But first year track record on existing efforts mixed

President Barack Obama scarcely mentioned defending the United States against bioterrorism in his State of the Union address Wednesday night. But when he did, he vowed to boost the capacity to combat bioterrorism and infectious disease.

"[W]e are launching a new initiative that will give us the capacity to respond faster and more effectively to bioterrorism or an infectious disease--a plan that will counter threats at home and strengthen public health abroad," Obama declared without offering any further details.

The White House strongly disagreed with the final report card of the WMD Commission, released Tuesday, which concluded that the administration and Congress had failed to do enough to defend the public against the threat of biological agents in the past year. The commission gave the federal government a grade of "F" on "enhancing the nation's capabilities for rapid response to prevent biological attacks from inflicting mass casualties"--one of 17 categories it graded.

White House spokesman Nick Shapiro, in a statement Tuesday, defended the Obama adminstration's actions on the issue and promised the president would mention a new measure to fight bioterrorism in the State of the Union speech.

But not only did Obama offer no details on the initiative, the commission and some in Congress have criticized him for attempting to transfer funds from Project BioShield to pandemic influenza preparedness.

Project BioShield, the principal federal program for the procurement of medical countermeasures, was established in 2004 to buy vaccines and countermeasures from private industry to defend against deadly pathogens.

The Federation of American Scientists publicly released a report by the Congressional Research Service (CRS) to the public Wednesday to shed light on some issues confronting the production of medical countermeasures for biological agents.

The Homeland Security Appropriations Act of 2004 (PL 108-90) originally provided about $5.6 billion for countermeasures under BioShield for a period covering fiscal 2004 through fiscal 2013.

But lawmakers removed about $25 million from Project BioShield in fiscal 2004 and 2005 to fund other activities. In 2009, Congress transferred an additional $412 million from BioShield to pandemic influenza preparedness and response, noted the CRS report, Project BioShield: Authorities, Appropriations, Acquisitions, and Issues for Congress.

The Consolidated Appropriations Act of 2010 (PL 111-117) transferred funding for Project BioShield from the Department of Homeland Security (DHS) to the Department of Health and Human Services (HHS) at Obama's request. The bill also provided BioShield with $609 million to support countermeasure research and development--one of the other activities Congress funded with BioShield funds in 2004 and 2005.

Separate legislation created the Biomedical Advanced Research and Development Authority (BARDA) at HHS under the Pandemic and All-Hazard Preparedness Act (PL 109-417). Today, BARDA oversees all activities under Project BioShield.

Under BioShield to date, HHS has approved five contracts and awarded 47 grants for countermeasures for chemical, biological, radiological, or nuclear (CBRN) agents. It has obligated about $2 billion for countermeasures to protect against anthrax, botulism, radiation, and smallpox, the report said.

BioShield funding

Congress now has some decisions to make going forward, the CRS reported suggested.

"The 111th Congress faces several challenging policy issues. Primary among them is assessing whether Project BioShield is successfully encouraging medical countermeasure development. A second issue is whether to allow additional diversions of the Project BioShield advance appropriation, a key element of the government's market guarantee, to support other activities. A third is whether to broaden Project BioShield's mandate beyond CBRN countermeasures in the face of other threats, such as pandemic influenza," stated the CRS report, dated Jan. 22.

Congress structured the budget for Project BioShield as a 10-year advance appropriation to encourage the participation of private companies in the program, the report said. Companies were to develop vaccines and countermeasures with the assurance of a guaranteed federal customer.

But legislators have backed down from that commitment somewhat by subjecting Project BioShield to annual appropriations. Doing so enabled lawmakers to rescind or transfer 19 percent of the program's funding--to research and development for CBRN countermeasures and other research projects.

Such transfers could have a chilling effect on industry's willingness to develop countermeasures for sale to the federal government, the report observed.

"Annual transfers from this account to fund such activity would continue to lower the amounts available for procuring CBRN countermeasures, their originally intended purpose," the report stated. "If funding becomes a limitation to acquiring countermeasures, Congress could appropriate additional money for Project BioShield acquisitions. However, such a course of events might cause potential countermeasure developers to feel dependent on the actions of future appropriators, precisely the situation that establishment and advanced funding of the special reserve fund was designed to ameliorate."

On the other hand, the transfer of the funds to research and development could defray those costs for industry, the report continued. The government could directly fund the development of countermeasures, which would become commercialized.

In 2009, Obama requested the transfer of additional money from Project BioShield for the purchase of medical countermeasures in a supplemental appropriation bill but Congress denied the request, partly at the urging of the WMD Commission.

In its final report card Tuesday, the WMD Commission assailed attempts to transfer funds from BioShield, which it viewed as woefully underfunded.

"Especially troubling is the lack of priority given to the development of medical countermeasures--the vaccines and medicines that would be required to mitigate the consequences of an attack," the commission wrote. "Congress created the Biomedical Advanced Research and Development Authority Advanced Development Fund to promote the development of new vaccines, drugs, and production processes required to meet the modern threats from man-made and naturally occurring epidemics.

"The estimated cost of developing the medical countermeasures required to meet the threats identified by the Department of Homeland Security is $3.4 billion a year for the next five years. Appropriation for FY 2010 is less than one tenth of that. In addition, there have been several attempts by the Administration and Congress to 'raid' the BioShield Strategic Reserve Fund for programs not associated with national security," it added.