To determine what factors contributed to the failure of ASPR’s procurement effort with VaxGen, we interviewed officials from HHS’s components—ASPR, NIAID, the Food and Drug Administration (FDA), and the Centers for Disease Control and Prevention (CDC). In addition, we reviewed documents these agencies provided. We visited and interviewed the officials of the two companies—Avecia and VaxGen—that NIAID contracted with to develop the new rPA anthrax vaccine. We also talked to officials of several biotech companies that are currently working on biodefense medical countermeasures. We consulted with a small group of experts in the manufacturing of biodefense vaccines to ensure that our assessments were accurate. Finally, we reviewed scientific literature on vaccine development, manufacturing, and safety and efficacy, including regulatory requirements for licensing. To identify issues associated with using the licensed anthrax vaccine (BioThrax) in the stockpile, we interviewed officials from ASPR, CDC, and DOD. In addition, we reviewed documents these agencies provided and analyzed data on stockpile inventory of the licensed anthrax vaccine. We visited and interviewed officials from Emergent Biosolutions, the company that manufactures the licensed anthrax vaccine. We also talked to officials of several biotech companies that are currently working on biodefense medical countermeasures to obtain their views on ways to minimize waste in the stockpile. We conducted our review from June 2007 through August 2007 in accordance with generally accepted government auditing standards. Following the anthrax attacks of 2001, the federal government determined that it would need additional medical countermeasures (for example, pharmaceuticals, vaccines, diagnostics, and other treatments) to respond to an attack involving chemical, biological, radiological, or nuclear (CBRN) agents. The Project BioShield Act of 2004 (Public Law 108-276) was designed to encourage private companies to develop civilian medical countermeasures by guaranteeing a market for successfully developed countermeasures. The Project BioShield Act (1) relaxes some procedures for bioterrorism- related procurement, hiring, and research grant awarding; (2) allows for the emergency use of countermeasures not approved by FDA; and (3) authorizes 10-year funding (available through fiscal year 2013) to encourage the development and production of new countermeasures for CBRN agents. The act also authorizes HHS to procure these countermeasures for the Strategic National Stockpile. Project BioShield is a procurement program that allows the government to enter into contracts to procure countermeasures while they still are in development, up to 8 years before product licensure is expected. Under this program, the government agrees to buy a certain quantity of successfully developed countermeasures for the Strategic National Stockpile at a specified price once the countermeasure meets specific requirements. The government pays the agreed-upon amount only after these requirements are met and the product is delivered to the Strategic National Stockpile. If the product does not meet the requirements within the specified time frame, the contract can be terminated without any payment to the contractor. Thus, while Project BioShield reduces the producer’s market risk—that is, the possibility that no customer will buy the successfully developed product—it does not reduce the development risk to the producer—that is, the possibility that the countermeasure will fail during development. In December 2006, the Pandemic and All-Hazards Preparedness Act (Public Law 109-417) modified the Project BioShield Act to allow for milestone-based payments before countermeasure delivery for up to half of the total award. Within HHS, the Biomedical Advanced Research and Development Authority (BARDA) has the authority to directly fund the advanced development of countermeasures that are not eligible for Project BioShield contracts. Project BioShield procurement involves actions by the Department of Homeland Security (DHS), HHS (including ASPR, NIAID, FDA, and CDC), and an interagency working group. The first step in the Project BioShield acquisition process is to determine whether a particular CBRN agent poses a material threat to national security. DHS performs this analysis, which is generally referred to as a population threat assessment (PTA). On the basis of this assessment, the DHS Secretary determines whether that agent poses a material threat to national security. The Project BioShield Act of 2004 requires such a written PTA for procurements using BioShield funds and authorities. This declaration neither addresses the relative risk posed by an agent nor determines the priority for acquisition, which is solely determined by ASPR. Furthermore, the issuance of a PTA does not guarantee that the government will pursue countermeasures against that agent. DHS has issued PTAs for 13 agents, including the biological agents that cause anthrax; multi-drug-resistant anthrax; botulism; glanders; meliodosis; tularemia; typhus; smallpox; plague; and the hemorrhagic fevers Ebola, Marburg, and Junin. Various offices within HHS (ASPR, NIAID, FDA, and CDC) fund the development research, procurement, and storage of medical countermeasures, including vaccines, for the Strategic National Stockpile. ASPR’s role: ASPR is responsible for the entire Project BioShield contracting process, including issuing requests for information and requests for proposals, awarding contracts, managing awarded contracts, and determining whether contractors have met the minimum requirements for payment. ASPR maintains a Web site detailing all Project BioShield solicitations and awards. ASPR has the primary responsibility for engaging with the industry and awarding contracts for large-scale manufacturing of licensable products, including vaccines, for delivery into the Strategic National Stockpile. With authorities recently granted, BARDA will be able to use a variety of funding mechanisms to support the advanced development of medical countermeasures and to award up to 50 percent of the contract as milestone payments before purchased products are delivered. NIAID’s role: NIAID is the lead agency in NIH for early candidate research and development of medical countermeasures for biodefense. NIAID issues grants and awards contracts for research on medical countermeasures exploration and early development, but it has no responsibility for taking research forward into marketable products. FDA’s role: Through its Center for Biologics Evaluation and Research (CBER), FDA licenses many biological products, including vaccines, and the facilities that produce them. Manufacturers are required to comply with current Good Manufacturing Practices regulations, which regulate personnel, buildings, equipment, production controls, records, and other aspects of the vaccine manufacturing process. FDA has also established the Office of Counterterrorism Policy and Planning in the Office of the Commissioner, which issued the draft Guidance on the Emergency Use Authorization of Medical Products in June 2005. This EUA guidance describes in general terms the data that should be submitted to FDA, when available, for unapproved products or unapproved uses of approved products that HHS or another entity wishes FDA to consider for use in the event of a declared emergency. The final EUA guidance was issued in July 2007. CDC’s role: Since 1999, CDC has had the major responsibility for managing and deploying the medical countermeasures stored in the Strategic National Stockpile. The Omnibus Consolidated and Emergency Supplemental Appropriations Act (Public Law 105-277) first provided the stockpile with a fund specially appropriated for purchases. Since then, CDC has maintained this civilian repository of medical countermeasures, such as antibiotics and vaccines. DOD is not currently a part of Project BioShield. Beginning in 1998, DOD had a program to vaccinate all military service members with BioThrax. DOD’s program prevaccinates personnel for deployment to Iraq, Afghanistan, and the Korean peninsula with BioThrax. For other deployments, this vaccination is voluntary. DOD also has a program to order, stockpile, and use the licensed anthrax vaccine. DOD estimates its needs for BioThrax doses and bases its purchases on that estimate. Multiple agencies, including HHS and DHS, provide input on priority- setting and requirements activities. For BioShield purchases, the Secretaries of HHS and DHS prepare a joint recommendation, which requires presidential approval before HHS enters into a procurement contract. The Secretary of HHS currently coordinates the interagency process; the National Science and Technology Council previously handled the coordination. Anthrax is a rare but serious acute infectious disease that must be treated quickly with antibiotics. Anthrax is caused by the spore-forming bacterium Bacillus anthracis. It occurs most commonly in herbivores in agricultural regions that have less effective veterinary and public health programs. Anthrax can infect humans who have been exposed to infected animals or products from infected animals such as hide, hair, or meat. Human anthrax occurs rarely in the United States from these natural causes. However, the anthrax exposures in September and October 2001 through mail intentionally contaminated with anthrax spores resulted in illness in 22 persons and the death of 5. An FDA-licensed anthrax vaccine, BioThrax, has been available since 1970. The vaccine has been recommended for laboratory workers who are involved in the production of cultures of anthrax or who risk repeated exposure to anthrax by, for example, conducting confirmatory or environmental testing for anthrax in the U.S. Laboratory Response Network for Bioterrorism laboratories; persons who may be required to make repeated entries into known Bacillus anthracis contaminated areas after a terrorist attack, such as remediation workers; and persons who work with imported animal hides, furs, or similar materials, if the industry standards and restrictions that help to control the disease are insufficient to prevent exposure to anthrax spores. Preventive anthrax vaccine is not recommended for civilians who do not have an occupational risk. However, in 1998, DOD began a mandatory program to administer the vaccine to all military personnel for protection against possible exposure to anthrax-based biological weapons.