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                                                        S. Hrg. 110-558
                        SIX YEARS AFTER ANTHRAX:
                            TO BIOTERRORISM?



                               before the

                              COMMITTEE ON
                          UNITED STATES SENATE

                       ONE HUNDRED TENTH CONGRESS

                             FIRST SESSION


                            OCTOBER 23, 2007


       Available via http://www.gpoaccess.gov/congress/index.html

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               JOSEPH I. LIEBERMAN, Connecticut, Chairman
CARL LEVIN, Michigan                 SUSAN M. COLLINS, Maine
DANIEL K. AKAKA, Hawaii              TED STEVENS, Alaska
THOMAS R. CARPER, Delaware           GEORGE V. VOINOVICH, Ohio
MARK L. PRYOR, Arkansas              NORM COLEMAN, Minnesota
MARY L. LANDRIEU, Louisiana          TOM COBURN, Oklahoma
BARACK OBAMA, Illinois               PETE V. DOMENICI, New Mexico
CLAIRE McCASKILL, Missouri           JOHN WARNER, Virginia
JON TESTER, Montana                  JOHN E. SUNUNU, New Hampshire

                  Michael L. Alexander, Staff Director
              Aaron M. Firoved, Professional Staff Member
     Brandon L. Milhorn, Minority Staff Director and Chief Counsel
                Asha A. Mathew, Minority Senior Counsel
                  Trina Driessnack Tyrer, Chief Clerk

                            C O N T E N T S

Opening statements:
    Senator Lieberman............................................     1
    Senator Collins..............................................     3
    Senator Akaka................................................    21

                       Tuesday, October 23, 2007

Hon. Jay M. Cohen, Under Secretary for Science and Technology, 
  U.S. Department of Homeland Security...........................     5
Gerald W. Parker, D.V.M., Ph.D., M.S., Principal Deputy Assistant 
  Secretary, Office of the Assistant Secretary for Preparedness 
  and Response, U.S. Department of Health and Human Services.....     9
Keith A. Rhodes, Chief Technologist, Director, Center for 
  Technology and Engineering, Applied Research and Methods, 
  Government Accountability Office...............................    12
Tara O'Toole, M.D., MPH, Director and Chief Executive Officer, 
  Center for Biosecurity, University of Pittsburgh Medical Center    14

                     Alphabetical List of Witnesses

Cohen, Hon. Jay M.:
    Testimony....................................................     5
    Prepared statement...........................................    29
O'Toole, Tara, M.D., MPH:
    Testimony....................................................    14
    Prepared statement...........................................    71
Parker, Gerald W., D.V.M., Ph.D., M.S.:
    Testimony....................................................     9
    Prepared statement...........................................    42
Rhodes, Keith A.:
    Testimony....................................................    12
    Prepared statement...........................................    54


Slides submitted for the Record from Mr. Cohen...................    38
Questions and responses for the record from:
    Mr. Cohen....................................................    80
    Mr. Parker...................................................    87
    Mr. Rhodes...................................................   103
    Dr. O'Toole..................................................   105
GAO Report to Congressional Requesters, ``Project Bioshield--
  Actions Needed to Avoid Repeating Past Problems with Procuring 
  New Anthrax Vaccine and Managing the Stockpile of Licensed 
  Vaccine,'' GAO-08-88, October 2007.............................   116



                       TUESDAY, OCTOBER 23, 2007

                                     U.S. Senate,  
                           Committee on Homeland Security  
                                  and Governmental Affairs,
                                                    Washington, DC.
    The Committee met, pursuant to notice, at 10:01 a.m., in 
Room SD-342, Dirksen Senate Office Building, Hon. Joseph I. 
Lieberman, Chairman of the Committee, presiding.
    Present: Senators Lieberman, Akaka, and Collins.


    Chairman Lieberman. Good morning and welcome to our hearing 
today where we will assess whether the Federal Government has 
developed the tools that we need in the post-September 11, 
2001, world to respond to bioterrorist attacks on the United 
States and also to the effects of pandemic events.
    Six years ago--just one week after the September 11 attacks 
traumatized America--we were shaken again by a string of 
anthrax attacks that, over the course of 2 months, killed five 
people, sickened 22, and drove more than 10,000 others to take 
powerful antibiotics as a precautionary measure. Postal Service 
workers were hit the hardest as the attack came in letters 
through the mail, but I will say, it also hit close to home. In 
Wallingford, Connecticut, a wonderful woman, Ottilie Lundgren, 
was one of those who died because she opened a letter 
containing the deadly substance.
    I know that we all certainly here in the Capitol remember 
those days because a mailroom employee of then-Majority Leader 
Tom Daschle opened a letter containing the deadly white powder. 
The Hart Building was evacuated, closed for months while 
environmental HAZMAT teams scoured the building.
    Regrettably, whoever was responsible for the anthrax 
attacks, has remained unknown and, therefore, unfortunately, 
unpunished. But we do know that a catastrophe can strike 
Americans in their homes or places of work or places of 
assembly as a result of bioterrorism or naturally occurring 
diseases such as pandemic flu. And, therefore, we must be 
    So 6 years after those anthrax attacks, are we better 
prepared to respond to bioterrorism than we were then? My 
answer, unfortunately, is yes, but not much, and certainly not 
enough. And I base that on the testimony and the GAO report 
that we will hear today.
    We have a lot to do in the area of medical readiness. Last 
week, the Administration finally produced its National Strategy 
for Public Health and Medical Preparedness. It covers the range 
of emergency responses that would be required after various 
types of biological attacks. As I read it, I became 
increasingly concerned that right now we are far from capable 
of achieving many of those requirements as stated in the 
National Strategy. For instance, we are still not able to 
monitor biological incidents and their effects on people in 
real time. We cannot reliably field sufficient medical surge 
capacity to respond to either a bioterrorism attack or a 
naturally occurring pandemic. We cannot dispense drugs to 
entire populations or track the spread of disease through a 
community. These are essential requirements of national health 
security post-September 11, 2001, and they are today, 
unfortunately, unmet. So we will ask why we have not met those 
requirements and how together we can do so as soon as possible.
    Today's hearing will also consider how well the government 
is protecting its citizens from biological threats through 
medical countermeasures and technologies, and here I 
specifically mean a 21st Century anthrax vaccine, a system of 
biological sensors in cities throughout the Nation, and better 
standards for anthrax field tests to speed response and reduce 
false alarms.
    In these areas, the status of our government's activities I 
think has been mixed. On the up side--and there is an up side 
here--the Strategic National Stockpile has been enlarged with 
additional doses of an anthrax vaccine, new antidotes to 
counter the toxins it produces, antibiotics for over 40 million 
people, and countermeasures to other diseases such as smallpox 
and botulism toxins that can be spread by a terrorist attack.
    As a result, the ability to treat victims of biological 
attacks with medical countermeasures has genuinely improved 
since 2001. Our research is also getting better as a result of 
centers that have been established specifically to study 
bioterrorism agents, their compositions, capabilities, and 
    On the down side, however, the Department of Health and 
Human Services' efforts to develop a second-generation anthrax 
vaccine have, in a word, failed. This is a very disappointing 
breakdown that has put us back at square one after 4 years of 
work, a lot of it apparently misguided, to improve on the 30-
year-old technology that we now have in the stockpile.
    Today, this Committee is releasing a report by the 
Government Accountability Office,\1\ the first of a series in 
related topics that reviews HSS' missteps, describes the 
Department's failure to minimize waste of the stockpiled 
vaccine, and provides recommendations for how to avoid similar 
mistakes in the future.
    \1\ GAO Report to Congressional Requesters, ``Project Bioshield--
Actions Needed to Avoid Repeating Past Problems with Procuring New 
Anthrax Vaccine and Managing the Stockpile of Licensed Vaccine,'' GAO-
08-88, October 2007, appears in the Appendix on page 116.
    I must say that I am particularly concerned about this 
problem because the Department of Health and Human Services is 
preparing to seek bids on a new contract for an anthrax vaccine 
without, according to GAO, having conducted a thorough 
postmortem of its errors with regard to the awarding of the 
first contract.
    The brief history of this vaccine began after Congress 
passed the BioShield legislation in 2004 to establish a method 
for the Federal Government to buy medical countermeasures to 
biological agents. The first contract was awarded later that 
year to a small company called VaxGen. They were to develop a 
next-generation vaccine to replace the current one, which, 
though safe, is often painful, requires six injections to be 
effective, and has had problems maintaining required purity.
    Multiple problems arose, as we know, in the VaxGen 
contract, and they have been well documented in previous 
congressional hearings so we need not go over them here. The 
contract was eventually canceled, and, needless to say, the 
second-generation vaccine was never produced.
    Today in its report, GAO points out that HHS has not yet 
fully examined its BioShield failure, much less adopted 
measures to avoid a repeat of it. So I will ask our HHS witness 
this morning how the Department expects to avoid similar 
failure the next time around.
    Beyond countermeasures, we are also going to look at 
detection technologies under development and those already 
being implemented. And there is some encouraging news here, 
too, including the Department of Homeland Security's BioWatch 
system, a network of sensors placed in over 30 cities to test 
the air for anthrax and other biological agents. How successful 
has that program been and should it be expanded further? I am 
going to ask the Department of Homeland Security also for an 
explanation of why it has not yet adopted standards it and 
other stakeholders created for anthrax field tests so that new 
technologies will be as effective as possible.
    To say the obvious, we are very fortunate that during the 
last 6 years we have not experienced another attack from 
biological agents or any other form of weapon of mass 
destruction. And so far we have, fortunately, also managed to 
avoid the major pandemics that seem to sweep the globe 
naturally every few decades. But that obviously does not mean 
that we will be so lucky in the future.
    The Departments of Homeland Security and Health and Human 
Services, working in coordination with State and local 
governments and the private sector, have very awesome 
responsibilities here to protect the public from deadly 
biological attacks, awesome in the sense of the scope of the 
responsibility and what has to be done to meet it. This 
Committee wants to work with both Departments to get it right 
because the consequences of failing to do so would obviously be 
    I look forward to the testimony of our witnesses today. I 
thank you for being here, and now I am pleased to call on 
Senator Collins.


    Senator Collins. Thank you, Mr. Chairman.
    Six years ago, anthrax-laced letters resulted in the deaths 
of five people, widespread concern about the safety of postal 
workers and the U.S. mail, the treatment of thousands of people 
with powerful antibiotics, and the evacuation of the Hart 
Senate Office Building.
    Today's hearing concerns two matters of great importance 
for this Committee and for all Americans: Our preparedness for 
bioterrorism and efficiency in government operations. 
Unfortunately, the report that Senator Lieberman and I 
requested from the GAO makes clear that the Federal attempt to 
procure an improved anthrax vaccine has yielded not a new 
vaccine but instead a textbook example of prodigious waste.
    As the GAO also discovered, taxpayers stand to lose $128 
million in 2008 as the stocks of the current vaccine expire. 
The Department of Health and Human Services currently has no 
system to transfer them for use by the Department of Defense, 
the only large-scale user of anthrax vaccine, before the stocks 
    In 1996, former Army Chief of Staff Gordon Sullivan wrote a 
wise book on a systematic approach to management in settings of 
uncertainty and change. Its title alone offers a kernel of 
wisdom: ``Hope Is Not a Method.''
    The story of the now canceled $877 million procurement 
contract between HHS and VaxGen demonstrates the danger of 
relying on hope for progress. The Department hoped that a small 
company could not only develop an effective vaccine, but also 
could obtain approval for it and manufacture 75 million doses 
all on an unrealistically fast track.
    VaxGen officials hoped that they could meet the terms and 
deadlines of a contract that lacked specific requirements and 
was critically vulnerable to future decisions by the Food and 
Drug Administration.
    VaxGen also hoped that its small staff, lack of expertise 
in vaccine formulation, and limited access to additional 
capital would not impede the required rapid progress to 
contract fulfillment.
    Not one of these hopes survived the collision with reality.
    The reality is that HHS' contracting practices for Project 
BioShield have displayed many of the same problems that this 
Committee has observed in procurements in other departments and 
agencies related, for example, to Hurricane Katrina and to 
reconstruction work in Iraq and Afghanistan--flaws that we hope 
to correct through contracting reform legislation.
    HHS was responding to a crisis in the wake of the September 
11, 2001, terrorist attacks and the anthrax mailings. No one 
knew how soon or in what number follow-on attacks might appear. 
But the risks, uncertainties, and vulnerabilities revealed by 
the anthrax attacks made a methodical approach to vaccine 
procurement more, not less, important.
    A methodical rather than a hopeful approach to Project 
BioShield contracts might have included a more realistic 
evaluation of the suitability of using a small vendor with 
limited experience, a vendor that had been de-listed from the 
NASDAQ securities market 3 months before the November 2004 
contract signing.
    A methodical approach would have included a fact-driven 
assessment of vaccine development prospects and production 
capabilities--an assessment that GAO's interviews with industry 
experts suggest would have been bleak indeed.
    And perhaps most important, a methodical approach would 
have identified and specified contract requirements up front.
    I have no doubt that many lessons could be drawn from this 
very troubling story. But as the GAO notes, HHS has yet to 
conduct a formal lessons-learned study.
    We will spend additional time today discussing two other 
disturbing issues outside the immediate ambit of the VaxGen 
contracts--the lack of a process to move the stocks of current 
anthrax vaccine to the military before they expire, and the 
reported willingness of HHS to deploy the vaccine even if it 
has expired.
    I look forward to hearing the testimony of our witnesses 
today on the procurement and the other challenges we must 
address to ensure that our Strategic National Stockpile 
fulfills its purpose of maintaining readily available stocks of 
vital medical supplies for victims of major disasters. I am 
particularly interested in hearing Admiral Cohen's thoughts on 
how the findings from the GAO report can be applied to the 
important work he is leading at DHS.
    The only good news in the GAO report was the obvious 
observation that we have suffered no new anthrax attacks since 
2001. If we had, our hearing could have unfolded in the wake of 
another tragedy. We must apply the lessons learned from the 
failures documented by the GAO to improve our preparations for 
a possible terrorist attack using biological weapons before it 
is too late.
    Chairman Lieberman. Thanks, Senator Collins, for that 
excellent opening statement.
    We appreciate the four witnesses before us who can help us 
answer the questions we have. We will begin with Jay Cohen, 
Under Secretary of the Department of Homeland Security for the 
Science and Technology Directorate, Retired Admiral of the U.S. 
Navy. Good to see you. This is actually your first appearance 
before the Committee since assuming this role. We welcome you. 
I think you know that the Science and Technology Directorate is 
one of the totally new entities created at the Department of 
Homeland Security effectively by this Committee. So just to 
make you feel younger, we take a paternalistic interest in what 
you are doing. Admiral Cohen?


    Mr. Cohen. Well, good morning, Chairman Lieberman, Senator 
Collins, and distinguished Members of the Committee. I am 
honored to appear before you on this solemn occasion of the 
sixth anniversary of the anthrax attacks against our Nation to 
report on the progress made by the Department of Homeland 
Security's Science and Technology (S&T) Directorate. Those 
events of 6 years ago served as a wake-up call that an 
adversary could produce or obtain biological agents to use 
against this country.
    \1\ The prepared statement of Mr. Cohen appears in the Appendix on 
page 29.
    Thank you for entering my formal written statement into the 
record. I will quickly summarize it here. But before I do, I 
wanted to thank the Congress, this Committee, and your very 
professional staff for the strong bipartisan leadership and 
support you have given me and the dedicated, hard-working men 
and women of the Department of Homeland Security Science and 
Technology Directorate as they work to make the Nation safer. 
Thomas Jefferson said, ``The price of freedom is eternal 
vigilance.'' And vigilant we must be.
    I am humbled to appear alongside such distinguished panel 
members. The Congress and the American people want to know, 6 
years after anthrax, are we better prepared to respond to 
bioterrorism? And I will tell you the answer is yes, and I 
would like to give you a few examples.\1\
    \1\ The slides submitted by Mr. Cohen appear in the Appendix on 
page 38.
    Prior to the anthrax attack, the Nation lacked a 
comprehensive understanding of the risks posed by acts of 
bioterrorism. We did not have a dedicated research and 
development capability for addressing those risks, civilian 
attack warning systems to know if we had been attacked, 
dedicated forensic analysis capabilities and adequate capacity 
to rapidly characterize samples from the attack to help others 
in trying to identify who might have perpetrated the attacks, 
plans and tools for cleaning up after such an attack, and focus 
on the additional significant threats posed by bioterrorism.
    In the intervening 6 years, DHS S&T, in collaboration with 
its interagency partners, represented here and in the audience, 
conducted formal risk assessments of 28 biological agents. This 
analysis is guiding the prioritization of the Nation's 
biodefense efforts and has resulted in nine additional material 
threat determinations, a list of key agents to be detected by 
warning systems, and identification of key vulnerability and 
research gaps.
    We established a National Biodefense Analysis and 
Countermeasures Center to provide a dedicated capability for 
conducting both unclassified and classified biodefense 
research; developed and operated the Nation's first bioattack 
warning system, which has already been referred to here, known 
as the BioWatch system. This system, first fielded in 2003--and 
I am very pleased that Dr. John Vitko, who is my Director of 
the Chemical and Biological Division, is largely responsible 
for that development and deployment. It was fielded in 2003 and 
is operating in more than 30 cities, as has already been 
stated, and has conducted some 4 million tests to date without 
a single false positive.
    We have conducted development of the next-generation fully 
autonomous detection systems to significantly increase the 
BioWatch capabilities, and I know your interest in that, and 
those systems are now entering field tests; developed standards 
and processes for biodetection tools to be used by first 
responders; in partnership with HHS, DOD, Department of 
Justice, the Postal Service developed a coordinated national 
biomonitoring architecture; established a National Bioforensic 
Analysis Center, and we are conducting operational bioforensic 
analysis today in partnership with the FBI.
    This provides the Nation with its first dedicated 
contamination-free biocontainment laboratory space for forensic 
analysis and the necessary analytic tools and chain of custody 
control for conducting that analysis. We have worked with the 
EPA, HHS, and State and local authorities to develop protocols 
and tools for cleaning up complex transportation hubs following 
a biological attack, and we are working closely with the U.S. 
Department of Agriculture to better characterize the existing 
veterinary countermeasures for agro-defense and to develop 
next-generation countermeasures.
    In the future, I am pleased to tell you that we will extend 
the formal risk assessments to include all of chemical, 
biological, radiological, and nuclear threats. We will complete 
construction and occupy the new National Biodefense and 
Analysis Countermeasures Center (NBACC) facility at Fort 
Detrick, Maryland, and that should occur at this time next 
year. And working with our colleagues on the National 
Interagency Biodefense Campus at Fort Detrick, we will provide 
the Nation with the understanding it needs to identify and 
prioritize threats and the tools it needs to defend them.
    We will develop the understanding and tools to defend 
against enhanced and advanced biological threats. We will 
complete testing of the next-generation BioWatch systems and 
work with the DHS Office of Health Affairs--and thank you for 
establishing that customer for me, critically important--to 
transition BioWatch III into operation. We will develop an 
expanded range of detection systems and tools for use in 
facility protection, protection of the food supply, and first 
responders. We will partner with the EPA, HHS, and State and 
local governments to develop the framework, plans, and tools 
for restoring entire city neighborhoods in the event of a 
biological attack. We will partner with the U.S. Department of 
Agriculture to develop next-generation veterinary 
countermeasures. And, finally, we will design, construct, and 
operate the National Bio- and Agro-defense Facility (NBAF), to 
provide the Nation with state-of-the-art biocontainment 
laboratory space to accelerate the development of veterinary 
countermeasures against foreign animal and zoonotic diseases. 
And you know we look to have that down-select at this time next 
    And so before I conclude, I am pleased to be joined here 
today, as I said, by Dr. John Vitko, and also Jamie Johnson, 
who is my Director of the Office of National Labs in the S&T 
Directorate, who will help this shade tree engineer with your 
more technical questions.
    Additionally, my DOD partners have brought examples of 
devices that we have developed together for our first 
responders. You see a new chem/bio suit that our firemen can 
    So, in summary, DHS S&T has taken the wake-up call of the 
2001 anthrax events very seriously. Much has been accomplished. 
However, because of the evolving nature of the threat, much 
also remains to be done. We look forward to continuing to 
support the Nation in responding to this challenge. I welcome 
your oversight, and I welcome your questions. Thank you so 
    Chairman Lieberman. Thanks, Admiral. Do you want to take a 
minute to describe the chem/bio outfit?
    Mr. Cohen. Yes, sir. In today's world, where we ask our 
heroes, our first responders--the enabling legislation that you 
so eloquently put in place, I am reminded that it is 183 pages 
of which 17 pages are DHS S&T. I just completed 6 years as 
Chief of Naval Research, and the legislation in Title X for the 
Office of Naval Research, 1946, is half a page. It says there 
will be an Office of Naval Research, it will be led by an 
admiral, you will do good S&T, and you will report to the 
Secretary of the Navy.
    Here, 60 years later, we have 17 pages, and it shows you 
the impact of word processing on the legislative process. But 
it is very well thought out.
    Chairman Lieberman. You and your predecessors made a lot 
out of that half-page. [Laughter.]
    Mr. Cohen. And we continue to, I can assure you. But 
everyone is well represented. It is very well thought out, and, 
of course, the support I got from your Committee and from all 
of the Congress the first 3 weeks I was on board a year ago, in 
August, in getting the new organization in place and the new 
investment portfolio was because I xeroxed those 17 pages, I 
highlighted them, and we organized to fulfill your vision, 
which I think was very thoughtful.
    But today, and I think you are very wise in this, I am not 
to re-create National Institutes of Health, National Science 
Foundation, DOD or DOE labs. But you have given me the 
authorities to leverage them and take my precious dollars and 
add on top.
    So we deal with the Technology Support Working Group 
(TSWG), which is a very strong, very proactive, and very 
innovative Department of Defense group, and working together 
with them, what you see here is an ensemble for our firemen 
where, when they go into a hazardous situation--and, as you 
have indicated, Chairman, they may not know initially that 
there are biological or chemical hazards. It provides the 
additional protection because we know they do not only have to 
worry about smoke and worry about the heat and the fire, but we 
know that when they come out we can monitor them, and they will 
not have been exposed internally to chemical and biological 
threats. And we do that through filters, the self-contained 
breathing apparatus, even the gloves--and there are two 
different variations because I am a big believer, as is TSWG, 
in competition of ideas. The gloves have magnetic seals, so 
when you put the glove on, even at the glove area you do not 
get the leakage. And so these are, in fact, in operation today.
    We have an iris scanner. Now, this is really expensive. It 
is about $15,000 a copy. But it will give us detection against 
your face of biological and chemical threats. If we were to 
deploy these in the hundreds, it would be $10,000 to $15,000 a 
copy, but you can imagine--and this is a wonderful thing about 
America, our innovation, the Bayh-Dole Act that you provided. 
In thousands, we would drive the price down, and this would be 
an export for American technology.
    Chairman Lieberman. What would you do with that? Just take 
a minute.
    Mr. Cohen. You would just put it--I am the first responder.
    Chairman Lieberman. Yes, you want to make sure that the 
first responder has not been compromised.
    Mr. Cohen. Or a victim.
    Chairman Lieberman. Or a victim, right.
    Mr. Cohen. It does not matter. It is the human subject. We 
put it there, we press the button, and it will give us a 
readout for the various biological and chemical contamination 
and give us a high confidence level.
    Chairman Lieberman. That is great.
    Mr. Cohen. This is in the final stage of testing.
    And, finally--and you are very kind to give me this extra 
time, Chairman--this little device, I thought it was a 
chocolate wafer. I was really pleased that my staff had 
provided that for me. I am a chocoholic. But it is actually 
this disposable mask. You can carry this in your back pocket. 
And, again, this provides the near-term--not against smoke, but 
against biological and chemical hazards so that you can 
evacuate the area of contamination.
    This is just a small example. We filled up the Cannon 
Caucus Room last spring, DHS and TSWG, showing the kind of 
progress that we have made in all these areas. Thank you so 
    Chairman Lieberman. Thanks, Admiral. I am glad you did 
that. Look, part of why Senator Collins and I wanted to put the 
S&T Directorate in DHS was because we in our service on the 
Armed Services Committee had seen the power of putting Federal 
money into research when there is, in that case, national 
security, and now here, homeland security. And, of course, 
there is tremendous spillover into commercial applications as 
well. So it has been very encouraging to see the combination of 
American innovation or American entrepreneurship come together 
to try to meet the needs that we have now. You are going to 
give that first responder the rest of the morning off?
    Mr. Cohen. Yes, sir. We will give him gangway liberty. 
    Chairman Lieberman. OK.
    Dr. Parker, welcome. Thank you for being here. Principal 
Deputy Assistant Secretary, Office of the Assistant Secretary 
for Preparedness and Response at the U.S. Department Health and 
Human Services. We welcome your testimony. Obviously, GAO had 
some tough things to say about HHS, so this is your opportunity 
to respond.

                   HEALTH AND HUMAN SERVICES

    Mr. Parker. Thank you and good morning. Chairman Lieberman, 
Ranking Member Collins, and distinguished Members of the 
Committee, I am honored to be here today to discuss the 
development and acquisition of medical countermeasures to 
address the threat of bioterrorism.
    \1\ The prepared statement of Mr. Parker appears in the Appendix on 
page 42.
    I would like to make it clear that medical countermeasures 
development and acquisition is only one component of our 
overall preparedness efforts that range from research, 
development, and acquisition of medical countermeasures to 
response delivery platforms that support State and local 
authorities in dealing with the medical aspects of major 
    Today I will focus on three themes related to how HHS has 
made significant progress in our medical preparedness 
    First, we have made significant progress; we have made 
significant acquisitions for the stockpile against the most 
serious threats facing the Nation.
    Second, as a result of the lessons learned from previous 
acquisition successes and setbacks, and with the help of 
Congress, we have changed the way we do business at HHS.
    Third, we have taken an all-hazards approach to public 
health preparedness. The gains we make against each threat will 
help us across the spectrum of public health emergencies and 
    HHS has already achieved a significant level of 
preparedness against a number of threats using all authorities 
available to us. For example, we have a stockpile of 
antibiotics that provides a substantial level of preparedness 
for bacterial threat agents, including anthrax, plague, and 
tularemia. This includes enough antibiotics for the first-line 
defense against anthrax to provide a 60-day post-exposure 
prophylaxis for over 40 million people. We also have enough 
smallpox vaccine for every American. That includes a new 
vaccine, ACAM-2000, developed by Acambis, that was just 
licensed by the FDA this year. Project BioShield, enacted in 
2004, authorized the $5.6 billion Special Reserve Fund for the 
procurement of security medical countermeasures.
    During the first 3 years of implementation, Project 
BioShield awarded procurement contracts for the current and 
next-generation anthrax vaccines, anthrax antitoxins, a next-
generation smallpox vaccine, botulism antitoxins, and two 
medical countermeasures for radiological threats. Additionally, 
we have made great progress in improving our Nation's ability 
to respond to an influenza pandemic.
    Since December 2005, HHS has awarded over $3 billion to 
support the first stage of our pandemic preparedness 
activities, including expanding and diversifying domestic 
influenza vaccine production and surge capacity, increasing 
H5N1 vaccine and antiviral stockpiles, and supporting advanced 
development of cell culture and antigen-sparing influenza 
vaccines, antivirals, and diagnostics.
    While we have achieved successes, we have also learned 
lessons. The discovery and development of new medical 
countermeasures is complex and an inherently risky endeavor. 
The termination of the contract to procure an rPA anthrax 
vaccine exemplifies the multifactorial challenges encountered 
in implementation of Project BioShield. We have observed 
several lessons in implementing Project BioShield:
    First, contract terms dictated by the BioShield statute 
were challenging, particularly for less experienced companies.
    Second, it is critical that developers establish effective 
relationships with the FDA to gain a clear understanding of the 
regulatory requirements with respect to their product for the 
    And, third, or finally, absence of a robust advanced 
development program placed too much risk on BioShield projects.
    In response to these lessons, in July 2006, HHS established 
the Public Health Emergency Medical Countermeasures Enterprise 
to coordinate the range of work being done to develop and 
procure countermeasures against terrorist and naturally 
occurring threats and to define priority requirements and make 
more efficient decisions.
    We have established the Biomedical Advanced Research and 
Development Authority (BARDA), as called for in the Pandemic 
and All-Hazards Preparedness Act. And we are working to improve 
and accelerate medical countermeasures advanced research and 
development using these new authorities. We also are building 
on the successes of the pandemic influenza program to support 
an advanced development portfolio of new products and 
technologies across the threat spectrum.
    We have requested $189 million for advanced development for 
fiscal year 2008 to increase the maturity of potential Project 
BioShield products, bridging the Valley of Death gap between 
NIH and other research and development programs in Project 
BioShield procurements.
    I cannot overstate the importance of advanced development, 
and the fiscal year 2008 request for advanced development 
funding is critical to BARDA implementation and effective 
utilization of the Special Reserve Fund for Project BioShield. 
We are using new BARDA authorities, such as advanced and 
milestone payments, in the new BioShield contract for the next-
generation smallpox vaccine and have recently awarded a number 
of advanced development contracts. These include advanced 
development contracts for anthrax antitoxins, rPA anthrax 
vaccine, a smallpox antiviral, novel antibiotic formulations, 
and radiological/nuclear medical countermeasures.
    We are facilitating stakeholder discussions with the FDA to 
establish a better understanding of the regulatory requirements 
for countermeasures. We will continue to insist on and verify 
demonstrated understanding of those requirements by 
    Last spring, we released the enterprise strategy and 
implementation plans which identified the top priority medical 
countermeasures development and acquisition thrust and 
requirements. These plans were informed by significant 
stakeholder input. The strategy and implementation plan 
reaffirms and further identifies our commitments to the 
development and acquisition of anthrax vaccines, anthrax 
antitoxins, and therapeutics for radiological and nuclear 
threats. It also identifies the need for the continued 
development and acquisition of broad spectrum antibiotics, 
antivirals, and diagnostics against the high-priority threats 
identified by the Department of Homeland Security.
    The National Biodefense Science Board was established last 
May to provide expert advice and guidance to the HHS on all 
matters related to preparedness and response to public health 
emergencies resulting from current or future threats, whether 
naturally occurring, accidental, or deliberate. These and other 
efforts signal our commitment to greater transparency, 
predictability, and partnership with our stakeholders. We will 
build on past successes, lessons learned, and new authorities 
to continue to improve implementation of all BARDA programs, 
including Project BioShield.
    This concludes my testimony, and I would be happy to answer 
any questions. Thank you.
    Chairman Lieberman. Thanks, Dr. Parker. We look forward to 
the questions.
    Our next witness is Keith Rhodes, who is the Chief 
Technologist of the Government Accountability Office and 
Director of the Center for Technology and Engineering. In this 
capacity, Mr. Rhodes provides assistance throughout the 
Legislative Branch, throughout Congress, on issues requiring 
significant technical expertise.
    Mr. Rhodes, we welcome your testimony. As I mentioned in my 
opening statement, one of the things that I found most 
troubling in your testimony was the conclusion that the folks 
at HHS had not done a thorough postmortem of the failed VaxGen 
contract, which was particularly troubling since they are in 
the process of going to a second try at it. Dr. Parker has just 
used the phrase ``lessons learned'' and mentioned some things, 
and I welcome your response as to whether that is adequate to 
meet the concerns that you expressed in your report.


    Mr. Rhodes. Thank you, Mr. Chairman. I will try and address 
that as quickly as I can.
    \1\ The prepared statement of Mr. Rhodes appears in the Appendix on 
page 54.
    Chairman Lieberman and Senator Collins and Members of the 
Committee, thank you for asking us here to discuss our findings 
on Project BioShield's first major procurement contract for the 
new rPA anthrax vaccine and the potential for waste in the 
Strategic National Stockpile. My statement is based on our 
report,\2\ which we are releasing today, and will focus on the 
following two issues that you asked us to address: One, factors 
that contributed to the failure of ASPR's first Project 
BioShield procurement effort with VaxGen for an rPA anthrax 
vaccine; and, two, potential for waste in the licensed anthrax 
vaccine BioThrax in the Strategic National Stockpile.
    \2\ The report by GAO appears in the Appendix on page 116.
    In November 2004, ASPR awarded VaxGen a procurement 
contract for $877.5 million. Two years later, in December 2006, 
ASPR terminated VaxGen's contract for failure to meet a 
critical contractual milestone. We identified three major 
factors that contributed to the failure of this effort:
    First, ASPR awarded the first BioShield procurement 
contract to VaxGen when its product was at a very early stage 
of development, when many critical manufacturing issues such as 
stability and scale-up production had not been addressed. 
Similarly, the requirement to deliver 25 million doses of rPA 
anthrax vaccine within 2 years was not based on objective data. 
This requirement, according to industry experts, would have 
been unrealistic even for a large pharmaceutical firm, given 
that the product was at such an early stage of development.
    Second, VaxGen took unrealistic risks in accepting the 
contract terms. According to VaxGen officials, they understood 
that their chances of success were limited. Nonetheless, they 
accepted the contract terms in spite of the aggressive delivery 
timeline, their lack of in-house technical expertise and 
stability in vaccine formulation, and their limited options for 
securing additional funding should the need arise for 
additional testing to meet regulatory requirements.
    Third, important FDA requirements regarding the type of 
data and testing required for the rPA anthrax vaccine to be 
eligible for use in an emergency were not known to FDA, NIAID, 
ASPR, and VaxGen at the outset of the procurement contract. The 
requirements for use of the new anthrax vaccine were defined 
later when FDA introduced new general guidance on emergency use 
authorization and specifically in January 2006, after VaxGen 
asked FDA for clarification. In addition, ASPR's anticipated 
use of the rPA anthrax vaccine was not articulated to all 
parties clearly enough and evolved over time.
    Finally, according to VaxGen, the purchase of BioThrax for 
the stockpile as a stopgap measure for post-exposure situations 
increased the requirements for using the VaxGen rPA vaccine.
    All of these factors created confusion over the acceptance 
criteria for VaxGen's product and significantly diminished 
VaxGen's ability to meet contract timelines.
    According to industry experts, the lack of clear 
requirements is a cause of concern to companies asked to 
partner with the government since they invest significant 
resources in just trying to meet government needs. These 
companies are now questioning whether the government can 
clearly define its requirements for future procurement 
    With regard to potential for waste in the stockpile, we 
identified two issues:
    First, ASPR lacks an effective strategy to minimize waste. 
Vaccine valued at more than $12 million has already expired and 
is no longer usable. Without an effective management strategy 
in the future, over $100 million per year could be lost over 
the life of the licensed anthrax vaccine currently in the 
stockpile. ASPR could minimize such potential waste by 
developing a single inventory system for BioThrax in 
conjunction with the Department of Defense, with rotation based 
on a first-in, first-out principle.
    Second, ASPR plans to use expired vaccine in violation of 
FDA's current rules. According to CDC, ASPR told CDC not to 
dispose of the three lots of BioThrax vaccine in 2006 and 2007. 
ASPR officials told us that the agency's decision was based on 
the possible need to use the lots of vaccines in an emergency. 
However, FDA rules prohibit the use of expired vaccine. Thus, 
ASPR's planned use of expired vaccine would violate FDA's 
current rules and could undermine public confidence because 
ASPR would be unable to guarantee the potency of the vaccine.
    Mr. Chairman, in our May 2006 testimony, we concluded that 
ASPR's procurement strategy for rPA anthrax vaccine had been 
very aggressive. We stated that, ``It is important to 
understand the unique issues at stake in this early phase of 
implementation for the biodefense strategy. The rest of the 
biotechnology sector will be watching to see whether the 
industry and the U.S. Government can make this partnership 
    And so, Mr. Chairman, Senator Collins, as you have said, 6 
years after the anthrax attacks of 2001, the government does 
not have a new, improved anthrax vaccine for protecting the 
public. The failure of this procurement effort has raised large 
questions regarding our country's ability to build a 
partnership between pharmaceutical and biotechnology firms and 
the government to develop both new vaccines and a robust and 
sustainable biodefense industrial base. This goes beyond just 
this individual vaccine procurement and could have an impact on 
how the biotechnology industry responds to government overtures 
in the future for tools to counter the many biothreat agents 
still to be addressed.
    Finally, given that the amount of money appropriated to 
procure medical countermeasures for the stockpile is limited, 
it is imperative that ASPR develop effective strategies to 
minimize waste. This point is the basis for maintaining public 
confidence. Since vaccines are perishable commodities that 
should not be used after their expiration dates, it is prudent 
for ASPR to destroy the expired lots to ensure the public that 
they will not be given an expired vaccine in case of an 
emergency. In addition, ASPR should find users for the 
stockpiled products before they expire to minimize waste.
    Regarding your question on lessons learned, we have seen no 
formal lessons learned. We have seen no documentation. If Dr. 
Parker's statements are credible, that is fine, but we have not 
seen a formal document explaining what I just explained to you 
and what we have stated in our report and in the testimony.
    Mr. Chairman, Senator Collins, this concludes my summary. I 
will be happy to answer any question you or other Members of 
the Committee may have.
    Chairman Lieberman. Thanks, Mr. Rhodes.
    Dr. Parker, during the question-and-answer period, we will 
give you a chance to respond.
    Our final witness on the panel, returning by popular 
demand, Dr. Tara O'Toole is the CEO and Director of the Center 
for Biosecurity at the University of Pittsburgh Medical Center 
and a professor of medicine at the University of Pittsburgh. 
The center conducts policy analyses and works to prevent the 
development and use of biological weapons, among other 
challenges it takes on.
    It is very good to see you, and I look forward to your 
testimony now.


    Dr. O'Toole. Thank you, Mr. Chairman, Senator Collins, and 
Members of the Committee. Thanks for the opportunity to be here 
today and thank you for this Committee's continuing dedication 
to homeland security and biodefense issues.
    \1\ The prepared statement of Dr. O'Toole appears in the Appendix 
on page 71.
    I would like to start by thanking the Federal employees who 
have worked so hard on these vital programs, including Admiral 
Cohen and his team and Dr. Parker and his colleagues. I have 
been amongst the sternest critics of both of these programs, 
and at this point, after studying biodefense issues since 1998, 
I think my colleagues and I have concluded that the scale of 
the challenges we face in constructing an adequate biodefense 
exceeds all our expectations as of 2001. The challenges are 
technical, they are organizational, and they are political.
    I will also say that I think that our narrow gauge and 
focus of some of these programs and the absence of what I would 
call a biodefense strategy has led us to miss some 
opportunities that we might take advantage of in our efforts to 
create a biodefense.
    What we are going to have to build is systems, not just 
technologies and vaccines, but systems for getting and 
deploying and using technologies and countermeasures, and those 
take a long time to build and, frankly, a lot more money than 
we have invested in biodefense so far. But I would like to 
start by reviewing why we are having this hearing and why we 
are worried about this problem.
    The Defense Science Board said in 2000, 6 months before the 
anthrax attacks, that there are no technical barriers to 
terrorist groups or individuals building and disseminating a 
devastating biological attack. That is even more true today. In 
2005, the National Intelligence Council Report said that of all 
the terrorist attacks and challenges facing U.S. security, they 
were most worried about a biological attack, which they thought 
was more likely than a nuclear attack. Those are the only two 
types of assaults that could really destabilize the United 
States of America.
    Chairman Lieberman. We are more worried--excuse me for 
interrupting--because of the relative ease with which a 
devastating amount of bioterrorist agents can be brought into 
the country.
    Dr. O'Toole. I think it was the ease of carrying out a 
biological attack, because these organisms live naturally in 
the world and are available in hundreds of gene banks across 
the world, and also because these are replicating organisms. So 
if you can mount one attack, you can make enough anthrax, for 
example, if you are patient, to do two or ten attacks. So 
everyone is going to feel vulnerable after the first attack. 
The whole country is going to want anthrax vaccine. That is why 
sitting here today with enough anthrax vaccine to cover only 
about 3 million people is so worrisome and, I suspect, part of 
the reason behind HHS' reluctance to get rid of expired 
vaccine. It might not be perfect, it might not be what you 
would use on a good day, but it might be a lot better than 
nothing in the breach.
    So we need to take, I believe, a much more strategic look 
both at these two programs that we are discussing today--and 
they are both vital programs--as well as at our overall 
biosecurity strategy.
    I think there is a lot of complacency and misinformation 
abroad in the leadership of the country about the biothreat and 
biodefense. I think people think the threat is much more remote 
and much less potentially destabilizing than is the case, and I 
think they believe we are more prepared than is the case 
because we have done a lot. We have worked hard and spent about 
$40 billion since 2001 on civilian biodefense.
    But the problem is that drugs and vaccines are a lot harder 
and trickier to make and a lot more expensive than sensors or 
engineering products. I do not think that when we embarked on 
the BioShield program in 2004, the complexity of this endeavor 
was fully realized either by the Congress or by HHS.
    The fact is that the $5.6 billion in BioShield is a 
fraction of what we are going to need, and part of the delay on 
HHS' part is trying to figure out how do we get countermeasures 
for all the possible CBRN threats within that sum of money. We 
are not asking, ``What do we need to defend the country against 
bioattacks?'' We are, in effect, asking, ``What countermeasures 
can we get for this amount of money?'' We are basically 
shopping at Costco. This is part of the reason why big 
pharmaceutical companies do not want to get into the game. It 
is also why we are dependent upon small, daring biotech 
companies who have never made anything before, and making a new 
drug or a vaccine is a lot more art than science. That is just 
where we are. We are in the midst of a revolution in 
bioscience. There are lots of very tempting possibilities 
coming down the pike in terms of new drugs and new vaccines. 
But at the current pace, it is going to take us about 10 years 
to get there.
    So the whole problem of trying to get what we need for a 
fairly paltry sum of money when you compare it to other 
national security expenditures is one of the big problems with 
    There have also been real process problems, as HHS staffed 
up and figured out how to do what it was trying to do. Some of 
these process problems are very well documented in the GAO 
report. I think some of these problems have been improved upon. 
The BARDA legislation that the Congress passed last year 
attempts to fix a lot of these process problems, but Congress 
has not appropriated any money for BARDA yet. And that is 
sending, I think totally unintentionally but very loudly, a 
message to the biotech and pharmaceutical companies who are in 
this game that Congress does not really take biodefense 
seriously. I know that is not the truth as far as this 
Committee is concerned, but that is how it is being read. I 
would be happy to talk more about that, but I think one of the 
vital tasks before this Congress is to appropriate some money 
for BARDA.
    Finally, I think the BioWatch program has made tremendous 
progress over the years. I think it is good technology. It is 
not clear to me that it is the right technology given our 
choices. It may be that we could make more strategic purchases, 
particularly in obtaining situational awareness, the 
information we need once an event is underway, through other 
investments. My recommendation is that DHS or an interagency 
process steps back and takes a strategic look at what we are 
doing across the board in biosurveillance and sets out clear 
goals for what we want to be able to do in 5 years and 10 
years. Thank you.
    Chairman Lieberman. Thanks, Dr. O'Toole. As usual, very 
good testimony.
    Let me go back briefly to the discussion between Mr. Rhodes 
and Dr. Parker. Dr. Parker, obviously there is a lot of concern 
here on Capitol Hill and generally about the VaxGen experience 
because we ultimately have spent hundreds of millions of 
taxpayer dollars with nothing to show. Mr. Rhodes in his report 
is upset that HHS did not do a very thorough postmortem at all, 
or lessons learned. Today you cited some lessons learned in 
your testimony. Mr. Rhodes said he is not satisfied with that. 
He would like to see, particularly as you go on and try to do 
this, something more formal about what you put in place to 
avoid repeating the mistakes. So tell us what you are doing and 
what you are going to do to make sure that the next millions of 
dollars get something for that.
    Mr. Parker. Thank you, Senator, and actually, if I may, I 
may also pick up on a couple themes that Dr. O'Toole picked up, 
because I think that is important.
    Chairman Lieberman. Yes.
    Mr. Parker. There are some themes that she mentioned as 
well, in addition to Keith's comments.
    Chairman Lieberman. So just respond to Mr. Rhodes first, 
and then you can----
    Mr. Parker. Yes, I will, but a little bit about my history. 
I joined the Department just a little over 2 years ago--
actually just before Hurricane Katrina, and so I was completely 
engrossed for about 3 months in Hurricanes Katrina, Rita, and 
Wilma. And when I began to then take a look at Project 
BioShield and the progress and the potential setbacks that were 
already kind of looming there, it became obvious that there 
needed to be some corrections and fixes.
    I think Dr. O'Toole properly described it as a young 
program, setting up a new organization. So we actually looked 
at some of these things, and we kind of categorized these 
issues as internal, interagency, and external with our 
stakeholders. And, yes, internal within the Department, within 
our office, did we have a large enough staff to effectively 
manage this, particularly when the experience was that we did 
not have large pharmaceutical companies, that we were dependent 
upon the up-and-coming, energetic biotechnology industry. We 
needed a larger staff because this was going to require greater 
government oversight and hand-holding, so to speak, to be 
successful in this endeavor.
    So, we had to go and get the budget resources and the 
direct management of budget line items so we could build the 
staff of qualified professionals, and we are doing that.
    Chairman Lieberman. So you feel that is one lesson learned 
that you are beginning to make better.
    Mr. Parker. Yes, sir. We are building a highly qualified 
acquisition and scientific staff so we can provide much better 
oversight of all of our BARDA programs, not only Project 
BioShield but pandemic influenza and the advanced development 
program authorities that we just got in the Pandemic and All-
Hazards Preparedness Act.
    Interagency: If you are not really familiar with the 
BioShield--most people do not understand the details of the 
BioShield statute and the legislation, and the fact that 
contracts--there are really fixed-cost procurement contracts, 
and you can build some of the R&D into that development cycle. 
But there is so much uncertainty in R&D that the earlier you 
let a contract for a procurement under Project BioShield, the 
higher the risk. And so that was a recognized need that we 
needed to bring products further into the pipeline, 
developmental, and mature them before we would bring them into 
Project BioShield. But also associated with that interagency is 
it is a very complex, also, approval process to make any 
acquisition decision. We need two Cabinet Secretaries and the 
President--now it has been delegated down to the OMB Director--
to make a decision on individual procurements.
    Chairman Lieberman. So the decisionmaking process has been 
better streamlined now.
    Mr. Parker. The decision has been better streamlined, and 
then the other part was transparency in working with industry.
    Chairman Lieberman. Let me interrupt you there because I 
have only got about a minute and 45 seconds. Let me suggest 
first that you and the Department present your responses of 
lessons learned in writing to GAO so they can respond to it, 
also for the benefit of the Committee. But I wanted to give you 
a little bit of time on another topic because I noticed you 
were shaking your head when there was reference to the vaccines 
that may be distributed that have expired. So why were you 
shaking your head?
    Mr. Parker. First, we totally agree with the GAO report 
that those expired products need to be destroyed, and we would 
do so. HHS never had an intention to use expired vaccine in an 
emergency use, so those products will be discarded. But it is 
also important to note--I think it has come up--but medical 
products, medical countermeasures, particularly biologics, they 
have a discrete shelf life.
    Chairman Lieberman. Sure.
    Mr. Parker. And so we are always going to be in a position 
that as they expire, they need to be discarded.
    Now, in regard to can we do a better job working with the 
Department of Defense to look at inventory management, sure, 
and we had begun, before the GAO began looking at this, talking 
to DOD about this. We have some particular challenges involved 
that include contracting, legal, and liability and so forth, 
but we are redoubling our efforts with the Department of 
Defense to see how we can better overcome some of those 
challenges so that we can minimize--we will never completely 
eliminate it, but perhaps minimize some that has to get 
    Chairman Lieberman. OK. My time is just about up. I do want 
to say very briefly that Dr. O'Toole made a good point, and 
part of the problem that led HHS to enter into this enormous 
contract with really an untested start-up company, VaxGen, was 
because you could not get the big pharmaceutical companies 
interested in it. And part of the problem here is still us, 
Congress, in the sense--it is not that it is an easy problem, 
but we have to find a way literally to entice the big 
pharmaceutical companies to get into this because there is not 
an obvious typical market incentive to do it. And we have tried 
various ways to try to create that incentive for the public 
good. They all run into some interest group that does not like 
the incentive. But, meantime, the Nation remains vulnerable to 
a bioterrorist attack, and the strongest part of our country to 
present an answer--a vaccine, a treatment--is essentially not 
on the playing field, and we have got to find a way to get them 
out there.
    My time is up. Senator Collins.
    Senator Collins. Thank you, Mr. Chairman.
    Dr. O'Toole, you made a very interesting comment when you 
said that we need to be building systems that can deliver the 
countermeasures or the technologies, and then you went on to 
make a very interesting comment about the BioWatch project. 
This is the project that deploys sensors in some 30 cities. I 
have always thought that it was an excellent idea, an early-
warning system. But I think you are causing us to take a second 
look at how we are deploying our resources.
    If there is a biological agent that is detected by Project 
BioWatch, how prepared do you think State and local first 
responders and emergency managers are to respond? In other 
words, we may have a great technology in place to detect a 
biological agent's release. But if we do not have the system in 
place to respond to that detection, are we any further ahead?
    Dr. O'Toole. Yes, well, that is the question, Senator, and 
I cannot directly answer your query as to how the public health 
officials who are charged with triggering response would react. 
But I can tell you that at a meeting called by the White House 
last spring, which included about 60 public health officials 
and emergency response experts, there was quite a widespread 
articulation of skepticism about BioWatch. And I have heard in 
other hearings of users being very critical of the resources 
BioWatch takes, of the lack of coordination in some places--not 
all--between those who operate the BioWatch system and those 
who are charged with public health. I am sure those kinds of 
problems are fixable, but they do need attention because this 
complaint litany has been going on for years now.
    My concern is that we cannot afford to put sensors in every 
nook and cranny of every city or every town in the country, so 
the first question is: Will the BioWatch sensors detect a 
release? The second question is basically the hinge point upon 
which BioWatch, at least its efficacy, depends. The whole idea 
of BioWatch is that early warning gets you an earlier and hence 
a better response. But it is not clear that public health is 
going to be willing to pull the trigger to respond--to move the 
stockpile, to tell everybody we have had an anthrax attack, 
etc.--until they have clinical evidence of an attack, meaning 
someone who is sick with symptoms or a lot of people who are 
sick with symptoms similar to a bioterror agent, or clinical 
diagnostic tests--cultures, PCRs, saying, yes, this person is 
infected with anthrax. That has been the case so far.
    Now, in practice, if they do get a BioWatch alert, public 
health starts actively querying emergency rooms and so forth 
for people who are sick and fit the description of this 
disease. Would we be better off--if it is a zero sum game--
investing some money in rapid point-of-service diagnostic tests 
so that a doctor could tell you immediately or within an hour 
that you have anthrax or you do not? Would we be better off 
making electronic links between hospital emergency rooms and 
public health, which more or less do not exist in most places 
today? Are we spending too much of our attention on detecting a 
bioattack based on the unproven and untested assumption that 
early detection improves response? Or would we be better off 
investing in systems that are going to give us more situational 
awareness during an attack? Situational awareness is going to 
be critical to managing an attack effectively and to mitigating 
the consequences. We are spending almost nothing on situational 
awareness right now comparatively in terms of energy, talent, 
and money, and I think that would be a very important part of 
the strategy.
    Senator Collins. Thank you. Admiral Cohen, I am going to 
ask you to comment on Dr. O'Toole's comments. I know that you 
are working on second-generation technology that is going to 
shorten the time involved in issuing an alert, and I have 
always thought the idea of sensors in key places in key cities 
was an excellent idea. But I think Dr. O'Toole also raises a 
very good point about what happens next.
    What is your response? Are we prepared in terms of public 
health authorities, emergency managers, medical personnel, 
first responders, to react quickly when you issue a report 
based on the BioWatch sensors?
    Mr. Cohen. Well, Senator, first of all, I think your 
question is right on the mark, and I think Dr. O'Toole's 
comments are very articulate, very thoughtful, and get right to 
the heart of the issue.
    Now, in my prepared statement, I told you that the existing 
BioWatch sensors have processed over 4 million samples, and we 
have had no false positives. But we have had close to two dozen 
positives in that same period of time. All of those positives 
that were determined to be valid, they were environmentally 
based. In the 14 months that I have been on board in this 
position, I have had an opportunity to see how different 
cities, different health organizations at the State, city, and 
local level, respond to the report of those valid positives. 
And I must tell you it varies significantly.
    In some of our larger metropolitan areas, they go, as we 
say, to battle stations. They take it very seriously. They 
bring in secondary sensors. They do surveys. They check the 
pharmacies to ensure that the Tylenol shelves are not emptied. 
They check with the emergency rooms. They do all of the things 
that you and Dr. O'Toole indicated would be necessary as part 
of a system, a systems approach. In other areas, well, it is a 
time-late sample, and if something is going to develop, we will 
know about it anyway.
    The Founding Fathers were very wise. Those powers not 
specifically given to the Federal Government are retained by 
the States and locals. So we wanted an inefficient and 
confrontational form of government, and the good news is that 
is what we have, and the bad news is that is what we have.
    In defense, it was quite easy. We can tell medical doctors 
and we can tell the patients what to do, what vaccines you are 
going to take, when to report to sick bay. It is not that 
simple or straightforward in health care, certainly the 
distributed health care or public service health care that we 
have throughout.
    So as we go forward, I do think Dr. O'Toole has one thing 
especially right. The more ubiquitous the sampling, the less 
expensive the sampling, the more responsive, meaning short time 
and accuracy, the sampling, whether it is at point of care or 
it is distributed throughout a city or it is on mobile trucks, 
or one of the things we are working on in my high-risk 
portfolio is what we call ``Cell-All.'' There are 2.8 billion 
cell phones today. Now, a cell phone is no longer just a phone. 
It is a mini-computer that has computing power that exceeds 
what a super-computer had 10 years ago. It has voice, it has 
video, it can take pictures, it has GPS in it. So if we could 
have even a single sensor, whether it is radiological or 
biological, every one of us would have a sensor and would then 
report through 911 the location, the fact there was a 
radiological or a biological event occurring. We are not 
talking about a CO, carbon monoxide, monitor that has numbers. 
It is a 1 or a 0. Did it hit the trip point that was 
established by HHS, CDC, etc.? And then if we have multiple of 
these in a metro station or in a hospital, etc., we know an 
event is occurring.
    Now, this is on the high end. This is the 9/11 Commission, 
not suffering from a lack of imagination, but I can tell you we 
are actively pursuing this. And coupled with BioWatch III, 
which will be more near term, wireless, more digital than 
BioWatch II, and because it will be cheaper, we will be able to 
put it, we hope, in four times as many cities. But we have got 
to go in the direction that Dr. O'Toole has said in the area of 
the response, in the linking of emergency rooms, etc., 
critically important, but I really do think that this is an 
HHS, CDC, and congressional area. We can give the tools. We 
cannot mandate their use.
    Senator Collins. Thank you.
    Chairman Lieberman. Thanks, Senator Collins. Senator Akaka, 
good morning. Thanks for being here.


    Senator Akaka. Thank you very much, Mr. Chairman. I want to 
congratulate you and the Ranking Member for having this 
hearing. It is fascinating for me to sit here and listen to all 
of this and to hear from our experts what they have been facing 
in dealing with the crisis.
    I was interested, Secretary Cohen, in some of the new 
equipment that you have been holding up here, and I 
specifically wanted to ask you about the iris scanner that you 
have. I wonder how accurate it is. Can it detect specific 
chemical or biological agents?
    Mr. Cohen. Well, Senator, aloha.
    Senator Akaka. Aloha.
    Mr. Cohen. The short answer is yes, it does select specific 
agents, both chemical and biological. That is why we have an 
LED screen so that when you hold it up to the face and you 
press the button, it identifies to you which specific agent you 
might be looking at.
    We are refining its accuracy, its false alarms, etc. This 
is cutting edge technology. It is in the final test phases. I 
am glad to come by and give you a demonstration, or your staff, 
or take for the record the specific sensitivities that it has. 
I was in your lovely State 2 weeks ago with Major General Bob 
Lee, your Adjutant General. Of course, Maine suffers from 
nor'easters, and Connecticut has the occasional influx where 
they lose all their beautiful elm trees about every 17 years--I 
remember that. But in Hawaii, you have not only the terrorist 
threats in the middle of the Pacific Basin, but you have a 
variety of natural threats, be it earthquakes or tsunamis, 
flooding, etc. And I am reminded of the loss of power on Oahu 
just months ago from the earthquake. And I am so pleased that 
we are able to work closely with your Adjutant General and all 
the Adjutants General in providing these kinds--initially in 
small numbers on an experimental basis so they can work with 
the first responders to make the people of Hawaii and the 
Nation safer.
    Senator Akaka. As these are developed, it is important that 
there is training down the line to the first responders so that 
it can be applied and used wherever it is necessary.
    Secretary Cohen and Secretary Parker, going back to the 
earlier discussion on anthrax, why is anthrax vaccine the only 
near-term anthrax BioShield procurement priority? What other 
near-term or non-antibiotic therapies is HHS focusing on?
    Mr. Parker. Well, anthrax vaccine is not the only near-time 
priority, and anthrax vaccine is not the only component of our 
strategy to have therapeutics for anthrax. The first line of 
defense is antibiotics; vaccine is important for post-exposure 
use in conjunction with antibiotics; but, also, anthrax 
antitoxins to treat symptomatic anthrax. And so it is important 
that we pursue that continuum and that complete tool chest for 
the medical countermeasures against anthrax.
    But we also have other priorities, and they tier from the 
DHS threat assessment and the material threat determinations, 
but they include antitoxins and botulinum neurotoxins. They 
include the need to pursue medical countermeasures for the 
radiological and the nuclear threat. They also include the need 
to have medical countermeasures against smallpox. And as I 
mentioned in my opening remarks, we have a vaccine now for 
every American, and we are also under a Project BioShield 
contract pursuing a modified and a second-generation smallpox 
vaccine that could be particularly useful in certain 
populations, at-risk populations. But we also need an antiviral 
for smallpox, and we just continued and extended an advance 
development contract to continue the development of a smallpox 
antiviral. But with the list of threats that we do face, we 
need to be turning our attention--and we are--to looking at 
more broad spectrum, both antibiotics and broad spectrum 
    One other category for which we actually have no medical 
countermeasures yet are the viral hemorrhagic fevers, but there 
has been a great deal of research and development in the 
discovery phase, and there is actually some reason for optimism 
that there may be some countermeasures for some of the viral 
hemorrhagic fevers that are maturing out of the tech base that 
could go into early development.
    So there are a number of projects that we have underway, 
and, again, I must emphasize the need for advanced development 
to bring those out of the tech base and mature those in a way 
that will ultimately make them more suitable for a Project 
BioShield type procurement.
    Senator Akaka. Thank you very much, Mr. Chairman.
    Chairman Lieberman. Thanks, Senator Akaka.
    I think we can do another round before a round of votes is 
called on the floor. I want to go back to the conversation 
about situational awareness. This Committee in our extensive 
investigation of Hurricane Katrina found that one of the great 
problems was that the responders did not have situational 
awareness. They could not talk to each other. They could not 
talk to their superiors. Here we are talking about something 
else, so I wanted just to ask you, Dr. O'Toole, give us a real 
brief definition of what you mean by situational awareness in a 
bioterrorist context or a pandemic context.
    Dr. O'Toole. Well, imagine yourself mayor of a city that 
has been attacked with anthrax. You may have knowledge of half 
a dozen or a dozen people who are in the hospital sick, and 
what you know is there is more to come. What you are going to 
want to know is, for example, how many people are sick, how 
many people are at risk, where are the sick people. Are the 
hospitals caring for them about to collapse because they are 
being overwhelmed, both by people who are infected and people 
who fear they might be? Do they have the resources they need, 
whether they be drugs, equipment, ventilators, whatever? If 
not, where are those resources and how could I get them to 
where they are? And this situation of confusion and of active 
management is not going to be over in a day or a week. It is 
going to go on for weeks and months.
    In 1918, in Baltimore, the Public Health Department 
completely lost its credibility overnight during the pandemic 
flu epidemic by saying we are seeing fewer and fewer reports 
from doctors of new patients with flu. At that time, as now, 
doctors submitted little green cards saying ``I have seen a 
case of flu'' via the mail to the Health Department. And what 
was happening at the time was that the doctors were so busy 
taking care of the surge in patients that the little green 
cards were not getting filled out.
    Chairman Lieberman. Let me stop you there. That is an 
excellent introduction. I want to now turn to Admiral Cohen and 
Dr. Parker and ask them to respond because obviously it is 
almost 90 years after the Baltimore situation, so this is the 
question that we want to ask, which is that if a biological 
agent has been distributed in a population by terrorists or if 
a pandemic is beginning, what systems are in place for the 
authorities, locally and then nationally, to know quickly 
enough that this is happening? I mean, obviously, we have 
enormous electronic capacity, telecommunications capacity that 
did not exist in 1918. Still, I fear--as I mentioned when I 
read the National Strategy for Public Health and Medical 
Preparedness--that a lot of the requirements in the strategy I 
do not think we have yet.
    Tell me where we are and what we are doing to try to close 
whatever gaps exist.
    Mr. Cohen. Well, Chairman, I will start at a macro level, 
and in terms of the detail of the health care, I will leave 
that, of course, to Dr. Parker.
    Chairman Lieberman. Let me ask you, if you can from your 
position at DHS, to respond to that type of situation, not 1918 
but to the mayor of a present-day city. Anthrax has been 
released in a city, a town, and it is beginning to turn up. Are 
we going to know about it quickly enough?
    Mr. Cohen. Well, the short answer is if we are monitoring 
for it in BioWatch, we have a high probability of knowing about 
it. Of course, there are many other ways to detect the anthrax. 
There is a great sense of awareness and alertness today in the 
general population, whether you go on a plane or you open a 
letter, you do it carefully. You know there are many reports 
that we get of white powder. Some turn out to be false. We have 
had some naturally occurring anthrax, as you know, from 
untanned animal hides over the last several years.
    Chairman Lieberman. Right.
    Mr. Cohen. It is a naturally occurring disease. But I have 
a higher confidence that in the near term, before we depleted 
the stocks of Tylenol, in major population areas we would know 
that there was a medical emergency occurring and that we would 
quickly know that it was anthrax.
    Chairman Lieberman. Would we know because of the monitors 
that you have set up or because there is a system where doctors 
will feed into some electronic process to let us know something 
is spreading rapidly?
    Mr. Cohen. Well, for us it is the monitors, for us it is 
the number of sick people. You both are very familiar with our 
operations center, which has come an awfully long way.
    Chairman Lieberman. Right.
    Mr. Cohen. You are aware that we do these exercises like 
TOPOFF. In fact, 2 weeks ago, we just did one in Phoenix. While 
it was a nuclear/radiological exercise, the dispersion models, 
etc., are very similar. We learned a lot about shelter in 
place, especially school children, the effect that the parents 
would worry about wanting to go out and get them. The doctor 
will talk much more about how you transmit these various 
diseases. Radiological is not biological. But there is a 
general awareness that, I think, works to our benefit. You then 
have to go into all of the other interoperability coordination 
issues and authorities that are necessary. And right now, last 
night we had with Secretary Chertoff a late-night phone call, 
all of the leadership, on how we are going to respond and help 
with the terrible tragedy that is occurring in California right 
now, with 250,000 people who have been displaced--Qualcomm 
Center, the convention center, working with the Red Cross, 
getting planes, cots, etc., there.
    So while biological may be very threatening and unique and 
have medical aspects to it, these kinds of events tend to 
replicate in how they develop and how we respond.
    Chairman Lieberman. OK. Dr. Parker, I am over my time, but 
just take a moment and tell us whether there is an electronic 
system in place.
    Mr. Parker. Yes, if I can add to that, the CDC is 
developing an electronic system--they have several surveillance 
systems that are very effective and active and serve local and 
State public health communities. And one of the surveillance 
systems that they have been developing is called BioSense. And, 
in fact, we refocused it recently to make sure that it is 
focusing on some of the high-consequence bioterrorism 
pathogens. But it is designed to build that electronic bridge 
between the public health community and the medical community 
and to help speed the flow of information electronically.
    Now, frankly, though, our vision really for the future to 
much better improve our situational awareness from a medical 
perspective is the electronic health record and to be able to 
use that in an improved way. But we are not there yet.
    Chairman Lieberman. We are not where we need to be there 
yet, are we? I would really challenge you to--I know a lot 
comes down to money, but to come back to us with a proposal for 
what we could do to facilitate that.
    Mr. Parker. I would be glad to.
    Chairman Lieberman. Because that will become the first line 
of defense.
    Mr. Parker. It is. And another thing with the Pandemic and 
All-Hazards Preparedness Act (PAHPA), recently, we have begun 
to also make sure that the Poison Control Centers are part of 
this because they are an important component in our real-time 
disease detection and monitoring.
    But I also have to emphasize this is part of our all-
hazards approach, and we have made a lot of accomplishments, I 
believe, in our pandemic influenza preparedness activities and 
working with State and local communities on these very issues, 
and that will have implication for a bioterrorism event as 
    Chairman Lieberman. OK. Senator Collins.
    Senator Collins. Dr. Parker, I want to go back to the issue 
of the stockpiled anthrax vaccine. It seems so logical to me 
for you to have a joint effort with DOD whereby, as your 
vaccine is getting closer to the expiration date, you rotate it 
out to DOD to use, and then you buy new and repeat the process 
over and over again. And if that kind of system does not occur, 
we know from GAO's estimates that it is going to cost the 
taxpayers $128 million in 2008, and then each year another $100 
    Now, you said you are working with the Defense Department 
on such a plan, but you alluded to certain obstacles. What are 
those obstacles? Are they legislative obstacles? Are they 
funding? What is the problem? It just seems like a common-sense 
solution to a problem that otherwise is going to cost the 
taxpayers hundreds of millions of dollars.
    Mr. Parker. Well, first, it does seem like a common-sense 
solution, and we are working to try to find that common-sense 
solution. But there are realities in the contracting issues 
because we use two different contracts, and we are working on 
that, too. That is another issue because we have worked very 
closely with the Department of Defense, particularly on all of 
our medical countermeasures, but even more specifically on 
Anthrax Vaccine Absorbed. But there are liability issues 
associated with each individual contract, and all that is 
associated with some legal issues. Both the Department and I, 
though, feel pretty optimistic that we can work through those 
issues. I have not identified that there is any need for 
legislative help on this, but we will be looking for that if it 
comes up. But so far, we will do everything we can to work 
through that and overcome it.
    But let me just talk also about the expense. I am not quite 
sure I agree with the $100 million figure in 2008, but that is 
something we can talk offline and work on that. Fortunately, we 
have not had to use these medical countermeasures--hopefully we 
will never have to use these medical countermeasures. They are 
part of our preparedness activities. But as medical 
countermeasures expire, though, we will have to discard medical 
    I am not sure if I would want to couch the fact that we 
have to discard expired medical countermeasures in our 
stockpile because they passed their expiration and we cannot 
use them as wastage. That is part of our cost of being 
prepared. We know we are going to have to lose some of that. We 
will work and redouble our efforts with the Department of 
Defense to try to do everything we can to minimize what has to 
be discarded and make sure it can be appropriately utilized. 
But just knowing the requirements, what the Department of 
Defense does, and how our stockpile is going to grow, we can 
never eliminate it. We are always going to be in a position 
that some will have to be expired.
    Senator Collins. Mr. Rhodes, do you see a potential for 
saving literally hundreds of millions of dollars over the next 
decade if we are able to come up with an integrated system 
whereby the BioShield vaccines are rotated to DOD to use?
    Mr. Rhodes. Yes, ma'am. I know Dr. Parker and I will 
probably always disagree on the exact number, and that is fine. 
But I think this also gets to the larger discussion that leads 
back to Dr. O'Toole's point about strategic vision. It is one 
thing to store vaccine in a vial. It is another to store it in 
bulk. It is one thing to rotate vials out of the Strategic 
National Stockpile and into DOD usage, the coordination between 
there. But it is also a function of how are we going to use it.
    Dr. O'Toole is absolutely right. A series of vaccines that 
have gone a certain period of time beyond their expiration date 
may indeed be better than nothing. But that is the discussion 
that needs to take place at the strategic level based on 
scientific data so that we can maintain the public's confidence 
in our Nation's ability to respond.
    Dr. Parker is absolutely right. Biologics expire. They get 
old. They die. They lose their efficacy. The point is to make 
certain that we have the strategy in place tied to the systems 
that Dr. O'Toole is describing where we can deliver the 
countermeasure and that we do have a pipeline for the 
countermeasure and we understand how the countermeasure is 
going to be used for emergency use. Is it directly in its most 
effective time of life? Can we rotate it to DOD? That is 
ultimately the message we are trying to deliver, is that 
broader view, whether it is looking at what is the next 
generation of anthrax vaccine going to be and how are we going 
to procure it, or how are we going to store what we already 
    Senator Collins. Mr. Rhodes, my time is almost expired. Let 
me just ask you one final question. We still need an improved 
anthrax vaccine, one that is easier to administer, less 
painful, etc. How prepared do you think HHS is at this point to 
award a new contract for the development of a new vaccine that 
does not have the same very unfortunate and expensive ending 
that the previous one had?
    Mr. Rhodes. I appreciate the Committee asking Dr. Parker to 
put together the lessons learned. Based on documentation that 
we have, I cannot give you the assurance here now that the next 
contract will be successful because I do not know that the 
lessons have been learned and incorporated directly into the 
process for acquiring the next version, letting the next 
    While we were having discussions this summer, we were told 
that there was internal analysis about the lessons learned. We 
have not seen it. And at the same time, the contract was being 
let. So I have to go with what I have, and what I have does not 
counter the position--the track record that I have already 
    Senator Collins. Thank you. Mr. Chairman, it looks like Dr. 
Parker wants to respond.
    Chairman Lieberman. Go ahead, Mr. Parker.
    Mr. Parker. I have just three major points as far as the 
lessons learned on individual contracts.
    One, we have moved away from a performance-based contract, 
which was basically deliver the product, to one that has very 
detailed milestones and deliverables along the way to 
delivering the product. And so that way we ensure that there is 
complete understanding by all parties at the beginning of what 
are the specific milestones that must be met.
    Two, we verify and ensure that there is early, often 
communication with the Food and Drug Administration; and as the 
science matures and the information matures, that the product 
continues to develop, it is critical that the manufacturer 
engage early and often with the FDA.
    And then, finally, our ability now to have advanced 
development through the BARDA is just absolutely critical that 
we can take products further down the developmental pipeline 
and experience some of the setbacks that you are going to have 
and that you will have in R&D with the appropriate type of 
funding and advanced development and have those products so 
they are more mature before they do go into a Project BioShield 
    Senator Collins. Thank you, Mr. Chairman.
    Chairman Lieberman. Thank you very much, Senator Collins.
    Dr. Parker, have you agreeded to respond in writing and 
present a kind of lessons learned plan to GAO?
    Mr. Parker. Yes, Senator.
    Chairman Lieberman. I appreciate that very much. The roll 
call has gone off, so Senator Collins and I have to go over to 
the Senate. We will have to close the hearing.
    I do just want to draw attention to something Dr. O'Toole 
said in her testimony, and perhaps we will form a question to 
the panel on it. But it is that a concept of operations to 
counter another anthrax attack is lacking. And by coincidence, 
Senator Collins and I last week sent a letter to Secretary 
Chertoff in which we said that we know he is working on the 
National Response Framework, which is the groundwork for 
planning efforts, but there is no substitute for actual 
operational plans. In some of the materials we read here, I got 
the feeling that the vaccine might be able to be delivered to a 
general area, but then it was not clear how it would get to the 
people who really need it. And this is a critical factor to 
    As you know, everyone talks about what keeps you up at 
night post-September 11, 2001. This keeps me and a lot of other 
people up at night for the reasons we have discussed. The ease 
of bringing biological agents into the country or actually 
preparing them here, and then the propensity they have to 
multiply and spread has devastating consequences.
    So the Committee is going to stay on this. We are going to 
look over your shoulder at DHS and HHS. We do not consider 
ourselves to be antagonists, but we are representing the public 
that we all serve. We are also going to say to you, tell us 
what you are not getting that is standing in the way of you 
achieving what we need to achieve as soon as possible. And I am 
pleased to say that Mr. Rhodes and the Committee and GAO are 
going to be working together. We have agreed that the excellent 
report issued today is the first of a series that will be 
issued with regard to the bioterrorist threat to our country.
    Admiral Cohen, do you want a last word?
    Mr. Cohen. Yes, sir. I know you are facing a vote. I just 
want to make one clarification. On the retinal scanner, what we 
are looking at are the physiological effects on the human, 
which we then track back to various chemical and biological 
agents. And I wanted to correct that record. And you asked is 
there anything you could do to help. I think your staff is 
aware that wisely you sunsetted many of the provisions of the 
initial Homeland Security Act, but one that is coming up on 
January 25, 2008, is the other transaction agreements. This is 
a critically important tool that we use, especially in the 
BioWatch and biodefense areas, and I would just with great 
respect ask that if there is any thing that its renewal could 
be attached to before it expires, we would greatly appreciate 
that and will not abuse it.
    Thank you so much for your leadership.
    Chairman Lieberman. Time flies. That is quick. Thank you.
    The record of the hearing will remain open for 15 days for 
any additional comments that the witnesses would like to submit 
or for us to ask you additional questions. This has been a very 
productive, direct hearing with, I think, the appropriate sense 
of urgency to it, and I thank you for all that you have all 
    Senator Collins, would you like to add anything?
    Senator Collins. Thank you to our witnesses and to you, Mr. 
Chairman, for holding this very important hearing.
    Chairman Lieberman. Thank you. The hearing is adjourned.
    [Whereupon, at 11:40 a.m., the Committee was adjourned.]

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