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




                               before the

                              COMMITTEE ON
                           GOVERNMENT REFORM

                        HOUSE OF REPRESENTATIVES

                       ONE HUNDRED NINTH CONGRESS

                             FIRST SESSION


                            NOVEMBER 4, 2005


                           Serial No. 109-94


       Printed for the use of the Committee on Government Reform

  Available via the World Wide Web: http://www.gpoaccess.gov/congress/


24-820                      WASHINGTON : 2005
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                     TOM DAVIS, Virginia, Chairman
CHRISTOPHER SHAYS, Connecticut       HENRY A. WAXMAN, California
DAN BURTON, Indiana                  TOM LANTOS, California
JOHN M. McHUGH, New York             EDOLPHUS TOWNS, New York
JOHN L. MICA, Florida                PAUL E. KANJORSKI, Pennsylvania
GIL GUTKNECHT, Minnesota             CAROLYN B. MALONEY, New York
MARK E. SOUDER, Indiana              ELIJAH E. CUMMINGS, Maryland
TODD RUSSELL PLATTS, Pennsylvania    DANNY K. DAVIS, Illinois
CHRIS CANNON, Utah                   WM. LACY CLAY, Missouri
JOHN J. DUNCAN, Jr., Tennessee       DIANE E. WATSON, California
CANDICE S. MILLER, Michigan          STEPHEN F. LYNCH, Massachusetts
MICHAEL R. TURNER, Ohio              CHRIS VAN HOLLEN, Maryland
DARRELL E. ISSA, California          LINDA T. SANCHEZ, California
JON C. PORTER, Nevada                C.A. DUTCH RUPPERSBERGER, Maryland
KENNY MARCHANT, Texas                BRIAN HIGGINS, New York
PATRICK T. McHENRY, North Carolina       Columbia
CHARLES W. DENT, Pennsylvania                    ------
VIRGINIA FOXX, North Carolina        BERNARD SANDERS, Vermont 
JEAN SCHMIDT, Ohio                       (Independent)
------ ------

                    Melissa Wojciak, Staff Director
       David Marin, Deputy Staff Director/Communications Director
                      Rob Borden, Parliamentarian
                       Teresa Austin, Chief Clerk
          Phil Barnett, Minority Chief of Staff/Chief Counsel

                            C O N T E N T S

Hearing held on November 4, 2005.................................     1
Statement of:
    Leavitt, Michael O., Secretary, Department of Health and 
      Human Services, accompanied by Dr. Anthony S. Fauci, 
      Director, National Institute of Allergy and Infectious 
      Diseases, National Institutes of Health, Department of 
      Health and Human Services; Dr. Bruce Gellin, Director, 
      National Vaccine Planning Office, Department of Health and 
      Human Services; Dr. Julie Gerberding, Director, Centers for 
      Disease Control and Prevention, Department of Health and 
      Human Services; and Dr. William Raub, Science Advisor to 
      the Secretary, Department of Health and Human Services.....    43
Letters, statements, etc., submitted for the record by:
    Cannon, Hon. Chris, a Representative in Congress from the 
      State of Utah, prepared statement of.......................    40
    Cummings, Hon. Elijah E., a Representative in Congress from 
      the State of Maryland, prepared statement of...............    35
    Davis, Chairman Tom, a Representative in Congress from the 
      State of Virginia, prepared statement of...................     4
    Gutknecht, Hon. Gil, a Representative in Congress from the 
      State of Minnesota, Letter dated October 24, 2005..........    72
    Leavitt, Michael O., Secretary, Department of Health and 
      Human Services, prepared statement of......................    47
    Porter, Hon. Jon C., a Representative in Congress from the 
      State of Nevada, prepared statement of.....................    99
    Schmidt, Hon. Jean, a Representative in Congress from the 
      State of Ohio, prepared statement of.......................   100
    Waxman, Hon. Henry A., a Representative in Congress from the 
      State of California:
        Fact sheet...............................................     7
        Prepared statement of....................................    17



                        FRIDAY, NOVEMBER 4, 2005

                          House of Representatives,
                            Committee on Government Reform,
                                                    Washington, DC.
    The committee met, pursuant to notice, at 10 a.m., in room 
2154, Rayburn House Office Building, Hon. Tom Davis (chairman 
of the committee) presiding.
    Present: Representatives Tom Davis, Shays, Burton, Ros-
Lehtinen, Gutknecht, Souder, Cannon, Duncan, Miller, Marchant, 
Schmidt, Waxman, Lantos, Kanjorski, Sanders, Cummings, 
Kucinich, Clay, Watson, Lynch, Van Hollen, Ruppersberger, 
Higgins, and Norton.
    Staff present: Melissa Wojciak, staff director; David 
Marin, deputy staff director/communications director; Jennifer 
Safavian, chief counsel for oversight and investigations; Howie 
Denis and Anne Marie Turner, counsels; Rob White, press 
secretary; Drew Crockett, deputy director of communications; 
Susie Schulte, professional staff member; Sarah D'Orsie, deputy 
clerk; Allyson Blandford, office manager; Andrew James, staff 
assistant; Phil Barnett, minority staff director/chief counsel; 
Kristin Amerling, minority general counsel; Sarah Despres and 
Robin Appleberry, minority counsels; Josh Sharfstein, minority 
health policy advisor; Earley Green, minority chief clerk; and 
Stacey Warady, minority staff assistant.
    Chairman Tom Davis. The committee will come to order.
    Good morning. Today, we are honored to have Secretary 
Michael O. Leavitt here to discuss what health experts describe 
as the largest public health threat facing our Nation, the 
threat of pandemic flu.
    We don't know when, or where, the next pandemic will 
strike. We don't even know what strain of influenza will be the 
culprit, although much evidence points to avian flu. The 
virulent H5N1 strain has already caused 62 deaths in Vietnam 
and Cambodia, Thailand and Indonesia. Nor do we know if avian 
flu will turn out to be more like the swine flu, a pandemic 
that never materialized.
    Regardless, we need to improve your readiness because we 
can be sure the next flu pandemic is a matter of when and not 
if. And when that time does come, the stakes will be enormous. 
The Spanish influenza outbreak of 1918-1919, for example, 
caused an estimated 40 to 50 million deaths worldwide. Experts 
have projected that more than half a million Americans could 
die, and over 2 million could be hospitalized in the event of a 
U.S. pandemic flu outbreak.
    How quickly could an influenza pandemic spread across the 
globe? As fast as you can fly from Hanoi to Washington, DC. We 
live in a flat world, a world not only connected by e-mail 
carried by fiber-optic cables, but by commerce and cargo 
transported by jumbo jets. Pandemic flu can move just as fast.
    As Federal officials, it is our responsibility to make sure 
America is prepared--prepared to detect the strain of pandemic 
flu, prepared to communicate with our State and local partners, 
and prepared to work with industry to get vaccine production 
moving as quickly as possible.
    Earlier this week, President Bush outlined the 
administration's national strategy for pandemic influenza. The 
three pillars of this strategy are preparedness and 
communication, surveillance and detection, and response and 
containment. The strategy allows the government to make 
immediate steps to ensure early warning against the possibility 
of a flu pandemic.
    The President has requested more than $7 billion in 
emergency funding to begin immediately implementing this 
national strategy. This includes nearly $3 billion to 
accelerate the development of cell culture technology, to move 
vaccine production away from the lengthy and fragile process 
that depends on cultivating the vaccine in chicken eggs, $1.5 
billion to stockpile the H5N1 vaccine currently in clinical 
trials at NIH, and $1 billion to stockpile antiviral drugs to 
treat first responders and our most vulnerable populations.
    Additionally, the strategy requests $580 million for 
pandemic preparedness and about $100 million to help States 
complete and exercise their pandemic plans. The strategy also 
calls for improving our detection capabilities, train 
personnel, and additional planning at both Federal and local 
    While finalizing the HHS pandemic influenza plan was 
important and necessary to provide more detailed guidance to 
State and local health officials, many concerns about 
preparedness still remain. I have already heard concerns from 
the Department of Health in my home State of Virginia about the 
limited amount of money for stockpiling the federally 
recommended amounts of the antiviral treatments and the need 
for additional support across the board for emergency 
    I think all of us here today agree that our State and local 
health officials will be on the front lines of a pandemic 
response. It is our job to provide them with the adequate 
support and essential resources they need to effectively 
prepare for and respond to a pandemic.
    Today's Washington Post applauds the administration for, 
``taking preparedness seriously.'' But the editorial also says, 
``the plan seems divorced from reality'' and ``is too vague to 
be reassuring.'' This morning we will search for reality-based 
details in the hope of reassuring all Americans that we are on 
the road to preparedness.
    I look forward to a constructive dialog with Secretary 
Leavitt on this life-and-death issue. I think the National 
Strategy and HHS Pandemic Influenza Plan will offer appropriate 
guidance and help better prepare our country for the unknowns 
of pandemic flu. However, as the Secretary has mentioned 
before, we need to remember that the plan is a living and 
breathing document subject to improvement as we develop better 
strategies and practices.
    I would now recognize our distinguished ranking member who 
has been so active in the field of health, Mr. Waxman, for his 
opening statement.
    [The prepared statement of Chairman Tom Davis follows:]

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    Mr. Waxman. Thank you very much, Chairman Davis, for 
calling today's hearing on the serious public health threat of 
a potential global influenza pandemic. And under your 
leadership, this will be this committee's seventh hearing 
related to a flu pandemic.
    As those who have followed our hearings know, I have been 
extraordinarily critical of the administration's failure to 
prepare for a pandemic. Recently, my staff put together an 
analysis of these delays and mistakes that have characterized 
the Federal effort over the last 5 years, and I ask for 
unanimous consent that this analysis be made part of the 
    Mr. Shays [presiding]. Without objection, so ordered.
    [The information referred to follows:]

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    Mr. Waxman. What we document is that the Department of 
Health and Human Services and the White House have ignored 
report after report and warning after warning.
    Four years ago, the Institute of Medicine urged the 
administration to create a national vaccine authority to 
coordinate a high-level response to a growing crisis in vaccine 
supply. This was an extraordinary recommendation made by a 
group of experts that included Dr. Anthony Fauci of the 
National Institutes of Health. Yet today these crucial 
recommendations still have not been implemented.
    Three years ago, the National Vaccine Advisory Committee to 
the Department of HHS recommended that the administration 
enhance incentives to spur vaccine development and support the 
vaccine market. Yet nothing was done.
    The front lines of fighting a flu pandemic are our State 
and local health departments, but the President's budget 
proposals repeatedly try to cut their funding. The result is 
that we have fallen significantly behind in our efforts to 
protect against the bird flu or other global pandemics.
    Our Nation--other nations have released comprehensive plans 
and purchased significant quantities of antiviral drugs. 
Because of our delays we are at the back of the line. At last, 
however, some progress is being made. On Tuesday, the President 
announced a significant new proposal for funding influenza 
vaccine development and procurement. Then, on Wednesday, the 
Department of Health and Human Services released a detailed 
plan to guide Federal, State and local preparations.
    These are important steps. And even as I wish they had been 
taking taken sooner, I commend the President and Secretary 
Leavitt for acting now. And we will all be safer if the events 
of this week become a turning point.
    There are parts of the President's strategy that make a lot 
of sense. He has proposed investing in the next generation of 
flu vaccines which can be produced quickly and safely. He has 
also released a plan that provides important guidance to State 
and local health departments and laboratories.
    But unfortunately, there are also some significant 
problems. The administration has given a key role to the 
Department of Homeland Security and FEMA to protect the Nation 
from a localized outbreak of pandemic flu in the United States. 
But given the abysmal performance of the Department of Homeland 
Security and FEMA in responding to Hurricane Katrina, this is a 
huge misjudgment. Protecting the public from a pandemic is a 
health problem, and it should be given to the government's 
health experts.
    Another serious problem is inadequate funding. The 
administration has produced a detailed plan that instructs 
local and State governments to perform literally hundreds of 
tasks to prepare for an influenza pandemic, yet the 
administration is asking Congress for only $100 million to fund 
these activities. And even this $100 million increase is a 
phony number. The White House has not retracted its $130 
million cut to State and local health departments.
    Moreover, the administration is also asking States and 
localities to spend $510 million of their own money to purchase 
antiviral medications. As one health department director put 
it, ``There seems to be a lack of connection between the 
strategy and recognition of what it takes to pull off these 
plans on the ground.''
    A third problem is the administration's plan to shield 
vaccine manufacturers from liability without providing any 
meaningful compensation for people who are injured by the 
vaccine. We have learned during the administration's failed 
efforts to vaccinate several million health care workers, fire 
fighters and other first responders that a liability shield 
will not work unless those who might be injured by a vaccine 
know they will receive compensation. Yet the administration is 
poised to make the same mistake all over again.
    These are serious problems, but they can be fixed; and I 
look forward to discussing these issues with Secretary Leavitt 
today. I thank him for his appearance. I hope this oversight 
hearing produces real improvements in public health 
preparedness for the benefit of the American people.
    [The prepared statement of Hon. Henry A. Waxman follows:]

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    Chairman Tom Davis. Mr. Waxman, thank you.
    All Members will be able to enter statements into the 
record. I know there are some who want to speak now. I would 
just add, the Secretary has limited time so to the extent we 
are speaking, we won't be able to get maybe through all the 
questions, but I don't want to deprive anyone of making an 
opening statement.
    Mr. Gutknecht, I know you wanted to say something.
    Mr. Gutknecht. Mr. Chairman, ever so briefly. And I want to 
thank you for this hearing and I want to thank the Secretary 
for coming up here today.
    I really think that one of the issues that I hope we will 
discuss today is the issue of duplication of efforts. Because I 
know that there are efforts going on in labs in my district, 
for example, that I think are very interesting; and my concern 
is that, ultimately, the Federal Government may wind up 
duplicating an awful lot of the good work that is being done 
right now. And so I think this is a very important issue.
    The public is deeply concerned, but I think they also want 
us to be accountable for the money we spend. And so as we have 
this hearing I hope that issue will at least get some 
    I would yield back.
    Chairman Tom Davis. Mr. Lantos.
    Mr. Lantos. Thank you, Mr. Chairman.
    I want to welcome this distinguished panel. And I would 
like to raise some specific issues which relate to the 
geographic pattern of our preparedness.
    One of the very severe problems we had in responding to 
September 11th was that, following historic patterns, we 
provided funding and made preparations on a nationwide basis, 
disregarding the fact that some areas are dramatically more 
likely to be targets of terrorist attacks than others.
    Now, Mr. Chairman, the San Francisco International Airport 
is at the heart of my congressional district. And it is self-
evident that this flu epidemic, generating in Asia, is most 
likely to hit, initially, the three major points of entry on 
the Pacific coast--San Francisco International Airport, Los 
Angeles, and Seattle.
    Last year, Mr. Chairman, 32 million passengers came through 
San Francisco International Airport. Over 3 million of these 
individuals came from Asia. A similar number landed in Los 
Angeles and a smaller number in Seattle.
    Now, the 1918 flu epidemic, which was responsible for the 
death of over 50 million people, circled the globe several 
times in 18 months, which was an amazing feat given the fact 
that we were a generation away from commercial air travel. Just 
consider what kind of devastation such a virus could unleash, 
given the enormous presence of global air travel.
    I know that deadly airborne illnesses are not novel for San 
Francisco International Airport. I remember going down to the 
airport to catch a flight and seeing passengers arriving from 
Asia with medical masks, in 2003 during the SARS outbreak.
    What I would like to ask Secretary Leavitt and his 
distinguished panel to tell us is, what specific provisions do 
you have in mind? What specific plans do you have to deal with 
the most likely initial points of entry with respect to 
quarantine and a dozen other items?
    And I very much hope that in planning for this potential 
pandemic we will not make the mistake we did after September 
11th, of assuming that Laramie, WY, is as likely to be hit as 
New York or San Francisco.
    This pandemic, if it comes, is most likely to come from 
Asia, it is most likely to come via San Francisco, Los Angeles 
or other ports of entry; and I would be most appreciative if 
you could deal with this issue.
    Thank you, Mr. Chairman.
    Chairman Tom Davis. Thank you, Mr. Lantos.
    Yes, Mr. Duncan.
    Mr. Duncan. Very briefly, Mr. Chairman, I thank you for 
calling this hearing; and I think it is very important that we 
look into this entire bird flu situation. However, I do have 
concerns and questions about whether we are overreacting 
because of breathless, overdramatized news reports, repeated 
over and over again in our 24-hour news cycles.
    Have we turned something into a pandemic before it is even 
an epidemic? In fact, almost every major disease known to man 
kills more people around the world every day than this bird flu 
has in the last several months.
    Now, from what I read, we are about to spend billions on a 
vaccine or medicine that we are not even sure will work on this 
particular virus. We have already scared people around the 
world so much that they are hoarding Tamiflu medicine that may 
or may not even help with this particular flu.
    I am not a medical doctor or a public health specialist I 
am not saying we should do nothing. All I am saying is that 
possibly we should look before we leap. In today's political 
climate, almost every threat is exaggerated, and then 
legislators have to try to do everything possible to prove that 
they are doing more than anyone else in case something does 
    I led a congressional delegation to Asia last February when 
we went into the Hong Kong airport. They immediately checked 
the temperatures of everybody in our delegation. Are we 
checking all those who are coming from countries where, or 
areas where, the bird flu has appeared and/or should we?
    Again, I will say that I am not saying we should do 
nothing. All I am saying is that we should not panic before the 
facts are justified. We need all those in authority to ask many 
questions and take reasonable common-sense and intelligent 
steps to sensibly deal with this situation.
    Thank you.
    Chairman Tom Davis. Thank you very much.
    Mr. Kucinich.
    Mr. Kucinich. Thank you, Mr. Chairman.
    Is the United States ready for avian flu? I don't think 
that there is any question that the answer is a clear ``no.'' 
The question is what are we doing about it?
    The administration finally released its plan this week 
under tremendous public pressure. It got overwhelming reviews--
excuse me, it got underwhelming reviews from experts because it 
is deficient on several fronts that will be collectively 
necessary for us to fight this disease.
    It is especially weak on efforts to stockpile antivirals. 
Our best antiviral bet will be Roche's Tamiflu. It is well 
established that it will take Roche years to produce enough 
American stockpile needs and--to produce enough to satisfy 
American stockpile needs. We have enough for less than 1 
percent of the population. We need at least enough for 25 
percent of the population.
    Even after promised increases in production capacity, 
Roche's supply is far less than our stockpile needs. The same 
goes for countries around the world, including those where the 
outbreak is likely to originate if the virus mutates to pass 
easily from human to human. And yet there are plenty of 
production facilities to solve the problem. In fact, over 100 
companies have expressed interest in making the drug.
    So what is the problem? The problem is that Roche has a 
monopoly on Tamiflu.
    We are very familiar with what happens when a company has a 
monopoly on a product the world needs. They control supply. And 
that is exactly what Roche is doing by choking world supply. 
And what is happening by choking world supply is not the only 
consequence of Roche's monopoly. If we need a reminder about 
the perils of concentrating production in the hands of a few, 
we only need to look to last year.
    Chiron was forced to scrap half of the U.S. flu vaccine 
supply when their manufacturing facility failed to meet safety 
standards. That was for the conventional flu. Imagine what 
would happen if we lost half of our Tamiflu supply in the 
middle of an avian flu outbreak? And yet, at the cost of a 
potentially far more devastating avian flu pandemic, we are 
about to repeat our mistake.
    But there is a solution. The solution is compulsory 
licensing. HHS, Mr. Secretary, has the authority to issue a 
compulsory license to get rid of this dangerous shortage by 
allowing other companies to make Tamiflu. Roche would get 
compensation. That authority exists specifically to prevent the 
most predictable scenario, a pharmaceutical company holding a 
drug hostage when it is needed to protect public health in 
order to increase its profits. And I believe that is what we 
are seeing here.
    Roche's revenues increased 17 percent last quarter. Tamiflu 
sales more than doubled to 215 million in 3 months. They expect 
to make only almost $1 billion from Tamiflu sales this year. Of 
course, they would want to hang on to this monopoly; their 
ultimate responsibility is to their shareholders, not to the 
    We have heard a lot of promises from Roche that they are 
willing to negotiate with other companies to sublicense 
production, but I have not heard anything about a firm 
agreement to do so. Roche can keep fees too high in order to 
make it unprofitable for an outside company to manufacture 
Tamiflu. They can stipulate--and have indicated their 
willingness to do so--that any Tamiflu made by a company other 
than Roche would not be available for sale in the United 
States. In other words, they can continue to restrict supply.
    And to top it off, the administration boasts it wants throw 
$1 billion into buying antivirals. But the drugs aren't there. 
There is nothing to buy. And as it stands, there won't be 
anything to buy in the near future. We may not have that kind 
of time. But the administration is still sitting on its hands 
while Roche's profits skyrocket and Tamiflu production does 
    This is a clear choice of profits over public health.
    As you know, Mr. Secretary, last month nine of my 
colleagues and I sent you a letter requesting compulsory 
licensing. We have given Roche plenty of time to act 
appropriately, and they have failed to do so.
    In order to protect public health, we must issue a 
compulsory license for Tamiflu immediately.
    I thank the Chair.
    Chairman Tom Davis. Mr. Souder.
    Mr. Souder. Thank you. I am grateful to Chairman Tom Davis 
for holding this important hearing as part of a series of 
hearings with Secretary Leavitt on our country's preparedness 
and response plan for the pandemic influenza.
    Earlier this week, the President announced a National 
Strategy for Pandemic Influenza and Health and Human Services 
published its Pandemic Influenza Plan. These developments are 
encouraging signs that the administration is taking seriously 
the potential devastation of a new pandemic.
    As stated in the HHS Pandemic Influenza Plan, 
``Preparedness planning is imperative to lessen the impact of a 
pandemic.'' I couldn't agree more. We should not have to 
relearn again and again that being caught unprepared for a 
predictable disaster makes an otherwise manageable situation 
spiral out of control. So while I commend the Secretary of 
Health and Human Services for attempting to get ahead of a 
possible influenza pandemic, I remain skeptical of the agency's 
ability to identify and respond to danger signals indicating a 
genuine national problem.
    This country is already struggling with a serious epidemic, 
methamphetamine abuse and trafficking. This epidemic is already 
in every State viscously destroying lives and tearing apart 
communities. This national epidemic, however, is one in which 
HHS, under Secretary Leavitt's leadership, stood as a barrier 
for formulating a national comprehensive strategy to address 
this problem.
    As this destructive epidemic was spreading, Congress was 
constantly asking the administration for a national plan to 
address this epidemic. But it was the HHS Secretary who was 
dragging his feet. The so-called ``policy'' that was finally 
announced at an August press conference--not in Washington, DC, 
but in Tennessee--after years of devastation and countless 
lives, is insufficient and hardly deserves to be called a 
national plan to address the epidemic. It was embarrassing.
    Mr. Secretary, I would like you to show this committee and 
the American people that we can have confidence in the ability 
of the Nation's health agency to do more than talk about an 
epidemic. This kind of lip service we have received in the 
midst of a meth epidemic had better give way to real, effective 
planning and treatment for an influenza pandemic, or the 
inevitable devastation could be the worst this country has ever 
    I would like to add, I was just given your response to my 
letter of August 19th. And I appreciate receiving the response. 
In the future, as someone who represents the same party and as 
chairman of the subcommittee, I would hope it wouldn't take the 
full committee chairman having you at a hearing to get a timely 
response to questions.
    I yield back.
    Chairman Tom Davis. Thank you.
    Mr. Sanders.
    Mr. Sanders. Thank you very much, Mr. Chairman. And 
Secretary Leavitt, thanks very much for being with us.
    Mr. Chairman, I think perhaps Mr. Duncan was right in 
suggesting that we may be overreacting. But I believe that the 
American people want us to be safe rather than sorry. I think 
they will forgive us if we end up doing things and spending 
money, and in the long run it may turn out not to be necessary. 
If, in fact, we are going forward vigorously to prevent what 
could be a horrible, horrible situation.
    I think we all remember, or read, that in 1918 some 50 
million people in this world died from an influenza epidemic. 
And I think it is beholden upon our country and governments 
throughout the world to do everything that we can in every way 
to protect the American people and people throughout the world.
    I think Mr. Kucinich a moment ago raised some very 
important issues. And the issue is that our job as the 
Government of the United States of America is not to worry at 
this moment about the corporate profits of the Roche company, 
or any other drug company, but to make certain that we are 
doing all that we can to prepare for what could be a terrible 
    I hope that in that context we can all agree that now is 
not the time to be tiptoeing around intellectual property 
rights or letting bald-faced profiteering inhibit our ability 
to prepare for a pandemic.
    This, in fact, is a matter of life and death. And the 
American people will never forgive us if we are not prepared 
and if we allow corporate profiteering to take the place of 
serious government action.
    I think most of us understand that one of the important 
tools that we now have at our disposal is getting caught up in 
that hemming and hawing about whether or not we go forward in 
terms of dealing with Roche.
    Tamiflu, as we all know, is the brand name of an antiviral 
medicine that is what we have right now for minimizing the 
scope and severity of damage from a pandemic flu outbreak. 
While we all, no doubt, support vigorous pursuit of an avian 
flu vaccine, antivirals are what we have got today, right now. 
But we don't have anywhere near the amount that we need; and I 
hope that the Secretary will address that important issue.
    All the speeches, all the reports are fine. Do we have the 
medicine that we need and will we have it? The Infectious 
Diseases Society of America and the World Health Organization 
say the United States should have enough courses to treat from 
25 to 40 percent of the population--our population. Right now, 
the United States only has enough to cover 1 to 2 percent of 
the population.
    So that is an issue I hope that you will address, sir, when 
you speak.
    Roche is the only company with a license to manufacture and 
sell Tamiflu in the United States. They have limited production 
capacity and simply cannot make enough Tamiflu to meet the 
demand. The World Health Organization says it will take 10 
years for Roche to adequately supply world demand for Tamiflu 
stockpiles. We don't have 10 years. Unfortunately, Roche has 
also been dragging its feet about licensing other manufacturers 
to mass produce it.
    So, Mr. Secretary, you come from an administration which, 
most of the American people know, bends over backward to 
protect large multinational corporations, whether it is drug 
companies or oil companies. Now is not the time to worry about 
the profits or campaign contributions. Now is the time to 
protect the American people. If Roche does not have the 
capability of producing the volume of Tamiflu that we need, 
clearly what has to happen is, other companies have to jump in.
    I know that Senator Schumer in the Senate has raised that 
issue. I hope that you will be able to tell us today that in 
one way or another you are going to make certain that Roche, 
either through compulsory licensing or through a voluntary 
approach working with other production capabilities and other 
companies, will start producing the medicine that we need.
    This is not the time for a company to be making excessive 
profits when the American people do not have the medicine they 
need to protect themselves, nor for the world as well. So we 
hope that you will be strong in dealing with Roche and saying 
that the health and well-being of the American people comes 
before their corporate profits.
    Thank you very much.
    Chairman Tom Davis. Mr. Burton.
    Mr. Burton. Thank you, Mr. Chairman.
    It is nice seeing all of you again.
    First of all, I want to commend the President for making 
the speech that he made on protecting ourselves and preparing 
for a possible epidemic or pandemic to be very bad not only for 
the United States, but for the entire world.
    I want to talk about another subject that is very, very 
important. And you folks will be making recommendations as well 
as getting the job done and helping produce the vaccines that 
are necessary to protect the American people.
    For about 4 or 5 years, when I was chairman of the 
committee, we had hearings on contaminants in vaccines. The one 
that really bothered me was the mercury in the vaccine 
thimerosal. Thimerosal was never tested by the Food and Drug 
Administration because it was produced before you guys had the 
ability to do that. And it's been used in vaccines for a long, 
long time, since the 1930's.
    And when I was a boy growing up, if you had measles, they 
quarantined you. Now they give you vaccinations for that. And 
kids get as many as 30 vaccinations before they go to school. 
And adults are getting all kinds of shots. I am ready to go 
over to Pakistan and India, and all the people on my CODEL are 
going to get a whole series of shots, and almost all of them 
contain thimerosal, which has 50 percent ethyl mercury in it.
    Now, the reason I bring this up is we have had an epidemic 
of autism in this country. We gone from 1 in 10,000 children 
that are autistic to 1 in 166, according to CDC. It is an 
epidemic. We have had an increase in Alzheimer's, another 
neurological disorder. And people that I had before my 
committee for years, scientists from around the world, said 
that one of the causes was the mercury in the vaccines.
    And the reason I bring this up is we are going to have to 
produce the vaccines that are necessary. You and the 
pharmaceutical industry are going to have to produce the 
vaccines. I want to give them protection against class-action 
lawsuits, but in exchange for that--and this President talked 
about that--tort reform. In exchange for that, it is extremely 
important that the Vaccine Injury Compensation Fund be more 
user-friendly, and we put more money into it if it is 
necessary, and that can be done by a small increase in the 
costs per shot.
    And the second thing is get mercury out of all vaccines. It 
can be done if you go to single shot vials or use something 
else as a preservative. But the mercury, in the opinion of 
scientists around the world, is causing neurological problems, 
an increase in Alzheimer's, autism and other things.
    Now, you have been very helpful in getting it out of most 
of the children's vaccines. It is still in three or four. 
Please, when they start talking about legislation to deal with 
this, do those three things: Get mercury out of the vaccines, 
make the compensation fund more user-friendly, and then we will 
do everything we can, No. 3, to give the pharmaceutical 
industry the class-action lawsuit protection that they want.
    I want them to produce those vaccines. I want them to keep 
this country and the world the safest it has ever been as far 
as health is concerned, and I know you feel that way, too. But 
you can't leave these contaminants, especially mercury, which 
is a known neurotoxin, in these vaccines. Thank you very much.
    Chairman Tom Davis. Ms. Norton.
    Ms. Norton. Mr. Chairman, I appreciate that you called this 
hearing. I want to welcome the Secretary and others from the 
Department. Mr. Chairman, in the street they would say, this 
hearing is right on time, following the President's 
announcement. I wish I could say that the government's response 
here is on time.
    I will be looking for answers to a number of questions 
concerning pandemic flu, why countries in Europe are more 
prepared, so that we may have to get in line behind them and, 
in fact, may not be able to get it at all if Europe decides to 
redirect whatever medicines they have and not allow their 
suppliers to deal with those who are offshore, if we get enough 
of a pandemic. Why there are large cuts in State and local 
public health budgets, the very vehicles that we will need in 
the event of a pandemic?
    But if I may say so, I think Mr. Duncan, my colleague 
across the aisle, raises a point that may be in the minds of 
the American people. If this had been an early reaction, if 
this had been earlier, it might have been seen as an attempt to 
get early hold of a pandemic. And now for many Americans it 
does seem like an overreaction when you consider that 
apparently we haven't done first things first.
    I don't know how Americans are to have confidence in the 
Department to deal with pandemic flu when already, this early 
in the season, we are having distribution problems with the 
vaccine we already are supposed to have.
    And I raise it only because I believe it would be 
legislative malpractice not to raise it when already early in 
the flu season here we are seeing pop up problems of 
distribution all over this region and across the country. 
Walgreen's says they are going to stop doing it altogether 
because they don't have enough supply after November 6th.
    We sat through the flu crisis of last year. I was so 
relieved when, before I got my shot here, Mr. Secretary, I 
wanted to make sure that the priorities were on straight, 
because the Congress had its supply when others did not, and I 
was assured that everybody had a supply. And here we have 
seniors standing in line. CDC, of course, tosses it off as a 
distribution problem.
    The fact is that these are the kinds of problems that we 
pay you to make sure we do not have. Part of it is, of course, 
that you are victims of our success, although it is not because 
of your advertising campaign. It is because we ran out last 
year, and now people have flu vaccine on their minds, and they 
rush in to get it. Well, that was foreseeable, sir. It was 
foreseeable that this company that we rely on so heavily for 
this ordinary, annual vaccine is still on its knees, still has 
huge problems that it is not correcting, and yet they are a 
major supplier.
    There is a huge confidence problem with respect to our 
ability to deal with the annual flu, the ordinary illnesses 
that are ordinary illnesses that Americans know they will get. 
It seems to me you have to get ahold of that problem, not say, 
oh, it is the distribution, or, it really isn't us. You have to 
tell us how you are going to get ahold of that problem before 
you can expect us to have any confidence that you can reach to 
a problem, which most Americans can't possibly take seriously 
yet because so few people, as Mr. Duncan says, have died. I 
think that is exactly when you want to get ahold of it.
    But my question to you is why should Americans focus on 
pandemics from Asia when they cannot get the ordinary flu 
vaccine in the District of Columbia, Maryland, and Virginia and 
across the United States of America?
    Thank you, Mr. Chairman.
    Chairman Tom Davis. Thank you.
    Any other Members on our side wish to address? How many 
other speakers we got here? OK, we will go straight on down the 
    Mr. Clay.
    Mr. Clay. Thank you, Mr. Chairman and Ranking Member 
Waxman, for holding today's hearing.
    Given that a flu pandemic today can cause over 500,000 
deaths and 2 million hospitalizations in the United States 
alone, it is essential that our Nation be prepared to 
effectively respond to a flu pandemic.
    While I applaud the Bush administration's efforts to 
prepare for the danger of a pandemic flu outbreak, I am 
concerned that the President's strategy underfunds State and 
local preparedness efforts. The President' plan requires States 
to spend $510 million to purchase antivirals. As we all know, 
many States' budgets are already strapped. And where does the 
President expect them to get $510 million to afford such a 
purchase? It is imperative that Congress ensure our 
constituents that this is not another underfunded mandate that 
will later be funded on the backs of poor people.
    I welcome Secretary Leavitt and thank him for graciously 
providing our committee with insight into the steps being taken 
to stockpile enough vaccine to protect Americans against the 
bird flu.
    It is my hope that today's hearing will also address recent 
reports that have indicated a possible repeat of last year's 
flu vaccine shortage.
    I yield back and ask that my written statement be included 
in the record.
    Chairman Tom Davis. Without objection, gentleman's 
statement and any other--Mr. Van Hollen.
    Mr. Van Hollen. Thank you, Mr. Chairman, I want to thank 
you and Mr. Waxman for holding these hearings, and for those of 
you who have been following this committee, you know that this 
is not the first hearing we have had on this issue. We have had 
hearings on this issue well over a year ago. And I want to 
commend the chairman and Mr. Waxman in trying to get ahead of 
this issue.
    Mr. Secretary, I welcome you and all the others here today 
and look forward to your testimony. And I appreciate the fact 
that the President has come up with a plan, and I think it has 
many good components. I share the view of some of my colleagues 
expressing some of what I think are the shortcomings with the 
    My major concern with the plan has to do with the amount of 
resources dedicated to trying to nip the problem in the bud 
overseas, trying to help our international partners, especially 
in Asia, be better prepared to respond to this issue. When we 
talk about the war on terrorism, the Bush administration has 
made a big point of the fact that it is important to fight the 
battle overseas before it comes here. We have to disrupt the 
terrorist networks overseas before they have time to organize 
and launch attacks here on the shores of the United States. 
Well, I can't think of a better case where it is better to 
address a problem overseas at its source before it gets here 
than the issue of pandemic flu and avian flu. I think we would 
all agree that by the time you ever saw this flu exhibiting 
itself in people here in the United States, it would already 
have gotten very much out of control worldwide.
    And so I think if you look at the plan that you have put 
forward, as I understand it, you have allocated about $251 
million to helping some of our partners and friends overseas on 
this issue. That is a near 3\1/2\ percent of the overall $7-
plus billion in this plan. And if you look at this issue as 
trying to control things before they get out of control and 
trying to identify ways to prevent the spread and nip things in 
the bud and at their source, it seems to me that that is not 
nearly enough to accomplish that purpose.
    Clearly, we want to stockpile drugs here. We want to have 
the ability to fight the virus in its current form, the ability 
to be able to quickly ramp up so we can meet whatever form it 
may take in the future. It is important to have antiviral 
drugs, but those stockpilings all assume and plan for the worst 
case. It seems to me we should be devoting more resources to 
preventing the worst case in terms of prevention at its source, 
and so I hope during your testimony you will address this.
    I know you traveled to Asia. You have looked at some of the 
farm techniques. There has been talk from the United Nations 
and World Health Organization about trying to develop something 
to put in the feed of chickens that might immunize them, and 
there are lots of ideas out there. It just seems to me that the 
plan that has being presented is very light on the amount of 
resources committed to what I think should be a very big focus 
of this, which is stopping this problem at its most likely 
    Thank you, Mr. Chairman.
    Chairman Tom Davis. Thank you very much.
    Mr. Ruppersberger. I think I am the last one, and then we 
will be able to get to the testimony.
    Mr. Chairman, thank you for the hearing. Mr. Waxman, thank 
you for your leadership.
    I am not going to repeat a lot that was said. First thing 
that we need to learn from what happened in the past last year 
with our flu vaccine shortage, that if we can learn from our 
mistakes and move forward, we will be better off.
    I think the President, the fact that he is paying attention 
to this issue, making it a priority and moving ahead with the 
plan is good, but we have to implement the plan right now. I 
think the fact that local government is going to really be 
involved is a good thing because as first responders, they are 
closest to the people, as long as they get the resources. And 
we have discussed that here today also.
    My major concern, though, is the issue of how with respect 
to the plan, and what is the delivery system?
    On the last time you were here, Mr. Secretary, I asked a 
question about the issue of needles and injection devices, and 
I have not received a small response.
    And I want to address what Congressman Souder said: We, 
here, have an oversight. We are relying on you. We have 
hearings to raise issues and to hopefully hold you accountable. 
My office sent a letter on October 7th asking about this issue, 
and I haven't received a return letter either. I understand you 
are very busy and you are not going to return a lot of letters, 
but I would hope you deal with us because we need the 
information from you to represent our constituents; that you 
have somebody on your staff highlight the fact and get back to 
us on the information that we need, especially before a 
    Now, with respect to that, my main concern is that we might 
acquire through manufacture all the vaccines we need. Hopefully 
we will have a system that will be able to do that, but there 
are some issues about that also. But I am concerned about the 
issue of whether or not we have the devices in place for 
needles and injections and whether there is a plan dealing with 
that. And I would hope that you can answer that question.
    I also believe the Federal Government needs a strategic 
vaccine reserve and production capability. This would be a 
plant that in times of emergency can be converted or switched 
on to meet vaccine needs. If the government cannot do this, we 
need to give business the incentive to have a facility that in 
times of need can push out large numbers of needed vaccines and 
needles. Thank you.
    Chairman Tom Davis. Thank you very much.
    Mr. Lynch.
    Mr. Lynch. Thank you, Mr. Chairman and Ranking Member 
Waxman, for holding this hearing. I want to thank the Secretary 
and members of the panel for helping the committee with its 
    I associate myself with the remarks of my colleagues here 
on both sides of the aisle. I just have two areas that haven't 
necessarily been addressed yet. One is, you know, we heard from 
Secretary Chertoff about the issue of rail security, and he 
said basically that the States are going to have to handle that 
responsibility, which I was surprised at, because an interstate 
rail security system cannot be handled by individual States.
    Then we heard from Mr. Michael Brown, who said that 
disaster relief such as Katrina, the Katrina situation, that 
also should be better handled by the States, even though that 
would have affected multiple States, and I don't think it could 
effectively be dealt with in that fashion. And I noticed in the 
President's plan which has recently come out, that federally we 
are going to handle 44 million courses of this vaccine, and 
then the other, the balance of it, which would be in the area 
of $500 million would be handled by individual States.
    And I am just curious, with this trend of giving all this 
added responsibility to the States, especially a global 
pandemic, asking individual States, in individual cases and 
circumstances, to handle the responsibility of containing a 
global pandemic, I just--you know, it is just a pattern of 
conduct that we have seen from this administration of handing 
more and more responsibility to the States for problems that 
they are not equipped to deal with. So I am very concerned 
about that.
    The second issue that has not been talked about, 
understandably, is an issue that has been brought up by the 
Association for the Prudent Use of Antibiotics. Now, I realize 
it is a different animal than what we are dealing with from 
this avian flu, but also they are concerned about the lack of 
incentives for drug companies to develop new antibiotics and 
the lack of investment in government incentives for those drug 
companies to do so. And I am hoping that at some point in your 
remarks you might be able to address that concern. It is a 
problem of a different nature, but it is quite similar to the 
growing problem that we have here with these new iterations of 
flu, influenza epidemics that we are concerned about at this 
hearing. So I look forward to your comments. Thank you.
    Chairman Tom Davis. Yes, sir. The gentleman from Maryland.
    Mr. Cummings. Thank you very much, Mr. Chairman, and again 
I want to thank you and the ranking member for holding this 
    And I want to thank you, Mr. Secretary, and all of you, for 
being with us this morning.
    In the wake of any catastrophe, our citizens expect 
assurance that our Government works hard to avert such a 
calamity and that it is well prepared to meet their essential 
needs. Regrettably, recent events have shaken the American 
people's faith in that certainty. The devastating flu vaccine 
shortage that typified last flu season coupled with the failed 
response to Hurricane Katrina demonstrated that there is much 
work to be done to improve our Nation's capacity to address an 
act of nature. If these lessons of our past are to have any 
value, we must seriously question our Nation's pandemic 
influenza preparedness. Further, we must acknowledge that while 
we do not have control over nature, we do have control over the 
policy choices that determine our ability to lessen the impact 
of nature's mighty blows.
    Simply put, planning and execution matter. It is estimated 
that a pandemic would result in the deaths of over 500,000 
Americans, and, in fact, 25 percent of the world's population. 
The Baltimore Sun reported in an article entitled Fears of Flu 
Pandemic Spurring Preparations that the threat of an avian flu 
pandemic from Asia could cause 12,000 deaths in the State of 
Maryland early on, with the possibility of many more later.
    One need not be an expert to comprehend the magnitude of 
such a loss of life and the disastrous impact a pandemic would 
have on our economy and our society. With this in mind, the 
time is long overdue for the government to move forward in the 
best interests of the Nation to ensure that a flu--a future flu 
pandemic is handled effectively.
    Fulfilling this obligation demands a comprehensive plan, 
one that covers intergovernmental coordination, international 
surveillance, public health and veterinary infrastructure, and 
process for obtaining and distributing vaccines and antivirals.
    The administration took a step in the right direction when 
it released a national strategy for pandemic influenza. The 
President wisely stated, ``in the last century our country and 
the world have been hit by three influenza pandemics, and 
viruses from birds contributed to all of them.'' Yet the same 
administration waited until November 2005 to introduce a 
pandemic flu preparedness plan. Americans should ask whether a 
flu pandemic was foreseeable during this long delay. The short 
answer is yes. It is unfortunate that valuable time was wasted 
that should have been spent substantially preparing.
    Although State and local health departments will function 
on the front lines of the flu pandemic, the administration 
proposed undermining State and local preparedness by cutting 
$130 million in Federal support of those efforts in fiscal year 
2006. The President's strategy proposes that State and local 
health departments primarily would respond to a pandemic, but 
too many Americans' assurances that localities are up to the 
task will not outweigh the memory of thousands enduring long 
lines and lotteries, public confusion and the inequitable 
distribution of limited vaccines that typified last year's flu 
season. I fear these concerns may be well founded.
    Finally, I am also concerned that this plan creates an 
untenable financial burden for some cash-strapped States and 
seeks to fund State and local preparedness on the cheap. 
Specifically, the recently released strategy calls for only 
over $100 million to update State pandemic plans, but also 
requires States to spend approximately $510 million to purchase 
antivirals. The Federal Government must spare no expense and 
exhaust every effort to ensure that no citizen is given less of 
an opportunity to survive a pandemic because they reside in a 
poor State.
    Mr. Chairman, the American people are closely watching how 
its Government responds to this challenge, one that will no 
doubt test the wisdom of our priorities and the firmness of our 
resolve to protect our citizens from threats, both seen and 
unseen. In the end, we will be judged not by the hearings that 
were held, nor by the proposals that were offered, but by how 
well we tangibly lessened human suffering and equipped our 
citizens with the ability to withstand the onslaught of a flu 
    With that, I yield back and thank you.
    [The prepared statement of Hon. Elijah E. Cummings 





    Chairman Tom Davis. Thank you.
    Mr. Secretary, thank you very much for your patience. We 
have a vote on now; there is only one vote. Mr. Shays has 
already voted and come back and prepared to keep the helm of 
this. But what I want to do right now is let Mr. Cannon 
introduce you formally to the committee. I have asked him to do 
that, being from your home State. Then we will swear you in. 
And I will ask you at that point if you want to take a break 
for 10 minutes and let Members come back, or if you want to 
continue with your statement with Mr. Shays presiding.
    Chris, why don't you go ahead.
    Mr. Cannon. Thank you, Mr. Chairman. I couldn't be more 
proud to introduce my Governor, almost exactly my age. I think 
I endorsed him before he ran for Governor the first time. He 
did a great job. He was a three-term Governor of Utah. Then to 
my consternation he took one of the toughest jobs you can 
possibly take in American Government, and that is to head up 
the EPA. He did an impossible job remarkably well. And he has 
now taken on the position of Secretary of HHS, which comes with 
more problems than EPA, I suspect, a much more difficult task, 
much more difficult budget to deal with, and the focus of some 
of our problems in America. And yet it also is one of the 
agencies that has the most opportunities, and I am actually 
thrilled that he is there because he has a great deal of 
    I was on an airplane recently with a mutual friend, Steve 
Prescott, who ran our Huntsman Cancer Center in Utah. He is one 
of the guys who designed some of the breakthroughs we have had 
in Utah, including a merger between the university hospital 
system and our largest hospital, private hospital, 
Intermountain Health Care, for the purpose of figuring out how 
we can better combat cancer. And Governor Leavitt then had 
worked with him to help set up a not-for-profit, which I think 
is going to be transformational in the way we do medicine in 
the very near future. He oversees, of course, the CDC, National 
Cancer Institute and the FDA. Mr. Souder's subcommittee had a 
hearing with three of those agencies represented. All three of 
them pointed out that the declining costs of DNA decoding and 
the declining cost of computerization is transformational to 
our medical system.
    I cannot imagine anyone better able to manage that process 
than Secretary Leavitt, who has done some remarkable things, 
including establishing the goal of getting a data base of 
health care so that we can deal in a new context with the 
development of drugs or the treating of disease through massive 
computing and databasing statistics rather than the double-
blind study.
    So it is my great honor to introduce my Governor, now the 
Secretary of HHS, Mike Leavitt. Thank you.
    [The prepared statement of Hon. Chris Cannon follows:]

    [GRAPHIC] [TIFF OMITTED] T4820.008
    [GRAPHIC] [TIFF OMITTED] T4820.009
    [GRAPHIC] [TIFF OMITTED] T4820.010
    Mr. Leavitt. Thank you.
    Chairman Tom Davis. Mr. Secretary, we always swear everyone 
in before you testify, so just rise and raise your right hand, 
and your staff.
    For the record, we have Dr. Bruce Gellin, Dr. Anthony 
Fauci, Dr. Julie Gerberding and Dr. William Raub here as well.
    [Witnesses sworn.]
    Chairman Tom Davis. Mr. Secretary, thank you for your 
patience, and we will go ahead and proceed.


    Secretary Leavitt. Thank you, Mr. Chairman. This is a topic 
of importance, I think, demonstrated by the number of members 
who have expressed interest, and I look forward to the period 
where we can interact directly.
    Chairman Tom Davis. Let me note that your entire statement 
is in the record, so you don't have to----
    Secretary Leavitt. I would like to just summarize the 
statement that was submitted.
    The bottom line is that pandemics happen. And 10 times in 
the last 300 years, 3 times in the last 100 years, we have had 
circumstances where literally, masses have been made ill and 
millions have been caused to die. Whenever there is a human to 
human transmission of a killer virus, it presents risk 
    Currently, we're worried about the HFN1 virus. It is 
primarily an animal disease, but there is no certainty it will 
remain such. There are troubling signs. If the H5N1 virus is 
not the spark of a pandemic, there will ultimately be another. 
Pandemics happen, they have happened in the past, they will 
happen in the future.
    Yesterday, the President laid out a broad national 
strategy, it calls on Congress to appropriate $7.1 billion. 
Today, I would like to just provide an overview of that plan 
and then go directly to questions.
    I will lay the plan out in basically six parts. The first 
part is the international surveillance; this was mentioned in 
the opening statements. The importance of determining when the 
virus transitions to human to human, and where.
    One can think of the world as a vast forest susceptible to 
fire. Whenever a forest fire starts it starts with a spark. If 
you were there when the spark happens, it can be--the damage 
can be limited quickly by simply putting it out. But if it's 
allowed to smolder, or if it goes on for a period of time, it 
burns to the point that it cannot be contained.
    The construct of international surveillance involves having 
laboratories throughout the world, having epidemic 
investigators who can be there when the spark happens, having 
rapid response teams, having American expertise on the ground 
in all of the theaters where it is most likely to occur. It 
also involves joint containment agreements with our friends 
around the world to be there jointly to bring our resources if 
it is possible to contain an outbreak.
    The second portion of the plan I'll refer to is domestic 
surveillance, essentially having the same capability in the 
United States as we've spoken of around the world, knowing when 
it happens and how broadly it has gone beyond, or if it's gone 
beyond containment.
    Again, it requires laboratories, it requires trained 
medical personnel. The plan calls for the development of a 
system known as BioSense, which is already under development 
because of our interest in bioterrorism, where we would have 
real-time data available both at the CDC, and also among local 
and State health departments, for the purpose of ascertaining 
when these things occur.
    The third part of the plan that I will refer to, and what I 
believe to be the foundation of this plan, is vaccines. The 
good news is that we do have a vaccine that has produced a 
sufficient immune response to protect human beings, the bad new 
is we do not have the capacity as a Nation within our vaccine 
industry to manufacture a sufficient supply in timeframes that 
would protect the American people, that needs to change. The 
plan calls for us to make heavy investments in three basic 
areas. The first is the expanding of our traditional egg base 
production of vaccine; the second is the rapid development of 
cell-based technology; and the third is agivent technology so 
that we're able to use that with the maximum level of 
    The plan calls for essentially two objectives to be met, 
the first is to have the capacity of manufacturing 300 million 
courses of an appropriate vaccine within a 6-month period of a 
strain being identified. The second objective is to have a 
stockpile of some 20 million doses--or rather courses of 
vaccine for the purpose of being able to provide early 
protection to first responders and so forth. We know that 
vaccine would not likely be perfect because it would be the 
last available vaccine, but it would at least give us some 
protection in those early periods.
    The forth area is in anti-virals. The importance of anti-
virals is evident, however, it should not be overstated. There 
are serious limits in what anti-virals can do; they do need to 
be part of a comprehensive plan. Those on the panel today, if 
Members are interested, I'm sure we will be able to detail 
those limits. We are proposing collective stockpiles of some 81 
million courses. The plan calls for the Federal Government to 
pay for some 70 percent of those and to provide States with the 
option of being able to acquire more; it does not make 
mandatory their participation.
    The fifth area is communication, informing the public with 
the best available information. I think it's been evident by 
the nature of the conversation today by members of the 
committee, some are worried about whether or not this is 
overreaction, others worry that we may have responded too 
slowly. Our objective now, and I must say, I believe good 
leadership, is to speak in a way that informs but does not 
inflame, to inspire preparation, but not panic.
    The last section--and I suspect we will have some 
conversation about this--is the importance of State and local 
participation. And Mr. Chairman, I would emphasize the unique 
nature of a pandemic as a disaster. We have gone through many 
disasters in this country just in the last several months. 
Katrina, for example, a terrible disaster, stretched over 
Louisiana, Mississippi and parts of Alabama. It was, however, 
constrained to those areas. It was--the emergency unfolded in a 
2 or 3-day period. It has taken us, of course, longer, and will 
take us longer to respond and to recover, but nevertheless the 
damage was done in a very limited period of time. A pandemic, 
on the other hand, is different, it is not constrained to a 
geographic area. It likely would be unfolding in thousands of 
different locations across the country and across the world 
    It also is not constrained as to time. It won't happen in a 
week, it will happen in a year or more, and it will happen in 
waives, and it will require that there are individual decisions 
made in different communities across the country at different 
times and for different reasons. What is happening in a rural 
city in Kansas will be different than what is happening in a 
metropolitan area in Tennessee. And there will be as many 
iterations of the disaster as there are locations.
    The budget is presented in two major accounts, the vaccines 
and anti-virals in one account, and the public health efforts 
between the various public health efforts, we're talking about 
nearly $600 million.
    I would just like to conclude my talking about the dilemma 
that's been presented today that will someday people look back 
and say H5N1 did not become a pandemic, therefore we 
overreacted? Will they say at some point in time, well, they 
were crying wolf? We do not know whether H5N1 will be the spark 
that creates a pandemic, but we do that know pandemics happen, 
they've happened in the past, they will happen in the future. 
And this plan is not about H5N1 alone, it is about general 
pandemic preparedness. And when we have concluded or when we 
have implemented this plan, the United States of America will 
be a better and safer place. We will have cell-based 
technology, something that will ultimately save millions of 
lives, a revolution in the way we conduct the business of 
vaccines and the way we protect the public from disease.
    We will have annual flu vaccine capacity that well exceeds 
what we have today. A great deal of conversation has gone on in 
the committee today about the on-going difficulties of the flu 
vaccine dilemmas in our annual flu; that is because we lack 
capacity. This can change that once and for all, it can take 
off the table the dilemma of annual flu and pandemic flu 
vaccines by resolving it with new capacity and new technology.
    This plan will create better prepared State and local 
governments. It will also provide an international surveillance 
system for disease. And we'll have the piece of mind of knowing 
we are prepared.
    Cell-based technology, annual flu capacity, better State 
and local government preparedness, an international network of 
surveillance, piece of mind of knowing we're prepared, that's 
what this plan is about, and I feel confident in saying, when 
it is implemented, that America will be a safer and healthier 
    [The prepared statement of Secretary Leavitt follows:]

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    Chairman Tom Davis. Mr. Secretary, thank you very much. And 
I think this is the most proactive--did anyone else want to say 
anything? I think this is the most proactive that any 
administration has ever been on this in history.
    And as we learned from Hurricane Katrina, sometimes an 
ounce of prevention is worth a pound of cure. Should a pandemic 
develop and we are not prepared, we're talking about a hole in 
our economy of perhaps trillions of dollars, people not being 
able to move out of the country from their cities, 
international tourism industry and everything else. Plus, what 
it would be to medical bills and hospitals and everything else.
    Let me ask this; according to the pandemic plan, the 
Federal Government requires States to pay for a substantial 
portion of the anti-virals. If States are responsible for the 
purchase of anti-virals, will the Federal Government help 
ensure that all of the States receive a lower nationally 
negotiated price?
    Secretary Leavitt. Yes, Mr. Chairman, we will. And that's a 
significant benefit.
    I want to emphasize that our belief is that a pandemic is 
unique to all natural disasters for reasons I enumerated in my 
opening statement. It is not possible, it is a certainty that 
if we have a pandemic condition, communities all over the 
country will be dealing with it, and they need to be able to 
deal with it in their own and unique ways. We have--public 
health is a local and a State responsibility for a reason, 
because they're able to respond to local conditions.
    Now the plan that's been put forward does have the national 
government paying for essentially 70 percent of the anti-
virals, but a very important part of the way we would split 
this up in terms of divisions of labor, you will note that $400 
million of the $1.4 billion that we have proposed for anti-
virals goes into research for new and better anti-virals.
    Why? Because there is no certainty at all that Tamiflu will 
be effective against H5N1, let alone whatever virus might 
ultimately be the one that in fact creates the pandemic. Any 
sense that having Tamiflu is synonymous with preparation or 
preparedness is wrong? It is an important part of a 
comprehensive strategy, but it is not synonymous with 
    And so tying one's plan so closely to one anti-viral that 
may or may not be effective would be a mistake. And we are 
working with the--we want to work with the States to make it 
certain they have it as part of their plan, but it does not, in 
essence, create an overdependence on that as their only remedy.
    Chairman Tom Davis. I didn't realize Tamiflu may not be 
effective. In that case, how long will it take to develop 
another anti-viral?
    Secretary Leavitt. I'll ask Dr. Fauci to talk about both of 
those subjects, the limited effectiveness potential----
    Chairman Tom Davis. And if I could just, because we're 
limited on time, throw out with that that we've heard some talk 
about Roche having the rights to Tamiflu and having a limited 
production capacity and our ability to get that out; and now 
I'm hearing that may not be an answer anyway.
    Of course, you would only use this until--the vaccine is 
the best defense, but you would need this in the short period. 
So you can talk about that.
    Dr. Fauci. Yes, Mr. Chairman. Thank you, Mr. Secretary.
    Tamiflu, the data that we have on the effectiveness on 
Tamiflu relates very heavily on and almost exclusively on the 
use of it in seasonal flu. And it's clear that in the standard 
seasonal flu, if you give Tamiflu, you need to give it within 
the first 24 to 48 hours to get an effect, and its main effect 
is to shave off about a day and a half from the symptomatic 
period of a viral infection with influenza. For example, if you 
would have been sick for 6 days or 7 days, you're sick for 4\1/
2\ or 5 days.
    The ability of Tamiflu to have a major impact on the 
seriousness of the infection that you would predict or project 
with a pandemic flu is still very much unclear. We're pushing 
the agenda with Tamiflu for stockpiling because it right now 
currently is the best that we have, but all of us, myself and 
Dr. Gerberding and others, are clearly in in our caution that 
this is not something that is going to be essentially the show 
stopper for a pandemic flu.
    With regard to your second question, we have a robust 
program, and part of the research component of the plan is to 
pursue other mechanisms of suppression of the virus, other 
viral targets in addition to the new amenities, which is the 
target for Tamiflu and Relenza, as well as one other, the M2 
protein, which is the target of Amantadine and Rimantadine. So 
we are pursuing, both by screening existing products as well as 
by targeting anti-virals to get a better drug than Tamiflu.
    Chairman Tom Davis. Thank you very much. My time is up, Mr. 
Waxman, 5 minutes.
    Mr. Waxman. Thank you, Mr. Chairman. Mr. Secretary, thank 
you, and all of your colleagues who have come with you today 
and appearing before us. And I appreciate that the 
administration is taking this matter seriously. We do not know 
if there is going to be a pandemic, but I think it's prudent 
for us to make plans.
    All the plans in the world aren't going to help, though, if 
we don't have on the ground in State and local governments the 
ability to respond to any kind of epidemic because they're on 
the front lines of a crisis, and they've got to have adequate 
funding to implement the plans. So I want to pursue that issue 
with you.
    The President's budget called for $130 million cut to the 
grants to the States for public health preparedness, that was 
part of the budget that we received much earlier in the year. 
The administration hasn't rescinded that call for the budget 
cut. I know that money is being directed elsewhere, but it 
means it's less money for the States to deal with any kind of 
public health emergency. Now we have this pandemic flu 
strategy, and that calls for $100 million to go to the States 
for planning activities, so it's $100--so now they got $30 
million left, because if you can cut $130 million, you have 
$100 now added, but there is an obligation for the States to 
spend money for part of the costs of the anti-viral 
medications, the Tamiflu or whatever other anti-virals there 
might be, and that is a requirement, an unfunded requirement or 
obligation to spend $510 million for the purchase of the anti-
    So the States and the local governments look at your 
overall proposals, they're not very enthusiastic about that. 
They say they can't afford it. Governor Huckaby, Republican of 
Arkansas, said ``They expect us to pay 75 cents on the dollar 
for flu medicine; that's going to be a tough pill to swallow.''
    New York City Public Health Commissioner submitted 
testimony this morning that the administration's budget plan, 
``would seriously undermine our preparedness capabilities,'' 
and Dr. Rex archer, president of the National Association of 
City and County Health Officials, and director of Health for 
Kansas City, MO, said ``you can't take $130 million with the 
right hand, give us $100 million with the left hand, with 
strings attached by the way, and expect that is going to get us 
where we need to go.'' How do you respond? It seems to me there 
is going to be a real problem for these local governments.
    Secretary Leavitt. As you pointed out, the $130 million was 
moved from one account to another. Preparedness dollars for 
States have actually gone up considerably. We also have 
substantial grants that have been offered to the States over 
the course of a 3-year period of $5 billion that we're still 
working with the States to draw down that can be used for this.
    But most of all, Mr. Waxman, I would like to reconcile the 
Tamiflu. We have a national goal of 81 million courses in 
collective stockpiles, the plan calls for 50 million of those 
courses to be purchased entirely by the Federal Government and 
for us to--and we will likely place those in stockpiles in the 
States. As Dr. Fauci indicated to you, if we don't get Tamiflu, 
or if Tamiflu is not placed into the hands of people who are 
sick within 24 to 48 hours, it does not do the good that it's 
intended for, or that it's manufactured for.
    The point is, it's distribution that ultimately defines 
victory, so we intend to put those stockpiles very closely out 
into the States where they can be deployed. That is 70 percent 
of the total. If States choose to buy more, we're prepared to 
assist in that. We are helping them meet a responsibility that 
they have, paying for 70 percent of the Tamiflu that will be 
    Now, we are willing to talk about how we go about it, 
because we want the States to be involved in the planning of 
this. If it is just knowing that the national government 
somehow has a stockpile of Tamiflu, they're not going to be 
involved in the distribution, and that's where we want them to 
    Mr. Waxman. Well, Dr. Gerberding, as the head of the Center 
for Disease Control, you work very closely with the State 
agencies that have to be on the front lines. If they can't 
afford to come up with the money for their share of the anti-
virals and they're complaining about it, they're saying they 
can't deal with it, how is this Federal, State, local 
relationship going to work if they're complaining that they 
can't do their job and the Federal Government is only paying 
part of the cost.
    Dr. Gerberding. The State and local health officials have a 
tough job, and they've been working hard over the last few 
years with the investments in preparedness that we've been 
making to try to dig out of a hole that's been very deep for 
many decades, as you know.
    I think the conversation that I had with the leaders of the 
health agencies yesterday would indicate to me that they're 
aware that they have a responsibility and a role to play, they 
are aware that we can't be successful if every component of the 
public health system doesn't step in and do its part. And we 
just want to work together to figure out how we are going to 
make sure that we have equitable coverage with Tamiflu.
    This is a pretty good deal for the States to get the 
Federal Government to buy the drug at a discount. Our planning 
    Mr. Waxman. Well, the States don't have really a choice in 
this matter. The national plan is for 25 percent of the 
population to be covered in the stock pool, that requires that 
the States must purchase, it's not an option. So we're having, 
in effect, an unfunded mandate.
    Secretary Leavitt. It is an option. If they choose to, we 
will help them pay for it. We are going to be putting up the 50 
million doses distributed in ways that meet the needs of the 
plan. So if a State chose not to do it, they would still have 
Tamiflu in their State, it wouldn't be the extent to which some 
other States might want to have it. But they need to step up 
and help with this, too. We need to have everyone involved in 
this, not just the Federal Government.
    Mr. Waxman. You've got to continue your conversations with 
them because they're complaining about it. Because my red light 
is on, if the chairman will indulge me for a minute.
    Because you're here, Mr. Secretary, I know this is not the 
end of this whole issue, it is just the beginning and we're 
going to have further conversations, but I want to express to 
you that I've been disappointed in my ability to get 
information from the Department. And I have a stack of letters 
that I've sent to the Department, and I just don't get 
responses to them. I think if we're going to have the dialog 
and efforts to work together, I want to impress upon you that 
we're all busy, but you do have a lot of people working under 
you, you don't have to personally answer each letter. I will 
like to impress upon that you have heard from other Members who 
have had the similar complaint, even on the Republican side, it 
is important and I'd like to make sure that we get responses. 
Thank you, Mr. Chairman.
    Chairman Tom Davis. Thank you, Mr. Waxman.
    Mr. Shays.
    Mr. Shays. Thank you. I'd also like to add to Mr. Waxman's 
point. As the administration asks for more power, I think they 
need more legislative oversight, and it would be helpful to 
have greater cooperation, not less cooperation from the 
    And I also want to say as you're surrounded by four very 
competent professionals, and I have high regard for HHS, I have 
high regard for you, Mr. Secretary, and the people who work 
around you. There is a black mark, in my judgment, with how the 
FDA has handled plan B when the experts have said that this 
should be available to prevent pregnancies and still not have 
this resolved, and I hope that you will find a way to quickly 
resolve that issue.
    I want to ask you if--first, I want to acknowledge I think 
this is a huge problem, and we probably should have been 
addressing it sooner rather than later, but thank goodness 
we're addressing it now. But now I'm going to sound like I'm 
contradicting myself because I'm interested to know from our 
experts why--this isn't 1918. And for instance, we don't have 
traps and dirty trenches, there were secondary infections. We 
have antibiotics, I guess developed in 1929, so that was one 
good thing that happened in 1929. Those are the things that 
come to mind to me that are different. Maybe your experts could 
tell us what some of the other things that are different.
    Secretary Leavitt. I will ask Dr. Gerberding to lead, and 
then call on others.
    Dr. Gerberding. Well, we live in a very small world today, 
it's actually much smaller than it was in 1918. If you remember 
SARS where one physician went to a hotel, stayed on the same 
floor of that hotel with a dozen people and overnight SARS went 
around the world.
    Mr. Shays. So that would argue that it's even a potentially 
worse environment.
    Dr. Gerberding. The connectivity and the connection between 
people in remote areas of the world with our backyard is much 
greater today than it was in 1918, and that's what we're 
worried about.
    Mr. Shays. Any other points, either that minimize or make 
it more of a problem?
    Dr. Fauci. One of the potential misconceptions that we hear 
is that now that we're living in the era of antibiotics, that 
most of what happened in 1918 was due to secondary infections. 
When you actually go back and examine carefully the records of 
what we know, how the course of illness occurred in many, not 
all, but many, many, and perhaps most of the patients, it was 
highly likely that it was not the antibiotic-sensitive 
bacteria, that if we had the antibiotics, then we would have 
had a major, major impact on 1918. It's more likely that the 
virulence of the virus that is inherent to the virus itself 
caused a significant amount of the morbidity and the mortality, 
and that is something that doesn't change very much from 1918 
to now.
    Mr. Shays. So you're raising a second point as to why it 
may be more serious, not less?
    Dr. Fauci. Yes. In fact, not necessarily more serious, 
where it counterbalances the argument that well, we have 
antibiotics now, we're OK.
    Mr. Shays. Any other points?
    Dr. Gellin. I want to build on what Dr. Fauci said in that 
the predicament we're in now with a single class of anti-
virals, the Neuraminidase inhibitors reflect the misuse of 
anti-microbials. We're all too familiar with the misuse of 
antibiotics, particularly in the agricultural industry. There 
is evidence that there has been misuse of the older class of 
anti-virals in that industry in Asia has led to their----
    Mr. Shays. So therefore they won't be as effective?
    Dr. Gellin. Oh, no. There are two classes of anti-virals 
for flu, one of them is essentially off the table for the H5 
virus, H5N1 virus, and likely because of the misuse of a 
similar molecule in animal feed in Asia.
    Mr. Shays. I guess I wasn't making myself clear. In other 
words, they are useless.
    Dr. Gellin. One class might be useless, we are left with 
    Secretary Leavitt. Mr. Shays, I would also mention one 
other item. In 1918, they had the biology in play where we had 
no human immunity, we essentially have the same circumstance 
today. We are now dealing with 1918 biology in a 21st century 
new cycle. SARS is a fascinating model to look at when you're 
looking at the cultural economic and political disruption that 
comes from a pandemic. There were 8,000 people who were 
infected with SARS, that is, in pandemic terms, small. It 
completely disrupted the Chinese economy. There were major 
airports all over the world that were essentially vacant.
    Part of the difficulty of a pandemic is of course the 
health impacts, but the economic cultural impacts that it 
creates are also profound.
    Mr. Shays. Let me just--since my red light will come on 
soon, just put in a word for the World Health Organization. I 
think it is underfunded, underutilized. I know we sent some of 
our best experts to participate, and that's terrific, but I 
really believe that World Health Organization should be playing 
a greater role, and the United States should be helping to 
encourage that. Thank you.
    Chairman Tom Davis. Thank you.
    Mr. Lantos, 5 minutes.
    Mr. Lantos. Thank you, Mr. Chairman.
    I'd like to ask you or any of your colleagues, Mr. 
Secretary, to address a, the geographic issue which I raised in 
my opening comment, San Francisco, Los Angeles, Seattle 
probably will be the first impacted area given air travel from 
    Second, I'd like to ask you to give us, as detailed as you 
are capable, a report of the dealings with Roche. What are the 
generic companies that are planning to undertake production? 
What is the timetable? What are the arrangements? Because as 
several of us have indicated, we must see to it that getting 
the product to our potential patients is dramatically more 
important than historic corporation relationships between 
companies and their licensees.
    And finally, I would be grateful if you could discuss what 
specific plans you have to see to it that the potentially most 
vulnerable are diagnosed and then are provided with medication 
on a priority basis; because this has not always been the case, 
as you well know.
    Secretary Leavitt. I will ask Dr. Gerberding to deal with 
the issue of locale.
    Dr. Gerberding. Mr. Lantos, I share your concern about our 
quarantine stations, and we recognize what an important point 
of entry the west coast is.
    I visited the Los Angeles quarantine station at LAX on 
Sunday so I could get a firsthand look at what steps are in 
place. And I'm pleased to report to you that with the 
investments that Congress has been making over the last 2 
years, we've been able to make some significant improvements 
there, as well as in San Francisco and Seattle. Overall, we are 
going from eight quarantine stations at airports in 2003, we 
will have 18 by the end of this year, and we will have 25 by 
the end of 2006.
    At SFO, we have a medical officer now which we didn't 
always have, we have a senior inspector, and we are planning 
for the possibility of an airplane with someone with suspected 
pandemic strain, how we would quarantine and isolate people 
until further evaluation could be conducted. So it's a very, 
very important part of our containment program. The Secretary 
has worked this through in our doctrine, and we will be happy 
to keep you up to date as we make additional improvements in 
our border security.
    Mr. Lantos. I appreciate that.
    Secretary Leavitt. With respect to Roche, we have had on-
going, very direct conversations. They have given us assurance 
that we will have sufficient supplies to meet our objectives--
    Mr. Lantos. What are those assurances?
    Secretary Leavitt. They have made representations that we 
will be able to reach our 20 million first target by fourth 
quarter of 2006, and that they also made further 
representations that we could get to our 81 million goal by the 
summer of 2007. And I might add that----
    Mr. Lantos. When you say--excuse me for interrupting. When 
you say representations, Mr. Secretary, were these oral 
commitments? Is there anything in writing? Is there anything 
you are prepared to share with the Congress and the American 
people? Or were these just conversations with Roche?
    Secretary Leavitt. We have ongoing negotiations with them. 
We are systemically making orders as we have appropriations to 
do so. We have orders in that will take us well over 5 million 
    As respects the intellectual property issue, they have 
given us their assurance that, and not just the United States, 
but the world, that intellectual property issues will not be 
the means of constricting the supply. Now I am not a chemist, 
Congressman, but I have worked hard to understand the process 
that is undertaken to manufacture Tamiflu. And it is clear to 
me that this is a highly complex process that involves as many 
as five different manufacturing processes, some of which 
involve quite dangerous explosive processes.
    Now I don't believe it will be intellectual property 
disputes that in any way limit the capacity for manufacturing, 
it's going to be the logistics. And it's my view that it's 
going to be, anywhere in the world, more than a year before we 
have additional manufacturers, and maybe as many as 2 years. 
That is just my assessment, and the----
    Mr. Lantos. Mr. Secretary, no one questions your good 
intentions, but what is at stake is the lives of potentially 
vast numbers of American citizens. Is there anything beyond 
conversation that you have with Roche? Are there any documents, 
any documents that you are prepared to share with this 
    Secretary Leavitt. The documents are, in fact, limited to 
those that I have outlined----
    Mr. Lantos. If the Chair would indulge me for a moment, 
this is a rather important item.
    Chairman Tom Davis. I'll give him an opportunity to answer 
    Secretary Leavitt. It is important, and you were not in the 
room when I made another thing that is very important and I 
hope clear, and that is that, in any sense that Tamiflu is 
synonymous with preparedness is wrong----
    Mr. Lantos. We know that.
    Secretary Leavitt. And we have proposed a $400 million 
appropriation to advance the development and the manufacture of 
advanced and improved anti-virals. We believe that Tamiflu is 
an important part of a comprehensive plan, but it should not be 
viewed as synonymous with good preparation.
    We are putting forward a strategy that includes vaccines, 
that includes anti-virals, that includes surveillance, that 
includes good communication, and State and local preparedness.
    Now we intend that every State would have a stockpile of 
Tamiflu, and that it could be deployed in a way that would be 
consistent with their needs, because if we can't get Tamiflu or 
some other suitable anti-viral into the hands of a sick person, 
it has done them no good unless it's there within 24 to 48 
hours. So part of this is distribution, not just having a 
    Chairman Tom Davis. Mr. Secretary, I think, though, Mr. 
Lantos' question is, are there any documents that you could 
share with the committee that have transpired between 
yourselves and the drug company at issue?
    Secretary Leavitt. The documents that I'm aware of are 
those that would relate to the purchase or the intent to 
purchase the first 5 million doses that I've spoken of.
    Mr. Lantos. There are discussions between Roche and generic 
drug manufacturers; is that correct?
    Secretary Leavitt. That is correct.
    Mr. Lantos. What can you tell us about those negotiations, 
and can we see those document as they become available?
    Secretary Leavitt. I am not party to those conversations, 
nor do I believe that anyone at HHS is. However, we have 
instructed and agreed with Roche that the FDA will work 
directly with them to facilitate the licensing of those 
    Mr. Lantos. May I just raise one more issue, Mr. Chairman, 
it will take just a minute. Several of my colleagues properly 
dealt with the budgetary ramifications of all of this. Have you 
given any thought of requesting the President to have a White 
House conference of donors from the private sector? Exxon made 
$10 billion in one quarter on these inflated petroleum prices. 
It is high time that these multi-national corporations with 
windfall profits deal with the health problems of the American 
people. Given the fiscal policies of the administration--which 
I think have been abominable, we have to turn to the private 
sector. Are there any plans of having a White House conference 
of funding the resources necessary so we won't have to have a 
dialog as you did with Mr. Waxman as to what happens if the 
States can't afford it?
    Secretary Leavitt. Congressman, the President has made 
clear that he will be bringing State and local officials 
together to plan, and that----
    Mr. Lantos. I'm talking about the private sector.
    Secretary Leavitt. I know of no plans to do what you have 
    Mr. Lantos. What would be your idea of it----
    Chairman Tom Davis. Mr. Gutknecht is recognized for 5 
    Mr. Gutknecht. Thank you, Mr. Chairman. Benjamin Franklin 
said ``I know no lamp by which to see the future than that of 
the past.'' Mr. Secretary, 4 years ago, this city, indeed this 
very building, was the subject of an anthrax attack. And I know 
that most of this transpired before your watch, but I have to 
ask a few questions and submit for the record some other 
    I have a copy of a Newsweek article that was posted on 
November 2nd talking about what the Department is doing 
relative to acquiring anthrax vaccines, and it's pretty 
troubling. And apparently, it is not just troubling to Members 
of the House, I also have a letter and an article--that I'd 
like to submit, Mr. Chairman, for the record--from CQ.com, with 
a letter enclosed from Senator Grassley asking about how we're 
handling this anthrax vaccine contract, as well as a letter 
that I'd like to submit from a former colleague of the House, 
and now a Member of the Senate, Dr. Tom Coburn. And in that 
letter, he raises 11 very specific questions.
    [The information referred to follows:]

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    Mr. Gutknecht. Now, Mr. Secretary, have you received that 
letter from Senator Coburn?
    Secretary Leavitt. I have personally not read the letter. I 
do not know if it's been received yet.
    Mr. Gutknecht. Well, the reason I'm going to submit it here 
in committee is that I hope you will not only respond to him, 
but I hope you will respond to the questions from this 
committee, because I think it does raise serious questions 
about the ability of the Department to manage these large 
    Four years after the anthrax problem we had here in the 
Capitol building, we still can't really say that we're 
protected with adequate doses of anthrax vaccine. Now, I try to 
remind--and you're not the first one I have reminded this of, 
but we won World War II in 3\1/2\ years, OK, and it shouldn't 
take 4 or 5 years for us to ramp up production and to purchase 
of an adequate supply of anthrax vaccine. What is troubled that 
is raised in the Newsweek article is that a contract has been 
given to a company, an $877 million contract has been given to 
a company that has never passed--I think they've never gone to 
phase three trials with this particular vaccine. They have, and 
it's documented at least in the article, that they have serious 
financial problems and are not going to be able to meet their 
production quotas this year, and perhaps not even next year.
    And I go back to my statement that if we're unable to 
manage an issue that has been around for 4 years, what gives us 
confidence that we're going to be able to manage the Avian Flu 
    Secretary Leavitt. Congressman, you're referencing the fact 
that we are moving to develop a better anthrax medication. I'd 
like to ask Dr. Fauci to give you an update on our progress, 
and to make clear that we do, in fact, or have, in fact, made 
substantial preparation for anthrax, we're just working to get 
better all the time. So Dr. Fauci.
    Dr. Fauci. Thank you, Mr. Secretary.
    As you know, there are two anthrax vaccines, there is the 
AVA, the standard one that have been used with the military. An 
Institute of Medicine committee has made it very clear that in 
order to prepare the country for an anthrax attack, that we 
need to make attempts to go beyond the older technology and use 
a new recombinant technology, which is the recombinant 
protective antigen. We have a supply, a modest supply in the 
stockpile of the older AVA, and there is an order for an 
additional amount of the AVA. But simultaneous with that, in 
the procurement process of getting companies to bid for making 
the recombinant protective antigen, the comment that you made 
is correct, we did not, and at the time--and this is an issue 
with trying to incentivize the big companies to get involved, 
the fact that the company in question, Vasogen, had not 
produced a vaccine beyond a phase 3 trial, I think bespeaks the 
lack of incentive of bigger companies to get involved, so we 
had to go with companies that, in fact, don't have a track 
record like a Merck or a GlaxoSmithKline and others.
    You're correct that the pace of the milestones of the 
contract of getting the material into the strategic national 
stockpile is, in fact, slower than the Department had hoped it 
would be. This is being monitored very carefully by the 
contract people, and we would be happy to keep you abreast of 
how this goes. But we are aware of the fact that they're behind 
schedule, and nonetheless, we will continue to monitor them 
very closely.
    Mr. Gutknecht. Well, Mr. Secretary, thank you for that 
answer, and it helps some, but I think ultimately the word that 
the American people are going to be using more and more about 
how we spend their money is accountability. And if we're going 
to give contracts to people and we expect them to live up to 
their end of that contract, there have to be some consequences 
when they don't. And the consequence seems to be, around this 
city, well, gee whiz, you didn't meet that goal, we'll give you 
more money, and I'm not sure that's going to cut it.
    The other thing I will say, though, and perhaps the most 
important thing that's come up out of this hearing so far this 
morning, at least from my perspective, is to deflate the idea 
that Tamiflu is the silver bullet relative to the potential 
outbreak of an Avian Flu virus pandemic. I yield back the 
balance of my time.
    Chairman Tom Davis. Thank you very much.
    Mr. Kucinich.
    Mr. Kucinich. Thank you very much.
    Mr. Secretary, you stated earlier the obvious, you're not a 
chemist, but you are the Secretary. At what point are you going 
to act on behalf of the American public and issue a compulsory 
license for Tamiflu?
    Secretary Leavitt. Congressman, I mentioned earlier that 
there were--we've put $400 million into our proposal for the 
development of new anti-viral drugs.
    Mr. Kucinich. Could you answer the question directly, Mr. 
Secretary? It was a simple question.
    Secretary Leavitt. I do not intend to, if that's a direct 
    Mr. Kucinich. Mr. Chairman, that's----
    Chairman Tom Davis. That's his answer. Do you have another 
    Mr. Kucinich. Are you invoking the fifth amendment?
    Secretary Leavitt. No. I don't think I can be any more 
    Mr. Kucinich. You just said you don't intend to--you don't 
intend to what? You don't intend to answer the question?
    Chairman Tom Davis. He doesn't intend to invoke it, I think 
it's pretty clear.
    Mr. Kucinich. You don't intend to issue compulsory 
    Secretary Leavitt. That is correct.
    Mr. Kucinich. Why not?
    Secretary Leavitt. Because it's my belief that if we want 
to have the last anti-viral or new product we will ever have in 
this country, we will begin to violate intellectual property 
and patent rights----
    Mr. Kucinich. So you believe that intellectual property and 
patent rights are more important than having a large supply of 
an anti-viral that could save lives?
    Secretary Leavitt. I do not believe that violating their 
patent would unleash a new stream of Tamiflu.
    Mr. Kucinich. There are, according to some statements, over 
100 companies waiting to begin production of Tamiflu. And 
contrary to what you've said about the complex process, there 
are many people waiting to go forward with the production. Now 
for you to sit here as Secretary of HHS, it's kind of shocking 
to see you here defending intellectual property rights when the 
American people could be facing the results of a pandemic.
    I want to ask you a question here. Have you had cabinet 
meetings? Have there been cabinet meetings about this issue of 
anti-viral and the Avian Flu?
    Secretary Leavitt. Yes.
    Mr. Kucinich. And have you participated in those meetings?
    Secretary Leavitt. I have.
    Mr. Kucinich. And has the Secretary of Defense participated 
in those meetings?
    Secretary Leavitt. Yes.
    Mr. Kucinich. Are you aware that the Secretary of Defense 
is an investor in Gilead Sciences, the California biotech 
company that owns rights to Tamiflu?
    Secretary Leavitt. I'm aware from news accounts that he has 
clearly set aside any interest in purchases of Tamiflu.
    Mr. Kucinich. You spoke to this being a highly complex 
process. Have you talked to people at Gilead?
    Secretary Leavitt. Yes, I have.
    Mr. Kucinich. And have people at Gilead made you aware that 
there are over 100 companies waiting to provide production of 
    Secretary Leavitt. Congressman, that isn't the case.
    Mr. Kucinich. Well, what is the case? Have they made you 
aware that there are many companies waiting to manufacture 
    Secretary Leavitt. They have made clear to me that there 
are those that have expressed an interest in licensing the 
product. And Roche has made clear to me that they are 
    Mr. Kucinich. How many?
    Secretary Leavitt. They have not given me a number.
    Mr. Kucinich. And you're the Secretary and you never asked 
for a number when we're looking at increasing the size of 
Tamiflu? That's incredible.
    Secretary Leavitt. Congressman, if I thought we had the 
capacity to unleash a needed anti-viral, or that in some 
fashion we would be withholding an important life-saving drug, 
we would take whatever action is necessary. However, I do not 
believe, nor do my advisors nor would I say would the FDA 
believe that would occur.
    Mr. Kucinich. That what would occur?
    Secretary Leavitt. It is the chemical process, it is the 
manufacturing process that is constraining the capacity for 
this to be developed. Roche has made is very clear that they're 
prepared to license anyone who wants to manufacture it, but 
they're going to have to go through a very detailed process----
    Mr. Kucinich. Several countries have asked Roche for the 
right to make the generic copies of Tamiflu. I have another 
question to ask you. Are you negotiating a price with Roche for 
Tamiflu or are they setting a price?
    Secretary Leavitt. We're negotiating, Congressman.
    Mr. Kucinich. And when you're negotiating, is it in the 
same way that the Veteran's Department negotiates with the drug 
companies to get the lowest possible price; or are you 
negotiating it so they can make the most profit?
    Secretary Leavitt. We are negotiating a price that has been 
steadily downward. They've been responding----
    Mr. Kucinich. Are you going to make those documents 
available to this committee so we can make sure that the 
American taxpayers are not paying a premium for this drug?
    Secretary Leavitt. To the extent that's necessary.
    Mr. Kucinich. Mr. Chairman, I think it would be important 
to the committee to have that information because they already 
talked about a first billion dollars for an anti-viral, since 
Tamiflu is the most effective, it certainly appears to me that 
we ought to know what we're getting for our money.
    I think that this committee, Mr. Chairman, has an 
obligation to stay on this issue of compulsory licensing. For 
this administration to be in a position of taking a stronger 
issue with support for intellectual property than they are for 
making a wide availability of Tamiflu is pretty shocking and 
ought to send a message to the people of this country where 
this administration's priorities lie.
    Chairman Tom Davis. Thank you, Mr. Kucinich, I think that 
question is addressed to me, and I think the answer is pretty 
clear that if Tamiflu were the solution and we knew that was 
the solution, we could be out there doing all kinds of things, 
but we're not even sure that is going to be helpful in a 
pandemic, and there have to be other anti-virals that have to 
be developed. And who is going to spend the money developing an 
anti-viral if whatever money is spent in the research and 
development is just taken away from them and given to somebody 
else? I think that's the way the markets work, and I think 
that, from my perspective, that the Secretary is behaving 
responsibly. And having said that, obviously when the prices 
are negotiated, this committee has oversight responsibility, 
and we will be happy to work with the Secretary and everyone 
else to do that.
    Mr. Kucinich. Will the gentleman yield?
    Chairman Tom Davis. If you have another constructive 
comment, I want to get----
    Mr. Kucinich. Well, I have a question. Are we saying that 
even if Roche refused to make more Tamiflu or provide licenses 
to other companies and thousands of Americans lives hang in the 
balance, that we would still----
    Chairman Tom Davis. No. And that's not the case.
    Secretary Leavitt. Mr. Chairman, no one is making that 
    Chairman Tom Davis. Of course not.
    Secretary Leavitt. This is a very complex chemical 
manufacturing process. And to simply say that there are 
hundreds out there that are, a, willing, and b, able to 
manufacture it is a misstatement of the truth and it is----
    Mr. Kucinich. Well, your drilling for oil is complex, too. 
We're seeing the American consumer getting hit two ways here.
    Chairman Tom Davis. I think we are getting a little off.
    Mr. Kucinich. I yield back.
    Chairman Tom Davis. Mr. Burton.
    Mr. Burton. While we're on a couple of other subjects here, 
I do--when we passed Medicare prescription drug bill, one of 
the things that I was concerned about was that we do negotiate 
prices, the VA does, with the pharmaceutical companies, and 
there was a prohibition against that in the Medicare 
prescription drug bill, and I think that is something that 
ought to be revisited. Obviously, we want the pharmaceutical 
industry to make a lot of money because we want them to be able 
to do the research and development that is necessary for new 
pharmaceutical products and drugs, but at the same time, we 
ought to do what we can to make sure that there is a 
negotiation process, like there are in other countries, as far 
as buying these pharmaceuticals.
    If we did that and provided a protection against the 
possible counterfeiting of pharmaceuticals--and that can be 
done--I've got a bill I'm going to introduce to do that--then I 
think we could negotiate these prices down like they're doing 
in other places, and that would be very good.
    I read an article in the Wall Street Journal the other day 
from some noted physicians and scientists, and it said that--
and I think it verifies what the chairman just said, and that 
is, that if we come up with a vaccination against the avian 
flu, it might mutate into something else and the vaccine might 
not be capable of dealing with a mutation that takes place. So 
this is a revolving, revolving situation that we face. And 
Tamiflu, while it might help now, if we produce an awful lot of 
it, by the time we get to the point where we do have an 
epidemic, it might not be worth the production costs that we 
did. So this is something that has to be looked at on a 
continual basis, as I understand it; is that correct?
    Secretary Leavitt. Your point is correct. That's one of the 
worries that the scientists at this table would express on 
Tamiflu. We don't know what the virus will be that will spark a 
pandemic. It's possible Tamiflu would have a positive impact, 
it is also quite possible it would not. And if we have simply 
used our resources to provide a stockpile of Tamiflu, we would 
not have prepared ourselves adequately.
    Mr. Burton. And it is my understanding from--go ahead, Dr. 
    Dr. Fauci. Mr. Burton, you raise an incredibly important 
question that is at the crux of what we're doing. At the same 
time that we're stockpiling, to the best that we can, Tamiflu, 
we're investing in alternative anti-viral drugs in case we run 
out of options with the evolution of resistance. Or even if in 
its best form, Tamiflu might not be up to the task of stopping 
this because of what I had mentioned in an earlier question, 
that we have no guarantee that this is going to be highly 
    With regard to the vaccine, you bring up an even more 
important point, and it's the two-pronged approach of vaccine 
in the Department's plan, and that is at the same time that 
we're actually building a stockpile of the vaccine that we have 
in hand at this time, we are building the capacity to be able 
to respond in a timely and expeditious manner if and when--and 
we hope it never happens--but if and when the vaccine--the 
virus changes enough that we may have to substitute in our 
vaccine the most recent updated version of the virus that we're 
dealing with. So we're doing them at the same time.
    Mr. Burton. And in the event, as I understand it from our 
testimony and answering other questions, in the event that it 
looks like there is going to be a production problem as the 
epidemic or pandemic grows, you would be willing to do 
emergency licensing with other pharmaceutical companies, even 
generics, in order to get the production level up to where it 
should be as quickly as possible.
    Secretary Leavitt. We would do what we need to do to 
provide for preparation for a pandemic.
    Mr. Burton. But you're prepared to do that if you have to 
do it.
    Secretary Leavitt. We will do what we have to do to protect 
the American people.
    Mr. Burton. Well, I really would like to know. I mean, in 
the event, let's say that Roche or any pharmaceutical company 
that makes vaccines is not capable of production levels that 
will protect as many Americans and people as possible, you 
would do whatever it took----
    Secretary Leavitt. We will do whatever it takes to protect 
the American people.
    Mr. Burton. That's what I wanted to hear, that's what you 
wanted to hear.
    And finally, let me just go back to something I said in my 
opening statement. It is extremely important, in my opinion, 
and I've talked to you about this before, that we get mercury 
out of vaccines, adult as well as children vaccines, and you 
can do that, and you know you can, it might cost a little bit 
more. And I want to give the pharmaceutical industry the 
protection it wants against class action lawsuits, I'm for tort 
    But the only way that many of us in good conscience can do 
that, and I think you might run into a problem here, and we're 
going to be watching the legislation that goes through to deal 
with this, is that we have to make sure that the Vaccine Injury 
Compensation Fund is user friendly so that people who do have 
children that are damaged or adults that are damaged have 
access to that and they don't have to go through a 10 or 12-
year process to get compensation for the damage that's been 
    So if we could get the mercury out of the vaccines and go 
to single shop vials as necessary, make sure the Vaccine Injury 
Compensation Fund is user friendly, then you're going to get, 
and the vaccine industry is going to get what they want, and 
that is, protection against class action lawsuits.
    We tried to do that in the 1980's. I and others are willing 
to do that now, we just want to make sure that the people who 
are damaged do have a modicum of protection, and right now that 
doesn't appear to be the case. Mr. Chairman.
    Chairman Tom Davis. Thank you very much.
    Ms. Norton.
    Ms. Norton. Thank you, Mr. Chairman.
    Mr. Secretary, I have questions on this issue, but I think 
I should give you the opportunity to respond to the glitches 
we've seen in the distribution system, to indicate where they 
come from and to give any assurances that you can about the 
existing flu vaccine. I think the overreaction problem comes 
from the fact that if people see this one and are not assured, 
then of course, they're not going to take very seriously what 
we're trying, and what you quite appropriately are trying to 
focus them on.
    Can you just give us some word about the issues that have 
come up, besides the fact that we know large numbers of people 
are coming forward?
    Secretary Leavitt. I'll ask Dr. Gerberding to give you an 
    Ms. Norton. I'm sorry?
    Secretary Leavitt. I will ask Dr. Gerberding from CDC to 
give you an update.
    Dr. Gerberding. Thank you. Where we are right now this year 
with the vaccine supply is that approximately 63 million doses 
of vaccine have already been distributed. We're expecting more 
than 80 million doses to be available this year, which is 
potentially more than we've ever delivered in any given year--
    Ms. Norton. I think I want to get on to my questions here. 
I simply want to know, because we know of the availability, I'm 
trying to find out about the distribution glitches, in 
particular, because otherwise I won't get to ask my other 
    Dr. Gerberding. The distribution is in the hands of the 
private sector, as is most of the vaccines.
    Ms. Norton. So there is nothing the CDC can do about it?
    Dr. Gerberding. It is not something that we have control 
over. That's been one of the challenges and why what the 
President is proposing is so helpful to us because we can 
really increase our seasonal flu vaccine supply----
    Ms. Norton. I'm very sorry to hear that. It has a direct 
effect upon people who will have any confidence on what you're 
doing on the pandemic. And I ask you to look into the matter of 
distribution and not simply throw your hands up and say I guess 
there's nothing we can do about that.
    If you can't get it to us, and I repeat what--I wrote it 
down, Mr. Secretary, distribution defines victory. Well, let me 
tell you, thousands of people die in the United States every 
year despite the fact that we do have vaccine available, so if 
you can't get it to them, if you can't help us on that score, 
then I guess victory is not ours.
    Secretary Leavitt. Ms. Norton, at the break I made a call, 
because of your opening statement I wanted to make certain I 
had the facts. There are two components to distribution, one is 
the ability for the company to get it to the place where it's 
been ordered, the other is the need for them to order enough. 
Washington, DC, ordered only 33,000 doses or, rather, courses 
of the vaccine, and one of the reasons that they may be having 
a shortage is because they didn't order enough.
    Ms. Norton. So you're saying--and so the fact that 
Walgreens across the country says they're not going to do it 
    Secretary, Leavitt. There are distribution challenges, but 
in some cases, communities also didn't order enough.
    Ms. Norton. I will check with our Department of Health, and 
I'm sure the Congressman will check with his, and I appreciate 
that answer.
    We've had trials that help us the next time to do know what 
do. The trial in this case was the smallpox vaccine, this 
completely collapsed. The President made a big and important 
announcement. Most experts believe that the reason was that, 
while the manufacturer got a liability shield, people, first 
responders, that's who we're trying to get to go first, didn't 
have any confidence that if, in fact, something happened, that 
there would be some kind of compensation for them.
    Now you know, Mr. Secretary, this--we get parents to 
vaccinate children because of the Vaccine Injury Compensation 
Program for childhood vaccines. The President didn't even 
mention this, even though he's had one failure already. You 
would think that there would have been some mention of or 
acknowledgement of that failure and saying that they were going 
to take some steps to deal with it.
    Let me ask you whether you believe, at least in principle, 
that first responders who might also be asked to take this 
vaccine first deserve to be--and in light of our experience--to 
be effective must be assured that there will be some kind of 
compensation in case some small number, I'm sure it will be 
small, are, in fact, injured from the vaccine.
    Secretary Leavitt. We do need to provide incentives for 
first responders to be inoculated. We will need them very much 
in a State of national emergency, whether it's smallpox or a 
    Ms. Norton. And you think the childhood vaccines 
compensation program is something of a model that we might 
follow here?
    Secretary Leavitt. I know that has been effective to a 
degree and it can be improved still. I expect as the discussion 
goes forward it will be discussed.
    Ms. Norton. Well, it will be on you, Mr. Chairman, if you 
put it out to first responders and you get the same response 
you got from smallpox, so be forewarned.
    Final question. Dr. Fauci testified here about--gave us 
some real hope during the last crisis--about moving on from 
this egg-based manufacturing to state-of-the-art, or the art 
apparently isn't here, cell culture, and, one, do we even 
have--are we any closer even for our annual vaccine needs; and 
two, is there any hope that, moving forward, we can leave this 
slow way of dealing with manufacturing of these vaccines for 
the annual flus and the other pandemics.
    Dr. Fauci. Yes. Thank you, Ms. Norton. The process that is 
going on now, since the last time I have spoken to you there 
has been considerably more of a transition. Right now the 
current technology of the industry as a whole is egg-based. The 
future of the influenza vaccine production will be based on 
cell. We are making significant investments, as are the 
companies themselves on their own dime, to ultimately 
transition into cell-based. Depending on the company, some are 
well into doing the transition----
    Ms. Norton. Any waiting on the annual vaccines, on cell-
based on how close are they----
    Dr. Fauci. The annual vaccine for the seasonal flu that we 
will be distributing to our citizens at least over the next 
couple of years will continue to be egg----
    Ms. Norton. How soon, Dr. Fauci, even on that?
    Dr. Fauci. The industry likely will not transition over to 
a full cell-based for at least 4 years or more. I want to just 
emphasize, Ms. Norton, that this advantage, the primary 
advantage of cell-based is what we call surge capacity, the 
ability to rapidly rev up on more doses and to have the 
flexibility of changing in midstream on the numbers that you 
need. We appreciate that is the wave of the future, but the 
technology itself will not allow the industry as a whole to get 
there for the next few years. So this year's is certainly egg-
based. And I can guarantee you that next year is going to be 
egg-based also.
    Chairman Tom Davis. Thank you. Thank you for that 
    Mr. Cannon.
    Mr. Cannon. Thank you, Mr. Chairman.
    I chair the Subcommittee on Commercial and Administrative 
Law which is part of the Judiciary Committee, and we are going 
to have a hearing next week on a tort liability limitation for 
flu vaccination or manufacturers of flu vaccine. And that is 
Darrell Issa's bill. So I got a bit engaged in this.
    And if I can followup on the question of the gentlelady 
from D.C. In some of our recent discussions, it sounds to me 
like industry has had huge failures, huge costs, and not much 
progress on cell-based vaccines. And I was just as recently as 
yesterday told that--by a major manufacturer--that this is at 
least 5 years off. And that is ``at least.'' So you said not 
within 4 years, but that means in 5 years or beyond we are 
looking at it. So this is not imminent; isn't that the case?
    Dr. Fauci. That is the case. It is not imminent. I think 
the investment that is taking place within the budget 
associated with the plan that was just released, that could be 
accelerated somewhat. But it is talking about 4 years at least 
and probably 5.
    Mr. Cannon. We had--I think this is the same science-based 
issue, but on line Newsweek this week has an Isikoff story so 
this is a very high-level story that they are pursuing. I take 
it from your response that you are familiar with that Dr. 
    Dr. Fauci. Uh-huh.
    Mr. Cannon. It is talking about the anthrax vaccine and 
VaxGen that is producing that with like a $900 million $800-
some-odd, almost $900 million in funding, and only one company 
bid on the project. And the other companies refused to bid 
because it was not feasible to do it in the timeframes that the 
RFP suggested, and so now we have a small company failing to 
perform in an area where we--this is not--not bird flu, but it 
is associated because we are talking about the same technology 
here where we have an experimental technology to deal with a 
disease that we have already been attacked with, it has already 
been a bioterrorist tool, attacked several times with, and yet 
we don't have a stockpile, even though my understanding is that 
we have a company that has an FDA-approved vaccine for anthrax.
    Is that a fair statement of where we are?
    Dr. Fauci. Yes, it is a fair statement. A little bit of a 
different interpretation of it, because there is a history 
behind why a company is pursuing what you say is an 
experimental approach. Which is not necessarily experimental; 
it is a recombinant DNA technology that is used with other 
vaccines. The Institute of Medicine, after careful examination 
of the anthrax problem, recommended that the Federal Government 
move on to a more advanced modern-day approach to vaccination 
after anthrax, and that was the recombinant DNA technology, the 
RPA. The vaccine that you refer to that is already licensed is 
the AVA that has been used in our Armed Forces. We do have some 
of that in our stockpile, and we have actually recently put in 
a purchase for an additional amount of the older AVA vaccine. 
The recombinant protective antigen is by a company that you 
mentioned, VaxGen. It is one of the few companies that put in a 
bid for the simple reason that we have trouble incentivizing 
the large companies to even get involved in the vaccine 
production industry.
    Mr. Cannon. And I think in part that is because of what Mr. 
Burton said about liability. We want to help solve some of 
these liability problems. But are we going to be in the 
business of paying Federal dollars to develop marginal 
technologies with companies--and by the way, I think it was in 
the article someone mentioned that these guys are being sued 
because they overstated what they could do with an AIDS vaccine 
that didn't work.
    So what you really have here, at least to me, sounds like a 
marginal company that is willing to say, yeah, we will do that 
$877 million, whatever that number is.
    We are at the table and then we get the problems because I 
believe, as I understand it, that the other companies were 
saying we can't do what you are tasking us to do. And so are we 
just spending Federal money to create, with a hope and a lot of 
dollars, a path to something that may be good in the long run 
but which we can get to reasonably?
    Dr. Fauci. I think it is important to put into context that 
the ultimate purchase of RPA or any other of the 
countermeasures that will go into the Strategic National 
Stockpile will be through a mechanism called BioShield which is 
money that does not go to the company except if they deliver 
the product. So, although we will be late, they will not get 
paid for a product that does not get delivered.
    Mr. Cannon. But of the $800 or $900 million we are dealing 
here for VaxGen, how much of that are they getting in advance 
to cover their R&D and other expenses?
    Dr. Fauci. They will get according to what the milestone 
is. So they will get the money when they meet a milestone. So 
if their milestone is late, their money will be late. If they 
never reach the milestone, they will not get the money.
    Mr. Cannon. I would just as soon see this not become a 
major issue, but let me jump on because I think there are other 
issues that are more important. In the hearing I chaired 
recently in Mr. Souder's subcommittee--I mentioned in this my 
introduction of the Governor, and now Mr. Secretary--that there 
is an absolute consensus that the decreasing cost of DNA 
decoding and decreasing cost of computing has transformed the 
    And I know Secretary Leavitt has been deeply involved in 
these kinds of issues. But there are at least a couple, maybe 
three different new technologies out there which allow 
immediate decoding not in a half hour, much later in time, but 
immediate decoding of DNA, which should allow us to be much 
more proactive in identifying where we are having these 
    Is anybody looking at that kind of technology in the 
Department today, and does it hold promise?
    Mr. Leavitt. The answer is yes. There is one point that I 
think Dr. Raub could add to this question that might be 
helpful. Could he have a moment.
    Chairman Tom Davis. Sure. Dr. Raub, please respond and then 
we will move to Mr. Van Hollen.
    Mr. Raub. You were citing the article, and I have not seen 
that particular one, but it is incorrect to say that the VaxGen 
was the only bidder. In fact, we had multiple bidders. We had a 
spirited competition. It's true, the large industries stayed on 
the sidelines for its own reasons. But we had strong proposals, 
a very thorough technical review, and VaxGen won that 
    Mr. Cannon. I hope, Mr. Chairman, that the Secretary could 
address the issue of new technology and identifying the DNA 
strands that identify the flu so that we can get a--if that 
would--the question, I guess, would that provide a better tool 
for identifying and containing a pandemic? And is it something 
we are pursuing?
    Secretary Leavitt. I will ask Dr. Gerberding. She can give 
you what I think will be a more satisfying answer.
    Dr. Gerberding. I think what you're referring to is the use 
of DNA-based diagnostics. In other words, to detect not the 
whole virus or wait until we grow it up and culture it, but to 
probe for specific components of the virus. And that technology 
is well underway. Actually, some preliminary approaches to 
this, using chip technology, are in clinical study now.
    Mr. Cannon. If the chairman would grant unanimous consent 
for 10 more seconds.
    Mr. Burton [presiding]. If Mr. Van Hollen doesn't mind.
    Mr. Cannon. Let me just suggest that I've heard of a test 
on malaria at Johns Hopkins using a new device that has been 
radically successful. And it might be worth pursuing that from 
your point of view. And I would be happy to get you information 
if you would like.
    Mr. Burton. Mr. Van Hollen.
    Mr. Van Hollen. Thank you, Mr. Chairman. And, again, thank 
all of you for your testimony.
    Mr. Secretary, I want to focus on some of the issues I 
raised in my opening comments regarding the fact that as I look 
at the plan, I don't think enough emphasis is being spent on 
that early warning/early intervention/prevention part it.
    As I listened to the testimony of a lot of people from the 
World Health Organization, the FAO and others, they say a 
critical part of a plan to prevent an outbreak would be to try 
to find a way to stop or slow down the transmission of the 
disease through the carriers, avian flu, birds and others.
    And my question No. 1 is, first, do you agree that that is 
an important part of the strategy? No. 2, what are your 
understandings of the cost and what it would take in terms of 
resources to address that strategy? And No. 3, what amount of 
money in this plan--I don't see any money especially for that 
particular part, transmission among the carriers--is in this 
plan, and how do we make up any gap in that funding?
    Secretary Leavitt. I spent 9 days in Southeast Asia with 
the head of the World Health Organization and the head of the 
animal health organizations and with the pandemic 
representative from the U.N. We spent time in the five major 
countries where the most cases have manifest.
    I had a chance to walk through wet markets and go to farms 
and to sit down and speak with people who had actually 
contracted avian flu, and I think I began to develop a pretty 
good sense of what the challenge is.
    We are investing heavily already, and have been for some 
time, in an international surveillance--disease surveillance 
system. We have people on the ground. We have laboratories on 
the ground. We are doing what we can now to build laboratory 
capacity. Ultimately we are going to have a decision to make 
when there is an outbreak of a pandemic flu, whatever the 
    Is the capacity to contain possible? If it is a small 
village in a remote area of Thailand or Cambodia and it hasn't 
gone beyond that village, and it is a strain that appears to 
have low efficiency and not much virulence, then it is quite 
possible that it would be a very good use of our resources to 
go in and to put that spark out while we can.
    If it is in a metropolitan area and it has spread to a 
number of places, and it is already achieving person-to-person 
transmission in a highly efficient way, the use of limited 
resources in the United States may not be the best choice.
    Mr. Van Hollen. Mr. Secretary, if I could, because my time 
is short, if I could just--I understand the importance of 
trying to prevent the outbreak among--if it gets from human-to-
human transmission and the importance of that.
    What I was referring to was part of a strategy that I 
understand many of the health experts in the WHO are talking 
about, trying to slow the transmission among the carrier 
population now of birds. You know, they have slaughtered 
millions of birds and we need to keep doing that to the extent 
that the virus exhibits itself. But there has been some talk 
about methods, through farming methods, but also even through 
putting stuff in the feed of chickens that would sort of 
immunize them against the further spread. And since they are 
the carriers, I don't see anything in this plan with respect to 
    Do you think that we--do you think that WHO and FAO folks 
are right, that we should focus on that as part of our 
strategy? And what resources will that take?
    Secretary Leavitt. The plan that--the President's plan 
does, in fact, have funds that would go to the Department of 
Agriculture and others who will be participating in those 
efforts. However, we need to remember that we now have a 
situation with tens of hundreds of millions of wild birds who 
are carrying the virus from continent to continent. We are 
seeing that unfold in the news virtually every day.
    I had a chance to see birds being culled and vaccinated and 
other processes and, frankly, they are imperfect. And they are 
inconsistent. And while I believe everything that you have said 
is, in principle, an important step, I did not come away from 
Southeast Asia with high optimism that is going to ultimately 
be the way in which we defeat this problem.
    Mr. Van Hollen. And don't get me wrong. I am not suggesting 
we shouldn't be putting a lot of emphasis on what we do if 
there is an outbreak. That is an absolutely critical part of 
the plan. But given the cost in lives and dollars of what an 
outbreak would mean, it just seems to me we should do 
everything humanly possible to prevent that spread.
    Let me just ask you about the ability of the HHS to respond 
generally to an outbreak, and your capacity to do that in the 
delivery system that has been raised, because as I understand 
in the National Response Plan, you were the lead agency with 
respect to overseeing the Federal response at the medical level 
and health level.
    And we have seen some early efforts to respond to 
catastrophes. We saw that with Hurricane Katrina. And I think 
there is general agreement that the Federal response over all--
I am not talking especially about the health area--but overall 
inadequate. And we had some early look at that with respect to 
the health response earlier with some of the hurricanes in 
Florida in 2004. And a report was commissioned by the 
Department from someone from the CNA Corp. I am not sure 
whether you're familiar with that report. But its findings were 
that the Department was not prepared. And looking at a case 
study in response to those Florida hurricanes in 2004, it found 
that despite the agency's role as a coordinator, HHS is not 
viewed as a leader of the health and medical operations in the 
field; often sends inexperienced junior staff members. And the 
report states that HHS had a, ``poor working relationship with 
key medical personnel from the Department of Homeland 
    No. 1, are you familiar with the report and its findings? 
And, if so, have any actions been taken within the Department 
in response to the recommendations and findings in that report?
    Secretary Leavitt. I am not familiar with the report, and I 
will tell you that is inconsistent with my own experience. We 
lack perfection, but I will suggest that during Katrina in 
particular the medical response--not just HHS, but from the 
medical community in general--was, I thought, quite remarkable.
    Mr. Van Hollen. Well, Mr. Secretary, I have a copy of the 
report here. And, Mr. Chairman, I think it might be worthwhile 
for your folks to at least brief some of the committee staff 
and other interested----
    Chairman Tom Davis [presiding]. That would be helpful, 
thank you, Mr. Van Hollen.
    Thank you very much. Mr. Kanjorski.
    Mr. Kanjorski. Thank you, Mr. Chairman. I don't know 
whether there is any truth to it. Of course I am watching some 
of the national news programs that indicate that most of the 
industrial nations of the world are ahead of us in the 
preparation for a pandemic. Is that a reasonable conclusion?
    Secretary Leavitt. I believe that is not the case, 
Congressman. I think, if you would, I have met with all of the 
health ministers from all the major countries many--several 
times on this issue. And we are following parallel tracks. And 
I would tell you with respect to the fact that we have a 
vaccine, we are leading in the development of the vaccine. We 
are now sharing our technology with other nations and working 
to collaborate with them. Others have made orders of Tamiflu, 
like we have, and they wait for their supply in the same way we 
do. I would say there is no nation on Earth that is 
particularly well prepared right now. But we are better 
prepared today than we were yesterday, and we intend to be 
better prepared tomorrow than we are today.
    Mr. Kanjorski. Mr. Secretary, in listening to the 
President's program and some of the testimony even here today, 
it strikes me that we are trying to resolve this problem within 
an existing culture of our economy and how it operates. We are 
looking at whether or not it is advantageous for companies to 
invest in this. It is a decisionmaking process for profit.
    If, in fact, we are talking about something that could kill 
100, 200, 300 million people in the world and several millions 
in the United States, it seems to me one of the largest 
challenges in modern time that we will have faced, and it would 
necessitate breaking the limitations of our--of the normal way 
we do business. And it seems that everything I am hearing is 
that we are trying to make sure we incentivize people, the drug 
companies; and they are not listening, they are not making 
enough profit.
    I think back to if we had decided to stay within that 
system to invent the atom bomb, we couldn't have done it in 3 
or 4 years. It would have taken us 20 years. And this may be 
something that necessitates a Manhattan-type Project. And the 
thing that brothers me in listening to this cell culture 
development--and I am all for it; I think the faster you can 
put a vaccine out to respond to an emergency or a situation, 
the better off you are.
    I have a hard time believing when I hear 5 years and 
everybody--well, unless, it is the technology might not be 
developed sufficiently to commercialize it in time? Or what is 
the problem? Why should it take 5 years to implement 
manufacturing capacity of this cell-culture alternative, unless 
it is experimental and we are still in the process of 
developing? Have we developed? If we have, why can't we 
implement it in a matter of a year or two?
    Secretary Leavitt. I am going to ask Dr. Fauci, who is 
deeply and personally involved in this, to respond to that.
    Dr. Fauci. Using cell culture-based techniques to develop 
vaccines is not new. It is successfully used in other vaccines. 
To adapt it to influenza has not been easy from a number of 
standpoints. The cell lines that have initially been involved 
at this point in time are not particularly good yielders of 
virus in the sense of the yield of growing the virus in the 
cell lines compared to the egg-based.
    The other is that what you have is a situation where 
companies, if they--and that gets into the incentive. And I 
appreciate what you're saying, sir, about the idea when you 
have an emergent situation, you have to go beyond incentives. 
But we had to deal with companies who are very tried and true 
in their egg-based culture to begin with. To get them to switch 
over is not an easy thing.
    Mr. Kanjorski. And that is what I sense, that we are trying 
to do this with an economic system that deals with normality 
rather than abnormality. And it seems to me it is going to be 
hard to tell people that they have lost their children or their 
grandparents or their friends or themselves, because, gee, it 
just wasn't--just didn't fit the capital structure that the 
American economy is based on. And we couldn't entice some of 
these manufacturers that would love to make an aspirin and make 
a lot more money on that than a vaccine.
    I am suggesting why haven't you come forth with setting up 
a government-sponsored enterprise we put up the manufacturing 
capacity, we pay for it, so we can move? So that everything is 
going concurrently, you're developing the strains, and how you 
pick up that efficiency could occur while we are building a 
manufacturing facility. But it seems to me we are lollygoggling 
around, if you will, and we are just saying, well, we probably 
have 5 years. And we hope we do. And some of the people I 
listen to say we may have 5 or 10 years.
    But what if we had had only 2 years and what if we had had 
a Manhattan Project, we could have put the capacity in place, 
we could have been ready, and we could have done it even 
governmentally? Why are you all----
    Dr. Fauci. First of all, with respect, sir, I don't think 
you could have a one-to-one relationship to say that if we 
don't get cell-based cultures next year as opposed to this 
year, or 2 years from now as opposed to 3 years from now, that 
is going to be the whole story of whether we are successful or 
not. It is not that simple and straightforward.
    Mr. Kanjorski. If we don't have sufficient vaccines, not 
only for the American population but for the world population, 
if we think we have suffered in Iraq, when we try and say we 
are not going to give to the rest of the world because we don't 
have enough--I mean, this country has suffered enough 
dissatisfaction from the rest of the world. We have to start 
thinking globally. We have a responsibility. But here we are 
talking about capacity to manufacture; something that should be 
American. We should be No. 1. I can't understand why you don't 
come forward and say, look, if we can't convince some of these 
companies--some of which are--one of which, the major producer 
of this, is in my district. And, you know, if they need 
infusion of capital to expand, let's do what we do for the 
military, let's buy them the equipment.
    Dr. Fauci. If you look at the plan----
    Mr. Kanjorski. Doctor, what I am so worried about is 
everybody talking about this magnificent plan that has been 
structured to operate over 5 years. And I am saying we may not 
have 5 years.
    What is the fastest period of time we could do it? What 
would it cost? And how efficient could we do it? And do we need 
the CDC or somebody to be the government-sponsored enterprise 
to get this done?
    And it is not only a one-use thing. We are not only doing 
it against this flu. We know that we are going to have diseases 
like this in the future that we have to meet with a vaccine. 
Why not have the capacity within the government to do that?
    Secretary Leavitt. Mr. Chairman, I think Dr. Raub, again, 
would have an insightful response.
    Chairman Tom Davis. And then we will move to Mr. Cummings 
as our last question. Thank you, Dr. Raub.
    Mr. Raub. Sir, in many ways you have summarized the budget 
proposal that accompanies the plan that we discussed with the 
two appropriations subcommittees yesterday. The President is 
proposing $4.7 billion worth for that kind of incentive to 
revitalize the vaccine industry for domestic production for the 
very reasons you're saying: to try to give an acceleration such 
that the limiting factor will be the technology rather than the 
investment decisions.
    We are proposing a substantial sharing of risk between the 
Federal Government and this industry as a way to transform that 
    Mr. Kanjorski. And I appreciate that. But all I am 
suggesting is that it sounds to me as though it is the regular 
order of how we do things. And it doesn't quite have the 
emphasis that I think one of these days all of us are going to 
be up here asking why didn't we do this and why did we lose a 
million people when we didn't have to? And if the technology is 
there, if cell culture works, let's do it and do it as fast and 
as soon as we can, regardless of what the expense will be.
    And I am not talking about throwing money away. I am 
talking about, look, we own munitions plants to develop certain 
munitions that aren't manufactured in this country. If we can 
do that for war, why can't we consider this a war on disease 
and spend a couple billion dollars to accomplish that?
    Chairman Tom Davis. Thank you. Gentleman's time has 
expired. But thank you for your comments.
    Mr. Cummings, 5 minutes.
    Mr. Cummings. Thank you very much, Mr. Chairman. I just 
want to go back to the opening statement of my good friend, Mr. 
Duncan, an hour or 2 ago. And he questioned whether or not this 
is--we are doing overkill. In other words, whether the problem 
is not as bad as the kind of cures that we are trying to come 
up with; in other words, the efforts that we are putting forth.
    Do you all think that we are under or overestimating the 
problem, the significance of this problem?
    Secretary Leavitt. Congressman, it is my belief it is a 
very serious problem and it is one that could have such 
profound impact on our country and the world that we absolutely 
have to respond and be ready.
    Now, I don't have any certainty that it is going to occur. 
But I do know that if we proceed forward on the plan that we 
have laid out, that at the conclusion we will have cell-based 
technology. We will have the capacity for annual flu vaccine 
manufacturing that we don't have. We will have better prepared 
State and local governments for whatever the medical emergency 
should be, whether it is a pandemic or bioterrorism event or a 
nuclear event.
    And we will have a bio--a disease surveillance system 
internationally unlike what we have today. And we will have the 
peace of mind of knowing we are ready for it, because it will 
in fact happen. Pandemics occur, and they will occur in the 
future just as they have in the past.
    Mr. Cummings. One of the things I want to just go back to 
my friend, Mr. Van Hollen, and some issues that he raised with 
regard to the international situation, Mr. Secretary. You know, 
the Food and Agricultural Organization of the U.N. Director 
said--and I want to quote--he said, countries at risk in the 
international community need to act rapidly to control avian 
influenza at source, in animals. We cannot afford to wait to 
battle the disease in pharmacies and hospitals, but we need to 
get rid of the virus in affected farmers' backyards. Prevention 
will be cheaper than the cure.
    And then we have the New York Times article entitled 
``Poverty and Superstition and the Drive to Block Bird Flu at 
the Source.'' And I quote them: ``A Cambodian farmer stopped by 
the clinic late one morning to pick up medicine for a chronic 
cough. He said if any of his chickens fell sick, he would not 
tell anyone for fear the government might arrange for the rest 
to be slaughtered without compensation. If they were very 
sick--and this is the farmer talking--before they died, then I 
might throw them in the brush, he said. But if they were only a 
little sick, I would probably eat them.''
    To what extent, if any, are you working to address this 
troubling reality, that farmers in the epicenter of this 
struggle have an economic disincentive to report avian flu 
contamination among their animals?
    Secretary Leavitt. Congressman, I sat in the living room or 
the family area of a man who did exactly that, who depended 
    Mr. Cummings. Where was that, Mr. Secretary?
    Secretary Leavitt. It was in Vietnam. He and his family had 
300 chickens. They depended heavily on them both for protein 
and for their livelihood.
    And when their village got H5N1, five of his chickens died, 
and the village committee concluded they needed to kill the 
chickens. He did. He had only lost five of them, and he decided 
he needed to eat the others or at least invite his family over. 
And a week later, he got a very serious cough and a fever and 
nausea, and within 2 hours he was debilitated and headed for 
death. I asked his wife about the experience. And she told me 
that it was obviously a terrible moment in their lives. And she 
was looking for ways that she could raise money to keep his 
treatment going, and they had sold the only thing they had, 
which was chickens.
    Now, I know the cross-pressures that you're speaking of and 
they are deep and they are all over Southeast Asia. Vietnam 
alone has, I think, 43 million farmers. Several million of them 
have chickens. In China there are 13.5 billion chickens.
    This is a problem that may have already gone beyond our 
capacity to contain among animals. I don't know that with 
certainty, but it is part of the equation that we have to 
factor in. It is primarily an animal disease right now.
    And for that, we can be grateful. And we need to move 
aggressively to contribute to the efforts that you've alluded 
    I will tell you that the head of animal health for the U.N. 
and for the World Animal Health Organization was with me on 
that trip. And we spent a lot of time walking through markets 
and dealing with the Health Ministers and the Agriculture 
Ministers from those nations who are perplexed by this.
    Is it possible for the United States to be involved in 
compensating farmers? We will be. We will be helping them in 
other countries in culling their chickens. We will be helping 
them vaccinate. But I did not leave there with any sense of 
certainty or optimism that we would, through those efforts, be 
able to prevent a pandemic should the virus mutate. We don't 
know anything about what is going on in Burma. We haven't got a 
clue about what is going on in North Korea. There are major 
sectors of the Earth in Africa where we don't have sufficient 
surveillance, nor do they.
    This is a tough problem. And ultimately if it makes that 
transition, it will become a human problem. And that is why we 
are taking this so seriously, to answer your first question.
    Mr. Cummings. Just one last question, Mr. Chairman. You 
know, as you just described, just based upon what you just 
said, it seems as if this is a problem that we don't have a lot 
of control over. I mean, am I right? Just going back to Mr. Van 
Hollen's concern that it is better to try to address this 
outside the country than inside the country, just based upon 
what you just said, it seems like it is almost an impossible 
task. And correct me if I'm wrong to try to address those 
farmers, because they seem to be on the first line of problems.
    Secretary Leavitt. If this makes a transition from an 
animal/bird disease to a human, there will be a spark. And if 
we are there, we will have an opportunity to contain it. But if 
it happens in a way that happens in a place, a massive urban 
city where people live close together with their animals and it 
spreads like wildfire, we will not have the ability to contain 
it. And our doctrine calls for us to begin containing it every 
other way we can, which we will begin to do things we talked 
about earlier in this hearing. There will need to be at that 
point provisions taken to do everything we can to keep it off 
the shores of the United States. If it doesn't, we need a 
surveillance system that will help us determine when it begins 
to manifest itself here, and where.
    That is what this plan is about. That is why this is such a 
serious, difficult complex problem. And we all hope it doesn't 
make that transition. But if it does, we need to be ready. And 
if H5N1 isn't the virus, there will be another, and we need to 
be ready then.
    Mr. Cummings. Thank you, Mr. Chairman, Mr. Secretary.
    Chairman Tom Davis. I thank the members for their 
questions. Mr. Secretary, you did a great job. Thank you and 
your team and keep up the good work.
    The hearing is adjourned.
    [Whereupon, at 12:45 p.m., the committee was adjourned.]
    [The prepared statements of Hon. Jon C. Porter and Hon. 
Jean Schmidt, and additional information submitted for the 
hearing record follows:]