. When we did earlier work on bioterrorism 
preparedness, we found that many communities were planning on 
surge capacity by calling on their temporary nurse network, but 
multiple hospitals were counting on the same nurses. And so I 
think that the bioterrorism funding that has gone to increase 
hospital planning and preparedness for bioterrorism is helping 
them to work through some of that planning and to sort through 
some of the issues. It still doesn't get the bodies there. And 
the mobile hospitals that were mentioned that could be brought 
in to be deployed, if you are having nationwide outbreaks, they 
are still going to have to be staffed locally in all likelihood 
so that some of the emergency medical care that might be 
available to be flown in if there was an outbreak in one area 
would not be available if you had a nationwide pandemic. And so 
this is a continuing problem.
    I can't point to the specific provisions. That would be 
probably better addressed to the department, but there has been 
funding through HRSA for hospital preparedness under the 
bioterrorism funding programs.
    Mr. Allen. Thank you. The only comment I would add is--this 
is just an anecdote. I don't mean it as a matter of policy. My 
son-in-law wants to go to nursing school; he has taken all the 
prerequisites. He can't get into nursing school until the fall 
of 2006 in Maine, and it has something to do with the number of 
slots available. Anyway, thank you all for your testimony. And, 
Mr. Chairman, I yield back.
    Mr. Ferguson. Mr. Allen, we would be delighted to have your 
son-in-law in New Jersey if he would like to come to nursing 
school. Mr. Brown.
    Mr. Brown. I already asked him if he would want to come to 
New Jersey, and he said he wanted to come to Ohio instead.
    Dr. Crosse, I want to follow Mr. Allen's question for a 
moment and then a question for you, Dr. Iacuzio. Does the 
bioterrorism funding in some sense, the increase in funding, 
mask or--maybe mask is a good work--funding for other 
preparedness for a pandemic outbreak or general public health 
needs and infrastructure?
    Ms. Crosse. I am not sure what you mean by mask. Is it 
filling a broader set of needs or do you mean that it----
    Mr. Brown. Or is it looking like it is filling a broader 
set of needs but in some sense taking away from other public 
health needs that we have seen?
    Ms. Crosse. I don't think that we have done work recently 
enough to be able to say how that has played out in the local 
communities. There are some concerns, I think, that this money 
coming in may be supplanting some of the funding that otherwise 
might be provided. But I think it has been providing a broader 
set of public health preparedness functions than would exist 
without that funding. It has funded communication systems that 
are not just used for bioterrorism but for all disease 
reporting. It has provided some kinds of systems and 
infrastructure that otherwise might not be in place. I can't 
speak really to what it has done in terms of whether it has 
supplanted other funding.
    Mr. Brown. My concern is while CDC funding particularly has 
not seen major increases in the last few years, unlike NIH 
which deserved it also, and when there were increases I am not 
sure that while we did do the right thing certainly for 
bioterrorism preparedness and answering those issues and 
preparing local communities, public health officials that we 
didn't take away from the sort of the workaday infrastructure 
building and whether it is an issue to like health disparities 
or whether it is lead poisoning or whether it is nutrition 
education or whether it is a whole host of issues. But that is 
more a comment than a question.
    Dr. Iacuzio, if I could, according to CDC flu viruses can 
become resistant to antiviral treatments like Tamiflu. I have 
done a lot of work on particularly international tuberculosis 
issues and seen what MDR-TB has done in New York City was our 
first really horrible experience I think a dozen plus years 
ago. But we have seen what has happened if we don't follow the 
DOTS treatment, if patients don't follow the DOTS treatments 
pretty regularly and pretty precisely, and we know how 
expensive it is and we know the cure rate, particularly in the 
most common places for TB, but how the cure rate is pretty 
difficult and not satisfying when drug resistance occurs. But 
sticking more to Tamiflu, could you elaborate on the potential 
and describe how, especially in a pandemic situation, public 
health officials can best avoid the onset of drug resistance?
    Mr. Iacuzio. I believe that the information that we have to 
date indicates that Tamiflu is safe and effective and there is 
a low level of resistance. And that has been in published 
studies. I guess the only thing that I would add is that the 
data that we do see from places like Japan where they are 
dosing at a lower dose than has been recommended through the 
rest of the world and for a shorter duration of time, that 
probably is the scenario for generating resistance. And there 
have been a couple of papers that have been published in Japan 
about increased resistance to antiviral drugs. And it is the 
same with antibiotics; if you are going to treat, you need to 
treat with enough antibiotic drug and you need to treat long 
enough. And if you do the opposite, then you are creating a 
scenario to generate resistance. I guess that is what I am 
trying to say. So you need enough drugs in consistent dosing.
    Mr. Brown. Well, I guess this is fairly evident, but you 
need enough drugs, you need a distribution mechanism to reach 
remote areas, but to reach them with a large enough supply and 
with an even-handed distribution and a consistent patient/nurse 
or patient--whatever the healthcare provider is--relationship 
that will mean full compliance.
    Mr. Iacuzio. Right. And that is why I believe that, you 
know, discussions of just stockpiling need to go beyond just a 
big stockpile but actually the whole distribution of how that 
drug gets out to the individuals who need it.
    Mr. Brown. This is a bit off, but are people with less 
education typically less likely to be compliant people in a 
developing world who are not just more remote in terms of 
distance but less familiar with the healthcare system, all of 
that? Those would be people likely less compliant----
    Mr. Iacuzio. That is----
    Mr. Brown. [continuing] or do we know that?
    Mr. Iacuzio. That is a good question that I really--I am 
not prepared to answer that----
    Mr. Brown. Okay.
    Mr. Iacuzio. [continuing] personally.
    Mr. Brown. Okay. Fair enough. All right. Thanks.
    Mr. Ferguson. We are going to do another round of questions 
if that is all right. I don't think it should take too long. 
The Chair recognizes himself.
    Dr. Hosbach, can you go through the steps and the timeline 
that it takes for a company from the decision to start, say, an 
Avian Flu vaccine and actually finishing production in as much 
detail as you would like? Can you just walk us through from the 
decision to do that to when it actually is produced and how 
much time that takes as well?
    Mr. Hosbach. Well, overall, as you heard I think earlier, 
the process itself will take about 6 months from start to 
getting doses produced and started to get out the door. The 
initial steps really are a collaboration with governments and 
other agencies in terms of identifying that strain, as you 
indicated, but then getting the reassortant strain that will 
grow in eggs and start practicing that in our laboratories and 
also handling it within our manufacturing facility to a point 
at which it becomes adapted to eggs. From that point on we 
start producing the vaccine within the egg itself and then 
activate the virus and harvest the virus from the eggs. I think 
you will find it interesting that actually the manufacturing 
piece of it is the smallest portion of the entire chain of 
production and release. There are large number of release 
tests, quality standards that need to be met. And actually the 
release testing those points of quality to observe really take 
the longest part of the production process. So it is not the 
actual making it in the eggs that takes long; it is the steps 
that you have to go through to ensure that you are making a 
safe and quality and effective product.
    Mr. Ferguson. Where do liability concerns fit into that 
process? I mean you mentioned a coordinated effort with 
government at the very beginning. How do liability concerns fit 
into that process and how do they affect the timeline of being 
able to produce the product?
    Mr. Hosbach. I think, you know, liability concerns enter 
in, especially when we are about to enter into something like 
clinical trials. That is critically important because you are 
now starting to introduce this into society and introduce this 
into human subjects. So that becomes one facet of liability 
that is of concern. But, of course, then once you are ready to 
release product into the general population, then it is a huge 
concern because you are not just immunizing perhaps 85 million 
people; you are immunizing 300 million people.
    And I think that if you go back to the mid-'70's, Congress 
then thought it was important enough in that environment to 
provide indemnification to companies and to physicians, et 
cetera. And I think within the current environment that would 
especially be appropriate. It would put companies in great 
peril given the unknowns about the actual properties of a new 
pandemic strain that is a total shift from things that we have 
utilized before. And given the fact that we only have so few 
manufacturers, I think you would be putting major assets in 
harm's way; and not just assets of these pharmaceutical 
companies, but assets to public health.
    Mr. Ferguson. I am told that, as you referenced in the 
1970's with the Swine Flu, that indemnification was a major 
component to being able to produce a product that was 
necessary. And as you are leading to, would indemnification 
hasten that process at all? Would it shorten the timeline to be 
able to get these products to market?
    Mr. Hosbach. Yes, I think----
    Mr. Ferguson. And we are looking at a----
    Mr. Hosbach. [continuing] in the end-stages it would----
    Mr. Ferguson. And we are looking at a serious problem.
    Mr. Hosbach. In terms of filling and packaging and having 
the material ready to release, I think that end part of the 
process could be expedited.
    Mr. Ferguson. Okay. Mr. Brown, did you have any other 
questions?
    Mr. Brown. A fairly general question, but one that I have 
not really been satisfied with the answers in the past just 
because I don't understand it particularly well. We all read 
about problems with antibiotic resistance. We read about, you 
know, the way that animals that ranchers and farmers and 
perhaps veterinarians treat animals prophylactically, partly 
for growth hormones with antibiotics, partly to protect them 
prophylactically as the chickens or the cattle are put in small 
areas. We read about problems obviously with other kinds of 
antibiotic resistance, physicians over-prescribing, patients 
demanding when they have a virus they want an antibiotic. I 
wanted to ask the private sector people here but really any of 
you to comment. What can Government do to encourage better 
research and production, getting in the pipeline of antibiotics 
and antivirals and anti-retrovirals and anti-parasitics?
    Mr. Pavia. Well, I will take that on since, as you know, 
IDSA has been very involved with that. I think that there are 
several components to it. One is the limitation of 
inappropriate use in animal husbandry. And that has come up 
over and over again. FDA has come up with a process for 
reviewing that. There is a possibility that antivirals could be 
used to protect chicken flocks with potential disastrous 
effects on antiviral resistance if the supplies existed.
    The other is education. And there have been efforts to 
educate patients that have been moderately successful. 
Educating physicians is another aspect of that. But I think the 
biggest problem is that we need more agents. Whatever we do to 
prevent the emergence of resistance or to slow it, it is 
inevitable. It is the nature of the organisms that they mutate 
faster than we can develop new drugs. And so we need new agents 
and we need to continue to do the things that are necessary to 
have a full pipeline. And to do that we have to understand the 
profit motives and what it takes to keep a full pipeline.
    Mr. Tripp. I would agree with that. One of our goals is 
obviously to develop these new breakthrough technologies with 
Alnylam Pharmaceuticals on RNA interference. These drugs target 
the actual structural components of the viruses that are very 
conservative amongst all strains. We have shown these drugs are 
very effective at targeting and preventing infection of all 
strains of RSV, for example. And now we are looking at the H5 
and H7 strains of influenza. You know, having another tool in 
your tool belt is the key to preventing resistance. And, of 
course, following protocol is also important. But I would 
really recommend that there is more of a linkage in bring 
private sector companies to the table with current research 
efforts at universities such as I spoke about today.
    Ms. Crosse. I would just add that we examined this issue of 
antibiotic resistance from the use of antibiotics in animal 
feed last year and issued a report with recommendations to FDA 
to step up its process of review and action on some of the 
antibiotics of concern. They have taken many years, and we have 
urged that they speed their process to try to slow down some of 
these problems from occurring where there is good evidence that 
resistance is arising from the use among animal flocks. There 
are other countries who have controls in place and have seen 
decreases in the prevalence of antibiotic resistance strains 
among their human population.
    Mr. Ferguson. Just as we close I just want to thank all of 
our panelists for being here today. There certainly seems to be 
a consensus that there are serious problems down the road, and 
we take your exaltations and your advice very seriously and we 
hope to be taking actions as well. Thank you very much.
    [Whereupon, at 1:13 p.m., the subcommittee was adjourned.]

                                 
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