Project BioShield: Purposes and Authorities
Frank Gottron
Specialist in Science and Technology Policy
July 6, 2009
Congressional Research Service
7-5700
www.crs.gov
RS21507
CRS Report for Congress
P
repared for Members and Committees of Congress

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Project BioShield: Purposes and Authorities

Summary
Many potential chemical, biological, radiological, and nuclear (CBRN) terrorism agents lack
available countermeasures. In 2003, President Bush proposed Project BioShield to address this
need. The Project BioShield Act became law in July 2004 (P.L. 108-276).
This law has three main provisions: (1) relaxing procedures for some CBRN terrorism-related
spending, including hiring and awarding research grants; (2) guaranteeing a federal government
market for new CBRN medical countermeasures; and (3) permitting emergency use of
unapproved countermeasures. The Department of Health and Human Services (HHS) has used
each of these authorities. The HHS used expedited review authorities to approve grants relating to
developing treatments for radiation exposure and used the authority to guarantee a government
market to obligate approximately $2.3 billion to acquire countermeasures against anthrax,
botulism, radiation, and smallpox. The HHS has also employed the emergency use authority
several times including allowing young children with H1N1 “swine flu” to receive specific
antiviral drugs.
The Department of Homeland Security Appropriations Act, 2004 (P.L. 108-90) advance-
appropriated $5.593 billion for FY2004 to FY2013 for Project BioShield. In addition to the
approximately $2.3 billion used for countermeasure procurement, Congress has decreased the
available amount in the BioShield account. In FY2004 and FY2005, Congress removed
approximately a total of $25 million through rescissions. In the Omnibus Appropriations Act,
2009 (P.L. 111-8), Congress transferred $412 million to other programs to support
countermeasure advanced research and development and pandemic influenza preparedness and
response. President Obama has proposed transferring an additional $305 million in FY2010 to
support countermeasure advanced research and development. The administration also seeks to
transfer management of this account from the Department of Homeland Security to HHS. The
President has also requested that the type of countermeasures that could be procured using these
funds be expanded from solely CBRN to include countermeasures against pandemic influenza.
Such an action would likely decrease the amount of BioShield money that would be available for
CBRN countermeasures.
Since passing the Project BioShield Act, subsequent congresses have considered additional
measures to further encourage countermeasure development. The 109th Congress passed the
Pandemic and All-Hazard Preparedness Act (P.L. 109-417) which created the Biomedical
Advanced Research and Development Authority (BARDA) in HHS. This office oversees all of
HHS’ Project BioShield activities, amongst other duties. The Pandemic and All-Hazard
Preparedness Act also modified the Project BioShield procurement process. Questions remain
regarding whether these changes have sufficiently improved countermeasure development and
procurement.
The 111th Congress faces several challenging policy decisions. Primary among them is assessing
whether Project BioShield is successfully encouraging medical countermeasure development. A
second issue is whether to allow additional diversions of Project BioShield appropriations, a key
element of the government’s market guarantee, to support other activities. A third is whether to
broaden what has been a CBRN countermeasure mandate in the face of other threats such as
pandemic influenza.

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Contents
Introduction ................................................................................................................................ 1
The Project BioShield Act ........................................................................................................... 1
Expedited Procedures............................................................................................................ 1
Market Guarantee ................................................................................................................. 2
Emergency Use of Unapproved Products............................................................................... 3
Reporting Requirements........................................................................................................ 3
Appropriations ............................................................................................................................ 4
Acquisitions................................................................................................................................ 5
Policy Issues ............................................................................................................................... 7
Diversion of Appropriations for Other Purposes .................................................................... 7
Transfer of Account to HHS .................................................................................................. 8
Stockpile Replenishment ....................................................................................................... 9
Broad Spectrum Countermeasures......................................................................................... 9
The Biomedical Advanced Research and Development Authority.......................................... 9

Tables
Table 1. Project BioShield Rescissions, and Transfers.................................................................. 4
Table 2. Project BioShield Acquisition Activity ........................................................................... 6

Contacts
Author Contact Information ...................................................................................................... 10

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Introduction
Following the terrorist attacks of 2001, the federal government determined that it would need new
medical countermeasures (e.g., diagnostic tests, drugs, vaccines, and other treatments) to respond
to an attack using chemical, biological, radiological, or nuclear (CBRN) agents.1 The
pharmaceutical industry attributes the paucity of CBRN agent countermeasures to the lack of a
significant commercial market.2 Because these diseases and conditions occur infrequently, the
private sector perceives little economic incentive to invest the millions of dollars required to bring
treatments to market.
The Project BioShield Act
To encourage the development of new CBRN countermeasures, President Bush proposed Project
BioShield in his 2003 State of the Union address. The 108th Congress considered this proposal
and passed the Project BioShield Act of 2004 (P.L. 108-276, signed into law July 21, 2004).3 This
act has three main provisions. It provides the Department of Health and Human Services (HHS)
expedited procedures for CBRN terrorism-related spending including procuring products, hiring
experts, and awarding research grants. The act creates a government-market guarantee by
allowing the HHS Secretary to obligate funds to purchase countermeasures while they still have
several more years of development. The act also authorizes the HHS Secretary to temporarily
allow the emergency use of countermeasures that lack Food and Drug Administration (FDA)
approval.
Expedited Procedures
The act relaxes procedures under the Federal Acquisition Regulation for procuring property or
services used in performing, administering, or supporting CBRN countermeasure research and
development (R&D). These expedited procedures decrease both the amount of paperwork
required for these expenditures and the potential for oversight. The act increases the maximum
amount, from $100,000 to $25 million, for contracts awarded under simplified acquisition
procedures. It also allows these purchases using other than full and open competition. Congress
granted similar, but smaller, contract-level increases to the Department of Homeland Security
(DHS) and other departments and agencies in the Homeland Security Act (P.L. 107-296) and the
National Defense Authorization Act, 2004 (P.L. 108-136). According to HHS, it has not used
these authorities.4

1 For additional information and analysis of the procurement provisions of Project BioShield, see CRS Report
RL33907, Project BioShield: Appropriations, Acquisitions, and Policy Implementation Issues for Congress, by Frank
Gottron.
2 Alan Pemberton, Pharmaceutical Research and Manufacturers of America, Testimony before the U.S. House of
Representatives Select Committee on Homeland Security, May 15, 2003.
3 For a detailed comparison of the legislative proposals, see CRS Report RL32549, Project BioShield: Legislative
History and Side-by-Side Comparison of H.R. 2122, S. 15, and S. 1504, by Frank Gottron and Eric A. Fischer.
4 See HHS, Project BioShield: Annual Report to Congress July 2004—July 2006, and HHS, Project BioShield: Annual
Report to Congress August 2006—July 2007. These reports are available at http://www.hhs.gov/aspr/barda/bioshield/
annualreport/.

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The Project BioShield Act authorizes the HHS Secretary to use an expedited award process for
grants, contracts, and cooperative agreements related to CBRN countermeasure R&D activity, if
the Secretary deems a pressing need for an expedited award exists. This authority is limited to
awards of $1.5 million or less. This expedited award process replaces the normal peer review
process. Some scientists have expressed concerns that an expedited review process will reduce
research quality.5 The normal peer review process is designed to provide proposals with greater
scientific merit a higher probability of receiving funding, a factor potentially lost in an expedited
process.
According to HHS, it has awarded 14 grants through this expedited peer review process.6 The
National Institutes of Allergy and Infectious Diseases (NIAID) awarded these grants between
three and five months of the application deadline.7 All awards were related to medical
countermeasures to be used following radiation exposure.
Market Guarantee
The Project BioShield act is designed to guarantee companies that the government will buy new,
successfully developed CBRN countermeasures for the Strategic National Stockpile (SNS).8 The
act allows the HHS Secretary, with the concurrence of the DHS Secretary and upon the approval
of the President, to promise to buy a product up to eight years before it is reasonably expected to
be delivered.9 A company was to be paid only on the delivery of a substantial portion of the
countermeasure. Therefore, this guarantee reduces the market risk for the company but does not
affect its exposure to development risk (i.e., the risk that the countermeasure will fail during
testing and be undeliverable). The Pandemic and All-Hazard Preparedness Act (P.L. 109-417)
modified the Project BioShield Act to allow for milestone-based payments of up to half of the
total award before delivery.10
The Project BioShield Act allows HHS to purchase unapproved and unlicensed countermeasures.
It requires the HHS Secretary to determine that “... sufficient and satisfactory clinical experience
or research data ... support[s] a reasonable conclusion that the product will qualify for approval or
licensing ... within eight years.”11 The approval and licensing processes are designed to protect
people from ineffective or dangerous treatments. Because most drugs that begin these processes
fail to become approved treatments, critics of this provision suggest that the government will end
up purchasing countermeasures that may never be approved. To reduce the government’s

5 John Miller, “Interview with Richard Ebright,” The Scientist, vol. 17 (7), April 7, 2003, p. 52.
6 See HHS, Project BioShield: Annual Report to Congress July 2004—July 2006, p. 2, and HHS, Project BioShield:
Annual Report to Congress August 2006—July 2007, p. 32.
7 Grants that go through the normal peer review process typically take nine to 18 months to receive funding. See
http://www.niaid.nih.gov/ncn/grants/charts/timeline_resub.htm.
8 The SNS contains pharmaceuticals, vaccines, medical supplies, and medical equipment to respond to terrorist attacks
and other emergencies.
9 President Bush delegated the presidential approval step to the Director of the Office of Management and Budget.
OMB maintains this authority in the Obama administration. See, Executive Office of the President, “Designation and
Authorization to Perform Functions Under Section 319F-2 of the Public Health Service Act,” 69 Federal Register
70349, December 3, 2004.
10 For more on this law, see CRS Report RL33589, The Pandemic and All-Hazards Preparedness Act (P.L. 109-417):
Provisions and Changes to Preexisting Law, by Sarah A. Lister and Frank Gottron.
11 118 Stat. 844.
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financial risk associated with this provision, the act allows HHS to write contracts so that
unapproved products may be purchased at lower cost than approved products. HHS used some of
these authorities when designing each of the Project BioShield contracts discussed below
(“Acquisitions”).
Emergency Use of Unapproved Products
The Project BioShield Act also allows the HHS Secretary to temporarily authorize the emergency
use of medical products that are not approved by the FDA or HHS. To exercise this authority, the
HHS Secretary must conclude that: (1) the agent for which the countermeasure is designed can
cause serious or life-threatening disease; (2) the product may reasonably be believed to be
effective in detecting, diagnosing, treating, or preventing the disease; (3) the known and potential
benefits of the product outweigh its known and potential risks; (4) no adequate alternative to the
product is approved and available; and (5) any other criteria prescribed in regulation are met.12
The HHS Secretary has used this emergency use authority (EUA) several times. Currently, four
countermeasures to the 2009 influenza A (H1N1)13 outbreak are permitted to be used under EUA:
the antiviral influenza treatments Tamiflu (oseltamivir) and Relenza (zananivir),14 N95
respirators, and diagnostic kits to help identify cases of this disease.15 As of October 2008,
antibiotic kits containing Doxycycline Hyclate are allowed to be distributed to certain people
participating in the Cities Readiness Initiative.16 That EUA remains in effect. In January 2005, the
HHS Secretary used this authority to allow the vaccination of Department of Defense (DOD)
personnel with a specified type of anthrax vaccine.17 This vaccine EUA expired in January 2006.
Reporting Requirements
The Project BioShield Act of 2004 requires annual reports from the HHS Secretary about the
exercise of the authorities granted in this bill.18 This act also requires the Government
Accountability Office (GAO) to produce a single report assessing actions taken under authorities
granted by the act, determining the effectiveness of the act, and recommending additional
measures to address deficiencies. GAO expects to issue this report in July 2009.19

12 118 Stat. 855.
13 For additional information, see CRS Report R40554, The 2009 Influenza Pandemic: An Overview, by Sarah A. Lister
and C. Stephen Redhead.
14 Although the antiviral treatments had been previously approved for treating influenza, the EUA makes it easier to
distribute these treatments and allows their use for infants and children younger than had been previously allowed.
15 For more information on these EUAs, see http://www.cdc.gov/swineflu/eua/.
16 73 Fed. Reg. 62507. For more on this program, see http://www.bt.cdc.gov/cri/.
17 70 Fed. Reg. 5452.
18 Available online at http://www.hhs.gov/aspr/barda/bioshield/annualreport/.
19 Personal communication with GAO, April 10, 2009.
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Appropriations
The Project BioShield Act did not appropriate any money. Instead, it authorized the appropriation
of up to a total of $5.593 billion for FY2004 through FY2013 for countermeasures procurement.
The Department of Homeland Security Appropriations Act, 2004 (P.L. 108-90) appropriated this
amount into a special reserve fund with explicit time windows in which the money could be
obligated. The act specified that $3.418 billion was available for obligation for FY2004 to
FY2008. The balance of the advance appropriation plus any unobligated funds remaining from
FY2004 to FY2008 became available for FY2009 to FY2013. The act specified that this money is
only for the procurement of CBRN countermeasures using the Project BioShield authorities and
may not be used for other purposes such as for grants to support countermeasure development or
program administration.
Congress advance-appropriated the 10-year program, but retains the power to annually increase
or decrease the amount in the special reserve fund. Congress removed $25 million from this
account through rescissions in the Consolidated Appropriations Act, 2004 (P.L. 108-199), and the
Consolidated Appropriations Act, 2005 (P.L. 108-447). See Table 1. The Omnibus Appropriations
Act, 2009 (P.L. 111-8), transferred $412 million from the special reserve fund to HHS . Of this
amount, $275 million went to fund countermeasure advanced research and development through
the Biodefense Advanced Research and Development Authority (BARDA, see below), and $137
million went to help respond to and prepare for pandemic influenza.20
Table 1. Project BioShield Rescissions, and Transfers
($ in Millions)
Public Law
Action
Amount
P.L. 108-199
0.59% Rescission
5
P.L. 108-447
0.8% Rescission
20
P.L. 111-8
Transfer for Advanced Development
275
P.L. 111-8
Transfer for Pandemic Flu
137
Total of Transfers and Rescissions to Date
437
President’s FY2010 Budget Request
Transfer for Advanced Development
305
Source: CRS analysis of P.L. 108-199, P.L. 108-447, P.L. 111-8, and FY2010 Presidential Budget Request.
Note: Amounts rounded to nearest million.
The Obama administration has proposed transferring the remaining Project BioShield advance-
appropriated funds from DHS to HHS in FY2010. After accounting for expected obligations in
FY2009, the Administration estimates the remaining balance will be $1.569 billion. Because of a
“lower than expected obligation rate,”21 $305 million of the transferred amount would fund
countermeasure advanced development through BARDA.22 According to this proposal, any

20 U.S. Congress, House Committee on Appropriations, Omnibus Appropriations Act, 2009 (H.R. 1105; P.L. 111-8),
committee print, 111th Cong., 1st sess., March 2009, p. 1301.
21 DHS, Office of Health Affairs, Biodefense Countermeasures Congressional Justification FY2010, p. BIO-2.
22 HHS, FY2010 Budget in Brief, p. 108.
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remaining transferred funds would go into the HHS Public Health and Social Services Emergency
Fund and be available for obligation through FY2013 for Project BioShield-related purchases.
Acquisitions
The first Project BioShield contract was announced on November 4, 2004.23 The HHS contracted
with VaxGen Inc. for delivery of 75 million doses of a new type of anthrax vaccine within three
years. This contract was worth $879 million. See Table 2. On December 17, 2006, HHS
terminated this contract because VaxGen failed to meet a contract milestone.24 Subsequent
contracts include $690 million for 29 million doses of the currently approved anthrax vaccine
(Emergent BioSolutions); $165 million for 20 thousand doses of ABthrax, a treatment for anthrax
(Human Genome Sciences); $144 million for 10 thousand doses of Anthrax Immune Globulin, a
treatment for anthrax (Cangene); $505 million for 20 million doses of a new smallpox vaccine
(Bavarian Nordic); $416 million for 200 thousand doses of botulinum antitoxin, a treatment for
botulinum toxin exposure (Cangene); $18 million for 5 million doses of a pediatric form of
potassium iodide, a treatment for radioactive iodine exposure (Fleming & Company); and $22
million for 395 thousand doses of Ca-DTPA and 80 thousand doses of Zn-DTPA, two treatments
for internal radioactive particle contamination (Akorn). Thus, excluding the canceled VaxGen
contract, HHS has obligated approximately $1.96 billion to date. Future targets for Project
BioShield procurement include countermeasures against anthrax, viral hemorrhagic fevers, and
radiation.25

23 See the HHS Project BioShield procurement page for status of current requests and contracts at http://www.hhs.gov/
aspr/barda/procurement/cbrnactivities.html. For issues regarding these awards, see CRS Report RL33907, Project
BioShield: Appropriations, Acquisitions, and Policy Implementation Issues for Congress, by Frank Gottron.
24 HHS, “Termination Letter - Contract No. HHSO100200500001C,” Letter to VaxGen, Inc., December 19, 2006.
25 HHS Public Health Emergency Medical Countermeasure Enterprise, “Implementation Plan For Chemical,
Biological, Radiological and Nuclear Threats,” 72 Fed. Reg. 20122, April 23, 2007.
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Table 2. Project BioShield Acquisition Activity
Threat Product Doses
Cost
(thousands)
($ millions)
Company Award
Date
Anthrax
rPA vaccine
75,000
879a VaxGen,
Inc.
11/4/04;
Cancelled
12/19/06
AVA vaccineb 28,750 690

Emergent
5/6/05; 5/5/06;

BioSolutions (formerly
9/25/07
BioPort Corp.)
ABthrax 20
165
Human
Genome
6/19/06

Sciences
Anthrax Immune
10 144
Cangene
Corp. 7/28/06

Globulin
Smallpox
MVA vaccine
20,000
505
Bavarian Nordic A/S
6/4/07
Botulinum
Botulinum Antitoxin
200
416
Cangene Corp.
6/1/06c
Toxin
Radiological/
Potassium Iodide
4,800
18
Fleming & Company
3/18/05 and
Nuclear
2/8/06
Ca-DTPA 395
22 Akorn,
Inc.
2/13/06

Zn-DTPA 80

Total Announced Obligations:
2,839


Total Active Announced Obligationsd:
1,961


Source: CRS analysis of HHS, Project BioShield: Annual Report to Congress July 2004—July 2006, January 2007;
HHS, Project BioShield: Annual Report to Congress August 2006—July 2007; HHS, “CBRN Acquisition
Activities” http://www.hhs.gov/aspr/barda/procurement/cbrnactivities.html; DHS, Office of Health Affairs,
Biodefense Countermeasures Congressional Justification FY2010; and personal communication with HHS, June 8,
2009.
a. This figure includes an additional approximately $1.5 million that HHS paid to VaxGen for mandatory
security upgrades. When HHS terminated the vaccine contract, VaxGen kept this amount, while the
approximately $878 million for the vaccine became available for other BioShield procurements. Personal
communication with BARDA, June 8, 2009.
b. This total does not include the $405 million contract for 14.5 million doses of AVA anthrax vaccine HHS
announced on 9/30/2008. According to HHS, this contract used Centers for Disease Control and
Prevention funds rather than the Project BioShield special reserve fund. Personal communication with HHS,
June 8, 2009.
c. This number includes $50 million that was obligated from this account to this company in FY2004 before
passage of the Project BioShield Act. See HHS, Project BioShield: Annual Report to Congress July 2004—July
2006, January 2007, p. 31.
d. Announced obligations minus the cancel ed rPA contract.
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Policy Issues
The 111th Congress faces several BioShield-related policy decisions. These include: whether to
allow Project BioShield funds to be diverted for other purposes; whether to grant the President’s
request to transfer the account to HHS; whether to rely on Project BioShield funds to replenish
the Strategic National Stockpile; whether to pursue broad spectrum countermeasures; and whether
Project BioShield and BARDA are encouraging medical countermeasure development
sufficiently.
Diversion of Appropriations for Other Purposes
One of the distinguishing features of Project BioShield is the ten-year $5.6 billion advanced
appropriation. Potential countermeasure developers considered the establishment of an advanced
funded separate account dedicated solely to countermeasure procurement as integral to their
participation in this program. The advanced funding helped assure developers that payment for
countermeasures they successfully developed would not depend on future potentially uncertain
appropriations processes. Although advanced funding the Project BioShield account may have
provided some assurance of stability to developers, in practice, subsequent Congresses have
removed approximately 8% of the advanced appropriation through rescission and transfer to other
accounts. See Table 1. These transfers fall into two categories: those devoted to CBRN
countermeasures advanced development and those related to influenza pandemic preparedness.
In FY2009, Congress transferred $275 million from the special reserve fund to BARDA to
support CBRN countermeasure advanced research and development. President Obama has
proposed a similar transfer for FY2010 of $305 million. The administration justifies the proposed
transfer by asserting that these funds will support “future successful acquisitions of medical
countermeasures under Project BioShield.”26 Thus, such transfers could be viewed as an attempt
to improve the “lower than expected” rate of Project BioShield acquisitions.27
If Congress agrees to this proposed transfer, the precedent set in FY2009 may be reinforced that
advanced research and development funding should be viewed as linked to procurement (and that
such activities should be funded by transfers from the Project BioShield special reserve fund).
Annual transfers from this account to fund such activity will continue to lower the amounts
available for procuring CBRN countermeasures, their originally intended purpose. However, if
funding becomes a limitation to acquiring countermeasures, Congress can appropriate additional
money for this purpose. However, such a course of events may cause the potential developers to
feel dependent on the actions of future appropriators, precisely the situation that establishment of
the special reserve fund was designed to ameliorate.
Such fund transfers may modify the respective roles of the federal government and the private
sector in Project BioShield. Congress designed Project BioShield to minimize the risk that the
government would pay for countermeasures which fail during development (see “Market
Guarantee” above). Developers were expected to manage this risk, using the government-market
guarantee to entice investors to fund countermeasure development. Congress attempted to assure

26 HHS, FY2010 Congressional Justification for the Public Health and Social Services Emergency Fund, p. 46.
27 DHS, Office of Health Affairs, Biodefense Countermeasures Congressional Justification FY2010, p. BIO-2.
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such potential investors that funding of this program was not subject to the annual appropriations
process by providing ten year advanced funding. Industry spokespeople reportedly have asserted
that transferring money out of this account weakens the ability of private firms to raise capital
necessary to sustain long-term research and development for countermeasures and hinder
potential participation in Project BioShield.28 Additionally, by shifting money from procurement
to research and development, the government assumes more of the development risk (i.e., the
government becomes more likely to spend money on developing countermeasures that will fail
during development and never become available).
In FY2009, Congress transferred $137 million from the Project BioShield special reserve fund to
HHS for pandemic influenza preparedness and response. President Obama did not request a
similar transfer for FY2010. President Obama did request the supplemental appropriations
conference committee to allow the purchase of influenza countermeasures using the Project
BioShield special reserve fund.29 Critics of such a move charged that it would damage the
biodefense countermeasure industry and “severely diminish the nation’s efforts to prepare for
WMD events and will leave the nation less, not more, prepared.”30 The conferees on the
supplemental appropriations bill declined to provide this authority.31 Similarly, in the Senate
report to accompany the Department of Homeland Security appropriations bill (S.Rept. 111-31
and S. 1298), the committee “strongly urges” not using the special reserve fund to purchase
influenza countermeasures.32
Transfer of Account to HHS
In the FY2010 budget request, President Obama has proposed transferring the entirety of the
Project BioShield special reserve fund from DHS to HHS. Currently DHS manages the special
reserve fund, while HHS designs and executes the Project BioShield contracts. As described
above, DHS and OMB must approve each contract. If Congress decides to transfer the account to
HHS, depending on how it is transferred, these roles may or may not be preserved. A simple
transfer of the account in the absence of additional amendments of the Project BioShield Act
provisions would likely maintain the current agency roles. Alternatively, Congress could amend
the Project BioShield act to change the agencies’ roles in contract approval. The Senate
Committee on Appropriations has recommended transferring the account to HHS and otherwise
maintaining the current agency roles.33

28 Spencer Hsu, “Bipartisan WMD Panel Criticizes Obama Plan To Fund Flu Vaccine,” Washington Post, June 8, 2009.
29 Letter from President Barack Obama to Speaker of the House Nancy Pelosi, June 2, 2009,
http://www.whitehouse.gov/omb/assets/budget_amendments/supplemental_06_02_09.pdf.
30 Letter from Senator Bob Graham, Chairman of the Commission on the Prevention of Weapons of Mass Destruction
Proliferation and Terrorism, and Senator Jim Talent, Vice Chairman of the Commission on the Prevention of Weapons
of Mass Destruction Proliferation and Terrorism, to President Obama, June 8, 2009, http://www.preventwmd.gov/
6_8_2009/; Spencer Hsu, “Bipartisan WMD Panel Criticizes Obama Plan To Fund Flu Vaccine,” Washington Post,
June 8, 2009; and Matt Korade, “Lawmakers, Industry Jeer Plan to Fund Flu Preparedness With Bioshield Money,”
June 9, 2009.
31 P.L. 111-32 and H.Rept. 111-151.
32 S.Rept. 111-31, p. 96. The House Committee on Appropriations report (H.Rept. 111-157) lacks similar language.
33 S.Rept. 111-31. The Senate Appropriations Committee states in this report that such a transfer, if approved, would be
included in the FY2010 Departments of Labor, Health and Human Services, and Education, and Related Agencies
appropriation bill. The House Committee on Appropriations report (H.Rept. 111-157) lacks similar language.
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Stockpile Replenishment
All medicines, including those added to the Strategic National Stockpile through Project
BioShield, have explicit expiration dates. They are not approved for use after this expiration date.
As a consequence, HHS must procure a number of doses greater than that stored in the SNS at
any given time. For example, HHS had to buy 29 million doses of anthrax vaccine to maintain a
stockpile of at least 10 million doses from 2006 to 2011.34 In 2007, the GAO suggested HHS and
DOD establish an inventory-sharing agreement that would allow DOD to use the HHS vaccines
in its active troop vaccination program before expiration.35 These agencies subsequently
implemented a shared stockpile approach for anthrax vaccines and pandemic influenza
countermeasures.36 However, this shared stockpile solution is not applicable for countermeasures
lacking other high-volume users. HHS may require additional periodic countermeasure purchases
to replenish the stockpile to maintain a consistent readiness level. Congress may consider whether
such purchases should be funded through the advance-appropriated Project BioShield account or
through annual SNS budget authorities. The BARDA used SNS funding to procure 14.5 million
additional doses of AVA vaccine for the stockpile for $405 million.37
Broad Spectrum Countermeasures
Many experts contend that broad spectrum countermeasures, those that address multiple CBRN
agents, would be the most valuable additions to the SNS.38 Such nonspecific countermeasures
might be a defense against currently unknown threats, such as emerging diseases or genetically
engineered pathogens. Furthermore, such countermeasures are more likely to have other
nonbiodefense-related applications. P.L. 108-276 does not exclude procuring such
countermeasures; however, it does require that the presence of another commercial market be
factored into the HHS Secretary’s decision to purchase the countermeasure. HHS has stated its
interest in using Project BioShield to acquire new broad spectrum countermeasures.39 However,
Project BioShield contracts to date have specifically targeted individual threat agents, a strategy
commonly described as “one bug, one drug.” Congress may decide that HHS needs further
guidance or authorities to encourage the development and acquisition of new broad spectrum
countermeasures.
The Biomedical Advanced Research and Development Authority
Congress has scrutinized the implementation and effectiveness of the Project BioShield act since
its enactment. In response to perceived problems with Project BioShield countermeasure

34 HHS News Release, “HHS Purchases Additional Anthrax Vaccine For Stockpile,” September 26, 2007.
35 Government Accountability Office, 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.
36 Robin Robinson, Deputy Assistant Secretary, Office of the Assistant Secretary for Preparedness and Response, HHS,
testimony before the House Committee on Appropriations, Subcommittee on Defense, April 24, 2008.
37 Personal communication with HHS staff, June 8, 2009.
38 For example, see Gigi Gronvall, Jason Matheny, and Bradley Smith, et al., “Flexible Defenses Roundtable Meeting:
Promoting the Strategic Innovation of Medical Countermeasures,” Biosecurity and Bioterrorism: Biodefense Strategy,
Practice, and Science, vol. 5, no. 3 (2007), pp. 271-277.
39 HHS Public Health Emergency Medical Countermeasure Enterprise, “Implementation Plan For Chemical,
Biological, Radiological and Nuclear Threats,” 72 Fed. Reg. 20122, April 23, 2007.
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Project BioShield: Purposes and Authorities

procurement, the 109th Congress created the Biodefense Advanced Research and Development
Authority (BARDA) in HHS through the Pandemic and All-Hazards Preparedness Act (P.L. 109-
417).
Congress determined that Project BioShield insufficiently encouraged the transition of promising
basic research results into the product development stage. This period in development is often
referred to as the “valley of death” for pharmaceuticals since some seemingly promising drugs are
not developed past this point due to lack of funding. As discussed above, the Pandemic and All-
Hazards Preparedness Act amended the Project BioShield Act to allow BioShield contracts to pay
up to half the contract value as milestone payments. Thus companies could receive payments
while continuing to develop their promising products. Additionally, Congress created in BARDA
a dedicated infrastructure to manage and fund advanced development and commercialization of
CBRN countermeasures. In theory, BARDA funding can take those promising drugs from the
basic research through the advanced development stage, which may include clinical trials. The
Pandemic and All-Hazards Preparedness Act (P.L. 109-417) grants BARDA these funding
authorities. Congress created the Biodefense Medical Countermeasure Development Fund to pay
for such advanced development contracts.
Critics of such programs suggest that because of the high product failure rate in advanced
development, the government will inevitably fund unusable products. In addition to removing the
development risks traditionally borne by industry, it inserts government decision makers into the
countermeasure development process, a role critics argue is better suited to industry experts and
entrepreneurs.40 Some critics would prefer to have the government set product requirements and
have industry determine how best to meet them. Because advanced research and development
activities generally take several years, it may still be too early to assess the full effect BARDA
has had on U.S. civilian biodefense preparedness.

Author Contact Information

Frank Gottron

Specialist in Science and Technology Policy
fgottron@crs.loc.gov, 7-5854





40 See CRS Report RL33528, Industrial Competitiveness and Technological Advancement: Debate Over Government
Policy, by Wendy H. Schacht.
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